Archive for the ‘Lebanon’ Category

U.S. Antiboycott Compliance: New Federal List Published

Tuesday, January 31st, 2017 by Danielle McClellan

By: Melissa Proctor, Polsinelli PC

Companies doing business in the Middle East take note: The Treasury Department recently published its quarterly list of countries that currently require participation or cooperation with an international boycott, such as the Arab League‘s boycott of Israel.

Even though many of these countries are WTO members and were required to shut down their Arab League offices as a condition of membership, many boycott-related requests are still being issued by government agencies and companies in these countries. The countries that are designated on this list, which by the way are the very same countries that were listed in the Third Quarter list, are:

  • Iraq
  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • Saudi Arabia
  • Syria
  • United Arab Emirates
  • Yemen

To view the list, click here.

If you are not familiar with U.S. antiboycott requirements, Part 750 of the Export Administration Regulations (EAR) prohibits U.S. companies and their foreign affiliates from complying with requests related to a foreign boycott that is not sanctioned by the U.S. Government. Specifically, U.S. companies and their overseas affiliates are prohibited from agreeing to:

  1. Refuse to do business with or in Israel or with blacklisted companies
  2. Discriminate against other persons based on race, religion, sex, national origin or nationality
  3. Furnish information about business relationships with or in Israel or with blacklisted companies, or
  4. Furnish information about the race, religion, sex, or national origin of another person

Foreign boycott-related requests can take many forms, and can be either verbal or written. They can appear in bid invitations, purchase agreements, letters of credit and can even be seen in emails, telephone conversations and in-person meetings. Some recent examples of boycott-related requests include:

  • “Provide a certificate of origin stating that your goods are not products of Israel.”
  • “Provide the religion and nationality of your officers and board members.” 
  • “Suppliers cannot be on the Israel boycott list published by the central Arab League.”  
  • “Provide a signed statement from the shipping company or its agent containing the name, flag and nationality of the carrying vessel and its eligibility to enter Arab ports “

In addition, implementing letters of credit that contain foreign boycott terms or conditions is also prohibited under the EAR.

Antiboycott compliance is a key issue for U.S. companies doing business in the Middle East, and personnel on the front lines with customers and supply chain partners in these countries should be trained to identify potential foreign boycott-related requests and escalate them to senior compliance personnel or in-house counsel to determine the applicable OAC and IRS reporting requirements.

Companies that receive boycott-related requests must submit quarterly reports to the Office of Antiboycott Compliance (OAC) unless an exemption applies. Failing to timely report a boycott request or complying with the request itself can lead to the imposition of civil penalties by the OAC. The IRS also requires U.S. taxpayers to report their operations in countries that require participation or cooperation with an international boycott on IRS Form 5713 (International Boycott Report) – the forms are submitted annually with U.S. tax returns.  Failure to comply with the Internal Revenue Code’s antiboycott requirements can lead to the revocation of certain international tax credits and benefits.

© Polsinelli PC, Polsinelli LLP in California

Lebanon Company Fined $450,000 for Reexporting Items to Syria

Tuesday, November 15th, 2016 by Danielle McClellan

By: Danielle McClellan

Tecnoline SAL (Tecnoline )of Sin El Fil, Beirut, Lebanon pled guilty to 7 charges of Causing, Aiding, or Abetting a Violation of the Regulations and will pay a civil penalty of $450,000. Tecnoline reexported US-origin mass spectrometers, gas chromatographs and consumables, liquid chromatograph-mass spectrometer systems, and liquid chromatograph modules (ECCN 3A999), controlled for anti-terrorism reasons, to Syria. There is a long standing US Embargo against Syria which makes a BIS license required for all exports/reexports subject to the EAR with the only exception being food and certain medicines).

