How the Arab League roped 7 U.S. companies into their Israel boycott in 2012

The Arab League has imposed a formal economic boycott against Israel since 1948 to the present.  In 1977, Congress passed legislation prohibiting U.S. businesses from becoming instruments of foreign-led, non-U.S. boycotts such as the Arab League boycott of Israel.

Under the law, if an entity asks an American firm for assurance that it does no business with Israel, the U.S. company is supposed to report that request to the federal government.  The business is not supposed to comply with the request or furnish information to the requestor that would help the Arab League enforce its boycott.

The Bureau of Industry and Security’s Office of Antiboycott Compliance has settled with seven U.S. companies in 2012 for 44 alleged violations of antiboycott regulations this year:

• Parfums de Ceour, a Connecticut-based discount perfume seller, furnished information three times to the United Arab Emirates, and failed to report six requests it received from the UAE, to assist with the boycott.
• The Miami branch of Banco Sabadell provided boycott-related information twice to Syria.
• Samuel Shapiro & Co., a trade logistics company in Maryland, made five failures to report requests from the UAE for boycott guarantees.
• SteelSummit International, a New York steel producers, gave information four times to Saudi Arabia about whether it had business relationships with Israel.
• Polk Audio, a speaker manufacturer in Maryland, failed to report a request from Oman and provided information to Oman.
• Dover Energy’s Texas valve and switch maker, Norriseal, failed six times to report requests from Pakistan and four instances of cooperating with Pakistan’s requests for boycott assurances.
• Grainger, the Illinois-based industrial supplier, failed to report 12 requests it received from Kuwait for boycott information.

The companies were required to pay over $100,000 total in civil penalties for the above violations this year.

A possible defense of the businesses is that requests from importers or banks from the Arab League states are deceptively designed to elicit the information they want without directly inquiring about business dealings with Israel.  Instead, they’ll request a signed statement confirming that a company’s ship can enter an Arab port, which is designed to weed out companies and shippers that have done business with Israel.

Nevertheless, U.S. antiboycott regulations have been on the books for over 40 years, and companies—particularly those doing business in the Middle East—should know that by now.

Hat tip and thanks to Twitter pal RushetteNY for suggesting coverage of antiboycott compliance.