- A Missouri company has been fined $6,000 for not reporting
a customer's question to the federal government. The question that's punished
by law is: Are any of these products made in Israel, or made of Israeli
materials?
-
- The Kansas City Star reports:
-
- The anti-boycott provisions bar U.S. companies from providing
information about their business relationships with Israel. They also require
that receipt of boycott requests be reported to the Bureau of Industry
and Security, formerly known as the Bureau of Export Administration.
-
- We ask: Why is this question forbidden? Why is ANY question
forbidden?
-
- It sounds more like the USSR than the USA, to punish
people for asking a forbidden question, or for not immediately reporting
to the government that someone else asked a forbidden question.
-
- Only a few years ago, during South Africa's apartheid
era, it was considered the height of good moral backbone to ask whether
a product came from that country. Today, many Americans are asking such
questions about products they suspect came from France, after the French
government declined to join "Operation Iraqi Freedom."
-
- The newspaper's article doesn't make it clear whether
these restrictions apply only to US companies selling stuff outside the
US, or whether the law applies to everyone. Either way, it's reprehensible.
Editor's note: Here's what the US Office of Antiboycott Compliance says:
"The antiboycott provisions of the Export Administration Regulations
(EAR) apply to all "U.S. persons," defined to include individuals
and companies located in the United States and their foreign affiliates...."
-
- And here's a press release from the US Department of
Commerce: "Commerce Under Secretary for Industry and Security Kenneth
I. Juster today reiterated to U.S. companies that the Department will vigorously
enforce its regulations prohibiting U.S. persons from taking any action
in support of foreign government boycotts against Israel. ..."
-
- If K-Mart is having a sale on cheap plastic chess sets
and we ask the clerk whether the board or pieces were made in Israel, is
the clerk allowed to answer? Must the store promptly file a form with the
Bureau of Industry and Security reporting that we asked?
-
- Well, we'll be asking the forbidden question in every
store we enter. Not because we're boycotting Israel - we're not. Heck,
if we were boycotting products from countries whose policies are abhorrent,
we'd start by boycotting anything marked "made in USA."
-
- We'll be asking the forbidden question because we believe
in freedom. In a free society, the government doesn't tell people what
questions they can ask, and what questions they can't, and what questions
must be promptly reported to the authorities.
-
- We had heard of this law before - banning people from
even asking about boycotting Israeli products - but we had foolishly assumed
it wasn't often enforced.
-
- According to the article, though, "more than $26
million in fines" have been levied for violations of this law, suggesting
that enforcement of the Forbidden Question Law is not at all uncommon.
The fine in this case was $6,000, so assuming that's average and doing
the math, more than 4,000 Americans or American companies have been fined
" for asking the forbidden question, or failure to report that someone
else asked the forbidden question.
-
- ____________
-
- North Kansas City company settles charge related to boycott
of Israel
-
- By Dan Margolies Kansas City Star June 25, 2003
-
- Cook Composites and Polymers Co. has agreed to pay a
$6,000 fine to settle charges that it violated Commerce Department regulations
aimed at countering the Arab boycott of Israel.
-
- The department's Bureau of Industry and Security had
charged that, in response to a request from a customer in Bahrain, Cook
had furnished information stating that the goods being shipped were not
of Israeli origin and did not contain Israeli materials.
-
- The bureau also charged that Cook had failed to report
its receipt of the request.
-
- Cook, of North Kansas City, neither admitted nor denied
the allegations, but agreed to pay the $6,000 civil penalty.
-
- The antiboycott provisions bar U.S. companies from providing
information about their business relationships with Israel. They also require
that receipt of boycott requests be reported to the Bureau of Industry
and Security, formerly known as the Bureau of Export Administration.
-
- Cook's chief executive, Charles Bennett, was in Paris
this week and unavailable for comment. A spokeswoman for the company, Rita
Durocher, said the fine marked the first time Cook has had a run-in with
a federal agency.
-
- "If you go back and look at our record, we've been
flawless with other government agencies," she said.
-
- Cook makes polyester gels and other coating resins. It
operates plants throughout North America.
-
- The settlement with the Commerce Department came after
the Bush administration in November warned U.S. companies not to heed calls
to boycott Israeli goods and services. The warning followed a call by the
22-member Arab League to reactivate its decades-long boycott of Israel.
-
- In a statement released at the time by the department,
Commerce Undersecretary for Industry and Security Kenneth Juster reminded
American companies that the "U.S. government is strongly opposed to
restrictive trade practices or boycotts targeted against Israel."
-
- Knowing violators of the anti-boycott provisions face
fines of up to $50,000, or five times the value of the exports at issue,
and possible imprisonment. Offenders can also be denied export privileges.
-
- The Bureau of Industry and Security says it has imposed
more than $26 million in fines for violations of the provisions.
-
- More than a decade ago, the Commerce Department sent
compliance officers to Kansas City to check out tips that Marion Merrell
Dow Inc. and Marley Cooling Tower Co. may have cooperated with the Arab
boycott. Nothing came of the investigation, and no penalties were imposed.
-
- In Cook's case, the Bureau of Industry and Security charged
that Cook failed to report a letter of credit it received on Dec. 1, 1997,
from ABN AMRO Bank in Manama, Bahrain. The letter asked it to confirm that
the goods being shipped "are not of Israeli origin nor do they contain
any Israeli"material.
