Antiboycott Issues

Background

During the mid-1970s the United States adopted two laws that seek to counteract the participation of U.S. citizens in other nation's economic boycotts or embargoes. These "antiboycott" laws are the 1977 amendments to the Export Administration Act and the Ribicoff Amendment to the 1976 Tax Reform Act. Boycotts of Israel in some Arab nations -- although less stringent today than in past years -- are the principal foreign economic boycotts 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.

It is currently a federal criminal offense under U.S. "antiboycott laws" for any U.S. person to participate in another nation's boycotts or embargoes of third countries. The definition of "boycott" is expansive and includes such seemingly benign activity as furnishing information about the nationality of past or present business partners to an inquiring government. The penalties imposed for each "knowing" violation can be a fine of up to $50,000 or five times the value of the exports involved, whichever is greater, and imprisonment of up to five years. Under certain circumstances, the criminal penalties for each "willful" violation can be a fine of up to $50,000 and imprisonment for up to 10 years.

U.S. Chamber Position

We do not countenance boycotts in any form and international standards for combating such boycotts must be developed. Meanwhile, in the absence of such international agreement, and at a bare minimum the standard for determining whether criminal activity has occurred must be clarified and made consistent with international norms.