The items were manufactured by Agilent Technologies (Agilent), a US company, and Technoline was an authorized distributor and reseller of Agilent’s products. In 2004, Technoline signed an agreement with Agilent that acknowledged their awareness of US export control laws and regulations and agreed to comply with them as a reseller and distributor of controlled products. Between August 2009 and October 2010, Technoline negotiated price discounts on the items with Agilent and eventually ordered the items for the Syrian Government ministries or entities. Technoline falsely identified the ultimate destination of the items as being Iraq or Lebanon (BIS license not required) and on one or more occasions they failed to disclose the ultimate destination of the items. Agilent shipped the items to TEchnoline in Beirut, Lebanon via Agilent’s German subsidiary. Once Technoline received the items they transferred them to Syria, there they were installed at Syrian Government ministries within a month or so. There were never any authorizations from BIS to export the items from the US to Syria, or to reexport them from Germany to Syria.

View Order: https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2015/1080-e2474/file

Antiboycott Violation Nets $238,000 Fine for Furnishing Prohibited Business Information

Tuesday, November 15th, 2016 by Danielle McClellan

By: Danielle McClellan

Coty Middle East FZCO (UAE) has agreed to pay $238,000 to settle 70 violations of 15 CFR §760.2(d) – Furnishing Information about Business Relationships with Boycotted Countries or Blacklisted Persons.

Coty Middle East FZCO is a foreign affiliate of Coty Inc., a US company located in Delaware thus are they are defined as a US person under 760.1(b) of the Export Administration Regulations (EAR). From 2009-2013 Coty Middle East engaged in transactions involving the sale and/or transfer of goods or services from the US to Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Syria, UAE, and Yemen, activities in the interstate or foreign commerce of the United States. In connection with these activities Coty Middle East furnished the following statement 70 times:  “WE HEREBY CERTIFY…. THAT ABOVE MENTIONED GOODS DO NOT CONTAIN ANY MATERIAL OF ISRAEL ORIGIN…”

View Order: https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2015/1083-a748/file

Companies Fined a Combined $61K for Antiboycott Violations

Thursday, November 5th, 2015 by Danielle McClellan

By: Danielle McClellan

Vinmar International, Ltd of Houston, TX will pay $19,800 to settle alleged antiboycott violations. Between January 2011 and February 2012, on two separate occasions, Vinmar provided information concerning another person’s business relationships with another person who is known or believed to be restricted from having any business relationship with or in a boycotting country (15 CFR 760.2(d)). In connection with these violations, Vinmar failed to report the receipt of a request to engage in a restrictive trade practice or Foreign Boycott against a country friendly to the US on five occasions (15 CFR 760.5). Below is a schedule of the violations.

An affiliate of Vinmar International, Ltd., Vinmar Overseas, Ltd. was charged with a total of 13 antiboycott violations with a total penalty of $41,400. On 5 separate occasions in 2009 the company violated 15 CFR 760.2(d) when they furnished information concerning another person’s business relationships with another person who is known or believed to be restricted from having any business relationship with or in a boycotting country. On 8 other instances the company violated 15 CFR 760.5 when they failed to report their receipts of requests to engage in a restrictive trade practice or boycott, as required by the Regulations. Below is a schedule of Vinmar Overseas, Ltd. violations.

Vinmar International, Ltd. Charging Letter

Vinmar Overseas, Ltd. Charging Letter

Need an Antiboycott refresher? Check out ECTI’s On Demand webinar, US Antiboycott Regulations: Clarified and Demystified!

BIS Relaxes License Approval Policy to Aid Syria

Wednesday, August 21st, 2013 by Brooke Driver

By: Brooke Driver

The US Department of State announced a new limited waiver of the Syrian Accountability and Lebanese Sovereignty Restoration Act of 2003 to aid the country in its time of need. According to the waiver, BIS may now issue licenses allowing the export and reexport of certain items and technologies into Syria that are viewed as essential to the reconstruction of the country, such as those related to water supply and sanitation, agricultural production and food processing, power generation, oil and gas production, construction and engineering, transportation and educational infrastructure. BIS reminds the public that medicines and food, also beneficial to Syrian aid, do not currently require licensure, while other items not listed above may be covered under other licenses or waivers. We will keep you updated on implementation details as they become available.

