Keynote Speech of David W. Mills, Assistant Secretary for Export Enforcement West Coast Forum, February 25, 2014

Details

 

Good morning. It is a pleasure to be back at the West Coast Forum to discuss new developments regarding Export Enforcement’s activities at the Bureau of Industry and Security, including our implementation of Export Control Reform – in other words, how we are erecting higher walls around the most sensitive items, end uses, and end users. As Under Secretary Hirschhorn said yesterday, the time for discussing what we are going to do has passed. Since October 2013, we are now administering controls over former U.S. Munitions List items on the Commerce Control List. This movement of items is occurring in waves, with items associated with military aircraft, vehicles, vessels, subs, and auxiliary equipment already completed, and certain satellite and military electronics-related items being transitioned next.

 

During this process, our Special Agents and enforcement analysts have been ramping up our monitoring and investigative capability associated with the 600 series military items, while continuing to monitor exports and reexports of dual-use items.

 

The evolution of our enforcement posture over the past year, and the associated accomplishments that I will review this morning, underscore the benefit to U.S. national security and U.S. economic security – including the protection of business reputations and proprietary data -- of having dedicated Department of Commerce resources enforcing 600 series military items and dual-use exports.

 

The security environment we face today is distinctive and diverse. While many of our concerns have remained constant for several years or decades, they are continually evolving. As these threats evolve and proliferators become more sophisticated, our collective mission remains the same: identify proliferation networks and dismantle or disrupt them.

 

The Role of Export Enforcement

 

For those new to the Export Administration Regulations, or EAR, and even for our more experienced exporters, I think it is important to frame the context of Export Enforcement’s role at the Bureau of Industry and Security. We work to ensure that strategic trade is secured by an effective export control system based largely on multilateral control lists that deter, prevent, and redress the diversion of dual-use and munitions items to end users and for end uses involved in the development of weapons of mass destruction and advanced conventional weapons or that support international terrorism. I like the metaphor that BIS plays defense on the Commerce export promotion team. We want to promote secure trade that is in the national interest of the United States. To that end, our law enforcement program focuses on sensitive exports to hostile entities or those that engage in onward or inward proliferation.

 

Over these past 32 years, Export Enforcement at BIS has evolved into a sophisticated law enforcement agency, with criminal investigators and enforcement analysts working together with licensing officers to identify violations and redress them. Using our subject matter expertise in the area of export controls, coupled with our unique and complementary administrative enforcement tools, as well as our partners in other agencies, industry, and abroad, we have leveraged our authorities to maximize the impact we are having.

 

BIS maintains Special Agents at offices in 14 cities across the United States. BIS also has Special Agents assigned with the Department of Commerce’s Foreign Commercial Service to conduct end-use checks to safeguard the disposition of U.S.-origin items exported abroad. These Export Control Officers or ECOs are assigned to six strategic locations that are critical to our mission: China, the United Arab Emirates, India, Russia, Singapore, and Hong Kong. All of these ECO positions have regional responsibilities that extend their reach to an additional forty-three countries.

 

The talented personnel that BIS has cultivated is only one of our strengths. As I spoke of previously, our administrative enforcement tools are also unique. The EAR places legal responsibility on persons who have information, authority or functions relevant to carrying out transactions subject to the EAR. These persons may include exporters, freight forwarders, carriers, consignees, and other participants in an export transaction. The EAR applies not only to parties in the United States, but also to persons in foreign countries who are involved in transactions subject to the EAR. And with the President’s Export Control Reform Initiative in full swing, our responsibilities are significantly increasing with the transfer of tens of thousands of military parts and components from the International Trafficking in Arms Regulations, or ITAR, to the EAR.

 

BIS pursues EAR violators, both domestically and abroad, and subjects them to both criminal and administrative fines and penalties. Under the International Emergency Economic Powers Act (IEEPA), criminal penalties can reach 20 years imprisonment and $1 million per violation. Administrative monetary penalties can reach $250,000 or twice the value of the transaction, whichever is greater, and a denial of export privileges.

 

Finally, no picture is complete without reference to the Office of Antiboycott Compliance (OAC). OAC carries out its mandate through a threefold approach: monitoring boycott requests received by U.S. businesses, bringing enforcement actions when necessary, and guiding U.S. businesses on the application of the EAR to particular transactions. In addition to these traditional compliance tools, OAC goes to the source to eliminate boycott requests at their origin. By working with its government partners in the Office of the U.S. Trade Representative and at the Department of State, OAC has met with the ministries of boycotting countries issuing the most boycott-related requests. By meeting with these governments and pointing out the barrier to trade that boycott requests impose, OAC often is able to remove prohibited language, enabling U.S. businesses to compete on an equal footing in this region of the world.

