Part 760 - Restrictive Trade Practices or Boycotts

PART 760
RESTRICTIVE TRADE PRACTICES OR BOYCOTTS
Sec.

Page

760.1

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

760.2

Prohibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

760.3

Exceptions to prohibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

760.4

Evasion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

760.5

Reporting requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

INTERPRETATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 1
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 2
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 3
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 4
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 5
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 6
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 7
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 8
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 9
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 10
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 11
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 12
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 13
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 14
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 15
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUPPLEMENT NO. 16

Export Administration Regulations

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includes:

§760.1

(i) The government of the United States or any
department, agency, or commission thereof;

DEFINITIONS
In this part, references to the EAR are references
to 15 CFR chapter VII, subchapter C.
(a) Definition of "Person"
For purposes of this part, the term "person"
means any individual, or any association or
organization, public or private, which is
organized, permanently established, resident, or
registered to do business, in the United States or
any foreign country. This definition of "person"
includes both the singular and plural and, in
addition, includes:
(1) Any partnership, corporation, company,
branch, or other form of association or
organization, whether organized for profit or
non-profit purposes;
(2) Any government, or any department, agency,
or commission of any government;
(3) Any trade association, chamber of commerce,
or labor union;

(ii) The government of any State of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, any territory or
possession of the United States, or any
subdivision, department, agency, or commission
of any such government;
(iii) Any partnership, corporation, company,
association, or other entity organized under the
laws of paragraph (b)(1)(i) or (ii) of this section;
(iv)
Any foreign concern's subsidiary,
partnership, affiliate, branch, office, or other
permanent establishment in any state of the
United States, the District of Columbia, the
Commonwealth of Puerto Rico, or any territory or
possession of the United States; and
(v) Any domestic concern's foreign subsidiary,
partnership, affiliate, branch, office, or other
permanent foreign establishment which is
controlled in fact by such domestic concern. (See
paragraph (c) of this section on "Definition of
'Controlled in Fact'.")

(4) Any charitable or fraternal organization; and
(5) Any other association or organization not
specifically listed in paragraphs (a)(1) through (4)
of this section.
(b) Definition of "United States Person"
(1) This part applies to United States persons.
For purposes of this part, the term "United States
person" means any person who is a United States
resident or national, including individuals,
domestic concerns, and "controlled in fact"
foreign subsidiaries, affiliates, or other permanent
foreign establishments of domestic concerns.
This definition of "United States person" includes
both the singular and plural and, in addition,
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(2) The term "domestic concern" means any
partnership, corporation, company, association, or
other entity of, or organized under the laws of,
any jurisdiction named in paragraph (b)(1)(i) or
(ii) of this section, or any permanent domestic
establishment of a foreign concern.
(3) The term "foreign concern" means any
partnership, corporation, company, association, or
other entity of, or organized under the laws of,
any jurisdiction other than those named in
paragraph (b)(1)(i) or (ii) of this section.
(4) The term "United States person" does not
include an individual United States national who
is resident outside the United States and who is
either employed permanently or temporarily by a
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non-United States person or assigned to work as
an employee for, and under the direction and
control of, a non-United States person.

foreign country and is employed by a foreign
corporation, makes occasional visits to the United
States, for purposes of exploring business
opportunities.

EXAMPLES OF "UNITED STATES PERSON"
The following examples are intended to give
guidance in determining whether a person is a
"United States person." They are illustrative, not
comprehensive.
(i) U.S. bank A has a branch office in foreign
country P. Such branch office is a United States
person, because it is a permanent foreign
establishment of a domestic concern.
(ii)
Ten foreign nationals establish a
manufacturing plant, A, in the United States,
incorporating the plant under New York law.
A is a United States person, because it is a
corporation organized under the laws of one of
the states of the United States.
(iii) A, a foreign corporation, opens an office
in the United States for purposes of soliciting
U.S. orders. The office is not separately
incorporated.
A's U.S. office is a United States person, because
it is a permanent establishment, in the United
States, of a foreign concern.
(iv) A, a U.S. individual, owns stock in foreign
corporation B.
A is a United States person. However, A is not a
"domestic concern," because the term "domestic
concern" does not include individuals.

A is not a United States person, because he is not
a United States resident or national.
(vii) A is an association of U.S. firms
organized under the laws of Pennsylvania for the
purpose of expanding trade.
A is a United States person, because it is an
association organized under the laws of one of the
states of the United States.
(viii) At the request of country Y, A, an
individual employed by U.S. company B, is
transferred to company C as an employee. C is a
foreign company owned and controlled by
country Y. A, a U.S. national who will reside in
Y, has agreed to the transfer provided he is able
to retain his insurance, pension, and other
benefits. Accordingly, company B has agreed to
keep A as an employee in order to protect his
employee benefits, and company C has agreed to
pay for A's salary. At all times while he works
for C, A will be under C's direction and control.
A is not a United States person while under C's
direction and control, because he will be resident
outside the United States and assigned as an
employee to a non-United States person. The
arrangement designed to protect A's insurance,
pension, and other benefits does not destroy his
status as an employee of C so long as he is under
the direction and control of C.

(v) A, a foreign national resident in the United
States, is employed by B, a foreign corporation.

(ix) A, a U.S. citizen, has resided in Europe for
three years, where he is a self-employed
consultant for United States and foreign
companies in the communications industry.

A is a United States person, because he is resident
in the United States.

A is a United States person, because he is a U.S.
national and because he is not a resident outside

(vi) A, a foreign national, who is resident in a

the United States who is employed by other than

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a United States person.

appoint the chief operating officer of the foreign
subsidiary or affiliate.

