HSBC tells 'Post': 'We divested from Elbit over cluster bombs, not BDS'

“HSBC has a banking operation in Tel Aviv and provides banking services to numerous Israeli companies. We have every intention of continuing to do so,” HSBC said.

January 2, 2019 20:43
3 minute read.
Elbit Systems Hermes 900, with the company's logo in the background

Elbit Systems Hermes 900, with the company's logo in the background. (photo credit: Wikimedia Commons)


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HSBC’s decision to divest from Elbit Systems was a statement against the production of cluster bombs and had nothing to do with the BDS movement, the global banking giant said on Wednesday.

HSBC’s decision to divest from Elbit Systems was not the result of campaigning by the Boycott, Divestment and Sanctions movement, and it is not indicative of support for the movement’s objectives,” Stuart Levey, HSBC’s chief legal officer and group managing director, wrote to The Jerusalem Post, in response to its Tuesday editorial, “Bad banking.”

“HSBC’s decision was based on our long-standing defense policy whereby we do not invest in companies linked to the production or marketing of cluster munitions. We test our shareholdings against this policy, assisted by an external, evidence-based ratings provider,” he wrote.

“Following a recent acquisition by Elbit Systems, our investment in the company is no longer consistent with our defense policy with respect to cluster munitions, and Elbit Systems joins a number of other companies, including some major US defense contractors, that are impacted by this policy,” Levey explained.

“This development is what prompted HSBC Asset Management to divest its shareholding in the company held in a passively managed fund. That shareholding was valued at approximately $600k and represented 0.01% of the total issued share capital of the company,” Levey said.

“HSBC has a banking operation in Tel Aviv and provides banking services to numerous Israeli companies. We have every intention of continuing to do so,” wrote Levey.

He wrote to the Post a week after the Palestine Solidarity Campaign linked HSBC’s divestment decision, which went into effect on December 20, to PSC’s long-standing BDS campaign against the company. The pro-Palestinian British group had written to BDS about its campaign and had been told over email that the company had divested from Elbit.

PSC targeted the bank, claiming it had shareholdings in companies that sold supplies to the Israel Defense Forces.

With regard to Elbit, PSC charged that it manufactured “deadly drones,” provided equipment to help build the West Bank security barrier and had “also manufactured white phosphorous and artillery systems that can be used for cluster munitions.”

PSC said that in supporting an arms company like Elbit that dealt with cluster munitions, the bank had violated its policy against financing such companies.

In communications with the Post, HSBC stressed that the issue had nothing to do with Israel and was instead specifically connected to its objection to the production of cluster bombs.

It made the decision one month after Elbit acquired the arms company IMI Systems Ltd., formerly known as Israel Military Industries. It has a history of producing cluster bombs.

“The action by HSBC does not appear to be a concession or adoption of BDS policy but rather a universally applied restrictions against investing in companies that produce cluster munitions, including us defense related corporations,” said Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations. “They are continuing all of their operations, including banking, in Israel, and have stated that they reject boycotts of Israel. We have known Stuart Levey for many years, and worked closely with him in his position of under secretary for terrorism and financial intelligence at the Treasury Department, where he was responsible for implementing sanctions on Iran.”

According to the Landmine & Cluster Munition Monitor website, “Israel has not used cluster munitions since 2006, but it has continued to acquire, produce and export them. It possesses cluster munition stocks and hosts stockpile of United States cluster munitions, but has never provided information on the quantities or types.”

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