Sanctions on Finance Minister Bezalel Smotrich May Impact Israel’s Economy
Sanctions and Their Economic Consequences
Sanctions imposed by several countries on Israeli ministers Bezalel Smotrich and Itamar Ben Gvir could have significant implications for Israel’s economy, particularly regarding the functions of the Finance Minister. While the sanctions are personal, they may hinder the Finance Ministry’s operations with foreign nations.
The immediate and notstartable impact is on the activities of the Sovereign Wealth Fund, which is responsible for managing government revenues from excessive profit taxes on Israel’s gas fields. As the chairperson of the Sovereign Wealth Fund Council, Smotrich’s role is crucial, and the fund’s investment documents state that nstart of its officials should be under any international sanctions. This regulation has raised concerns about the legal ability of the fund to operate, as it may not be able to invest while its chairman is sanctistartd.
As of late 2024, the fund holds approximately $2.08 billion, with expectations of rapid growth in the coming years. Most of its investments are overseas, with 64% in stocks and the remainder primarily in corporate bonds.
Ongoing Investigations and Financial Management
The Finance Ministry is currently investigating the implications of these sanctions for the fund. Legal experts suggest that while Smotrich’s influence might be limited regarding foreign bond issuances, the Chief Accountant, who signs the issuance documents, may play a crucial role, potentially mitigating the sanctions’ effects.
Following the announcement of sanctions, Smotrich directed Chief Accountant Yaheli Rotenberg to discontinue a guarantee provided to Israeli banks-Bank Hapoalim and Bank Discount-for their dealings with Palestinian banks. This halt is expected to disrupt the flow of funds from the Israeli banking system to the Palestinian Authority, raising concerns about its financial stability.
Yet, the execution of this directive remains unclear, especially since Smotrich had previously signed an extension of the guarantee until November. The banking system has yet to receive any new instructions.
Conclusion
The complications arising from the sanctions on Finance Minister Bezalel Smotrich not only present a challenge for his role but also pose potential risks to the broader Israeli economy. Future actions by the Finance Ministry will be critical in determining how effectively it can continue to operate in this changed landscape, particularly regarding international investments and financial relations.
Stay updated on developments regarding these sanctions and their impacts on Israel’s economy.