Israeli business owners in Spain say bank froze accounts under new ‘Gaza decree’

Spain’s fourth-largest bank, Banco Sabadell, is under fire from Israeli business owners who say their accounts have been frozen under a new Spanish royal decree targeting trade linked to Israeli settlements.

Israeli financial publication Calcalist reported that the Catalonia-based bank has asked all Israeli clients to sign declarations confirming they do not “conduct, export, or import goods or services” connected to Israeli settlements – a move it says complies with new Spanish legislation introduced in September.

Royal Decree No. 10/2025 – formally described as “urgent measures against the genocide in Gaza and in support of the Palestinian population” – expands Spain’s arms embargo on Israel and prohibits the import, export or promotion of products originating in Israeli settlements.

In recent days, several Israeli entrepreneurs with Spanish-registered companies said they had been warned that incoming funds from Israel would not be released unless they submitted the new forms. One businesswoman told Calcalist: “Every Israeli who receives money from an Israeli must prove that it is clean and complies with the new law. It’s a crazy situation I never believed would come to us.”

The form requires customers to confirm that transactions “do not violate the restrictions set forth in Royal Decree No. 10/2025” and to provide details including end-user addresses and product origin. Banco Sabadell’s compliance department must now clear all payments before approval.

An Israeli client quoted by Calcalist said she had “more than €10,000 stuck” and that “dozens of other Israelis” were unable to access funds for rent or food.

Critics argue the bank is interpreting the decree too broadly. “It seems they are applying the law in an excessive and possibly illegal way,” said another Israeli business owner, noting that the regulation applies to Spanish companies, not individual clients.

Others have suggested political motives. One activist in Spain told Calcalist the policy “may be an attempt to please the Spanish government amid Banco Sabadell’s ongoing battle against a takeover bid by BBVA Bank.”

Banco Sabadell, which manages around €240 billion in assets and employs nearly 18,700 people, has not publicly commented on the specific complaints.