Israel Launches Compensation Program for Businesses Hit by Extortion
Translated & summarized from Globes by baba
The story in 5 lines · by baba
- Israel's Tax Authority offers compensation for "protection" racket victims.
- Maximum payout is 2 million shekels for direct property damage.
- Program covers damages from September 24 to November 23, 2026.
- Eligibility requires a police report and specific insurance conditions.
- Claims must be filed within seven days, without prior repairs.
Israel's Tax Authority has opened a new compensation track for business owners who have suffered direct property damage due to "protection" rackets, also known as "hush money" or "guard fees." This pilot program, established under government decision 4299, covers damages incurred between September 24 and November 23, 2026. The compensation is strictly for direct damages to business property or a business owner's residence, excluding indirect losses or third-party damages, with a maximum payout of 2 million shekels.
To be eligible, business owners must operate a legal business with a valid license and an active tax file. Their property, including inventory, equipment, or home, must have been directly damaged as a result of refusing to pay extortion fees or filing a police complaint. Key conditions for compensation include filing a recognized police report related to protection rackets, demonstrating that insurance coverage for malicious damage was unobtainable or denied, and adhering to security and risk reduction measures required by insurers. For structural damage, proof of legal construction is also necessary.
Claims must be submitted online to the Tax Authority's compensation fund within seven days of the damage occurring. Crucially, claimants must not repair the damage before a property tax assessor has inspected it, as unauthorized repairs could lead to claim denial. Minor repairs like replacing broken glass are permitted. The processing time for claims is estimated to be up to eight months.
The "protection" phenomenon, which involves threats and violence from criminal elements against contractors and business owners, has seen incidents like vandalism, arson, and grenade attacks. Recently, the Japnika restaurant chain experienced multiple attacks on its branches. The government is combating this issue through dedicated police units and legislation, including the "Protection Law" enacted in August 2023, which imposes prison sentences for extortion, with harsher penalties for threats.
This new compensation track aims to provide a measure of relief for victims of these criminal activities, acknowledging the significant financial and personal toll such extortion can take.