 

Vital Role of Industry

 

Industry IS the first line of defense. Industry reports of suspicious transactions have led to the identification and disruption of some of the most sophisticated proliferation networks. Our special agents will tell you that some of our best cases start from industry sources. Without the cooperation of industry, these bad-actors would have continued to operate unabated. I strongly encourage you to report suspicious transactions through our website or by contacting the closest Office of Export Enforcement (OEE) field office.

 

Last year, I discussed with you our plans to expand outreach to companies involved with the transfer of munitions items to the CCL. Since the last time I spoke to you here, OEE has conducted over 1,500 outreaches and tailored our outreach materials to align with the new 600 Series requirements. Your knowledge and compliance with the EAR establishes a built-in warning system for Export Enforcement to be aware of suspicious actors.

 

Coupled with this general outreach, Export Enforcement has expanded its Guardian outreach program to industry over the past year, where we alert companies of suspicious parties that may be seeking to obtain your items. We fully appreciate the reputational risk associated with your items being involved in illicit activities, and this advance warning system is meant to help you identify otherwise unforeseen risks in potential transactions.

 

One of the new areas of focus in this regard relates to cyber-intrusions and data exfiltration that result in your export controlled data ending up overseas.

 

To expand further, it is becoming almost a daily occurrence to read about a cyber intrusion or attack. President Obama recently stated that "[T]he Cyber threat is one of the most serious economic and national security challenges we face as a nation. America's economic prosperity in the 21st century will depend on cyber security." FBI Director James Comey testified before Congress that "[t]he risk of cyberattacks is likely to exceed the danger posed by al-Qaeda and other terrorist networks as the top national security threat to the United States and will become the dominant focus of law enforcement and intelligence services."

 

Cyber activities range from denial of service attacks on public facing websites to the compromise and theft of enormous amounts of bulk personal data. These crimes affect everyone from large U.S. Government contractors working on the Nation’s most sensitive technology to your neighborhood retail franchise. The perpetrators of cyber-crime are varied; they include independent hackers, criminal organizations as well as state actors.

 

Let me be clear, the theft of export controlled information from your computer systems as a result of foreign cyber actors is a threat to U.S. national security interests and your company’s competitive lifeblood: intellectual property.

 

The U.S Government is attempting to address this looming menace through a whole of government approach. On February 12th of this year, the National Institute of Science and Technology, a sister agency at the Department of Commerce, published the first National Cyber Security Framework, which can be found at www.nist.gov/cyberframework. Regardless of the type of business sector or an organization’s size, an entity can use the framework to determine its current level of cybersecurity, set goals for cybersecurity that are in sync with its business environment, and establish a plan for improving or maintaining its cybersecurity. This Framework also offers a methodology to protect privacy and civil liberties to help organizations incorporate those protections into a comprehensive cybersecurity program. The Framework is part of a larger initiative to combat the ever evolving cyber threat. Both the FBI and the Department of Homeland Security’s Office of Infrastructure Protection are developing programs and initiatives to help the private sector protect, identify, mitigate and report malicious cyber activity and actors.

 

Export Enforcement is working closely with our government partners in both the regulatory as well as the law enforcement community to address this challenge. We are identifying opportunities to utilize and incorporate our unique authorities and abilities into this critical effort. It is my intent to raise the level of awareness as well as to encourage the reporting of malicious cyber events by the exporting community, especially when export controlled information is compromised. Evaluate whether you need to incorporate cyber security into your company’s export compliance program as well as report cyber incidents.

 

Reporting the exfiltration of controlled technology is separate and distinct from submitting a voluntary self-disclosure (VSD). The latter involves your discovery of a violation of the EAR committed by your company. By reporting cyber thefts, you are giving us critical information that can allow BIS, working with our interagency partners, to identify these cyber-actors and bring our unique BIS tools to bear against them. I believe that cyber security, like effective export controls, can only be achieved effectively with your support and partnership.

 

Returning to VSDs, let me reinforce a message from last year: The best way to ensure you’re not violating the regulations is to have a comprehensive internal compliance program (ICP) in place. A good compliance program pays for itself: it keeps you from committing a violation in the first place; and if you do slip up, it will be a mitigating factor in an administrative penalty proceeding.

