Is the Iran-Sanctions Playbook Coming for Israel? - with Mark Dubowitz

Dan Senor (0:00)

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Mark Dubowitz (0:34)

Israel has yet to experience what American financial warfare looks like. And I'm saying, let's conduct a stress test on a computer before someone conducts it on the Israeli economy. What would happen if you designate a hypothetical major Israeli corporation, I mean, pick a major Israeli tech company, including one that you've mentioned, and then designate a bank, and then what happens to those corresponded banking relationships, and dollar clearing, and insurance?

What happens to the foreign venture capital firms to say, you know what, incredible technology in Israel, but lots of good jurisdictions, and I don't want to take the risk. And then what happens to the shekel? Run that exercise, and maybe, I hope, to God, we discover Israel is much more resilient than I'm warning, and that would be excellent news. But again, national security planning isn't about necessarily proving the worst-case scenario correct. It's about discovering what are your vulnerabilities for your allies or your adversaries discover them for you.

Dan Senor (1:37)

It's 9 a.m. on Sunday, September 27th here in New York City. It's 4 p.m. on Sunday, September 27th in Israel, as Israelis celebrate the Sukkot holiday.

Last week, Prime Minister Netanyahu stood at the UN General Assembly. 24 hours later, the UN did something that got almost no attention outside of the Israeli press. It expanded its settlement business blacklist from 158 companies to 215 companies, including companies like TNUVA, a dairy products Israeli company headquartered in Ramat Gan, listed on the Tel Aviv Stock Exchange, which is the largest exporter and supplier of kosher dairy products around the world. Also companies like Elektra, which is an Israeli construction company, and dozens of others. It's not a sanction. It's not binding. But it is, as my next guest predicts, exactly how things start. Mark Dubowitz, a frequent guest on Call Me Back, runs FDD, the Foundation for Defense of Democracies, a Washington-based think tank. Iran sanctions architecture is basically his life's work. He helped build the case for the maximum pressure campaign, what we call the E3 snapback, the swift cutoffs, the whole 30-year machine that isolated Tehran's economy before a single shot was fired. Now, FDD has published a report, the one we are going to discuss today, arguing that almost the exact same machine, the same designations, the same escalation logic, could be assembled against Israel. Not by enemies, but by allies, or at least by quote-unquote neutral parties and neutral governments, by sovereign wealth funds in the West that manage trillions of dollars, by the EU, stating that the reason has been Israel's conduct in Gaza and the West Bank. And now, this is the part that should make Jerusalem very nervous. This same architecture could be built by Democrats, by mainstream Democrats, something to ponder on the eve of Democrats potentially taking majority control of one or both houses of Congress. So today's conversation, is this alarmism, or is it just describing what's already happening in slow motion? What did Iran's 30-year isolation teach us about how fast this can move once it starts? And if the man who helped design the playbook against Iran is now warning it's going to be aimed at Jerusalem, what if anything can actually stop it? My conversation with Mark Dubowitz right after this short message.

In the United States, if there's an emergency, you're dealing with several different systems. One organization runs the ambulances, another handles disaster relief, a third manages the blood supply.

In Israel, it's one organization, Magan David Adom. MDA is Israel's National Emergency Services System. It's mandated by the government, but it is not a government agency, which means it runs on philanthropy. Most of Israel's ambulances were paid for by generous donors from around the world. Something else worth knowing, MDA's medics are Jewish, Muslim, Christian and Druze, serving Israel's entire population, regardless of religion, nationality or ethnic background. In a country that argues about almost everything, that diversity is sacred. You can support their important work at afmda.org/call me back, or follow the link in the episode description.

Mark Dubowitz, welcome back to Call Me Back.

Mark Dubowitz (5:20)

Honored to be back with you, Dan. Thank you.