Some European Firms Retreat from Israel-Linked Finance amid War Pressure

 An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
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Some European Firms Retreat from Israel-Linked Finance amid War Pressure

 An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)

Several of Europe's biggest financial firms have cut back their links to Israeli companies or those with ties to the country, a Reuters analysis of filings shows, as pressure mounts from activists and governments to end the war in Gaza.

While banks and insurers are often vocal about their environmental and governance aims, they are less forthcoming about disclosing their potential exposure to war.

UniCredit put Israel on a "forbidden" list as the conflict escalated in October last year, said a source familiar with the matter, confirming a study by Dutch NGO PAX.

While in line with the Italian bank's defense-sector policy of not directly financing arms exports to any country involved in conflict, it goes beyond Italy's guidelines on arms exports to Israel.

UniCredit declined to comment on its move and the Israeli finance ministry also declined to comment.

Meanwhile, Norwegian asset manager Storebrand and French insurer AXA have sold shares of some Israeli firms, including banks.

Although corporate filings offer only a glimpse into such exposures, they show companies have been readjusting.

"We don't know whether this represents the beginning of a shift in the industry, one that recognizes the power banks have in choosing where to allocate capital, and where not," said Martin Rohner, executive director at the Global Alliance for Banking on Values, which focuses on sustainable financing.

"Investing in the production and trade of weapons is fundamentally opposed to the principles of sustainable development," Rohner added.

Israeli Finance Minister Bezalel Smotrich told a press briefing last week that although there are challenges to Israel's economy, firms are still raising money. "I sit with foreign investors and they believe in our economy," he said.

Reuters has reported that Israel's investor base has narrowed since it entered Gaza last year in response to attacks by Hamas, and it is feeling the effects of rising borrowing costs.

The potential wider effects can be seen in the approach taken by Storebrand, which a filing showed divested a holding worth about $24 million in Palantir, citing the risk of violations of international humanitarian law and human rights.

US group Palantir, which provides technology to Israel's military, did not respond to a request for comment.

Storebrand's annual investment review said that, as of the end of 2023, it had excluded 24 firms, including Israeli companies, across its portfolios in relation to the occupation of Palestinian territories.

The International Court of Justice, the United Nations' highest court, ruled in January of plausible risk of irreparable harm to Palestinian rights to be protected from genocide.

The same court said in July that Israel's occupation of Palestinian territories including the settlements is illegal.

Israel has rejected the rulings, which combined with growing pressure from activists and governments, are nevertheless having an impact on investment decisions.

AXA, one of Europe's largest insurers, British bank Barclays and German insurer Allianz have increasingly been targeted by campaigners.

"Increasing demand for greater transparency and scrutiny can only mean that financial institutions will intensify and broaden their self-assessment of their commercial associations with arms-related businesses or states," said David Kinley, professor and chair of human rights law at the Sydney law school.

The Ireland Strategic Investment Fund (ISIF) has exited six Israeli companies, selling holdings which amounted to about 3 million euros ($3.26 million), including some of Israel's largest banks, a spokesperson told Reuters.

Earlier this year, the 15-billion-euro Irish fund said that the risk profile of such investments were no longer within its investment parameters.

And Norway's $1.8 trillion wealth fund, the world's biggest, may divest shares of companies that aid Israel's operations in the occupied Palestinian territories which violate its ethics standards for businesses.

WAR EXPOSURE

Investments in Israeli banks are also under scrutiny.

The UN included them in 2020 in a list of companies with ties to settlements in the occupied Palestinian territories as part of its mission to review the implications on Palestinian rights.

A study by research firm Profundo, commissioned by corporate watchdog Ekō, shows that AXA sold almost all of its holdings in Israeli banks stocks earlier this year, retaining only a marginal stake in Bank Leumi.

Reuters verified the data with LSEG. A representative for Bank Leumi did not respond to a request for comment.

A spokesperson for AXA declined to comment on whether AXA had cut its holdings, adding that it is not invested in the banks targeted by activists. The UN list is among the criteria AXA takes into account for investment decisions, they added.

'A CLEAR LINE'

Foreign direct investment into Israel fell by 29% in 2023 to its lowest since 2016, UN Trade and Development data shows.

While UNCTAD 2024 figures are not available, credit ratings agencies have flagged the war's unpredictable impact on investment in Israel as a concern.

Although the US remains Israel's biggest military and financial backer, Spain, Ireland and Norway have recognized a Palestinian state, French President Emmanuel Macron has called for an arms export halt and Britain has suspended some licenses.

When it comes to international politics, "it should be down to the governments to take a clear line," said Richard Portes, professor of economics at London Business School, adding: "To put the burden on the private firms, where does this end?"

In an example of how activists are targeting companies directly, Barclays came under pressure from a campaign in Britain, prompting it to withdraw sponsorship from summer music festivals, while the Financial Times reported in August that it considered pulling out of an Israeli government bond sale.

Barclays said in a statement that it remained "fully committed" to its role as a primary dealer and that such activities fluctuated each quarter. The bank fell out of the top five dealers of Israeli bonds in the second and third quarters, after ranking third in 2023.



