US steps up sanctions against Israeli settlers and ‘outposts’ in occupied West Bank

The US has stepped up efforts to target violent Israeli settlers, adding new individuals and organisations to a growing sanctions list and warning banks to check transactions linked to all Israeli “outposts” in the occupied West Bank.

The new sanctions cover the far-right group Lehava, already listed by the UK, and two founding members of Tsav9, a campaign group that blocked aid from reaching Gaza. The new measures also target outposts, suggesting the Biden administration is prepared to take at least some steps to confront Israel’s creeping land grab on the West Bank.

One of the outposts targeted was set up by a regional council, implying that branches of the Israeli state are potentially no longer off limits, when it comes to sanctions.

“It appears that they’ve not just targeted extremist settlers but have introduced a linkage to territoriality by citing illegal outposts,” Aaron David Miller, a former state department Middle East negotiator now a senior fellow at the Carnegie Endowment for International Peace.

“It doesn’t take much imagination to conclude that the next target would be [Israeli] government financing for illegal outposts. And that would be a new departure to be sure.”

The G7 foreign ministers joined the UN and EU on Thursday in condemning the Israeli government’s decision last month to legalize five outposts in the West Bank, labelling the plan “inconsistent with international law”. The G7 statement comes at a time of rising concern that Israel’s rightist government is steadily moving towards annexation of the West Bank.

Matthew Miller, the state department spokesperson, said that the four West Bank outposts specifically targeted by Thursday’s sanctions, “are owned or controlled by US-designated individuals who have weaponized them as bases for violent actions to displace Palestinians”.

“Outposts like these have been used to disrupt grazing lands, limit access to wells, and launch violent attacks against neighboring Palestinians,” Miller said.

In a written statement, Miller reflected growing frustration in the Biden administration at the failure of the Israeli government to take its own measures against violent West Bank settlers, and warned that further US punitive measures could be in the pipeline.

“We strongly encourage the Government of Israel to take immediate steps to hold these individuals and entities accountable,” he said. “In the absence of such steps, we will continue to impose our own accountability measures.”

Potentially the most consequential element in the new US measures is the updated red flag alert from America’s Financial Crimes Enforcement Network (FinCen). It raises the risks of punitive fines for banks dealing with West Bank settlements.

The alert warns financial institutions about potential “suspicious activity”, that could indicate a sanctioned individual or organisation is trying to bypass controls. This now includes “payments involving entities, individuals, addresses on accounts, receiving addresses, or IP addresses linked to any West Bank ‘outpost’,” the warning says.

Human Rights Watch, who have long campaigned to highlight settler violence on the West Bank, welcomed the US measures as being the most far-reaching on the issue to date, but called for direct action against the Israeli government for its support for the extremists.

“In this case we’re pleased that the Biden administration is going farther than before with the alert,” Sarah Yager, Washington director of Human Rights Watch, said. “Now it’s time for sanctions against the Israeli authorities that are approving and inciting. We want to see the US, UK, Canada and others focus on power behind all this in the West Bank.”

All settlements in the occupied West Bank are considered illegal under international law. Outposts are settlements considered illegal even under Israeli law. There are nearly 200 all across the West Bank, according to the activist group Peace Now.

Many of the small outposts have close links to over 140 larger settlements recognised by the Israeli state though deemed illegal under international law. The broad language used in the FinCEN alert could mean financial transactions with all West Bank settlements could be affected.

Richard Nephew, a former state department coordinator on global anti-corruption in the Biden administration, said the financial crimes alert combined with the newly announced sanctions and the G7 declaration “create a pretty toxic environment”.

“That is the goal,” Nephew, author of The Art of Sanctions and now a senior research scholar at Columbia University, said. “The goal is to make it so that financial institutions, companies and others say: ‘This just isn’t worth it’, because the risks of actually falling into a sanctions problem or to a compliance problem, if you’re a US entity, is just simply too great.”

Additional reporting by Quique Kierszenbaum in Jerusalem