EXPORT COMPLIANCE | 2026-09-28
U.S. Antiboycott Compliance: What California Exporters Must Not Agree To — or Must Report
Two overlapping U.S. antiboycott laws prohibit American companies from participating in unsanctioned foreign boycotts — and require reporting boycott requests even when you refuse them. The penalties are real.
U.S. antiboycott laws prohibit American companies from participating in foreign boycotts that the United States does not sanction — most prominently the Arab League boycott of Israel. The rules do more than forbid participation: they require companies to report boycott-related requests to the U.S. g
Antiboycott compliance is one of the most overlooked corners of U.S. trade law — until a boycott clause appears in a customer’s letter of credit. Two U.S. legal regimes prohibit participating in unsanctioned foreign boycotts and, critically, require reporting boycott requests even when a company refuses to comply.
Two Overlapping Regimes
- The Export Administration Regulations (EAR) antiboycott provisions, administered by the Commerce Department’s Office of Antiboycott Compliance (OAC), prohibit certain conduct and require reporting of boycott requests.
- The Ribicoff Amendment to the Tax Reform Act, administered by the IRS, denies certain tax benefits to companies that participate in or cooperate with an unsanctioned boycott and has its own reporting requirement.
A single boycott request can implicate both regimes at once, which is why compliance is handled together.
What Conduct Is Prohibited
The EAR antiboycott rules generally prohibit U.S. persons, with respect to their activities in interstate or foreign commerce, from taking actions with the intent to comply with, further, or support an unsanctioned foreign boycott, including:
- refusing, or agreeing to refuse, to do business with a boycotted country or a blacklisted person;
- furnishing information about a person’s race, religion, national origin, or business relationships with a boycotted country or blacklisted entities;
- implementing letters of credit that contain prohibited boycott conditions.
These prohibitions can be triggered by contract language, certifications, or questionnaires that ask a company to certify or act in support of a boycott.
The Duty to Report — Even When You Refuse
A defining feature of U.S. antiboycott law is that receiving a boycott request generally must be reported to the U.S. government — typically on a quarterly basis — whether or not the company agrees to it. In other words, refusing the boycott request does not end the obligation; the request itself is reportable. Companies that quietly decline boycott language without reporting it can still be in violation of the reporting requirement.
Penalties
Antiboycott violations can carry civil penalties, and knowing or willful violations can carry criminal penalties, along with denial of export privileges and the tax consequences under the Ribicoff Amendment. Enforcement has been active, with settlements arising from boycott language accepted in contracts and letters of credit and from failures to report reportable requests.
Building an Antiboycott Screen
- Screen contracts, purchase orders, letters of credit, and questionnaires for boycott-related language before signing.
- Train sales, finance, and logistics staff to recognize and escalate boycott requests.
- Log and report reportable requests on the required schedule, even when refused.
- Seek counsel before agreeing to any clause that references a boycotted country or blacklisting.
Frequently Asked Questions
Which boycott do these rules target?
Primarily the Arab League boycott of Israel, but the rules apply to any foreign boycott the United States does not sanction.
Do I have to report a boycott request if I refuse it?
Yes. U.S. antiboycott law generally requires reporting reportable boycott requests to the government whether or not you comply.
Where do boycott requests usually appear?
In letters of credit, purchase orders, contracts, shipping documents, and vendor questionnaires — often as certifications or conditions.
What are the penalties?
Civil and, for knowing/willful conduct, criminal penalties, loss of export privileges, and tax consequences under the Ribicoff Amendment.
Related Customs & Trade Guides
Talk to a Trade Attorney About Antiboycott Compliance
If a boycott clause has appeared in your contracts or letters of credit, both the prohibition and the reporting duty are in play. Trembach Law Firm advises California exporters on U.S. antiboycott compliance. Call (818) 514-7680.
Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.
Trembach Law Firm | 27001 Agoura Road, Suite 350, Calabasas, CA 91301