Sunday 21 July 2019

Eli Lake: 'Ireland must ask if boycott plan is worth the potential cost'


A view of Jerusalem
A view of Jerusalem

Eli Lake

Since its founding, the movement to boycott, divest and sanction (BDS) Israel has largely been symbolic. Since the BDS movement began in 2005, Israel's GDP has doubled.

Now legislation scheduled for debate this week in the Dáil would criminalise any transactions with businesses or individuals living in Israel's West Bank. The Control of Economic Activity Bill would impose jail for up to five years and heavy fines on Irish citizens who import or sell products from the West Bank. Crucially, it would require foreign companies with divisions or subsidiaries in Ireland to adhere to the boycott as well.

Because of Ireland's low corporate tax rates, many of the world's largest companies keep their wealth here. US companies accounted for 67pc of all foreign direct investment in the country in 2017, and Ireland is especially popular with America's tech giants. Apple is Ireland's largest company. Google, Microsoft and Facebook are also in the top 10.

A big reason why Israel's economy has boomed since the inception of the BDS movement is because America's tech giants have set up branch offices and bought promising Israeli tech startups. The Irish legislation, if it becomes law, would force Apple, Google, Microsoft and Facebook to choose between their Irish tax haven and their business in the Jewish state.

While the proposed law only targets the West Bank territories, not all of Israel, in practice it would be difficult to enforce that distinction. Orde Kittrie, a law professor at Arizona State University and a senior fellow at the Foundation for Defence of Democracies, told me that it would probably violate the proposed law if Apple allowed an Israeli employee living in the West Bank to telecommute. The distinction becomes even thornier given that Ireland considers all of East Jerusalem to be "occupied territory".

This would place US companies in a bind. If they follow Irish law, they would have to either fire the telecommuting employee or not allow the employee to work from home. If they did that, however, the companies would be participating in a boycott not sanctioned by the US government.

That, as Kittrie observed last year, would in turn risk violating the anti-boycott sections of US export regulations.

Leaving aside the problems the Irish BDS bill creates for US companies, there are other reasons why some Irish lawmakers have opposed it. Foreign Minister Simon Coveney has said he worries the legislation would violate EU directives, noting that Ireland's attorney general has called the bill "legally unsound".

Popular sentiment in Ireland has long sided with the Palestinians over the Israelis. But the Irish proposal comes with a cost. Is Palestinian solidarity worth squeezing some of Ireland's largest companies?

Eli Lake is a columnist with Bloomberg

Irish Independent

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