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Update to: Is it Legal to Boycott Israel or Not?
The short answer is that it is illegal to participate in any way with a foreign-originated boycott against Israel.
But a boycott that originates within the U.S., by citizen or company, is not illegal.
Just as with the international boycott of Apartheid South Africa, there are U.S. citizens and companies that peacefully boycott Israel as a matter of conscience. Boycott is meant to encourage Israel to quit the military occupation of the West Bank and lift the military siege of Gaza.
However, these American antiboycott laws do not really feel like this is an issue under discussion in a free society. I have had e-mailed to me a link to an on-line article circa June 27, 2003 which also discusses this. I include a thoughtful comment which adds to the discussion by Michael Breen. It is troubling that the U.S government orders American companies to file reports on any inquiries they receive from foreign buyers regarding whether or not a company does business with Israel. Millions of dollars in fines have been levied against American companies for not reporting foreign boycott queries to the government's satisfaction.
From the website, 'Unknown News', entitled: 'Company fined for not reporting customer's question 'Is any of this stuff made in Israel?'; by Helen and Harry Highwater:
'A Missouri company has been fined $6,000 for not reporting a [foreign] customer’s question to the federal government. The question that’s punished by law is: Are any of these products made in Israel, or made of Israeli materials?
The Kansas City Star reports:
The anti-boycott provisions bar U.S. companies from providing information about their business relationships with Israel. They also require that receipt of boycott requests be reported to the Bureau of Industry and Security, formerly known as the Bureau of Export Administration.We ask: Why is this question forbidden? Why is any question forbidden?
It sounds more like the USSR than the USA, to punish people for asking a forbidden question, or for not immediately reporting to the government that someone else asked a forbidden question.'
Michael Breen adds to the discussion:
Regarding ariwatch.com/Links/CompanyFined6000.htm, it may be worth noting for the sake of those who might be cowed rather than angered by US laws protecting Israel from boycott (as if Israel were a US citizen!) that it applies only to cooperation with foreign boycotts, and so permits boycotting where it is not motivated by a wish to comply with another country's foreign policy: http://mcloughlinpost.blogspot.com/2010/04/2002-commerce-official-urges-compliance.html This is implicit, however: the writers of the regulations clearly do not envisage a situation where a US businessperson might *want* to boycott Israel for any reason other than the profit available from trading with boycotting countries. And if the existence of the foreign boycott is found to form any part of the motivation, the company can still be penalized. Example (x) on p16 illustrates: A, a U.S. construction company, enters into a contract to build an office complex in boycotting country Y. A receives bids from B and C, U.S. companies that are equally qualified suppliers of electrical cable for the project. A knows that B is blacklisted by Y and that C is not. A accepts C's bid, in part because C is as qualified as the other potential supplier and in part because C is not blacklisted. A's decision to select supplier C instead of blacklisted supplier B is a refusal to do business, because the boycott was one of the reasons for A's decision. One can envision a US company choosing an Israeli supplier instead of an equally qualified US one merely to protect itself from the thought police. (Such a fearful company could act more fairly by choosing from among equally qualified suppliers by lot, and have the draw witnessed.) However, I would assume that before a penalty could be imposed some evidence would still be required, e.g., a statistically significant pattern of contract awards, a remark a manager is reported to have made at a meeting, etc. In short, under the EAR, it seems that a company that doesn't have any trade with boycotting countries will suffer no penalty for publicly boycotting Israel on its own account. A company that can expect to profit from its position needs to be far more careful. But a company seeking only to avoid a loss in domestic US sales (admittedly still a rather hypothetical entity) should be OK. Disclaimer: I am not a lawyer and I have not read the regulations in their entirety. Get your own advice before acting.