How Much Is Ireland Willing to Pay to Boycott Israel?

(Bloomberg Opinion) -- Since its founding, the movement to boycott, divest and sanction Israel has largely been symbolic.

Sure, stars like Shakira and Lorde have canceled concerts. Activists have waged economic war against Israeli hummus. And British professors have shunned their Israeli peers. But none of this has made much of a dent. Since the BDS movement began in 2005, Israel’s gross domestic product has doubled.

Now comes the Irish parliament looking to change all this. Legislation scheduled for debate this week in Ireland’s lower house would criminalize 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 that import or sell products from the territory Israel won in the Six Day War. 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 there. U.S. companies accounted for 67 percent 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.

Which brings us back to Israel. 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 Defense 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 U.S. 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 U.S. government. And that, as Kittrie observed last year, would in turn risk violating the anti-boycott sections of U.S. export regulations.

Leaving aside the problems the Irish BDS bill creates for U.S. companies, there are other reasons why some Irish lawmakers have opposed it. Irish Foreign Minister Simon Coveney has said he worries the legislation would violate European Union directives, noting that Ireland’s attorney general has called the bill “legally unsound.” 

All of these issues will be hashed out this week as debate begins in the lower house of Ireland’s parliament. The bill has to survive several rounds of debate in order to become law. If it passes, Israel’s ambassador to Ireland wrote recently, Ireland would become the most anti-Israel nation on the planet outside of Iran and the Middle East.

Perhaps such a distinction won’t matter to many Irish lawmakers. Popular sentiment in Ireland has long sided with the Palestinians over the Israelis. But unlike much of the performative BDS politics until now, the Irish proposal comes with a cost. Is Palestinian solidarity worth squeezing some of Ireland’s largest companies?

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Eli Lake is a Bloomberg Opinion columnist covering national security and foreign policy. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.

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