US revising regulations on Arab boycott

New government proposal aims to boost compliance with anti-boycott rules.

September 14, 2006 22:01
2 minute read.
arab league 298.88

arab league 298.88. (photo credit: Associated Press)


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The US government is planning to amend federal guidelines implementing its anti-boycott law, which bars American companies from cooperating with the Arab boycott of Israel, The Jerusalem Post has learned. The proposed change, which will likely go into effect before the end of the year, would set forth clearer guidelines concerning issues such as the factors considered in setting penalties for companies found to be in violation of the law. The change is designed to provide incentives for violators to come forward voluntarily, to avoid lengthy and often costly investigations. The reason behind the timing of the change remains unclear. Earlier this year, however, the boycott issue garnered international attention when the Post revealed that a Dubai-based firm seeking to purchase six US ports participated in the Arab boycott of Israel. The sale eventually fell through. The Arab League first initiated a boycott against "Zionist products" in 1945, prior to the establishment of the state. Over the years, its aim has been to isolate Israel and to undermine its economy by discouraging trade with the Jewish state. Arab states have regularly asked companies to supply documentation attesting that they have no business or financial ties to Israel. In 1977, the US Congress passed a law prohibiting American firms from cooperating with the boycott. The Office of Antiboycott Compliance, which is part of the US Department of Commerce's Bureau of Industry and Security, oversees enforcement of the law and assesses fines and other penalties to those who violate it. "The proposed rule sets out general, aggravating and mitigating factors the Office of Antiboycott Compliance considers when determining the appropriate administrative penalty associated with an alleged violation of the antiboycott provisions of the Export Administration Regulations," the bureau's Eugene Cottilli told the Post via e-mail. "The proposed rule also sets forth specific criteria and procedures for voluntary self-disclosure of violations of the antiboycott provisions." The goal of the proposed rule," Cottilli said, "is to improve adherence to the antiboycott provisions of the Export Administration Regulations by more fully informing US companies of case settlement and voluntary self-disclosure procedures involving violations of these regulations." Under the proposed rule change, disclosure by a firm that it has been violated the antiboycott statute would be a mitigating factor of "great value." According to the Bureau of Industry and Security, the change will save the department time and money, allowing it to devote more resources to investigate more cases. Cottilli added that the proposed rule "is strictly a clarification of the practices already in place. "The BIS is and has always been aggressively enforcing the antiboycott provisions of the Export Administration Regulations," he said.

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