The U.S. Department of the Treasury recently published a letter sent to the Bank of Israel on March 26, 2024 to provide guidance regarding recent sanctions issued by President Biden’s Executive Order 14115 issued on February 1, 2024. The letter, signed by the Director of the Office of Foreign Assets Control Bradley Smith, indicated that the guidance was issued in response to questions that Israeli banks had with respect to subsistence payments to persons sanctioned under EO 14115. EO 14511 authorizes U.S. authorities to sanction individuals and entities who undermine the peace, security and stability in the West Bank. According to Smith, this includes “extremist settler violence against Palestinian and Israeli civilians and forced displacement of farmers and villages.”
The letter confirms that Israeli banks can process transactions for individuals designated under EO 14115 if they relate to humanitarian transactions involving basic human needs or subsistence without the risk of U.S. sanctions if they don’t involve a U.S. person or the U.S. financial system. This exception also applies to transactions “for expenses essential for the survival of animals on farms that are blocked as the result of a designation of their owners.” The letter also provided examples of basic living expenses and subsistence payments that fall within and beyond the scope of the guidance and confirmed that the guidance does not include “the kind of crowdfunding support” that extremists have used to raise funds internationally.
In summary, the letter indicated that Israeli banks will not risk exposure to OFAC sanctions if the transactions (1) involve basic human needs and/or subsistence; (2) do not involve U.S. persons or U.S. financial institutions; and (3) do not involve persons blocked under U.S. sanctions regimes other than EO 14511.