Sinn Féin has proposed a bill which seeks to prevent Ireland’s state-funded investments in businesses that have operations in disputed Israeli communities on the West Bank. Although it is more likely that the impact will be felt in Ireland rather than Israel. The conversation revolves around various stocks that the Ireland Strategic Investment Fund (ISIF) holds in companies already listed in a UN directory of businesses in disputed areas. Originally started as the National Pensions Reserve Fund, the ISIF, which was subsequently utilised to save the banks, controls €5.2 billion. Its role is to invest commercially in projects that encourage economic activity and job creation in Ireland.
The ISIF has promised to allocate €1.15 billion to the Land Development Agency (LDA) and another €0.4 billion to Home Building Finance Ireland (HBFI). The remaining €3.65 billion lies with an assortment of banks and fund managers, awaiting a more suitable investment opportunity from the Government. A minor fraction of the total amount managed, €4.2 million, invests in 11 companies operating in the disputed territories.
The Finance Department has resisted this situation, citing legal issues with relying on the UN catalog, while the ISIF has pointed out tangible challenges. It’s almost like a genuine “Yes Minister” moment; the government, primarily concerned about maintaining popular opinion, is extremely cautious about addressing this thorny topic.
The unspoken toll of the Gaza war on children outweighs the amount the ISIF has directly invested in companies that benefit from or operate in these controversial settlements. These include Airbnb, which made it onto the UN directory last June, and is one of Ireland’s most prominent inward investment companies. According to Airbnb Ireland’s latest accounts, it “generates the lion’s share of its revenue from arranging accommodation for international guests via Airbnb’s online platform, outside of the United States.”
In 2022, the Irish division reported a turnover of $4.2 billion (€3.9 billion) and a profit of $82 million following the payment of $15.6 million in taxes to the Irish Government. The annual wage bill for its 380 employees amounted to $56 million, suggesting they also contribute to Irish taxes. Overlook not the $289,000 remitted to their auditors, PwC, which would also be taxable in Ireland. The Irish Development Authority (IDA) maintains silence over the substantial benefits offered to companies like Airbnb to set up global headquarters in Ireland.
Multiple IDA clients excluded from the database indirectly gain from Israel’s security and settlement strategies. Almost all Western military outfits, including the Israeli Defence Forces, depend on Microsoft’s software. As reported by NGO Who Profits, scrutinising the commercial participation of Israeli and international firms in occupied territories, Microsoft Israel has provided services to the Israeli Government, defence ministry, and offered cloud services to military and security bodies in Israel. The NGO underscores a program used to manage work permits issuance for Palestinians in West Bank and Gaza.
The crucial role Ireland plays in Microsoft’s overseas financial management is a known fact. Several Irish subsidiaries assist the company in doing this in a tax-efficient manner. Microsoft Round Island One is the top subsidiary recording a profit of $78 billion for the year ending in June 2022, paying slightly over $1 million in taxes with no personnel besides its directors. Its main branch, Microsoft Global Finance, works as an internal cash hub for other units of the business, earning $2.1 billion in 2022 and paying a tax of $157 million with a list of two employees.
One might wonder if Microsoft Israel falls within the jurisdiction of the global treasury operation based in Ireland.
However, these examples demonstrate that imposing sanctions isn’t always a straightforward process. Consider the sanctions against Russia that have led us to pay more than triple the earlier rates for electricity and gas. The sanctions orchestrated in response to the Ukraine invasion are effective as they are depriving Russia of significant revenue streams necessary to fuel its militant activities.
The liquidation of €4.2 million in investments by the ISIF will not adversely affect anyone in Ireland. The assorted parties involved are expected to comprehend the situation. This may, however, upset Israel and the ongoing conflict in Gaza will persist.
It’s open to interpretation as to what effect it may have on Israel if Ireland decided to terminate the advantageous tax provisions and financial aid currently extended to companies situated within Ireland, that conduct business in the illegitimate settlements or indirectly profit from them. One thing is certain – the implications for Ireland would be substantial.