A Risk-Based Approach for Anti-Boycott Compliance

[Editor's Note: This is the fifth article in Greg Husisian's five-part series on compliance strategies for multinational corporations. Click here to see the entire series of articles.]

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In recent years, the U.S. Government has become increasingly aggressive in enforcing U.S. laws designed to regulate the conduct of U.S. citizens and companies operating abroad. As a result, multinational firms face multiplying compliance concerns, especially with regard to the Foreign Corrupt Practices Act, export-control and sanctions regulations, and anti-money laundering requirements.

An additional key component for companies that operate in the Middle East, or deal with Middle Eastern companies (or their affiliates) is to ensure that they have adequate compliance procedures in place arises with regard to the twin anti-boycott requirements administered by the Department of Commerce and the Internal Revenue Service, which are designed to combat the Arab League’s boycott of Israel.

anti-boycott-complianceIn the fifth of five articles on compliance with U.S. regulations of exports and international conduct, the author presents compliance strategies for multinational corporations attempting to manage the risks posed by U.S. anti-boycott requirements.

Introduction

Many companies that operate abroad are only vaguely aware of the anti-boycott requirements maintained by the U.S. government, which are intended to counteract attempts by the Arab League to economically isolate Israel by targeting companies that engage in economic transactions with Israel.  In some ways this is surprising, because the anti-boycott restrictions have been around for many years.

In September of 1976, the House Subcommittee on Oversight and Investigations of the Committee on Interstate and Foreign Commerce issued a report that detailed the history and economic impact of the Arab League boycott.  This spurred Congress to pass two measures dealing with the boycott practices of the Arab League—first, provisions that entail the loss of certain tax benefits when a U.S. person complies with a boycott-related request (administered by the IRS), and later provisions that impose civil, administrative, and criminal penalties on U.S. persons that violate anti-boycott prohibitions (administered by the Office of Antiboycott Compliance, which is part of the Bureau of Industry and Security, or the “BIS”).

This two-part approach to anti-boycott requests is maintained today.  The BIS has promulgated regulations (contained in the Export Administration Regulations, or the “EAR”), pursuant to Section 8 of the Export Administration Act of 1979, 50 USC app. § 2407, which provide for civil and criminal penalties for compliance with enumerated boycott-related requests.[1]

These regulations cover not only agreements by U.S. companies to participate in the boycott, such as by not doing business with firms that are on the “blacklists” maintained by the Arab League, but also forbid even providing information regarding the business activities of the U.S. entity that would help identify whether the firm is participating in the boycott.  The IRS administers section 999 of the Internal Revenue Code (known as the Ribicoff Amendment), which focuses on agreements to participate in or cooperate with an international boycott, and administers penalties that can result in the loss of certain foreign tax credits, among other penalties.

As detailed in Part I of this compliance series, multinational corporations generally are best served by implementing an integrated, risk-based approach to their international regulatory responsibilities.  One of the key pieces of that integrated approach is for companies to put in place anti-boycott compliance programs, especially if they have dealings with Middle Eastern countries.  This article details the compliance measures that multinational corporations can take to minimize their regulatory risks in this area.

Establishing and Implementing an Effective Anti-Boycott Compliance Program

Most companies that operate abroad, especially if they operate in the Middle East, should have some kind of anti-boycott compliance policy.  The anti-boycott regulations rely on concepts of intent and can, in some circumstances, excuse inadvertent violations.  For both the BIS and IRS provisions, the failure of a corporation to have any kind of boycott-related compliance measures would weigh against any argument that a violation was inadvertent or that it should be lightly punished.

As with much of compliance, anti-boycott compliance starts with a proper risk assessment—in this case, determining from which areas of the world, from which customers, and from which portions of the company boycott-related issues are likely to arise.  Since the only boycott that is considered to be “unsanctioned” right now is the Arab League boycott of Israel, realistically this means paying special attention to requests originating from the Middle East and other sympathetic countries, such as Pakistan.

Consideration also should be given to risk factors from outside the company, such as freight forwarders and customs agents, which could be executing documents on behalf of the company.  There should be procedures for gathering boycott requests that arise in all areas of the company and forwarding them to compliance personnel who are familiar with the anti-boycott requirements and reporting obligations.