 

An ICP ensures that all employees understand the EAR and know that senior management is committed to compliance with the regulatory regime. Other key aspects of the ICP is knowing your customers, asking for end-use certificates, and effectively screening them against government lists. Let me highlight specific actions you should be taking in this regard:

 

  1. All transactions should be screened against government lists. A consolidated list is available for free at www.export.gov/ECR
  2. All items subject to an export transaction should be classified against the Commerce Control List (or CCL) and sales persons need to understand list-based, end use, and end user controls.
  3. For items subject to a license, you have an obligation to share license conditions with your customer and I highly encourage you to ensure they acknowledge their intent to comply if such acknowledgement is not otherwise required by BIS. Our end-use checks over the past year have found significant non-compliance in this area.
  4. For license exception transactions involving Strategic Trade Authorization (STA), ensure that you obtain the certification from your consignee before you ship in which the recipient acknowledges that it understands that any subsequent retransfer or reexport requires a similar consignee statement prior to such retransfer or reexport. BIS is planning to amend the STA certification contents to more clearly articulate this existing requirement.
  5. For export transactions with end use or end user concerns, it is recommended that you obtain end use certificates and double check potential licensing requirements. Self-blinding by not inquiring about end use or not doing due diligence on an end user is not an acceptable defense.
  6. Finally, for items moving through transshipment countries like Hong Kong, Singapore, and the UAE, it is important for you to understand the foreign export control requirements of those countries in addition to those of the EAR. In December 2013, BIS published a new best practice encouraging exporters to obtain a copy of their customer’s import license prior to exporting and to ensure that your customer in Hong Kong or Singapore is aware of export control requirements for the reexport, transshipment, or transit of your item through their country.

 

In particular for Hong Kong, the absence of receipt of such an import certificate from the importer should be a red flag. We have encountered many Hong Kong entities that are nothing more than secretarial firms who simply offer a forwarding service for the reexport of your item to another country. Because of the likely difference in licensing treatment for your item to Hong Kong as compared to most other countries, such as China, extra due diligence is warranted. Foreign shell companies establishing businesses in transshipment zones, even for legitimate purposes such as preferential tax treatment, can result in the diversion of your items and a violation of the EAR. Once again, you need to perform due diligence checks on your customers.

 

Higher Wall Initiatives

 

Last year, I discussed two key organizational efforts that contribute to the higher fence paradigm: the Information Triage Unit housed in our Office of Enforcement Analysis and the Export Enforcement Coordination Center, or E2C2, housed at the Department of Homeland Security. In its first year of full operations, the ITU reviewed almost 700 license applications, producing more than 1,000 reports on foreign parties to such license applications. It is safe to say that when the ITU gets involved with licenses for the most sensitive transactions, the U.S. Government’s ability to evaluate the bona fides of the foreign parties is significantly improved, thereby facilitating the processing of these license applications as well as securing the integrity of our export control system.

 

The E2C2 has been similarly effective in bringing better coordination of export enforcement investigations. Deconfliction involves law enforcement agencies exchanging information about new cases to determine if any other U.S. Government agency already has an investigation related to the same matter or possesses information that will aid in the investigation. The deconfliction process is enhancing case work and interagency collaboration, while ensuring that in the rare occasion an active investigation was already under way and unknown to the requesting agency, both agencies coordinate with one another.

 

As stated by Under Secretary Hirschhorn, in December 2013, we significantly upgraded our end-use check authorities by strengthening the Unverified List or UVL, further enhancing our higher walls initiative. Previously, when BIS was unable to confirm the bona fides of a foreign party during an end-use check, we could designate persons on the UVL, thereby creating a red flag for subsequent export transactions. However, the public found the red flag confusing, with no clear guidance as to how to overcome it other than by applying for a license.

 

Accordingly, we have amended the UVL to instruct exporters how to address UVL-designated parties. For transactions normally subject to a license exception, where a UVL party is involved, the exporter must seek a license from BIS. For all other transactions not subject to a license requirement, the exporter must obtain a statement from the UVL party certifying compliance with the EAR and agreeing to host an end-use check. That will assist BIS to determine the bona fides of the party.

 

We are also continuing to work closely with our colleagues at the Directorate of Defense Trade Controls to coordinate end-use checks where EAR items, such as those under the 600 Series, are collocated with ITAR items. This will avoid duplication of resources and allow the U.S. Government to obtain a more fulsome picture of the activities of foreign parties involved with U.S. exports.

 

ENFORCEMENT CASES

 

Some recent case successes demonstrate the vigor with which we use our BIS criminal and civil authorities to secure U.S. trade. Since our conference here last year, we have had some very exciting cases across a spectrum of issues and destinations. Let me tell you about just a few of them.

