From: <a href="http://www.aftenposten.no/spesial/wikileaksdokumenter/article3965559.ece">Aftenposten</a><br>
Date: shortly after 2006-02-27

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UNCLAS COPENHAGEN 000352
SIPDIS
SIPDIS
SENSITIVE
E.O: 12958: N/A
TAGS: ECON, PREL, ETRD, PHUM, IS, DA
SUBJECT: ANTI-ISRAEL CLAUSES - LESS THAN MEETS THE EYE

1. (U)
Summary: In the context of domestic Danish politics following
the Mohammed cartoon crisis, it has become known that some
Danish firms accept the use of anti-Israel clauses in trade
agreements with certain Muslim countries. The government of
Prime Minister Anders Fogh Rasmussen, despite considerable
irritation with Danish business for pressing the government to
distance itself more clearly from the publication of the
cartoons, joined the business community in downplaying the use
and significance of anti-Israel clauses. Unlike the United
States, Denmark has no legislation explicitly prohibiting the
use of such clauses in trade agreements. End Summary.

2. (U)
Jyllands-Posten, the Danish newspaper which published the
Mohammed cartoons, reported in late February that a handful of
Danish firms have signed anti-Israel clauses when doing
business in the Middle East. The story surfaced just when
domestic political wrangling over the Mohammed cartoon crisis
was escalating. On February 27, PM Fogh Rasmussen publicly
accused broad circles in Danish corporations, culture and
media of failing to support freedom of expression during the
controversy. This opened a broad fissure between the
government and business leaders, and exacerbated tensions
between Fogh Rasmussen´s Liberal Party and its junior
coalition partner, the staunchly pro- business Conservative
Party. In this context, the allegations of craven Danish
business practice, and the implication of government
acquiescence, generated considerable public attention.

3. (U)
The dairy producer Arla admitted having active contracts with
clauses that no ingredients produced in Israel are used in the
production of Arla´s exports to Arab countries and that
shipments are not sent through Israel. Furthermore, it is
clear that at least four Danish firms agreed to participate in
some form of boycott of Israel in return for trade with Iraq
in 2000-2001:

-- Bruel & Kjaer, a manufacturer of sound and vibration equipment,
signed a clause that its goods did not include any parts, raw materials,
labor or capital of Israeli origin and that the goods did not pass
through Israeli ports;

-- The pharmaceutical producers Maquet and Leo 
Pharma signed clauses prohibiting trade or transport through Israel;

-- Bukkehave, a firm supplying vehicles and spare parts to 
international organizations and companies working in developing 
countries, signed a clause to "abide by and comply in all respects with 
the rules and instructions issued from time to time by the Israel 
boycott office in Iraq."

4. (U)
These companies downplay the significance of the clauses. Arla
states that despite signing the clauses, it has never
boycotted Israel and trade with Israel has been increasing.
Leo Pharma no longer maintains these clauses but says they
were previously a condition for selling medicine in the Middle
East. Leo Pharma has maintained regular trade with Israel
despite the clauses. Bukkehave states that the agreement was
signed at a local level.

5. (U)
Post approached some of the main business organizations in
Denmark for their views on the prevalence of anti-Israel
clauses. According to the Confederation of Danish Industries
(DI), the use of such clauses is limited at present and is
diminishing in line with increasing Arab WTO membership. DI
Director Joergen K. Hansen said that "the boycott has on
several occasions been discussed in parliament. DI has always
been opposed to this form of special restriction and has
supported attempts to find a solution at the EU level." DI
paints a picture of an unofficial policy in some parts of
corporate Denmark to sign the anti-Israel clauses but
disregard them and continue trading with Israel, often through
other subsidiaries in the group. Danish Shipowners´
Association official Ren Pihl Pedersen says the Danish
shipping industry does not sign anti-Israel clauses and that
"the problem has been on the decline for years and is almost
non-existent at present."

6. (U)
Ambassador Svend Roed Nielsen of the MFA´s Danish Trade
Council says that the anti-Israel clauses have a long history
but are rarely used at present except in trade with Syria and
Libya. "We have informed companies that the boycott is clearly
violating international trade standards but there is no Danish
law prohibiting the companies from signing the clauses,"
Nielsen states.

7. (U)
When asked by the Danish press for a public comment on the
acceptance of anti-Israel clauses by Danish firms, the
American Israel Public Affairs Committee (AIPAC) provided the
following standard reaction: "Agreeing to boycott Israel in
exchange for business in the Arab world reinforces Arab racism
against Israel, demonstrates highly unethical business
practices. and may be in violation of WTO rules. Danish
companies should be particularly sensitive to this at a time
when they are being targeted as well with unfair boycotts." In
a follow-up comment to post, AIPAC´s Director of Media Affairs
Joshua Block stated that "AIPAC sees the response as a pretty
minor thing: a comment on something so basic as the Arab boycott."

8. (SBU)
Comment: It may not be wholly coincidental that this story of
questionable Danish business practice in the Middle East
emerged just as political waters were roiling over the
Mohammed cartoon crisis. Post´s inquiries support the view
that the acceptance by the Danish business sector of
anti-Israel clauses in trade agreements is limited and
diminishing. In cases where they have been signed, firms
appear to ignore these clauses in practice. Despite the
absence of legal prohibitions, neither the government nor the
Confederation of Danish Industries offers support or comfort
to firms that have entered into such arrangements. Post will
continue to monitor the issue.

CAIN
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