Archive for the ‘Antiboycott’ Category

Whirlpool Europe Srl (Italy)/Whirlpool Corporation to Pay Civil Settlements to Settle Alleged Antiboycott Violations

Wednesday, November 15th, 2017 by Danielle McClellan

By: Ashleigh Foor (Source: Commerce/BIS)

On September 25, 2017, Whirlpool Europe Srl (Italy) was charged with three violations of 15 CFR 760.2(a), refusal to do business, ten violations of 15 CFR 760.2(d), furnishing information about business relationships with boycotted countries or blacklisted persons, and eight violations of 15 CFR 760.5, failing to report the receipt of a request to engage in a restrictive trade practice or foreign boycott against a country friendly to the United States (Case No: 14-02(A)). A civil settlement of $72,450, if paid as agreed, will keep Whirlpool from being debarred or suspended from export transactions.

Related case number 14-02(B) involves Whirlpool Corporation. The company received a civil settlement of $9,000 for three violations of 15 CFR 760.2(d), furnishing information about business relationships with boycotted countries or blacklisted persons. No debarment or suspension will be placed if penalty is paid as agreed.

Company Fined $162K for Antiboycott Violations

Thursday, March 30th, 2017 by Danielle McClellan

By: Danielle McClellan

The Office of Antiboycott Compliance, Bureau of Industry and Security (BIS) has charged Pelco Inc. (Pelco) with 66 violations. Between May 2011 and January 2016 it was found that on 32 occasions Pelco was engaged in transactions involving the sale/transfer of goods and services from the US to the United Arab Emirates and Kuwait, activities in the interstate or foreign commerce of the US (Section 760.1(d)). In connection with these transactions, Pelco, with intent to comply with, further supported an unsanctioned foreign boycott by agreeing to refuse to do business with another person (prohibited by Section 760.2(a)).

In addition to those 32 charges, Pelco was charged with 34 violations of “Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the US” (Section 760.5). This is not surprising, a company who agrees to an illegal boycott is not likely to report said boycott.

Pelco will pay $162K to settle the violations and will not be debarred as long as the settlement amount it paid.

Charging Letter: https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2015/1100-a749/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

Save a Stamp…File Boycott- Related Requests Online Now

Tuesday, November 15th, 2016 by Danielle McClellan

By: Danielle McClellan

Effective October 14, 2016 BIS has amended the EAR to permit electronic submission as an additional method available to US person for reporting requests they receive to take certain actions in furtherance or support of an unsanctioned foreign boycott.  The amendments are basically administrative changes to the EAR to permit electronic filing as opposed to only mail filings.

Prior to this rule, § 760.5(b)(4) and (5) of the EAR required United States persons to prepare reports of boycott- related requests on form BIS 621–P (single transaction) or on form BIS 6051–P (multiple transactions), both available on-line through the Office of Antiboycott Compliance (OAC) page of the BIS Web site (OAC Web page) in a fillable PDF format, and to submit the reports in duplicate paper copy to OAC postmarked by the last day of the month following the calendar quarter in which the request was received (or, if received outside the United States, by the last day of the second month following the calendar quarter in which the request was received).

While United States persons may continue to submit paper reports by mail consistent with §760.5(b)(4)— (b)(7), this final rule amends the EAR to allow submission of reports electronically, with the same deadlines, through the OAC Web page.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-10-14/pdf/2016-24831.pdf

Information on both paper and electronic submissions is available through the OAC Web page at https://www.bis.doc.gov/index.php/enforcement/%20oac?id=300

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!