 

Our biggest civil penalty in the past year, in fact the biggest ever, was levied against Weatherford International Ltd. in Houston, Texas, and four of its subsidiaries who agreed to pay a combined $100 million for export control violations to Iran, Syria, Cuba, and other countries. A $50 million civil penalty was imposed for the export of oil and gas equipment to Iran, Syria, and Cuba in violation of the EAR and the Iranian Transactions and Sanctions Regulations (ITSR). BIS also alleged that Weatherford exported items controlled for nuclear non-nonproliferation reasons to Venezuela and Mexico. The Department of Justice imposed a $48 million monetary penalty on Weatherford International Ltd. pursuant to a deferred prosecution agreement and also imposed $2 million in criminal fines pursuant to guilty pleas by two of Weatherford’s subsidiaries. Weatherford agreed, as part of the settlement agreement, to hire an unaffiliated third-party expert in U.S. export control laws to audit its compliance with respect to all exports or re-exports to Cuba, Iran, North Korea, Sudan, and Syria for calendar years 2012, 2013, and 2014. The Weatherford investigation was conducted by OEE at BIS, working closely with Treasury’s Office of Foreign Assets Control and the Department of Justice.

 

As a result of a joint investigation by OEE and Immigration and Customs Enforcement (ICE) at the Department of Homeland Security, Ming Suan Zhang, a citizen of the People’s Republic of China, was sentenced to 57 months incarceration for violating the International Emergency Economic Powers Act by attempting to export high-grade carbon fiber from the United States to China. This material can be used in the production of such items as ballistic missiles, unmanned aerial vehicles, and nuclear centrifuges. In this particular case, Zhang attempted to negotiate a long-term contract for massive quantities of the controlled commodity, which he asserted was to be provided to a Chinese company involved in the development of a military fighter aircraft.

 

Another joint investigation by OEE, FBI, ICE, and the Defense Criminal Investigative Service resulted in SEYED AMIN GHORASHI SARVESTANI, an Iranian national, being sentenced to 30 months in prison for conspiring to export goods, including satellite technology, and hardware from the United States to Iran. GHORASHI conspired to acquire satellite technology and hardware from a supplier based in the United States for shipment to Iran. To conceal the true destination of the goods from the U.S. supplier, GHORASHI and his co-conspirators arranged for the items to be shipped first to the United Arab Emirates and subsequently shipped to Iran.

 

As a result of an investigation by OEE, in April 2013, Computerlinks FZCO in the United Arab Emirates was fined $2.8 million by BIS, the statutory maximum penalty. Computerlinks was involved in the transfer to Syria of devices from the U.S. company Blue Coat designed to monitor and control Internet traffic. Under the distribution agreement with Blue Coat, Computerlinks FZCO was obligated to "comply with all export and import laws, rules, policies, procedures, restrictions, and regulations of the Department of Commerce." Computerlinks knew that the items were destined for end users in Syria. However, when placing these orders with Blue Coat, Computerlinks falsely stated that the end users for the items were the Iraq Ministry of Telecom and the Afghan Internet service provider Liwalnet.

 

Last year I also told you about Timoth Gormley, the export control officer at Amplifier Research who was sentenced to 42 months in prison, admitting that he had: altered invoices and shipping documents to conceal the correct classification of amplifiers to be exported so that they would be shipped without the required licenses; listed false license numbers on export paperwork for defense article shipments; and lied to fellow employees about the status and existence of export licenses.  On September 26, 2013, BIS denied Mr. Gormley’s export privileges for 10 years based on his conviction. And on January 17, 2014, BIS reached a settlement with Amplifier Research for a $500,000 penalty. However, BIS suspended the civil penalty in its entirety because of the VSD filed by Amplifier Research in 2011 detailing the actions of Gormley and its substantial cooperation in the course of this investigation. The settlement also mandates that Amplifier Research hire an expert outside of the company to conduct an audit of its compliance with export control laws, including recordkeeping. By filing the VSD, Amplifier Research avoided criminal charges (against the company itself), and the suspended fine will be waived at the end of the penalty period provided all commitments are met.

 

These are just a few of the cases OEE agents investigated in the last year. In fiscal year 2013, BIS investigations led to the criminal convictions of 52 individuals and businesses for export violations with penalties of over $2.6 million in criminal fines, more than $18 million in forfeitures, and more than 881 months of imprisonment. In addition, we completed 63 administrative export cases, resulting in $6.1 million in civil penalties. Export Enforcement also supported the addition of 68 new parties onto the BIS Entity List. Fiscal year 2014 has started off strong with the Weatherford case, with the BIS responsible for a $50 million civil penalty.

 

CONCLUSION

 

To say that I am proud of my organization is an understatement. Given our resources compared with the breadth of items we regulate and the controls we enforce, our successes demonstrate that Export Enforcement clearly "punches well above its weight class." However, our success is dependent upon the efforts of industry, our interagency colleagues, and international partners.

