Could new US sanctions threaten the future of West Bank settlements?

Escalating US sanctions on violent settlers, initially taken as a mostly political rebuke to extremists, are now seen by some inside Israel as a potential threat to the financial viability of all Israeli settlements and companies in the occupied West Bank.

The Biden administration’s new controls on a handful of men andorganisations linked to attacks on Palestinian civilians, first announced in February then expanded twice in March and April, have generally been treated in Israel and beyond more as a humiliating public censure of a close ally than as a major political shift.

But experts from across Israel’s political spectrum say this underestimates the ferocity with which the US implements its financial controls and the scope of the new sanctions framework.

They told the Observer that the relatively small list of sanctions targets in West Bank settlements could still prompt financial institutions to draw back from offering services to any people or companies based there, because of fears they could accidentally facilitate illegal transactions.

And while sanctions so far have focused only on violent individuals and small groups, a new executive order gives the US a very broad remit to target any person or entity “responsible for or complicit in … threaten[ing] the peace, security, or stability of the West Bank”.

That explicitly includes politicians who support or enable them, stating actions subject to sanctions include “directing, enacting, implementing, enforcing or failing to enforce policies”, wording that could be used to target people at the heart of Israel’s government.

“Israel must do more to stop violence against civilians in the West Bank and hold accountable those responsible,” US secretary of state Antony Blinken