Targeting Israeli banks will help bring an end to the occupation. (Oren Ziv/ActiveStills)

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If international civil society is serious about urgently ending Israel’s violations of Palestinian rights, including ending the occupation, then suspension of SWIFT transactions to and from Israeli banks offers an instrument to help bring about a peaceful resolution of an intractable conflict. With computerization, international banking technology has advanced dramatically in the subsequent 20 years since the South African anti-apartheid campaign.

Although access to New York banks remains essential for foreign exchange transactions because of the role of the dollar, interbank transfer instructions are conducted through the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which is based in Belgium. So, instead of New York — as in the period when sanctions were applied on South Africa— Belgium is now the pressure point.

SWIFT links 8,740 financial institutions in 209 countries. Without access to SWIFT and its interbank payment network, countries are unable either to pay for imports or to receive payment for exports. In short, no payment — no trade. Should it come to a point where trade sanctions are imposed on Israel, it may be able to evade them. Instead of chasing trade sanctions-busters and plugging loopholes, it is both faster and much more effective to suspend the payment system.

The Israeli government may consider itself to be militarily and diplomatically invincible, given support from the United States, and other governments, but Israel’s economy is exceptionally dependent upon international trade. It is thus very vulnerable to financial retaliation. South Africa’s apartheid government had also believed itself to be immune from foreign pressure.

Without SWIFT, Israel’s access to the international banking system would be crippled. Banking is the lifeblood of any economy. Without payment for imports or exports, the Israeli economy would quickly collapse. The matter has gained additional urgency with the bill now before the Knesset, Israel’s parliament, to penalize any person who promotes the imposition of boycotts against Israel. Another important political factor is that SWIFT is not only outside American jurisdiction, it is also beyond the reach of Israeli military retaliation.

Israel has long experience in sanctions-busting since the 1948 Arab boycotts. Apartheid South Africa was also well experienced in sanctions-busting — breaking oil embargoes was almost a “national sport.” Trade sanctions are invariably full of loopholes. Profiteering opportunities abound, as illustrated by Iraq, Cuba and numerous countries against which for many years the United States unsuccessfully has applied trade sanctions. Iran conducts its trade through Dubai, which happily profits from the political impasse.

Suspension of bank payments plugs such loopholes, and also alters the balance of power so that meaningful negotiations between Israelis and Palestinians become even possible. This is because banking sanctions impact quickly upon financial elites who have the clout to pressure governments to concede political change. Trade sanctions, by contrast, impact hardest on the poor or lower-paid workers, who have virtually no political influence.

SWIFT will, however, only take action against Israeli banks if ordered to do so by a Belgian court, and then only in very exceptional circumstances. Such very exceptional circumstances are now well-documented by the UN-commissioned Goldstone report into Israel’s winter 2008-09 invasion and massacre in Gaza and by the attack on the Gaza Freedom Flotilla on 31 May 2010. There is also a huge body of literature from Amnesty International, Human Rights Watch and other organizations detailing Israeli war crimes and violations of humanitarian law.

The Israeli government, like that of apartheid South Africa, has become a menace to the international community. Corruption and abuses of human rights are invariably interconnected. Israel’s long military occupation of the West Bank and Gaza Strip, for example, has corrupted almost every aspect of Israeli society, most especially its economy. The Organization For Economic Cooperation and Development (OECD) reported in December 2009 that the Israeli government lacks commitment in tackling international corruption and money laundering.

The international financial system is exceedingly sensitive about allegations of money laundering, but also to any associations with human rights abuses. Organized crime and money laundering are major international security threats, as illustrated by the United States subpoena after the 11 September 2001 attacks of SWIFT data to track terrorist financing. The website Who Profits? (www.whoprofits.org) lists hundreds of international and Israeli companies that illegally profiteer from the occupation.

Their operations range from construction of the “apartheid wall” and settlements to agricultural produce grown on confiscated Palestinian land. As examples, Caterpillar, Volvo and Hyundai supply bulldozing equipment to demolish Palestinian homes. British supermarkets sell fresh produce grown in the West Bank, but illegally labelled as Israeli. Ahava markets Dead Sea mud and cosmetics.

The notorious Lev Leviev claims in Dubai that Leviev diamonds are of African origin, and are cut and polished in the United States rather than Israel. They are sourced from Angola, Namibia and also allegedly Zimbabwe, and can rightly be described as “blood diamonds.” Israeli diamond exports in 2008 were worth $19.4 billion, and accounted for almost 35 percent of Israeli exports. Industrial grade diamonds are essential to Israel’s armaments industry, and its provision of surveillance equipment to the world’s most unsavory dictatorships. Such profiteering depends on foreign exchange and access to the international payments system. Hence interbank transfers are essential, and SWIFT — willingly or unwillingly — has become complicit, as were the New York banks with apartheid South Africa.

Accordingly, a credible civil society organization amongst the Palestinian diaspora should lead the SWIFT sanctions campaign against Israeli banks. And, per the South African experience, it should be led by civil society rather than rely on governments.

Each bank has an eight letter SWIFT code that identifies both the bank and its country of domicile. “IL” are the fifth and sixth letters in SWIFT codes that identify Israel. The four major Israeli banks and their SWIFT codes are Israel Discount Bank (IDBILIT), Bank Hapoalim (POALILIT), Bank Leumi (LUMIILIT) and Bank of Israel (ISRAILIJ).

Such a suspension would not affect domestic banking transactions within Israel and the occupied West Bank and Gaza Strip — or international transfers to Palestinian banks that have separate “PS” identities. The campaign can be reversed as soon as the objectives have been achieved, and without long-term economic damage.

What is required is an urgent application in a Belgian court ordering SWIFT to reprogram its computers to suspend all transactions to and from Israeli banks until the Israeli government agrees to end the occupation of the West Bank including East Jerusalem, and that it will dismantle the “apartheid wall;” the Israeli government recognizes the fundamental rights of Palestinian citizens of Israel to full equality; and Israel recognizes, respects and promotes the rights of Palestinian refugees.

The writer is a retired banker, who advised the South African Council of Churches on the banking sanctions campaign against apartheid South Africa. He spent October 2009 to January 2010 in East Jerusalem monitoring checkpoints, house demolitions and evictions, and liaising with Israeli peace groups. He lives in Cape Town.