In the wake of Luxembourg's recognition of Palestine, the government is now analysing the creation of a national sanctions framework, as announced by Prime Minister Luc Frieden and Foreign Minister Xavier Bettel.

Following Luxembourg's official recognition of the State of Palestine, Prime Minister Luc Frieden and Minister of Foreign Affairs Xavier Bettel have announced that the government is analysing the creation of a national sanctions framework.
Minister Bettel clarified that Luxembourg currently lacks a legal basis for imposing national sanctions. This analysis is expected to be completed by the end of the year.

When questioned whether such sanctions could prompt the Financial Sector Supervisory Commission (CSSF) to revoke authorisations for Israeli government bond sales in Europe, Bettel stated that any CSSF decision would be independent. "If we decide on sanctions, then the CSSF must decide whether this is a reason not to accept the bonds", he explained, adding, "We are not imposing sanctions to see to it that the CSSF cannot reject bonds."

Bettel further detailed that the government is compiling a list of all current measures against Israel for the CSSF. Additionally, Luxembourg will coordinate with its BENELUX partners regarding imports from Israeli settlements in occupied Palestinian territories, arguing that a joint approach is necessary as most such imports enter the region via Brussels.

At the European level, Bettel noted that unanimous support for sanctions against Israel has been lacking. However, he expressed optimism regarding areas requiring only a simple majority, such as certain EU-Israel trade agreements.

The minister emphasised that work on this issue is being conducted simultaneously on national, European, and international levels.