In taking a risk-based approach, the company should evaluate the areas where a boycott-related request is most likely to arise.  In general, these requests tend to arise in four areas:

  1. the initial contact with the customer, where an Arab League member might be seeking a new firm that is compliant with boycott requirements;
  2. the drafting of a contract/supply agreement, where the customer might attempt to establish an agreement with boycott-related requirements;
  3. at the time of importation, where many Middle Eastern countries request boycott-related information; and
  4. in letters of credit, where the customer may attempt to insert boycott-related requirements, which would need to be satisfied so that the supplier can get paid.

With regard to initial requests for information, firms that receive such requests need to be wary of questions regarding the nationalities of senior officers and members of the board of directors, whether they do business with Israel, and anything that comes from a boycott office.  Because the BIS regulations cover even the provision of information, and require the reporting of any requests for boycott-related information (even if no agreement ever is reached), firms need to be careful when receiving any requests that relate to dealings with Israel in any form, especially when they come from the Middle East or from affiliates of Middle Eastern companies.

Because the anti-boycott requirements cover requests received by “controlled in fact” foreign subsidiaries, a good risk-based approach is to provide procedures whereby foreign subsidiaries that receive potential boycott-related requests can forward them to a central person who is aware of the requirements of the anti-boycott regimes.

Similar care needs to be taken with regard to contracts and invoices.  In some cases, boycotting language has been put in fine print on the backs of invoices, or otherwise made inconspicuous.  In general, however, the requests are very blatant, and include explicit requirements that no Israeli components will be used, or that blacklisted companies will be avoided.  Often the same contract clauses will be used over and over again.  Dissemination of typical contract clauses that would violate the regulations, such as those found in the Appendix to this article, can be very important, and in many ways is the best way to train people to spot red flags.

Compliance does not end once the contract is signed.  Many Middle Eastern countries require that firms execute boycott-related forms before goods can be unloaded.  These can include statements relating not only to the origination of the merchandise and its components, but also the nationality or prior stops of the transporting trip or plane.  In order to navigate these requests, careful knowledge of what is and is not allowed is essential.

For example, “negative” certifications, stating that no Israeli components were used would violate the BIS anti-boycott regulations, while “positive” certifications (such as stating that the goods are 100% U.S.-origin components) generally are allowed, even though this statement necessarily conveys that no Israeli components were used.  The rules regarding ships at the port, however, differ, in that certain types of negative certifications are allowed. A good compliance program will lay out these differences so as to provide quick and practical help when a certification request is received.

Often, if action is taken quickly, steps can be taken to avoid a violation, such as changing a negative certification into a positive one, or getting the certification requirement waived, which would mean that the only requirement then is to report the receipt of the request to the U.S. government.

Finally, special care needs to be taken with regard to letters of credit.  Boycotting countries have discovered that by putting in place boycott-related requirements, such as requesting a certificate of origin that includes anti-Israeli language, they turn banks into third-party enforcers of the boycott.  When this occurs, banks, which are required to withhold payment under a letter of credit until the conditions are satisfied, can be caught in the middle.

The placement of boycott-related requests for documents in a letter of credit can create a boycott request that obliges both the bank and other parties to the transaction not only to take positive steps to avoid honoring the request, but also to report it (assuming that they are covered U.S. entities).  Given the prevalence of this particular type of boycott-related activity, special compliance procedures should be put in place for letters of credit, both at banks that deal with letters of credit and at exporters that need to draw on letters of credit for payment for their exports.

There is no one perfect type of anti-boycott compliance program.  In general, however, when it comes to specific anti-boycott compliance, multinational corporations that deal with the Middle East should consider the following procedures:

  • Setting up training procedures for personnel likely to encounter boycott-related requests.
  • Establishing more intensive training for members of the sales force and for subsidiaries or divisions that operate in Arab countries, including a focus on the bans on sharing of information with potential customers that can trigger violations even without any agreement to participate in a boycott.
  • Setting up clear compliance procedures with regard to responsibility for compliance, updating the compliance program and manual, conducting new employee and ongoing training, and so forth.
  • Setting procedures to coordinate BIS and IRS reports.
  • Communicating the reporting requirements to foreign subsidiaries, down to the level of ten-percent ownership (as required by the IRS anti-boycott requirements).
  • Establishing procedures that allows compliance personnel to stop questionable transactions that raise red flags until they are resolved.
  • Setting procedures for gathering and keeping boycott-related requests, and related documentation, for the required five-year period.
  • Establishing audit procedures that test likely problem areas, including compliance training, reporting mechanisms, follow up of red flags, and record retention.

