As EU leaders meet this week to review the EU–Israel Association Agreement, the Hind Rajab Foundation (HRF) has lodged a landmark complaint with the European Investment Bank’s Complaints Mechanism (EIB‑CM). The complaint accuses the EIB of funding Israeli entities involved in illegal settlement expansion and systemic apartheid—a clear breach of international law.
🏛️ Legal Framework & Binding ICJ Ruling
On 19 July 2024, the International Court of Justice issued an advisory opinion holding that Israel’s presence in the Occupied Palestinian Territory is illegal under international law. The ICJ further ruled that all States and international organisations must “not render aid or assistance in maintaining the situation created by Israel’s illegal presence”.
As a party to international law, the EU—and by extension the EIB—bears a legal obligation to comply. This includes halting any trade, investment, or financial assistance that may entrench Israel’s unlawful status in the occupied territories.
In addition, on 29 December 2023, the ICJ issued provisional measures in the South Africa v. Israel genocide case, requiring Israel to prevent acts of genocide in Gaza. The ICJ’s twin rulings solidify legal expectations that EU institutions must refrain from funding any entity facilitating these breaches.
🛠️ EIB Investments: €1 Billion in Question
HRF’s complaint zeroes in on four main EIB-funded operations, totalling over €1 billion, which allegedly enable Israel’s occupation infrastructure:
- €500 million → Bank Leumi – Underwrites housing, industrial zones, and local councils within West Bank settlements, despite Bank Leumi’s appearance on UN blacklists.
- €250 million → Electra – Funds the Green Line of Tel Aviv Light Rail, criticised for consolidating settler networks in occupied territory.
- €250 million & €96 million – “Green transition” and “financial inclusion” programs channelled through Bank Leumi, which maintain longstanding ties with settlement municipalities—raising compliance concerns.
Analysts highlight that reliance on Bank Leumi—designated for “direct involvement in the development, expansion, and maintenance of illegal settlements”—strikes at the core of ICJ compliance obligations.
🕰️ Historical Context: Decades of Occupation & EU Ambiguity
Post-1967, Israel seized the West Bank, Gaza, and East Jerusalem. International law (Fourth Geneva Convention Article 49) prohibits transferring an occupier’s civilian population into occupied land. Israel’s settlement expansion contravenes this rule—and the ICJ has now confirmed this policy is unlawful .
Despite this, the EIB and other European financial institutions have pumped over €114 billion into settlement-linked firms, even while committing €1.177 billion to Palestinian development between 2021–24.
This imbalance raises stark questions: can the EU genuinely promote human rights while financing the mechanisms enforcing occupation and apartheid?
⚖️ Legal Analysis: Where EIB Stands Legally
1. ICJ Obligations & Institutional Duty
The ICJ’s advisory opinion legally binds EU bodies: funding entities in occupied territory may constitute “aid or assistance” to an illegal regime.
2. Aarhus Regulation and Oversight Power
Under the Aarhus Regulation, EU courts have authorized non-governmental challenges to EIB projects on environmental (and human rights) grounds—demonstrating judicial pathways for accountability.
3. Association Agreement Leverage
Human rights are embedded as essential elements in the EU–Israel Association Agreement. Article breaches—such as systematic violations tied to settlements—can legally justify suspension or termination .
🧩 Expert & Stakeholder Voices
Dyab Abou Jahjah, HRF Chairman:
“Either Europe enforces the ICJ ruling… or it admits its treaties and human rights talk are worthless when it comes to Palestinian lives.”
Anna Dupont, Accountability Counsel:
“EIB’s funding decisions reflect a systemic disregard for the human rights implications. Funding settlement infrastructure while claiming to uphold EU values is hypocritical at best.”
Michael Lynk, then UN Special Rapporteur:
“European financial institutions provide the indispensable economic oxygen [for settlements].”
Dr. Emma Svensson, Crisis Group encryption via an anonymous diplomat:
“This juncture could mark a turning point. The EU holds both legal and moral high ground—but only if it chooses action over rhetoric.”
🔎 EU Political Landscape: Public & Policy Pressure
A public letter signed by over 30 EU Members of Parliament, plus Amnesty International, Oxfam, and others, urges a full ban on settlement-related trade—deeming current differentiation policies insufficient and ICJ-inconsistent.
Additionally, Norway’s global fund and Nordic banks have begun divestment from blacklisted Israeli companies, setting a policy precedent the EIB could follow.
✅ HRF’s Demands in Detail
- Immediate suspension of all EIB funding to UN-blacklisted Israeli companies and settlement-related projects.
- A rigorous independent compliance audit—not cosmetic reviews—conducted by external experts with public results.
- EU leaders must condition future cooperation on verifiable respect for international law, including potential sanctions and a reassessment of the Association Agreement.
🌟 The Stakes: Law, Credibility, and Justice
This complaint emerges at a legal and ethical inflection point. The EU, founded on the rule of law and human rights, now faces a test: continue enabling an illegal system or realign policy with global legal norms. The decisions taken in the next days could define the EU’s global moral weight and its authenticity as a defender of international law.
