The trigger was a new Israeli banking directive, rushed out to placate Israel’s hardliners, that they said did too little to shield Israelis from international sanctions. In February 2024, Smotrich publicly browbeat Israeli banks and regulators for complying with sanctions on Israeli settlers, vowing to use “all available tools” to prevent banks from enforcing the sanctions. Even in the absence of active US sanctions, Israeli institutions are still scrambling to manage the fallout from economic sanctions imposed by other countries. On 30 December 2025, the Bank of Israel issued Directive 412 to balance the financial interests of sanctioned Israelis with Israeli banks’ exposure to foreign sanctions risk. Even this compromise was met with protest, alongside assurances from Smotrich that his campaign to shield Israelis from the practical effects of international sanctions remains unfinished.

Source: The Guardian March 10, 2026 17:21 UTC