The US Department of Commerce and the Treasury Department’s Internal Revenue Service (IRS) administer regulatory regimes that prohibit or penalize cooperation with foreign economic boycott of countries friendly to the United States.
The US regulatory regimes impose complex and often counter-intuitive restrictions on US companies, individuals, and foreign affiliates doing business in the Middle East and elsewhere. In addition, US companies can face penalties and adverse publicity for failing to comply with mandatory reporting requirements that impose strict deadlines.
Audit activity by US government enforcement officials increases a company’s risk of inadvertent transgressions and enforcement action. Finally, the Commerce Department and Treasury regimes are often inconsistent in the regulatory restrictions they impose, thereby increasing a company’s risk of legal exposure.
Steptoe regularly advises clients on both the Commerce Department and Treasury Department requirements and provides comprehensive assistance on regulatory prohibitions, tax penalty implications, regulatory exceptions, formal and informal interpretations of regulatory requirements, and reporting obligations.
We are often asked to advise on ambiguous contractual, purchase order, investment, letter of credit, and import requirements, to ensure compliance with US antiboycott requirements consistent with successful completion of the commercial transaction. Steptoe attorneys work with in-house counsel to handle complex transactions that may appear irresolvable in the face of regulatory requirements.
Reporting, Enforcement, and Regulatory Activity
Steptoe has handled all aspects of Commerce Department and Treasury Department reporting obligations. We are intimately familiar with the key regulatory definitions, jurisdictional prerequisites, and tax computation methodologies that bear on reporting and legal obligations.
Steptoe assists clients with internal compliance reviews, Commerce Department audits, and government enforcement proceedings. We regularly monitor legislative initiatives, regulatory developments (including agency interpretations), and administrative and judicial decisions to ensure our clients remain current on the state of the law and government enforcement priorities.
We have participated in Commerce and Treasury Department notice and comment proceedings on behalf of clients. Where appropriate, we have challenged agency interpretations and proposed rules that are inconsistent with the statutory language or legislative history of the Anti-boycott Amendments to the Export Administration Act.
Areas of Experience
Steptoe has experience assisting clients with these types of matters:
- Commerce Department anti-boycott regulations and interpretations, including jurisdictional requirements, knowledge and intent standards, letter of credit transactions, substantive prohibitions and exceptions, and reporting obligations;
- Treasury Department Guidelines and interpretations, including jurisdictional issues, scope of penalizable agreements, separate and identifiable operations, calculations of the international boycott factor, and tax return filing requirements;
- Record-keeping, internal and external audit, and enforcement proceedings, including prior disclosure, mitigation of liability, and negotiation of settlements;
- Legislative and regulatory monitoring and comment on proposed rules, interpretations, and statutory amendments; and
- Establishment of internal compliance systems, corporate education programs, and reporting channels consistent with regulatory deadlines.
We assist corporate clients in a wide range of industries, including:
- Banking and financial services
- Oil field services
- Hydrocarbon exploration and production
- Construction and engineering
- Software and computer electronics
- Food and beverage
- Equipment manufacturing
Our clients range in size from large multinational corporations to mid-sized businesses.
- Global Investigations Review (GIR) 100, Top 30 Firms for Investigations Worldwide, 2015
- World ECR, Export Controls Law Firm of the Year (USA), 2015-2016
- Chambers Global, Corporate Investigations: Anti-Corruption (Global), 2015-2016
- Chambers Global, International Trade/WTO (Global), 2008-2016
- Chambers USA, FCPA (Nationwide), 2014-2016
- Chambers USA, International Trade (Nationwide), 2005-2016
- Chambers Asia-Pacific, International Trade/WTO (Asia-Pacific Region), 2009-2016
- Chambers Latin America, Fraud & Corporate Investigations: Latin America-wide, 2016
- The Legal 500 US, Litigation: International Trade, 2007-2016
- Law360, International Trade Group of the Year, 2010-2013, 2015
- China Business Law Journal, China Business Law Award: Compliance and Anti-Corruption, 2015
Select News & Events
- Rich Battaglia Joins Steptoe’s International Regulation & Compliance Group
- Strategies for Dealing with Trade Sanctions & Restricted Parties, Antiboycott & FCPA, Third Annual Impact of Export Controls on Higher Education & Scientific Institutions