Asharq Al-Awsat Uncovers New Details on Sinwar’s Movements During the Gaza Conflict

Yahya Sinwar 
Yahya Sinwar 
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Asharq Al-Awsat Uncovers New Details on Sinwar’s Movements During the Gaza Conflict

Yahya Sinwar 
Yahya Sinwar 

Reliable information from Asharq Al-Awsat sources within and close to Hamas reveals that Israel nearly captured the group's leader, Yahya Sinwar, at least five times before he was killed during a routine military operation in Rafah, southern Gaza, last month.

The sources described Sinwar's movements and those with him during the ongoing conflict in Gaza, which has lasted over a year. They noted that Sinwar sent a message to his family about the death of his nephew, Ibrahim Muhammad Sinwar, who was with him.

This message arrived two days after Sinwar was also killed.

Khan Younis Operation

During the Israeli military operation in Khan Younis in January, it was believed that Sinwar was hiding in one of the tunnels.

After entering several tunnels, Israeli forces found recordings from cameras showing Sinwar moving around and transferring supplies into a tunnel with his family just hours before the attack on Oct. 7, 2023, as well as on the day of the attack.

Despite this, Israel could not locate him in the tunnels or above ground. As the operation expanded, Sinwar had to find a safe place for his wife and children away from him due to the ongoing pursuit, according to reliable sources for Asharq Al-Awsat.

Sources report that Sinwar’s wife and children were safe, receiving written messages from him at least once a month.

As military operations intensified in Khan Younis, Sinwar chose to stay in the area, often separating from his brother Muhammad and Raef Salameh, the regional brigade commander who was killed in a July airstrike alongside Muhammad Deif, the leader of Hamas’s military wing.

They occasionally met in safe houses or tunnels since the conflict began.

The sources noted that the four did not remain together at all times; they spent hours or days together before parting based on the situation.

A closely guarded secret reveals that Israeli forces were just meters away from a house where Sinwar was hiding in Block G of Khan Younis, accompanied only by his personal bodyguard.

Sinwar was armed and ready for a potential Israeli raid.

However, the movements of Hamas fighters from house to house, as they demolished walls for street fighting, revealed Sinwar’s location.

He was quickly evacuated through gaps created by the fighters in neighboring homes and taken to a safe house about one kilometer away.

He was later moved to another location where he met his brother Muhammad and Salameh before they all separated as the Israeli operation expanded near the Nasser Medical Complex.

Sources say that in February, under pressure from his brother and Salameh, as well as Hamas fighters, Sinwar was forced to leave Khan Younis for Rafah. By then, Israeli forces had almost complete control over Khan Younis and had effectively tightened their siege.

However, Sinwar was safely transported to Rafah through coordinated movements above and below ground.

Sources indicate that the person who stayed with Sinwar throughout the conflict was Ibrahim Muhammad Sinwar, the son of his brother Muhammad, a senior Hamas leader.

Both Yahya and Muhammad named their firstborn sons after each other.

Ibrahim was killed in an Israeli airstrike in August while exiting a tunnel to monitor Israeli movements in Rafah, southern Gaza, alongside his uncle.

Sinwar sent a message to his brother’s family explaining the circumstances of Ibrahim’s death and detailing where he was buried in an underground tunnel, stating that he had personally prayed over his body.

The family received this message two days after Sinwar’s own death, indicating that it took more than two months for it to reach them.

The timing of the message, arriving just after Sinwar’s death, highlights the challenging security conditions he faced amid ongoing Israeli pursuit.

It also reflects the extreme precautions he took to avoid leaving any gaps that could lead Israel to him, which helps explain the circumstances of his “accidental” death.

Sources reveal that Sinwar stayed in Rafah for several months, moving between different areas, particularly in the western part since late May. He used both underground and above-ground shelters.

During his time away from his brother Muhammad, as well as Deif and Salameh, Sinwar communicated with them through written messages, following specific security protocols he defined.

This method also applied to his communications with Hamas leaders locally and abroad, especially regarding ceasefire negotiations and potential prisoner exchanges.

Sinwar was reportedly in tunnels in Rafah, including one where six prisoners were killed. It is believed he may have ordered their execution as Israeli forces advanced in late September.

Before his death, Sinwar and his companions experienced severe food shortages, going three days without eating while preparing for an Israeli confrontation. They moved between damaged buildings in the area.

In the final two weeks, attempts were made by Mahmoud Hamdan, the commander of the Tel Sultan brigade, who was killed the day after Sinwar, to extract him from the area. However, these efforts failed due to heavy military activity.

Sources indicate that Israeli forces came close to Sinwar’s location at least five times, including three times above ground and two underground.

Each time, he was moved to different locations despite wanting to remain with the fighting forces.

When asked if Sinwar’s presence in Rafah was related to assessing the Philadelphia corridor, sources denied this.

However, individuals close to Hamas suggested that he may have been considering a potential Israeli withdrawal from the corridor and its implications for prisoner exchange negotiations and the situation on the ground.

In related news, Hamas has issued a statement denying reports regarding the fate of Deif, the leader of the Izz ad-Din al-Qassam Brigades.

Earlier, Asharq Al-Awsat reported new indications of Deif’s death in an Israeli airstrike in Khan Younis in July. Despite these reports, Hamas officials continue to assert that Deif is alive, while Israeli officials claim he has been killed.