Sinn Féin proposals banning State investment in companies operating in Israeli settlements may be unconstitutional, Minister says

Government privately accused of trying to slow the Bill down as bitter row breaks out over procedure

The Minister for Finance has warned that laws proposed by Sinn Féin banning the State from investing in companies operating in illegal Israeli settlements may be unconstitutional.

In a letter sent this week to the Dáil’s business committee – which itself is now embroiled in an internal row over the proposed Bill – Michael McGrath warned of a raft of issues with the proposed legislation brought forward by Sinn Féin’s foreign affairs spokesman John Brady.

“I am concerned that in its current form the Bill raises significant constitutional and operational issues,” he wrote to Seán Ó Fearghaíl, the Ceann Comhairle and chair of the Oireachtas business committee.

The Illegal Israeli Settlements Divestment Bill 2023 would force the National Treasury Management Agency and the Ireland Strategic Investment Fund to sell off any interests they hold in companies on a UN human rights database of companies operating in illegal Israeli settlements in the Occupied Palestinian Territories.


“The State has a duty to ensure that constitutional rights are adequately protected, and it does not appear that placing unconditional reliance on the UN list can adequately protect entities affected, or insulate the State from legal challenge,” Mr McGrath wrote.

“I am concerned that the legislation may not sufficiently protect the constitutional right to fair procedures, and the property rights and reputational rights of affected parties may be adversely impacted for similar reasons,” he wrote.

Despite the concerns emanating from the Department of Finance, the Oireachtas finance committee – chaired by Mr McGrath’s party colleague and Fianna Fáil backbench rebel John McGuinness – has accepted a request from Sinn Féin to waive pre-legislative scrutiny of the Bill, a step that would speed up its progress through the Oireachtas.

But now a bitter row has broken out on the business committee, which must approve the decision to waive scrutiny, with opposition members privately accusing the Government of trying to slow the Bill down, arguing this is usually a rubber-stamping process.

The notice to waive pre-legislative scrutiny originally came before the business committee last week, and it was decided to consider the request at this week’s meeting on Thursday. However, no decision was made due to the Ceann Comhairle not being present. He is on official business in Wales.

This sparked a backlash from the opposition TDs on the committee, who privately argue that the situation is extremely unusual as requests like this are usually approved without discussion. Mr McGrath has said that scrutiny is vital and that further amendments to the Bill would be needed to make it constitutionally robust and compliant with European law.

While some members downplayed the split on the committee, others said it was a “big row” and “bitter and heated”. One said the situation was “unprecedented” and “hot and heavy” while another described it as “outrageous”. The opposition members sought an emergency meeting of the business committee, which is now due to take place on Friday, with concerns that too much of a delay would mean the finance committee would be forced to begin the pre-legislative scrutiny process.

Last year, the Government kicked the proposed legislation to touch with a timed amendment that stalled its progress from May last year to February this year. During that time, Mr McGrath sought the views of the foreign affairs committee on the legislation, which expressed a range of views on the proposed laws and suggested that the finance committee was better placed to advise on it.

It is understood that Fine Gael TD Charlie Flanagan, who chairs the foreign affairs committee, was unhappy from the outset that the Bill was referred to his group as he felt there were competency issues.

“We considered the matter and we informed Minister McGrath that we felt the foreign affairs and defence committee was not the appropriate committee to take it further,” Mr Flanagan said on Thursday.

In his letter, Mr McGrath argues that no country has formally adopted the UN list in domestic law and “to do so would be a significant policy change for the State ... and for its relations with other states”.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a Political Correspondent with The Irish Times