The Houses of Parliament are seen on June 28, 2024 in London, England ahead of the UK general election.
Peter Nicholls | Getty Images News | Getty Images
The U.K. government is pushing ahead with planned sanctions targeting Israeli settlements in the occupied West Bank, despite U.S. officials and lawmakers warning of economic consequences for doing so.
Speaking in the country’s parliament on Tuesday, U.K. Foreign Secretary Ed Miliband said Britain would ban imports from Israeli settlements built on land that is internationally recognized as Palestinian territory. The measures are expected to take six to nine months to come into force, he added.
“Today I announce that the official view of the British government is that the occupation [of the West Bank] is unlawful,” Miliband told British lawmakers. “The government believes the unlawfulness of the occupation should be reflected in the economic relationships we choose to have with the occupied territories.”
Miliband said the British government agreed that there is ethnic cleansing of Palestinians in areas of the West Bank, “perpetrated by settler terrorists.”
“All too often, the Israeli government has turned a blind eye to this, and worse, members of it have made statements and taken actions to support the displacement of Palestinians,” he said. “It should be the prelude to justice.”
CNBC reached out to the Israeli government for comment.
Alongside the roll-out of a “comprehensive sanctions regime,” Miliband said the British government would take action against specific companies and individuals that provide services such as construction, infrastructure, or financing for real estate expansion by settlers. The U.K. will also ban advertisements related to the settlements.
“To those who finance or facilitate illegal settlements, let me say this: you will face the full force of U.K. sanctions,” he said, but he stressed that the U.K. would continue to trade with Israel, “precisely because we support the two-state solution, including security and prosperity for Israel.”
However, Miliband said the U.K. would also extend a ban on arms exports to include refusing all license applications for arms and other goods and services “that materially contribute to the occupation.”
He called this an effective “double lock against arms sales” after the U.K. suspended over 30 arms licenses used by the Israel Defense Forces in Gaza.
“This means the ban on such exports will now remain in place as long as the occupation exists,” he told lawmakers.
Last week, Miliband told lawmakers that Israel’s recent issuance of tenders for the E1 settlement in the occupied West Bank was “the crossing of a red line.”
“Israeli settlements are illegal under international law,” he said at the time. “This Government will not acquiesce in the destruction of the two-state solution — we will act. I will set out a comprehensive set of measures in the coming weeks.”
U.S. warns U.K. of consequences for sanctions
Speaking to the BBC on Tuesday, U.S. Ambassador to Israel Mike Huckabee said “without a doubt there will be” a response from Washington if London enacts sanctions.
Doing “something like this with… Israel” could have a “huge economic impact on British businesses,” he said, warning they could be banned from doing business “in a number of” U.S. states.
U.S. Representative Randy Fine has already warned that, should the U.K. proceed with sanctions, British firms will face consequences in Florida.
“As the British government considers forcing British companies to boycott portions of Israel, it should be aware that a Florida law that I passed as a member of the Legislature would ban any British company forced to comply from doing business with any state or local government in Florida,” he said in a post on X Monday evening, referring to the state’s Prohibition Against Contracting with Scrutinized Companies law.
The legislation bans state agencies from doing business with or investing in companies that boycott Israel. In 2019, Airbnb was placed on Florida’s Scrutinized Companies list after it announced it would remove around 200 listings in the West Bank. Airbnb later reversed its policy and was removed from the list.
“Florida is one of Britain’s largest trading partners,” Fine added. “Florida has made it clear. Any company — or nation — that boycotts Israel is boycotted by Florida.”
Several U.S. states have so-called anti-BDS rules in place, including Texas, New Jersey and Alabama.
An Israeli soldier walks near an armored vehicle in Qalqilya, West Bank, on August 7, 2025, during a night raid marked by confrontations with residents. The raid, part of ongoing Israeli operations in the West Bank, adds to the tension in Qalqilya, a city encircled by the Israeli separation barrier and frequently targeted in military incursions.
Mohammad Nazal | Afp | Getty Images
The Trump administration has also condemned European governments and investors in recent years over their stances on trading with Israel.
Last year, the U.S. State Department told CNBC it was “very troubled” by the $2 trillion Norwegian wealth fund’s exit from American company Caterpillar, along with five Israeli banks, over concerns about rights violations tied to the companies amid conflict in the region.
The State Department spokesperson said the move was “based on illegitimate claims against Caterpillar and the Israeli government.”
Over the summer, Ireland passed a bill banning the import of goods originating in certain Israeli settlements. The U.S. embassy in Ireland later issued a statement warning the move “risks real unintended consequences” for almost 1,000 American companies.
“If the goal is to make a meaningful difference for Palestinians, the focus should be on coordinated international efforts that deliver real impact, not symbolic measures that harm Ireland’s economy and will not advance peace,” the statement said.
“We urge Ireland to avoid pushing similarly unhelpful initiatives at the EU-level.”
