Israel Offers Cash to Help Settlement Firms Evade EU Bans

Israel is throwing money at businesses stuck by European trade bans while Europe struggles to agree on fresh rules. The goal? To steer goods away from outlawed Israeli settlements toward buyers in Asia and South America. Yet, whether these European bans actually work remains a shaky question, as many nations have not yet put them into practice.

The Israeli government has promised payouts of up to 200,000 shekels, about $54,000, to firms located in illegal settlements. This move follows promises from several European countries to stop buying their products after human rights abuses against Palestinians in the occupied West Bank got worse. Roey Fisher, who leads Israel's Foreign Trade Administration at the Ministry of Economy and Industry, told Calcalist that a special team is now helping companies find new buyers. They are looking at markets like the Philippines, India, the United Arab Emirates, Chile, and Argentina. This aid covers exporters selling fresh food too. More than 25 companies expect to get help, and they have already submitted requests for it.

Fisher tried to downplay how far these bans reach right now. "Not everyone is boycotting us," he told Calcalist, noting that European countries are not on the same page. "Right now, Spain and the Netherlands are among the only places in Europe where there is an effective boycott," he said. Even nations that announced a boycott, like England, have not stopped all Israeli exports.

Julie Norman, an associate fellow at Chatham House, told Al Jazeera that these grants would give exporters a "significant lift" when hunting for new markets. She admitted the financial hit from the bans is still unclear. The money likely cannot fix lost sales quickly because the UK and EU together make up over a third of Israel's exports. Norman also pointed out a bigger problem for countries trying to hurt settlements economically. "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 nonprofit based in the UK, told Al Jazeera that this government support could "cushion the commercial impact" of the bans. He argued it shows why hitting settlement goods alone is not enough. The settlement economy can simply send its trade elsewhere if needed.

So which bans are actually working? Many countries have pledged to restrict trade with Israeli settlements, but far fewer have taken real action. On September 8, Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden, and the United Kingdom issued a joint statement. They said they intended to introduce national restrictions or support rules at the European level. Some were just considering measures.

Among those nations, only a handful have acted. Spain and Ireland have introduced rules targeting imports of settlement goods. The Netherlands made its ban official on September 22. This Dutch rule is stricter than others. It bans importing, buying, and selling goods from illegal Israeli settlements in occupied Palestinian territory. It also targets services that help make this trade happen or try to get around the restrictions.

The Netherlands matters more than just local trade because it acts as a primary entry point for goods heading throughout Europe. Elsewhere, rules sit in different stages and are not yet active. Belgium's cabinet gave green light to a draft on July 18 that would automatically reject import permits for items traced back to Israeli settlements. Yet the plan includes a 120-day transition period before it starts. That proposal went to the Council of State for feedback, so approval by the cabinet did not make it law immediately.

Norway has drafted laws going further than a simple ban. They would stop both imports from and exports to illegal Israeli settlements. Still, the measure has not taken effect. The Norwegian government lists it as under active consideration. France and Canada have promised national actions that remain on paper. Denmark, Finland, Iceland, Poland, Portugal, and Sweden signed a joint statement, but none of them says their ban is currently in force. Sweden pushed for limits at the EU level instead, suggesting higher tariffs on settlement goods and new requirements for export certificates.

In the UK, Foreign Secretary Ed Miliband stated the legislation would arrive within six to nine months. That creates a space between the government promise and any actual legal ban. Norman explained that this timeline could let officials sort out practical details. "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 might also give the government time 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 introduced a separate bill seeking sanctions against people involved in building Israel's E1 settlement project in the occupied West Bank. It remains a proposal rather than an active trade restriction. Yet Israeli media reports suggest the country also views the US as a potential source of relief if import bans take hold, with lobbyists reportedly pushing for sanction relief. Warnings have surfaced that these bans could trigger penalties from US states under anti-boycott laws.