What’s Behind the Lull in Israel’s Financial Fight Against Terror?

An announcement by Bennett about an administrative order against a Palestinian ultimately reveals how the Defense Ministry’s fight against terror has been frozen for the past eight months

Hagai Amit
Hagai Amit
Bennett in Tel Aviv, September 2019.
Bennett in Tel Aviv, September 2019.Credit: Moti Milrod
Hagai Amit
Hagai Amit

New Defense Minister Naftali Bennett festively announced Tuesday that he’d signed a first-of-its-kind administrative order intended to limit the financial access of one Palestinian named Mohammed Jamil Mahmoud.

According to Bennett, this is the first time the Law on Fighting Terror has been used to sanction a single individual, and not an entire organization.

Israel will send the order to authorities around the world, and thus seek to limit Mahmoud’s financial access anywhere.

And yet, Bennett’s announcement ultimately reveals how the Defense Ministry’s fight against terror has been frozen for the past eight months.

The base for the financial fight against terror is the Law on Fighting Terror, which was passed in June 2016. The law states that the defense minister is authorized to sanction a terror organization, or an individual, in keeping with the recommendations of Israel’s defense bodies or foreign authorities.

The law is designed to block financing to groups or individuals engaging in terror, and to limit their ability to manage their finances via the banking system.

Financial institutions in Israel and around the world are informed of the defense minister’s decision, in order to block targeted individuals and groups from accessing their accounts. The law got its teeth from clauses approved in mid-2017. Immediately afterward, then-Defense Minister Avigdor Lieberman signed the first such order, declaring the Palestine National Fund a terror group.

In keeping with the recommendation of Israel’s defense authorities, primarily the Shin Bet security service, the Defense Ministry declared in 2018 that it was sanctioning another four terror organizations, including the Eliya Association for Youth, and the Palestinian Student House, a student organization in Turkey run by Hamas. That year, it named another nine institutions and 26 individuals as terrorists, in keeping with United Nations Security Council decisions.

These include groups in Pakistan, Indonesia, Afghanistan, Syria and Iraq, and they have ties to groups including the Al-Nusra Front, the Islamic State and Al-Qaida. The individuals marked as terrorists included citizens of Britain, China, Iraq, France, Russia, Jordan, Algeria, Indonesia, Yemen, Tunisia, the Philippines, Saudi Arabia, Uzbekistan, Mali, Malaysia and Trinidad and Tobago.

Surprisingly, 2019 was marked by a sharp drop in declarations against terror groups and individuals. Israel named only one group and one individual as terrorists, in keeping with UN Security Council decisions.

This was at the beginning of the year, and Israeli banks haven’t received any orders regarding terror groups since March.

The only action taken on this front since then was a summer announcement that groups that had been declared terror groups under a temporary order were having their status revised to permanent – a change that occurs nearly automatically. At the beginning of this week, we contacted the Defense Ministry to understand the reasoning behind the inaction, but the lull was broken on Tuesday with Bennett’s declaration.

Some of the inaction is due to external factors. The near-victory over the Islamic State reduced UN motivation to impose financial sanctions on it, meaning Israel doesn’t have UN Security Council decisions to implement.

It’s also due in part to the fact that regulations regarding fighting terror groups took effect only in 2017, meaning that at that point there was a backlog of groups.

Yet unfortunately, the inaction may also be due to the political stalemate in Israel, as the man who served as defense minister up until three weeks ago – embattled Prime Minister Benjamin Netanyahu – was more concerned with two election campaigns and police investigations into his alleged corruption.

Attorney Yigal Borochovsky, who represents several financial institutions in Israel and is responsible for tracking Defense Ministry declarations on their behalf, stated this week, “Israel, along with other countries in the world, is waging a financial war against terror organizations and individuals.... this is a critical front for preventing terror, and an effective tool for protecting Israel. Surprisingly, since July no individual or group has been declared a terror suspect,” he said, noting that in total only six people and groups were added to the terror list in 2019, compared to 41 in 2018.

“I hope there’s an explanation for this, and that it’s not the result of a transition government and three defense ministers over the course of a year. But it’s a matter of saving lives – this matter needs to be thoroughly checked and we must ensure that the war on terror continues regardless of Israel’s political challenges,” said Borochovsky.

The Defense Ministry stated in response, “The defense minister declares groups as terror bodies in keeping with recommendations from Israel’s defense authorities as defined by the Law on Fighting Terror (the Shin Bet, the Mossad, the Israel Defense Forces and the Israel Police), after receiving approval from the Attorney General and a recommendation from the Defense Ministry’s body for the financial fight on terror. Such a declaration is based on security and professional considerations and is not relate to political circumstances.”

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