On Monday 1 September 2025, it was announced that Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF), Luxembourg's financial regulator, had issued approval for the sale of Israel’s sovereign bonds in the European market.

According to reports, Israel moved the process of securing EU approval for its diaspora bond prospectus to Luxembourg from Ireland amid increasing opposition in Dublin to its central bank's role in approving the programme on behalf of the European Union.

After Irish lawmakers and pro-Palestine campaign groups had called on the central bank to stop facilitating the sale of the bonds due to Israel's military campaign in Gaza, the central bank’s governor Gabriel Makhlouf said the approval for Israel's programme would be transferred to Luxembourg upon the expiry of the prior year's prospectus, which occurred on Monday 1 September 2025.

This followed a joint committee of Irish lawmakers recommendation in August 2025, that the Irish government seek to amend EU regulations so as to allow each individual European central bank to refuse to act as the competent authority for such bond prospectuses.

Ireland, regarded as one of the most pro-Palestinian member states in the European Union, said last year that it officially recognised a Palestinian state and was drafting legislation on restricting trade with Israeli settlements in the occupied Palestinian territories.

Israel Bonds, the country's borrowing vehicle for diaspora bonds, said on its website that the programme for the next year had been approved by the Luxembourg authorities, meaning Luxembourg will now serve as the base for bringing Israeli government bonds to market across the European Union. The approval is valid for twelve months and allows the bonds to be offered under the framework of EU prospectus regulations.

The Israel Bonds website is currently offering the bonds for sale under the slogan "Stand with Israel. Buy Israel Bonds. Now is the time.”

The website also carries an endorsement from Israeli President Isaac Herzog, which states his “unwavering support for the Jewish state” and “emphasises the crucial role of Israel Bonds during this time of conflict and war."

The CSSF's website carries the following statement in relation to the approval of securities prospectuses, from the Prospectus Act 2019: "The CSSF assumes no responsibility as to the economic and financial soundness of the transaction and the quality or solvency of the Issuer in line with the provisions of Article 6(4) of the Luxembourg act dated 16 July 2019 on prospectuses for securities (the ‘Prospectus Act 2019’)."

Specifically, it grants the CSSF the authority to approve a prospectus only after verifying that the issuer, offeror or person seeking admission to trading on a regulated market has provided sufficient information. 

When contacted by Chronicle.lu, the CSSF responded: “The State of Israel requested the Central Bank of Ireland transfer the approval of its new base prospectus to the CSSF.”

They added: “The scrutiny of this base prospectus by the CSSF for its subsequent approval has been carried out in compliance with the EU regulations on prospectuses and was limited to determining the completeness, consistency and comprehensibility of the information contained in the prospectus. The approval of a prospectus in accordance with Article 20 of Regulation (EU) 2017/1129, is not to be considered as an endorsement by the CSSF of the economic or financial opportunity of the transaction or of the quality and creditworthiness of the issuer.”

Moreover, the CSSF stated: “The scrutiny of this base prospectus by the CSSF for its subsequent approval has been carried out in compliance with the EU regulations on prospectuses, and was limited to determining the completeness, consistency and comprehensibility of the information contained in the prospectus.”

In closing, the regulatory authority emphasised: “We would also like to reiterate that the CSSF carries out the tasks conferred on it independently.”