A map of Qatar is seen in this picture illustration June 5, 2017.
(photo credit: REUTERS)
Given how much more trade there is around the world with a Saudi-led alliance of four countries than with little Qatar, why not threaten a boycott of any company doing business with the tiny Gulf state?
So thought the United Arab Emirates’ ambassador to Moscow when he warned of further reprisals against Qatar if it did not cave in to 13 onerous demands in the wake of a diplomatic and transport blockade.
“One possibility would be to impose conditions on our trading partners and say you want to work with us then you have got to make a commercial choice,” warned Omar Ghobash. Except if you’re an American company you could fall foul of anti-boycott laws drawn up 40 years ago to protect Israel.
In the United States the Arab League’s boycott of Israel led to the Ribicoff Amendment to the Tax Reform Act of 1976 and the Export Administration Act of 1979. These laws barred US companies and their subsidiaries from accepting a foreign country’s demand to comply with a boycott which is not supported by the US.
So, in today’s terms, boycotting North Korea is fine because the US already restricts trade with the pariah state, but not Qatar.
The issue flared up last month after a Saudi Arabia, Bahrain, the UAE and Egypt broke off ties with Qatar over claims it was funding terrorism and getting too close to Iran.
It followed US President Donald Trump’s outspoken attacks on the Doha government which encouraged and lent support to a Saudi-led blockade.
As the crisis wore on and it became clear that Qatar was not going to cave in to the Saudi demands, the idea of a Qatar-or-us ultimatum was put forward.
This led to warnings about the dangers faced by any US companies who chose to comply.
Brian Egan, a former lawyer at the US State Department, said: “If you’re a company operating in those countries, your compliance people should be thinking about those questions, because you can stumble into those issues unknowingly.”
US anti-boycott laws date back to the 1970s when Saudi Arabia and other Arab nations imposed an oil embargo against the US, angry at its support for Israel in the 1973 war. It led to fuel prices surging in the ensuing oil crisis.
If US businesses don’t obey the law they could face fines and loss of export privileges.
The US government publishes quarterly lists of countries seeking participation in boycotts. The latest one, from the end of March, includes Saudi Arabia and the UAE, because of their attempt to force companies to join boycotts of Israel.
The fact that American companies are barred from boycotting Qatar may explain why the UAE’s minister of state for foreign affairs, Anwar Gargash, was yesterday rowing back on what Ghobash had earlier put forward.
By saying there were no such plans didn’t Gargash really just show that his government’s threats hadn’t really been thought through?
The author is the former foreign editor of the Daily Mail.