US States Threaten UK Firms With Blacklists Over Israel Settlement Sanctions

British companies face potential blacklisting in the United States if they comply with UK Foreign Secretary Ed Miliband's sanctions against Israeli settlements in the West Bank. Pro-Israel organizations in the U.S. have established a hotline to report British firms that sever ties with Israeli companies or Israel following London's trade ban on settlement goods. These actions could have severe repercussions for British businesses, as several U.S. states have laws against the Boycott, Divestment, and Sanctions (BDS) movement targeting Israel. These laws permit authorities to terminate contracts with companies boycotting Israel or Israeli-controlled territories and divest state investments from them.

Miliband announced the trade prohibition on September 8, labeling "settler terrorists" as engaging in "ethnic cleansing" in the West Bank. The Telegraph described the ensuing crisis as the lowest point in bilateral diplomatic relations since Israel's founding. Israel responded by closing the British consulate in East Jerusalem and banning entry for 12 Britons who supported Gaza.

The National Jewish Advocacy Centre, a U.S. pro-Israel legal advocacy group, launched its hotline on September 10, urging employees, suppliers, and clients to report British companies cutting ties with Israeli businesses. The organization plans to share this information with U.S. state authorities to push for divestment from these companies' assets. This tactic has precedent; in 2021, Ben & Jerry's decision to halt sales in the West Bank led several U.S. states to divest hundreds of millions of dollars from its parent company, Unilever, ultimately prompting Unilever to sell its Israeli business to a local licensee.

U.S. congressmen have warned that British companies adhering to London's new rules could face similar consequences. Arkansas Governor Sarah Huckabee Sanders stated that boycotting Israel is antisemitic and that Arkansas law prohibits dealing with companies involved in BDS. Florida Republican Randy Fine indicated that his state's law would bar any British company forced to comply with the sanctions from doing business with Florida's state or local governments, potentially costing billions. He cited a similar law that thwarted Airbnb's boycott attempt in 2019.

Florida Congressman Carlos Gimenez proposed extending retaliatory measures to include banning countries that boycott Israel from having consulates in Florida. Mark Goldfeder, Director of the National Jewish Advocacy Centre, commented that Britain had "ordered its companies into a trap that it did not even calculate." He noted that laws in states like Texas and Florida mandate divestment from companies limiting commercial relations with Israelis or Israel, and that state lists are not based on Whitehall's definitions.