- Office of Antiboycott Compliance
Washington, DC
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- Antiboycott Laws:
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- During the mid-1970's the United States adopted two
laws that seek to counteract the participation of U.S. citizens in
other nation's economic boycotts or embargoes. These "antiboycott"
laws are the 1977 amendments to the Export Administration Act (EAA)
and the Ribicoff Amendment to the 1976 Tax Reform Act (TRA).
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- Objectives:
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- The antiboycott laws were adopted to encourage, and
in specified cases, require U.S. firms to refuse to participate in
foreign boycotts that the United States does not sanction. They have
the effect of preventing U.S. firms >from being used to implement
foreign policies of other nations which run counter to U.S.
policy.
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- Primary Impact:
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- The Arab League boycott of Israel is the principal
foreign economic boycott that U.S. companies must be concerned with
today. The antiboycott laws, however, apply to all boycotts imposed by
foreign countries that are unsanctioned by the United States.
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- Who Is Covered by the Laws?
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- The antiboycott provisions of the Export
Administration Regulations (EAR) apply to all "U.S. persons," defined
to include individuals and companies located in the United States and
their foreign affiliates. These persons are subject to the law when
their activities relate to the sale, purchase, or transfer of goods or
services (including information) within the United States or between
the U.S. and a foreign country. This covers U.S. exports and imports,
financing, forwarding and shipping, and certain other transactions
that may take place wholly offshore.
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- Generally, the TRA applies to all U.S. taxpayers
(and their related companies). The TRA's reporting requirements apply
to taxpayers' "operations" in, with, or related to boycotting
countries or their nationals. Its penalties apply to those taxpayers
with foreign tax credit, foreign subsidiary deferral, FSC (Foreign
Sales Corporation), and IC-DISC (Interest Charge-Domestic
International Sales Corporation) benefits.
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- What do the Laws Prohibit?
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- Conduct that may be penalized under the TRA and/or
prohibited under the EAR includes:
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- Agreements to refuse or actual refusal to do
business with or in Israel or with blacklisted companies.
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- Agreements to discriminate or actual discrimination
against other persons based on race, religion, sex, national origin or
nationality.
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- Agreements to furnish or actual furnishing of
information about business relationships with or in Israel or with
blacklisted companies.
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- Agreements to furnish or actual furnishing of
information about the race, religion, sex, or national origin of
another person.
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- Implementing letters of credit containing prohibited
boycott terms or conditions.
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- The TRA does not "prohibit" conduct, but denies tax
benefits ("penalizes") for certain types of boycott-related
agreements.
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- What Must Be Reported?
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- The EAR requires U.S. persons to report quarterly
requests they have received to take certain actions to comply with,
further, or support an unsanctioned foreign boycott.
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- The TRA requires taxpayers to report "operations"
in, with, or related to a boycotting country or its nationals and
requests received to participate in or cooperate with an international
boycott. The Treasury Department publishes a quarterly list of
"boycotting countries."
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- How To Report:
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- EAR reports are filed quarterly on form BIS 621-P
for single requests or BIS 6051-P for multiple requests available from
the Department of Commerce,s Office of Antiboycott Compliance (OAC) in
Washington, D.C. To obtain these forms, telephone OAC,s Reports
Processing Unit at (202) 482-2448. TRA reports are filed with tax
returns on IRS Form 5713. This form is available from local IRS
offices.
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- Penalties:
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- The EAR prescribe the penalties for violations of
the Antiboycott Regulations as well as export control violations.
These can include:
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- Criminal:
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- The penalties imposed for each "knowing" violation
can be a fine of up to $50,000 or five times the value of the exports
involved, whichever is greater, and imprisonment of up to five years.
During periods when the EAR are continued in effect by an Executive
Order issued pursuant to the International Emergency Economic Powers
Act, the criminal penalties for each "willful" violation can be a fine
of up to $50,000 and imprisonment for up to ten years.
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- Administrative:
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- For each violation of the EAR any or all of the
following may be imposed:
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- General denial of export privileges;
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- The imposition of fines of up to $12,000 per
violation; and/or
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- Exclusion from practice.
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- Boycott agreements under the TRA involve the denial
of all or part of the foreign tax benefits discussed above.
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- The $10,000 maximum per violation specified in the
EAA is adjusted periodically pursuant to law for inflation.
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- The maximum civil penalty for any violation
committed from October 23, 1996 through November 1, 2000 is $11,000
per violation.
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- The maximum civil penalty for any violation
committed after November 1, 2000 is $12,000 per violation.
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- Where to Get More Information:
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- U.S. Department of Commerce BIS/Office of
Antiboycott Compliance, Room 6098 Washington, D.C. 20230 (202)
482-2381 or by E-Mail
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- http://www.bxa.doc.gov/AntiboycottCompliance/OACRequirements.html
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