(c) Definition of "Controlled in Fact"
(1) This part applies to any domestic concern's
foreign subsidiary, partnership, affiliate, branch,
office, or other permanent foreign establishment
which is "controlled in fact" by such domestic
concern. "Control in fact" consists of the
authority or ability of a domestic concern to
establish the general policies or to control
day-to-day operations of its foreign subsidiary,
partnership, affiliate, branch, office, or other
permanent foreign establishment.
(2) A foreign subsidiary or affiliate of a domestic
concern will be presumed to be controlled in fact
by that domestic concern, subject to rebuttal by
competent evidence, when:
(i) The domestic concern beneficially owns or
controls (whether directly or indirectly) more than
50 percent of the outstanding voting securities of
the foreign subsidiary or affiliate;
(ii) The domestic concern beneficially owns or
controls (whether directly or indirectly) 25
percent or more of the voting securities of the
foreign subsidiary or affiliate, if no other person
owns or controls (whether directly or indirectly)
an equal or larger percentage;
(iii) The foreign subsidiary or affiliate is
operated by the domestic concern pursuant to the
provisions of an exclusive management contract;
(iv) A majority of the members of the board of
directors of the foreign subsidiary or affiliate are
also members of the comparable governing body
of the domestic concern;
(v) The domestic concern has authority to
appoint the majority of the members of the board
of directors of the foreign subsidiary or affiliate;
or
(vi) The domestic concern has authority to
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(3) A brokerage firm or other person which holds
simple record ownership of securities for the
convenience of clients will not be deemed to
control the securities.
(4) A domestic concern which owns, directly or
indirectly, securities that are immediately
convertible at the option of the holder or owner
into voting securities is presumed to own or
control those voting securities.
(5) A domestic concern's foreign branch office or
other unincorporated permanent foreign
establishment is deemed to be controlled in fact
by such domestic concern under all
circumstances.
EXAMPLES OF "CONTROLLED IN FACT"
The following examples are intended to give
guidance in determining the circumstances in
which a foreign subsidiary, affiliate, or other
permanent foreign establishment of a domestic
concern is "controlled in fact." They are
illustrative, not comprehensive.
(i) Company A is incorporated in a foreign
country. Fifty-one percent of the voting stock of
A is owned by U.S. company B.
A is presumed to be controlled in fact by B. This
presumption may be rebutted by competent
evidence showing that control does not, in fact,
lie with B.
(ii) Company A is incorporated in a foreign
country. Ten percent of the voting stock of A is
owned by U.S. company B. A has an exclusive
management contract with B pursuant to which A
is operated by B.
As long as such contract is in effect, A is
presumed to be controlled in fact by B. This
presumption may be rebutted by competent
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evidence showing that control does not, in fact,
lie with B.
(iii) Company A is incorporated in a foreign
country. Ten percent of the voting stock of A is
owned by U.S. company B. A has 10 persons on
its board of directors. Six of those persons are
also members of the board of directors of U.S.
company B.
A is presumed to be controlled in fact by B. This
presumption may be rebutted by competent
evidence showing that control does not, in fact,
lie with B.
(iv) Company A is incorporated in a foreign
country. Thirty percent of the voting securities of
A is owned by U.S. company B and no other
person owns or controls an equal or larger share.
A is presumed to be controlled in fact by B. This
presumption may be rebutted by competent
evidence showing that control does not, in fact,
lie with B.
(v) Company A is incorporated in a foreign
country. In A's articles of incorporation, U.S.
company B has been given authority to appoint
A's board of directors.
A is presumed to be controlled in fact by B. This
presumption may be rebutted by competent
evidence showing that control does not, in fact,
lie with B.
(vi) Company A is a joint venture established
in a foreign country, with equal participation by
U.S. company B and foreign company C. U.S.
Company B has authority to appoint A's chief
operating officer.
A is presumed to be controlled in fact by B. This
presumption may be rebutted by competent
evidence showing that control does not, in fact,
lie with B.
(vii)

Same as (vi), except that B has no

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authority to appoint A's chief operating officer.
B is not presumed to control A, absent other facts
giving rise to a presumption of control.
(viii) Company A is incorporated in a foreign
country. U.S. companies B, C, and D each own
20 percent of A's voting securities and regularly
cast their votes in concert.
A is presumed to be controlled in fact by B, C,
and D, because these companies are acting in
concert to control A.
(ix) U.S. bank B located in the United States
has a branch office, A, in a foreign country. A is
not separately incorporated.
A is deemed to be controlled in fact by B, because
A is a branch
office of a domestic concern.
(x) Company A is incorporated in a foreign
country. Fifty-one percent of the voting stock of
A is owned by company B, which is incorporated
in another foreign country. Fifty-one percent of
the voting stock of B is owned by C, a U.S.
company.
Both A and B are presumed to be controlled in
fact by C. The presumption of C's control over B
may be rebutted by competent evidence showing
that control over B does not, in fact, lie with C.
The presumption of B's control over A (and thus
C's control over A) may be rebutted by competent
evidence showing that control over A does not, in
fact, lie with B.
(xi) B, a U.S. individual, owns 51 percent of
the voting securities of A, a manufacturing
company incorporated and located in a foreign
country.

A is not "controlled in fact" under this part,
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because it is not controlled by a "domestic
concern."

mean that the underlying or related activity is in
United States commerce.

(d) Definition of "Activities in the Interstate or
Foreign Commerce of the United States"

(4) Hence, the action of a United States bank
located in the United States in providing
financing from the United States for a foreign
transaction that is not in United States commerce
is nonetheless itself in United States commerce.
However, the fact that the financing is in United
States commerce does not, in and of itself, make
the underlying foreign transaction an activity in
United States commerce, even if the underlying
transaction involves a foreign company that is a
"United States person" within the meaning of this
part.

ACTIVITIES INVOLVING UNITED STATES
PERSONS LOCATED IN THE UNITED
STATES
(1) For purposes of this part, the activities of a
United States person located in the United States
are in the interstate or foreign commerce of the
United States if they involve the sale, purchase, or
transfer of goods or services (including
information) between:
(i) Two or more of the several States (including
the District of Columbia);
(ii) Any State (including the District of
Columbia) and any territory or possession of the
United States;
(iii) Two or more of the territories or
possessions of the United States; or
(iv)
A State (including the District of
Columbia), territory or possession of the United
States and any foreign country.
(2) For purposes of this part, the export of goods
or services from the United States and the import
of goods or services into the United States are
activities in United States commerce. In addition,
the action of a domestic concern in specifically
directing the activities of its controlled in fact
foreign subsidiary, affiliate, or other permanent
foreign establishment is an activity in United
States commerce.
(3) Activities of a United States person located in
the United States may be in United States
commerce even if they are part of or ancillary to
activities outside United States commerce.
However, the fact that an ancillary activity is in
United States commerce does not, in and of itself,
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(5) Similarly, the action of a United States person
located in the United States in providing
financial, accounting, legal, transportation, or
other ancillary services to its controlled in fact
foreign subsidiary, affiliate, or other permanent
foreign establishment in connection with a
foreign transaction is in United States commerce.
But the provision of such ancillary services will
not, in and of itself, bring the foreign transaction
of such subsidiary, affiliate, or permanent foreign
establishment into United States commerce.
ACTIVITIES OF CONTROLLED IN FACT
FOREIGN SUBSIDIARIES, AFFILIATES,
AND OTHER PERMANENT FOREIGN
ESTABLISHMENTS
(6) Any transaction between a controlled in fact
foreign subsidiary, affiliate, or other permanent
foreign establishment of a domestic concern and
a person located in the United States is an activity
in United States commerce.
(7) Whether a transaction between such a foreign
subsidiary, affiliate, or other permanent foreign
establishment and a person located outside the
United States is an activity in United States
commerce is governed by the following rules.
ACTIVITIES IN UNITED STATES
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COMMERCE

any other transaction with a person outside the
United States where:

(8) A transaction between a domestic concern's
controlled in fact foreign subsidiary, affiliate, or
other permanent foreign establishment and a
person outside the United States, involving goods
or services (including information but not
including ancillary services) acquired from a
person in the United States is in United States
commerce under any of the following
circumstances:
(i) If the goods or services were acquired for
the purpose of filling an order from a person
outside the United States;
(ii) If the goods or services were acquired for
incorporation into, refining into, reprocessing
into, or manufacture of another product for the
purpose of filling an order from a person outside
the United States;
(iii) If the goods or services were acquired for
the purpose of fulfilling or engaging in any other
transaction with a person outside the United
States; or
(iv) If the goods were acquired and are
ultimately used, without substantial alteration or
modification, in filling an order from, or fulfilling
or engaging in any other transaction with, a
person outside the United States (whether or not
the goods were originally acquired for that
purpose). If the goods are indistinguishable as to
origin from similar foreign-trade goods with
which they have been mingled in a stockpile or
inventory, the subsequent transaction involving
the goods is presumed to be in United States
commerce unless, at the time of filling the order,
the foreign-origin inventory on hand was
sufficient to fill the order.
(9) For purposes of this section, goods or
services are considered to be acquired for the
purpose of filling an order from or engaging in

