Israel Launches Pilot Program to Compensate Businesses for Racketeering Damage
Translated & summarized from NEWSru Israel by baba
The story in 5 lines · by baba
- Israel's Tax Authority will compensate racketeering victims up to 2 million shekels.
- A pilot program runs from October 4 to December 4, 2026.
- Reporting to police within seven days is a key requirement.
- Funds will come from confiscated assets, not the compensation fund.
- The program aims to encourage reporting of criminal threats.
The Israeli Tax Authority's Compensation Fund has begun accepting applications from business owners who have been victims of racketeering. This pilot program, running from October 4 to December 4, 2026, aims to provide financial compensation of up to 2 million shekels per business. The funds for this initiative will not come from the compensation fund itself but from a separate fund that accumulates assets confiscated during criminal proceedings. A total of 30 million shekels has been allocated for the pilot project.
Payments will not be immediate. After the pilot period concludes, the Tax Authority will tally all approved claims. If the total amount of approved claims exceeds the allocated budget, the funds will be distributed proportionally among the applicants. The program's primary objective is to encourage business owners to report threats from criminal elements.
A key requirement for receiving compensation is filing a complaint with the police. Business owners must report any damage to the police within seven days of the incident. This allows a tax authority appraiser to inspect the site promptly to preserve evidence, similar to the procedure for damage resulting from hostile actions. While a full documentation package is not required initially, a letter from an insurance company denying payment and police confirmation of racketeering can be submitted later.
Compensation is limited to direct property damage and is only available to businesses operating with a valid license. If a building is damaged, the owner must prove it was legally constructed. Furthermore, victims are prohibited from repairing damages before an appraiser's visit, with the exception of clearing glass and debris, to avoid claim rejection.
This initiative follows a state comptroller's report earlier this year that identified racketeering as a widespread issue in the construction industry nationwide. A survey by the Association of Building Contractors indicated that 87% of contractors and developers had received demands for protection money, yet 75% of those surveyed did not report these incidents to the police. In the Negev police district between 2020 and 2024, out of 1,743 racketeering cases opened, only 263 resulted in indictments.