The goal of the training is not to make every person who comes into contact with boycott-related requests into an expert; rather, it is to sensitize relevant personnel to the issues so that they can identify red flags and refer questionable transactions to compliance experts.  To facilitate this, many companies include basic checklists that quickly summarize the six basic prohibitions and the five basic IRS prohibitions.  This communicates that the anti-boycott requirements pertain to more than just an overt refusal to do business with Israel or Israeli persons.

Since reporting is an independent obligation, procedures should be in place to ensure regular reports are filed, with the related records being maintained for the required five-year period.  It should be made clear that these reports will be filed even if the request was ignored or affirmatively rejected.  The follow up should include records regarding what steps were taken to ensure that there was no implicit agreement to comply with the request (i.e., to show that superseding contract language was suggested or the offending language was deleted).[2]

Another issue that can arise is how to deal with anti-boycott issues in mergers and acquisitions.  As with other areas of trade, due diligence in the merger context has to balance seeking information required to get a very quick handle on the risk exposure of completing the deal with the reality that the acquiring firm generally cannot find out the information required to give a complete risk assessment and is dependent on the cooperation of a target company that may not cooperate fully.

Still, some effort needs to be made, since the presence of boycott-related regulatory risk might need to be taken into account in the offering price or otherwise.  Although boycott-related violations seldom result in fines sizeable enough to derail a deal, they could impact how much of an escrow is set aside and whether the acquiring company will seek to disclose the issue to the OAC prior to closing.

Another issue is with regard to ongoing business activity, since the acquiring company might not want to be involved with violations of U.S. law, which the acquiring company is in a better position to prevent if it has inquired into the boycott posture of the target prior to closing.  Adequate due diligence can put the company in a better position to cut off such business activity right after closing.  Further, if the loss of business from cutting off such activity will be large, it is better to know this before the deal is closed than to suffer an unpleasant surprise afterwards by finding out that the company will lose a significant amount of revenue when boycott-related transactions cease.

The final issue that comes up is how to deal with the BIS and IRS reporting obligations.  Companies need procedures to ensure that they are complying with both sets of reporting obligations, since failure to do so is a violation in and of itself of both sets of regulations.  Companies should designate a person responsible for each type of reporting.  Because reporting generally is handled by different departments (the compliance and the finance departments, in most cases), procedures need to be crafted to ensure consultation so that responses are made in a consistent fashion.

Conclusion

Anti-boycott compliance is another piece of the regulatory puzzle that covers companies that do business abroad while being subject to U.S. oversight of their international conduct.  Although the vigor with which the Arab League boycott is enforced varies, it never entirely goes away.

With the U.S. Government paying more attention to all aspects of its regulation of exports and international conduct, knowledge of how the anti-boycott laws function, and what steps companies can take to minimize the risks posed by the BIS and IRS enforcement of the provisions, is important for multinational corporations that fit the enforcement shadow cast by the anti-boycott restrictions.


[1] Because the Export Administration Act currently is lapsed, the BIS Anti-Boycott regulations currently are maintained pursuant to the International Emergency Economic Powers Act, 50 USC §§ 1701-1707.

[2] For example, the BIS has taken the position that agreeing to a contractual term that “no six-pointed stars may be used on the goods, packing or cases” is forbidden because “the six-pointed star is a religious symbol” and accepting this provision would constitute an “agreement to furnish information about the religion of a U.S. person.”  EAR Supplement No. 6 to Part 760.  The Supplement indicates that “[i]t is not enough to ignore the condition”; instead “[e]xception must affirmatively be taken to this term or it must be stricken from the documents of the transaction.”  Id.

