Commerce Department Says It Has Not Shifted Its Stand on Boycott Issue

The Department of Commerce said Monday following Secretary Elliot Richardson’s brief discussion of the Arab boycott Sunday that it has not shifted its position from that held by Richardson’s predecessor, Rogers Morton, now President Ford’s political advisor.

Referring apparently to the Stevenson-Williams bill now before the Senate that would bring sanctions against U.S. companies that neglect to report requests from Arab officials to engage in the boycott or comply with it, Richardson, on CBS-TV “Face the Nation” outlined “two possible steps” regarding the situation.

“One would require the publication of any demand for compliance with the boycott by the firm receiving the demand, that it would give the information to us, and we would make it public,” Richardson said. “The question of whether or not completely to prohibit such a firm’s compliance is a tougher question involving really fundamental issues of Middle Eastern foreign policy, and I think that both in the Congress and the Administration there needs to be quite a lot of thought to that issue.”

NEED TO PRESERVE CONFIDENTIALITY

Asked to clarify the Secretary’s statements, a principal aide told the JTA that the Department of Commerce is “very strong” on preserving the confidentiality of company statements to it and regards the present regulation for a company to report to the Department on Arab requests as “sufficient.” The aide said Richardson supported the Morion position in keeping material given to Congress confidential.

Richardson, who entered his new post a week ago, also said that “we should cut off aid to firms that join in any discriminatory practice as the result of Arab pressure. But when the JTA inquired as to the kind of aid the U.S. gives companies it was told that Richardson, in “the heat of questioning” meant to say “countries” and not “firms” since we don’t give aid to companies.

THREE MAJOR ELEMENTS IN BILL

The bill, reported to the Senate last Friday by its banking committee, has three major elements that appear to conflict with the Administration’s views. Proposals in it by Sen. Adlai Stevenson (D.Ill.) call for disclosure of reports of boycott requests that require a U.S. firm to disclose to the Department of Commerce any action that would help the boycott and any action it intends to take regarding the request. Failure in either event would result in a fine of up to $10,000.

A second Stevenson provision would suspend export privileges to a company and make it liable to a fine of up to $10,000 if it engaged in compliance in the boycott.

Under the proposal in the bill by Sen. Harrison Williams (D.NJ), the Social Security Act of 1934 would lower the percentage requirement that triggers disclosure of stock ownership in a public corporation from the present five percent to two percent after the law is a year old, and to one-half of one percent after the second year. There-after it could be dropped to one-tenth of one percent. This is regarded as effectively disclosing stock ownership.

Congressional sources told the JTA that the compliance proposals in the bill prohibit a company asked to support the Arab boycott to disclose the race and religion of officers or owners of another American company and also prohibit a company from refusing to do business with another American company subject to the Arab boycott.

However, the legislation does not demand “total” opposition to compliance, because that the sources said, would, in effect, be a counter-boycott and cause disruption of U.S. diplomatic policy and foreign economic relations.

An example of how a company could do business with an Arab boycotter but still remain within the proposed law, the sources said, would be to agree not to use items manufactured in Israel or not to ship goods on an Israeli shipping line or a vessel that stops in Israel. This is permitted under existing law and is not prohibited under the proposed legislation, the sources said.