Rare are the instances where legal actions taken by a particular state according to its domestic laws lead to dramatic repercussions in another country and affect its conduct. The sanctions imposed by the Biden administration on four Israelis following allegations of violence against Palestinians are emerging as one of those rare situations.
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These sanctions are potentially devastating and could impact the Israeli economy, Israel's law enforcement policy in the West Bank and its international standing. Economic sanctions are a central enforcement tool of Western countries against states, organizations and individuals deemed to be serial violators of international law.
Typically, sanctions are directed toward companies and individuals from countries like Russia, Iran, North Korea and Venezuela. The implications of sanctions include prohibiting any economic activity with the sanctioned entity, freezing its assets and banning entry to the United States or European countries.
During the Biden administration, there has been a worrying shift in the policy of implementing sanctions against Israeli entities and individuals. In 2021, two Israeli cyber companies – NSO and Candiru – were added to the "blacklist" of entities posing a threat to national security and infringing on human rights. This move dealt a severe blow to the Israeli offensive cyber industry, which had thrived until then.
Sanctions on Israeli citizens with ties to the Russian government were imposed as part of efforts by Europe and the U.S. against Russia following its invasion of Ukraine. For example, in August the U.S. Treasury Department imposed sanctions on Russian-Israeli billionaire Mikhail Fridman.
However, the sanctions imposed on the four Israeli settlers represent a significant escalation in the Biden administration's policy against Israel, marking the first time the U.S. has imposed sanctions on Israeli citizens for actions taken in Israel, which should have been addressed by Israel's legal authorities.
The implication is that the United States is expressing a lack of confidence in Israel's ability to enforce the law in the West Bank autonomously. Imposing sanctions sends an extremely problematic message to Israel, as it suggests that its law enforcement system in the West Bank is ineffective. This comes at a time when Israel is facing various legal proceedings in the international arena due to the war in Gaza and the UN's request for an advisory opinion from the International Court of Justice regarding the legality of Israeli control in the West Bank
Especially at this juncture, Israel needs broad international support to argue for the independence and effectiveness of its law enforcement and judicial system. The sanctions imposed by the U.S. on Israeli citizens casts significant doubt on law enforcement in the West Bank.
Beyond the severe international repercussions, American sanctions also affect the domestic Israeli scene. For the first time, Israelis understand that international sanction regimes are not just insignificant and non-threatening tools but aggressive steps that can lead to consequences as severe as freezing anyone's private bank account.
Unlike countries like North Korea, Russia or Iran, the Israeli banking system sees itself as committed to international sanction regimes and does not want to be perceived as aiding in the violation of international sanctions. The concern is that anyone who assists someone subject to sanctions may themselves be considered a violator of the sanctions. The consequences for a bank considered to be violating sanctions can be disastrous, such as being cut off from the international payment system.
Therefore, immediately after the imposition of sanctions, Israeli banks began to freeze the bank accounts of the settlers targeted by the sanctions. Right-wing ministers in the government, led by Finance Minister Zalman Shoval, protested vehemently, with Shoval even attempting to prevent the move and engaging in discussions with the banking supervisor at the Bank of Israel. However, the Bank of Israel issued a clear statement endorsing the Israeli banks' policy of enforcing U.S. sanctions on Israeli citizens.
This was also the position of the government's legal advisor in a legal proceeding concerning a bank's refusal to transfer a donation from billionaire Roman Abramovich to an organization dealing with search and rescue. In that case, the district court ruled against the bank and the government's legal advisor, and now the matter is being clarified in the Supreme Court.
In this way, with the assistance of Israeli banks, without any explicit Israeli legislation, and without the Israeli legal system conducting a fair trial or imposing punishment, the Biden administration managed to inflict severe and painful economic punishment on those Israelis included in the sanctions order. Washington, with the help of Israeli banks, has become the enforcer of the law in the West Bank.
The ramifications of this new policy will be dramatic, especially considering that, according to President Biden's decree, the U.S. can expand sanctions to anyone involved, directly or indirectly, in violent acts or property damage in the West Bank.
To prevent further significant damage, Israeli law enforcement authorities must be allowed to operate effectively in the West Bank to try and restore international trust in Israel's ability to act on its own against those who violate the law.
Dr. Matan Gutman is a lawyer, Ynet's legal analyst, and an expert in constitutional law, administrative law and human rights law