Commerce Department Issues Rules for U.S. Exporters on Arab Boycott

The U. S. Department of Commerce today issued new regulations to American exporters, asking them not to cooperate with efforts of Arab states to impose a boycott on trade with Israel, but pointing out that they are not legally prohibited from cooperating with the boycott. Under the new regulations, exporters must report to the Department of Commerce within 15 days any request from foreign nations for boycott action or other restrictive trade practices against Israel or any other foreign country.

Secretary of Commerce John T. Connor prefaced the new regulations with a statement of official guidance to exporters. He said: “It is the policy of the United States to oppose restrictive trade practices or boycotts fostered or imposed by foreign countries against other countries friendly to the United States. All U. S. exporters of articles, materials, supplies or information are encouraged and requested to refuse to take, but are not legally prohibited from taking, any action, including the furnishing of information or the signing of agreements which has the effect of furthering or supporting such restrictive trade practices or boycotts. Accordingly. I encourage and request individuals and firms receiving such requests to refuse to comply with them.”

The Government action was taken in conformity with an amendment to the Export Control Act adopted by Congress. Export Bulletin No. 920, issued today, said the policy, reflected by the forms issued to exporters under the new law, indicated American efforts to eliminate trade obstacles and promote international business “as a means of achieving peace and well-being.” The Bulletin said “in the long run, both the United States business community and foreign trade interests will benefit from adherence to this anti-boycott policy.”

The Department established formal requirements to the effect that any exporter receiving demands for boycott information or agreement to boycott practices report this within 15 days to the Office of Export Control by filing a specified form, and noted that information received by the Department shall be deemed confidential. Typical of the kind of requests, linked with the boycott, that exporters are now required to report, are demands for information on whether the exporter employs Jews or has Israeli stockholders. Also, of course, exporters would be expected to report the outright demands for details on trade with Israel.

Article 10 of the form, which is not mandatory, says the Government would appreciate knowing but does not require a report on whether the firm did or did not comply with the request for boycott information. This was in line with a decision stated by Secretary Connor that firms “are not legally prohibited” from cooperating with the boycott.

CHAIRMAN OF AMERICAN-ISRAEL CHAMBER OF COMMERCE COMMENTS ON RULES

Nathan Straus, III, chairman of the American-Israel Chamber of Commerce and Industry, today issued a statement commenting that the new regulations “have several clearly positive elements.” “On the other hand,” he noted, “the regulations include the unusual negative statement that there is no legal obligation to refrain from yielding to the boycott. In this respect, the regulations suggest the need closer examination.”

Mr. Straus made known that the Chamber “intends to study the regulations in detail. After consultation with legal experts, the business community and others who are vitally concerned with the matter, we shall form a considered judgment which we may wish to bring to the attention of the Secretary of Commerce for his consideration.”

“Although the amendment and the regulations apply, and rightly so, to all friendly nations, it was the Arab boycott of Israel that prompted this legislation,” Mr. Straus declared. “Some three years ago, our Chamber became aware of mounting pressure on American business firms in general and on members of the Chamber in particular to sever their business ties with Israel in compliance with the Arab boycott.

“Israel is a major customer for U.S. goods and services. It has been buying more U.S. products than virtually all other Mid-east countries combined; and more than 200 American firms participate in its industry, transportation and commerce. We felt, however, that even more is at stake than this dollars-and-cents consideration. We saw a deliberate effort to make American businessmen party to an economic and political conflict between other countries–an enforced involvement that, once condoned, could lead to similar involvements in disputes between other countries.”