U.S. Government announces new West Bank-related sanctions and designations

In response to current hostilities and reports of settler violence, forced displacement of people and villages, and property destruction in the West Bank, President Biden issued an “Executive Order on Imposing Certain Sanctions on Persons Undermining Peace, Security, and Stability in the West Bank” (the Executive Order). The Executive Order finds that these occurrences constitute a serious threat to the peace, security, and stability of the West Bank and Gaza, Israel, and the broader Middle East region.

Imposition of blocking sanctions

The Executive Order blocks all property and interests in property that are in the United States, or in the possession or control of any U.S. person¹ or persons (individuals and entities) that are determined by the U.S. Government to have engaged in certain activities posing a threat to peace, security, or stability in the West Bank. Such persons will be identified on the List of Specially Designated Nationals and Blocked Persons (the SDN List, and persons identified thereon, SDNs) maintained and administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury.

• Bases for designation under the Executive Order include:
• being responsible for, or complicit in, or having directly or indirectly attempted to engage in:
  • actions that threaten the peace, security, or stability of the West Bank; or
  • planning, ordering, otherwise directing, or participating in any of the following actions affecting the West Bank: (i) an act or threat of violence targeting civilians; (ii) efforts to place civilians in reasonable fear of violence to cause or with the effect of causing such persons to change residence; (iii) property destruction; or (iv) seizure or dispossession of property by private actors;
• being or having been a leader of:
  • an entity (including governmental entities) that has (or whose members have) engaged in any of the activities described above related to the leader’s or official’s tenure; or
  • an entity whose property and interests in property are blocked pursuant to the Executive Order as a result of activities relating to the leader’s or official’s tenure;
• materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of, any person blocked pursuant to the Executive Order;
• being owned or controlled by, or having acted or purporting to act for or on behalf of, directly or indirectly, any person blocked pursuant to the Executive Order; or
• having committed or attempted to commit, posing a significant threat of committing, or having participated in training to commit acts of terrorism affecting the West Bank, or being a leader or official of any entity designated for such conduct.

The Executive Order further prohibits the contribution or provision of funds, goods, or services by, to, or for the benefit of any persons targeted under the Executive Order, as well as the receipt of any contribution or provision of funds, goods, or services from such person(s).

The Executive Order also defines “terrorism” as any activity that:

• involves a violent act or an act dangerous to human life, property, or infrastructure; and
• appears to be intended to:
  • intimidate or coerce a civilian population;
  • influence the policy of a government by intimidation or coercion; or
  • affect the conduct of a government by mass destruction, assassination, kidnapping, or hostage-taking.

Key takeaways

Four individuals were designated as SDNs and added to the SDN List concurrently with the issuance of the Executive Order. The Executive Order’s sanctions authorizations are fairly broad and additional designations could be forthcoming, particularly as the situation in the Middle East remains unstable.

Additionally, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury published a related advisory alert regarding settler violence against Palestinians in the West Bank, which (in reference to the Executive Order) states that the United States “seeks to impose tangible and significant consequences on those engaged in” activities determined to undermine peace, security, and stability in the West Bank.

Allen & Overy’s experienced U.S. sanctions team, in coordination with A&O’s Global Sanctions Group, has been tracking these developments closely and can assist businesses in navigating these new prohibitions.

Footnote

^1. Any U.S. citizen or permanent resident, any entity organized under the laws of the United States and their non-U.S. branches, and any person located in the United States.