 

Let me reiterate that our goals in this regard should be complementary: safeguarding your products and intellectual property from diversion is good for your company and U.S. national security. A key piece of this involves implementation of a good ICP and promptly informing your local OEE field office of suspicious inquiries or activities involving the illicit export of controlled items, violations committed by your company or its employees in the form of a VSD; or alerting the U.S. Government of illicit acquisitions of controlled technology, such as through cyberintrusion, in order for Export Enforcement, along with our interagency partners, to take action against these nefarious actors.

 

I will now turn the podium over to our new Deputy Assistant Secretary for Export Enforcement, Richard Majauskas, who will moderate the Enforcement panel. Our panel is composed of Doug Hassebrock, the Director of the Office of Export Enforcement; Kevin Kurland, Director of the Office of Enforcement Analysis; Cathleen Ryan, Acting Director of the Office of Antiboycott Compliance; and Anthony Levey, the Special Agent in Charge of our Los Angeles Field Office. Thank you for your attention and participation in this conference.

 

Examples of Boycott Requests

Details

Following are recent examples of boycott requests that have been reported to the Office of Antiboycott Compliance. These examples are illustrative and not exhaustive. Companies should call our advice line (202) 482-2381 with questions concerning these or any request to comply with restrictive trade practices or boycotts.

BAHRAIN

Prohibited Boycott Condition in a Purchase Order:

"In the case of overseas suppliers, this order is placed subject to the suppliers being not on the Israel boycott list published by the central Arab League."

Reportable boycott condition in an importer’s purchase order:

"Goods of Israeli origin not acceptable."

Reportable boycott condition in a letter of credit:

"A signed statement from the shipping company, or its agent, stating the name, flag and nationality of the carrying vessel and confirming ... that it is permitted to enter Arab ports."

Prohibited Boycott Condition in a Contract

"Israeli Clause: The Seller shall not supply goods or materials which have been manufactured or processed in Israel nor shall the services of any Israeli organization be used in handling or transporting the goods or materials."

Prohibited Condition in a Contract

"The Contractor shall comply in all respects with the requirements of the laws of the State of Bahrain relating to the boycott of Israel. Goods manufactured by companies blacklisted by the Arab Boycott of Israel Office may not be imported into the State of Bahrain and must not be supplied against this Contract. For information concerning the Boycott List, the Contractor can approach the nearest Arab Consulate."

Prohibited Condition in a Letter of Credit

"Buyer shall in no way contravene the regulations issued by Bahrain Government and or Israel Boycott Office. Buyer shall not nominate a vessel blacklisted by the said office."

BANGLADESH

Prohibited Boycott Condition in instructions to bidders on a contract

"No produced commodity shall be eligible for ... financing if such commodity contains any component or components which were imported into the producing country from Israel and countries not eligible to trade with ... the People’s Republic of Bangladesh. The equipment and materials must not be of Israeli origin. The supplier/bidder who are not black listed by Arab boycott of Israel will be allowed to participate in this bid."

IRAQ

Prohibited Boycott Condition in a Questionnaire

"1. Do you have or ever have had a branch or main company, factory or assembly plant in Israel or have sold to an Israeli?"

"2. Do you have or ever have had general agencies or offices in Israel for your Middle Eastern or international operations?"

"3. Have you ever granted the right of using your name, trademarks royalty, patent, copyright or that of any of your subsidiaries to Israeli persons or firms?"

"4. Do you participate or ever participated or owned shares in an Israeli firm or business?"

"5. Do you render now or ever have rendered any consultative service or technical assistance to any Israeli firm or business?"

"6. Do you represent now or ever have represented any Israeli firm or business or abroad?"

"7. What companies in whose capital are your shareholders?" Please state the name and nationality of each company and the percentage of share of their total capital."

"8. What companies or shareholders in your capital? Please state the name and nationality of each company and the percentage of share of their total capital."

"N.B. The above questions should be answered on behalf of the company itself and all of its branch companies, if any."

Prohibited Condition in a Contract

"The Contractor shall, throughout the continuance of the Contract, abide by and comply in all respects with the rules and instructions issued from time to time by the Israel Boycott Office in Iraq."

Prohibited Condition in a Trademark Application

"Requirement for the registration of pharmaceutical companies:

  • Certification letter regarding the boycott of Israel (i.e., do not comprise any parts, raw materials, labor or capital of Israeli origin)."

"Requirement for the Registration of Medical Appliances, Disposables producing companies, and Laboratory diagnostic kit manufacturers:

  • Certification letter regarding boycott of Israel."

Prohibited Condition in a Purchase Order

"Supplies of our purchase order should never be consigned or shipped by steamers included on Israel Boycott list."

