The Ministry of Industry, Trade and Tourism answered a Palestinian government letter protesting the involvement of Spanish firms in a tram network being built in East Jerusalem, a project tied to the occupied Palestinian territories. The ministry affirmed strong support for the Palestinian cause and stated that it does not participate in projects carried out by certain Spanish multinationals such as CAF or COMSA, while noting that there are no legal elements preventing those companies from pursuing such work.
The industry letter, signed by Héctor Gómez, begins: “His Excellency Khaled Osaily, Minister of National Economy of Palestine. In response to your letter from July 2023, I take this opportunity to confirm our firm backing of the Palestinian cause.” It also notes that all EU member states view Israeli settlements as illegal under international law and as an obstacle to peace and a two-state solution to the Israeli-Palestinian conflict, as stated in the correspondence.
The ministry emphasizes that it regularly draws the attention of citizens and businesses to risks associated with financial activities tied to Israeli settlements in the West Bank and East Jerusalem. Specifically, it warns that financial transactions, investments, acquisitions, and contracts that benefit Israeli settlements may involve economic and legal risks because such settlements sit on territory considered occupied and not legitimately part of Israeli sovereignty. Public tenders for tram construction in Jerusalem are cited as an example, with a reminder that these activities could violate international humanitarian law.
Basque-based CAF and Catalan company COMSA, along with smaller outfits such as Madrid-based GMV and TYPSA, are involved in developing new tram lines in Jerusalem with stops in settlements on occupied land. The projects are valued at over 3.2 billion euros and reportedly involve collaboration with Israeli partners on line layout, train construction, and long-term maintenance. Amnesty International and other organizations have opposed participation by multinational firms in these plans, arguing that it reinforces occupation and recalling that some firms chose not to enter the competition because the plan included Israeli settlements.
The Israeli-Palestinian conflict remains at a high point, with reporting indicating significant casualties and abductions in recent escalations. The humanitarian toll has been heavy, affecting thousands of lives across both sides in the affected regions.
Complaints to Industry
A Committee of Solidarity with the Arab Cause filed a complaint with the ministry through the National Contact Point (PNC) regarding CAF and GMV, which won the first competition in 2019. A non-judicial process was opened to assess compliance with OECD standards on international conduct. The industry offered mediation, but CAF and GMV declined. CAF later issued a non-binding report arguing that its operations did not promote colonization because they followed appropriate guidelines.
Last summer, the Palestinian government sent a letter to the Spanish Minister of Industry urging urgent actions and measures, including suspending CAF and GMV and withdrawing these projects from Spanish companies. COMSA was not named in that letter since its contract had not yet been awarded at that time.
In his response, Héctor Gómez acknowledged the Palestinian concerns and explained that while the ministry understands and supports those concerns, the National Contact Point lacks the legal tools to intervene directly in the private sector’s decisions abroad. He noted that the ministry supports the internationalization of Spanish firms in general but did not share the view presented about these particular companies. The message to the involved firms was reiterated during the entire PNC process.
International voices advocating for Palestinian rights suggest that more can be done beyond the PNC when political will exists. They argue that the Spanish state and the EU could ban trade and impose sanctions on firms linked to settlement activities through mechanisms such as public procurement laws. They also remind governments of prior measures, such as ensuring that pandemic-era subsidies do not enable entities to shelter funds in tax havens.