Penny Wong prepares new sanctions against Israel but no trade ban

The Albanese government is preparing to announce a new sanctions package against Israel, but has rejected internal calls to join the United Kingdom by banning commercial activity with Israeli settlements in the occupied West Bank.

UK Prime Minister Andy Burnham is preparing to announce wide-ranging economic restrictions, including a trade ban on goods produced in Israeli settlements, which are considered illegal under international law.

The moves represent a significant toughening of British policy towards Israel, which has threatened unspecified retaliation.

Former Labor cabinet minister Ed Husic urged Australia to join the UK, but Foreign Minister Penny Wong said that Australia was “not, at this time, pursuing a blanket-style export ban” on goods produced in the settlements.

“We have concerns about the implementation of a blanket ban and unintended consequences for Australian businesses, for Palestinians and Israelis,” Wong said in a speech to the Senate.

The government has told Australian businesses not to bid for construction tenders for illegal settlement developments, she said.

“I can announce Australia is pursuing further targeted measures in coordination with international partners to deter illegal settlements and settler violence,” Wong said in her speech.

Wong accused the Netanyahu government of “extinguishing the possibility of a two-state solution” by allowing the rapid expansion of settlements in the West Bank and failing to take sufficient action against extremist settlers.

“Australia continues to call on Israel to take urgent steps to address the situation on the ground, including to stop settlers destroying properties, displacing families, beating, torturing, sexually assaulting, and killing Palestinians,” she said.

Wong also condemned Hamas, the listed terror group that controls Gaza, for “ongoing acts of terror that undermine a two-state solution” and said it must play no role in a future Palestinian state.

Relations between Australia and Israel have soured dramatically since the war in Gaza began in October 2023, as Australia began regularly voting against Israel at the United Nations and recognised Palestinian statehood.

Wong is considering how to respond to Israel’s decision not to press charges against the soldiers who killed Australian aid worker Zomi Frankcom in a 2024 drone strike after meeting with Frankcom’s family last week.

Pro-Palestinian protesters gathered outside the Israeli embassy on Tuesday calling for an independent investigation into Frankcom’s death and for the government to expel Israeli ambassador Hillel Newman.

“Israel is open to discussions on the legal aspects,” Israel’s Ambassador to Australia Hillel Newman told ABC radio last month when asked whether options remain available for those seeking accountability for Frankcom’s killing.

“We can share information with legal teams of Australia, and the aspect of reparations can be checked definitely.”

The government imposed financial sanctions and travel bans on Israeli individuals and entities in June in response to escalating settler violence against Palestinians in the West Bank, following previous sanctions on Itamar Ben-Gvir and Bezalel Smotrich, two members of Benjamin Netanyahu’s right-wing governing coalition.

Husic, a critic of Israel’s conduct in the war in Gaza, hailed the imminent British announcement as a “seismic movement by one of our close allies, and it reflects the fact that I think there’s realisation dawning — statements won’t cut it, concrete action is needed”.

Husic unsuccessfully tried to pass a resolution at Labor’s national conference in July calling for trade sanctions connected to “illegal settlements in the occupied Palestinian territories” and other measures to condemn Israel.

“I can be silenced at conference, but you can’t stop world opinion, and I know that countries are deeply concerned about what’s going on,” Husic said.

“I just don’t think we can be left dragging the chain on something as big as this.”

Husic said he believed purchases of agricultural products, such as wine, were the main form of Australian economic activity with the settlements.

British Foreign Secretary Ed Miliband said last week: “We need to look at our wider economic relationship with the occupied territories, as we are doing, and at the different tools we have.

“We do not want British companies financing, constructing or advertising new settlements.”

Israeli Foreign Minister Gideon Saar said that “Israel will act” against any new British sanctions, without elaborating.

Greens foreign affairs spokesman David Shoebridge said: “The world is moving and the Albanese government is standing still.

“The UK government has rightfully realised they need to reset the relationship with Israel, they cannot just keep ignoring international law.”

Israel occupied the West Bank after winning a 1967 war with Jordan, and the population of Israeli settlers there has expanded dramatically in recent years.

The International Court of Justice said in a 2024 advisory opinion that Israel should stop settlement activity in the occupied West Bank and East Jerusalem, and end its “illegal” occupation of those areas and the Gaza Strip as soon as possible.

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Matthew Knott is the foreign affairs and national security correspondent for The Sydney Morning Herald and The Age.Connect via X, Facebook or email.AdvertisementAdvertisement