December 15, 2020 | Policy Brief

Occupied Territories Bill in Ireland Is Dead on Arrival

December 15, 2020 | Policy Brief

Occupied Territories Bill in Ireland Is Dead on Arrival

Amid a COVID-19-induced economic recession, Irish independent Senator Frances Black has revived a draft law targeting Israel after a previous failed attempt. The Occupied Territories Bill, if enacted, could have disastrous consequences for U.S. economic relations with Ireland – and Ireland itself.

The Occupied Territories Bill seeks to criminalize trade in goods and services produced in Israeli settlements. When the bill was initially introduced in January 2018, it triggered a sharp denouncement from the Irish government and U.S. policymakers.

During the 32nd session of the Irish parliament, which was dissolved in January 2020, the bill reached the seventh of 10 steps toward becoming law. Unpassed bills typically lapse at the end of Ireland’s parliamentary session and must begin the process anew in the subsequent session. However, Black succeeded in now having the bill reinstated at the same stage during the 33rd session.

If enacted, the bill could force U.S. companies with an Irish division or subsidiary to choose between one of two costly options: violate Irish law by continuing to do business with companies and persons in Israeli settlements, or violate U.S. law by participating in a foreign boycott not endorsed by the U.S. government. Major U.S. companies, including Apple, Google, Microsoft, and Facebook, employ over 155,000 people in Ireland. All four of these corporations have substantial research and development centers in Israel. Not only would these and other U.S. companies risk running afoul of U.S. federal law prohibiting compliance with an unsanctioned boycott, they would also be violating nearly two dozen U.S. state laws that prohibit unauthorized boycotts against Israel.

The bill has already received sharp criticism from officials of Ireland’s two leading political parties, as well as bipartisan criticism from the U.S. Congress. Earlier this year, Irish Prime Minister Micheal Martin of Ireland’s Fianna Fail party asserted that the bill would violate EU trade regulations by undermining the European Union’s exclusive right to determine trade policy for its member states.

Irish Foreign Minister Simon Coveney of the Fine Gael party has made similar assertions. In addition, Irish Attorney General Séamus Woulfe weighed in that the bill would be “impractical” to enforce.

In a 2019 letter to the Irish prime minister, then-House Foreign Affairs Committee Chairman Eliot Engel and Ranking Member Michael McCaul warned that “passage of this law could have broader consequences, such as making American companies choose between violating Irish law or U.S. Export Administration Regulations.”

In addition to the bill’s problematic substance, the timing of the bill’s reintroduction is surprising. The COVID-19 pandemic triggered an economic recession in Ireland. Like most countries, Ireland will face many challenges in reviving its downtrodden economy, but it is better positioned than most European countries due to the presence of multinational corporations. The revenue Ireland earns from major U.S. companies will be critical to its recovery. The bill, if enacted, would inevitably strain U.S.-Irish economic relations and compromise Ireland’s economic recovery.

Black’s efforts also run counter to recent regional developments. The Abraham Accords between Israel, the United Arab Emirates, and Bahrain inspired a series of other normalization agreements between Israel and countries in the Middle East and South Asia. According to Israel’s Ministry of Economy, the normalization ties could be worth up to $500 million in bilateral trade and investment between Israel and its new partners. As more Arab states commit to shared prosperity, Black’s bill could alienate Ireland from future business deals.

The incoming Biden administration has expressed its support for normalization in the Middle East, signaling its commitment to build on recent successes. The proposed legislation would put Ireland at odds with the United States and other countries working to advance peace in the Middle East. In all likelihood, however, the Irish majority government will not allow the legislation to move forward, thereby safeguarding U.S.-Irish economic ties.

Julia Schulman is senior director of special projects at the Foundation for Defense of Democracies (FDD). For more analysis from Julia and FDD, please subscribe HERE. Follow FDD on Twitter @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

COVID-19 Gulf States Israel Lawfare