U.S. antiboycott laws deter U.S. persons from complying with other countries’ boycott and sanctions programs.
Our attorneys have evaluated thousands of potential boycott requests for companies in the high-risk energy, manufacturing, and financial services industries. We are uniquely qualified to assess compliance with U.S. antiboycott laws and can assist with any inquiry you may have.
Wardlaw Trade Law can help you understand:
Let us think about your antiboycott issue through a holistic lens.
We can also work with partners to audit your transactions, run your antiboycott compliance program, and respond to a government subpoena or investigation.
U.S. antiboycott laws are administered through two sets of regulations: One from the Department of Commerce (through the Office of Antiboycott Compliance (“OAC”), within the Bureau of Industry and Security) and the Department of Treasury (through the Internal Revenue Service (“IRS”)).
The OAC regulations are contained within the U.S. Export Administration Regulations. They prohibit a U.S. person’s participation or agreement to participate in an unapproved foreign boycott, with a focus on boycotts that are nationally-mandated (like boycotts of Israel by countries in the Arab League), rather than on boycotts put on by individual protestors, regions, U.S. states, or non-state actors (like boycotts of Israel spearheaded by unhappy citizens of other countries).
The regulations administered by Treasury’s Internal Revenue Service (IRS) are contained within the U.S. tax code. These “penalize” a U.S. taxpayer’s agreement to participate in the same kinds of boycotts, with a few important distinctions, by revoking a taxpayer’s eligibility for certain high-value tax credits. Like boycott participation, boycott-related discrimination (i.e., against boycotted country nationals, or against people that have traits that may affiliate them with the boycotted country, such as their race, religion, nationality, or the fraternal or charitable groups they participate in) is disincentivized by both regulators.
The regulations have a similar goal but are not identical, creating potential traps for compliance teams that are less fluent with both sets of requirements.
One important distinction is that while both agencies require taxpayers to report on the boycott requests they receive, and on how they have responded to those requests, they have different reporting requirements. OAC expects quarterly reports of the boycott requests a U.S. person has received and of related responses. The IRS expects corporate taxpayers to include a report of their operations in boycotting countries, any boycott requests they have received, and their response in their annual tax returns.
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