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greg-husisianAbout the Author

Gregory Husisian is of counsel with Foley & Lardner LLP and has extensive experience in export controls, the Foreign Corrupt Practices Act (FCPA), and issues arising from international trade.

Mr. Husisian is a member of the firm’s Government Enforcement, Compliance & White Collar Defense; Securities Enforcement & Litigation; and Appellate Practices.

He can be reached via email at GHusisian [at] foley [dot] com

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Appendix

Following are recent examples of boycott requests that have been reported to the BIS, as reported on the  BIS/BIS website at http://www.bis.doc.gov/antiboycottcompliance/BISantiboycottrequestexamples.html.  Comparison of anti-boycott requests with these provisions, as well as the examples provided in the BIS anti-boycott regulations, should help clarify the legality of requests received by U.S. persons.

Bahrain (Prohibited Boycott Condition in a Purchase Order):  “In the case of overseas suppliers, this order is placed subject to the suppliers being not on the Israel boycott list published by the central Arab League.”

Bahrain (Reportable Boycott Condition in an Importer’s Purchase Order):  “Goods of Israeli origin not acceptable.”

Bahrain (Reportable Boycott Condition in a Letter of Credit):  “A signed statement from the shipping company, or its agent, stating the name, flag and nationality of the carrying vessel and confirming … that it is permitted to enter Arab ports.”

Bahrain (Prohibited Boycott Condition in a Contract):  “The Seller shall not supply goods or materials which have been manufactured or processed in Israel nor shall the services of any Israeli organization be used in handling or transporting the goods or materials.”

Bahrain (Prohibited Condition in a Contract):  “The Contractor shall comply in all respects with the requirements of the laws of the State of Bahrain relating to the boycott of Israel. Goods manufactured by companies blacklisted by the Arab Boycott of Israel Office may not be imported into the State of Bahrain and must not be supplied against this Contract. For information concerning the Boycott List, the Contractor can approach the nearest Arab Consulate.”

Bahrain (Prohibited Condition in a Letter of Credit):  “Buyer shall in no way contravene the regulations issued by Bahrain Government and or Israel Boycott Office. Buyer shall not nominate a vessel blacklisted by the said office.”

Bangladesh (Prohibited Boycott Condition in Instructions to Bidders on a Contract):  “No produced commodity shall be eligible for … financing if such commodity contains any component or components which were imported into the producing country from Israel and countries not eligible to trade with … the People’s Republic of Bangladesh. The equipment and materials must not be of Israeli origin. The supplier/bidder who are not black listed by Arab boycott of Israel will be allowed to participate in this bid.”

Iraq (Prohibited Boycott Condition in a Questionnaire):  “1. Do you have or ever have had a branch or main company, factory or assembly plant in Israel or have sold to an Israeli?”; 2. Do you have or ever have had general agencies or offices in Israel for your Middle Eastern or international operations?; 3. Have you ever granted the right of using your name, trademarks royalty, patent, copyright or that of any of your subsidiaries to Israeli persons or firms?; 4. Do you participate or ever participated or owned shares in an Israeli firm or business?”; 5. Do you render now or ever have rendered any consultative service or technical assistance to any Israeli firm or business?”;  6. Do you represent now or ever have represented any Israeli firm or business or abroad?’ 7. What companies in whose capital are your shareholders?”  Please state the name and nationality of each company and the percentage of share of their total capital”; 8. What companies or shareholders in your capital?  Please state the name and nationality of each company and the percentage of share of their total capital.  N.B. The above questions should be answered on behalf of the company itself and all of its branch companies, if any.”

Iraq (Prohibited Condition in a Contract):  The Contractor shall, throughout the continuance of the Contract, abide by and comply in all respects with the rules and instructions issued from time to time by the Israel Boycott Office in Iraq.”

Iraq (Prohibited Condition in a Trademark Application):  “Requirement for the registration of pharmaceutical companies:  Certification letter regarding the boycott of Israel (i.e., do not comprise any parts, raw materials, labor or capital of Israeli origin); requirement for the Registration of Medical Appliances, Disposables producing companies, and Laboratory diagnostic kit manufacturers; certification letter regarding boycott of Israel.”

