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Record Fines Levied Against Firm Accused of Complying with Boycott

March 26, 1993
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In a demonstration that the Clinton administration will actively crack down on those who comply with the Arab boycott against Israel, the government this week assessed a record fine against an Illinois-based medical supply company accused of violating federal anti-boycott laws.

The company, Baxter International Inc. of Deerfield, Ill., two of its subsidiaries and a top Baxter executive have agreed to pay a total of $6,060,600 in civil penalties and another $500,000 in criminal penalties.

Baxter had been under federal government investigation for three years and was accused, among other charges, of providing illegal business information to Arab boycott officials.

Commerce Secretary Ron Brown said in a statement Thursday that the administration places “a high priority on vigorous enforcement of the Export Administration Act, and on seeking an end to the Arab boycott of Israel.”

Jewish groups hailed the announcement of the fine.

Will Maslow, editor of the American Jewish Congress newsletter Boycott Report, said that the largest boycott-related fine imposed before Thursday’s announcement was $950,000.

“It’s a lesson to corporate America,” said Maslow, who has been actively involved in the Baxter case. “The government is saying, ‘Here’s what may happen if you violate the anti-boycott laws,’ ” he added.

In addition to agreeing to pay the fine, Baxter has pledged to the Commerce Department that it will not develop new export contracts with Syria or Saudi Arabia for the next two years.

Maslow said the company, which he said had a net income of $591 million in 1991, would lose approximately $3 million a year in sales to Saudi Arabia.

While Maslow noted that efforts to investi- gate Baxter were “in the works” before Clinton took office, he praised the Clinton administration and Commerce Secretary Brown for approving the record fine.

Earlier this month, the Commerce Department assessed a fine of $83,000 against a New York-based company for alleged boycott-related activities.


The Anti-Defamation League, in a statement, commended the U.S. Justice and Commerce departments for their enforcement of anti-boycott laws.

Abraham Foxman, the organization’s national director, also said in a statement that he welcomed Baxter’s commitment to “explore business opportunities in Israel” and said that the company “is already demonstrating that commitment by meaningful action.”

Anthony Rucci, Baxter senior vice president, said his company “fully supports the Export Administration Act and opposes boycotts of any kind against Israel.”

“We respect the government’s conclusions in this investigation,” Rucci added, “and we are pleased that the issue is now resolved.”

Rucci also pointed out that his company has been “conducting business in Israel continuously for more than 20 years,” and that Israel is its largest trading partner in the Middle East.

Rep. Charles Schumer (D-N.Y.), the chairman of a congressional task force on the Arab boycott, said in a statement that “the Clinton administration has sent a message loud and clear: that American companies have no business aiding the Arabs in their economic warfare against Israel.”

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