Israeli soldiers of the Ultra-Orthodox battalion "Netzah Yehuda" take part in their annual unit training in the Israeli annexed Golan Heights, near the Syrian border. AFP
Israeli soldiers of the Ultra-Orthodox battalion "Netzah Yehuda" take part in their annual unit training in the Israeli annexed Golan Heights, near the Syrian border. AFP
Israeli soldiers of the Ultra-Orthodox battalion "Netzah Yehuda" take part in their annual unit training in the Israeli annexed Golan Heights, near the Syrian border. AFP
Israeli soldiers of the Ultra-Orthodox battalion "Netzah Yehuda" take part in their annual unit training in the Israeli annexed Golan Heights, near the Syrian border. AFP

Netzah Yehuda: What is the Israeli army battalion and why could it face US sanctions?


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Israeli leaders are reacting angrily to reports that an Israeli army battalion could be sanctioned under US human rights legislation, after US Secretary of State Antony Blinken said a decision on the move would be made “soon”.

The unit in question is the Netzah Yehuda battalion, established in 1999 to accommodate ultra Orthodox Jews – many of whom resist Israel’s compulsory military service.

Critics of US policy regarding its military support to Israel – normally almost $4 billion per year and now boosted by $26 billion this year – say sanctions on the unit of 1,000 men would mostly be symbolic.

Who are the Netzah Yehuda battalion?

The unit is well-known to rights groups, and was identified by the US State Department – which evaluates abuses by military units of allied countries – as having allegedly murdered civilians.

The unit made headlines in 2022 when its members were accused of killing a 78-year-old dual US-Palestinian citizen, but rights organisations have flagged alleged abuses by the soldiers long before then.

Omar Assad was found dead on an abandoned building site having been detained by the unit. A Palestinian autopsy later found he had suffered a stress-induced heart attack, after being handcuffed, gagged, threatened and manhandled by the troops.

Detractors of the unit point to its composition, with many recruits belonging to the so-called Hilltop Youth, an extremist settler organisation with a history of attacking Palestinian shepherds and establishing illegal settlements.

Attempting to placate the US, Israel withdrew Netzah Yehuda from the West Bank in 2022 and moved it to the Golan Heights.

Benny Gantz, a minister in the Israeli war cabinet, spoke to Mr Blinken on Sunday and requested that he “reconsider the prospective decision”.

The Israeli military said the Netzah Yehuda battalion is an active combat unit that operates according to the principles of international law. The US State Department clearly disputes this – at least for now – and could use existing legislation to halt support for the battalion.

What is the Leahy Amendment and will it be used against Israel?

The possible sanctioning of the unit is in line with US legislation introduced in 1997, known as the Leahy Law, named after human rights campaigner and Senator Patrick Leahy.

The law was enacted amid US military support for Columbia in its war against Marxist rebel group FARC, after several Colombian army and police units were accused by rights groups of severe human rights violations.

The US did not want to restrict arms supplies to its Columbian ally wholesale – as it did briefly to allies Pakistan and El Salvador in the 1960s and 1980s respectively – so the law emerged as a compromise to halt support to individual units. Since its passing, it’s been applied to security forces in Azerbaijan, Kyrgyzstan and Mexico, but not Israel.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Rating: 4/5

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Updated: April 24, 2024, 10:53 AM