Iraq (Prohibited Condition in a Purchase Order):  Supplies of our purchase order should never be consigned or shipped by steamers included on Israel Boycott list.”

Iraq (Prohibited Condition in a Contract):  “The bill of lading shall bear a note that the vessel delivering the cargo is not on the “Black List” and does not call at Israeli ports.”

Kuwait (Prohibited Boycott Condition in a Custom’s document):  “[The vessel entry document asks the ship’s captain to certify that,] no goods, dry cargo, or personal effects listed on the document of Israeli origin or manufactured by a blacklisted firm or company are to be landed as they will be subject to confiscation.”

Kuwait (Prohibited Boycott Condition in Letter of Credit):  “We hereby certify that the beneficiaries, manufacturers, exporters and transferees of this credit are neither blacklisted nor have any connection with Israel, and that the terms and conditions of this credit in no way contravenes the law pertaining to the boycott of Israel and the decisions issued by the Israel Boycott Office.”

Kuwait (Reportable Boycott Condition in Letter of Credit):  “Importation of goods from Israel is strictly prohibited by Kuwait import regulations; therefore, certificate of origin covering goods originating in Israel is not acceptable.”

Kuwait (Prohibited Condition in a Purchase Order):  “All shipments under this order shall comply with Israel Boycott Office Rules and Regulations.”

Kuwait (Prohibited Condition in a Purchase Order):  “Goods must not be shipped on vessels/carriers included in the Israeli Boycott list.”

Kuwait (Prohibited Condition in a Contract):  “The vendor (as person or organization) or his representatives should not be an Israeli national. So the vendor should not be owned, managed, or represented by any companies that carry an Israeli nationality and there should not be any sub-contractors that carry Israeli nationality.  The vendor should not involve any person or representatives that carries the Israeli nationality in importing or exporting the software or hardware mentioned in this contract and its appendices and the vendor should provide all documents that support the above information.”

Lebanon (Prohibited Boycott Condition in Power of Attorney from Lebanese firm):  A Lebanese firm sent a power of attorney affidavit to appoint a local agent in Iraq to a U.S. firm. The affidavit asked that U.S. firm answer a series of questions concerning the Arab boycott. These questions included whether the firm had a plant in Israel, has sold to Israel, had offices in Israel, owned shares in an Israeli firm, had provided services for an Israeli firm, or had granted any trademarks, copy or patent rights to Israeli persons of firms.

Lebanon (Reportable Boycott Condition in Letter of Credit):  “Certificate issued by the shipping company or its agent testifying that the carrying vessel is allowed to enter the Lebanese port..”

Libya (Prohibited Condition in a Letter of Credit):  “Original commercial invoice signed and certified by the beneficiary that the goods supplied are not manufactured by either a company or one of its subsidiary branches who are blacklisted by the Arab boycott of Israel or in which Israeli capital is invested.”

Libya (Prohibited Condition in a Contract):  “The Second Party shall observe the provisions of the Law for Boycott of Israel or any other State which the provisions for Boycott are applicable and shall ensure such observation from any other sub-contractor.  In case of contravening this condition, the First Party shall have the right to cancel the contract and confiscate the deposit by mere notice by registered letter without prejudice to his right of compensation.”

Libya (Prohibited Condition in a Contract):  “Boycott Provisions:  The Contractor shall observe and comply with all the provisions and decisions concerning the boycott to Israel or any other country the same is valid.  The Contractor shall secure the respect of such boycott by any other party he might have subcontracted with him.”

Libya (Prohibited Condition in a Certificate of Origin):  “The goods being exported are of national origin of the producing country and the goods do not contain any components of Israeli origin, whatever the proportion of such component is.  We, the exporter, declare that the company producing the respective commodity is not an affiliate to or mother of any company that appears on the Israeli boycott blacklist and also, we the exporter, have no direct or indirect connection with Israel and shall act in compliance with the principles and regulations of the Arab boycott of Israel.”

Oman (Prohibited Condition in a Tender):  “The supplier must comply with the Israel boycott conditions.”

Oman (Prohibited Condition in a Tender):  “All goods to be supplied as a part of this order must comply with the Israel boycott rules stipulated by the Royal Oman Police.”