Treasury Identifies Countries Requiring Cooperation With an International Boycott

Thursday, January 17th, 2013 by Danielle McClellan

By: John Black

Once again the Treasury Department has identified the countries cooperating with an international boycott that raises issues related to claiming foreign tax credits under the Internal Revenue Service (IRS), specifically section 999(a)(3) of the IRS Code of 1986. The countries are:

  • Iraq
  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • Saudi Arabia
  • Syria
  • United Arab Emirates
  • Yemen

The IRS antiboycott rules come into play in many of the same situations in which the antiboycott provisions in Part 760 of the Export Administration Regulations (EAR) come into play. While the Commerce Department does not publish a list of countries for its EAR Part 760 antiboycott rules, as a practical matter the IRS list certainly represents many of the highest risk countries for EAR purposes so it is a good starting point for the focus of your EAR antiboycott compliance program. For EAR compliance purposes, US persons should also be aware that certain other Moslem countries cooperate with the Arab League boycott of Israel and present antiboycott compliance issues. These other countries include Bangladesh, Malaysia, Indonesia and Pakistan.

For the actual Federal Register notice go to http://www.gpo.gov/fdsys/pkg/FR-2012-11-16/html/2012-27737.htm

Treasury Department Announces Countries Requiring Compliance with Arab Boycott of Israel

Tuesday, September 4th, 2012 by John Black

In the August 13, 2012 Federal Register the Treasury Department announces, that for purposes of compliance with the antiboycott provisions of the IRS code, the list of countries which “require or may require participation in, or cooperation with, an international boycott.   This notice refers to the countries that require cooperation with the Arab League’s secondary and tertiary boycotts of Israel.  Under  the IRS rules a company may not claim foreign tax credits if it cooperates with such boycotts.

Part 760 of the Export Administration Regulations (EAR) also prohibits US persons from complying with certain aspects of unsanctioned foreign boycotts.  It has been a long time since the Commerce Department announced which countries require cooperation with boycotts for EAR purposes.  Even though the IRS list is not officially endorsed by the Commerce Department, it certainly makes a good list to use as a basis for deciding how to spend your antiboycott compliance resources.

The countries are:

  • Iraq
  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • Saudi Arabia
  • Syria
  • United Arab Emirates
  • Yemen

http://www.gpo.gov/fdsys/pkg/FR-2012-08-17/html/2012-20182.htm

Treasury Lists Countries Requiring Cooperation With an International Boycott

Tuesday, January 3rd, 2012 by Holly Thorne

The Department of the Treasury published a current list of countries which 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).  The purpose of this list is to provide guidance regarding compliance with the antiboycott compliance aspects of the US tax code.  While this advice is not technically specific to the antiboycott provisions in Part 760 of the Export Administration Regulations (EAR), it certainly is a reasonable basis for a company to use when it decides how to allocate its compliance resources for compliance with the EAR antiboycott rules.

Treasury identified the following countries that “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),” e.g., the Arab boycott of Israel:

– Kuwait

– Lebanon

– Libya

– Qatar

– Saudi Arabia

– Syria

– United Arab Emirates

– Yemen

Iraq is not included in this list, but its status with respect to future lists remains under review by the Department of the Treasury.

Treasury Lists – Countries Requiring Cooperation with an International Boycott

Wednesday, October 5th, 2011 by Holly Thorne

The Department of the Treasury has published a current list of countries which 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).

The countries are:

  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • Saudi Arabia
  • Syria
  • United Arab Emirates
  • Yemen

Republic of Iraq is not included in this list, but its status with respect to future lists remains under review by the Department of the Treasury.

While this list officially applies to the Internal Revenue Service (IRS) antiboycott rules, it is a reasonable indicator of the high risk countries for the EAR antiboycott regulations.

Treasury Identifies Countries Participating in the Secondary and Tertiary Arab League Boycotts of Israel

Monday, June 27th, 2011 by Anna Barone

By: Anna Barone

In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the Department of the Treasury is publishing the following list of countries which require or may require participation in, or cooperation with, an international boycott:

Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen (more…)