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(i)
They are purchased by the foreign
subsidiary, affiliate, or other permanent foreign
establishment upon the receipt of an order from or
on behalf of a customer with the intention that the
goods or services are to go to the customer;
(ii) They are purchased by the foreign
subsidiary, affiliate, or other permanent foreign
establishment to meet the needs of specified
customers pursuant to understandings with those
customers, although not for immediate delivery;
or
(iii) They are purchased by the foreign
subsidiary, affiliate, or other permanent foreign
establishment based on the anticipated needs of
specified customers.
(10) If any non-ancillary part of a transaction
between a domestic concern's controlled foreign
subsidiary, affiliate, or other permanent foreign
establishment and a person outside the United
States is in United States commerce, the entire
transaction is in United States commerce. For
example, if such a foreign subsidiary is engaged
in filling an order from a non-United States
customer both with goods acquired from the
United States and with goods acquired elsewhere,
the entire transaction with that customer is in
United States commerce.
ACTIVITIES OUTSIDE
UNITED STATES COMMERCE
(11) A transaction between a domestic concern's
controlled foreign subsidiary, affiliate, or other
permanent foreign establishment and a person
outside the United States, not involving the
purchase, sale, or transfer of goods or services
(including information) to or from a person in the
United States, is not an activity in United States
commerce.

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(12) The activities of a domestic concern's
controlled foreign subsidiary, affiliate, or other
permanent foreign establishment with respect to
goods acquired from a person in the United States
are not in United States commerce where:
(i) They were acquired without reference to a
specific order from or transaction with a person
outside the United States; and
(ii) They were further manufactured,
incorporated into, refined into, or reprocessed
into another product.
(13) The activities of a domestic concern's
controlled foreign subsidiary, affiliate, or other
permanent foreign establishment with respect to
services acquired from a person in the United
States are not in United States commerce
where:
(i) They were acquired without reference to a
specific order from or transaction with a person
outside the United States; or
(ii) They are ancillary to the transaction with
the person outside the United States.
(14) For purposes of this section, services are
"ancillary services" if they are provided to a
controlled foreign subsidiary, affiliate, or other
permanent foreign establishment primarily for its
own use rather than for the use of a third person.
These typically include financial, accounting,
legal, transportation, and other services, whether
provided by a domestic concern or an unrelated
entity.
(15) Thus, the provision of the project financing
by a United States bank located in the United
States to a controlled foreign subsidiary unrelated
to the bank is an ancillary service which will not
cause the underlying transaction to be in United
States commerce. By contrast, where a domestic
concern, on behalf of its controlled foreign
subsidiary, gives a guaranty of performance to a
foreign country customer, that is a service
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provided to the customer and, as such, brings that
subsidiary's transaction with the customer into
United States commerce. Similarly, architectural
or engineering services provided by a domestic
concern in connection with its controlled foreign
subsidiary's construction project in a third country
are services passed through to the subsidiary's
customer and, as such, bring that subsidiary's
foreign transaction into United States commerce.
GENERAL
(16) Regardless of whether the subsequent
disposition of goods or services from the United
States is in United States commerce, the original
acquisition of goods or services from a person in
the United States is an activity in United States
commerce subject to this part. Thus, if a
domestic concern's controlled foreign subsidiary
engages in a prohibited refusal to do business in
stocking its inventory with goods from the United
States, that action is subject to this part whether
or not subsequent sales from that inventory are.
(17) In all the above, goods and services will be
considered to have been acquired from a person
in the United States whether they were acquired
directly or indirectly through a third party, where
the person acquiring the goods or services knows
or expects, at the time he places the order, that
they will be delivered from the United States.
LETTERS OF CREDIT
(18) Implementation of a letter of credit in the
United States by a United States person located in
the United States, including a permanent United
States establishment of a foreign concern, is an
activity in United States commerce.
(19) Implementation of a letter of credit outside
the United States by a United States person
located outside the United States is in United
States commerce where the letter of credit (a)
specifies a United States address for the
beneficiary, (b) calls for documents indicating
shipment from the United States, or (c) calls for
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documents indicating that the goods are of United
States origin.
(20) See §760.2(f) of this part on "Letters of
Credit" to determine the circumstances in which
paying, honoring, confirming, or otherwise
implementing a letter of credit is covered by this
part.
EXAMPLES OF ACTIVITIES IN THE
INTERSTATE OR FOREIGN COMMERCE OF
THE UNITED STATES
The following examples are intended to give
guidance in determining the circumstances in
which an activity is in the interstate or foreign
commerce of the United States. They are
illustrative, not comprehensive.
UNITED STATES PERSON LOCATED IN
THE UNITED STATES
(i) U.S. company A exports goods from the
United States to a foreign country. A's activity is
in U.S. commerce, because A is exporting goods
from the United States.
(ii) U.S. company A imports goods into the
United States from a foreign country. A's activity
is in U.S. commerce, because A is importing
goods into the United States.
(iii) U.S. engineering company A supplies
consulting services to its controlled foreign
subsidiary, B. A's activity is in U.S. commerce,
because A is exporting services from the United
States.
(iv) U.S. company A supplies consulting
services to foreign company B. B is unrelated to
A or any other U.S. person.
A's activity is in U.S. commerce even though B, a
foreign-owned company located outside the United States, is not subject to this part, because A is
exporting services from the United States.

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(v) Same as (iv), except A is a bank located in
the United States and provides a construction loan
to B.
A's activity is in U.S. commerce even though B is
not subject to this part, because A is exporting
financial services from the United States.
(vi) U.S. company A issues policy directives
from time to time to its controlled foreign
subsidiary, B, governing the conduct of B's
activities with boycotting countries.
A's activity in directing the activities of its foreign
subsidiary, B, is an activity in U.S. commerce.
FOREIGN SUBSIDIARIES, AFFILIATES,
AND OTHER PERMANENT FOREIGN
ESTABLISHMENTS OF DOMESTIC
CONCERNS
(i) A, a controlled foreign subsidiary of U.S.
company B, purchases goods from the United
States.
A's purchase of goods from the United States is in
U.S. commerce, because A is importing goods
from the United States. Whether A's subsequent
disposition of these goods is in U.S. commerce is
irrelevant. Similarly, the fact that A purchased
goods from the United States does not, in and of
itself, make any subsequent disposition of those
goods an activity in U.S. commerce.
(ii) A, a controlled foreign subsidiary of U.S.
company B, receives an order from boycotting
country Y for construction materials. A places an
order with U.S. company B for the materials.
A's transaction with Y is an activity in U.S.
commerce, because the materials are purchased
from the United States for the purpose of filling
the order from Y.
(iii) A, a controlled foreign subsidiary of U.S.
company B, receives an order from boycotting
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country Y for construction materials. A places an
order with U.S. company B for some of the
materials, and with U.S. company C, an unrelated
company, for the rest of the materials.

