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Civil Penalties for Anti-Boycott Violations

Monday, September 04, 2017
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has imposed a $12,000 civil penalty against a controlled-in-fact foreign affiliate of a U.S. company to settle charges that it violated the anti-boycott provisions of the Export Administration Regulations. Specifically, in connection with the sale or transfer of goods or services (including information) from the U.S. to Saudi Arabia, the company is charged with (a) knowingly agreeing to refuse to do business with another person pursuant to an agreement with, a requirement of, or a request from a boycotting country, and (b) failing to report its receipt of requests to take an action that would have the effect of furthering or supporting a restrictive trade practice or unsanctioned foreign boycott.

Separately, BIS has imposed a $37,000 civil penalty against a U.S. company to settle similar charges. BIS alleges that in connection with the sale or transfer of goods or services (including information) from the U.S. to the United Arab Emirates this company (a) with the intent to comply with, further, or support an unsanctioned foreign boycott, furnished information concerning another person’s business relationships with other persons known or believed to be restricted from having any business relationship with or in a boycotting country, and (b) failed to report its receipt of requests to take an action that would have the effect of furthering or supporting a restrictive trade practice or unsanctioned foreign boycott.

BIS states that if either of these companies fails to pay the applicable penalty in a timely manner it may deny all of that company’s export privileges for one year.

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