Prohibited Condition in a Contract

"The bill of lading shall bear a note that the vessel delivering the cargo is not on the "Black List" and does not call at Israeli ports."

KUWAIT

Prohibited Boycott Condition in a Custom’s document

"[The vessel entry document asks the ship’s captain to certify that,] no goods, dry cargo, or personal effects listed on the document of Israeli origin or manufactured by a blacklisted firm or company are to be landed as they will be subject to confiscation."

Prohibited Boycott Condition in Letter of Credit

"We hereby certify that the beneficiaries, manufacturers, exporters and transferees of this credit are neither blacklisted nor have any connection with Israel, and that the terms and conditions of this credit in no way contravenes the law pertaining to the boycott of Israel and the decisions issued by the Israel Boycott Office."

Reportable Boycott Condition in Letter of Credit:

"Importation of goods from Israel is strictly prohibited by Kuwait import regulations; therefore, certificate of origin covering goods originating in Israel is not acceptable."

Prohibited Condition in a Purchase Order

“All shipments under this order shall comply with Israel Boycott Office Rules and Regulations.”

Prohibited Condition in a Purchase Order

“Goods must not be shipped on vessels/carriers included in the Israeli Boycott list.”

Prohibited Condition in a Contract

“The vendor (as person or organization) or his representatives should not be an Israeli national. So the vendor should not be owned, managed, or represented by any companies that carry an Israeli nationality and there should not be any sub-contractors that carry Israeli nationality.

The vendor should not involve any person or representatives that carries the Israeli nationality in importing or exporting the software or hardware mentioned in this contract and its appendices and the vendor should provide all documents that support the above information.”

LEBANON

Prohibited Boycott Condition in Power of Attorney from Lebanese firm

A Lebanese firm sent a power of attorney affidavit to appoint a local agent in Iraq to a U.S. firm. The affidavit asked that U.S. firm answer a series of questions concerning the Arab boycott. These questions included whether the firm had a plant in Israel, has sold to Israel, had offices in Israel, owned shares in an Israeli firm, had provided services for an Israeli firm, or had granted any trademarks, copy or patent rights to Israeli persons of firms.

Reportable Boycott Condition in letter of credit:

"Certificate issued by the shipping company or its agent testifying that the carrying vessel is allowed to enter the Lebanese port..."

LIBYA

Prohibited Condition in a Letter of Credit

"Original commercial invoice signed and certified by the beneficiary that the goods supplied are not manufactured by either a company or one of its subsidiary branches who are blacklisted by the Arab boycott of Israel or in which Israeli capital is invested."

Prohibited Condition in a Contract

"The Second Party shall observe the provisions of the Law for Boycott of Israel or any other State which the provisions for Boycott are applicable and shall ensure such observation from any other sub-contractor. In case of contravening this condition, the First Party shall have the right to cancel the contract and confiscate the deposit by mere notice by registered letter without prejudice to his right of compensation."

Prohibited Condition in a Contract

"Boycott Provisions: The Contractor shall observe and comply with all the provisions and decisions concerning the boycott to Israel or any other country the same is valid. The Contractor shall secure the respect of such boycott by any other party he might have subcontracted with him."

Prohibited Condition in a Certificate of Origin

"The goods being exported are of national origin of the producing country and the goods do not contain any components of Israeli origin, whatever the proportion of such component is. We, the exporter, declare that the company producing the respective commodity is not an affiliate to or mother of any company that appears on the Israeli boycott blacklist and also, we the exporter, have no direct or indirect connection with Israel and shall act in compliance with the principles and regulations of the Arab boycott of Israel."

OMAN

Prohibited Condition in a Tender

"The supplier must comply with the Israel boycott conditions."

Prohibited Condition in a Tender

"All goods to be supplied as a part of this order must comply with the Israel boycott rules stipulated by the Royal Oman Police."

Prohibited Condition in purchase order

"The vendor must ensure that all products supplied do not contravene the regulations in force with regard to the boycott of Israel."

Prohibited Condition in a Contract

"The certificate of origin must contain the following statement: ‘We certify that the goods are neither of Israeli origin no do they contain any Israeli materials."

Prohibited Condition in a Purchase Order

"Commercial invoice, duly signed by shipper covering value of the goods and containing statement ‘The goods are neither Israeli origin, nor do they contain any Israeli material."

Prohibited Condition in a Letter of Credit

"Certificate issued by the air company/agent that it is not blacklisted by the Arab League boycott committee."

QATAR

Prohibited Boycott Conditions in a Contract

"The (tenders) committee may also exclude any bid that does not abide by the provisions of the commercial and economic laws and the provisions of the law of boycott of Israel applicable in the state."