Oman (Prohibited Condition in Purchase Order):  “The vendor must ensure that all products supplied do not contravene the regulations in force with regard to the boycott of Israel.”

Oman (Prohibited Condition in a Contract):  “The certificate of origin must contain the following statement: ‘We certify that the goods are neither of Israeli origin no do they contain any Israeli materials.”

Oman (Prohibited Condition in a Purchase Order):  “Commercial invoice, duly signed by shipper covering value of the goods and containing statement ‘The goods are neither Israeli origin, nor do they contain any Israeli material.”

Oman (Prohibited Condition in a Letter of Credit):  “Certificate issued by the air company/agent that it is not blacklisted by the Arab League boycott committee.”

Qatar (Prohibited Boycott Conditions in a Contract):  “The (tenders) committee may also exclude any bid that does not abide by the provisions of the commercial and economic laws and the provisions of the law of boycott of Israel applicable in the state…. [A certificate is required stating] that the items have not been manufactured in Israel and that any of the components thereof have not been manufactured in Israel.”

Qatar (Prohibited Condition in a Contract):  “Certificate issued by the manufacturer or exporter stating that the goods are not of Israeli origin, have not been exported from Israel, and do not contain any Israeli materials.”

Qatar (Prohibited Boycott Condition in a Purchase Order):  “Goods/equipment subject to Israeli Boycott terms, must not be quoted.”

Qatar (Prohibited Boycott Condition in a Letter of Credit):  “Under no circumstances may a bank listed in the Arab Israeli Boycott Black List be permitted to negotiate this Documentary Credit.”

Saudi Arabia (Prohibited Boycott Condition in a Contract):  “Vendor shall comply with the Israel boycott laws in performing his contractual obligations.”

Saudi Arabia (Prohibited Boycott Condition in a Contract):  “The seller warrants that no supplier or manufacturer or any part of the product is precluded from doing business with Saudi Arabia under the terms of the Arab boycott regulations.”

Saudi Arabia (Reportable Boycott Condition in List of Documents Required by a Freight Forwarder):  “Certificate from insurance company stating that they are not blacklisted.”

Saudi Arabia (Prohibited Boycott Condition in a Purchase Order):  “Following statement should appear at foot of invoice: ‘We hereby certify that these goods are not of Israeli Origin nor do they contain materials of Israeli origin and they are manufactured by….’”

Saudi Arabia (Prohibited Boycott Condition in a Contract):  “The Contractor whether an Establishment or Company, National or Foreign, shall not import or enter into Agreement with any Foreign Company or Establishment as Sub-Contractor particularly if such Company did not have previous dealing in the Kingdom of Saudi Arabia, except after contacting the Regional office of the Arab Boycott to Israel, or one of the two Sub-Offices of the Ministry of Commerce at Jeddah or Dammam, to ensure of the status of the said Foreign Company, in light of the Rules and orders issued by the office of the Arab Boycott of Israel.”

Saudi Arabia (Prohibited Boycott Condition in a Contract):  “Israeli Boycott:  The Contractor shall apply all rules of the Israeli Boycott.”

Saudi Arabia (Prohibited Boycott Condition in a Boycott Questionnaire):  “Company/Corporation Background:  a. Has the company/corporation engaged in or conducted business in Israel?; b. Does the company/corporation or its subsidiary have an office, facility or business operation in Israel?”

Saudi Arabia (Prohibited Boycott Condition in a Tender):  “The quotation should not include any material manufactured or exported by Boycotted companies as per the Kingdom of Saudi Arabia regulations.”

Saudi Arabia (Prohibited Boycott Condition in a Tender):  “Eligible Bidders:  The bidder/supplier who are not subject to the Boycott regulations of the League of Arab States or of the Kingdom of Saudi Arabia will only be considered.”

Syria (Prohibited Boycott Conditions (Requests for Information) in a Trademark Application Form):  “Do you or any of your subsidiaries now or ever had a branch of main company factory or assembly plant in Israel? …. do you have or any of your subsidiaries now or ever had general agencies or offices in Israel for your middle eastern or international operations? …. what companies are you shareholders in their capital? State the name of each company and the percentage of share to their total capital—and the nationality of each one? ….

