If it ever succeeds, the United States’ effort to push Lebanon into repealing its 1955 Israeli boycott law would have far-reaching legal and economic consequences.
The boycott law is the only Lebanese law that explicitly names Israel as the subject of a comprehensive prohibition on commercial dealings, and a repeal would remove the main legal barrier to Israeli business interests and capital entering the Lebanese economy, whether directly or through intermediaries. While Lebanon’s Penal Code bans trade with the “enemy”, Israel would no longer be considered such if the two sides officially ended their state of war, as both have said they intend to as part of the US-led negotiations since April. Most seriously, repealing the boycott law could expose land in occupied South Lebanon to Israeli buyers, potentially giving legal cover to settlement efforts. At a time when Israel continues to occupy Lebanese territory, dismantling these restrictions would almost certainly weaken Lebanon’s ability to control Israeli economic interests without securing withdrawal or reciprocal security guarantees.
On October 15, US Secretary of State Marco Rubio told President Joseph Aoun that the boycott law “is routinely used for politicised prosecutions that deter steps toward peace with Israel.” This followed a legal complaint in Lebanese court against the country’s ambassador to Washington, Nada Hamadeh Moawad, for unofficial communications with her Israeli counterpart. A military court commissioner has since dismissed the complaint.
The same week as Rubio’s statement, US Ambassador to Lebanon Michel Issa told a delegation of 11 Lebanese lawmakers that the time had come to repeal the boycott law. Notably, Lebanon’s Parliamentary Speaker Nabih Berri said repeal would not pass Parliament, but the debate has since centred on whether Lebanese may talk to Israelis, rather than what the boycott law actually does.
No Deals, No Loopholes
The distinction between diplomatic contact and economic normalisation is fundamental. Under the auspices of the law, Lebanon can negotiate an end to hostilities without surrendering the legal protections that restrict Israeli investment, commercial transactions and access to Lebanese property.
The 1955 law bars anyone in Lebanon from doing business with people who live in Israel or work on its behalf. It covers trade, money, and “any other transactions of any nature whatsoever,” and it applies to deals made “in person or through mediation,” meaning through a middleman. Violators face three to 10 years of hard labor. The ban on middlemen lets the state act against Israeli buyers or investors hiding behind a Lebanese or foreign front. This makes the law more than a prohibition on direct trade: it provides a legal basis for restricting Israeli commercial and financial interests operating through third countries, companies and intermediaries.
Article 285 of Lebanon’s Penal Code also bans commercial transactions, sales and exchanges with “enemy” nationals, including through intermediaries. Unlike the boycott law, however, Article 285 does not explicitly name Israel. Its application to Israelis therefore depends on Israel’s legal classification as an enemy state.
Repealing the boycott law would potentially allow Israeli entities to compete for public contracts under the same general eligibility requirements as other foreign companies.
The US-brokered framework agreement Lebanon and Israel signed on June 26 states, in its first clause, that both parties intend to formally end any state of war. If implemented, such an agreement could raise questions about the continued applicability of Article 285 to Israeli nationals, potentially requiring judicial interpretation. The 1955 boycott law, by contrast, expressly identifies Israel and would remain in force unless Parliament amended or repealed it.
If the boycott law were also repealed, Lebanon’s company, banking, and anti-money-laundering laws would be the only rules covering Israeli investment, and none of them would treat Israeli money differently from other foreign money. An Israeli company could then invest directly, provided Israel also lifted its own ban on trade with Lebanon. An investor seeking discretion could instead, for example, go through a company registered in Cyprus. While Lebanese banks would remain subject to beneficial-ownership checks and other regulatory obligations, those requirements would not, by themselves, amount to a prohibition on Israeli-linked investment.
Repealing the boycott law would potentially allow Israeli entities to compete for public contracts under the same general eligibility requirements as other foreign companies. Under the current framework, foreign companies seeking to participate in certain public procurement processes must obtain clearance from the Israel Boycott Office. If the law were repealed, the legal basis for these clearance requirements would need to be reconsidered as Public Procurement Law No. 244 of 2021 does not, by itself, provide an equivalent Israel-specific screening mechanism.
Repeal would therefore do more than remove a symbolic obstacle to peace. It could dismantle a distinct legal barrier to Israeli economic participation, including through indirect transactions that are difficult to identify and regulate.
Legitimising Land Grabs
Lebanon’s foreign-ownership law, Legislative Decree No. 11614/1969, as amended by law in 2001, bars property purchases by anyone who “does not hold a nationality issued by a recognised state.” Many Israelis also hold European or American citizenship, which could allow them to acquire property under their other nationality. Such ownership would be subject to Lebanon’s foreign-ownership restrictions, and including applicable authorisation requirements and the 3,000-square-meter threshold.
Lebanon must retain the means to prevent Israeli territorial ambitions from being pursued through commercial transactions as well as military force.
The legality of land purchase may seem irrelevant under the current circumstances in South Lebanon, with the Israeli army’s occupation zone stretching across roughly 700 square kilometers, within which it has leveled roughly 50 villages and kept more than 200,000 Lebanese displaced. Even so, some Israelis have shown interest in acquiring southern land in ways that could later carry legal weight.
In November 2025, the Israeli settler group Uri Tzafon advertised plots in South Lebanon at about 300,000 shekels each. In April this year, Israeli Finance Minister Bezalel Smotrich promised “a political step in Lebanon that expands our borders.” Last month, Lebanese daily Al-Akhbar reported that lawyers at US firms had offered large landowners on the occupied coast between Mansouri and Naqoura above-market prices for property sales. While these developments do not establish that legally valid property transfers have occurred, they demonstrate why Lebanon must retain the means to prevent Israeli territorial ambitions from being pursued through commercial transactions as well as military force.
In a move to block such purchases, on September 10, the Lebanese cabinet approved a draft law from Finance Minister Yassine Jaber that bans property sales in occupied areas and targets buyers acting as fronts for Israeli businessmen. Parliament has yet to vote on the draft law, however, and as written it would expire with the end of the Israeli occupation. Even if adopted, such a measure would provide a narrower and potentially temporary safeguard than the existing boycott framework, leaving the question of Israeli-linked property acquisitions beyond occupied areas unresolved.
Repeal Without Return
A boycott is not inherently an act of hostility. It is a tool for regulating economic relations, whether through individual choices, collective action or government policy. Maintaining a boycott does not, in itself, prevent diplomatic negotiations or formal relations. Lebanon’s boycott law restricts Israeli commercial access to its economy, not its ability to negotiate an end to the conflict. There is therefore no legal basis to amend or repeal the law simply to allow diplomatic engagement.
Lebanon could end the state of war while keeping the boycott law in force.
Lebanon could also end the state of war while keeping the boycott law in force. Egypt’s 1979 peace treaty with Israel ended the state of war but delayed the end of Egypt’s boycott until “completion of the interim withdrawal” of Israeli forces from Sinai.
The difference today, however, is that Washington is asking Lebanon to open the door to business dealings with Israel without a peace agreement, and with the Israeli army only further entrenching itself on Lebanese territory.
In a context where Israel has offered no corresponding guarantees of withdrawal or lasting security for Lebanon, repeal of the 1955 boycott law would not only remove the strongest and most specific safeguard against Israeli economic encroachment, but it would do so for almost nothing in return.
The views expressed in this article are solely those of the author and do not necessarily reflect the views of BADIL | The Alternative Policy Institute or its editorial team.
