Updated List of Countries Requiring Cooperation With an International Boycott.

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The Department of the Treasury is required under section 999(a)(3) of the Internal Revenue Code of 1986 to publish a list of countries which require or may require participation in, or cooperation with an international boycott.

As of 5/16/2018, these countries include:

Iraq

Kuwait

Lebanon

Libya

Qatar

Saudi Arabia

Syria

United Arab Emirates

Yemen

The full Federal Register notice can be found here.

Office of Antiboycott Compliance (OAC)

Overview
The United States Export Administration Regulations (EAR) require all US persons (individuals, corporations) to report requests they have received to take actions to comply with, or support an unsanctioned foreign boycott.┬áThe Treasury Department publishes a quarterly list of “boycotting countries.”

 

What do the Laws Prohibit?
Conduct that may be penalized under the TRA and/or prohibited under the EAR includes:

(1) Agreements to refuse or actual refusal to do business with or in Israel or with blacklisted companies.
(2) Agreements to discriminate or actual discrimination against other persons based on race, religion, sex, national origin or nationality.
(3) Agreements to furnish or actual furnishing of information about business relationships with or in Israel or with blacklisted companies.
(4) Agreements to furnish or actual furnishing of information about the race, religion, sex, or national origin of another person.
(5) Implementing letters of credit containing prohibited boycott terms or conditions.

 

How To Report?:
All requests for boycott participation is required quarterly and can be filed electronically or by mail (Form BIS 621-P or BIS 6051P). BIS 621-P should be used for single transactions and BIS 6051P for multiple transactions in which boycott requests may have been received in a calendar quarter.

 

If you have any questions about boycotts, contact experienced trade and compliance attorney, Davis Hsu at 832.896.6288 or by email at: dhsu@givensjohnston.com.

Department of the Treasury – List of Countries Requiring Cooperation with an International Boycott.

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According a January 8, 2018 Federal Register notice here, the U.S. Department of the Treasury (Treasury) published it’s quarterly “List of Countries Requiring Cooperation with International Boycott”. According to the notice, the following countries do require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986:

Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen (all 9 of these countries have previously been designated as boycotting countries).

The Treasury rules apply to U.S. taxpayers, including but not limited to members of a controlled group, regardless of whether the transaction involves U.S. goods or services. The rules do impose reporting requirements on U.S. taxpapers and their related companies. If taxpayers have coopreated with an unsanctioned boycott, they are denied certain tax benefits as a peanlty. U.S. taxpapers must report anything related to boycotting countries by filing IRS Form 5713 and attaching to the taxpayer’s federal tax return.

If your company does business overseas, it is important to be aware of reporting found instances of boycott laws and regulations and ensure your company is in compliance with all of the rules. We find our clients sometimes overlook the boycott issue, unfortunately Customs will not, and failure to comply with boycott rules may result in significant penalties.

If you have any questions regarding boycotts, contact David Hsu at 832.896.6288 or by email at: dhsu@givensjohnston.com.