Yes, it is. Illegal settlements break the highest norms of international law. These include the prohibition to acquire territory by the use of force, the prohibition on colonialism and apartheid, the right to self-determination, and the fundamental norms of international humanitarian law. All States and international organizations, including the EU and its Member States, have obligations to not recognize and not assist breaches of these norms. Trade, however, both recognizes illegal settlements and assists them and their expansion.