US tells Israel it need not close bank accounts of sanctioned settlers

Jacob Magid is The Times of Israel's US bureau chief

The United States sent a letter to the Israeli Finance Ministry earlier this week informing Jerusalem that the sanctions imposed by the Biden administration earlier this year against violent settlers were not intended to compel Israeli banks to close the accounts of targeted individuals, an Israeli official tells The Times of Israel.

Several major banks took this step in order to avoid violating the sanctions, which the Biden administration began issuing earlier this year after determining that the Israeli government was systematically failing to clamp down on settler violence.

The sanctions infuriated Finance Minister Bezalel Smotrich who characterized them as a draconian obstruction of Israeli sovereignty, and the far-right lawmaker threatened to take steps in his capacity as head of the treasury that would significantly impede the Palestinian economy, the Israeli official adds, confirming reporting in the Israel Hayom daily.

Ostensibly wary of such retaliatory actions, the US agreed to send a letter to the Finance Ministry clarifying that the sanctions were not intended to cut off those targeted from the entirety of their assets.

Rather, they should still be allowed to access their bank accounts for basic sustenance purposes. Purchases beyond this scope, including foreign transactions will remain barred, the letter clarified, giving Israeli banks the nod to partially re-open the accounts of the handful of settlers targeted, according to the Israeli official.

There have been two rounds of sanctions since the policy was first unveiled on February 1, with four being targeted in the first batch and three in the second along with two illegal outposts.

A third round is expected in the coming weeks, a US official told The Times of Israel, adding that the US plans to add new names to the list every month or so.

Those liable under the sanctions are not only the violent individuals themselves, but also entities that have financial interactions with them.

The US State Department did not immediately respond to a request for comment on the matter.

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