U.S. Anti-Boycott Laws

How They Affect Business Credit

In the 1970's the United States adopted two anti-boycott laws; the Ribicoff Amendment to the 1976 Tax Reform Act (TRA), and the amendments to the Export Administration Act passed in 1977. These laws were created to "encourage" companies to refuse to participate in foreign boycotts that the U.S. does not sanction. It is a federal criminal offense under U.S. anti-boycott laws for any U.S. person to knowingly participate in another nation's boycotts or embargoes of third countries. These laws specifically prevent U.S. companies, citizens, overseas subsidiaries of U.S. companies, U.S. subsidiaries of overseas companies, as well as Federal, state and local governments from being used to implement foreign policies of other nations that run counter to U.S. foreign policy.

Conduct that may be penalized or prohibited under these federal laws includes the following:

• Agreements to refuse to do business, or refusal to do business with or in Israel or with blacklisted companies

• Agreements to discriminate, or actual discrimination against persons based on race, religion, sex, national origin or nationality

• Agreements to furnish or furnishing information about business relationships with or in Israel or with blacklisted companies

• Agreements to furnish or furnishing information about the race, religion sex, or national origin of another person

• Shipping against and presenting documentation in support of letters of credit containing prohibited boycott terms or conditions

One final note: The U.S. Department of Commerce requires quarterly reports of all requests companies have received to take actions to comply with or support an unsanctioned foreign boycott. For more information on how to report an unlawful request, please follow this link: http://www.bxa.doc.gov.