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Barclays stands accused of enabling Israel’s militarised violence against Palestinians through substantial financial investments

Barclays, one of the UK’s largest high street banks, stands accused of facilitating Israel’s ongoing militarised violence against the Palestinian people through substantial financial investments and loans to arms companies.

The report titled “Barclays: Arming Israel’s Apartheid and Genocide,” released in May 2024 by the Palestinian Solidarity Campaign (PSC), the Campaign Against the Arms Trade (CAAT) and War on Want on Barclays’ highlights the bank’s deep financial ties to nine companies that produce weapons and military technology used by Israel in its assaults on Palestinians. The report draws attention to the increasing death toll and displacement of Palestinians due to Israel’s 2023/4 assault on Gaza, which far surpasses previous military campaigns in its scale and severity.

Israel’s latest assault on Gaza has been described as genocidal, with the International Court of Justice (ICJ) ruling it plausible that Israel is committing genocide against the Palestinian population. The Israeli military launched a campaign to destroy Hamas in response to an unprecedented attack on southern Israel on 7 October, during which about 1,200 people were killed and 251 others were taken hostage. More than 37,650 people have been killed in Gaza since then, according to the territory’s Hamas-run health ministry.

This campaign has also led to the destruction of at least 70,000 homes and the displacement of 90% of Gaza’s population, many of whom were already refugees from the 1947/8 Nakba.

The report accuses Barclays’ of its complicity in alleged atrocities by detailing its financial relationships with companies such as BAE Systems, Boeing, Caterpillar, Elbit Systems, General Dynamics, QinetiQ, Raytheon, Rolls-Royce, and Ultra Electronics. Barclays holds over $2.5 billion in shares and provides more than $7.6 billion in loans and underwriting to these companies. This financial support has enabled these arms manufacturers to grow and continue supplying Israel with the weaponry used in its military operations against Palestinians.

As AOAV has reported, among the arms companies, BAE Systems, a London-based defence giant, produces components for the F-35 fighter jets used by Israel in its airstrikes on Gaza. Boeing, another major arms manufacturer, supplies Apache helicopters and Hellfire missiles extensively used in the bombings. Caterpillar provides weaponised D9 bulldozers used to demolish Palestinian homes and infrastructure. Elbit Systems, Israel’s largest private arms company, supplies drones and munitions, including the Hermes 450 drone used to kill aid workers in Gaza.

“By providing investment and financial services to these arms companies, Barclays is facilitating Israel’s militarized attacks on Palestinians across their homeland, including Israel’s genocidal assault on Palestinians in the Gaza Strip,” the report states. It further emphasizes, “The provision of loans and other forms of credit enables these arms companies to grow, acquire new companies, gain more market share, and increase their profits.”

The report also highlights the broader financial and moral responsibility of institutions like Barclays. The UN Guiding Principles for Business and Human Rights, which Barclays claims to follow, require businesses to respect international human rights standards. The ICJ’s ruling and various international human rights organizations have called for an arms embargo on Israel, emphasizing the need for financial institutions to sever ties with companies contributing to human rights violations.

Despite growing international condemnation and legal obligations under the Genocide Convention, Barclays has increased its investments in these arms companies by over 55% and its loans and underwriting by 54.5% since 2022. This includes new investments in Raytheon and Rolls-Royce and significant increases in financial support to Caterpillar and Elbit Systems.

The report documents the scale of Barclays’ financial involvement with these companies. For instance, Barclays has over $1.3 billion invested in BAE Systems, $458.7 million in Boeing, and $387.4 million in Caterpillar. Additionally, Barclays has significantly increased its shareholding in Elbit Systems, a company heavily implicated in the production of controversial weaponry, including cluster munitions.

Investor responses to such complicity have varied, with some divesting from companies involved in Israel’s military activities. Notably, Norway’s largest pension scheme, KLP, and Australia’s Future Fund have excluded Elbit Systems from their portfolios, citing its involvement in producing banned cluster munitions and other controversial weapons. In December 2018, HSBC divested from Elbit Systems following months of pressure from human rights campaigners. AXA Investment Managers also withdrew direct investments from Elbit Systems, citing the company’s involvement in the production of banned cluster munitions.

In January 2024, the ICJ ruled it plausible that Israel was committing genocide in its attacks on Palestinians in Gaza. The court ordered a set of binding interim measures, deemed necessary to protect the Palestinian population from further genocidal acts. Following the ICJ’s ruling, financial institutions such as Barclays must end all financial ties with companies enabling not only serious breaches of international humanitarian and human rights law but acts of genocide.

Dr. Iain Overton of Action on Armed Violence commented on the allegations, “Barclays’ continued financial support of these arms manufacturers risks directly implicating them in the suffering and violence inflicted upon the Palestinian people. It’s imperative that financial institutions take responsibility and cease their support for companies that facilitate such grave violations of human rights.”

In its defence, Barclays highlights its policy statements on human rights and the defence sector. The bank claims that it conducts thorough due diligence to avoid contributing to adverse human rights impacts and maintains that it operates within the framework of internationally agreed standards of human rights. Furthermore, Barclays argues that its financial relationships with companies involved in the defence sector are managed with a strong emphasis on compliance with all relevant laws and ethical standards.

Barclays also emphasises that its investments are intended to support legitimate business activities and that it does not knowingly engage in or support activities that violate international laws. The bank reiterates its commitment to ongoing monitoring and review of its business relationships to ensure alignment with its stated policies and ethical principles.

The report concludes with a call for Barclays to end all financial services and investments in companies supplying weapons used by Israel in its unlawful attacks on Palestinians. It urges the bank to conduct enhanced human rights due diligence and cease business relationships with companies identified as causing adverse human rights impacts.

“Barclays must take immediate action to address the findings above and comply with its own stated policies on human rights and the defence sector,” the report recommends. “It must prevent its further contribution to adverse human rights impacts through its financial relationships with companies providing Israel with weapons, components, and military technology used in its militarised violence against Palestinians.”