New listings open door for US investment in Israeli occupation

Early December, the New York Stock Exchange has signed a memorandum of understanding to begin dual-listing the securities with its Israeli counterpart, the Tel Aviv Stock Exchange, potentially accelerating US investment in businesses linked to illegal settlements in the West Bank.

The move could allow U.S. investors greater access to companies like construction company Ashtrom, which is currently listed on the Tel Aviv Stock Exchange and on a database of the United Nations human rights office. of more than 100 companies linked to the expansion of illegal Israeli settlements in the West Bank. To be on this list, a company had to be engaged in the supply of equipment used to destroy Palestinian property, including agricultural land and property; provide transportation, utilities or other support to existing settlements; or help with financial support for the expansion or upkeep of the colony. Ashtrom, in addition to operating quarries in the West Bank, has helped build housing in illegal settlements in the West Bank and in prisons and military installations in the occupied territories.

Dozens of companies in sectors such as telecommunications, construction and renewable energy are listed in both the United Nations database and the Tel Aviv Stock Exchange. This includes some of Israel’s biggest banks and the huge energy and infrastructure conglomerate Delek, one of Israel’s biggest companies.

Beyond dual listing, the memorandum signed between the two exchanges also lists the potential development of exchange-listed index funds, environmental, social and corporate governance or ESG products. The potential creation of ESG products is all the more notable as ESG funds, while offering groupings of socially responsible products, have also been used to launder companies with a history of various abuses. At the same time, impact investment groups, like JLenshave gone on the offensive to attack ESG funds incorporating Israeli human rights abuses into their modeling.

While the vast majority of companies in the 2020 database are Israeli, a handful of americans companies are on the list, including Airbnb, Tripadvisor, Expedia and General Mills. These companies are already listed on the New York Stock Exchange and Nasdaq. The memorandum will likely open up access for American investors to Israeli companies also doing business in the illegal settlements and bolster Tel Aviv’s listings with institutional support and the size of the New York Stock Exchange.

NYSE President Lynn Martin said in a press release that “our dual listing exploration will provide investors with potential exposure to listed companies and economic activity in both markets. The importance of our global capital markets has never been greater, and we look forward to demonstrating what two great exchanges can accomplish when working together.

The dual listing does not deviate from the standard norms of the financial sector. Tel Aviv made similar deals with stock exchanges like Toronto before the New York memorandum.

“The narrow frame of this is that it’s the perfect headline for those of us who would worry about a mix of the Israeli far right and American-style financial capitalism,” Robert Hockett, professor of law international finance and economics at Cornell, told The Intercept. “The New York Stock Exchange is the biggest of them all,” Hockett said, “and is the most traded stock exchange and is in that sense the biggest capital market, so any company in Tel Aviv will get a lot more access than before.”

Despite the Biden administration’s official stance against illegal settlement expansion, as the UN was set to add more companies to its database last month, the United States began lobby the human rights office to drop their bid to expand the list. Two US diplomats, including Michèle Taylor, US ambassador to the UN Human Rights Council, told an Israeli ambassador that they were pressuring the human rights chief of the UN, Volker Türk, not to add more companies to the UN database.

At the same time that the New York and Tel Aviv stock exchanges announced their collaboration, a coalition of far-right Israeli extremists took power in the Knesset, the Israeli parliament. Fueled by Benjamin Netanyahu’s desperation to regain power amid ongoing corruption investigations, the new coalition of ministers has already engaged in blatant provocations against the Palestinians and unveiled its intention to completely annex the West Bank.

Wording of the coalition agreement states that Jews “have a natural right to the Land of Israel” and that “in light of our belief in the aforementioned right, the Prime Minister will lead the formulation and advancement of policies in the implementation of the sovereignty in Judea and Samaria”. Israel’s new tourism minister vows to speed up annexation and Jewish tourism in the West Bank, describing Palestine as “our local Tuscany”.

The possible creation of ESG products referenced in the dual rating announcement also follows intense lobbying to ignore Israeli human rights abuses in the social impact rating of investments. In October, financial services giant Morningstar bent to crushing pressure powerful American Zionist groups like the Anti-Defamation League, the American Jewish Committee and the Women’s Zionist Organization of America to remove Israeli human rights violations against Palestinians from its methodology. Leader in ESG analysis, Morningstar and its subsidiary Sustainalytics engaged to remove its Human Rights Radar service, do not use anymore the UN Human Rights Council as the source of its analysis, and the abandonment of terms relating to the Israeli occupation of Palestine.

ESG products that may emerge from the dual rating memorandum have the potential to reflect the principles of JLensan investment advisory fund now owned by the Anti-Defamation League that led the charge against Morningstar, leveling accusations of anti-Semitism.

“Dual listing serves the interests of Israeli businesses and the State of Israel by allowing companies to maintain a strong connection to Israel and the ecosystem it offers while enjoying the benefits of a listing on the larger stock exchange in the world,” Ittai Ben-Zeev, CEO of the Tel Aviv Stock Exchange, said in a press release. Ben-Zeev was previously executive vice president and head of capital markets at Bank Leumi, which is listed in the United Nations database of financial institutions supporting illegal settlements in the West Bank.

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