The Importance of Focusing on Antiboycott Enforcement

• Jurisdiction: United States,Federal
• Citation: Vol. 1 No. 1
• Publication year: 2024

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Jen Fernandez, Andrew Shoyer, and Kayla M. Scott ^*

In this article, the authors discuss the U.S. government's increased interest on antiboycott enforcement.

In the past year or so, the U.S. Department of Commerce Bureau of Industry and Security (BIS) has published two enforcement policy updates and issued four enforcement actions resulting in public settlements related to the antiboycott provisions of the Export Administration Regulations. These updates and enforcement actions highlight BIS's stricter approach and renewed focus on antiboycott enforcement.

What Are U.S. Antiboycott Laws?

These laws, administered by BIS, ¹ generally (with some exceptions) prohibit U.S. persons from:

■ Taking action or agreeing to take action in furtherance or support of a boycott of a U.S. allied country by a foreign country;
■ Providing information on relationships with such boycotted countries or blacklisted companies or charitable or fraternal organizations that support the boycotted country;
■ Taking discriminatory actions or agreements to take discriminatory actions based on race, religion, sex, or national origin; and
■ Providing information about race, religion, sex, or national origin.

Such requests often appear in a number of routine transaction, financing, and shipping documents.

U.S. antiboycott laws also require the reporting of certain boycott requests. Knowing when an action is prohibited or when a request

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requires reporting is complicated and often depends on the phrasing of a request. ² There are situations where a person may be:

■ Both prohibited from complying with a request and required to report the request,
■ Permitted to comply with the request but required to report the request, or
■ Permitted to comply with the request and not required to report the request.

Given the complexity and nuance of these provisions, a legal or compliance expert is often required to navigate these provisions.

While U.S. enforcement has historically focused on the boycott of Israel, these laws could be applied to foreign boycotts of any U.S. ally.

What Is New in U.S. Antiboycott Enforcement?

From 2007 to 2017, BIS averaged nearly seven enforcement actions per year. However, starting in 2018, there was a steep dropoff in the rate of enforcement actions, with an annual average of two settlement agreements from 2018 to 2022.

Enforcement is once again increasing. BIS recently published two updates to its antiboycott enforcement policies and measures...