Is it Legal to Boycott Israel or Not

by Diane V. McLoughlin

Main website: mcloughlinpost.com

I stumbled upon a U.S. government document from 2002 which refers to the ‘antiboycott’ law. It seemed to suggest that U.S. law prohibited boycott of Israel. I looked into it and this is not quite true. It is illegal to participate in a boycott of Israel if it is a foreign boycott – ie initiated by Arab countries, for example.

But it turns out that it is not illegal for a U.S. citizen or company to choose to boycott Israel if the impetus to boycott originates domestically. For more, see below:

2002 document: From the Bureau of Industry and Security: Commerce Official Urges Compliance with U.S. Regulations Opposing Boycott of Israel:

‘Commerce Under Secretary for Industry and Security Kenneth I. Juster today again reminded U.S. companies of the need to comply with laws and regulations prohibiting U.S. persons from taking actions in support of foreign government boycotts against Israel. Juster’s comments were in response to recent statements made by certain members of the Arab League’s Boycott Office to reactivate the ban on trade with Israel.

“The U.S. Government is strongly opposed to restrictive trade practices or boycotts targeted at Israel,” Juster said. “The Commerce Department is closely monitoring efforts that appear to be made to reinvigorate the Arab boycott of Israel and will use all of its resources to vigorously enforce U.S. antiboycott regulations.”

‘The Commerce Department’s Bureau of Industry and Security (BIS) administers U.S. antiboycott regulations, which prohibit U.S. persons from taking actions in support of unsanctioned foreign government boycotts, including the Arab League boycott of Israel. BIS has a long record of aggressive enforcement of the antiboycott regulations, with over $26 million in civil penalties imposed and denials of export privileges where violations have been found.

‘Questions concerning the Commerce Department’s antiboycott regulations can be directed to its Office of Antiboycott Compliance by telephone at (202) 482-2381 or via e-mail.’

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I wrote to the Commerce Department and asked whether the antiboycott law applied to American citizens or American businesses, if the desire to boycott originated within the American citizen or the American business – not due to pressure, suggestion or duress from a foreign country or foreign citizen.

Here is my e-mail query, dated April 5, 2010:

With apologies in advance, I have a supplemental query with regard to the antiboycott law.

So far, what I believe I understand from the law (hoping you will correct me if I am not reading it right) is this:

A U.S. citizen or U.S. company may not boycott or choose not to do business with Israel if this is something that they are being compelled to do by a boycotting Arab country in order to do business with that foreign country.

My question: What if a U.S. citizen or company or other American entity, of their own accord, wishes to boycott freely themselves from doing business with Israel based upon their own freedom of thought, belief or conscience?

If they are not being asked to do it in order to do business with anyone, but the U.S. person or business within themselves wants to not do business in any way, shape or form with Israel, i.e. until Israel dismantles its apartheid regime oppressing the Palestinian people – does the antiboycott law still apply?

Those considering boycott of Israel to peacefully encourage change is not the same scenario that was first in mind when the antiboycott law was originally formulated.

Reading the bill, the law appears to only cover antiboycott activities originating outside of American borders.

If the antiboycott law still applies even though it is originating within the U.S. person or company rather than being encouraged from beyond American borders it would be most appreciated if you were able to cite the section of law specifically applicable to the above scenario, with my sincere thanks.

I am a person with a deep respect for the rule of law. So I appreciate your help in furthering my understanding of the antiboycott law.

Again, thank you very much for your prompt reply, and I look forward to hearing from you.

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This is the entire reply I received to my e-mail query, from GMOHLER[at]bis.doc.gov :

‘The Regulations relate to unsanctioned foreign boycotts. The Regulations are not applicable to boycotts of domestic origin.

BIS’.

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A bit cryptic, but it seems to answer the question nevertheless.

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by Diane V. McLoughlin, writer, peace activist, Apr. 10, 2010

main website: http://www.mcloughlinpost.com

Update to: Is it Legal to Boycott Israel or Not?

The short answer is that it is illegal to participate in any way with a foreign-originated boycott against Israel.

But a boycott that originates within the U.S., by citizen or company, is not illegal.

Just as with the international boycott of Apartheid South Africa, there are U.S. citizens and companies that peacefully boycott Israel as a matter of conscience. Boycott is meant to encourage Israel to quit the military occupation of the West Bank and lift the military siege of Gaza.

However, these American antiboycott laws do not really feel like this is an issue under discussion in a free society. I have had e-mailed to me a link to an on-line article circa June 27, 2003 which also discusses this. I include a thoughtful comment which adds to the discussion by Michael Breen. It is troubling that the U.S government orders American companies to file reports on any inquiries they receive from foreign buyers regarding whether or not a company does business with Israel. Millions of dollars in fines have been levied against American companies for not reporting foreign boycott queries to the government’s satisfaction.

From the website, ‘Unknown News’, entitled: ‘Company fined for not reporting customer’s question ‘Is any of this stuff made in Israel?’; by Helen and Harry Highwater:

‘A Missouri company has been fined $6,000 for not reporting a [foreign] customer’s question to the federal government. The question that’s punished by law is: Are any of these products made in Israel, or made of Israeli materials?

The Kansas City Star reports:

The anti-boycott provisions bar U.S. companies from providing information about their business relationships with Israel. They also require that receipt of boycott requests be reported to the Bureau of Industry and Security, formerly known as the Bureau of Export Administration.

We ask: Why is this question forbidden? Why is any question forbidden?

It sounds more like the USSR than the USA, to punish people for asking a forbidden question, or for not immediately reporting to the government that someone else asked a forbidden question.’

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Michael Breen adds to the discussion:

Regarding ariwatch.com/Links/CompanyFined6000.htm, it may be worth noting for the sake of those who might be cowed rather than angered by US laws protecting Israel from boycott (as if Israel were a US citizen!) that it applies only to cooperation with foreign boycotts, and so permits boycotting where it is not motivated by a wish to comply with another country’s foreign policy:

http://mcloughlinpost.blogspot.com/2010/04/2002-commerce-official-urges-compliance.html

This is implicit, however: the writers of the regulations clearly do not envisage a situation where a US businessperson might *want* to boycott Israel for any reason other than the profit available from trading with boycotting countries. And if the existence of the foreign boycott is found to form any part of the motivation, the company can still be penalized. Example (x) on p16 illustrates:

A, a U.S. construction company, enters into a contract to build an office complex in boycotting country Y. A receives bids from B and C, U.S. companies that are equally qualified suppliers of electrical cable for the project. A knows that B is blacklisted by Y and that C is not. A accepts C’s bid, in part because C is as qualified as the other potential supplier and in part because C is not blacklisted.

A’s decision to select supplier C instead of blacklisted supplier B is a refusal to do business, because the boycott was one of the reasons for A’s decision.

One can envision a US company choosing an Israeli supplier instead of an equally qualified US one merely to protect itself from the thought police. (Such a fearful company could act more fairly by choosing from among equally qualified suppliers by lot, and have the draw witnessed.) However, I would assume that before a penalty could be imposed some evidence would still be required, e.g., a statistically significant pattern of contract awards, a remark a manager is reported to have made at a meeting, etc.

In short, under the EAR, it seems that a company that doesn’t have any trade with boycotting countries will suffer no penalty for publicly boycotting Israel on its own account. A company that can expect to profit from its position needs to be far more careful. But a company seeking only to avoid a loss in domestic US sales (admittedly still a rather hypothetical entity) should be OK.

Disclaimer: I am not a lawyer and I have not read the regulations in their entirety. Get your own advice before acting.

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