Syria (Prohibited Condition in a Tender):  “Offeror must not be included by the provisions of Arab Boycott of Israel.”

Syria (Prohibited Condition in a Tender):  “Declaration showing that the bidder doesn’t own any factory, establishment, or a branch office in Israel, neither he is a partner in any establishment or organization, nor a party in any contract for manufacturing, assembling, licensing or technical assistance with any organization or establishment in Israel and he should not practice such activity in Israel whether personally or through any mediator.  He should not participate in any way in supporting Israel or its military efforts.”

Syria (Prohibited Condition in a Purchase Order):  “A declaration that the goods contracted upon have no Israeli origin and that no Israeli raw materials is used in its producing manufacturing or preparing of the goods.”

United Arab Emirates (Prohibited Boycott Condition in a Contract):  “Tenderer shall verify on his own responsibility the laws and regulations in Abu Dhabi which apply to the performance of the services, including the boycott of Israel.”

United Arab Emirates (Prohibited Boycott Condition in an Invitation to Bid):  “Documents to accompany tenders [include] the declaration and Israel boycott certificate. It states the tenderer must accompany his offer with the following, written signed declaration. We declare that we are a company which is not owned by any companies that have violated the approved rules of the boycott and that we do not own or participate in companies that are in violation of the approved rules of the boycott. Further, we do not have, nor does any of the companies that are considered to be a parent company or a branch of ours, any dealings with any Israeli party, whether directly or indirectly. Furthermore, a certificate issued by the Israel boycott office in UAE confirming that neither the supplier nor the manufacturer are blacklisted, should also be accompanied.”

United Arab Emirates (Prohibited Boycott Condition in a Tender):  “Declaration and Israel Boycott Certificate:  We ___________ (Name of Company) on behalf of all branches, declare that we are a company which is not owned by any companies that have violated the approved rules of the Boycott and that we do not own or participate in companies that are in violation of the approved rules of the Boycott.  Further, we do not have nor does any of the companies that are considered to be a parent company or branch of ours, any dealings with any Israeli Party whether directly or indirectly.  Furthermore, a Certificate issued by the Israel Boycott office in the UAE, confirming that neither the supplier nor the manufacturer are blacklisted, should also be accompanied.”

United Arab Emirates (Prohibited Boycott Condition in a Tender):  “Certificate of Origin:

The Contractor shall undertake to furnish the Purchaser with a Certificate of Origin, to accompany each invoice.  This shall certify that the equipment is not of Israeli origin.”

United Arab Emirates (Prohibited Boycott Condition in a Tender):  “Boycott of Israel:

Seller and his assignees shall abide by and strictly observe all regulations and instructions in force from time to time by the League of Arab States regarding the Boycott of Israel especially those related to blacklisted companies, ships and persons.  No materials shall be procured which has been wholly or partially manufactured by the blacklisted company.”

United Arab Emirates (Prohibited Boycott Condition in a Letter of Credit):  “On no conditions may a bank listed on the Arab Israeli Boycott list be permitted to negotiate this credit.”

United Arab Emirates (Prohibited Boycott Condition in a Letter of Credit Application):  “We certify that neither the beneficiaries nor the suppliers of goods and services are subject to boycott.”

United Arab Emirates (Prohibited Boycott Condition in a Letter of Credit Application):  “We also certify that to the best of our knowledge the beneficiaries have no connection with Israel and that the terms of this credit in no way contravene the regulations issued by the Israel Boycott Office or local government regulations.”

United Arab Emirates (Prohibited Boycott Condition in a Contract):  “Buyer shall adhere to and implement the Arab Embargo and Boycott Regulations issued and revised from tine to time by the Government of the United Arab Emirates.”

United Arab Emirates (Prohibited Boycott Condition in a Tender):  “Tenders shall include the following statement in their tenders: ‘We certify that neither our principle manufacturers Messrs: ______________ nor any of the components’ manufacturers, is blacklisted by the Arab Boycott Office.”

United Arab Emirates (Prohibited Boycott Condition in a Contract):  “Boycott of Israel:  “The Contractor shall observe and abide by all rules and regulations concerning the boycotting of Israel in Dubai and the UAE.”

