Bank of Israel backs freezing settlers' accounts

National bank says in statement that circumventing international policies may introduce risk to Israeli banks and the entire market as a whole; Smotrich, Ben-Gvir object
The Bank of Israel said on Monday that it would not intervene in the decisions of Israeli banks to block and freeze the accounts of Israeli settlers suspected of violent activity against Palestinians in the West Bank. In a statement the central bank added that circumventing the U.S. sanctions imposed on those involved could expose Israeli banks to risks.
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The Bank of Israel failed to respond to Finance Minister Bezalel Smotrich’s request, who sought to prevent the freezing of the settlers’ accounts. Following the U.S., Canada has also announced that it would join the move, and it’s now expected that other Israeli banks will freeze the accounts of the four Israeli settlers after Bank Leumi and Israel’s Postal Bank have already done so.
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בנק ישראל
בנק ישראל
Bank of Israel
(Photo: Reuters)
"Banking corporations engaged in international activity are required to establish policies and procedures to enforce national and international sanctions lists and dealing or conducting transactions with entities noted in the aforementioned lists," the Bank of Israel statement read.
"The circumvention of sanctions, therefore, has the potential to expose banking corporations to significant risks, including compliance risks, money laundering risks, and financing terror, legal risks, and reputational risks. Maintaining proper management and activity of Israeli banking corporations is necessary to preserve the regulated activity of the Israeli market as a whole, to maintain proper ties with the global economy, and ultimately for the proper functioning of the Israeli economy."
central bank said it has issued no new directive in the matter, but rather reiterated existing regulations. Therefore, it’s clear that it did not instruct Israeli banks to clarify the circumstances of freezing the settlers’ accounts, despite Smotrich’s request to do so.
Earlier on Monday, the Israel Postal Bank froze the account of David Chai Chasdai, one of the four settlers whom the U.S. government sanctioned. According to the U.S., Chasdai "initiated and led a riot that included setting vehicles and buildings on fire and causing damage to property in Huwara, resulting in the death of a Palestinian civilian.”
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ינון לוי שחשבונו בבנק לאומי הוקפא
ינון לוי שחשבונו בבנק לאומי הוקפא
Yinon Levi (left) who had his bank account frozen
The account was one used by Chasdai and his wife. "The fact that a government bank decides to freeze settlers’ accounts due to pressure from extreme leftist organizations and a hostile U.S. government is unimaginable,” Chasdai said. “However, the fact this is happening under the tenure of a right-wing government just after the biggest massacre in the country's history is a national disgrace."
The Postal Bank's restriction comes after Leumi Bank froze the account of Yinon Levi on Sunday. "These are baseless accusations," Levi said. According to the U.S. government's order, Levi " led a group of settlers that assaulted Palestinian and Bedouin civilians, burned their fields and destroyed their property.”
Last week, U.S. President Joe Biden signed the first-of-its-kind presidential order imposing sanctions on four Israeli settlers, saying that according to the U.S. Department of State, they were involved in violent incidents against Palestinians in the West Bank.
In addition to Levi and Chasdai, sanctions were imposed on two more settlers: Einan Tanjil, who, according to the U.S., "assaulted Palestinian farmers and Israeli activists by attacking them with stones and clubs, resulting in injuries that required medical treatment," and Shalom Zicherman who, “according to video evidence, assaulted Israeli activists and their vehicles in the West Bank, blocking them on the street, attempted to break the windows of passing vehicles with activists inside, and cornered at least two of the activists and injured both.”
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Itamar Ben-Gvir, Bezalel Smotrich
Itamar Ben-Gvir, Bezalel Smotrich
Itamar Ben-Gvir, Bezalel Smotrich
(Photo: AFP, Alex Kolomoisky)
On Sunday, Leumi Bank decided to block the UN agency UNRWA’s bank account following concerns that funds in the organization's account, intended to assist refugees, may be aiding terrorist organizations in the Gaza Strip.
Communication Minister Shlomo Karhi, responded to the Postal Bank's actions, saying: "The blocking of an Israeli citizen's account by an outrageous U.S. order is intolerable. Such actions against an Israeli citizen without any proper legal process should not be accepted. I have referred the matter for legal consideration, and will order to restore the account should I be able to."
National Security Minister Itamar Ben-Gvir added: "Restricting the bank accounts of Israeli settlers without explanation and due process is crossing a red line and can’t be allowed. Bank CEOs are dragged along by foreign statements, and implement them in practice. I call on those responsible in Israel to act immediately to restore the frozen bank accounts.”
Finance Minister Bezalel Smotrich sought answers from Bank of Israel Banking Supervisor Daniel Hahiashvili regarding the legal basis upon which the directive to freeze Levi's bank account was given. "It's unreasonable, and we cannot leave it like this," said Smotrich.
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