Biden's sanctions will damage the economy of West Bank settlements

The damage to the settlement enterprise will not be abated by the signing of a nullification order in Washington.

By SHUKI FRIEDMAN NOVEMBER 23, 2024 15:39

Finance Minister Bezalel Smotrich cries as he recounts the sacrifices of the Religious Zionist community during the war, October 28, 2024. (photo credit: KNESSET CHANNEL/SCREENSHOT)

Following the United Kingdom’s lead, on Monday the United States imposed sanctions on Amana, the primary settler development organization in Judea and Samaria (the West Bank). Those who failed to stop this snowball when it involved a few shepherds on isolated farms must now endure sanctions against the heart of the settlement enterprise. 

Given the broad language of President Joe Biden’s executive order, it is possible that even as a “lame duck” the president might impose sanctions on individual ministers, such as National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich, as well as additional organizational entities. 

The implications of these sanctions, as long as they remain in effect, are dramatic. Indirectly, they signal that all economic activity in Judea and Samaria is something to avoid. A Trump administration will likely repeal these sanctions, but other countries will continue to impose them. The damage to the settlement enterprise will not be abated by the signing of a nullification order in Washington.

In early February, while Israel was embroiled in the war in Gaza, Biden, encouraged by Israeli and American Jewish left-wing organizations, signed an executive order allowing sanctions to be imposed on individual settlers. A few settlers whom the Americans believed engaged in violence against Palestinians were the first to be sanctioned. That executive order was sold as clearing the way for sanctions on “violent settlers.” 

Threatening the two-state solution

This was a dangerous misrepresentation. A close reading of the February order shows that it enabled sanctions on the entire settlement enterprise. It stated that sanctions could be imposed on anyone threatening the realization of the two-state vision promoted by the United States – in essence, any Jew operating within the territories.

Since February, the Americans have progressively expanded the circle of sanctions – from a few errant shepherds who may have attacked Palestinians to organizations daring to oppose American policy, such as Tzav 9 and Hashomer Yosh. 

National Security Minister Itamar Ben-Gvir asks the District Court in Jerusalem to bar the showing of an expose against him, November 10, 2024 (credit: Chaim Goldberg/Flash90)

THE NEW Amana sanctions represent a crescendo in this process but by no means mark the end of the US sanctions campaign. Despite characterizing these sanctions as a response to “settler violence,” it is clear that it is much more than that. In fact, these sanctions have turned into a vehicle for expressing frustration with the Israeli government’s West Bank policies, effectively controlled by hardliners like Smotrich and Ben-Gvir.

On January 20 at noon, the Oval Office will be turned over to President Donald Trump, whose personnel picks thus far signal an administration far friendlier to settlement activity in Judea and Samaria. It is highly likely that repealing Biden’s executive orders concerning the territories will be among Trump’s first acts, canceling declarations targeting individuals and companies. But the cost paid by the settlement enterprise for Biden’s sanctions will persist.

Why? The consequences of these sanctions are severe. In the immediate future, Amana and other sanctioned organizations will face difficulties in managing their daily economic activities. Even if these sanctions were lifted by Washington tomorrow, the train has already left the station. 

Numerous other countries, led by the UK, France, and Canada, have imposed similar and, in some cases, even broader sanctions than the Americans. Their impact is wide and enduring. For example, many international financial bodies, wary of sanctions, are reluctant to handle any transaction originating from Judea and Samaria, even if unrelated to the sanctions. 

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Moreover, companies increasingly avoid doing business with entities operating there, and some international investment bodies are disavowing activities in the West Bank and potentially in Israel as a whole.

The new Trump administration may ameliorate the situation, but it will not be able to resolve it entirely. First, even though these sanctions have been in place for months and are intensifying, the Israeli public and government have yet to fully grasp their ramifications. 

It is the government’s duty to work to halt this snowball effect and mitigate the cost of the sanctions – externally through diplomatic efforts by sanctioning countries; and internally by finding solutions for those hit by sanctions.

However, these solutions should avoid rash measures that might lead to Israel’s entire financial system being ostracized globally.

The writer is the director-general of the Jewish People Policy Institute and a senior lecturer in law at the Peres Academic Center. He previously chaired the committee promoting sanctions against Iran in the Prime Minister’s Office.