Exporting Anti-Boycott Requirements - dummies

By John J. Capela

The U.S. has a policy of opposing restrictive trade practices that countries impose against other countries friendly to the U.S. The Arab League boycott of Israel is the principal foreign economic boycott that U.S. companies have to be concerned with today.

So what does this mean to you? You’d be in violation of these laws if you agreed not to do business with Israel as a precondition to doing business with another country.

The following are a few examples of boycott requests or conditions that would be in violation of U.S. law if you agreed to the terms.

  • “In the case of overseas suppliers, this order is placed subject to the suppliers’ not being on the Israel boycott list published by the central Arab League.” You may see this language on a purchase order.

  • “Goods of Israeli origin not acceptable.” You may see this language on the importer’s purchase order.

  • “We hereby certify that the beneficiaries, manufacturers, exporters, and transferees of this credit are neither blacklisted nor have any connection with Israel and that the terms and conditions of this credit in no way contravene the law pertaining to the boycott of Israel and the decisions issued by the Israel Boycott Office.” You may see this language on a letter of credit.

These are just some examples of the kind of language that, if you agreed to the terms, would get you in trouble.

Want a real-world example? Rexnord Industries, LLC, had to pay a civil penalty of $8,000 to settle five charges that they violated the anti-boycott rules. It was determined that from 2007 to 2009, they made several shipments from the United States to Qatar, Pakistan, and Bangladesh; in each case, Rexnord provided information in a statement to the customer, certifying that the goods were not of Israeli origin and did not contain Israeli materials. In addition, they were charged for failing to report the customer’s request to the Department of Commerce.