US Antiboycott Law: What Businesspeople Should Know
U.S. individuals and companies are absolutely prohibited by law (as well as SCOA company rules) from taking action to further or support any boycott maintained by a foreign country against a country friendly to the United States. The purpose of this legal framework is to prevent anyone in the U.S. from advancing foreign policies of other nations that run counter to U.S. policy. Although the Arab League boycott of Israel is the principal unsanctioned foreign boycott with which U.S. law is concerned at present, it is important to note that U.S. antiboycott laws apply to all unsanctioned foreign boycotts. Because the U.S. Commerce Department has indicated it will continue to be increasingly focused on Antiboycott Compliance going forward, SCOA’s Legal and Compliance Department would like to remind all employees of their obligations in this area.
What Is Prohibited?
◦ Any agreement to refuse or any actual refusal to do business with or in Israel or with Israel-related companies.
◦ Any agreement to furnish information about business relationships with or in Israel or any Israel-related companies.
What Is an Impermissible Boycott Request?
◦ What to review?: all transaction documents (especially shipments to or involving Middle Eastern countries)
◦ What to look for?: “Israel” or “Israeli” and contain any of the following terms: Blacklist; Boycott; Content; Origin; Ownership; Relationship; Manufacture; Vessels
◦ Where can boycott requests be found?: questionnaires, invitations for bids, contracts, PO’s, L/C’s, C/O’s, shipping instructions
Specific Examples: Certificate of origin (“Invoices must be endorsed with a certificate of origin stating that goods are not of Israeli origin, do not contain any Israeli material, and are not shipped from any Israeli port.”); Contracts (“Vendor shall comply with the Israel boycott laws in performing their contractual obligations.“); Instructions to bidders (“The equipment and materials must not be of Israeli origin. Suppliers/bidders that are not blacklisted by the Arab boycott of Israel will be allowed to participate in this bid.”); Customs Documents (*”[The vessel entry document asks the ship’s captain to certify that] no goods, dry cargo, or personal effects listed on the document of Israeli origin or manufactured by a blacklisted firm or company are to be landed, as they will be subject to confiscation.“); Purchase orders (“In the case of overseas suppliers, this order is placed subject to the suppliers being not on the Israel boycott list published by the central Arab League.“)
What To Do If You Find a Potentially Impermissible Boycott Request?
◦ Immediately report to SCOA Legal and Compliance Offices – before proceeding with transaction, or doing anything with request.
◦ You may not do anything at all to advance the transaction until you have received the approval from SCOA Legal and Compliance.
◦ Recipients of such requests have an affirmative obligation to report them to the Commerce Department. SCOA Legal and Compliance will assist you in determining whether such a report is necessary, and if so, making the required report.
U.S. companies must report to OAC their receipt of certain boycott-related requests for information designed to verify compliance with an unsanctioned foreign boycott.