Federal Court of Appeal of Canada remits settlement wine labelling “Product of Israel” to Food Inspection Agency

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On 5 May 2021, the Federal Court of Appeal of Canada, issued its decision (see judgment and reasons for judgment), to remit the matter on labeling wines produced in illegal Israeli settlements in the Occupied Palestinian Territory (OPT) as “Product of Israel” to the Canadian Food Inspection Agency (CFIA) for reconsideration. Al-Haq urges the CFIA to ensure correct re-labelling of the wines to reflect Canada’s internal policies and obligations under international law, to not recognize, give effect to or assist in maintaining the unlawful situation, of Israel’s settlement enterprise. Noting that Canada’s foreign policy from the 1990’s clearly articulates that Canada does not recognize Israel’s annexation of Jerusalem or permanent control of the occupied territory: “Canada does not recognize permanent Israeli control over territories occupied in 1967… As referred to in UN Security Council Resolutions 446 and 465, Israeli settlements in the occupied territories are a violation of the Fourth Geneva Convention. The settlements also constitute a serious obstacle to achieving a comprehensive, just and lasting peace”.

In March 2017, Jewish-Canadian human rights activist Dr. David Kattenburg filed a complaint with the CFIA claiming it was inappropriate for wines produced in illegal Israeli settlements to be labeled “Product of Israel”.

The CFIA initially agreed, but then reversed its decision and continued to allow such labels, citing the Canada-Israel Free Trade Agreement (CIFTA)’s the definition of Israeli “territory,” which includes areas where Israel’s custom laws apply, such as settlements in the OPT.

Dr. Kattenburg appealed this decision to the CFIA’s Complaints and Appeals Office (CAO), which affirmed the CFIA’s decision to allow these labels while maintaining that questions of Canadian foreign policy were outside its mandate.

Dr. Kattenburg subsequently filed an application for judicial review of the COA’s decision in the Federal Court.

On July 29 2019, the Court issued a decision determining that the wines in question cannot be labelled “Product of Israel”, finding that such labelling was “false, misleading and deceptive”. In support of its decision, the Federal Court cited the violation of Canadian consumers’ right to “express their political views through their purchasing decisions”, which requires accurate information regarding the source of the product. “Product of Israel” labels were found to interfere with the ability of consumers to make “well-informed decisions and well-informed and rational choices” to “buy conscientiously”.

The Court further held that the decisions of the CFIA and its CAO were “unreasonable in law”, rejecting the Canadian Government’s CIFTA argument, that settlements were included in the territory in which Israeli customs law applied, and therefore should be considered as “from Israel”.

The Court’s rejection of this argument reinforces Israel’s inability to unilaterally and illegally expand the scope of its territory to include illegal settlements in the OPT, infringing on the Palestinian right to self-determination, among other basic rights. This is in accordance with the Canadian Government’s official position that it does not recognize the OPT as part of Israel. The Court, therefore, set aside the CAO’s recommendation, allowed Kattenburg’s application for review, and remitted the matter to the CAO for re-determination.

Subsequently, the Attorney General applied to the Federal Court of Appeal to overturn the Federal Court’s decision. The Court of Appeal examined whether the Federal Court had identified the appropriate standard of review and applied it properly in coming to its conclusion that the label “Product of Israel” was false, misleading and deceptive, and that the decision of the Agency that the label complied with Canadian labelling legislation was not reasonable. It found that the applicable standard of review was reasonableness and that principles of international law were “merely part of the context that can inform the interpretation of Canada’s labeling legislation.”

The Court of Appeal assessed the Federal Court’s application of the standard by reference to the new guidelines determined in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 441 D.L.R. (4th) 1 [Vavilov], which succeeded the Federal Court’s decision. The Court of Appeal agreed with the Federal Court in its rejection of the CFIA’s decision, going as far as to state, “We simply have no idea how the Agency construed its legislation in coming to the conclusion that the labels are compliant”.

The Court of Appeal further found that the Federal Court judge should not have attempted to determine the proper outcome and provide the required justification for the CFIA’s decision themselves. As such, it was decided that the appropriate remedy was to remit the matter to the CFIA to re-determine it itself. The Court of Appeal encouraged the CFIA to receive submissions from the affected parties, including Dr. Kattenburg and Psagot Winery Ltd., and to determine whether Charter rights and freedoms are relevant to its decision-making. Notably, Al-Haq and Canadian Lawyers for International Human Rights (CLAIHR) had previously filed a joint motion seeking leave to intervene in the appeal before the Canadian Supreme Court in this case. The Court of Appeal clarified the CFIA will not be bound by the Federal Court judge’s reasons, but its interpretation and application of the relevant provisions to the facts in issue must be reasonable.

Al-Haq views the Federal Court of Appeal’s recent decision as a critical opportunity for Canada to fulfill its legal obligations to not aid in the maintenance or expansion of the illegal settlements, in compliance with its own domestic policy and international law.

The ruling also suggests that the CFIA, which is reconsidering its decision, ought to receive submissions from interested parties. This means that the CFIA may take into account the arguments of Al-Haq, Canadian Lawyers for International Human Rights (CLAIHR), Independent Jewish Voices Canada, Amnesty International Canada, Centre for Free Expression, UN Special Rapporteur Michael Lynk, Arab Canadian Lawyers Association, and Transnational Law and Justice Network, who had previously filed as intervenors at the judicial review stage in Kattenburg v. Canada (Attorney General), 2019 FC 1003.

Finally, Al-Haq urges the CFIA to take into account the ongoing International Criminal Court investigation into the Situation in Palestine, which includes the admissibility of the construction of illegal Israeli settlements in the OPT, and appropriation of lands for commercial settlement enterprises, such as Psagot.

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