Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I am glad to be able to speak to this Bill. The Bill merits very careful consideration in all its aspects. I have addressed this Bill already in the Seanad. I will not therefore repeat what I have said about my activities on the issue of the Israeli-Palestinian conflict. I trust Deputies will recognise the priority I have attached to this issue, the time I have devoted to it and, indeed, the public funds that I have committed to it in the context of support for the Palestinian Authority and to the United Nations Relief and Works Agency for Palestine Refugees in the Near East, UNRWA, in recent times. This has included three visits to the region in my 12 months as Minister for Foreign Affairs and Trade, work on the political process and on Gaza, and keeping up consistent pressure at EU and international level against the expansion of settlements.

Ireland has also been to the fore in shaping EU policies on settlements, including the exclusion of settlement products from normal tariff levels, preventing EU research funding being spent in settlements, preventing misleading labelling of settlement goods, and providing for the specific exclusion of settlements from future EU agreements with Israel. Ireland also supports Israeli, Palestinian and international NGOs which defend Palestinian communities under threat from settlements. No Member of this House attaches greater importance than I do to bringing Ireland’s influence to bear to help end the occupation of the Palestinian territories, to promote a two-state solution that works for Israel and for Palestinians, and to deliver a sustainable peace after decades of conflict.

However, speaking on behalf of the Government, I do not agree that the Bill is the right way forward now. I wish to set out carefully for the Dáil why this is so. There are three broad reasons: legal, political and practical effects. The overriding point that frames the Government’s view is that the Bill asks the State to do something that is not within its power. Ireland is part of a single unified EU market. Trade is an exclusive competence of the European Union. Everyone who is informed in this House should know that. We are not in a position to raise a barrier and declare that it is prohibited to bring to Ireland, for sale or personal use, goods which enter the EU legally and are freely circulating elsewhere in the Single Market. This is the meaning of the Single Market, the defence of which is something which the EU takes very seriously, as we have seen in the context of Brexit. The integrity of the Single Market is in Ireland’s overall interest.

The formal advice to the Government of the Attorney General on this matter has confirmed clearly that passage of the Bill would put Ireland in breach of EU law and would expose Ireland to legal action by the European Commission as guardian of the treaties. Some supporters of the Bill have put forward legal opinions which highlight a so-called public policy exemption, which states that provisions on free circulation of goods do not preclude “prohibitions, quantitative restrictions or surveillance measures on grounds of public morality, public policy or public security”. However, I am strongly advised that the European Court of Justice has shown in previous cases that it will not allow this term to be interpreted broadly. A broad interpretation of the public policy exemption would so obviously have implications for the EU’s exclusive competence on trade that it is entirely foreseeable that a challenge by the European Commission would follow. Our informal soundings lead us to consider that very likely.

Should Ireland be found to have breached EU law, as we would expect, the State would be exposed to potentially very significant fines as well as legal costs. Fines recommended by the Commission in such cases can include lump sums of more than €1.5 million plus daily fines. Cumulative annual costs of these fines can range from hundreds of thousands of euros per year at the lower end of the scale, up to tens of millions of euros per year at the highest end. No Government, nor any responsible Opposition, could support intentionally breaking EU law and exposing the State to such significant penalties.

The Bill could also be challenged by companies or individuals claiming to be adversely affected by it. In addition to legal costs arising in these circumstances, a finding against Ireland in favour of a private party could give rise to damages being awarded against the State. In addition, costs would also arise for the relevant authorities in the implementation of the law, which would create new offences, the investigation, enforcement and potential prosecution of which would have resource implications for the customs authorities, An Garda Síochána and the criminal justice system more broadly, including, perhaps, the Prison Service. Our view is that additional costs will also arise from voted funds for certain Irish diplomatic missions abroad should this Bill be enacted. I should state clearly at this point that because of these costs across a wide range of areas, there can be no doubt that the Bill will require a money message to proceed to Committee Stage.

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