On October 7, 2022, a final rule was published in the Federal Register by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) that strengthen the antiboycott regulations in Part 766 of the Export Administration Regulations (EAR). This amendment clarifies and realigns such guidance with current boycott-related activity and BIS’s priorities and charging practices with a focus on three main areas.
- Enhance penalties for violating the antiboycott regulations and reprioritize violation categories,
- Strengthen the requirements for the settlement agreement process by requiring an admission of conduct, and
- Shift its focus to more directly target non-U.S. subsidiaries of U.S. companies not in compliance
The Office of Antiboycott Compliance (OAC) discourages, and in some circumstances, prohibits U.S. companies from taking certain actions in furtherance or support of a boycott maintained by a foreign country against a country friendly to the United States (unsanctioned foreign boycott).
The ECRA (Export Control Reform Act) specifies administrative and criminal penalties for violations of the Anti-Boycott Act of 2018. In the case of administrative antiboycott violations, BIS may impose the following penalties:
- A monetary penalty in the amount of the greater of approximately $300,000 per violation or twice the value of the underlying transaction, as appropriate;
- Denial of export privileges; and/or
- Revocation of any BIS export licenses.
The OAC highlighted the change in potential penalties. Specifically, the maximum penalties previously were $11,000 per violation (before March 9, 2006) and $50,000 per violation committed on or after March 9, 2006, (2) denial of a party’s export privileges under EAR and, (3) exclusion from practice.
Settlements will now require public admissions of a violation, but on that basis should include a more detailed statement of facts designed to provide additional guidance to industry.
If you are in need of assistance in understanding if a particular situation falls under the regulations the OAC has a direct line for consultation, I encourage you to contact them with your questions and or concerns. In addition to the direct line (provided below) it may be beneficial for you to review past materials on the subject as a refresher and ensure that all employees are aware of these regulations and the financial and economic impact that can occur if a violation occurs.
Contact Information:
U.S. Department of Commerce
BIS/Office of Antiboycott Compliance
1401 Constitution Avenue, NW
Room 6098
Washington, DC 20230
Antiboycott Advice Line:
Phone: (202) 482-2381
