U.S. Department of Commerce issues new resource to facilitate antiboycott compliance

The list is posted on the Office of Antiboycott Compliance (OAC) webpage. Each listed entity has been reported to BIS recently on a boycott request report form as having made a boycott-related request in connection with a transaction in the interstate or foreign commerce of the United States. The list is not exhaustive and will be updated quarterly.

BIS hopes that the list will assist U.S. persons in complying with the antiboycott regulations set forth in Part 760 of the Export Administration Regulations, 15 CFR Parts 730-774 (EAR). The publishing of this list also reflects BIS’s enhanced enforcement of the antiboycott regulations, focusing on those making (in addition to receiving) boycott requests.

The Issuance of This List Is Part of a Broader BIS Effort to Enhance Enforcement Related to U.S. Antiboycott Regulations and to Highlight Their Applicability to Federal Government Contracts

Other efforts undertaken by BIS in recent years to enhance its enforcement efforts related to antiboycott laws include issuance of two policy statements designed to highlight the requirements of the antiboycott regulations, and their applicability to U.S. Government acquisition contracts, respectively.

• 6 October 2022 Memorandum on Enhanced Enforcement of the Antiboycott Rules
  • Enhanced penalties, seeking to impose penalty amounts that reflected the agency’s assessment of the seriousness of the violations and that were commensurate with the harm caused;
  • Reprioritized violation categories in the Antiboycott Penalty Guidance, better aligning them with the agency’s view of the violations’ relative seriousness;
  • Required admissions of misconduct in settlement agreements for antiboycott violations; and
  • Renewed focus on foreign subsidiaries of U.S. companies, committing to a more aggressive approach to exploring ways to deter foreign parties from making or issuing boycott requests to U.S. persons.
• 26 July 2023 Memorandum on Strengthening Antiboycott Reporting and Compliance
  • Amended Boycott Reporting Form, requiring reporters to identify the specific party from whom the boycott-related request was received; and
  • Included an Antiboycott Policy Statement on U.S. Acquisition Management websites that sets forth the requirements of the antiboycott regulations and their applicability to U.S. Government acquisition contractors.  In addition to being posted on the Department of Commerce Office of Acquisition Management (OAM) website, the Antiboycott Policy Statement was posted on the System for Award Management (SAM) contractor registry website at SAM.gov. Prospective and active Federal contractors must visit SAM.gov to register to be eligible to receive Federal contract awards. The Policy statement encourages contractors to:
    • Review the antiboycott regulations;
    • Be aware of prohibitions affecting their company or any contract they may have with the U.S. Government;
    • Ensure they do not comply with, or otherwise participate in, any unsanctioned foreign boycott;
    • Report the receipt of any boycott-related requests; and
    • Make sure they do not request or require others to take any action in furtherance with an unsanctioned foreign boycott (including discriminating on the basis of religion or national origin).

A Number of States Have Also Enacted Antiboycott Measures and Created Similar Lists

Companies should also be cognizant that in the past ten years, dozens of states have also adopted laws and policies intending to penalize participation in international boycotts, including the Arab League boycott of Israel. For example, Illinois was the first state to pass legislation to oppose the Boycott, Divestment and Sanctions (BDS) movement in 2015. Illinois prohibits taxpayer-funded pension funds from being invested in certain companies, including those that have been determined to participate in the BDS movement. Such companies are included on the state’s Prohibited Investment List, which is public and from which companies must petition for removal if they feel they have been listed erroneously.

Next steps

U.S. companies, including Federal contractors, financial institutions, freight forwarders and others should review the list to increase awareness of the sources of past boycott requests. U.S. persons are also encouraged to diligently review transaction documents from all sources, but especially transaction documents with or involving these listed parties – given that they have been identified by others as a source of boycott requests – to identify possible boycott-related language and to determine whether U.S. persons have a reporting requirement to BIS pursuant to Part 760 of the EAR.

Authored by Ajay Kuntamukkala, Beth Peters, Aleksandar Dukic, Mike Mason, Stacy Hadeka, Joy Sturm, and Annika Lichtenbaum.