This report provides information and analysis on the following: Background on a "BDS" (boycott, divestment, and sanctions) movement against Israel. Private economic measures and product labeling policies—including those of the United States and European Union (EU)—that "differentiate" between (1) Israel in general and (2) entities linked with Israeli-developed areas and settlements in the West Bank, East Jerusalem, and Golan Heights (areas that Israel has controlled and administered since the 1967 Arab-Israeli war). Anti-BDS or antidifferentiation efforts to date, including federal and state legislation and proposals. Legislative considerations arising from existing antiboycott law, First Amendment issues, and issues regarding congressional powers over commerce and foreign affairs. Congress and the Trump Administration currently face a number of policy questions on these issues. The BDS movement exists within a larger context of Israel's complex economic and political relations with the world. For more information, see CRS Report RL33476, Israel: Background and U.S. Relations , by [author name scrubbed]. The BDS movement is generally seen as a loose grouping of actors from various countries who advocate or engage in economic measures against Israel or Israel-related individuals or organizations, though defining precisely what may or may not constitute BDS activity is subject to debate. Those who are part of the movement or support it generally express sympathy for the Palestinian cause. No foreign government has acknowledged participating in the BDS movement, and the movement does not have a secondary tier targeting companies that do business in or with Israel. In July 2005, various Palestinian civil society groups issued a "Call for BDS." These groups compared their grievances against Israel to the "struggle of South Africans against apartheid," and sought international support for "non-violent punitive measures" against Israel unless and until it changes its policies by (in the words of the "call") 1. "ending its occupation and colonization of all Arab lands and dismantling the Wall;" 2. "recognizing the fundamental rights of the Arab-Palestinian citizens of Israel to full equality;" and 3. "respecting, protecting and promoting the rights of Palestinian refugees to return to their homes and properties as stipulated in UN [General Assembly] resolution 194." Specifically, these Palestinian civil society groups called upon "international civil society organizations and people of conscience all over the world to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era," and sought to have this audience pressure their "respective states to impose embargoes and sanctions against Israel." The stated goals of the movement to change Israel's treatment of Palestinians might, if achieved, have broader implications for the demographic and sociopolitical structure of Israel within its original 1948 borders. For example, some Israelis and their supporters voice concern that the movement's demands for an end to "occupation" of Arab lands and for promoting a "right of return" for Palestinian refugees could endanger Israel's identity as a Jewish state if the demands were interpreted as insisting that refugee populations be able to live and vote in Israel. Israeli officials strenuously oppose the BDS movement, and statements by U.S. officials have consistently denounced any boycotts or other punitive economic measures targeting Israel. In their Senate confirmation hearings in January 2017, Secretary of State Rex Tillerson and Permanent Representative to the United Nations Nikki Haley stated their opposition to BDS-related measures. Debate is ongoing in the United States and elsewhere about whether economic "differentiation" (such as through product labeling policies) between (1) Israel proper and (2) Israeli-developed areas and settlements in the West Bank, East Jerusalem, and Golan Heights constitute a form of BDS. Some individuals and groups who proclaim the need to maintain Israel's Jewish identity publicly oppose BDS measures against companies inside Israel, but voice support for economic measures that target the settlements or those doing business there. These individuals and groups sometimes cite international political and legal views calling into question the legitimacy of Israeli civilian communities and businesses in areas that Israel has controlled since the 1967 Arab-Israeli war. For example, some European countries' pension funds and companies have withdrawn investments or canceled contracts owing to concerns regarding connections with settlement activity, as distinguished from broader anti-Israel economic measures. Also, the leading councils of a number of U.S.