A's transaction with Y is an activity in U.S.
commerce, because some of the components are
acquired from the United States for purposes of
filling an order from Y.

A's transaction with Y is an activity in U.S.
commerce, because the materials are purchased
from the United States for the purpose of filling
the order from Y. It makes no difference whether
the materials are ordered from B or C.

(vii) Same as (vi), except A purchases all the
components from non-U.S. sources.

(iv) A, a controlled foreign subsidiary of U.S.
company B, is in the wholesale and retail
appliance sales business. A purchases finished
air conditioning units from the United States from
time to time in order to stock its inventory. A's
inventory is also stocked with air conditioning
units purchased outside the United States. A
receives an order for air conditioning units from
Y, a boycotting country. The order is filled with
U.S.-origin units in A's inventory.
A's transaction with Y is in U.S. commerce,
because its U.S.-origin goods are resold without
substantial alteration.

A's transaction with Y is not an activity in U.S.
commerce, because it involves no export of goods
from the United States. It makes no difference
whether the technology A uses to manufacture
computers was originally acquired from its U.S.
parent.
(viii) A, a controlled foreign subsidiary of U.S.
company B, manufactures computers. A stocks
its general components and parts inventory with
purchases made at times from the United States
and at times from foreign sources. A receives an
order from Y, a boycotting country, for
computers. A fills that order by manufacturing
the computers using materials from its general
inventory.

(v) Same as (iv), except that A is in the
chemicals distribution business. Its U.S.-origin
goods are mingled in inventory with
foreign-origin goods.

A's transaction with Y is not in U.S. commerce,
because the U.S.-origin components are not
acquired for the purpose of meeting the
anticipated needs of specified customers in Y. It
is irrelevant that A's operations may be based on
U.S.-origin technology.

A's sale to Y of unaltered goods from its general
inventory is presumed to be in U.S. commerce
unless A can show that at the time of the sale the
foreign-origin inventory on hand was sufficient
to cover the shipment to Y.

(ix) Same as (viii), except that in anticipation
of the order from Y, A orders and receives the
necessary materials from the United States.

(vi) A, a foreign subsidiary of U.S. company B,
receives an order from boycotting country Y for
computers. A places an order with U.S. company
B for some of the components; with U.S.
company C, an unrelated company, for other
components; and with foreign company D for the
rest of the components. A then assembles the
computers and ships them to Y.

Export Administration Regulations

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A's transaction with Y is in U.S. commerce,
because the U.S.-origin goods were acquired for
the purpose of filling an anticipated order from Y.
(x) A, a controlled foreign subsidiary of U.S.
company B, manufactures typewriters. It buys
typewriter components both from the United
States and from foreign sources. A sells its
output in various places throughout the world,
including boycotting country Y. Its sales to Y
vary from year to year, but have averaged
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approximately 20 percent of sales for the past five
years. A expects that its sales to Y will remain at
approximately that level in the years ahead
although it has no contracts or orders from Y on
hand.
A's sales of typewriters to Y are not in U.S.
commerce, because the U.S. components are not
acquired for the purpose of filling an order from
Y. A general expectancy of future sales is not an
"order" within the meaning of this section.
(xi)
U.S. company A's corporate counsel
provides legal advice to B, its controlled foreign
subsidiary, on the applicability of this Part to B's
transactions.
While provision of this legal advice is itself an
activity in U.S. commerce, it does not, in and of
itself, bring B's activities into U.S. commerce.
(xii) A, a controlled foreign subsidiary of U.S.
company B, is in the general construction
business. A enters into a contract with boycotting
country Y to construct a power plant in Y. In
preparing engineering drawings and
specifications, A uses the advice and assistance of
B.
A's transaction with Y is in U.S. commerce,
because B's services are used for purposes of
fulfilling the contract with Y. B's services are not
ancillary services, because the engineering
services in connection with construction of the
power plant are part of the services ultimately
provided to Y by A.
(xiii) Same as (xii), except that A gets no
engineering advice or assistance from B.
However, B's corporate counsel provides legal
advice to A regarding the structure of the
transaction. In addition, B's corporate counsel
draws up the contract documents.
A's transaction with Y is not in U.S. commerce.
The legal services provided to A are ancillary
services, because they are not part of the services
Export Administration Regulations

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provided to Y by A in fulfillment of its contract
with Y.
(xiv) A, a controlled foreign subsidiary of U.S.
company B, enters into a contract to construct an
apartment complex in boycotting country Y. A
will fulfill its contract completely with goods and
services from outside the United States. Pursuant
to a provision in the contract, B guarantees A's
performance of the contract.
A's transaction with Y is in U.S. commerce,
because B's guaranty of A's performance involves
the acquisition of services from the United States
for purposes of fulfilling the transaction with Y,
and those services are part of the services
ultimately provided to Y.
(xv) Same as (xiv), except that the guaranty of
A's performance is supplied by C, a non-U.S.
person located outside the United States.
However, unrelated to any particular transaction,
B from time to time provides general financial,
legal, and technical services to A.
A's transaction with Y is not in U.S. commerce,
because the services acquired from the United
States are not acquired for purposes of fulfilling
the contract with Y.
(xvi) A, a foreign subsidiary of U.S. company
B, has a contract with boycotting country Y to
conduct oil drilling operations in that country. In
conducting these operations, A from time to time
seeks certain technical advice from B regarding
the operation of the drilling rigs.
A's contract with Y is in U.S. commerce, because
B's services are sought for purposes of fulfilling
the contract with Y and are part of the services
ultimately provided to Y.
(xvii) A, a controlled foreign subsidiary of U.S.
company B, enters into a contract to sell
typewriters to boycotting country Y. A is located
in non-boycotting country P. None of the
components are acquired from the United States.
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A engages C, a U.S. shipping company, to
transport the typewriters from P to Y.
A's sales to Y are not in U.S. commerce, because
in carrying A's goods, C is providing an ancillary
service to A and not a service to Y.
(xviii) Same as (xvii), except that A's contract
with Y calls for title to pass to Y in P. In
addition, the contract calls for A to engage a
carrier to make delivery to Y.
A's sales to Y are in U.S. commerce, because in
carrying Y's goods, C is providing a service to A
which is ultimately provided to Y.
(xix) A, a controlled foreign subsidiary of U.S.
company B, has general product liability
insurance with U.S. company C. Foreign-origin
goods sold from time to time by A to boycotting
country Y are covered by the insurance policy.
A's sales to Y are not in U.S. commerce, because
the insurance provided by C is an ancillary
service provided to A which is not ultimately
provided to Y.
(xx) A, a controlled foreign subsidiary of U.S.
company B, manufactures automobiles abroad
under a license agreement with B. From time to
time, A sells such goods to boycotting country Y.
A's sales to Y are not in U.S. commerce, because
the rights conveyed by the license are not
acquired for the specific purpose of engaging in
transactions with Y.
(e) "Intent"
(1) This part prohibits a United States person
from taking or knowingly agreeing to take certain
specified actions with intent to comply with,
further, or support an unsanctioned foreign
boycott.
(2) A United States person has the intent to
comply with, further, or support an unsanctioned
Export Administration Regulations

