Office of Antiboycott Compliance

[MGKrebs]

I had never heard of this office until it was referenced in a Newsmax story recently, so I looked it up. Sure enough, it seems it can be illegal for US companies to NOT do business with Israel in some ways. Here's the website:

http://www.bis.doc.gov/AntiboycottCompliance/Default.htm

Here's a relevant passage:

"Conduct that may be penalized under the TRA (1976 Tax Reform Act) and/or prohibited under the EAR (Export Administration Act) 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."

Apparently this was written by Abraham Ribicoff (a good Dem if I remember correctly) in the 70's, but on the surface it bothers me to have a company's behavior controlled in this way. I am a small business owner, and it looks to me as if someone were to approach our company with a business transaction that involved material from Israel, I cannot refuse to do it without placing the company in some form of jeapordy? For example, we sell transformers for low voltage lighting that are made in Israel, but if someone wanted to buy some, and requested a different (made in China, for example) brand and we made the substitution for them, it could mean we would be subject to a fine?

Hope this isn't flame bait, but it seemed like it deserved some discussion. or maybe some here know a little more about how this all works.

[TexasLawyer]

1. Group boycotts among corporations have long been illegal

under anti-trust laws. It's a "term-of-art" that doesn't refer to boycotts by individual consumers of goods and services. Group boycotts by companies can restrain trade just like price fixing or market division. This is from the FTC:

Boycotts. A group boycott -- an agreement among competitors not to deal with another person or business -- violates the law if it is used to force another party to pay higher prices.

Boycotts to prevent a firm from entering a market or to disadvantage a competitor also are illegal. Recent cases involved a group of physicians charged with using a boycott to prevent a managed care organization from establishing a competing health care facility in Virginia and retailers who used a boycott to force manufacturers to limit sales through a competing catalog vendor.

Are boycotts for other purposes illegal? It depends on their effect on competition and possible justifications. A group of California auto dealers used a boycott to prevent a newspaper from telling consumers how to use wholesale price information when shopping for cars. The FTC proved that the boycott affected price competition and had no reasonable justification.

http://www.ftc.gov/bc/compguide/illegal.htm