EU Can’t Sanction? Try Israel

For more than a decade, the West has increasingly used sanctions as its chief weapon to punish bad actors, including states and individuals. Following successes against Apartheid South Africa, Western governments began applying sanctions more widely.

Regimes from North Korea to Iran came under crippling trade bans, as have many lesser offenders, such as Zimbabwe. EU firms are even banned from certain sales to some U.S. states due to the American death penalty.

It has gotten to the point where businesses in the West will have to add a new position to their leadership roster, that of a Chief Sanctions Officer (CSO). He or she would be tasked with keeping the company free and clear from violating sanctions.

The Palestinian-led Boycott, Divestment and Sanctions (BDS) movement has caught on in the EU. BDS activists in Europe tend to promote varied objectives. Some focus on a boycott of Israeli settlements and the goods produced there, while others call for a boycott of everything Israeli until a peace deal is reached.

All of them argue that Israel will withdraw from the territory it won in the 1967 war only if it has a price to pay.

Struggling peace talks

With regard to efforts to resolve the prickly situation between the Israeli government and the Palestinian Authority (PA) that rules the West Bank, talks — which began in July 2013 — have made very slow progress.

The parties face an April deadline for an agreement, under the terms of the talks. Israeli PM Netanyahu plans to make public a framework agreement when he meets with President Obama next month at the White House. But how the framework will deal with difficult issues such as borders and the presence of Israeli settlements on the West Bank and in East Jerusalem, remains unclear.

Accepting the pre-1967 borders is a non-starter for the Israelis. It is possible they would accept a land exchange accompanied by contingent of Israeli troops posted in what would be Palestinian territory.

The PA has rejected having Israeli troops posted on its territory, but it has been open to having a NATO force stationed there. Such a move would help assure Israel that it will have some semblance of security.

This brings us to another key issue, which is the fact Hamas, which controls Gaza, has rejected any peace deal with Israel. Hamas is also opposed to the presence of NATO troops. Hamas wants to rid the region of all Israelis, preferably by warfare.

Settlements still going up

The Palestinians have been infuriated by the continuous settlement construction. Since the bilateral talks began the Israelis have built or advanced plans for more than 11,700 new settlers’ homes on the West Bank and in East Jerusalem. The Palestinians have also balked at the prospect of extending the nine-month negotiating period.

U.S. Secretary of State John Kerry met with PA leader Mahmud Abbas in Paris recently and presented a plan that would demand Israel implement a partial settlement freeze. This would allow the talks to be extended past the deadline. It is unclear how the Palestinians responded to Kerry’s plan, or whether Israel would accept it.

Despite these obvious roadblocks to achieving a peace deal, the EU has basically accepted the PA position, and it has threatened Israel with boycotts and sanctions if it refuses to go along. The prospect of EU sanctions has caused European-based companies to make preparations for their implementation.

Preparing for sanctions

In January, the Norwegian Ministry of Finance announced its decision to prohibit its Government Pension Fund Global from holding positions in two Israeli firms, Africa Israel Investments and Danya Cebus.

The Ministry said it was responding to a November 1st, 2013 recommendation from Norway’s Council of Ethics to exclude the two firms from the fund “due to contribution to serious violations of individual rights in war or conflict through the construction of settlements in East Jerusalem”.

In early February, Danske Bank, Denmark’s largest, blacklisted Israel’s Hapoalim Bank because of its funding of settlements. On February 17, Germany’s Deutsche Bank followed suit and added Hapoalim to its list of companies that it considers ethically questionable for investment, according to a report from the Israeli Walla website.

This month, Haaretz reported leading international companies that had been bidding to build private seaports had dropped out of the Israeli government’s tender. They had concerns over potential political repercussions and the possibility the EU would enact sanctions.

The Israeli government’s purpose in developing private seaports in Haifa and Ashdod is to create competition with inefficient and costly state-owned groups that now operate Israel’s ports. Israel sees them as a way to lower the cost of imported goods and the cost of living.

There is no chance the port projects will press forward with the prospect of EU sanctions or boycotts hanging over the head of Israel.

Conclusion

The point is the BDS movement has legs and the Europeans have taken it up. No amount of comments by Israeli officials that this amounts to anti-Semitism will change this.

The reason why is that the Europeans have accepted the Palestinians’ claims they have been disenfranchised, and the Israelis have stolen the land that has been owned by their families for generations. Israel’s argument that it needs the settlements for the nation’s security will simply not be accepted.

The BDS movement represents the greatest threat to Israel, in its present form, since the 1973 war that it nearly lost. The Israelis will have to make a deal with the PA in spite of all the difficulties, if they hope to avoid sanctions. The PA holds the edge in these negotiations due to all the international support it has received.

The Israeli government faces a choice between making a deal and risking seeing its economy crumble.