Matthew S. Axelrod, Assistant Secretary for Export Enforcement at the U.S. Department of Commerce, released a memorandum July 26, 2023, announcing changes in antiboycott reporting and compliance requirements. This announcement follows a series of similar memorandums from the Department of Commerce that have increased the intensity of export enforcement actions.
History of U.S. Antiboycott Regulations
The Arab Boycott was formally declared by the Arab League formerly the League of Arab States) in 1945 as an effort to isolate and weaken Israel. It called for Arab institutions, organizations, merchants, commission agents, and individuals to refuse to deal in, distribute, or consume Israeli products. As the boycott evolved in its efforts to isolate Israel, it focused on three targets:
- Restriction of trade between Israel and Arab states
- Restriction of trade between companies that trade with Israel and Arab states
- Boycotting agencies that trade with other companies that trade with Israel
During the mid-1970’s the U.S. adopted laws to counteract the participation of U.S. citizens in other unsanctioned economic boycotts or embargoes. These regulations were adopted to require U.S. firms to refuse to participate in foreign boycotts that the United States does not sanction. These regulations of the Export Administration Regulations (EAR) apply to all individuals and companies located in the United States and their foreign affiliates.
Reporting Changes
Boycott Request Reporting Forms
The Bureau of Industry and Security (BIS) has changed its reporting form to include identification of actual parties that made a boycott request. Formerly, U.S. Persons were required to only report the country from which the request originated.
Placement of Antiboycott Policy of Federal Acquisition Sites
The BIS and the Office of Acquisition Management (OAM) are now posting an antiboycott policy statement on the OAM and SAM websites. This statement informs federal contractors about antiboycott regulations, encourages awareness of prohibitions, warns businesses against participation in boycotts, and stresses requirement for reporting boycott related requests.
CVG Strategy Export Compliance Expertise
Recent changes in antiboycott reporting and compliance requirements are part of a larger trend in U.S, export control laws to further national security and foreign policy objectives. This enhanced enforcement of the Export Administration Regulations points out the need for viable export compliance programs.
CVG Strategy, a proven leader in export compliance, can help your organization implement and maintain viable export compliance programs to navigate this increasingly complex business concern. We can provide expertise in Export Administration Regulations, International Traffic in Arms Regulations (ITAR), Sanctions, Denied Parties Screening, Antiboycott and Canadian Goods Program (CGP).
We also provide assistance in item classification, Technical Assistance Agreements (TAA), and voluntary disclosures. Our staff can also provide effective training for all levels of an organization to ensure that all personnel are aware and up to date on export compliance issues.
As the BIS considers enforcement policies changes, it is becoming more and more important for companies to develop effective export compliance programs. These developments are likely to continue to raise the complexity and associated risks for companies involved in the international supply chain.