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The High Court of Justice on Wednesday upheld two core parts and struck down one core part of the Anti-Boycott Law, and in a close 5-4 ruling upheld lawsuits against boycotters of “1967 Israel.”The rulings that preserved core parts of the law came in a 9-0 vote on the authority of the finance minister to impose fines or withhold funding from Israeli NGOs calling for boycotts of businesses in all or parts of Israel, and a 8-1 ruling on the ability to file lawsuits against those NGOs.One justice declared all lawsuits against boycotts unconstitutional.American-born Justice Neal Hendel called free speech the “lifeblood” of democracy and reviewed American law, noting that it has no provision for lawsuits against boycotters.At the same time, the court voted 9-0 to strike down as unconstitutional a core part of the law that would have allowed punitive damages in such lawsuits.Finally, in a 5-4 vote, the majority of justices said that the above lawsuits could go forward even if they were against groups that called only for boycotts of post-1967 Israel, meaning of Israeli settlements in the West Bank, whereas the minority said that such boycotts should be protected free speech.The minority explained that since there is a vibrant debate about whether Israelis should remain in Judea and Samaria, a boycott targeted only at that area and not at the rest of the country is legitimate speech and not trying to undermine Israel’s existence.Many strong supporters of the law, including Foreign Minister Avigdor Liberman of Yisrael Beytenu, MK Ze’ev Elkin (Likud), as well as political leaders whose positions are less clear, such as former justice minister MK Tzipi Livni (Zionist Union), declined to comment on the ruling since its came on the eve of Holocaust Remembrance Day.Adalah, the Legal Center for Arab Minority Rights in Israel, said the High Court had failed “to defend free speech,” calling the “Anti-Boycott Law a law for shutting people’s mouths, with its entire purpose being silencing legitimate criticism.”It added, “The High Court decision does severe harm to free speech and to the right of activism regarding a political issue in dispute.”The Association of Civil Rights in Israel also slammed the ruling, while Gush Shalom’s lawyer Gabi Lasky said, “It cannot be that it is permitted to boycott cottage cheese within the Green Line because of its price, but according to the High Court it is prohibited to call for boycotting cottage cheese... in the settlements for political ideals.”On the other side, Construction Minister Uri Ariel (Bayit Yehudi) said the verdict is “a clear proof that attempts to harm the State of Israel via boycotts are unacceptable. Israel has a right to defend itself not only from harm to its security, but also from economic harm.”MK Danny Danon (Likud) said following the verdict that “the extreme Left is trying unsuccessfully to instill its post-Zionist values.“Yesterday the High Court decided that terrorists can’t study in prison, and today it rejected the petition against the Boycott Law. Not only did the public speak out clearly against the Left’s petitions, the High Court Justices did, too,” he said.Supreme Court President Miriam Naor, who was likely the decisive swing vote on the issue of boycotting the settlements, appeared to express some sympathy with there being a distinction between regarding the two sides of the 1949 Armistice (Green) Line, but ultimately said that with the massive delegitimization campaign facing the country, the Knesset is well within its authority to ignore that distinction in the law as many Israel- boycotters do.Explaining the court’s decision to uphold two of the law’s three main parts, Justice Hanan Melcer wrote that the finance minister should be able to remove tax breaks, on the principle that the state need not feed those who try to undermine it.Likewise, with the lawsuits, Melcer said that boycotting was not regular free speech, and was playing a level of political hardball that, if it caused damage to others who were specifically targeted, should expose those practicing it to retaliation and allow those harmed compensation.Melcer clarified that those lawsuits which were allowed would face a very high standard of proof in terms of showing direct causation between a specific boycott and economic losses, and that general proof or the mere announcement of a boycott would not suffice.The High Court froze the law in December 2012, days after a first hearing against it, and then gave numerous extensions to the sides for addressing the legal issues in dispute.The Anti-Boycott Law was passed in July 2011, with Prime Minister Benjamin Netanyahu abstaining but allowing it to go forward, and imposes sanctions on any individual or entity that calls for an economic boycott of settlements in the West Bank or of Israel within the Green Line.It allows entities to win compensation in civil courts from individuals or organizations that have called for a boycott.The law also empowers the minister of finance to impose financial penalties, including the removal of tax exemptions, on NGOs that call for a boycott.The law encountered legal difficulties from the start, with Knesset Legal Advisor Eyal Yinon and Attorney- General Yehuda Weinstein each initially trying to convince its proponents to drop it, then trying to dilute it, almost refusing to defend it in court. Even then, they admitted that its legality was borderline.During Wednesday’s session, the justices hammered the state repeatedly to speak to whether it believed the law violated fundamental free speech rights, with the state relenting and admitting that it did after around 10 minutes of trying to evade the question.The justices zoned in on pressing the NGOs to defend their attack on the law penalizing boycotts of “1948 Israel,” claiming that otherwise the NGOs were treating free speech as an “absolute right” – a position the court implied was indefensible.At one point, new Justice Yitzhak Amit noted that “some say that BDS is anti-Semitism.”Adalah head Hassan Jabareen gave the most spirited attack, saying that Liberman’s transfer plan and waves of anti-Arab racism, including campaigns to keep Israeli-Arabs out of cities such as Safed, meant that 1948 Israel was part of the political debate as much as 1967 Israel.Jabareen also said that if the court distinguished between 1967 Israel and 1948 Israel boycotts, it would itself improperly be weighing into political debates, and going beyond a court’s role by declaring which political ideas were acceptable and which were not.Lahav Harkov contributed to this story.