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The dangers of partially informed comment revealed as activists state agenda

Nigel Morris-Co...

Years ago, there was a cliché phrase that seemed to be repeated far too much: "a little knowledge is a dangerous thing." We need to relearn this for the benefit of society as a whole and for business in particular as comment-lite and narrow opinion is promoted as the norm across the whole spectrum of media.

As the world has been driven by politicians' sound-bites and the tweets of so-called celebrities, and as opinions are spouted by those who say much but know little, the phrase is becoming more important. Worse, as media, both traditional and new, desperately tries to gather readers, listeners and viewers, the art of the challenging interview is being lost. Increasingly, media is a platform for one side of arguments where balance is absent or, worse, where a wider perspective is unknown to the presenter and, therefore, his audience. "Experts" are often lobbying for their position and have no interest in balance, and will often retreat into a stock of pre-prepared phrases to defeat questioning, even if there is some. It is sad that, even the BBC, which advertises its claimed independence, rarely challenges its interviewees and, when it does, internet traffic increases criticising the questioner. Indeed, the only BBC TV programme that consistently does that is "Hard Talk" which often turns into non-interview as the presenter shouts down the person he is interviewing.

Yesterday, I was listening to a broadcast on an Islamic radio station. I'm not going to discuss the religion, nor the politically charged language that was used - but it bears making the point that the speakers were very clear to separate criticism of the state of Israel's anti-Palestinian attitude of its occupation of Palestinian properties and the abuses of the Palestinian people from comments about Jews, per se. Indeed, they were at pains to indicate that their objective is a peaceful co-existence between all the various faiths.

I am going to focus on one very specific aspect made by one of the "activists" that was being interviewed. She said that people should find out where products originate and, if they originate in the occupied territories, they should refuse to buy them. For the avoidance of doubt, this author agrees, without question, with that policy.

By reason of that statement, I and my companies are now at risk of action by the USA because the USA has a law that says that no person over which the USA claims any authority, acts illegally if he undertakes any act in support of the Arab League blockade of Israel. Anyone who promotes interfering with trade with Israel falls foul of that law.

By encouraging businesses to refuse to purchase product that originates in the Occupied Territories and is moved via Israel (as almost all things are), the speakers exposed businesses to prosecution in the USA.

Many people would adopt the Mugabe response when he was told that the EU was planning in issuing sanctions: he said "I have no sheep in Europe." But while most of the world has no sheep in Europe, it does have money there. This is how it works:

If you are sitting in a café in Melbourne and you agree to make payment to the person sitting next to you, using US dollars, you might think that you tell your bank to make the payment and your bank simply debits your account and credits your friend's account. You might even imagine that, if you are customers of banks that have branches next door to each other, that someone would walk next door with the money and a paying-in slip (or would have done before the clever back-office tech was linked to internet banking).

But that is now what happens: you tell your bank to make the transfer, and your bank transfers the money from your account to its own account. Then it sends a message to a "correspondent bank" in New York and tells it to make a transfer to the account of the correspondent bank for the bank where your friend holds his account. The first correspondent bank debits your bank's account and sends a message to the second correspondent bank saying "we've got some money for you. Please credit the account of [your friend's bank] and we'll settle up later. Later, the two banks work out what moneys have passed between them and the difference, one way or the other, is paid over In this way the records of transactions between customers do not reflect the value that in fact passes between banks at settlement time. Now the second correspondent bank sends a message to your friend's bank saying "we've got some money for your and it's to be credited to the account of [your friend]. And so it is.

Under USA law, operating on the sidelines since the mid 1970s and brought into legislation by the USA PATRIOT Act in 2001, that transaction between the two American, correspondent, banks gives the USA the right to examine the details and, not so long ago, the messaging system that almost all banks in almost all countries use, SWIFT, was pressured into modifying its forms so that there is much more information available in relation to the sender and the recipient of the moneys.

All banks are required to monitor transactions for suspicious activity and that relates to the money as well as where and who it comes from and to. Therefore, both of the correspondent banks are looking for information, on the SWIFT forms and otherwise that might indicate that the US government might be interested. Note all the "might" statements: that's because it's all very woolly and banks often make reports so they don't get into trouble.

Having established that your money is in the USA and that the USA has control over it, it is clear that if a transaction comes to light that a bank suspects might be in breach of the USA's support for Israel, the USA can freeze that money. But, it won't still have the money: it will have moved by the time action is taken. Here comes another reason why people really have to know the detail of what they are talking about: at the time the money is in the USA, the USA does not consider it your money, they consider it to be your bank's money. Therefore they will freeze money held by your bank and that means your bank has to freeze your accounts so that it does not end up with a shortfall. Your bank probably won't do it at once: they will explain and ask you for the money but they cannot delay fixing the hole in their own balances that the action has created.

This is why the statements about refusing to buy product from the occupied territories were dangerous. There are many small and large importers all over the world who, if they rejected product that Israel claims originates in its territory, despite that lie, could find themselves with their accounts frozen and the risk of a fine in the USA, if they do any business in US Dollars. And it's why interviewers must challenge speakers, not allow platforms simpliciter. It is vital that those who suggest courses of action are required to explain what can go wrong, even with something as apparently benign as refusing product produced in illegal conditions.

Individuals making purchasing decisions on supermarket shelves are safe.