A group of British lawmakers has urged banks and other financial institutions to avoid taking on new financial commitments connected to Israel’s E1 settlement project in the occupied West Bank, citing possible legal, sanctions and reputational risks.
The appeal was made in a letter from members of the all-party Britain-Palestine group as the UK government prepares to introduce a ban on trade with Israeli settlements considered illegal under international law.
Foreign Secretary Ed Miliband announced plans two weeks ago for a complete ban on such trade, alongside additional sanctions targeting those involved in settlement construction. However, the secondary legislation required to implement the measures could take between six and nine months to pass through Parliament.
The lawmakers warned financial institutions that commitments entered into during this interim period could become difficult to reverse once the restrictions take effect.
“Commitments made now may be difficult to unwind when restrictions commence; the allocation of costs will depend on the contracts and applicable law. We ask boards to consider this interim risk before agreeing new or increased commitments,” the letter, seen by The Guardian, said.
The group also called on financial institutions to formally assess their potential exposure to the E1 project and other settlement-related activities by placing the issue on board agendas and corporate risk registers.
The E1 development envisages thousands of new homes in the occupied West Bank. Israeli authorities are seeking bids through two tenders covering as many as 3,400 homes, with financing, insurance and guarantees required before construction can proceed.
A tender covering more than 1,300 of those homes is due to close on October 25, two days before Israel’s elections.
The E1 project has faced repeated delays over concerns that construction in the area could further undermine prospects for a contiguous Palestinian state and a two-state solution, which is supported by many Western and Gulf governments.
Israel has occupied the West Bank, including East Jerusalem, since 1967. Israeli settlements in the occupied territories are widely regarded by the international community as illegal under international law, a position disputed by Israel.
According to figures cited in the report, around 750,000 Israeli settlers live in 156 settlements and 360 settlement outposts across the occupied West Bank, including East Jerusalem. The report also cited repeated attacks by settlers against Palestinians amid disputes over land and displacement.