Photographer: Ahmad Gharabli/AFP via Getty Images

Loans to Israeli Settlers Break International Law, HRW Says

Updated on
  • Human Rights Watch: loans to West Bank projects should stop
  • Israeli banks lack legal basis to finance settlements, it says

Human Rights Watch called on Israeli banks to halt the financing of settlement activity in the West Bank, arguing that the legal justification they use for doing business there isn’t valid.

Israel’s five biggest banks, led by Bank Hapoalim Ltd. and Bank Leumi Le-Israel Ltd., are contributing “to serious human rights and international humanitarian law abuses” by financing construction in the settlements, the New York-based group said in a report published on Wednesday. 

“Israeli banks are making existing settlements more sustainable, enabling the expansion of their built-up area and the take-over of Palestinian land, and furthering the de-facto annexation of the territory,” the group said.

The banks have maintained that ending their services to West Bank clients would violate domestic anti-discrimination laws. While they cannot refuse a customer based on the place of residence, they can avoid financing settlement projects by citing their obligation to human rights and still comply with Israeli law, HRW said.

The Israel Association of Banks, the umbrella group representing the country’s lenders, declined to comment.

An Israeli group set up to scrutinize non-governmental organizations said the report was part of HRW’s participation in an international campaign to enact economic sanctions against the country. 

“Economic warfare against the Israeli financial system has long been a goal of anti-Israel activists,” Anne Herzberg, legal adviser at Jerusalem-based NGO Monitor, said in an email. “HRW’s pseudo-legal arguments and sophistry do not stand up to scrutiny and cannot create legal obligations where none exists,” she said.

Israeli banks’ role in financing settlement construction has also made them a target of the Palestinian-led Boycott, Divestment and Sanctions movement, which seeks to end Israel’s occupation of territories Palestinians claim for a state through economic pressure and isolation. In the biggest case, the Dutch asset manager PGGM cut its holdings in Israel’s five largest banks in 2014, citing “their involvement in financing Israeli settlements.”

(Adds response from NGO monitor in seventh paragraph.)
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