US Government Issues Antiboycott Advisory on Turkey

In response to the Turkish Ministry of Trade’s suspension of trade in goods with Israel, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has issued an antiboycott advisory on Turkey. BIS’ advisory confirms that the Turkish policy creates compliance risk for persons subject to U.S. antiboycott laws and regulations.

As we have discussed previously, the U.S. antiboycott regime requires U.S. persons, in certain circumstances, to refuse to participate in unsanctioned foreign boycotts. BIS’ advisory reminds all U.S. persons, wherever located, that the Export Administration Regulations (EAR) prohibit certain actions that further or support an unsanctioned boycott.

Although Turkey has now authorized limited trade permits, U.S. and multinational companies must be vigilant in their compliance efforts with antiboycott regulations. U.S. persons are cautioned to be alert to the receipt of any requests to refrain from trade to or from Israel or to provide certification that the goods are not of Israeli origin or do not contain Israeli-origin components or materials.

Compliance with such requests could violate the antiboycott regulations and result in denial of tax benefits, financial penalties, and/or imprisonment. Further, even where a request is rejected, violation of the antiboycott regulations may occur for failure to properly report a boycott request under the EAR’s mandatory reporting rules. As such, it is important to assess whether requests, permits, or transactions involving Turkey implicate U.S. antiboycott laws and regulations.

For assistance on antiboycott issues 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.