-
- The bureau also charged that on Jan. 20, 1998, Cook,
through its freight forwarder, provided a U.S. bank with a copy of a commercial
invoice confirming that the goods were not of Israeli origin and did not
contain Israeli material.
-
- Cook, with 558 employees overall and 120 employees locally,
is one of North Kansas City's biggest employers. The company bills itself
as the No. 1 producer of gel coats in the world and, together with affiliated
companies, the No. 2 producer of resins.
-
- Since 1990, Cook has had a joint venture relationship
with the chemicals division of TotalFinaElf, a multibillion-dollar petrochemicals
giant based in Paris. Published by The Kansas City Star _____________________
-
- Here's the official Q&A about this law, as found
at the federal government's Office of Antiboycott Compliance website
-
- Antiboycott Laws
-
- During the mid-1970's the United States adopted two laws
that seek to counteract the participation of U.S. citizens in other nation's
economic boycotts or embargoes. These "antiboycott" laws are
the 1977 amendments to the Export Administration Act (EAA) and the Ribicoff
Amendment to the 1976 Tax Reform Act (TRA).
-
- Objectives
-
- The antiboycott laws were adopted to encourage, and in
specified cases, require U.S. firms to refuse to participate in foreign
boycotts that the United States does not sanction. They have the effect
of preventing U.S. firms from being used to implement foreign policies
of other nations which run counter to U.S. policy.
-
- Primary Impact
-
- The Arab League boycott of Israel is the principal foreign
economic boycott that U.S. companies must be concerned with today. The
antiboycott laws, however, apply to all boycotts imposed by foreign countries
that are unsanctioned by the United States.
-
- Who Is Covered by the Laws?
-
- The antiboycott provisions of the Export Administration
Regulations (EAR) apply to all "U.S. persons," defined to include
individuals and companies located in the United States and their foreign
affiliates. These persons are subject to the law when their activities
relate to the sale, purchase, or transfer of goods or services (including
information) within the United States or between the U.S. and a foreign
country. This covers U.S. exports and imports, financing, forwarding and
shipping, and certain other transactions that may take place wholly offshore.
-
- Generally, the TRA applies to all U.S. taxpayers (and
their related companies). The TRA's reporting requirements apply to taxpayers'
"operations" in, with, or related to boycotting countries or
their nationals. Its penalties apply to those taxpayers with foreign tax
credit, foreign subsidiary deferral, FSC (Foreign Sales Corporation), and
IC-DISC (Interest Charge-Domestic International Sales Corporation) benefits.
-
- What do the Laws Prohibit?
-
- Conduct that may be penalized under the TRA and/or prohibited
under the EAR includes:
-
- Agreements to refuse or actual refusal to do business
with or in Israel or with blacklisted companies.
-
- Agreements to discriminate or actual discrimination against
other persons based on race, religion, sex, national origin or nationality.
-
- Agreements to furnish or actual furnishing of information
about business relationships with or in Israel or with blacklisted companies.
-
- Agreements to furnish or actual furnishing of information
about the race, religion, sex, or national origin of another person.
-
- Implementing letters of credit containing prohibited
boycott terms or conditions.
-
- The TRA does not "prohibit" conduct, but denies
tax benefits ("penalizes") for certain types of boycott-related
agreements.
-
- What Must Be Reported?
-
- The EAR requires U.S. persons to report quarterly requests
they have received to take certain actions to comply with, further, or
support an unsanctioned foreign boycott.
-
- The TRA requires taxpayers to report "operations"
in, with, or related to a boycotting country or its nationals and requests
received to participate in or cooperate with an international boycott.
The Treasury Department publishes a quarterly list of "boycotting
countries."
-
- How To Report
-
- EAR reports are filed quarterly on form BIS 621-P for
single requests or BIS 6051-P for multiple requests available from the
Department of Commerce,s Office of Antiboycott Compliance (OAC) in Washington,
D.C. To obtain these forms, telephone OAC,s Reports Processing Unit at
(202) 482-2448. TRA reports are filed with tax returns on IRS Form 5713.
This form is available from local IRS offices.
-
- Penalties
-
- The EAR prescribe the penalties for violations of the
Antiboycott Regulations as well as export control violations. These can
include:
-
- Criminal
-
- The penalties imposed for each "knowing" violation
can be a fine of up to $50,000 or five times the value of the exports involved,
whichever is greater, and imprisonment of up to five years. During periods
when the EAR are continued in effect by an Executive Order issued pursuant
to the International Emergency Economic Powers Act, the criminal penalties
for each "willful" violation can be a fine of up to $50,000 and
imprisonment for up to ten years.
-
- Administrative
-
- For each violation of the EAR any or all of the following
may be imposed:
-
- General denial of export privileges;
-
- The imposition of fines of up to $12,000 per violation;
and/or
-
- Exclusion from practice
-
- Boycott agreements under the TRA involve the denial of
all or part of the foreign tax benefits discussed above.
-
- The $10,000 maximum per violation specified in the EAA
is adjusted periodically pursuant to law for inflation. The maximum civil
penalty for any violation committed from October 23, 1996 through November
1, 2000 is $11,000 per violation. The maximum civil penalty for any violation
committed after November 1, 2000 is $12,000 per violation.
-
- First published June 27, 2003 http://www.unknownnews.net/0626-2.html
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