Most trade intermediaries are familiar with the antiboycott provisions contained in Part 760 of the Export Administration Regulations (EAR).\u00a0 These regulations prohibit U.S. persons\u2019 participation in or cooperation with the Arab League\u2019s ongoing boycott of Israel.\u00a0 Subpart (d) of Part 760.2 prohibits the furnishing of certain information about a U.S. person\u2019s business relationships with boycotted countries such as Israel, or blacklisted persons or entities.\u00a0 Specifically, the regulation states that no U.S. person may furnish information concerning his or any other person\u2019s past, present or proposed business relationships (i) with or in a boycotted country; (ii) with any business organized under the law of a boycotted country; (iii) with any national or resident of a boycotted country; or (iv) with any other person who is known or believed to be restricted from having any business relationship with or in a boycotting country.<\/p>\n
Manufacturers or shippers that provide a \u201cnegative certification\u201d of origin run afoul of this regulation.\u00a0 In certifying the origin of a good, it is permissible to state in positive terms that \u201cthis widget was made in Canada.\u201d\u00a0 It is impermissible to certify that \u201cthis widget contains no Israeli parts.\u201d\u00a0 Negative certifications are to be avoided, although there are certain narrow exceptions to this general rule applicable to shipping information.<\/p>\n
What many freight forwarders do not realize is that, if a shipper itself violates this regulation and states on its invoice that its goods \u201ccontain no Israeli parts,\u201d and the forwarder then tenders the invoice a consignee or foreign agent, the forwarder itself violates the regulations.\u00a0 A recent example of this can be found in the June 21, 2010, settlement of administrative charges between Houston freight forwarder Plane Cargo, Inc. and the Bureau of Industry and Security\u2019s Office of Antiboycott Compliance.\u00a0 The transaction at issue was a shipment from the United States to Syria, and Plane Cargo furnished a shipper\u2019s invoice that stated:<\/p>\n
We hereby certify that the good described in this invoice are not of Israelian origin and there has no Israelian material been used to produce it.<\/p>\n
Plane Cargo\u2019s furnishing of the shipper\u2019s negative certification on its invoice resulted in BIS charging it with one violation of the EAR.\u00a0 The company entered into a settlement agreement with BIS whereby it agreed to pay a $5,200 civil penalty.\u00a0 When one considers that a single violation can result in a penalty of $250,000 or twice the value of the transaction that is the basis of the violation, one could view the settlement as being favorable for the forwarder.<\/p>\n
This is not the first instance where a forwarder has been charged with furnishing invoices that contain a prohibited negative certification.\u00a0 For example, another Texas forwarder, Rohde & Liesenfeld, paid a $108,000 civil penalty to settle charges that, on thirty-six occasions from 2002 to 2003, it furnished invoices from a shipper that certified that \u201cthe goods enumerated in this Invoice are not of Israeli origin and do not contain any Israeli materials.\u201d
\nThe lesson to be learned is that, although forwarders do not create the invoices furnished in export transactions, they can pay a hefty price in penalties if their content runs afoul of the EAR\u2019s antiboycott regulations.<\/p>","protected":false},"excerpt":{"rendered":"
Most trade intermediaries are familiar with the antiboycott provisions contained in Part 760 of the Export Administration Regulations (EAR).\u00a0 These regulations prohibit U.S. persons\u2019 participation in or cooperation with the Arab League\u2019s ongoing boycott of Israel.\u00a0 Subpart (d) of Part 760.2 prohibits the furnishing of certain information about a U.S. person\u2019s business relationships with boycotted countries such as Israel, or […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-52","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/posts\/52","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/comments?post=52"}],"version-history":[{"count":0,"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/posts\/52\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/media?parent=52"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/categories?post=52"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.customscourt.com\/es\/wp-json\/wp\/v2\/tags?post=52"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}