Is the ongoing effort to punish Qatar economically a boycott covered by the Bureau of Industry and Security’s (BIS) Antiboycott Regulations? What about the Boycott, Divestment, and Sanctions (BDS) movement? Both present challenges for international business – what position will you take? How do you choose between the competing commercial and policy options? But, do they require compliance with part 760, Restrictive Trade Practices or Boycotts, of the BIS regulations?
According to the BIS web site, “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.” So, the question is whether the collective effort to isolate Qatar and the BDS movement are unsanctioned boycotts.
- Qatar. In what is being termed a diplomatic crisis, several countries suspended relations – such as a trade and travel ban — in June, including Saudi Arabia, United Arab Emirates, Bahrain, and Egypt. The origins of the split can be found in the shifting allegiances in the Middle East, and a variety of differences between Qatar on the one hand and Saudi Arabia on the other. Caught in the middle, global business must navigate around the economic conflict, and find ways to maintain trade relations.
- Boycott, Divestment, Sanctions (BDS). The BDS movement claims inspiration from the South African anti-apartheid movement, and is designed to put economic pressure on Israel through consumer and other boycotts of Israel, urging divestment, and advocating for sanctions. New York, among other states, is pushing back on BDS and taking the position that support for BDS disqualifies companies from doing business with NY State.
Guidance from BIS’ Office of Antiboycott Compliance (OAC)
What does BIS think? After many months of silence, the Director of the Office of Antiboycott Compliance expressed the agency’s position on both actions. At October’s BIS Update 2017 in Washington, DC, the Director of the OAC explained that neither the Qatar “diplomatic crisis” nor BDS are considered “unsanctioned” foreign boycotts subject to Part 760.* The Director did warn, however, that OAC is monitoring these actions and reserves the option to address them in the future.
For more information or to discuss antiboycott compliance, please contact Dj Wolff or Jeff Snyder.
* Please note that no official statement has been made by the IRS, which administers the Treasury provisions of the Antiboycott law. Treasury could, therefore, adopt the position that its regulations did extend to the Qatar dispute and/or BDS.