Israel offers cash to firms hit by trade ban; Europe dithers on new rules

The Israeli government plans to pay companies in illegal settlements up to ۲۰۰,۰۰۰ shekels ($۵۴,۰۰۰) following a commitment by European countries to ban their goods amid escalating human rights abuses against Palestinians in the occupied West Bank.

Roey Fisher, head of Israel’s Foreign Trade Administration at the Ministry of Economy and Industry, told Israeli media outlet Calcalist that it has set up a “dedicated team” to help companies operating in illegal settlements find “alternative markets”, including the Philippines, India, the United Arab Emirates, Chile and Argentina. The assistance also covers exporters of fresh produce, and more than ۲۵ applications for assistance have already been submitted by companies expected to be affected, the report added.

Fisher, however, played down the immediate reach of the bans. “Not everyone is boycotting us,” he told Calcalist, pointing to differences between European countries. “Right now, Spain and the Netherlands are among the only places in Europe where there is an effective boycott,” he said. “The countries that have announced boycotts, including England, have not applied them to all Israeli exports.”

Julie Norman, an associate fellow at Chatham House, told Al Jazeera the grants would provide a “significant lift” for exporters seeking new markets, but said the financial impact of the bans remained “uncertain”. She said the grants were unlikely to fully offset lost sales in the short term, with the UK and EU together accounting for “over a third of Israel’s exports”.

But Norman said the government support highlighted a broader challenge for countries seeking to economically target settlements. “The question of the grants highlights the challenge for states like the UK or European states when trying to target the settlements, when the settlements themselves are still supported by the Israeli government,” she said.

Shamiul Joarder, director at Friends of Al-Aqsa, a UK-based nonprofit, told Al Jazeera that government support helping exporters find alternative markets could “cushion the commercial impact” of the bans. “This demonstrates why targeting settlement goods alone is insufficient, as the settlement economy can simply redirect its trade elsewhere,” he added.

Which import bans are actually in force?

While a growing number of countries have pledged to restrict trade with Israeli settlements, far fewer have actually put those measures into force. On September ۸, Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the United Kingdom issued a joint statement saying they intended to introduce national restrictions, support restrictions at the European level or were considering such measures.

But among those countries, only a handful have enacted restrictions. Spain and Ireland have introduced measures targeting imports of settlement goods, while the Netherlands brought its ban into force on September ۲۲.

The Dutch measure goes further than some others. It prohibits the import, purchase and sale of goods from illegal Israeli settlements in occupied Palestinian territory, as well as services facilitating that trade and attempts to circumvent the restrictions. Its significance also extends beyond the Dutch market, with the Netherlands serving as a major gateway for goods entering the rest of Europe.

Elsewhere, measures remain at various stages and are not yet operational. Belgium’s cabinet approved a draft measure on July ۱۸ that would systematically refuse import permits for goods identified as coming from Israeli settlements. But the proposal includes a ۱۲۰-day transition period and was sent to the Council of State for an opinion, meaning cabinet approval alone did not bring it into force.

Norway has put forward draft legislation that would go further than an import ban, prohibiting both imports from and exports to illegal Israeli settlements. But the legislation has yet to enter into force, with the Norwegian government listing it as still under consideration.

France and Canada have pledged national measures that have yet to take effect. Denmark, Finland, Iceland, Poland, Portugal and Sweden signed the joint statement, but none has announced that a national ban on settlement goods has entered into force. Sweden has instead proposed restrictions at the EU level, including higher tariffs on settlement goods and new export-certificate requirements.

Meanwhile, in the UK, Foreign Secretary Ed Miliband said the legislation would be introduced within six to nine months, leaving a gap between the government’s pledge and any ban taking legal effect.

Norman said the UK’s six-to-nine-month timetable could give officials time to work through the practical details of implementing the ban. “I think that is to just work out logistics, and for UK firms to adapt so they don’t hurt their own domestic businesses,” she said.

The delay could also allow the government to wait for Israel’s elections, she added, “and see what the outcome is there, and how a new government approaches settlement expansion”.

Even in the United States, Israel’s closest ally, a group of senators has introduced a separate bill seeking sanctions against people involved in constructing Israel’s E۱ settlement project in the occupied West Bank. It remains a proposal rather than a trade restriction in force.

But Israeli media reports suggest the country also sees the US as a potential avenue for relief should the import bans come into force, with lobbyists reportedly pushing for sanctions relief. There have also been warnings that the bans could trigger sanctions from US states under anti-boycott legislation.