Britain denies diplomatic rift on trade advice

The Foreign Office has denied that it has opened a diplomatic rift with Israel over government guidelines that warn British businesses about the “reputational implications” of working with the settlements.

Information published online by UK Trade and Investment includes a risk assessment of “security and political” difficulties British firms might face when trading with Israelis in the West Bank.

Europeans are also warned they should be aware of the “potential reputational implications of getting involved in economic and financial activities in settlements” and should be wary of “possible abuses” of human rights.

Firms are advised to seek legal advice before engaging with settlement businesses. The guidance also reaffirms the UK government’s position that the labelling of goods from West Bank settlements is voluntary.

Israeli media reports suggested ministries in Jerusalem were angry that they had not been notified sooner about Britain’s plans to publish the Overseas Business Risk, and that Israel felt “singled out”. But a Whitehall source said this week it was wrong to suggest the move had caused diplomatic difficulties.

A Foreign Office spokesman said the advice had been published to “raise awareness” and was a reiteration of current government positions.

A spokesman at the Israeli embassy in London said there was satisfaction that the advice reaffirmed Britain’s opposition to boycotts. But he said Israel was “troubled by the assertion that economic activity in Israeli settlements entails special ‘legal or economic risks’.

“One-sided assertions of this nature do nothing to support, and in fact are detrimental to, prospects of peace between Israelis and Palestinians.”

The warning of “potential reputational implications” was not used in relation to any other country, the embassy said.

The Foreign Office spokesman said the guidance was voluntary. “It will be the decision of an individual or company whether to operate in settlements in the Occupied Territories, but the British government would neither encourage nor offer support to such activity.”

Last updated: 6:45am, January 12 2014