On December 10, 2019, based on research by Professor Eugene Kontorovich and the Kohelet Policy Forum, the Jerusalem Post published an expose on donations to the European Council for Foreign Relations (ECFR) from companies operating in settlements (“EU think tank advocating for West Bank boycotts funded by occupied territories worldwide”). ECFR has been one of the leading BDS advocates in Europe under the guise of a so-called “differentiation” policy. Under differentiation, ECFR lobbies the EU and European governments to adopt policies that promote silent boycott and divestment of any business activities supposedly related to Israeli “settlements built on occupied territory” on the basis that such activities purportedly violate international law and the “domestic legal order.”

Yet, it appears that, for ECFR, occupied territory is only a problem in the Israeli context. The Jerusalem Post article reveals that “several of the ECFR’s biggest corporate donors do active business in the occupied territories of Western Sahara and Northern Cyprus.” These corporate donors include, Allianz SE (Germany), Banco Bibao (Spain), Bosch (Germany), Daimler (Germany), and Santander (Spain). Despite their extensive business activity in settlements, ECFR “has not given any indication of differentiating or rejecting these funds . . . although they do the exact kind of business the ECFR has called on the EU to act against.” It should be noted that some of these companies also appear to do business with Iran, but Iran’s massive violations of human rights and international law and potential complicity by the corporations with such abuses do not seem to be on ECFR’s agenda.

Rather, ECFR has published multiple reports advocating divestment from and sanctions on Israel. It maintains a “Differentiation Tracker” on its website to monitor adoption of such policies in Europe. As noted by the Jerusalem Post, the “ECFR has close ties to the European Commission” and its “studies are often adopted by Brussels as EU policy.”

Notably, ECFR, however, never defines the term “settlements” and it appears to use the terms “settlements”, “occupation”, and “annexation” interchangeably.  In other words, ECFR, improperly blurs the term “settlements” to include all territory over the 1948 armistice lines, including the Jewish Quarter of the Old City of Jerusalem and the Golan Heights. According to ECFR, it wants, “third states to apply a ‘legal’ tourniquet to their relations with ‘Green Line’ Israel to ensure these do not bleed into annexed territory.”

Although situations of occupation and settlements are common throughout the world, such as Western Sahara and Northern Cyprus, and there is extensive business activity in these areas, ECFR exclusively singles out Israel for divestment and sanctions. Applying double standards towards Israel “not expected or demanded of any other democratic nation” meets the International Holocaust Remembrance (IHRA) Definition of antisemitism.

To defend its discriminatory position, ECHR’s Policy Fellow Hugh Lovatt writes, “instead of deconstructing international law to make internationally unlawful actions permissible – as supporters of the settler movement seem to advocate – a more correct approach would surely be to improve implementation and respect across the board. In other words, third states should be doing more, not less, to meet their international law-based duties in all situations of annexation and occupation.”

Yet, as revealed by the Jerusalem Post expose and subsequent public comments by ECFR officials, when it comes to themselves and their donations, ECFR fails to apply these standards.

For example, on Twitter, Lovatt immediately walked back ECFR’s positions when confronted with the conflict of interest posed by ECFR’s corporate donors. He stated,

  • “Re business activities in occupied/annexed territory: what matters to me is their proximity to wrong doing and what policies they have in place to guard against potential exposure to IHL/IHRL violations.”
  • “In a sense, business activities in an OT are not inherently problematic.”
  • “By contrast, as EU member states have warned, business activities in illegal Israeli settlements carry inherent legal, financial, and reputational risks. The only way to fully eliminate these risks is not to be involved there.”
  • “Assessing whether businesses may be exposed to ihl/ihrl violations in Western Sahara (while no less important imo) can be more tricky since you don’t have clearly defined illegal settlements like in the West Bank. So assessments have to be done on a case by case basis.”

Lovatt’s comments minimize IHL/IHRL violations in Western Sahara and the contribution played by corporations, which are far more extensive than any involving Israel. Furthermore, he emphasizes his discriminatory approach towards Israel, by claiming any Israeli-related business is automatically prohibited in the West Bank simply because of location (“The only way to fully eliminate these risks is not to be involved there.”). In contrast, regarding Western Sahara, Lovatt endorses a case-by case approach, a determination of corporate proximity to wrong-doing, and reference to “corporate policies.”

In fact, the nuanced process Lovatt discusses for Western Sahara, is precisely the universal business and human rights formula promoted by the OECD and the UN! None of these guidelines endorses complete cessation of business activities because of the presence of a territorial dispute. Yet, Lovatt seeks to exclude Israel from these global guidelines and create a wholly separate policy applicable to the Jewish State alone.

Despite the extensive promotion of discriminatory differentiation on its website, ECFR as an organization is now attempting to distance itself from this scandal by claiming that “it does not take corporate or collective positions on differentiation” and instead placed the blame on “the authors” (i.e. Lovatt).

It also claimed that it will “explore these issues with our existing donors to double check they are following all applicable laws and guidelines.” There is no evidence that ECFR ever challenged any of these companies on their business activities in settlements in the first place, such that they are now only going to “double check.” It remains to be seen if any due diligence by ECFR will be made public.