[News] To end the occupation, cripple Israeli banks

Anti-Imperialist News news at freedomarchives.org
Wed Jun 30 20:02:36 EDT 2010

To end the occupation, cripple Israeli banks

Terry Crawford-Browne, The Electronic Intifada, 30 June 2010

The international banking sanctions campaign in New York against 
apartheid South Africa during the 1980s is regarded as the most 
effective strategy in bringing about a nonviolent end to the 
country's apartheid system. The campaign culminated in President FW 
de Klerk's announcement in February 1990, releasing Nelson Mandela 
and other political prisoners, and the beginning of constitutional 
negotiations towards a non-racial and democratic society.

If international civil society is serious about urgently ending 
Israel's violations of Palestinian rights, including ending the 
occupation, then suspension of SWIFT transactions to and from Israeli 
banks offers an instrument to help bring about a peaceful resolution 
of an intractable conflict. With computerization, international 
banking technology has advanced dramatically in the subsequent 20 
years since the South African anti-apartheid campaign.

Although access to New York banks remains essential for foreign 
exchange transactions because of the role of the dollar, interbank 
transfer instructions are conducted through the Society for Worldwide 
Interbank Financial Telecommunication (SWIFT), which is based in 
Belgium. So, instead of New York -- as in the period when sanctions 
were applied on South Africa-- Belgium is now the pressure point.

SWIFT links 8,740 financial institutions in 209 countries. Without 
access to SWIFT and its interbank payment network, countries are 
unable either to pay for imports or to receive payment for exports. 
In short, no payment -- no trade. Should it come to a point where 
trade sanctions are imposed on Israel, it may be able to evade them. 
Instead of chasing trade sanctions-busters and plugging loopholes, it 
is both faster and much more effective to suspend the payment system.

The Israeli government may consider itself to be militarily and 
diplomatically invincible, given support from the United States, and 
other governments, but Israel's economy is exceptionally dependent 
upon international trade. It is thus very vulnerable to financial 
retaliation. South Africa's apartheid government had also believed 
itself to be immune from foreign pressure.

Without SWIFT, Israel's access to the international banking system 
would be crippled. Banking is the lifeblood of any economy. Without 
payment for imports or exports, the Israeli economy would quickly 
collapse. The matter has gained additional urgency with the bill now 
before the Knesset, Israel's parliament, to penalize any person who 
promotes the imposition of boycotts against Israel. Another important 
political factor is that SWIFT is not only outside American 
jurisdiction, it is also beyond the reach of Israeli military retaliation.

Israel has long experience in sanctions-busting since the 1948 Arab 
boycotts. Apartheid South Africa was also well experienced in 
sanctions-busting -- breaking oil embargoes was almost a "national 
sport." Trade sanctions are invariably full of loopholes. 
Profiteering opportunities abound, as illustrated by Iraq, Cuba and 
numerous countries against which for many years the United States 
unsuccessfully has applied trade sanctions. Iran conducts its trade 
through Dubai, which happily profits from the political impasse.

Suspension of bank payments plugs such loopholes, and also alters the 
balance of power so that meaningful negotiations between Israelis and 
Palestinians become even possible. This is because banking sanctions 
impact quickly upon financial elites who have the clout to pressure 
governments to concede political change. Trade sanctions, by 
contrast, impact hardest on the poor or lower-paid workers, who have 
virtually no political influence.

SWIFT will, however, only take action against Israeli banks if 
ordered to do so by a Belgian court, and then only in very 
exceptional circumstances. Such very exceptional circumstances are 
now well-documented by the UN-commissioned Goldstone report into 
Israel's winter 2008-09 invasion and massacre in Gaza and by the 
attack on the Gaza Freedom Flotilla on 31 May 2010. There is also a 
huge body of literature from Amnesty International, Human Rights 
Watch and other organizations detailing Israeli war crimes and 
violations of humanitarian law.

The Israeli government, like that of apartheid South Africa, has 
become a menace to the international community. Corruption and abuses 
of human rights are invariably interconnected. Israel's long military 
occupation of the West Bank and Gaza Strip, for example, has 
corrupted almost every aspect of Israeli society, most especially its 
economy. The Organization For Economic Cooperation and Development 
(OECD) reported in December 2009 that the Israeli government lacks 
commitment in tackling international corruption and money laundering.

The international financial system is exceedingly sensitive about 
allegations of money laundering, but also to any associations with 
human rights abuses. Organized crime and money laundering are major 
international security threats, as illustrated by the United States 
subpoena after the 11 September 2001 attacks of SWIFT data to track 
terrorist financing. The website Who Profits? 
(<http://www.whoprofits.org/>www.whoprofits.org) lists hundreds of 
international and Israeli companies that illegally profiteer from the 

Their operations range from construction of the "apartheid wall" and 
settlements to agricultural produce grown on confiscated Palestinian 
land. As examples, Caterpillar, Volvo and Hyundai supply bulldozing 
equipment to demolish Palestinian homes. British supermarkets sell 
fresh produce grown in the West Bank, but illegally labelled as 
Israeli. Ahava markets Dead Sea mud and cosmetics.

The notorious Lev Leviev claims in Dubai that Leviev diamonds are of 
African origin, and are cut and polished in the United States rather 
than Israel. They are sourced from Angola, Namibia and also allegedly 
Zimbabwe, and can rightly be described as "blood diamonds." Israeli 
diamond exports in 2008 were worth $19.4 billion, and accounted for 
almost 35 percent of Israeli exports. Industrial grade diamonds are 
essential to Israel's armaments industry, and its provision of 
surveillance equipment to the world's most unsavory dictatorships. 
Such profiteering depends on foreign exchange and access to the 
international payments system. Hence interbank transfers are 
essential, and SWIFT -- willingly or unwillingly -- has become 
complicit, as were the New York banks with apartheid South Africa.

Accordingly, a credible civil society organization amongst the 
Palestinian diaspora should lead the SWIFT sanctions campaign against 
Israeli banks. And, per the South African experience, it should be 
led by civil society rather than rely on governments.

Each bank has an eight letter SWIFT code that identifies both the 
bank and its country of domicile. "IL" are the fifth and sixth 
letters in SWIFT codes that identify Israel. The four major Israeli 
banks and their SWIFT codes are Israel Discount Bank (IDBILIT), Bank 
Hapoalim (POALILIT), Bank Leumi (LUMIILIT) and Bank of Israel (ISRAILIJ).

Such a suspension would not affect domestic banking transactions 
within Israel and the occupied West Bank and Gaza Strip -- or 
international transfers to Palestinian banks that have separate "PS" 
identities. The campaign can be reversed as soon as the objectives 
have been achieved, and without long-term economic damage.

What is required is an urgent application in a Belgian court ordering 
SWIFT to reprogram its computers to suspend all transactions to and 
from Israeli banks until the Israeli government agrees to end the 
occupation of the West Bank including East Jerusalem, and that it 
will dismantle the "apartheid wall;" the Israeli government 
recognizes the fundamental rights of Palestinian citizens of Israel 
to full equality; and Israel recognizes, respects and promotes the 
rights of Palestinian refugees.

The writer is a retired banker, who advised the South African Council 
of Churches on the banking sanctions campaign against apartheid South 
Africa. He spent October 2009 to January 2010 in East Jerusalem 
monitoring checkpoints, house demolitions and evictions, and liaising 
with Israeli peace groups. He lives in Cape Town.

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