"[A certificate required stating] that the items have not been manufactured in Israel and that any of the components thereof have not been manufactured in Israel."

Prohibited Condition in a Contract

"Certificate issued by the manufacturer or exporter stating that the goods are not of Israeli origin, have not been exported from Israel, and do not contain any Israeli materials."

Prohibited Boycott Condition in a Purchase Order

"Goods/equipment subject to Israeli Boycott terms, must not be quoted."

Prohibited Boycott Condition in a Letter of Credit

"Under no circumstances may a bank listed in the Arab Israeli Boycott Black List be permitted to negotiate this Documentary Credit."

SAUDI ARABIA

Prohibited Boycott Condition in a Contract

"Vendor shall comply with the Israel boycott laws in performing his contractual obligations."

Prohibited Boycott Condition in a Contract

"The seller warrants that no supplier or manufacturer or any part of the product is precluded from doing business with Saudi Arabia under the terms of the Arab boycott regulations."

Reportable Boycott Condition in list of documents required by a freight forwarder

"Certificate from insurance company stating that they are not blacklisted."

Prohibited Boycott Condition in a Purchase Order

"Following statement should appear at foot of invoice: ‘We hereby certify that these goods are not of Israeli Origin nor do they contain materials of Israeli origin and they are manufactured by….’"

Prohibited Boycott Condition in a Contract

"The Contractor whether an Establishment or Company, National or Foreign, shall not import or enter into Agreement with any Foreign Company or Establishment as Sub-Contractor particularly if such Company did not have previous dealing in the Kingdom of Saudi Arabia, except after contacting the Regional office of the Arab Boycott to Israel, or one of the two Sub-Offices of the Ministry of Commerce at Jeddah or Dammam, to ensure of the status of the said Foreign Company, in light of the Rules and orders issued by the office of the Arab Boycott of Israel."

Prohibited Boycott Condition in a Contract

"Israeli Boycott: The Contractor shall apply all rules of the Israeli Boycott."

Prohibited Boycott Condition in a Boycott Questionnaire

"Company/Corporation Background:

  1. Has the company/corporation engaged in or conducted business in Israel?
  1. Does the company/corporation or its subsidiary have an office, facility or business operation in Israel?"

Prohibited Boycott Condition in a Tender

"The quotation should not include any material manufactured or exported by Boycotted companies as per the Kingdom of Saudi Arabia regulations."

Prohibited Boycott Condition in a Tender

"Eligible Bidders: The bidder/supplier who are not subject to the Boycott regulations of the League of Arab States or of the Kingdom of Saudi Arabia will only be considered."

SYRIA

Prohibited Boycott Conditions (requests for information) in a trademark application form

"Do you or any of your subsidiaries now or ever had a branch of main company factory or assembly plant in Israel? .... do you have or any of your subsidiaries now or ever had general agencies or offices in Israel for your middle eastern or international operations? .... what companies are you shareholders in their capital? State the name of each company and the percentage of share to their total capital---and the nationality of each one? ....

Prohibited Condition in a Tender

"Offeror must not be included by the provisions of Arab Boycott of Israel."

Prohibited Condition in a Tender

"Declaration showing that the bidder doesn’t own any factory, establishment, or a branch office in Israel, neither he is a partner in any establishment or organization, nor a party in any contract for manufacturing, assembling, licensing or technical assistance with any organization or establishment in Israel and he should not practice such activity in Israel whether personally or through any mediator. He should not participate in any way in supporting Israel or its military efforts."

Prohibited Condition in a Purchase Order

"A declaration that the goods contracted upon have no Israeli origin and that no Israeli raw materials is used in its producing manufacturing or preparing of the goods."

UNITED ARAB EMIRATES

Prohibited Boycott Condition in a Contract

"Tenderer shall verify on his own responsibility the laws and regulations in Abu Dhabi which apply to the performance of the services, including the boycott of Israel."

Prohibited Boycott Condition in an invitation to bid

"Documents to accompany tenders [include] the declaration and Israel boycott certificate. It states the tenderer must accompany his offer with the following, written signed declaration. We declare that we are a company which is not owned by any companies that have violated the approved rules of the boycott and that we do not own or participate in companies that are in violation of the approved rules of the boycott. Further, we do not have, nor does any of the companies that are considered to be a parent company or a branch of ours, any dealings with any Israeli party, whether directly or indirectly. Furthermore, a certificate issued by the Israel boycott office in UAE confirming that neither the supplier nor the manufacturer are blacklisted, should also be accompanied."

