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The Israeli Association of Customs Agents and International Freight Forwarders has sent an urgent letter to the Accountant General at the Israeli Ministry of Finance, Michal Abadi-Boiangiu, demanding a reconsideration of the decision to terminate the government insurance program for cargo against war and terrorism risks, and requesting an extension of the coverage for an additional three months.
As previously reported, a joint announcement by the Ministry of Finance and the Israel Tax Authority in late August stated that the program, operated through the Tax Authority's Compensation Fund, would be extended only until October 31, 2026, and that absent any other decision, its operation would cease at the end of this period.
In his letter, the Chairman of the Association, Amir Shani, notes that the request comes against the backdrop of a significant shift in the international shipping map: in the last two months, major shipping giants, including Maersk, MSC, and Hapag-Lloyd, have begun a cautious and gradual return to transit through the Bab el-Mandeb Strait and the Suez Canal, following a long period in which they were forced to circumnavigate Africa via the Cape of Good Hope due to Houthi threats.
Partial Recovery Alongside Constant Risk
According to Shani, alongside the return of shipping companies to the shorter route, Houthi rebels have recently tightened their grip on various areas along the coast of Yemen and on Perim Island in the strait, creating a reality of "partial recovery alongside constant risk."
The Association emphasizes that Israeli freight forwarding companies have received reports from cargo insurers indicating that commercial insurance companies are still unwilling to insure cargo passing through the Red Sea against war and terrorism risks. These circumstances make the government safety net critical for Israeli importers and exporters to prevent the cessation of essential shipments and to maintain trade continuity.
"Given the level of risk, it is of paramount importance to extend the government protection layer for an additional period," Shani concluded in his appeal.
The Israeli Ministry of Finance has not yet issued a response.
