Boycotting Countries
July 2002
In a Federal Register Notice dated July 16, the IRS once again issued its list of countries deemed to be cooperating with an “international boycott.” That is code for “countries that are deemed to be active in supporting the Arab League Boycott on Israel.” The countries listed include: Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and Yemen.
Part 760 of the EAR prohibits any US Person (which can include your foreign subsidiaries) from supporting certain aspects of the Arab League embargo on Israel. In recent months, the Bureau of Industry and Security Office of Boycott Compliance has issued a number of website warnings ( www.bis.doc.gov/AntiboycottCompliance/Default.htm ) of both increased boycott activity and enforcement vigilance by BIS. Companies need to be take considerable care in dealing with customers in these countries and not agree to a prohibited boycott request. Companies must also frequently report boycott requests, prohibited or not, to BIS.
Boycott requests can also come from other countries and do not necessarily need to only be related to the Arab League embargo on Israel. But most of the enforcement focus relates to these countries, and you should establish a program of heightened vigilance with customers in them.