United Arab Emirates (Prohibited Boycott Condition in a Tender):  “Quotation should not include items manufactured by firms who are under Israeli Boycott list.”

United Arab Emirates (Prohibited Boycott Condition in a Purchase Order):  “Applicable Laws/Boycott of Israel:  “All relevant laws, rules and regulation of all duly constituted government authorities of Abu Dhabi and the UAE, including laws with respect to boycott of Israel shall apply in the performance of this purchase order.”

United Arab Emirates (Prohibited Boycott Condition in a Contract):  “He shall not be boycotted whether in his personal capacity or as a company or establishment because of the violation of the Israeli Boycott Provisions in respect of establishments and companies operating abroad or contracts concluded through correspondence.”

United Arab Emirates (Prohibited Boycott Condition in a Tender):  “Engineer shall at its own expense and at all times comply with all laws, rules, regulations or requirements of the Government of Abu Dhabi and the UAE and any bodies having jurisdiction over the site and the access thereto and there from including, but not limited to, the Boycott of Israel Regulations.”

Yemen (Prohibited Boycott Condition in a Repair Order):  “Invoices must be endorsed with a certificate of origin that goods are not of Israeli origin and do not contain any Israeli material and are not shipped from any Israeli port.”

About the Author

Greg Husisian

greg husisianAbout the Author
Gregory Husisian is of counsel with Foley & Lardner LLP and has extensive experience in export controls, the Foreign Corrupt Practices Act (FCPA), and issues arising from international trade. Mr. Husisian is a member of the firm’s Government Enforcement, Compliance & White Collar Defense; Securities Enforcement & Litigation; and Appellate Practices. Mr. Husisian regularly advises clients regarding various export control issues under the Department of State’s International Traffic in Arms Regulations (ITAR) restrictions and the Department of Commerce’s dual-use regulations (EAR), as well sanctions/embargo issues under the Office of Foreign Assets Control (OFAC) regulations. His practice includes advising companies regarding risk-management, compliance, and licensing, and dealing with violations. The co-author of a legal textbook on the Foreign Corrupt Practices Act (FCPA), Mr. Husisian also regularly counsels both Fortune 500 and smaller clients regarding FCPA issues, including FCPA compliance, due diligence, enforcement, mergers and restructurings, and other issues relating to the application of the FCPA. Mr. Husisian also is the author of a treatise on the U.S. Regulation of Exports and International Conduct, which will appear in the forthcoming Thomson Reuters/West textbook entitled International Trade: Statutes and Strategies. This treatise will be the first comprehensive treatment of the area, and will include extensive chapters on export controls, sanctions, the FCPA, and the Anti-Boycott regulations, as well as chapters on compliance with each of these laws. It will include comprehensive, risk-based solutions for companies seeking to comply with these complicated laws. Mr. Husisian also counsels clients on a wide variety of international trade litigation matters, including antidumping and countervailing duty issues arising before the International Trade Commission and the Department of Commerce and other international trade issues, such as Section 332 investigations and GSP issues before the U.S. Trade Representative. An experienced court litigator, he also has represented clients in numerous trade appeals before the Court of International Trade and the Court of Appeals for the Federal Circuit, as well as in cases before NAFTA and U.S.-Canada Dispute Resolution Panels. Mr. Husisian is admitted to practice in the District of Columbia, the Court of Appeals for the Federal Circuit, and the Fourth and Fifth Circuit Courts of Appeals. Before entering private practice, Mr. Husisian clerked for the Honorable Jerry E. Smith of the Fifth Circuit Court of Appeals. Mr. Husisian graduated from Cornell University (B.A., double major, economics and government, with honors in law and public policy, 1987). He received his J.D. from Cornell Law School in 1990, where he graduated magna cum laude and was elected to the Order of the Coif. While at Cornell Law School, he was the managing editor of the Cornell Law Review and the national editor of the Harvard Journal of Law & Public Policy. Prior to joining Foley & Lardner LLP, Mr. Husisian was a partner at a national law firm, and of counsel at a large international law firm. He can be reached via email at GHusisian [at] foley [dot] com. You can read Mr. Husisian's contributions to CCI here.