New Dutch Law Signals Potential Risk for Business with Israel

The Netherlands has joined the list of European countries boycotting goods from settlements. However, the Dutch law is stricter than those adopted by other nations such as Spain, Belgium, and Ireland, and could trigger a chain reaction that discourages Dutch companies from doing business with Israeli firms. The law, passed by the center-left coalition without debate in the Knesset, will enter into force on September 22.

The legislation is particularly stringent as it applies not only to settlements beyond the Green Line in the West Bank but also to the Golan Heights. It imposes a comprehensive ban on the purchase and sale of goods or components originating from these areas, affecting products like wine, dates, and other agricultural goods.

Booking Excluded

The law applies to all Dutch citizens, even when they are outside the country, with a maximum penalty of six years of imprisonment for intentional violations. Crucially, the law applies only to goods, not services, allowing platforms like Booking to continue listing properties located beyond the Green Line.

Economic Impact

While direct economic damage is estimated at approximately $200 million annually—about 0.3% of Israel's total exports to the EU—the primary concern is the signal it sends to the business community. With the Netherlands accounting for 5% of Israeli exports, there is fear that companies will avoid Israeli partnerships to mitigate risk.

Dutch policy toward Israel has shifted significantly over the past three years. Once a balanced partner, The Hague has become increasingly critical, pushing for EU-wide sanctions. Israeli officials worry that the combination of these trade restrictions and existing academic boycotts will create a chilling effect on bilateral relations.