Irish Central Bank has "no doubt" it complied with law on Israel bonds
The Central Bank of Ireland is keeping its compliance with international law in handling prospectuses for Israel bonds "under review", its governor said, but added it was in "no doubt" that it complied with its obligations.
Governor Gabriel Makhlouf indicated the Central Bank may have a role in approving the bonds upon potential renewal in September or in moving that approval to another country – similar to what happened last year.
Makhlouf said on Wednesday that he was under "no doubt" that the authority had complied with international law in dealing with prospectuses for the bonds in recent years.
However, he told the Oireachtas Committee on Finance that the Central Bank "continues to keep under review its compliance with the applicable international legal and regulatory frameworks" in discharging its role in relation to Israeli bond prospectuses.
Israel Bonds have been advertised as supporting the country's economy and websites promoting the securities have emphasised their role in supporting Israel's military operations in Gaza.
The Central Bank, which was the designated authority in relation to the sale of Israel Bonds in the EU, faced criticism in recent years after determining the securities meet the standards of the bloc's prospectus regulations.
Protesters and opposition politicians have said approving the bonds is tantamount to complicity with genocide of Palestinian people.
The Central Bank had said EU regulations require that it approves prospectuses that meet standards of completeness, consistency and comprehensibility.
Last year, the approval of the securities was moved to Luxembourg – and the bonds are potentially up for renewal in September.
A protest was held outside Leinster House in advance of the committee session, with demonstrators from the Ireland-Palestine Solidarity Campaign accusing the Central Bank of "off-shoring" its responsibility as Ireland remains the home member state for the bonds in Europe despite the transfer of approval to Luxembourg.
The activists want the Central Bank to have no role whatsoever in the approval of the securities.
Asked about obligations under the Genocide Convention, Makhlouf said he believes what is happening in Gaza "is awful and horrific and appalling", but told legislators that "genocide is a legal term where the International Court of Justice has jurisdiction over".
He said proceedings at the International Court of Justice and the International Criminal Court were ongoing, but added: "There is no decision that's been made on these cases."
Makhlouf said the Central Bank's role in the matter is governed by EU regulations which require it to approve prospectuses that meet disclosure standards on completeness, comprehensibility and consistency.
He said the Central Bank would continue to do the job it is "required to do" while following the law and legal advice it has received.
He said: "I note that there have been a number of statements that the Central Bank could refuse to approve a prospectus, or indeed its transfer to another competent authority for approval, on the basis of certain international law rulings and opinions, namely on the basis of the ICJ provisional rulings in the ongoing South Africa-Israel case, and/or on the basis of the ICJ opinion on the occupied Palestinian territory.
"While these cases could lead to EU sanctions being imposed upon Israel, as matters stand, there are no EU sanctions imposed upon Israel, restricting its ability to issue securities, such as the sanctions that were imposed upon Russia following its invasion of Ukraine.
"The Central Bank continues to keep under review its compliance with the applicable international legal and regulatory frameworks in discharging its role in relation to the Israeli bond prospectuses."
On the upcoming potential renewal in September, Makhlouf said he could not speak specifically about the Israel bonds but offered the committee members four potential scenarios which the Central Bank faced in general.
He said these were that the issuer could decide not to issue any more bonds or decide to issue bonds of a value above 1,000 euro, the latter of which would allow the issuer to seek approval in any EU jurisdiction it wants without asking the Central Bank of Ireland.
The other two scenarios are the issuer asking the Central Bank to approve the prospectus or asking it to transfer the approval process.
He said: "If they ask us – as happened last year – to approve a transfer to another jurisdiction, the only decision we have to make is on the transfer, not on the prospectus itself – that's a decision taken by whoever it goes to."
Makhlouf said if Israel decides to issue securities of below EUR1,000 "then they're going to come to us".
He said if this happened, the Central Bank will "do what we did in 2024" which was to examine whether the prospectus met requirements.
He added: "We would be making sure that the prospectus has that information, and you know if it does, then we will approve it.
"And if it doesn't, we will carry on having a conversation with the issuer until they either decide to include the information or they may decide then to just give up."
By Cillian Sherlock, Press Association
Press Association: News
source: PA
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