Israel's business sector is facing an earthquake that could severely harm businesses – yet, strangely and troublingly, it remains silent. The companies that could be affected are not warning investors of the looming danger, are not issuing official statements about the severity of the situation and the risks involved, and may thereby be betraying the trust of investors, customers and the wider business community.
The earthquake was announced on September 9 by British Foreign Secretary Ed Miliband, who said the British government intended to impose sanctions on Israeli companies over "rampant settler terrorism." He did not specify what the sanctions would entail, but made clear that "an import ban will be imposed on goods originating in illegal settlements in the occupied territories."
The measures would apply not only to goods but also to businesses providing services in the settlements. "We will take action against certain companies and individuals providing services such as construction, infrastructure, financing or real estate for the expansion of settlements," he said.
The sanctions are expected to be imposed within six to nine months, and the lengthy period before their implementation may be intended to exert the necessary pressure on the Israeli government to act against Jewish terrorism. Judging by recent events, the Israeli government does not appear particularly concerned by the threat.
Its impotence and indifference were evident this week when Jewish rioters attacked Palestinians and IDF and Border Police forces in the village of Jalud. Such reckless conduct by the government requires businesses threatened by the sanctions to make their voices heard – yet they remain silent.
During the judicial overhaul, companies in the business sector issued statements calling for dialogue and even threatened to shut down the economy in an effort to halt the severe deterioration in Israeli society and the growing rift.
Since then, however, they have gone back to business as usual. Perhaps accusations that they were entering the political arena deterred them, or perhaps the fact that many have prospered in recent years and benefited from the security situation has led them to remain silent. When profits soar, executives stay quiet.
But the severe security situation in the West Bank is intensifying international pressure to impose sanctions on Israeli companies. Twelve major countries have joined Britain's declaration on imposing sanctions, including France, Canada, Denmark, Spain, Finland, Ireland, Iceland, Poland, Portugal and Sweden.
If they boycott Israeli banks that finance construction in the territories and provide mortgages there, the damage to Israel's banking sector could be devastating.
Israeli banks operate within the international banking system, and sanctions against them could completely disrupt their operations and cause their valuations to collapse. They could also severely impair the ability of Israeli and global companies to operate through the Israeli banking system.
This is a deeply concerning development, and the heads of Israel's banking system should be making their voices heard, yet they remain silent. Does it not occur to them to say something to the government and law enforcement authorities? Are they afraid they will be accused of interfering in political matters that are none of their business? If so, they are mistaken.
Sanctions on the Israeli banking system, regardless of the reasons behind them, are a major business issue that requires them to act as responsible executives engaged in risk management. After all, they deal every day, every hour, with a host of risks – from cyber risks to credit and market risks, as well as legal and operational risks. And now comes a risk that may be defined as political or diplomatic – but its business implications are enormous.
If they do not speak out to prevent the looming disaster facing them and the Israeli economy, who will?
Responding to Haaretz's inquiries, the Bank of Israel said this is "a general statement," adding that "the range of possible scenarios and consequences is broad and depends on whether, and how, the statement is translated into concrete measures."
The Bank added that it is "in contact with the commercial banks, and if anything concrete arises, it will be addressed. This is an issue with diplomatic aspects, and it is appropriate for the relevant authorities to take the lead in addressing those aspects."
The relevant authorities when it comes to the sanctions are the prime minister and the foreign minister, while responsibility for addressing Jewish terrorism lies with the Israel Police, the IDF and the Shin Bet. All of them are failing in their duties.
The current threat of sanctions is not directly related to settlement construction, which has been taking place for decades, but rather to what the British government describes as the "ethnic cleansing of Palestinians in areas of the West Bank, carried out by settler terrorists," stemming from the current Israeli government's "turning a blind eye."
Israel's business sector, and particularly the banks, whose operations are critical to the functioning of Israel's economy and of local and global companies, do not have to address every aspect of the British statement.
But they must understand that their responsibility is to their shareholders – the Israeli public – and their customers, and they must do everything possible to prevent sanctions from being imposed. The business sector cannot wait for Benjamin Netanyahu or Gideon Sa'ar to do something – so far, they have mainly taken retaliatory measures against Britain, such as closing the British consulate in Jerusalem – but must speak out loudly and clearly against Jewish terrorism.
This may once have been a political issue, but once the threat of sanctions is hanging over them, it has also become a major business issue. It is a tangible and genuine threat that requires them to speak out, demand that the government act decisively against Jewish terrorism and make clear the consequences of sanctions being imposed on them.
Doing so is corporate responsibility of the highest order, as well as a social responsibility toward the Israeli public, which could suffer if the banks – owned by and serving the Israeli public – are harmed. Fear of political actors in Israel, various smear machines and violent lawbreakers cannot justify this silence.