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foreign boycott when such a boycott is at least
one of the reasons for that person's decision
whether to take a particular prohibited action. So
long as that is at least one of the reasons for that
person's action, a violation occurs regardless of
whether the prohibited action is also taken for
non-boycott reasons. Stated differently, the fact
that such action was taken for legitimate business
reasons does not remove that action from the
scope of this part if compliance with an
unsanctioned foreign boycott was also a reason
for the action.
(3) Intent is a necessary element of any violation
of any of the prohibitions under §760.2. It is not
sufficient that one take action that is specifically
prohibited by this part. It is essential that one
take such action with intent to comply with,
further, or support an unsanctioned foreign
boycott.
Accordingly, a person who
inadvertently, without boycott intent, takes a
prohibited action, does not commit any violation
of this part.
(4) Intent in this context means the reason or
purpose for one's behavior. It does not mean that
one has to agree with the boycott in question or
desire that it succeed or that it be furthered or
supported. But it does mean that the reason why
a particular prohibited action was taken must be
established.
(5) Reason or purpose can be proved by
circumstantial evidence. For example, if a person
receives a request to supply certain boycott
information, the furnishing of which is prohibited
by this part, and he knowingly supplies that
information in response, he clearly intends to
comply with that boycott request. It is irrelevant
that he may disagree with or object to the boycott
itself. Information will be deemed to be furnished
with the requisite intent if the person furnishing
the information knows that it was sought for
boycott purposes. On the other hand, if a person
refuses to do business with someone who happens
to be blacklisted, but the reason is because that
person produces an inferior product, the requisite
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intent does not exist.

comply with Y's boycott, because the boycott was
not a reason for A's action.

(6) Actions will be deemed to be taken with
intent to comply with an unsanctioned foreign
boycott if the person taking such action knew that
such action was required or requested for boycott
reasons. On the other hand, the mere absence of
a business relationship with a blacklisted person
or with or in a boycotted country does not
indicate the existence of the requisite intent.
(7) In seeking to determine whether the requisite
intent exists, all available evidence will be
examined.

(iv) U.S. bank A engages in letter of credit
transactions, in favor of U.S. beneficiaries,
involving the shipments of U.S. goods to
boycotting country Y. As A knows, such letters
of credit routinely contain conditions requiring
prohibited certifications.
A fails to take
reasonable steps to prevent the implementation of
such letters of credit.
A receives for
implementation a letter of credit which in fact
contains a prohibited condition but does not
examine the letter of credit to determine whether
it contains such a condition.

EXAMPLES OF "INTENT"
The following examples are intended to illustrate
the factors which will be considered in
determining whether the required intent exists.
They are illustrative, not comprehensive.
(i) U.S. person A does business in boycotting
country Y. In selecting firms to supply goods for
shipment to Y, A chooses supplier B because B's
products are less expensive and of higher quality
than the comparable products of supplier C. A
knows that C is blacklisted, but that is not a
reason for A's selection of B.
A's choice of B rather than C is not action with
intent to comply with Y's boycott, because C's
blacklist status is not a reason for A's action.
(ii) Same as (i), except that A chooses B rather
than C in part because C is blacklisted by Y.
Since C's blacklist status is a reason for A's
choice, A's action is taken with intent to comply
with Y's boycott.
(iii) U.S. person A bids on a tender issued by
boycotting country Y. A inadvertently fails to
notice a prohibited certification which appears in
the tender document. A's bid is accepted.

Although Y's boycott may not be a specific reason
for A's action in implementing the letter of credit
with a prohibited condition, all available evidence
shows that A's action was taken with intent to
comply with the boycott, because A knows or
should know that its procedures result in
compliance with the boycott.
(v) U.S. bank A engages in letter of credit
transactions, in favor of U.S. beneficiaries,
involving the shipment of U.S. goods to
boycotting country Y.
As A knows, the
documentation accompanying such letters of
credit sometimes contains prohibited
certifications. In accordance with standard
banking practices applicable to A, it does not
examine such accompanying documentation. A
receives a letter of credit in favor of a U.S.
beneficiary. The letter of credit itself contains no
prohibited conditions.
However, the
accompanying documentation, which A does not
examine, does contain such a condition.
All available evidence shows that A's action in
implementing the letter of credit was not taken
with intent to comply with the boycott, because A
has no affirmative obligation to go beyond
applicable standard banking practices in
implementing letters of credit.

A's action in bidding was not taken with intent to
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(vi) A, a U.S. company, is considering opening a
manufacturing facility in boycotted country X. A
already has such a facility in boycotting country
Y. After exploring the possibilities in X, A
concludes that the market does not justify the
move. A is aware that if it did open a plant in X,
Y might object because of Y's boycott of X.
However Y's possible objection is not a reason for
A's decision not to open a plant in X.

and send it in with the bid. The questionnaire
asks for information about A's business
relationships with X. Regardless of whether A's
bid is successful, A intends to continue its
business in X undiminished and in fact is
exploring and intends to continue exploring an
expansion of its activities in X without regard to
Y's boycott.

A's decision not to proceed with the plant in X is
not action with intent to comply with Y's boycott,
because Y's boycott of X is not a reason for A's
decision.

A may not answer the questionnaire, because,
despite A's intentions with regard to its business
operations in X, Y's request for completion of the
questionnaire is for boycott purposes and by
responding, A's action would be taken with intent
to comply with Y's boycott.

(vii) Same as (vi), except that after exploring
the business possibilities in X, A concludes that
the market does justify the move to X. However,
A does not open the plant because of Y's possible
objections due to Y's boycott of X.

§760.2

A's decision not to proceed with the plant in X is
action taken with intent to comply with Y's
boycott, because Y's boycott is a reason for A's
decision.
(viii) A, a U.S. chemical manufacturer,
receives a "boycott questionnaire" from
boycotting country Y asking, among other things,
whether A has any plants located in boycotted
country X. A, which has never supported Y's
boycott of X, responds to Y's questionnaire,
indicating affirmatively that it does have plants in
X and that it intends to continue to have plants in
X.
A's responding to Y's questionnaire is deemed to
be action with intent to comply with Y's boycott
because A knows that the questionnaire is
boycott-related. It is irrelevant that A does not
also wish to support Y's boycott.
(ix) U.S. company A has a manufacturing
facility in boycotted country X. A receives an
invitation to bid on a construction project in
boycotting country Y. The invitation states that
all bidders must complete a boycott questionnaire
Export Administration Regulations

