To Boycott or Not to Boycott…

The Most SPAC-tacular Blog Title
May 6, 2021
Max Schrems Strikes Again
June 14, 2021
Show all

Requests to participate in or facilitate the Arab League’s Boycott of Israel are both prohibited (by the US Department of Commerce) and penalized (by the US Department of Treasury).  Deciphering what is permissible and what is prohibited is not always clear; requests are often indirectly phrased, such as the requirement of a certificate stating that a vessel is eligible to enter Arab ports.  Interpretation rests on many factors, inclusive of whether or not a given country is included on the US’s “List of Countries Requiring Cooperation With an International Boycott” (the “List”).

On August 16 ,2020, the United Arab Emirates (“UAE”) formally terminated its participation in the Arab League Boycott of Israel via Federal-Decree Law No. 4.  Demonstrating the alacrity with which governments are known to act, on April 8, 2021, Treasury formally removed the UAE from its List (Federal Registry.)  On June 9, Commerce amended the Export Administration Regulations (retroactively) to reflect that requests presumed to be boycott-related before August 16 ,2020, are no longer so presumed after August 16, 2020.  (The English majors continue to wonder about requests made on August 16, 2020.)

What does this mean for clients?  It means that they don’t have to presume that fuzzy certification language (like “eligible to enter the ports of the UAE”) is boycott-related, and don’t have to report these cases.  However, other language such as “eligible to enter the ports of the UAE according to the laws and regulations of Arabian ports” remains prohibited, penalized, and reportable.

We recommend that clients encountering a potential boycott request from the UAE (whether, e.g., in a contract, certification of origin, letter of credit, or due diligence questionnaire) request deletion or retraction based on the UAE’s own Federal-Decree Law No. 4 and support this contention with the US government’s regulatory related changes.

If you’re still confused, you’re not alone!  And, we’d be happy to help. Call us today!

Leave a Reply

Your email address will not be published. Required fields are marked *