2026-06-25

2. Deputy Cian O'Callaghan asked the Tánaiste and Minister for Finance the steps he is taking to ensure that the Central Bank is acting in accordance with international law in relation to its role as the home state for the Israeli bond programme; and if he will make a statement on the matter. [48495/26]

Israel is still issuing war bonds across the EU and using the money to fund the genocide. While the role of approving these bonds has been moved to Luxembourg, Ireland remains the home member state for Israeli bonds. I am asking what steps the Minister is taking to ensure the Central Bank is acting in accordance with international law regarding its role as home member state for the Israeli bonds.

I thank Deputy O'Callaghan. As he will be aware, the Central Bank is the competent authority when it comes to the issuing of prospectus approval. It has informed me that it continues to keep under review its compliance with the applicable international legal and regulatory frameworks in relation to its mandates and engagements. Furthermore, the Central Bank, as the financial regulator, is independent in its functions from the Government, as is necessary in any well-functioning democracy. The Governor of the Central Bank made the following clear in a reply to a letter from the Oireachtas finance committee on 24 November 2025: The Central Bank is established by statute to fulfil legal responsibilities and obligations including in relation to the Prospectus Regulation. In carrying out these responsibilities we are at all times required to assess and understand the nature of our legal obligations and responsibilities. We do this on the basis of robust analysis relying on the legal expertise available to us. This takes the form of both internal legal and subject matter expertise and, where necessary and appropriate, of access to external legal advice. We believe that further action – I believe the Deputy and I agree on this point – is necessary with respect to the EU's relationship with the State of Israel. This is why we are working with others to achieve co-ordinated action at EU level. Ireland will continue to call for and work for concrete EU action in response to the horrific Israeli breaches of human rights and democratic principles. This includes a call for a proposal to prohibit EU trade with Israeli settlements and to suspend the EU-Israel Association Agreement or, at a minimum, to suspend the trade elements of the agreement, as previously proposed by the President of the European Commission. It is expected that the European Commission will bring forward options at the Foreign Affairs Council on 13 July, including on EU trade with Israeli settlements. The last time Deputy O'Callaghan raised this issue with me here, I think at the last Question Time, I undertook to engage directly with the EU Commission on this matter. I do not believe we disagree on the fundamental issue, but we can agree or disagree on how to resolve it. My very clear view is that this requires EU action in terms of the regulation. I directed my officials to engage with the EU Commission. Department officials subsequently liaised with their counterparts. We drew attention to the work of the Oireachtas, in particular the Oireachtas joint committee's recommendations that the prospectus regulation be amended. This engagement reflected my view that the Commission needs to act on those findings. I also undertook that I would raise the matter directly with the EU Commissioner. I spoke to Commissioner Albuquerque on this issue at the last ECOFIN meeting. I have also written to her as recently as the last couple of days, and I will give the Deputy a copy of that letter.

I welcome any engagement the Minister has with the EU Commission on this but there are actions the Irish Government can take. It was very clear when the Central Bank officials were before the Oireachtas finance committee about a year ago that the bank was saying it would comply if there were any domestic law or instruction on this. Indeed, in the Minister's reply he spoke about the Central Bank following its legal obligations. The key is that there are no national restrictive measures put in place by the Irish Government when it comes to this, and the Government could be doing that. Article 65.1(b) of the Treaty on the Functioning of the European Union allows restrictions on grounds of public policy or public security. Clearly, there are public policy grounds here. The Irish Government has made its position clear in terms of recognising the State of Palestine, the submissions to the International Court of Justice and calling for EU action. There is the ability for the Government to act and put legal restrictive measures in place on public policy grounds, and then the Central Bank would follow those. It is welcome that the Minister is engaging with the EU Commission, but who knows if anything concrete will ever actually come out of that? I am asking whether the Minister will take on board the measures called for by the Oireachtas joint committee for the Government to take action on restrictive grounds.

I thank the Deputy. I have been very clear in my view on this. Our clear advice is that even if domestic legislation were passed, it would not allow for the Central Bank to refuse a prospectus where the requirements of the EU prospectus regulation have been met, including the standards of completeness, consistency and comprehensibility. We have to respect EU law and the Central Bank has to abide by it. In my view, EU law needs to change in relation to this. That is why I agree with the Oireachtas joint committee finding. After I directed my officials to engage with the Commission, the Deputy asked me whether I would directly engage. I did. I spoke to the Commissioner in the past week or two. I have written to the Commissioner in the last few days, outlining the very clear view of this Oireachtas that the prospectus regulation needs to be amended. I intend to continue to pursue this actively. I also hope this could be considered as part of the EU Commission's set of proposals, which it is due to bring to the next Foreign Affairs Council meeting. I will also send the Deputy a copy of the letter and keep him informed of any further engagement. My honest view on the matter is that domestic legislation cannot trump EU law in determining what the Central Bank can and cannot do.

I support any engagement the Minister is having with the EU Commission on this. However, we have independent advice from the Office of Parliamentary Legal Advisers that Ireland could indeed take action to restrict Israeli bonds. It concludes that there is a case for unilateral Irish action on this if it is framed on public policy grounds. I have given the Minister the reasons it could be framed on such grounds, and I have also cited the relevant article of the Treaty on the Functioning of the European Union. The Minister has options on this beyond EU-level engagement. It would be great if something positive came out of that, but he knows well that it may not because achieving consensus at European level is very difficult. The Government has options to take domestic restrictive measures that would mean the Central Bank would then have a legal basis for taking restrictive measures regarding the Israeli war bonds. Will the Minister take these? It is imperative that the Government act owing to the ongoing killing of Palestinian people in Gaza, and also in the West Bank. Will the Minister do that?

I agree with the Deputy's analysis of the atrocities happening in Palestine and that the actions of the Israeli Government are in breach of international law and despicable. There is a genocide happening in Palestine. The only area we disagree on, or are teasing through, concerns what is legally possible. I will look again at the independent legal advice of the Office of Parliamentary Legal Advisers but I do not want to mislead the Oireachtas. It is the clear view in the advice I have that we cannot do anything domestically to trump the EU regulation. I am certainly not suggesting the Deputy is endeavouring to do this, but we cannot be saying we are standing by international law and then passing legislation here that we know would actually breach our own legal obligations. We cannot progress legislation if it will not work. I am a bit more optimistic on action being taken at EU level. It has been far too slow. It has been appallingly slow. Ireland has been advocating for action for such a long time on a cross-party basis. There are options that the European Council of Ministers can take that require qualified majority voting instead of consensus, but I agree with the Deputy on consensus being unlikely. There is an onus on the Commission to make proposals for the next Foreign Affairs Council, where there are measures that could be taken by qualified majority and not just consensus.