Israeli banks fear new sanctions over West Bank settlement financing: Report

Israeli banks fear new international sanctions over financing settlement expansion in the occupied West Bank, particularly measures planned by Britain, Israeli daily Haaretz reported Wednesday, Anadolu reports.

The newspaper said the Association of Banks in Israel had prepared an assessment warning that anticipated British sanctions could affect Israeli financial institutions.

The measures could target entities involved in settlement construction or financing, extending beyond those implicated in violence by Israeli occupiers, according to the report.

Banks are declining to clarify whether they will provide guarantees to contractors seeking to participate in government tenders for the E1 settlement project between Jerusalem and the Maale Adumim settlement.

Located east of Jerusalem, the project aims to connect Maale Adumim to the city through the confiscation of Palestinian land, separating occupied East Jerusalem from the occupied West Bank.

On Sept. 8, 12 countries, including Britain, France, Spain and Canada, announced plans to prohibit trade with Israeli settlements in the occupied Palestinian territories.

Britain also announced plans to expand its sanctions framework to cover individuals and entities involved in settlement construction or financing.

According to Haaretz, the British measures require legislation that could take six to nine months to pass.

Representatives of the banking association have met with officials from Israel’s Foreign Ministry, central bank and Strategic Affairs Ministry to discuss concerns over the potential consequences.

The association’s assessment warned that sanctions, if approved, could affect financial institutions linked to settlement expansion. International financial institutions could also tighten scrutiny of related transactions before the legislation takes effect.

The Bank of Israel expressed concern over the threat of sanctions, saying in a statement that the range of scenarios and implications is broad.

Banks have yet to clarify their position on financing or providing guarantees to construction companies participating in the E1 tenders.

“We have to be patient for another month and hope this issue calms down. Things may look different a week after the elections,” Haaretz quoted a banking source as saying, referring to Israel’s parliamentary vote scheduled for Oct. 27.

On Sept. 27, Israeli Attorney General Gali Baharav-Miara postponed the deadline for submitting bids for the E1 construction tender by one month, leaving the remaining procedures until after the Knesset elections.

Israeli authorities had planned to put 2,167 settlement housing units out to tender on Oct. 25, in addition to 1,234 units included in a separate tender in August, bringing the total to 3,401.

About 750,000 Israeli occupiers live in 194 settlements and 400 settlement outposts across the occupied West Bank, including occupied East Jerusalem, according to official Palestinian figures.

The UN has repeatedly affirmed that Israeli settlements in the occupied Palestinian territories are illegal under international law, warning that they undermine prospects for a two-state solution.