‘Israeli war bonds should not be sold through Ireland,’ Central Bank told

Governor of the Central Bank of Ireland Gabriel Makhlouf said legally, they must approve a prospectus that offers securities to the public.

Israeli-issued sovereign bonds which are being advertised as a way to raise funds for the country’s war efforts should not be sold through Ireland or its Central Bank, an Oireachtas committee has heard.

Speaking to the Governor of the Central Bank of Ireland Gabriel Makhlouf at the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on Wednesday, Sinn Féin’s finance spokesperson Pearse Doherty said more should be done to prevent the sale of Israeli bonds through Ireland, calling on the Central Bank to add further conditionality to the sale of these financial products.

Ireland is the home country of Israeli bonds sold in the EU, with the Central Bank of Ireland designated as the competent authority to approve prospectuses for the securities.

Third-country issuers - those being countries outside the EU - must choose the Central Bank of a country within the EU as its Home Member State. The choice is up to the issuer, with the Central Bank only able to object if it believes it does not have legal jurisdiction for the approval.

In the past 12 months, Israel Bonds have been used as a means to support the country’s war efforts in Gaza and the Middle East.

In a note on Israel Bonds’ website, the company said it has launched an international campaign to “raise funds for the Jewish State during this time.” 

In another post, it highlighted the “crucial role of Israel Bonds during this time of conflict and war,” with the Israel Bonds’ CEO and President Dani Naveh saying buyers of the securities were “part of Israel’s success story.” 

Since October 7th 2023, Israel Bonds have seen more than $3bn in sales, nearly triple its annual average.

Before 2021, the UK was the EU Home Member State for Israel, with Ireland being chosen by Israel as the new Home Member State following the UK’s exit from the EU.

The Central Bank of Ireland approved the first prospectuses for the bond issuance program in 2021, with the securities offered in Ireland, Austria, France, Germany and the Netherlands through the EU passport.

Addressing the Central Bank Governor, Mr Doherty said that current regulation allows for the regulator to include supplementary information when necessary to protect investors.

Mr Makhlouf previously stated that the law was clear, adding that legally, the Central Bank must approve a prospectus that offers securities to the public.

“The law is also clear that our approval should not be considered an endorsement of the issuer or the securities,” Mr Makhlouf told the Oireachtas Committee.

However, Mr Doherty said that the Central Bank could do more, according to existing legislation, adding that it could include additional information in these prospectuses.

“[The regulation] allows you to say, to protect investors and those buying Israeli bonds, that these bonds are for a war,” Mr Doherty said.

“I do not doubt that nobody in the Central Banks wants Ireland to be selling these bonds, but you have enough wiggle room to make sure that that doesn’t happen.” 

The Central Bank Governor said he was “very happy” to take this away, adding that he would think “very hard” about the ability he has to do what Mr Doherty asked him to do.