The Ahava Dead Sea cosmetics company says it does not expect to be affected by the European Union's stricter funding guidelines, even though the firm produces in the West Bank. But sources close to Israel's talks with the EU say Ahava will indeed by hit.
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On Friday, the EU expects to publish guidelines that would bar funding to entities with links beyond the 1967 borders. The directive would go into effect next year.
Sources say Ahava received grants for four projects in recent years totaling about 1.44 million euros, or NIS 6.8 million. Ahava is based in Israel proper, but its main manufacturing plant is in the Mitzpeh Shalem settlement.
"This decision does not deal with Ahava," the company said in a statement. "The company offices are at Airport City in Lod and are so registered with the Registrar of Companies. Its research activities are carried out at Kibbutz Ein Gedi, which is also within the Green Line."
Sources say the new policy might become the subject of negotiations, similar to talks on an EU demand that products from the settlements be specially labeled. In the latter case, the Europeans simply agreed to let the products be marked with the location where they were made.
The new EU directive deals with funding, not exports. Also, research institutions such as Ariel University are not expected to be affected because they have not been receiving EU funding.
Israel and the EU will soon be negotiating a new research and development pact as part of Horizon 2020, an 80-billion-euro EU program running from 2014 to 2020.
According to the Science and Technology Ministry, between 2007 and 2011, Israelis submitted about 850 applications for funding to the European Union's R&D program, 144 of which were funded to the tune of 210 million euros.