The Bureau of Industry and Security reports that a U.S. company has been assessed a civil penalty of $151,875 to resolve 45 alleged violations of the anti-boycott provisions of the Export Administration Regulations.
According to BIS, between July 2018 and December 2019 the company received 45 requests from its customer, a distributor located in the United Arab Emirates, to refrain from importing goods of Israeli origin into the UAE in fulfillment of purchase orders from that customer. The company failed to report to BIS the receipt of these requests.
BIS regulations 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 their receipt of certain boycott-related requests whether or not they intend to comply with them.
In this case the company voluntarily self-disclosed the violative conduct, cooperated with the investigation by BIS’s Office of Antiboycott Compliance, and implemented remedial measures, all of which resulted in a significant reduction in penalty.
BIS notes that it has enhanced its anti-boycott enforcement efforts in recent years. In October 2022 it increased its related penalties and instituted a requirement that companies entering into settlement agreements for anti-boycott violations admit to a statement of facts outlining their conduct. In July 2023 BIS announced a renewed focus on foreign subsidiaries of U.S. companies and noted that it would explore additional ways to deter foreign parties from issuing or making boycott requests.
On the other hand, BIS has moved to aid compliance by maintaining on its website a quarterly-updated list of entities that have been reported as having made a boycott-related request in connection with a transaction in U.S. interstate or foreign commerce. BIS encourages U.S. persons to diligently review transaction documents from all sources but especially those involving parties on this list.
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