It seems the UK government is complaining about its own loose ends.
Last week, UK Foreign Secretary Ed Miliband said there needed to be a “step change” in the UK government’s approach toward Israeli settlement construction in the West Bank. The UK would amend its sanctions regime to enable the further targeting of settlements and stop UK companies assisting in settlement construction, he announced.
He has stirred up a hornet’s nest – but definitely not peace.
The announcement acknowledges that Israel has “argued” against the characterization of the “Occupied” Palestinian Territories; they are “disputed” territories.
The UK government expects the new sanctions to be brought into force “in the next few weeks” – i.e., can be canceled after the Israeli election on October 27.
The UK’s legal framework for sanctions is primarily governed by the Sanctions and Anti-Money Laundering Act 2018. Individuals can request that a minister review or revoke their designation. If the minister maintains the sanctions, the individual can then challenge the decision in court.
Comment: Winston Churchill originally sought an Irish-style partition plan regarding the West Bank in the 1920s. It seems the UK government is complaining about its own loose ends.
Geneva Convention
The Fourth Geneva Convention Article 49 Paragraph 6 states: “The Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies.” This rule is widely interpreted by international bodies such as the Red Cross to ban the creation of settlements in occupied territories.
The problem is Israel didn’t “deport or transfer” the Jewish population to Judea and Samaria, the “West Bank settlers” voluntarily chose to buy property and live there based on biblical precedent.
Free-trade agreement
Israel and the EU have a free-trade agreement. Following the UK’s departure from the EU in 2020, the UK and Israel entered into a continuity agreement known as the Trade and Partnership Agreement on January 1, 2021.
The UK is defined; Israel apparently isn’t defined. Products certified as originating in the UK or Israel by the customs authorities of the exporting country shall benefit from the free-trade provisions of the agreement.
Comment: Is the UK government reneging on the Trade and Partnership Agreement?
Position of US states
About 38 US states have laws against boycotts on Israel. These laws might cost British companies dearly.
One example with an affluent population and clear legislation is Florida, which maintains a blacklist of “scrutinized companies or other entities that boycott Israel.”
According to Florida law:
• A statement by a company that it is in compliance with, or calls for, a boycott of Israel, may be considered by the State Board of Administration (SBA) to be evidence that a company is participating in a boycott of Israel.
• A company or other entity is ineligible to submit a proposal for, or enter into a contract with, an agency or local governmental entity for goods or services if it boycotts Israel.
• Public investment and pension funds under the SBA must make best efforts to identify all scrutinized companies in which the public fund has direct or indirect holdings. If after 90 days following the public fund’s first engagement with a company, the company continues to boycott Israel, the public fund must divest all publicly traded securities of the company within 12 months.
Recent casualties of Florida’s “scrutinized companies” list include Airbnb in 2018, when it tried to remove roughly 200 West Bank listings; and Ben and Jerry’s parent Unilever in 2021, when it tried to ban West Bank sales.
No Florida tax on British ecommerce?
Some say a British business participating in a boycott might be unable to do any business needing official interaction with Florida state or local government to operate, such as permits or tax collection. How can you do business if you cannot pay tax thereon?
Ireland: The UK should get real. The British Empire’s record is awful. Regarding Ireland, the period of 829 years from England’s conquest of Ireland in 1169 to the Good Friday Agreement of 1998 was marred by bloodshed, cruelty, and famine. The 30-year period starting in the late 1960s, known as the Troubles in Ireland, resembles the West Bank issues – but nobody boycotted Belfast products.
Britain should use its extensive Irish experience to encourage all parties to adopt a mutually beneficial economic solution across the Middle East, e.g., based on Gaza gas development. That experience would be more appreciated than sanctions.
As always, consult experienced professional advisers in each country concerned at an early stage in specific cases.leon@hcat.co
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.