U.S. Antiboycott Laws

U.S. anti-boycott laws were adopted to ensure that U.S. companies do not act in a way that undermines America's foreign policies.  U.S. companies are required to refuse to participate in foreign boycotts that the U.S. does not sanction.  This rule prevents U.S. companies from being used to implement foreign policies of other nations which run counter to U.S. policies.   The Arab League boycott of Israel is the principal foreign economic boycott that U.S. companies must be concerned with today. This boycott relates to goods manufactured in Israel, transported on Israeli flagged ships, and to boats or airplanes that land at a port or an airport in Israel as part of their normal routine.

The anti-boycott provisions of the Export Administration Regulations (EAR) issued by the United States Department of Commerce apply to:  All "U.S. persons"; defined to include individuals and companies located in the U.S. and their foreign affiliates. These persons are subject to the law when their activities relate to the sale, purchase, or transfer of goods and services (including information) within the U.S. or between the U.S. and a foreign country. This covers U.S. exports and imports, financing, forwarding and shipping, and certain other activities that may take place wholly off shore.

Conduct that may be penalized under these laws and or prohibited by these federal regulations includes the following:

• Agreements to refuse or refusal to do business with or in Israel or with blacklisted companies; 
• Agreements to discriminate or actual discrimination against other persons based on race, religion, sex, national origin or nationality; 
• Agreements to furnish or furnishing information about business relationships with or in Israel or with blacklisted companies; 
• Agreements to furnish or furnishing information about the race, religion sex, or national origin of another person; 
• Shipping against and presenting documentation in support of letters of credit containing prohibited boycott terms or conditions 

The EAR requires U.S. persons to report quarterly any requests they have received to comply with, further, or support an unsanctioned foreign boycott.  The Treasury Department publishes a quarterly list of "boycotting countries" and implements the law requiring taxpayers to report operations in, with, or related to a boycotting country or its nationals and any requests received to participate in or cooperate with an international boycott.  The EAR prescribes the penalties for violating anti-boycott regulations and export controls.

Resources:

U.S. Department of Commerce
BXA/Office of Antiboycott Compliance, Room 609B
Washington, D.C. 20230
(202) 482-2381

Department of the Treasury
Office of the General Counsel, Room 2004
Washington, D.C. 20220
(202) 622-1945

Edited by Michael C. Dennis, author of "Credit and Collection Handbook."   Mr. Dennis is a consultant.  Please email him at mcdennis13@yahoo.com with your questions, comments or business inquiries.