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PROHIBITIONS
(a) Refusals to do business
PROHIBITION AGAINST REFUSALS
TO DO BUSINESS
(1) No United States person may: refuse,
knowingly agree to refuse, require any other
person to refuse, or knowingly agree to require
any other person to refuse, to do business with or
in a boycotted country, with any business concern
organized under the laws of a boycotted country,
with any national or resident of a boycotted
country, or with any other person, when such
refusal is pursuant to an agreement with the
boycotting country, or a requirement of the
boycotting country, or a request from or on
behalf of the boycotting country.
(2) Generally, a refusal to do business under this
section consists of action that excludes a person
or country from a transaction for boycott reasons.
This includes a situation in which a United States
person chooses or selects one person over another
on a boycott basis or takes action to carry out
another person's boycott-based selection when he
knows or has reason to know that the other
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person's selection is boycott-based.
(3) Refusals to do business which are prohibited
by this section include not only specific refusals,
but also refusals implied by a course or pattern of
conduct. There need not be a specific offer and
refusal to constitute a refusal to do business; a
refusal may occur when a United States person
has a financial or commercial opportunity and
declines for boycott reasons to consider or accept
it.
(4) A United States person's use of either a
boycott-based list of persons with whom he will
not deal (a so-called "blacklist") or a
boycott-based list of persons with whom he will
deal (a so-called "whitelist") constitutes a refusal
to do business.
(5) An agreement by a United States person to
comply generally with the laws of the boycotting
country with which it is doing business or an
agreement that local laws of the boycotting
country shall apply or govern is not, in and of
itself, a refusal to do business. Nor, in and of
itself, is use of a contractual clause explicitly
requiring a person to assume the risk of loss of
non-delivery of his products a refusal to do
business with any person who will not or cannot
comply with such a clause. (But see §760.4 of this
part on "Evasion.")
(6) If, for boycott reasons, a United States
general manager chooses one supplier over
another, or enters into a contract with one
supplier over another, or advises its client to do
so, then the general manager's actions constitute a
refusal to do business under this section.
However, it is not a refusal to do business under
this section for a United States person to provide
management, procurement, or other pre-award
services for another person so long as the
provision of such pre-award services is customary
for that firm (or industry of which the firm is a
part), without regard to the boycotting or
non-boycotting character of the countries in
which they are performed, and the United States
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person, in providing such services, does not act to
exclude a person or country from the transaction
for boycott reasons, or otherwise take actions that
are boycott-based. For example, a United States
person under contract to provide general
management services in connection with a
construction project in a boycotting country may
compile lists of qualified bidders for the client if
that service is a customary one and if persons who
are qualified are not excluded from that list
because they are blacklisted.
(7) With respect to post-award services, if a
client makes a boycott-based selection, actions
taken by the United States general manager or
contractor to carry out the client's choice are
themselves refusals to do business if the United
States contractor knows or has reason to know
that the client's choice was boycott-based. (It is
irrelevant whether the United States contractor
also provided pre-award services.) Such actions
include entering into a contract with the selected
supplier, notifying the supplier of the client's
choice, executing a contract on behalf of the
client, arranging for inspection and shipment of
the supplier's goods, or taking any other action to
effect the client's choice. (But see §760.3(d) on
"Compliance with Unilateral Selection" as it may
apply to post-award services.)
(8) An agreement is not a prerequisite to a
violation of this section since the prohibition
extends to actions taken pursuant not only to
agreements but also to requirements of, and
requests from or on behalf of, a boycotting
country.
(9) Agreements under this section may be either
express or implied by a course or pattern of
conduct. There need not be a direct request from
a boycotting country for action by a United States
person to have been taken pursuant to an
agreement with or requirement of a boycotting
country.
(10) This prohibition, like all others, applies only
with respect to a United States person's activities
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in the interstate or foreign commerce of the
United States and only when such activities are
undertaken with intent to comply with, further, or
support an unsanctioned foreign boycott. The
mere absence of a business relationship with or in
the boycotted country, with any business concern
organized under the laws of the boycotted
country, with national(s) or resident(s) of the
boycotted country, or with any other person does
not indicate the existence of the required intent.
EXAMPLES OF REFUSALS AND
AGREEMENTS TO REFUSE TO
DO BUSINESS
The following examples are intended to give
guidance in determining the circumstances in
which, in a boycott situation, a refusal to do
business or an agreement to refuse to do business
is prohibited.
They are illustrative, not
comprehensive.
REFUSALS TO DO BUSINESS
(i) A, a U.S. manufacturer, receives an order
for its products from boycotting country Y. To
fill that order, A solicits bids from U.S.
companies B and C, manufacturers of
components used in A's products. A does not,
however, solicit bids from U.S. companies D or
E, which also manufacture such components,
because it knows that D and E are restricted from
doing business in Y and that their products are,
therefore, not importable into that country.
Company A may not refuse to solicit bids from D
and E for boycott reasons, because to do so would
constitute a refusal to do business with those
persons.
(ii) A, a U.S. exporter, uses company B, a U.S.
insurer, to insure the shipment of its goods to all
its overseas customers. For the first time, A
receives an order for its products from boycotting
country Y. Knowing that B is on the blacklist of
Y, A arranges with company C, a non-blacklisted

Export Administration Regulations

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U.S. insurer, to insure the shipment of its goods to
Y.
A's action constitutes a refusal to do business
with B.
(iii) A, a U.S. exporter, purchases all its
liability insurance from company B, a U.S.
company that does business in boycotted country
X. A wishes to expand its operations into country
Y, the boycotting country. Before doing so, A
decides to switch from insurer B to insurer C in
anticipation of a request from Y that A sever its
relations with B as a condition of doing
business in Y.
A may not switch insurers for this reason, because
doing so would constitute a refusal to do business
with B.
(iv) U.S. company A exports goods to
boycotting country Y. In selecting vessels to
transport the goods to Y, A chooses only from
among carriers which call at ports in Y.
A's action is not a refusal to do business with
carriers which do not call at ports in Y.
(v) A, a U.S. bank with a branch office in
boycotting country Y, sends representatives to
boycotted country X to discuss plans for opening
a branch office in X. Upon learning of these
discussions, an official of the local boycott office
in Y advises A's local branch manager that if A
opens an office in X it will no longer be allowed
to do business in Y. As a result of this
notification, A decides to abandon its plans to
open a branch in X.
Bank A may not abandon its plans to open a
branch in X as a result of Y's notification,
because doing so would constitute a refusal to do
business in boycotted country X.
(vi) A, a U.S. company that manufactures
office equipment, has been restricted from doing
business in boycotting country Y because of its
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business dealings with boycotted country X. In
an effort to have itself removed from Y's
blacklist, A ceases its business in X.
A's action constitutes a refusal to do business in
boycotted country X.
(vii) A, a U.S. computer company, does
business in boycotting country Y. A decides to
explore business opportunities in boycotted
country X. After careful analysis of possible
business opportunities in X, A decides, solely for
business reasons, not to market its products in X.
A's decision not to proceed is not a refusal to do
business, because it is not based on boycott
considerations. A has no affirmative obligation to
do business in X.
(viii) A, a U.S. oil company with operations in
boycotting country Y, has regularly purchased
equipment from U.S. petroleum equipment
suppliers B, C, and D, none of whom is on the
blacklist of Y. Because of its satisfactory
relationship with B, C, and D, A has not dealt
with other suppliers, including supplier E, who is
blacklisted by Y.
A's failure affirmatively to seek or secure
business with blacklisted supplier E is not a
refusal to do business with E.
(ix) Same as (viii), except U.S. petroleum
equipment supplier E, a company on boycotting
country Y's blacklist, offers to supply U.S. oil
company A with goods comparable to those
provided by U.S. suppliers B, C, and D. A,
because it has satisfactory, established
relationships with suppliers B, C, and D, does not
accept supplier E's offer.
A's refusal of supplier E's offer is not a refusal to
do business, because it is based solely on
non-boycott considerations. A has no affirmative
obligation to do business with E.
(x) A, a U.S. construction company, enters into
Export Administration Regulations

