Irish bill to boycott Israeli settlements runs afoul of US laws

A bill to be considered by Ireland’s Senate on Tuesday would criminalize trade with Israeli settlements. If enacted, it could put leading U.S. companies with Irish subsidiaries to a choice between violating the Irish law or violating the U.S. Export Administration Regulations, which require U.S. firms to refuse to participate in foreign boycotts that the United States does not sanction.  

In addition to running afoul of U.S. federal law, the bill would subject companies to U.S. state-level sanctions, violate European Union and international law, threaten Ireland’s vital economic links to the United States, and hinder the prospects for peace between Israel and the Palestinians.

{mosads}The bill, titled “Control of Economic Activity (Occupied Territories) Bill 2018, would make it a violation of Irish criminal law for Irish persons and companies to import or sell items, or to provide services, produced in the Israeli settlements. It would punish violators with up to five years in prison. The senator who introduced the bill, Frances Black, previously signed a letter calling for a boycott of all Israeli products and services.

While the bill does not mention Israel or Palestine by name, Black and its other sponsors have announced that it was designed to effectively prohibit Irish transactions relating to Israeli settlers and settlements, including in the West Bank, East Jerusalem, and Golan Heights. The bill would punish Irish citizens and residents, as well as companies incorporated in Ireland, which engage in such transactions, regardless of whether the violation occurs in or outside Ireland. While there are several contentious occupations closer to Europe — including Russia’s occupation of Crimea, Turkey’s occupation of northern Cyprus, Armenia’s occupation of Nagorno-Karabakh, and Morocco’s occupation of Western Sahara — its sponsors suggest that the Irish bill is carefully drafted to apply only to territories occupied by Israel.

To this author’s knowledge, no such law criminally prohibiting trade with Israeli settlements has been enacted in any other European country. Indeed, the Irish bill, if enacted, would be inconsistent with EU and international law. For example, the EU has exclusive competence for the common commercial policy and member states are not permitted to adopt unilateral restrictions on imports into the EU.  

The bill is also inconsistent with the General Agreement on Tariffs and Trade, the international agreement covering trade in goods. As Nikki Haley, the U.S. Ambassador to the United Nations, accurately put it in June 2017:

“Blacklisting companies without even looking at their employment practices or their contributions to local empowerment, but rather based entirely on their location in areas of conflict, is contrary to the laws of international trade and to any reasonable definition of human rights.”

The bill, if enacted, would gravely undermine Ireland’s economic links to the United States, which are vital to Irish prosperity. U.S. investment in 2016 accounted for 67 percent of all foreign direct investment in Ireland. Yet this bill would make U.S. companies with subsidiaries in Ireland, Irish companies with subsidiaries in the U.S., and their employees who are Irish or resident in Ireland, choose between violating the Irish law or violating the U.S. Export Administration Regulations. Violations of these U.S. antiboycott laws are punishable by fines and by imprisonment for up to 10 years.

According to the American Chamber of Commerce Ireland, some 700 U.S. companies employ over 150,000 people in Ireland. The companies include Apple, Dell, Facebook, Google, Hewlett Packard, Intel, Johnson & Johnson, and Twitter. In addition, some 227 Irish companies employ an estimated 120,000 people in the United States.

These companies would also be forced by Irish law to run afoul of some or all of the two dozen U.S. state laws which impose sanctions on companies that boycott Israel. For example, Illinois law requires that Illinois’ state-funded retirement systems divest from “companies that boycott Israel.” “Boycott Israel” is defined to include:

“Engaging in actions that are politically motivated and are intended to penalize, inflict economic harm on, or otherwise limit commercial relations with the State of Israel or companies based in the State of Israel or in territories controlled by the State of Israel.”

Aside from its legal and economic implications for Ireland, the bill would hinder the prospects for peace between Israel and the Palestinians. By trying to impose a one-sided “solution” on Israel, this and other boycott, divestment and sanctions (BDS) measures undermine the possibility of a lasting peace by relieving the Palestinians of responsibility for the absence of peace. This is both wrong and counterproductive. The Palestinian government is paralyzed by the fracture between Hamas-ruled Gaza and the PLO-ruled West Bank.

Designated by the EU as a terrorist group, Hamas is virulently anti-Semitic and hostile to Israel, and rejects the existing agreements between Israel and the Palestinian Authority, let alone the possibility of a lasting future compromise. Relieving Palestinians of responsibility for the absence of peace is particularly ironic coming only two weeks after Mahmoud Abbas, the usually more moderate leader of the West Bank Palestinians, gave a speech to the UN in which he falsely asserted that the Jewish connection to the land of Israel “has been made up.”

By blaming only Israel for the absence of peace, the Irish bill and other BDS measures contribute to Palestinians believing they might not need to negotiate with Israel. Such measures also promote demands (such as a complete evacuation of the occupied territories) that forgo any expectation of compromise and go beyond what Abbas himself offered in 2008.  

While this Irish bill may be amongst the first of its kind in Europe, it seems unlikely to be the last. The anti-Israel BDS movement has been working to tee up such legislation across the continent.

Congress should quickly and systematically reach out to its counterparts in Europe’s parliaments to make sure they understand that boycotts of the U.S.’s close ally Israel run afoul of U.S. federal and state anti-boycott laws, and what that could mean for their countries’ economies.  The U.S. Commerce Department has a small office focused on enforcing compliance with the U.S. federal laws that require American companies to refuse to participate in foreign boycotts that the United States does not sanction.  

While the office has traditionally focused on countering Arab government boycotts of Israel, its statutory authority and mission are applicable to any relevant foreign governments, including European ones. When foreign parliaments consider such legislation, the U.S. Commerce Department should reach out and warn them of the implications.

At the same time, European parliaments should step more carefully as they try to address the Israeli-Palestinian conflict.  Rather than such a careful step, the Irish bill would be a reckless stomp that could squash Palestinian incentives to compromise with Israel, run afoul of U.S. federal and state laws, break EU and international law, and trample Ireland’s vital economic links to the United States. 

Orde F. Kittrie is a law professor at Arizona State University, senior fellow at the Foundation for Defense of Democracies, and the author of “Lawfare: Law as a Weapon of War” (Oxford, 2016).