This comes after more than a dozen members of the US congress asked that Ireland be added to a list of countries boycotting Israel if the bill is passed.
Tanaiste and Foreign Affairs Minister Simon Harris said despite the opposition, Ireland “intends” to continue to pass the draft laws.
It comes amid global criticism of Israel after its security cabinet approved a plan to take over Gaza City.
Israel’s air and ground war has already killed tens of thousands of people in the Gaza Strip, displaced most of the population, destroyed vast areas and pushed the territory towards famine.
The campaign was triggered when Hamas-led militants stormed into Israel on October 7 2023, killing around 1,200 people and abducting 251 others.
The militants still hold 55 hostages — less than half of them believed to be alive — after more than half the captives were released during ceasefires or other deals.
Ireland’s coalition of Fine Gael, Fianna Fail and a group of independents committed to passing a ban on goods from the occupied Palestinian territories in its programme for government completed in January.
A cross-party committee recommended that the government pass the bill and the prohibition of imports from the Palestinian Occupied Territories should be extended to include trade in services.
Mr Harris said Ireland was not alone in wanting to ban trade with the occupied Palestinian territories.
“People in Ireland, people in Europe and people right across the world feel extraordinarily strongly about the genocidal activity that we’re seeing in Gaza, about the starving children and we will use all tools at our disposal,” he told reporters on Friday.
“It’s not a surprise that some seek to distort or misrepresent our proposed actions.
“Remember, Ireland isn’t alone in relation to this; this week we also saw Slovenia take action in relation to trade from the occupied territories, I expect Belgium are likely to do the same and we intend to advance with our legislation.
“Of course we’ll continue to engage and explain and never allow our position to be misrepresented.”
The group of US Congress members wrote to US Secretary of the Treasury Scott Bessent asking him to consider adding Ireland to a list of countries boycotting Israel if the Occupied Territories Bill (OTB) is passed.
The letter, signed by New York Republican Congresswoman Claudia Tenney and supported by a group of 16 congressmen and women, states “serious concerns” regarding the Government’s proposal to prohibit the import of goods from Israeli-occupied territories.
It references Section 999 of the Internal Revenue Code of 1986 which opposes “foreign boycotts against friendly nations, particularly those aimed at Israel”.
If Ireland was to be added to the list of countries which boycott Israel, it would impose specific tax reporting requirements and potential penalties for US individuals and businesses engaged in certain activities in those countries, the letter said.
The group describe the work of the Irish government on the OTB as “part of broader effort aligned with the global Boycott, Divestment, and Sanctions (BDS) movement which seeks to economically isolate Israel”.
The letter said: “Last month, Irish Foreign Affairs and Trade Minister Simon Harris introduced legislation to prohibit the import of goods and services originating from territories under Israeli administration that they characterize as ‘occupied,’ including Judea and Samaria, Gaza, parts of Jerusalem and the Golan Heights.
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“This measure is part of a broader effort aligned with the global Boycott, Divestment, and Sanctions (BDS) movement, which seeks to economically isolate Israel. Such policies not only promote economic discrimination but also create legal uncertainty for U.S. companies operating in Ireland.
“We encourage the Treasury Department to assess whether Ireland’s proposal indicate that they require or may require participation in or encouragement of an international boycott within the meaning of Section 999(a)(3). If the criteria are met, Ireland should be added to the boycott list to ensure that U.S. companies are informed of their reporting obligations and protected from unintended legal exposure.
“The United States must send a clear signal that efforts to economically isolate Israel will carry consequences, and that U.S. law designed to combat such discrimination will be enforced.
“We appreciate your attention to this matter and look forward to your response.”
Simon Harris has indicated that the bill is likely to go before the Dáil and Seanad in early autumn.
If passed the bill would lead to Ireland being added to a list of countries which implement an “unsanctioned international boycott”.