Table of Contents What Are Anti-Boycott Regulations? Understanding the Regulations Special Considerations Anti-boycott regulations prevent customers from withholding their patronage to a business. The EAA anti-boycott regulations prohibit: Refusal to do business with blacklisted companies or boycotted countries Providing details about business dealings or relationships with a boycotted or blacklisted entity Agreeing to discriminate (or actual discrimination) against other persons based on race, religion, sex, or national origin The EAA specifies various administrative and criminal penalties for violations of anti-boycott regulations. In the United States, the Export Administration Act (EAA) establishes anti-boycott regulations, which include civil and criminal penalties for individuals and companies that violate the law. The Export Administration Act (EAA) of 1979 set forth the U.S. anti-boycott regulations and the criminal and civil penalties for companies and employees who don't comply with the law. The EAA's regulations prohibit U.S. companies from implementing a foreign country's boycott policies when those policies violate U.S. policies.
What Are Anti-Boycott Regulations?
Anti-boycott regulations prevent customers from withholding their patronage to a business. In the United States, anti-boycott regulations primarily deal with opposing restrictive trade practices against Israeli businesses.
The Arab League formally requires member countries to boycott trade with Israel and trade with companies that trade with Israel based on an agreement it enacted in 1948. In response, the U.S implemented anti-boycott laws in the mid-1970s to prevent U.S. companies from boycotting trade with Israeli companies. The law also prohibits the refusal to employ U.S. citizens because of their nationality, race, sex, or religion.
Understanding Anti-Boycott Regulations
The Export Administration Act (EAA) of 1979 set forth the U.S. anti-boycott regulations and the criminal and civil penalties for companies and employees who don't comply with the law. The EAA lapsed in 2001 and the President used an executive order to extend it until the Export Control Reform Act (ERCA) of 2018. These penalties included heavy fines, imprisonment, and denial of export privileges.
The purpose of the regulations is to prohibit U.S. companies from implementing other countries' foreign policies when those policies disagree with U.S. policy. The related Ribicoff Amendment to the Tax Reform Act of 1976, which is overseen by the Internal Revenue Service (IRS), denies tax benefits to companies that do not comply with anti-boycott laws.
In the United States, the Office of Antiboycott Compliance (OAC) within the Bureau of Industry and Security is responsible for administering and enforcing anti-boycott regulations.
Examples of Anti-Boycott Regulations
As a result of the laws dealing with boycotts fostered or imposed by foreign countries against other countries friendly to the U.S., the following actions are prohibited. A person or company may not discriminate against or agree to discriminate against any U.S. person on the basis of race, religion, sex, or national origin. They also may not refuse to do business with a boycotted or blacklisted entity.
According to the regulations, companies and individuals are not permitted to furnish information about business relationships with a boycotted country or a blacklisted entity. In addition, the U.S. Department of Commerce (DOC) must be notified if a person receives a request to comply with an unsanctioned foreign boycott against a boycotted country or a blacklisted entity.
The ERCA lists a number of penalties for violations of anti-boycott regulations. The civil penalties include a fine of up to $300,000 per violation or twice the value of the exports involved (whichever is greater), with a possible imprisonment term of up to up to 20 years. The U.S. government may also decide to impose a $1 million criminal penalty on either individuals or companies for criminal violations.
Anti-boycott penalties may involve the denial of export privilege and exclusion from trade practices as well as denial of foreign tax benefits via the Ribicoff Amendment.
What Do Anti-Boycott Regulations Prohibit?
The Export Administration Act (EAA) prohibits U.S. persons and businesses from supporting or complying with boycotts mandated by foreign nations against nations friendly to the United States.
The EAA anti-boycott regulations prohibit:
What Are Anti-Boycott Penalties?
The EAA specifies various administrative and criminal penalties for violations of anti-boycott regulations. Administrative penalties can include denial of export privileges, exclusion from practice, and/or fines of up to $11,000 per violation.
Criminal penalties for violations can include imprisonment of up to five years. Violators may also be required to pay a fine of up to $50,000 or five times the value of the involved exported goods, whichever is greater. Criminal penalties can increase if the violations occur when an executive order under the International Emergency Economic Powers Act is in effect. In these cases, imprisonment can be up to 10 years and fines up to $50,000 for each willful violation.
What Is a Counter Boycott?
A counter boycott is a response to a boycott that is intended to counter, offset, or negate the efforts of the original boycott. For example, a group of consumers that oppose a particular company's product may organize a boycott to encourage others to not buy that product. A different group of consumers that enjoy the product may organize a counter boycott to encourage others to stock up and buy more of the company's products than they normally would. Their goal is to disrupt the original boycott and lead to its failure.
The Arab League is a union of Arabic-speaking African and Asian countries that promotes the interests of its member countries and observers. read more
A blacklist is a list of persons, organizations or countries penalized because they are believed to engage in unfavorable or unethical activity. read more
Department of Commerce (DOC)
Department of Commerce is the cabinet department in the U.S. government that deals with business, trade, and commerce to ensure economic vitality. read more
SEC Division Of Enforcement
The Division of Enforcement of the Securities and Exchange Commission (SEC) investigates possible securities law violations. read more
The effects test is a method to assess the discriminatory impact of credit policies using demographic and statistical data. read more
Exports are those products or services that are made in one country but purchased and consumed in another country. read more
What Is the Internal Revenue Service (IRS)?
The Internal Revenue Service (IRS) is the U.S. federal agency that oversees the collection of taxes—primarily income taxes—and the enforcement of tax laws. read more
National Housing Act
The National Housing Act, passed in 1934 to strengthen the residential real estate market, created the Federal Housing Administration (FHA). read more
Occupational Safety and Health Act
The Occupational Safety and Health Act, passed by the U.S. Congress in 1970, ensures and enforces safe workplace conditions and standards. read more