Statement by Tánaiste -Dáil Debate on Control of Economic Activity (Occupied Territories) Bill 2018

Speech

Control of Economic Activity (Occupied Territories) Bill 2018 (Private Members’ Bill)

Dáil Second Stage Debate, 23 January 2019

Speech by Tánaiste and Minister for Foreign Affairs and Trade, Simon Coveney T.D.

CHECK AGAINST DELIVERY

I am glad to be able to speak to this Bill today. The Bill merits very careful consideration, in all its aspects.

I have addressed this Bill already in the Seanad. I will not therefore repeat what I have already said about my activities on the issue of the Israeli-Palestinian conflict. I trust Deputies will recognise the priority I have attached to this issue, and the time I have devoted to it. This has included work on the political process, on Gaza, and keeping up consistent pressure at EU and international level against the expansion of settlements.

Ireland has also been to the fore in shaping EU policies on settlements, including the exclusion of settlement products from normal tariff levels, preventing EU research funding being spent in settlements, preventing misleading labelling of settlement goods, and providing for the specific exclusion of settlements from future EU agreements with Israel. Ireland also supports Israeli, Palestinian and international NGOs which defend Palestinian communities under threat from settlements.

No Member of this house attaches greater importance than I do to bringing Ireland’s influence to bear to help end the occupation of the Palestinian territory, to promote a two-state solution that works for Israel and Palestine, and to deliver a sustainable peace after decades of conflict.

However, speaking on behalf of the Government, I am unable to agree that the Bill is the right way forward. I wish to set out carefully for the Dáil why this is so. There are three broad reasons: legal, political and the practical effects.

The overriding point that frames the Government's view is that the Bill asks the State to do something that is not within our power. Ireland is part of a single unified EU market. Trade is an exclusive competence of the European Union.

We are not in a position to raise a barrier and declare that it is prohibited to bring to Ireland, for sale or personal use, goods which enter the EU legally, and are freely circulating elsewhere in the Single Market.

This is the meaning of the Single Market – the defence of which is something which the EU takes very seriously, as we have seen in the context of Brexit. The integrity of the Single Market is in Ireland’s overall interest.

The formal advice to the Government of the Attorney General on this matter has confirmed that passage of the Bill would put Ireland in breach of EU law and expose Ireland to legal action by the European Commission, as guardian of the Treaties.

Some supporters of the Bill have put forward legal opinions which highlight a “public policy” exception, which states that provisions on free circulation of goods do not preclude, “prohibitions, quantitative restrictions or surveillance measures on grounds of public morality, public policy or public security.”

However, I am strongly advised that the European Court of Justice has shown in previous cases that it will not allow this term to be interpreted broadly.

A broad interpretation of the “public policy” exemption would so obviously have implications for the EU’s exclusive competence on trade, that it is entirely foreseeable that a challenge by the European Commission would follow. Our informal soundings do indeed lead us to consider that extremely likely.

And should Ireland be found to have breached EU law, as we would expect, the State would be exposed to potentially very significant fines, as well as legal costs. Fines recommended by the Commission in such cases can include lump sums of over €1.5 million, plus daily fines. Cumulative annual costs of these fines can range from hundreds of thousands of euros per year at the lower end of the scale, up to tens of millions of euros per year at the highest end. No Government, nor any responsible opposition, could support intentionally breaking EU law, and exposing the State to such significant penalties.

The Bill could also be challenged by companies or individuals claiming to be adversely affected by it. And in addition to legal costs arising in these circumstances, a finding against Ireland in favour of a private party could give rise to damages being awarded against the State.

In addition, costs would also arise for the relevant authorities in the implementation of the law, which would create new offences, the investigation, enforcement and potential prosecution of which would have resource implications for the customs authorities, An Garda Síochána and the criminal justice system more broadly, including the prison system. Additional costs will also arise from voted funds for certain Irish diplomatic missions abroad should this Bill be enacted.

I should state clearly at this point that because of these costs across a wide range of areas, there can be no doubt that the Bill will require a Money Message in order to proceed to Committee Stage.

I should also mention briefly some other legal and constitutional difficulties identified with the Bill, including the use of Ministerial regulations to extend the scope of the Bill, aspects of the extraterritorial application of this Bill, and constitutional difficulties around the legal certainty and capability of enforcement of some criminal offences contained in the Bill.

The political effects of the Bill are also an important consideration. Ireland has a stronger voice, and greater influence on Middle East issues generally at UN and EU level, than our size alone would justify. That is where we are able to be of most help to the Palestinian people – indeed, both the Israeli and Palestinian people – in achieving peace.

My fear is that if Ireland adopts this Bill, we would be choosing to be a principled voice in the wilderness, satisfied in the righteousness of our course, but largely unable to influence the real action.

I am in no doubt, from my experience of discussions on this issue at EU level, that a unilateral move by Ireland on this matter would weaken our ability to influence overall EU policy, not strengthen it. If we allow ourselves to be discounted in the calculations that other states make, about where the centre of gravity on Middle East policy lies, then we cease to shape that political centre of gravity.

The third basis on which the Government must oppose the Bill is the assessment of its practical effects, including practical challenges and costs of compliance for Irish companies which trade internationally.

For example, US companies in Ireland, and Irish companies in the US, could be placed in an impossible conflict of jurisdictions. Legislation was under discussion in the United States Congress in 2018 to forbid companies based in the US from cooperating with trade bans on Israel and Israeli settlements. Such proposals have enjoyed strong cross-party support in the US, so such legislation may well be passed into law. Similar legislation already exists at state level in many US states. Irish Missions and state agencies in the US have already received queries from companies concerned about this impact of the Bill, and the lack of clarity on their legal obligations.

Ceann Comhairle,

This Bill is a sincere attempt to address a real issue. If enacted, it would provide a moment of solace for Palestinians at a difficult time. But the solace would only be momentary.

Legislation must be designed by the head as well as the heart. And it is the job of any Government to assess the balance of positives and negatives of any policy option.

The Bill before us will not significantly impact on Israeli settlements.

Conversely,

-          It will place Ireland in breach of EU law. That alone should be enough to make it impossible to vote for it. But it will also:

-          Lead to Ireland facing legal challenge and the strong likelihood of very significant penalties, as well as being obliged to repeal the law, and possibly pay damages to those with economic interests in settlements;

-          It will diminish Ireland’s influence on behalf of the Palestinians at EU level;

-          And it will create difficulties for Ireland and for companies in Ireland with compliance, including with US legislation.

Ultimately, despite being well and sincerely intentioned by its original authors, this Bill will do serious damage to Ireland and bring only momentary consolation to Palestinians. For these reasons, no responsible party of Government could support this Bill and this Government must and will oppose it.  Thank you.

ENDS

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