I found the following information in a thread on Mamta's Kitchen forum:
Because it is EU-designated external use only, [mustard oil] is therefore exempt from shipping regulations that would apply to foods. Thus, it can be shipped in a container truck that had previously contained, say, motor oil, or even something worse. This probably was the cause of the poisonings, because people have been consuming mustard oil for millennia without ill effect despite the current EU designation – which seems to be causing greater problems than it is trying to save us from.
I haven't personally verified this statement, but if true, it's best to avoid the "for external use" oil.