British banks and financial institutions are receiving warnings from members of parliament not to invest in Israel’s controversial E1 settlement project, despite new UK laws banning trade with illegal settlements likely not taking effect for several months. A letter sent on Tuesday by the all-party Britain-Palestine group of MPs urged banks to review their involvement with new settlements, emphasizing that the responsibility now lies with the banks to ensure they are not supporting such projects. This comes after the UK’s foreign secretary, Ed Miliband, announced plans for a complete ban on trade with illegal settlements and new sanctions targeting those involved in their construction. However, the necessary secondary legislation to enforce these rules may take six to nine months to pass through parliament, delaying their implementation. The urgency of the situation is heightened by the Israeli government’s efforts to secure bids for the construction of up to 3,400 homes, including over 1,300 units for which the deadline to submit proposals is 25 October—just two days before Israel’s upcoming elections. Israel’s finance minister, Bezalel Smotrich, has previously claimed that the E1 settlement would significantly undermine the possibility of a two-state solution by dividing the territory that would be allocated to a future Palestinian state. The E1 project has long faced opposition due to its potential to derail the two-state solution, which remains the primary peace plan supported by Western and Gulf nations. Before construction can begin, finance, insurance, and guarantees are required—making the timing of the UK’s potential sanctions particularly significant. Ed Miliband’s decision to act earlier this month, prior to the Israeli elections, was partly motivated by concerns over the scale of settler violence in the West Bank and a desire to prevent UK financial institutions from supporting the tenders or the construction of the settlements. Some reports suggest that Miliband may have disregarded certain diplomatic advice in moving forward before the elections. The all-party group of MPs emphasized that financial institutions should consider the potential risks associated with E1 and other settlement projects while the detailed rules for the sanctions are being finalized. They warned that commitments made now could be difficult to reverse once the restrictions are in place, and that the allocation of costs would depend on the contracts and applicable law. In their letter, signed by two Labour MPs, Debbie Abrahams and Andy McDonald, the group urged banks to place E1-related exposure on their board’s agenda and risk register, and to make a reasoned decision on whether the associated legal, reputational, and financial risks align with the institution’s risk appetite. They clarified that the goal was not to stop trade with Israel in general but to ensure that financial support does not go to illegal settlements. Abrahams stressed that the group was not trying to preempt the law but was asking institutions to consider their exposure while the sanctions framework is being developed. The all-party group plans to publish responses to their letter by 10 October.