Key facts
- British MPs are urging banks not to invest in Israel's E1 settlement project.
- New UK laws banning trade with illegal settlements are expected to take six to nine months to pass.
- Israel is seeking bids for tenders to construct up to 3,400 houses in the E1 settlement.
- A tender for over 1,300 houses closes on October 25.
- Israeli Finance Minister Bezalel Smotrich stated the E1 settlement "practically erases the two-state delusion".
- The all-party Britain-Palestine group intends to publish replies to its letter by October 10.
British lawmakers are advising financial institutions against investing in Israel's E1 settlement project, even as new UK legislation to ban trade with illegal settlements is likely months away from implementation. A letter sent on Tuesday by the all-party Britain-Palestine group urged banks to review their obligations and consider the risks associated with new settlements.
Foreign Secretary Ed Miliband had announced plans for a comprehensive ban on trade with illegal settlements and new sanctions two weeks prior. However, the complex secondary legislation required for these measures to take effect may take six to nine months to navigate parliamentary approval. The urgency is underscored by Israel's pursuit of tenders for the construction of up to 3,400 houses in the E1 settlement, with one tender for over 1,300 homes closing on October 25.
Israeli Finance Minister Bezalel Smotrich has described the E1 settlement as a project that "practically erases the two-state delusion" by dividing territory designated for a future Palestinian state. The plan has faced long-standing delays due to its significant political implications for the two-state solution, a framework supported by Western and Gulf states. Miliband's early action before the Israeli elections was reportedly aimed at deterring UK finance from supporting the tenders or construction, potentially overriding some diplomatic advice.
The all-party group's letter questioned what commitments institutions were willing to make during the interim period before detailed rules are finalized and how they would respond when restrictions are enacted. It advised boards to place potential E1 and settlement-related exposure on their risk registers and to assess whether the associated sanctions, legal, and reputational risks align with their stated risk appetite. The group plans to publish responses to its letter by October 10.