The antiboycott laws and regulations prohibit U.S. Companies from cooperating or participating in a foreign boycott that is not sanctioned by the United States. These laws, which are complex and often counter-intuitive, are enforced by the U.S. Department of Commerce and the Treasury Department’s Internal Revenue Service (IRS).
The primary foreign boycott of concern today is the Arab League’s Boycott of Israel, which means that U.S. company dealings in the Middle East are risk for boycott issues; however, boycotting activities amongst other countries, such as India, Pakistan and Bangladesh, can arise from time to time. U.S. companies (and their foreign affiliates) are prohibited from responding to a foreign boycott-related request, and must report their receipt of the request on a quarterly basis to the Commerce Department’s Office of Antiboycott Compliance (unless an exception or exemption applies).
- Assessing and determining if suspected foreign boycott requests (in bid requests, contracts, purchase orders, letters of credit, etc.) are subject to regulatory exemptions or exceptions, and if they are reportable to the OAC;
- Assisting in preparing and filing the required IRS reports on dealings in or with countries known to support foreign boycotts;
- Designing and implementing internal controls for identifying suspected foreign boycott-related requests, reviewing requests received, and ensuring that timely reports (when required) are submitted to the OAC;
- Documenting antiboycott compliance policies and procedures;
- Assessment of antiboycott compliance during internal audits and compliance reviews;
- Providing in-house training to company personnel on U.S. antiboycott compliance requirements;
- Keeping clients updated on legislative, regulatory and judicial developments involving U.S. antiboycott laws, regulations and enforcement actions.