International Law Advisory - No Change in Treasury Department's List of Boycotting Countries

During the 1970s, the United States adopted two sets of rules to prevent U.S persons from complying with certain boycotts that conflict with U.S. foreign policy.  The Department of Commerce’s Office of Antiboycott Compliance (“OAC”) enforces the “Anti-Boycott Regulations,” located at 15 C.F.R. Part 760, which make it illegal for U.S. persons (which includes U.S. companies and controlled in fact foreign affiliates)  to comply with certain boycotts.  Likewise, the Department of the Treasury and the Internal Revenue Service (“IRS”) administer “Anti-Boycott Guidelines” under section 999 of the Internal Revenue Code of 1986, as amended (the “IRC”), which penalize U.S. taxpayers that participate in or cooperate with boycotts not approved by the United States. 
 
The Arab League boycott of Israel is the primary foreign economic boycott of concern at present, but all unsanctioned boycotts imposed by foreign countries are subject to the Anti-Boycott Regulations and Anti-Boycott Guidelines.  Participation in a boycott is broadly defined and described in these regulatory regimes, and may include, among other things, refusing to do business with a company if such a refusal is a result of an agreement or request from a boycotting country, agreeing to certain legal requirements when doing business, providing certain information about business relationships or personnel, or implementing letters of credit, shipping documents, or insurance practices that contain boycott-related requests. 

The Treasury Department periodically publishes a list of countries which may require participation in, or cooperation with, an international boycott (“boycotting countries”).  The Treasury Department published a new list of boycotting countries yesterday, consisting of Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, and the Republic of Yemen.  This newly published list reflects no changes from the last list issued by the Treasury Department in July of this year.  Also similar to the July list, the Treasury Department has noted that while Iraq is not included in the list, its status with respect to future lists remains under review.

Should you have any questions regarding the issues discussed herein, please contact Ed Krauland at 202-429-8083, Stan Smilack at 202-429-6464, or Negar Katirai at 202-429-8028.