Central Bank should carry out ‘immediate’ review of Israeli war bonds – report

By Cate McCurry, PA

The Central Bank should carry out an “immediate” internal review before it renews a request from Israel to continue to facilitate the sale of its war bonds, an Oireachtas committee has said.

The Joint Committee on Finance made the recommendation in its report on the Israeli Bonds Programme, published on Tuesday.

The cross-party committee stated that the Central Bank of Ireland should review the process for the approval of the prospectus for the sale of Israeli bonds within the European Union.

Under the EU Prospectus Regulation, a prospectus must be drawn up, approved and published when securities are to be offered to the public or admitted to trading on a regulated market in the EU.

Third Country issuers must choose an EU country as their Home Member State, and follow certain criteria set out in the prospectus regulation.

Prior to 2021, the UK was the EU Home Member State for Israel. Ireland was then chosen as the new state after the UK’s left the EU.

The bank is the designated authority in relation to the sale of Israel bonds in the EU, and has determined the securities meet the standards of the bloc’s prospectus regulations.

The committee’s chairwoman, Sinn Féin’s Mairead Farrell, said the Central Bank’s facilitation of Israeli bonds arose as “a matter of concern”.

“In line with these engagements, the committee understands that the Central Bank may only refuse the approval of a prospectus where the Central Bank has legal basis to do so,” she said.

“Early in its establishment in this Dáil, the Joint Committee took the decision to carry out an in-depth consideration of the holding of the prospectus for Israeli Bonds by the Central Bank of Ireland, with the aim of determining if there are any avenues available to the Central Bank to refuse to facilitate the prospectus.

“The Joint Committee held two public sessions on this topic in June, meeting with officials from the Central Bank of Ireland; representatives of the Ireland-Palestine Solidarity Campaign; and expert in international law, Dr Munir Nuseibah of Al Quds University in Jerusalem.

“Ireland has been to the forefront and steadfast in its position of support and solidarity with the people of Palestine, but we must ask ourselves are we doing everything we can.

“The issuing of bonds by the State of Israel is seen to assist in the financing of Israel’s continued violations of human rights.

“As such, the facilitation of the prospectus by the Central Bank raises issues of significant concern for the Joint Committee, not only around moral obligations but also obligations under international law.

“This report details the various obligations flowing from EU law, international law, and how those obligations interact.”

The Joint Committee makes 15 recommendations in its report.

“These include that the Government engage at EU level with a view to amending the EU Prospectus regulations to permit each individual European Central Bank to refuse to act as a Competent Authority;

The Central Bank engage with other EU Central Banks to develop a mechanism whereby an individual Central Bank can refuse to process any new prospectus certification request;

 

The Central Bank as the competent authority shall conduct an immediate internal review in advance of any renewal in September of the Israeli bond prospectus with the intention of determining whether it is in compliance with the Prospectus Regulation in terms of the required level of disclosure, accuracy and transparency;

Pending the outcome of a compliance review of the Israeli Bond Prospectus under Article 32.1D of the Regulation, the Central Bank of Ireland exercises the powers vested in it, by refusing to certify the renewal of the prospectus or any new applications for the certification of a related prospectus, until such a time when it is satisfied that it is in compliance with the rules as set out in the Regulation.

The Central Bank seeks legal advice and makes information available which clarifies that their decision in approving a prospectus is not in breach of international law.

The Government consider what national restrictive measures are possible in relation to the approval of prospectuses by the Central Bank of Ireland, which could be used to ensure compliance with the International Court of Justice (ICJ) opinion of July 2024.

Ms Farrell said the committee believes the review should seek supplementary information from Israel.

“It should include an examination of the completeness of the bond prospectus and a request that further information be provided by the Israeli authorities.

“This should take into account the nature of the case taken by South Africa against Israel under the Genocide Convention and the interim findings of the ICJ in that regard, the ICJ advisory opinion of July 2024 in respect of the illegal situation created by Israel in the Occupied Palestinian Territories, and any other pertinent matters in respect of international law.

“The Joint Committee is of the view that an amendment to the Prospectus Regulation to allow individual European Central Banks to refuse to act as competent authority is necessary in order to allow individual member states to make decisions which align with their stated position, and indeed, with obligations under international law.

“The Committee further believes that the Central Bank is vested with powers that it has not yet exercised and makes a number of recommendations identifying areas which may provide the Central Bank with the opportunity to desist from facilitation of the prospectus.

“The Joint Committee encourages the Central Bank to exercise the powers available to it in this regard.”