US Says Israeli Banks Can Unfreeze Accounts of Sanctioned ‘Settlers’

WASHINGTON (JNS) – The Biden administration has clarified to Israeli Finance Minister Bezalel Smotrich that local banks are not required to block accounts belonging to citizens sanctioned for “undermining peace, security, and stability” in Judea and Samaria, Israel Hayom reported on Thursday.

The move effectively cancels the practical consequences of President Joe Biden’s Feb. 1 Executive Order 14115, as none of the sanctioned individuals own assets in the U.S. or have intentions to travel there.

According to Israel Hayom, the U.S. Department of the Treasury issued the clarification after Smotrich threatened this week not to sign a waiver shielding two major Israeli banks with business ties to the Palestinian Authority from lawsuits stemming from charges of supporting terrorism.

Ramallah’s economy largely depends on its relationship with Israel. Accordingly, the Biden administration informed Jerusalem’s Finance Ministry that there is no need for Israeli banks to prevent “routine use” of the financial system by citizens who appear on the U.S. sanction list.

Washington now only objects to financial transactions directly related to actions prohibited by the sanctions—e.g., “undermining peace, security, and stability.” In the coming days, Israeli officials will meet to discuss what this demand would practically mean, per Israel Hayom.

Knesset Constitution, Law and Justice Committee Chairman Simcha Rothman, a fellow member of Smotrich’s Religious Zionism Party, congratulated the finance minister, writing on X that “there are two important lessons here. 1. That a firm stand for the State of Israel’s sovereignty is not only a duty, but that it leads the world power to understand that it has crossed the line. 2. That [Smotrich] knows how to set this red line without flinching.”

The White House initially named four Jews as the targets of its sanctions: Yinon Levi of Meitarim Farm; David Chai Chasdai of Givat Ronen; Einan Tanjil of Kiryat Ekron; and Shalom Zicherman of Mitzpe Yair. On March 14, the Biden administration announced sanctions against three more Judea and Samaria residents: Zvi Bar Yosef of Zvi’s Farm; Moshe Sharvit of Moshe’s Farm; and Neriya Ben Pazi of Rimonim Farm.

Faced with the prospect of being cut off from the U.S. monetary system, Bank Leumi, Bank Hapoalim and the state-owned Postal Bank all took action against the Israeli citizens appearing on the sanction list.

The number of violent incidents committed by Jews against Palestinian residents of Judea and Samaria has continued to drop sharply, according to data presented to the Israeli Cabinet this month.

In the period from Oct. 7, 2023, when Hamas launched its war against the Jewish state, to Feb. 24, 2024, authorities registered 256 such incidents. This is compared to 489 incidents of nationalist crime committed by Jews in Judea and Samaria, including 26 attacks on Israeli security forces, between Oct. 7, 2022, and Feb. 24, 2023.

The report presented to decision-makers in Jerusalem comes against the background of Israel Defense Forces and Israel Police data also showing that Jewish violence in Judea and Samaria has been decreasing. Earlier this year, Israeli Foreign Minister Eli Cohen called reports of growing “settler violence” a “blood libel” and “a lie disconnected from reality.”