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U.S. ANTIBOYCOTT REGULATIONS. 2 U.S. ANTIBOYCOTT LAWS Section 203 of the International Emergency Economic Powers Act. Regulations in EAR 760 Ribicoff.

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Presentation on theme: "U.S. ANTIBOYCOTT REGULATIONS. 2 U.S. ANTIBOYCOTT LAWS Section 203 of the International Emergency Economic Powers Act. Regulations in EAR 760 Ribicoff."— Presentation transcript:

1 U.S. ANTIBOYCOTT REGULATIONS

2 2 U.S. ANTIBOYCOTT LAWS Section 203 of the International Emergency Economic Powers Act. Regulations in EAR 760 Ribicoff Amendment to the Tax Reform Act of 1976 Section 999 of the Internal Revenue Code

3 3 WHAT KIND OF BOYCOTT? Primary: Restricts imports from boycotted country *Secondary: Restricts trade with firms dealing with boycotted country *Tertiary: Restricts trade with firms dealing with blacklisted persons “*”--Jurisdiction of Antiboycott Rules

4 4 HOW TO ANALYZE AN ANTIBOYCOTT ISSUE Jurisdiction: U.S. persons and U.S. commerce? Prohibitions: Is conduct illegal? Exceptions: Is conduct excepted from prohibitions? Reporting: Is there a boycott request?

5 5 JURISDICTION An activity is subject to the jurisdiction of the antiboycott regulations if it involves a “U.S. person” and “U.S. commerce.”

6 6 U.S. ANTIBOYCOTT REGULATIONS Prohibitions & Exceptions

7 7 PROHIBITIONS Agreements to refuse, or actual refusal to do business, with or in Israel Agreements to refuse, or actual refusal to do business with companies the Arab League has blacklisted

8 8 PROHIBITIONS Agreements to furnish or actual furnishing of information about business relationships with or in Israel Agreements to furnish information about business relationships with Arab League blacklisted companies Furnishing of business information

9 9 PROHIBITIONS Implementing letters of credit containing prohibited boycott terms or conditions Other Prohibitions: –Discriminating or agreeing to discriminate based on race, religion, sex, national origin or nationality –Furnishing or agreeing to furnish information about the above

10 10 PROHIBITIONS Information Concerning Association with Charitable and Fraternal Organizations –Furnishing information about charitable or fraternal organizations –No exceptions

11 11 EXCEPTIONS Compliance with Import Requirements of a Boycotting Country Examples: –Exports to boycotted country, directly or indirectly –Route of shipment of exports to or through boycotted country

12 12 EXCEPTIONS Compliance with Shipping Document Requirements of Boycotting Country –Positive Requests –Examples: Country of Origin Name of Carrier Name of Supplier or Service Provider

13 13 EXCEPTIONS Compliance with Unilateral and Specific Selection –“Necessary and Customary” –Goods specifically identifiable –Applies to “Pre-selection” and “Pre-award” services

14 14 EXCEPTIONS Compliance with Local Laws: –Applies to “laws,” not “policies” –Applies to U.S. persons that are resident in a foreign country –Includes entering into contracts, employing host country residents, purchasing and selling host country goods, furnishing information

15 ANTIBOYCOTT REPORTING REQUIREMENTS

16 16 REPORTING REQUIREMENTS Reports required quarterly U.S. person must report receipt of request to take action that furthers boycott even if they did not act on it Must relate to transaction of anticipated business in U.S. Commerce Includes overseas subsidiaries that are controlled “in fact” by the U.S. parent

17 17 EXCEPTIONS TO REPORTING REQUIREMENT Route of vessel Use of specified country’s vessel Positive certification of origin Compliance with country’s laws if boycott laws not mentioned Certificates of vessel eligibility

18 18 ENFORCEMENT Criminal: –Each "knowing" violation up to $50,000 or five times the value of the exports involved, whichever is greater –Imprisonment of up to five years

19 WHERE COMPANIES GO WRONG Only check targeted countries Do not train their subsidiaries to report 19

20 20 ENFORCEMENT Administrative: –General denial of export privileges –Fines of up to $11,000 per violation –Exclusion from practice

21 Penalties imposed for each "knowing" violation fine of up to $50,000 or 5 times the value of the exports involved, whichever is greater, and imprisonment of up to five years. 21

22 During Fiscal Year companies paid civil penalties totaling $194,500 to settle allegations they violated the antiboycott provisions of the EAR. Most of the settlements involved alleged violations of the prohibition against furnishing information about business relationships with or in Israel, or with companies on boycotting countries’ blacklists. Other settlements involved failure to report receipt of requests to engage in restrictive trade practices or boycotts. 22

23 In Fiscal Year 2007, BIS’s Office of Antiboycott Compliance responded to 1,097 requests from companies for guidance on compliance with the antiboycott regulations. During the same period, BIS officials made 16 public presentations on the antiboycott regulations to exporters, manufacturers, financial services institutions, freight forwarders, and attorneys involved in international trade. BIS also provided extensive counseling to individual companies with specific boycott problems. 23

24 24 SUMMARY U.S. Antiboycott laws How to analyze your antiboycott problem Exceptions and Prohibitions Reporting requirements Enforcement QUESTIONS?


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