Israel Launches Pilot Program to Compensate Businesses for Extortion-Related Damage

Israel's Ministry of Finance is launching a pilot program to compensate business owners for property damage resulting from extortion, also known as 'protection' rackets. The program, championed by Finance Minister Bezalel Smotrich, allocates up to 35 million shekels to provide a financial safety net for businesses whose property is damaged due to extortion and is not adequately covered by insurance.

The final procedure for the pilot, which begins on Thursday and will run for approximately two months, was published after a public comment period. During this initial phase, the ministry will assess the mechanism's operation, the volume of applications, and its effectiveness for victims. The compensation focuses on direct property damage not covered by insurance, not on extortion payments themselves.

The initiative aims to encourage business owners to report extortion attempts and cooperate with law enforcement. The compensation will be processed through the Property Tax and Valuation Authority's compensation fund. The pilot's success will be measured not only by the number of claims and payouts but also by whether the mechanism genuinely assists businesses facing threats from criminal elements.

This move follows extensive public and governmental discussions on aiding businesses affected by extortion. The Knesset's Economics Committee has also addressed the issue, calling for expanded government support. While a government decision and budget were allocated in August, the implementation was delayed pending the finalization of procedures.

Minister Smotrich linked the program's launch to broader government plans to strengthen economic activity in the Negev and Galilee regions, offering financial protection to farmers and business owners in these areas. He urged business owners not to yield to criminal demands, stating, "The State of Israel stands behind you." The pilot's outcomes will inform future decisions regarding the program's continuation, eligibility criteria, and potential expansion.