US amends strictures on Arab boycott

Changes aim to encourage voluntary disclosure by firms.

By MICHAEL FREUND
Jeddah 298.88 (photo credit: Courtesy)
Jeddah 298.88
(photo credit: Courtesy)
The US government has recently revised its federal antiboycott statutes, which prohibit American companies from cooperating with any Arab trade embargo of Israel. The changes, which take effect on August 16, amend existing penalty guidelines and outline the procedure for firms wishing to come forward and voluntarily disclose violations of the law. Officials hope that by providing exporters with new incentives to come clean regarding noncompliance with the rules, it will preclude the need for lengthy, and often costly, investigations. A spokesman for the US Commerce Department's Bureau of Industry and Security (BIS), which oversees enforcement of the antiboycott laws, told The Jerusalem Post via e-mail that the revised guidelines will "provide US businesses with a clear understanding of the procedures BIS uses to settle alleged violations of the antiboycott provisions." The spokesman said the US government "anticipates the new statute will provide a well-defined process for the self-disclosure of violations and may thus encourage self-disclosures." He added that the antiboycott laws would continue to be enforced "with diligence and vigor." The revisions have been in the works for nearly a year, and were first reported in the Post in September. Congress passed an antiboycott law in 1977 prohibiting American firms from cooperating with the trade embargo, which is administered by the Arab League with the aim of isolating Israel and harming its economy. Various Muslim and Arab states regularly ask foreign firms to supply documentation attesting that they have no business or financial ties to Israel. US law bars Americans from complying with such demands and requires them to report requests for such information to the Commerce Department in a timely fashion. According to the Bureau of Industry and Security, nine US firms agreed to pay civil penalties totaling $95,950 in fiscal year 2006 to settle allegations that they had violated the statutes either by complying with boycott-related requests or by failing to report them. "The Department of Commerce policy of opposing restrictive trade practices or unsanctioned boycotts, including against Israel, is clear-cut," said Mario Mancuso, under secretary of commerce for industry and security. "Publishing the penalty and voluntary self-disclosure guidelines provides additional clarity and is a valuable part of our continuing efforts to educate US businesses about their responsibilities," he said. The Bureau of Industry and Security spokesman said that no additional changes to the law were expected any time soon. "There are no current plans to change the antiboycott provisions," he told the Post.