LegiStorm

Summary:

This report provides information and analysis on a boycott, divestment, and sanctions ("BDS") movement against Israel, as well as on economic measures that "differentiate" or might be seen as differentiating between (1) Israel in general and (2) entities linked with Israeli-developed areas and settlements (of disputed legality). Such settlements are found in the West Bank, East Jerusalem, and Golan Heights—areas that Israel has controlled and administered since the 1967 Arab-Israeli war. The report also discusses Anti-BDS or anti-differentiation efforts to date, including U.S. legislative action and proposals at both the federal and state level. Legislative considerations drawing from existing antiboycott law and from First Amendment issues. The BDS movement exists within a larger context of Israel's complex economic and political relations with the world. Since the breakdown of the last round of Israeli-Palestinian negotiations in April 2014, challenges that Israel has faced to its international economic and cultural relations have received greater public attention. Many Israeli officials and other observers speculate that Israel could, over time, face greater international isolation. For more information, see CRS Report RL33476, Israel: Background and U.S. Relations, by Jim Zanotti. Congress and the Obama Administration currently encounter a number of policy questions related to the BDS movement and other international economic measures affecting Israel. There appear to be some similarities between U.S. and EU laws and guidelines for labeling of certain products imported from the West Bank. Both jurisdictions require the West Bank to be identified as the place of origin, but a November 11, 2015, European Commission notice requires that the labels for certain imports into the EU—Israel's largest trading partner—provide additional information to its consumers by further differentiating between products from Israeli settlements and from non-settlement areas. This has fueled debate about whether the EU's guidelines might contravene international trade commitments under the World Trade Organization (WTO) or constitute, encourage, or foreshadow punitive economic measures against Israel. The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (P.L. 114-26), enacted in June 2015, contains a trade negotiating objective for the U.S.-EU Transatlantic Trade and Investment Partnership (T-TIP) that discourages politically motivated economic actions "intended to penalize or otherwise limit commercial relations specifically with Israel or persons doing business in Israel or in Israeli-controlled territories." Public debate over P.L. 114-26 focused on whether economic actions differentiating between commerce with Israeli settlements and commerce with Israel constitute or promote BDS-related activity. In a statement after the law's enactment, the State Department reiterated its continued opposition to BDS activity targeting Israel, but asserted that the inclusion of the phrase "Israeli-controlled territories" in P.L. 114-26 "runs counter to longstanding U.S. policy towards the occupied territories, including with regard to settlement activity." In November 2015, two Senators proposed an amendment to H.R. 22 (Surface Transportation Reauthorization and Reform Act of 2015) that, if enacted, could lead the Export-Import Bank of the United States to deny credit applications in cases where the executive branch discerns a need to advance U.S. policy in opposing politically motivated behavior intended to penalize or otherwise limit commercial relations with Israel-related persons or entities. Observers question whether and to what extent the proposed amendment might affect the "carefully crafted compromise" on H.R. 22 and its proposed reauthorization of the Export-Import Bank's charter. Participating in the BDS movement would not appear to place a U.S. organization in violation of existing federal antiboycott legislation, which targets organizations' participation in foreign boycotts. No foreign state has proclaimed that it participates in the BDS movement, and the movement does not have a secondary tier targeting companies that do business in or with Israel. If Members of Congress are inclined to propose legislation regarding BDS, they might consider using, as points of reference, legal and regulatory frameworks Congress and the executive branch have used to designate actors of concern under various rubrics having to do with trade and/or national security. Opponents of the BDS movement have proposed the enactment of legislation that would prohibit the provision of federal funding to United States corporations, academic institutions, groups, or individuals that engage in BDS activity. Some scholars and commentators have argued that such legislation would raise First Amendment concerns, while others have argued that such legislation would be consistent with the First Amendment. The constitutionality of a restriction on the availability of federal funds would depend upon the particulars of the legislation at issue.