Private Members Bill Restrictive Financial Measures (State of Israel) Bill 2025: Opening Speech by Minister for Finance Paschal Donohoe

Introduction

Ceann Comhairle, I welcome the opportunity to discuss this Private Members’ Bill which was introduced by Deputy Pearse Doherty in the Dáil on 21 May.

At the outset, I wish to say that the government understands the intentions behind this Bill. Respect for international law is at the core of Ireland’s foreign policy. Ireland has been vocal in calling for Israel to comply with international law. As reflected in the Statements made by the Taoiseach and Tánaiste in the House last week, we condemn Israel’s illegal annexation of the Occupied Palestinian Territories, as well as the catastrophic humanitarian situation arising from Israel’s war in Gaza.

Ireland has taken an active role in the preparations and conduct of the forthcoming UN High-Level Conference on Implementing the Two-State Solution, which will take place in New York this June.

Ireland also continues to push for action at an EU level, and we are starting to see results. We welcome the announcement that the EU will conduct a review of the Association Agreement with Israel. This is a step that Ireland and Spain first called for in February 2024. This is an important decision, reflecting the grave concerns held by Member States regarding the ongoing military operations by Israel and the blockade of humanitarian aid entering Gaza.

By contrast to these interventions at multilateral level, the Bill before us today represents a unilateral effort to attempt to curtail the ability of Israel to raise financing on the international markets.

As Deputies will be aware, this is not the only legislative initiative that addresses aspects of Ireland’s obligations under international law vis-a-vis its relations with Israel. The Tánaiste today brought a Memorandum to Government to Cabinet requesting approval for the preparation of the general scheme of a bill to prohibit imports from illegal settlements in the Occupied Palestinian Territory. So this government will not be found wanting in terms of taking meaningful steps.

It is important to note that these bonds are not listed on the Irish Stock Exchange, or on any EU stock exchange. These bonds are targeted at retail investors, and to purchase the bonds, you may subscribe for the bonds through the promoters, who are based in London, Paris and Frankfurt.

Objectives of this Bill

On the legislation before us now, its objective is to end the sale of Israeli bonds across the European Union.

To reflect on some of the discourse and commentary on Ireland’s connection to Israeli bonds for a moment, it is important that we are precise in our language. The Central Bank does not sell or oversee the sale of Israeli bonds. The Central Bank’s role, under EU legislation, is to assess the bond prospectus to ensure that it includes all the disclosure requirements of the Prospectus Regulation. Neither the issuer – in this case the State of Israel – nor the financial products – the government bonds – become regulated or endorsed as a result of the assessment.

The Central Bank is required to approve the prospectus if the disclosure meets the standards of legality, completeness, consistency and comprehensibility as set out in the Prospectus Regulation and associated legislation. The Central Bank has confirmed that the prospectus documentation for the Israeli bond programme contains all the necessary information as required under the Prospectus Regulation. In order for the Central Bank to refuse the approval of a prospectus, it must have a firm legal basis on which to do so. The intent of the Bill before us today is to provide that legal basis.

However, there are questions around the efficacy of the Bill in this regard.

Section 4 of the Bill sets out the restrictive measures that may be taken. These include a prohibition on the sale or purchase of any security or class of security and a prohibition on the provision of any investment service or activity for the purpose of issuing or providing assistance in relation to their issuance. It is important to note that these provisions will not prevent the Central Bank from carrying out its role under the Prospectus Regulation.

Section 4(c) seeks to provide a means of restricting or prohibiting the Central Bank from fulfilling its obligations under the Prospectus Regulation. However, by seeking to permit the Central Bank to step outside binding EU financial services legislation, it is thought that such measures would be judged inconsistent with EU law and therefore subject to potential legal challenge. In addition to legal challenges, Deputies can also appreciate that any attempts by the government to introduce measures outside the agreed EU financial services framework could pose a significant policy risk for Ireland.

For the first time in the State, this Bill introduces a national sanctions regime. Ireland implements all sanctions measures negotiated, agreed and introduced at EU and UN level. They are an important tool to promote the objectives of the EU’s Common Foreign and Security Policy.

Sanctions are stronger and more effective when done at the multilateral level. Rather than being seen to do something, it is far better to ensure that the outcome is effective and persuasive when done in cooperation with others.

Furthermore, the advice provided to me is that this Bill conflicts with Article 215 of the EU Treaty, which is intended to preclude individual Member States from issuing their own restrictive measures in an ad hoc or inconsistent manner, which may tend to undermine the integrity of certain aspects of the EU’s external affairs policy.

There are also concerns around extraterritoriality; statements by Deputy Doherty indicate that the Bill is intended to prevent the sale of Israeli bonds throughout the EU.[1] We cannot propose national legislation that prohibits the sale of something at EU level. Any actions taken by Ireland must recognise the distinction between policy areas that are of national competence and those that are of EU competence.

Even if this Bill were to be enacted, Israeli bonds will still be available to retail investors across the EU and further afield. Government does not support enacting legislation that is ineffective.

Legal/procedural issues with this Bill

I have received preliminary advice from the Attorney General which points to this PMB conflicting with EU Treaties and our obligations as a Member State, which suggest that it is unworkable. Importantly, this Bill does not materially impact on the ability of Israel to raise money by selling bonds.

If our goal is to uphold the international rule of law, then we must be sure not to violate it. This Bill does not meet the threshold to be considered consistent with EU and international law.

Conclusion

While the government understands the motivation and intentions behind the Restrictive Financial Measures (State of Israel) Bill 2025, the legislation is unworkable. The Bill would not be effective in achieving its stated objectives.

It proposes to introduce domestic restrictive measures, which would be ineffective. It would also move away from a stronger multilateral approach where Government is active in building a consensus at EU and international level to support the implementation of a negotiated two-State solution and a lasting peace.

Whether Opposition parties appreciate it or not, we must be mindful of the legal realities when trying to address such difficult situations. It is the government’s responsibility to ensure that any solution proposed can actually work and is constitutionally, legally and operationally robust. For those reasons, we will oppose the Bill.

So while we oppose this today, we must be mindful of the measures Government is taking. I refer to the approval this morning by Government to advance legislation to regulate trade with illegal settlements in the Occupied Palestinian Territory in accordance with the commitment in the Programme for Government, along with our continued engagement in the EU and international system to build consensus for a lasting peace.

Thank you.

ENDS

[1]“The Bill would give the Minister for Finance the explicit power to intervene to stop Israel using Ireland to raise money in Europe, money that pays for the bombs and the tanks and the weapons being used to slaughter children. We have the ability to end the sale of Israeli war bonds across the European Union.” Deputy Pearse Doherty, Restricted Financial Measures (State of Israel) Bill 2025: First Stage, Dáil Éireann debate - Wednesday, 21 May 2025