The Bureau of Industry and Security announced this week that it has imposed a $44,750 civil penalty against a U.S. company to resolve three violations of the antiboycott provisions of the Export Administration Regulations. Boycott-related actions could see an increase amid ongoing conflicts in the Middle East, and U.S. companies and their foreign affiliates can be hit with substantial criminal and civil penalties if they violate related U.S. laws and regulations.
According to BIS, the company admitted that, in connection with the shipment of products and items for display at an overseas trade show, it furnished to its freight forwarder a commercial invoice/packing list certifying that the goods were not of Israeli origin and not manufactured by a company on the “Israeli Boycott Blacklist.” However, the company obtained a significantly reduced penalty by voluntarily self-disclosing this violation, cooperating with BIS’ investigation, and taking remedial measures after discovering the conduct at issue.
The anti-boycott provisions of the EAR discourage, and in certain circumstances prohibit, U.S. persons from taking certain actions in furtherance or support of a boycott maintained by a foreign country against a country friendly to the U.S. In addition, U.S. persons must report to BIS their receipt of certain boycott-related requests, whether or not they intend to comply with them. Reports may be filed electronically or by mail on form BIS 621-P for single transactions or on form BIS 6051P for multiple transactions involving boycott requests received in the same calendar quarter. Voluntary self-disclosures may be submitted by those who believe they may have violated these provisions.
Earlier this year BIS made available a new resource to help companies, freight forwarders, and others identify boycott-related requests they may receive during the regular course of business. This resource is a list of entities that have been identified in reports received by BIS as having made a boycott-related request in connection with a transaction in U.S. interstate or foreign commerce. BIS is encouraging U.S. persons to diligently review transaction documents from all sources, but especially those involving the parties on this list (which will be updated regularly), to identify possible boycott-related language and determine whether they need to report it to BIS.
For more information on complying with anti-boycott requirements, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.
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