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UK says there should be 'no economic involvement in illegal settlements' for first time

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UK says there should be 'no economic involvement in illegal settlements' for first time





Submitted by
Imran Mulla
on
Tue, 06/09/2026 - 13:40






Britain will 'explicitly advise businesses against economic and financial activity' in illegal Israeli settlements


Britain's Foreign Secretary Yvette Cooper at a meeting at Lewisham Police Station in south London on 19 May (AFP)
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Britain has announced "that there should be no economic involvement in illegal settlements" for the first time.

The UK will also impose fresh sanctions against "networks financing and enabling settler attacks against Palestinians" in coordination with France, Norway, Canada, New Zealand and Australia. 

The British government has said it will impose sanctions on six entities and one individual.

An International Court of Justice opinion in 2024 ruled that Israel's occupation of Palestinian territory is illegal. It is against international law for an occupying power to transferring its own civilian population into occupied territory or to forcibly deport or displacing the local population.

Significantly, for the first time the UK will "explicitly advise businesses against economic and financial activity in illegal settlements", according to a government statement.

The government said: "The UK continues to support trade with Israel within 1967 lines, but states that there should be no economic involvement in illegal settlements."  

In a statement in parliament on Tuesday, Foreign Secretary Yvette Cooper is expected to say: "Today we are acting with our international partners to sanction those who support and sponsor violence against Palestinian communities in the West Bank.

"Settler expansion and violence is illegal and a fundamental threat to the viability of a two-state solution, and to long-term peace and security for Palestinians and Israelis.

"These measures show the UK is leading with our partners to target those who are fuelling this violence."

The sanctioned entities include the Farms Association, which the British government said "provides financial and organisational support to Israeli settler farms and outposts in the West Bank, including those associated with violence, intimidation and forced displacement of Palestinians".

They also include the Israeli settler group Ari Artzenu, which "promotes, finances and resources settler farms and outposts associated with violence against Palestinians".

Implications of the new policy

The new measures fall short of a call by more than 230 MPs this week for a full ban on the import of goods from illegal Israeli settlements.

In opposition, Labour called for a ban on the import of settlement goods, with then-Shadow Foreign Secretary Lisa Nandy saying in June 2020 that the move would require "courage that so far ministers have not been willing to show".

Privately, MEE understands, ministers accept that a ban on settlement goods would be consistent with the British position on the occupied territories.

Britain set to announce new sanctions against Israel over 'E1' settlement expansion
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The new measures could have significant implications for local council pension funds.

In the past two years, multiple local authorities have voted to boycott companies complicit in Israeli war crimes or that arm Israel or benefit from its occupation of Palestinian territory.

And the pension funds of numerous councils - including Islington, Lewisham, Wandsworth and Caerphilly - have excluded companies on the United Nations' list of businesses involved in the occupied Palestinian territories.

But in January, the Labour government's Communities Secretary Steve Reed warned Labour-administered councils that they could be sued for boycotting Israeli businesses.

Reed pointed local councils to government guidance published in 2016 that prohibits procurement boycotts against Israeli firms and firms that trade with Israel.

In May 2025, the Labour government sanctioned several prominent Israeli settlers in the West Bank, including veteran settler activist and head of the Nachala movement Daniella Weiss.

Last June, the UK – alongside several allies – sanctioned two far-right Israeli ministers, National Security Minister Itamar Ben Gvir and Finance Minister Bezalel Smotrich, over "their repeated incitement of violence against Palestinian communities" in Gaza and the West Bank.

According to Israeli human rights group B’Tselem, Israel has driven out 59 Palestinian communities, home to more than 4,000 people, since 7 October 2023.

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