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Restrictive Trade Practices - Antiboycott Compliance

United States law prohibits any United States person from refusing, agreeing to refuse, or requiring or requesting any other person to refuse to do business with any business concern organized under the laws of a boycotted country, with any national or resident of a boycotted country, or any other person, when such refusal is the result of an agreement, requirement, or request of a boycotting country which runs counter to United States policy.


The antiboycott laws were adopted to encourage, and in some cases, require U.S. firms to refuse to participate in foreign boycotts that the U.S. does not sanction. The effect of these laws is to prevent U.S. firms and individuals from being used to implement foreign policies of other countries that are not supported by U.S. policies.


The Arab League boycott of Israel is the current primary example of a foreign economic boycott that U.S. firms and people must be concerned with today. Specifically, the following activities are prohibited under these laws:

  • Agreements to refuse, or actual refusal, to do business with or in Israel or with blacklisted companies.
  • Agreements to discriminate, or actual discrimination, against other persons based on race, religion, sex, national origin or nationality.
  • Agreements to furnish, or actual furnishing, of information about business relationships with or in Israel or with blacklisted companies.
  • Agreements to furnish, or actual furnishing, of information about the race, religion, sex, or national origin of another person.

 

The law further requires U.S. persons to report receipts of such boycott requests quarterly to the Commerce Department and to the IRS with filed tax returns.

 

Questions involving Restrictive Trade Practices and the Antiboycott Act should be referred to the Office of the General Counsel at (401) 863-3122.

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