The Luxembourg-based European Court of Justice said labels must not imply that goods produced in the occupied territory came from Israel, Reuters reported.

Labels must “prevent consumers from being misled” as to the fact that Israel is present in the territories concerned as an occupying force, the court said.

The case focused on a winery in the Israeli-occupied West Bank, but the court referred to all territory Israel invaded in the 1967 war, including East Al-Quds and the Golan Heights, both of which the regime annexed, as well as the West Bank.

On top of wine, Israeli farmers grow and package herbs, fruits, and vegetables in the territories, many of which have been exported to the EU and labeled as “Product of Israel”.

Saeb Erekat, the Palestinian chief negotiator, welcomed the ruling and called on all EU countries to “implement what is a legal and political obligation”.

Palestinians want to establish a state on territory occupied by Israel since 1967. Settlements on occupied land are an unlawful violation of the Geneva conventions and multiple UN resolutions.

Israel’s foreign ministry said it “strongly rejects” the ruling “which serves as a tool in the political campaign against Israel”. Foreign Minister Israel Katz said he would work with foreign ministers of EU countries to prevent its implementation.

In its ruling, the EU court said settlements involved the transfer of Israelis “in violation of the rules of general international humanitarian law”.

As a result, failing to inform EU consumers they were potentially buying goods produced in settlements denies them access to “ethical considerations and considerations relating to the observance of international law”, it said.

Human Rights Watch, which monitors Israel’s activities in the occupied territories, said the court decision was an important step toward EU member states not participating “in the fiction that illegal settlements are part of Israel”.

“European consumers are entitled to be confident that the products they purchase are not linked to serious violations of international humanitarian law,” it said.