USA - Office of Antiboycott Compliance (OAC)
During the Mid-1970's, the US Adopted 2 Laws that Seek to Counteract the Participation of U.S. Citizens in other Nation's Economic Boycotts or Embargoes
The Office of Antiboycott Compliance (OAC) within BIS is charged with administering and enforcing the Anti-Boycott Act of 2018, Part II of the Export Control Reform Act of 2018 (ECRA), and the antiboycott provisions set forth in Part 760 of the Export Administration Regulations, 15 CFR parts 730-774 (EAR). These authorities discourage, and in some circumstances, prohibit U.S. companies from taking certain actions in furtherance or support of a boycott maintained by a foreign country against a country friendly to the United States (unsanctioned foreign boycott). U.S. companies must report to OAC their receipt of certain boycott-related requests for information designed to verify compliance with an unsanctioned foreign boycott. Prohibited activities include, inter alia, agreements by U.S. companies to refuse to do business with a boycotted country or with blacklisted persons for boycott-related reasons, furnishing information about any person’s business relationships with a boycotted country or with blacklisted persons, and implementation (by U.S. banking entities) of letters of credit that include prohibited boycott-related terms or conditions.
U.S. companies should report their receipt of requests to engage in boycott-related activities or to otherwise further or support an unsanctioned foreign boycott. If you have questions, please call (202) 482-2381 and leave a message for the Duty Officer or contact OAC by email.
Antiboycott Authorities (History):
During the late 1970s, the United States adopted several authorities that sought to counteract the participation of U.S. persons in other countries’ economic boycotts or restrictive trade practices. The 1977 amendments to the Export Administration Act of 1969 targeted certain activities by U.S. persons taken in furtherance of an unsanctioned foreign boycott. These amendments formed the basis of Section 8 of the Export Administration Act of 1979, which was implemented as Part 760 of the EAR. Enacted on August 13, 2018, as part of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, the Anti-Boycott Act of 2018, Part II of the ECRA, Title XVII, Subtitle B of Pub. L. 115-232, 132 Stat. 2208, provides the current statutory basis for OAC’s boycott-related administration and enforcement.
U.S. persons should also be aware of the boycott-related prohibitions and reporting requirements set forth in the Ribicoff Amendment to the 1976 Tax Reform Act. We recommend that you consult the Department of the Treasury regarding the Ribicoff Amendment.
The antiboycott provisions of the EAR encourage, and in specified cases, require U.S. persons to refuse to participate in unsanctioned foreign boycotts. They have the effect of preventing U.S. persons from advancing foreign policies of other nations that run counter to U.S. policy.
The Arab League boycott of Israel is the principal unsanctioned foreign boycott that U.S. persons must be concerned with today. The antiboycott provisions of the EAR, however, apply to all unsanctioned foreign boycotts.
The Antiboycott Provisions of the EAR: Jurisdiction
The antiboycott provisions of the EAR (see Part 760) apply to certain activities of “U.S. persons,” undertaken with boycott intent, in the “interstate or foreign commerce of the United States.”
U.S. person: includes all individuals, including foreign nationals, who are resident in the United States, and corporations and unincorporated associations that are resident in the United States, including the permanent domestic establishments of foreign concerns. The term also applies to U.S. citizens residing abroad (except when they are employed by non-U.S. persons) and the “controlled in fact” foreign subsidiaries, affiliates or other permanent foreign establishments of domestic concerns. The test for “controlled in fact” is the authority or ability to establish the general policies or to control the day-to-day operations of the foreign subsidiary, affiliate, partnership, branch, office, or other permanent foreign establishment. See Section 760.1 of the EAR, including its examples regarding key definitions.
Boycott intent: The antiboycott provisions of the EAR apply to certain activities of U.S. persons undertaken with intent to comply with, further, or support an unsanctioned foreign boycott.
The Interstate or foreign commerce of the United States includes activities involving the sale, purchase, or transfer of goods (including information) or services between two or more U.S. states or between a U.S. state and a foreign country. Exports/imports from/to the U.S. of goods or services may also be covered. See Section 760.1(d) of the EAR.
What do the Antiboycott Provisions of the EAR Prohibit?
Activities that may be prohibited under the EAR include:
• Refusals or agreements to refuse to do business with or in a boycotted country or with blacklisted companies.
• Discrimination or agreements to discriminate against a U.S. person based on race, religion, sex, or national origin.
• Furnishing information or agreements to furnish information about business relationships with or in a boycotted country or with blacklisted companies.
• Furnishing information or agreements to furnish information about the race, religion, sex, or national origin of a U.S. person.
• Implementation of letters of credit containing prohibited boycott terms or conditions.
• Taking actions with the intent to evade Part 760 of the EAR.
What Must Be Reported?
The antiboycott provisions of the EAR require U.S. persons to report requests they have received to take certain actions to comply with, further, or support an unsanctioned foreign boycott.
How To Report:
Section 760.5 of the EAR requires U.S. persons to report their receipt of boycott requests. 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. U.S. persons located in the U.S. must postmark or electronically date stamp their reports by the last day of the month following the calendar quarter in which the underlying request was received.
Forms for both electronic transmission and/or mail submission may be accessed from the forms request page.
The ECRA specifies administrative and criminal penalties for violations of the Anti-Boycott Act of 2018.
In the case of administrative antiboycott violations, BIS may impose the following penalties:
• A monetary penalty in the amount of the greater of approximately $300,000 per violation or twice the value of the underlying transaction, as appropriate;
• Denial of export privileges; and/or
• Revocation of any BIS export licenses.
In the case of violations that occurred prior to August 13, 2018, the potential sanctions are provided for in the International Emergency Economic Powers Act (IEEPA). Currently, the maximum monetary penalty under IEEPA for each violation is the greater of $307,922 per violation, or twice the value of the transaction that forms the basis of the violation. In situations involving alleged violations that occurred on or after August 13, 2018, the potential sanctions are specified in Section 1774(b) of the ECRA, including a maximum monetary penalty per violation of the greater of $300,000 or twice the value of the underlying transaction.
The U.S. Government may impose a criminal penalty of up to $1 million on individuals or companies for a criminal antiboycott violation. Individuals may additionally (or alternatively) face up to 20 years of imprisonment.
U.S. persons may voluntarily disclose violations of the antiboycott provisions of the EAR in accordance with the procedures set forth in Section 764.8 of the EAR. If you believe you may have violated the antiboycott provisions of the EAR, BIS urges you to file a voluntary self-disclosure (VSD). Filers should ensure that they comply with the requirements of Section 764.8 regarding the timing of filing, the contents of the initial notification of a VSD, the subsequent narrative account of the violation(s), and certification of any representations made in connection with the VSD. The provision also describes supporting documentation that should accompany a VSD filing.
After receipt of the disclosure and any supporting documentation, and thorough review and investigation, OAC will inform the party filing the disclosure of any action it intends to take. The criteria BIS uses in determining whether to pursue an enforcement action and what sanctions it will recommend are described in Supplement 2 of part 766. As indicated in Supplement 2, BIS encourages VSDs by giving the disclosing party “great weight” mitigation in the assessment of penalties.
Voluntary self-disclosures of antiboycott violations must be submitted to:
Office of Antiboycott Compliance
1401 Constitution Avenue, NW
Washington, DC 20230
Tel: (202) 482-2381