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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.
(xi) A, a U.S. general contractor, has been
retained to construct a highway in boycotting
country Y. A circulates an invitation to bid to
U.S. manufacturers of road-building equipment.
One of the conditions listed in the invitation to
bid is that, in order for A to obtain prompt
service, suppliers will be required to maintain a
supply of spare parts and a service facility in Y.
A includes this condition solely for commercial
reasons unrelated to the boycott. Because of this
condition, however, those suppliers on Y's
blacklist do not bid, since they would be unable to
satisfy the parts and services requirements.
A's action is not a refusal to do business, because
the contractual condition was included solely for
legitimate business reasons and was not
boycott-based.
(xii) Company A, a U.S. oil company, purchases drill bits from U.S. suppliers for export to
boycotting country Y. In its purchase orders, A
includes a provision requiring the supplier to
make delivery to A's facilities in Y and providing
that title to the goods does not pass until delivery
has been made. As is customary under such an
arrangement, the supplier bears all risks of loss,
including loss from fire, theft, perils of the sea,
and inability to clear customs, until title passes.
Insistence on such an arrangement does not
constitute a refusal to do business, because this
requirement is imposed on all suppliers whether
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they are blacklisted or not. (But see §760.4 on
"Evasion".)

inspect the goods upon arrival. A knows that C
was chosen by the client for boycott reasons.

(xiii) A, a U.S. engineering and construction
company, contracts with a government agency in
boycotting country Y to perform a variety of
services in connection with the construction of a
large industrial facility in Y. Pursuant to this
contract, A analyzes the market of prospective
suppliers, compiles a suggested bidders list,
analyzes the bids received, and makes
recommendations to the client. The client
independently selects and awards the contract to
supplier C for boycott reasons. All of A's
services are performed without regard to Y's
blacklist or any other boycott considerations, and
are the type of services A provides clients in both
boycotting and non-boycotting countries.

A's action in complying with his client's direction
is a refusal to do business, because A's post-award
actions carry out his client's boycott-based
decision. (Note: Whether A's action comes within the unilateral selection exception depends upon
factors discussed in §760.3(d) of this part).

A's actions do not constitute a refusal to do
business, because, in the provision of pre-award
services, A has not excluded the other bidders and
because A customarily provides such services to
its clients.
(xiv) Same as (xiii), except that in compiling a
list of prospective suppliers, A deletes suppliers
he knows his client will refuse to select because
they are blacklisted. A knows that including the
names of blacklisted suppliers will neither
enhance their chances of being selected nor
provide his client with a useful service, the
function for which he has been retained.
A's actions, which amount to furnishing a
so-called "whitelist", constitute refusals to do
business, because A's pre-award services have not
been furnished without regard to boycott
considerations.
(xv) A, a U.S. construction firm, provides its
boycotting country client with a permissible list
of prospective suppliers, B, C, D, and E. The
client independently selects and awards the
contract to C, for boycott reasons, and then
requests A to advise C of his selection, negotiate
the contract with C, arrange for the shipment, and
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(xvi) Same as (xv), except that A is building
the project on a turnkey basis and will retain title
until completion. The client instructs A to
contract only with C.
A's action in contracting with C constitutes a
refusal to do business, because it is action that
excludes blacklisted persons from the transaction
for boycott reasons. (Note: Whether A's action
comes within the unilateral selection exception
depends upon factors discussed in §760.3(d) of
this part).
(xvii) A, a U.S. exporter of machine tools,
receives an order for drill presses from boycotting
country Y. The cover letter from Y's procurement
official states that A was selected over other U.S.
manufacturers in part because A is not on Y's
blacklist.
A's action in filling this order is not a refusal to
do business, because A has not excluded anyone
from the transaction.
(xviii) A, a U.S. engineering firm under
contract to construct a dam in boycotting country
Y, compiles, on a non-boycott basis, a list of
potential heavy equipment suppliers, including
information on their qualifications and prior
experience. A then solicits bids from the top
three firms on its list--B, C, and D--because they
are the best qualified. None of them happens to
be blacklisted. A does not solicit bids from E, F,
or G, the next three firms on the list, one of whom
is on Y's blacklist.

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A's decision to solicit bids from only B, C, and D,
is not a refusal to do business with any person,
because the solicited bidders were not selected for
boycott reasons.
(xix) U.S. bank A receives a letter of credit in
favor of U.S. beneficiary B. The letter of credit
requires B to certify that he is not blacklisted. B
meets all other conditions of the letter of credit
but refuses to certify as to his blacklist status. A
refuses to pay B on the letter of credit solely
because B refuses to certify as to his blacklist
status.
A has refused to do business with another person
pursuant to a boycott requirement or request.
(xx) U.S. bank A receives a letter of credit in
favor of U.S. beneficiary B. The letter of credit
requires B to provide a certification from the
steamship line that the vessel carrying the goods
is not blacklisted. B seeks payment from A and
meets all other conditions of the letter of credit
but refuses or is unable to provide the
certification from the steamship line about the
vessel's blacklist status. A refuses to pay B on the
letter of credit solely because B cannot or will not
provide the certification.
A has required another person to refuse to do
business pursuant to a boycott requirement or
request by insisting that B obtain such a
certificate. (Either A or B may request an
amendment to the letter of credit substituting a
certificate of vessel eligibility, however. See
Example (xxi) below).
(xxi) U.S. bank A receives a letter of credit
from a bank in boycotting country Y in favor of
U.S. beneficiary B. The letter of credit requires B
to provide a certification from the steamship line
that the vessel carrying the goods is eligible to
enter the ports in Y. B seeks payment from A and
meets all other conditions of the letter of credit.
A refuses to pay B solely because B cannot or
will not provide the certification.