Prohibited Boycott Condition in a Tender

"Declaration and Israel Boycott Certificate: We ___________ (Name of Company) on behalf of all branches, declare that we are a company which is not owned by any companies that have violated the approved rules of the Boycott and that we do not own or participate in companies that are in violation of the approved rules of the Boycott.

Further, we do not have nor does any of the companies that are considered to be a parent company or branch of ours, any dealings with any Israeli Party whether directly or indirectly.

Furthermore, a Certificate issued by the Israel Boycott office in the UAE, confirming that neither the supplier nor the manufacturer are blacklisted, should also be accompanied."

Prohibited Boycott Condition in a Tender

"Certificate of Origin: The Contractor shall undertake to furnish the Purchaser with a Certificate of Origin, to accompany each invoice. This shall certify that the equipment is not of Israeli origin."

Prohibited Boycott Condition in a Tender

"Boycott of Israel: Seller and his assignees shall abide by and strictly observe all regulations and instructions in force from time to time by the League of Arab States regarding the Boycott of Israel especially those related to blacklisted companies, ships and persons.

No materials shall be procured which has been wholly or partially manufactured by the blacklisted company."

Prohibited Boycott Condition in a Letter of Credit

"On no conditions may a bank listed on the Arab Israeli Boycott list be permitted to negotiate this credit."

Prohibited Boycott Condition in a Letter of Credit Application

"We certify that neither the beneficiaries nor the suppliers of goods and services are subject to boycott."

Prohibited Boycott Condition in a Letter of Credit Application

"We also certify that to the best of our knowledge the beneficiaries have no connection with Israel and that the terms of this credit in no way contravene the regulations issued by the Israel Boycott Office or local government regulations."

Prohibited Boycott Condition in a Contract

"Buyer shall adhere to and implement the Arab Embargo and Boycott Regulations issued and revised from tine to time by the Government of the United Arab Emirates."

Prohibited Boycott Condition in a Tender

"Tenders shall include the following statement in their tenders: ‘We certify that neither our principle manufacturers Messrs: ______________ nor any of the components’ manufacturers, is blacklisted by the Arab Boycott Office."

"NB: the above statement should be completed with the name of your manufacturer."

Prohibited Boycott Condition in a Contract

"Boycott of Israel: The Contractor shall observe and abide by all rules and regulations concerning the boycotting of Israel in Dubai and the UAE."

Prohibited Boycott Condition in a Tender

"Quotation should not include items manufactured by firms who are under Israeli Boycott list."

Prohibited Boycott Condition in a Purchase Order

"Applicable Laws/Boycott of Israel: All relevant laws, rules and regulation of all duly constituted government authorities of Abu Dhabi and the UAE, including laws with respect to boycott of Israel shall apply in the performance of this purchase order."

Prohibited Boycott Condition in a Contract

"He shall not be boycotted whether in his personal capacity or as a company or establishment because of the violation of the Israeli Boycott Provisions in respect of establishments and companies operating abroad or contracts concluded through correspondence."

Prohibited Boycott Condition in a Tender

"Engineer shall at its own expense and at all times comply with all laws, rules, regulations or requirements of the Government of Abu Dhabi and the UAE and any bodies having jurisdiction over the site and the access thereto and there from including, but not limited to, the Boycott of Israel Regulations."

YEMEN

Prohibited Boycott Condition in a repair order

"Invoices must be endorsed with a certificate of origin that goods are not of Israeli origin and do not contain any Israeli material and are not shipped from any Israeli port."

 

Articles Commenting to the SBA on Enforcement and Compliance Matters

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Right to Comment to the Small Business Administration

Small entities may comment about BIS's enforcement and compliance process to the Office of the National Ombudsman, Small Business Administration, via the internet (www.sba.gov/ombudsman), e-mail (This email address is being protected from spambots. You need JavaScript enabled to view it. ), mail (Small Business Administration, Office of the National Ombudsman, 409 Third St., SW, Washington, D.C. 20416), or by calling 1-888-REG-FAIR.

Non-Retaliation Policy

The Office of the National Ombudsman of the Small Business Administration (SBA) has asked all Federal agencies to make clear that, if a small business requests Ombudsman assistance on a matter or otherwise questions or complains about a Federal agency action, the agency will not retaliate in response.

The Department of Commerce is committed to fair regulatory practices, supports the right of the regulated community to raise concerns about regulatory enforcement actions without the fear of retaliation, and will investigate any allegations of retaliation and take appropriate action. We take such concerns and allegations very seriously and strive to avoid even the appearance of impropriety.

However, while the Department will investigate any allegation of retaliation, a complaint to the Ombudsman will not stop or delay investigations and legal or administrative proceedings as part of the Departments ongoing responsibility to enforce relevant Federal laws.

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