All EU leaders warn banks against involvement in E1 settlement project days before bid deadline

Liza Rozovsky reports in Haaretz on 17 October 2026:

Days before the deadline for submitting bids for construction in the E1 area, the European Council issued a statement Friday warning financial institutions against financing settlement construction and contractors against bidding on the project.  The council cited potential “legal, economic and reputational consequences” for companies involved in the E1 tender.

Several Western countries have issued similar warnings in recent months, but the European Council – which sets the European Union’s broad political direction – required the approval of all EU leaders to issue the statement.

The warning comes a day after a new British sanctions regime took effect, allowing sanctions to be imposed on entities and individuals involved in settlement expansion.

Last week, Haaretz reported that Israeli banks fear they could also be affected by new international sanctions, particularly those Britain is expected to impose, according to an assessment by the Association of Banks in Israel.  The banks are concerned that British sanctions could target institutions involved in settlement expansion. They declined to say whether they would provide guarantees to contractors bidding on government tenders for construction in E1. The Bank of Israel has also expressed serious concern.

The banks are concerned that British sanctions could target institutions involved in settlement expansion. They declined to say whether they would provide guarantees to contractors bidding on government tenders for construction in E1. The Bank of Israel has also expressed serious concern.

Last month, British Foreign Secretary Ed Miliband announced that Britain would expand its sanctions regime. According to Miliband, sanctions could be imposed not only on entities and individuals involved in settler violence, but also on those involved in settlement construction or its financing.

The day after Miliband’s announcement, representatives of the Association of Banks in Israel spoke with officials from the Foreign Ministry, Bank of Israel and Strategic Affairs Ministry to raise their concerns. The association subsequently briefed all banks on the discussions and their conclusions.

The measures announced by Miliband will require legislation in Britain, a process expected to take six to nine months.

The E1 area stretches between Jerusalem and the settlement of Ma’ale Adumim and is considered a red line by many countries because Israeli construction there could sever Palestinian territorial contiguity and make future diplomatic arrangements more difficult to implement.

The state has announced three construction tenders in the area. The first, already open for bids, is scheduled to close on October 19, about a week before the election.

The attorney general’s office instructed officials to postpone the announcement of the winning bidders by a month because of the proximity to the election. That would also have delayed the bidding deadline, but the Israel Land Authority asked to separate the two stages, leaving the original submission deadline in place while postponing the opening of the bids by one month. Legal officials approved the request.

A second tender is scheduled to open for bids on October 25, two days before the election, and a third is expected to open in November.

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