The U.S. antiboycott laws and regulations require U.S. persons, in certain circumstances, to refuse to participate in unsanctioned foreign boycotts. The antiboycott regulations are intended to prevent U.S. persons from advancing foreign policies of other nations that run counter to U.S. policy.

The U.S. Department of Treasury (Treasury) and U.S. Department of Commerce are jointly responsible for administering U.S. antiboycott laws. In general, there are three main levels of boycotts: (1) primary, in which one country refuses to do business with another (and with which the U.S. does not interfere); (2) secondary, in which one country refuses to trade with anyone who does business with a boycotted country; and (3) tertiary, in which one country refuses to trade with anyone who does business with companies or firms on their "blacklist."

Treasury recently published in the Federal Register a "List of Countries Requiring Cooperation With an International Boycott" 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)." The countries are:

  • Iraq
  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • Saudi Arabia
  • Syria
  • Yemen

U.S. and multinational companies must be vigilant in their compliance efforts with antiboycotting regulations. Violation of these laws may result in denial of tax benefits, stiff financial penalties, imprisonment, or all of the above. Consequently, it is important to carefully review and analyze transactions, particularly those involving listed countries, to determine whether U.S. antiboycott regulations apply.

For assistance on antiboycott sanctions and other export control-related matters (including loss of tax credits under Section 999 of U.S. tax laws), Buchanan's team of national security, tax attorneys, and specialists are here to help. In addition to assisting clients with antiboycott, economic sanctions, and export control matters, our attorneys also assist clients with a wide variety of international trade compliance matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.