-based Christian churches have either voted to divest from companies with settlement ties or have considered doing so. BDS or economic differentiation measures exist within a larger context of international criticism of Israel. Israel and many of its supporters, along with the international media, frequently raise the possibility of Israel's "isolation" (or, as some Israelis characterize it, "delegitimization"). Some Israeli officials and outside observers have downplayed the concern, pointing to improvements in Israel's relations with a number of countries. Moreover, while some divestment from and boycotts of Israel or Israeli goods have taken place in recent years, such measures appear to have had little overall effect on Israel's economy. For example, one observer pointed to the tripling of foreign investment in Israel from 2005 to 2016 to claim that BDS or related economic measures against Israel have not been successful. In September 2015, the Israel-based company SodaStream closed its West Bank factory and relocated its operations inside Israel, though its CEO claimed that the BDS movement had only a "marginal" effect on these changes. Reportedly, all of SodaStream's West Bank-based Palestinian employees (between 500 and 600) were laid off because none could obtain permits from Israeli authorities to work at the new location. In May 2017, 74 of these employees received permits after persistent requests from the company. A common Israeli assertion is that BDS advocates or those who differentiate economically between Israel and West Bank settlements harm the employment situation of West Bank Palestinians. Many Palestinians and some international human rights groups counter this assertion by stating that Palestinians would be able to enjoy greater job prospects if Israeli settlements and movement/access/zoning restrictions in the West Bank did not constrain Palestinians' entrepreneurial capacities or their ability to attract international employers or outside investment. Some Israelis attempt to justify constraints on West Bank Palestinians by reference to concerns about security for Israeli citizens located in Israel proper and the settlements. While widespread consensus across Israel's political spectrum favors countering economic and political measures targeting Israel, there is debate over the extent to which changes in Israeli policy toward Palestinians can improve international attitudes toward Israel. Right-of-center political figures within the government sometimes portray criticisms of Israeli actions as pretexts for more deep-seated prejudice against Israel and/or Jews, while left-of-center figures within the opposition periodically criticize government leaders for steps that may have the potential to undermine support for Israel in international fora. Israeli political leaders routinely denounce BDS, and Israel's government has reportedly allocated about $26 million in annual funding to the Ministry of Strategic Affairs aimed at countering BDS-related activities. Such countermeasures apparently include assertive public diplomacy, outreach to enlist anti-BDS allies within the Jewish diaspora, and digital initiatives like gathering intelligence on activist groups. Some current and former Israeli diplomats were cited in 2016 as saying that robust Israeli efforts to counter BDS may backfire by providing the movement with free publicity and by possibly alienating would-be diaspora supporters—including in the United States—via polarizing rhetoric. Some private individuals and organizations have raised funds and public awareness in an effort to counter pro-BDS sentiment in the United States (such as on college campuses and social media websites) and elsewhere, and Israel and a number of organizations held an anti-BDS summit in May 2016 at the U.N. General Assembly. In March 2017, Israel's Knesset (parliament) passed a law that allows the government to block entry into the country of nonresidents who publicly call for a boycott against Israel or Israelis in West Bank settlements, or are associated with organizations that do so. Some of the law's opponents warn of negative consequences to Israel if it keeps out those who assert that they support its interests by means of their opposition to settlements. Debates regarding policies that govern the labeling of consumer products imported into the European Union and United States from Israeli settlements, as well as the broader implications of such policies, have become part of the overall policy discussion regarding BDS and differentiation. Given that the 28-country European Union (EU) is Israel's largest trading partner, Israeli officials routinely express concern regarding prospects of reduced Israel-EU economic cooperation as a consequence of Palestinian-related developments. Dating back even to the previous decade, some EU member states have taken a number of steps to "differentiate between Israel and its settlements project in the day-to-day conduct of bilateral relations." The EU does not view such "differentiation" measures as part of or supporting the BDS movement. On November 11, 2015, the European Commission issued a notice setting forth guidelines regarding labeling of certain products imported into EU countries from areas that Israel captured in the 1967 Arab-Israeli war, along with an accompanying factsheet. The labeling notice provides that products in question coming from Israeli settlements in the West Bank (including East Jerusalem) or Golan Heights should be clearly differentiated from products coming from Israel and those produced (generally by Palestinian-run businesses) outside of settlements in the West Bank, Golan Heights, and Gaza Strip. According to one media report, "EU diplomats say there are no serious plans for additional measures" and that the EU "insists the move is purely technical, applying the EU policy that settlements are illegal." The factsheet accompanying the notice stated The EU does not support any form of boycott or sanctions against Israel. The EU does not intend to impose any boycott on Israeli exports from the settlements. The Commission will only help Member States to apply already existing EU legislation. The indication of origin will give consumers the possibility to make an informed choice.