Ryan Fayhee – now a partner at Washington DC legal firm Akin Gump – warned that the proposed law aimed at ending trade with illegal Israeli settlements could also leave Irish firms open to enforcement under America’s anti-boycott law.
The threat is just one of a growing number of risks faced by Irish companies in a volatile geopolitical landscape, attendees at a corporate crime conference held in Croke Park last week were warned.
Many Irish firms are also in danger of committing a criminal offence by inadvertently breaching sanctions against Russia if they ignore the risk, A&L Goodbody’s (ALG) annual Corporate Crime and Regulation Summit was warned.
“We’re in a new era altogether, where we’ve seen the Trump administration use tariffs, in particular to regulate conduct,” said Fayhee, who made it clear that he was not commenting on the merits of the Occupied Territories Bill itself. He said the US president would face pressure from America’s strong Israeli lobby to retaliate against Ireland.
“Almost nothing is predictable with respect to the Trump administration these days. But one of the things that is crystal clear is I think the president is going to do anything he can to protect this very fragile deal [on Gaza].”?
If Trump was convinced the Bill was a “risk to maintaining this fragile deal, he would very happily use, or at least threaten to use, increased tariffs targeting Ireland”, he said.
A bipartisan letter from members of the US Congress has already warned the Irish Government of the implications of proceeding with a law that only impacts a small amount of fruit and veg exports but which could form a precedent for other EU members to follow, particularly if the Gaza ceasefire does not hold.
“I think it is acknowledged that it is largely symbolic,” said Kate Harnett, Of Counsel in A&L Goodbody’s white collar crime unit. “But Ireland is a big importer of products from Israel, so I guess the concern would be where does it go. And obviously, if it broadens beyond the Occupied Territories to more general sanctions against Israel, the consequences will be very, very serious,” said Harnett.
Fayhee said that an existing anti boycott law had previously been used by the US to interrupt Israeli embargoes by Gulf states and was “designed to be directly in conflict” with a law such as the proposed Irish bill.
“US companies would be prohibited from complying with the Irish law and any other law that would effectively impose an embargo due to Israeli occupation of these areas,” said Fayhee.
A&L Goodbody partner Kenan Furlong said the implications were that an Irish-based business owned by a US company that was currently importing goods from a business in the occupied territories would have to cancel the contract because it would be an offence under the proposed new Irish law.
“They then turn to their US lawyers who say ‘well, if you don’t go ahead with that contract you’ll be in breach of the anti-boycott law,” said Furlong.
The sanctions levelled on Russia by the US and EU following its invasion and ongoing occupation of Ukraine also create threats for Irish companies. A new wave of EU sanctions – the 19th – are expected soon and Furlong warned that mid-size Irish firms that do not treat sanctions with the same vigilance that they now generally do with anti-money laundering (AML) rules risk unwittingly breaching them.?
“Sanctions breaches carry serious consequences and in Ireland it is a criminal offence,” he said. “So the stakes are very high. The only defence for a company is to show that it did such due diligence that it was able to say we did not have reasonable cause to suspect that we might breach international sanctions,” said Furlong.
Ireland is something of an outlier in that, unlike in most other EU countries, there has not yet been a prosecution here for a breach of sanctions . In 2023, head of the Department of Finance’s anti-money laundering unit Brenda McVeigh said the sanctions were often “unenforceable” in practice, comments the Department of Finance later tried to downplay, according to reports at the time.
It was also reported that there had been four cases of breaches of financial sanctions against Russia reported to gardaí for investigation.
“There’s a lot of gray areas that make sanctions compliance challenging, but I think it would also make a prosecution quite challenging,” said Harnett, who previously worked for the Director of Public Prosecutions (DPP).
“My feeling is that because we haven’t had a prosecution in Ireland, the DPP’s office would want the first prosecution to be based on firm facts, where there’s strong evidence and where there’s a strong public policy interest. So I think it would be something like a deliberate breach of EU sanctions or intent to circumvent something, as opposed to an inadvertent breach, because there was some issue with the policies and procedures.”
Fayhee said that Russian entities had increasingly used crypto currencies to find ways to operate either undetected or outside of US jurisdiction and warned that this presented another area where Irish firms needed to tread very carefully.
“The Russians have become largely dependent on organised crime to find ways to fund their economy, and that presents really highly unusual risks for companies operating across Europe,” he said.
“And these are not street gangs. These are very highly organised, really well funded groups operating all across Europe, between drug trafficking and other money-laundering related activities. The introduction of crypto really presents some pretty highly unusual risks and are very difficult to adapt to.
For now, Trump is, you know, the new crypto bro. It’s not clear tat he’s going to really chase it. Three years from now, though, if somebody else is in the White House, and crypto is not quite as in fashion, you could see a turning back of this more open environment around crypto.
“So my advice is to be cautious because three years is not so far away and there could be a totally different enforcement environment worldwide,” he said.
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