Finans Suffers $750,000 Blow for Electronic Funds Transfer to Iran

Friday, October 25th, 2013 by Brooke Driver

By: Brooke Driver

September 26, the Turkish-based company (prepare for this name—as in maybe get a snack so that you’ll have the energy to get through it) Finans Kiymetli Madnenler Turizm Otomotiv Gida Tekstil San. Ve Tic (phew!) was sentenced to a hefty fine of $750,000 for violating the Iranian Transactions and Sanctions Regulations on at least three occasions. Between the dates of February 21, 2012 and May 29, 2012, Finans attempted to transfer electronic funds to Iranian individuals or government entities three times. The total value of these transactions was $257,808, and although two were intercepted, one transaction proved successful. Based on the following considerations, OFAC imposed a large penalty of $750,000:

  • The case was classified as egregious
  • Finans did not self-disclose
  • Finans acted recklessly by concealing and/or omitting material information in funds transfers originated by the company
  • Finans employees, including senior management, had reason to believe that violations occurred
  • Finans actions resulted in potentially great harm to U.S. sanctions program objectives with respect to Iran
  • Finans appears to lack an OFAC compliance program
  • Finans did not cooperate with OFAC throughout its investigation
  • A large penalty against Finans will teach others to avoid making the same mistake

Network Hardware Resale to Pay $262,000 for Illegal Transshipments to Iran, Syria and Sudan

Friday, October 25th, 2013 by Brooke Driver

By: Brooke Driver

Assistant Secretary David Mills of BIS, who will speak at ECTI’s upcoming Advanced Issues in Export Controls Workshop, approved a settlement with Network Hardware Resale of Santa Barbara, California on September 13, 2013. The California company allegedly committed 16 violations of the EAR, all of which are related to illegal reexporting to embargoed countries.

Twice between the dates of October 27, 2009 and January 6, 2011, NHR reexported through Finland and the United Arab Emirates U.S.-origin networking equipment and related accessories from its Amsterdam branch to Iran, thereby violating the Iranian Transactions Regulations. These shipments valued at $21,798.

Seven times between December 19, 2007 and December 22, 2010, the Amsterdam office reexported these same products, this time valued at $17,001, to Syria through the United Arab Emirates. NHR is also charged with seven instances—occurring between the dates of May 29, 2008 and May 3, 2010—of illegally reexporting the aforementioned products to Sudan at a total value of $114,151.

BIS has required that, as restitution for these violations, Network Hardware Resale pays a fine of $262,000 within 30 days of the settlement agreement.

BIS Cracks Down on EAR Antiboycott Rules Violators

Friday, October 25th, 2013 by Brooke Driver

By: Brooke Driver

Certainly, violations of export controls are frequent and varied, but anyone paying attention to the publicized violations of the past few months (or this newsletter, for that matter) will notice a trend; the government is targeting companies for violating U.S. boycott regulations. The very similar cases of Digi-Key, Laptop Plaza Inc. and Leprino Foods Company stand as further evidence to that truth.

BIS agreed to settle with Digi-Key on September 13, 2013 for its high number of EAR violations. According to the Office of Antiboycott Compliance, Digi-Key’s violations fall under two categories; the company was accused of five instances of furnishing information about business relationships with Israel (aka “boycotted countries”) or blacklisted persons between the years of 2008 and 2011 and 58 instances of failures to report receipts of requests to engage in a restrictive trade practice or foreign boycott against a country friendly to the United States. All of these violations occurred during transactions involving the sale and/or transfer of goods or services to the United Arab Emirates and Malaysia. BIS has imposed what seems a fairly low penalty charge of $56,600 considering the high number of violations in this case.

Laptop’s case, settled September 7, 2013, resembles Digi-Key’s in that four of the seven violations were results of furnishing information about business relationships with Israel. Apparently, between August and September of 2006, Laptop engaged in unauthorized business transactions with Lebanon and Pakistan. Laptop committed three other violations of the EAR by failing to record and report these transactions. BIS chose to fine Laptop $48,800—to be paid within a month of the settlement date—for its penalties.

Leprino Foods Company settled with BIS this past June, agreeing to pay a fine of $32,000 for its 16 violations, one of which was—you guessed it, folks—furnishing information about business relationships with Israel. In this case, Leprino participated in business transactions with Bahrain, Oman, Qatar and the United Arab Emirates. The other fifteen violations were failures to report these actions. Leprino will pay $32,000 for its violations.

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