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A has neither refused, nor required another person
to refuse, to do business with another person
pursuant to a boycott requirement or request
because a request for a vessel eligibility
certificate to be furnished by the steamship line is
not a prohibited condition. (See Supplement No.
1 of this part, paragraph (I)(B), “Shipping
Certificate”.)
(xxii) U.S. bank A confirms a letter of credit in
favor of U.S. beneficiary B. The letter of credit
contains a requirement that B certify that he is not
blacklisted. B presents the letter of credit to U.S.
bank C, a correspondent of bank A. B does not
present the certificate of blacklist status to bank
C, but, in accordance with these rules, bank C
pays B, and then presents the letter of credit and
documentation to bank A for reimbursement.
Bank A refuses to reimburse bank C because the
blacklist certification of B is not included in the
documentation.
A has required another person to refuse to do
business with a person pursuant to a boycott
requirement or request by insisting that C obtain
the certificate from B.
(xxiii) U.S. bank A receives a letter of credit in
favor of U.S. beneficiary B. The letter of credit
requires B to certify that he is not blacklisted. B
fails to provide such a certification when he
presents the documents to A for payment. A
notifies B that the certification has not been
submitted.
A has not refused to do business with another
person pursuant to a boycott requirement by
notifying B of the omitted certificate. A may not
refuse to pay on the letter of credit, however, if B
states that B will not provide such a certificate.
(xxiv) U.S. bank A receives a letter of credit in
favor of U.S. beneficiary B from the issuing bank
for the purpose of confirmation, negotiation or
payment. The letter of credit requires B to certify
that he is not blacklisted. A notifies B that it is
contrary to the policy of A to handle letters of
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credit containing this condition and that, unless
an amendment is obtained deleting this condition,
A will not implement the letter of credit.
A has not refused to do business with another
person pursuant to a boycott requirement, because
A has indicated its policy against implementing
the letter of credit containing the term without
regard to B's ability or willingness to furnish such
a certificate.
AGREEMENTS TO REFUSE
TO DO BUSINESS
(i) A, a U.S. construction firm, is retained by
an agency of boycotting country Y to build a
primary school. The proposed contract contains
a clause stating that A "may not use goods or
services in the project that are produced or
provided by any person restricted from having a
business relationship with country Y by reason of
Y's boycott against country X".
A's action in entering into such a contract would
constitute an agreement to refuse to do business,
because it is an agreement to exclude blacklisted
persons from the transaction. A may, however,
renegotiate this clause so that it does not contain
terms prohibited by this part.
(ii) A, a U.S. manufacturer of commercial
refrigerators and freezers, receives an invitation
to bid from boycotting country Y. The tender
states that the bidder must agree not to deal with
companies on Y's blacklist. A does not know
which companies are on the blacklist; however, A
submits a bid without taking exception to the
boycott conditions.
A's bid makes no
commitment regarding not dealing with certain
companies.
At the point when A submits its bid without
taking exception to the boycott request in Y’s
tender, A has agreed to refuse to do business with
blacklisted persons, because the terms of Y's
tender require A to agree to refuse to do business.

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(iii) A, a U.S. construction firm, is offered a
contract to perform engineering and construction
services in connection with a project located in
boycotting country Y. The contract contains a
clause stating that, in the event of a contract
dispute, the laws of Y will apply.
A may enter into the contract. Agreement that the
laws of boycotting country Y will control in
resolving a contract dispute is not an agreement to
refuse to do business.
(iv) Same as (iii), except that the contract
contains a clause that A and its employees will
comply with the laws of boycotting country Y. A
knows that Y has a number of boycott laws.
Such an agreement is not, in and of itself, an
agreement to refuse to do business. If, however,
A subsequently refuses to do business with
someone because of the laws of Y, A's action
would be a refusal to do business.
(v) Same as (iv), except that the contract
contains a clause that A and its employees will
comply with the laws of boycotting country Y,
"including boycott laws."
A's agreeing, without qualification, to comply
with local boycott laws constitutes an agreement
to refuse to do business.
(vi) Same as (v), except that A inserts a proviso
"except insofar as Y's laws conflict with U.S.
laws," or words to that effect.
Such an agreement is not an agreement to refuse
to do business.
(vii) A, a U.S. general contractor, is retained to
construct a pipeline in boycotting country Y. A
provision in the proposed contract stipulates that
in purchasing equipment, supplies, and services A
must give preference to companies located in host
country Y.

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A may agree to this contract provision. Agreeing
to a "buy local" contract provision is not an agree
ment to refuse to do business, because A's
agreement is not made for boycott reasons.

B has agreed to refuse to do business with
blacklisted banks because, by presenting the letter
of credit for payment, B has accepted all of its
terms and conditions.

(viii) A, a U.S. exporter planning to sell retail
goods to customers in boycotting country Y,
enters into a contract to purchase goods wholesale
from B, a U.S. appliance manufacturer. A's
contract with B includes a provision stipulating
that B may not use components or services of
blacklisted companies in the manufacture of its
appliances.

(b) Discriminatory actions

A's contract constitutes a refusal to do business,
because it would require another person, B, to
refuse to do business with other persons for
boycott reasons. B may not agree to such a
contract, because it would be agreeing to refuse to
do business with other persons for boycott
reasons.
(ix) Same as (viii), except that A and B reach
an implicit understanding that B will not use
components or services of blacklisted companies
in the manufacture of goods to be exported to Y.
In the manufacture of appliances to be sold to A
for export to non-boycotting countries, B uses
components manufactured by blacklisted
companies.
The actions of both A and B constitute agreement
to refuse to do business. The agreement is implied
by their pattern of conduct.
(x) Boycotting country Y orders goods from
U.S. company B. Y opens a letter of credit with
foreign bank C in favor of B. The letter of credit
specifies that negotiation of the letter of credit
with a bank that appears on the country X boycott
blacklist is prohibited. U.S. bank A, C's
correspondent bank, advises B of the letter of
credit. B presents documentation to bank A
seeking to be paid on the letter of credit, without
amending or otherwise taking exception to the
boycott condition.

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PROHIBITIONS AGAINST TAKING
DISCRIMINATORY ACTIONS
(1) No United States person may:
(i) Refuse to employ or otherwise discriminate
against any individual who is a United States
person on the basis of race, religion, sex, or
national origin;
(ii) Discriminate against any corporation or
other organization which is a United States
person on the basis of the race, religion, sex, or
national origin of any owner, officer, director, or
employee of such corporation or organization;
(iii) Knowingly agree to take any of the actions
described in paragraph (b)(1)(i) and (ii) of this
section; or
(iv) Require or knowingly agree to require any
other person to take any of the actions described
in paragraph (b)(1)(i) and (ii) of this section.
(2) This prohibition shall apply whether the
discriminatory action is taken by a United States
person on its own or in response to an agreement
with, request from, or requirement of a boycotting
country. This prohibition, like all others, applies
only with respect to a United States person's
activities in the interstate or foreign commerce of
the United States and only when such activities
are undertaken with intent to comply with,
further, or support an unsanctioned foreign
boycott.
(3) The section does not supersede or limit the
operation of the civil rights laws of the United
States.

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EXAMPLES OF
DISCRIMINATORY ACTIONS
The following examples are intended to give
guidance in determining the circumstances in
which the taking of particular discriminatory
actions is prohibited. They are illustrative, not
comprehensive.
(i) U.S. construction company A is awarded a
contract to build an office complex in boycotting
country Y. A, believing that employees of a
particular religion will not be permitted to work
in Y because of Y's boycott against country X,
excludes U.S. persons of that religion from
consideration for employment on the project.
A's refusal to consider qualified U.S. persons of a
particular religion for work on the project in Y
constitutes a prohibited boycott-based
discriminatory action against U.S. persons on the
basis of religion.
(ii) Same as (i), except that a clause in the
contract provides that "no persons of country X
origin are to work on this project."
A's agreement constitutes a prohibited boycott-based agreement to discriminate against U.S.
persons, among others, on the basis of national
origin.
(iii) Same as (i), except that a clause in the
contract provides that "no persons who are
citizens, residents, or nationals of country X are
to work on this project."
A's agreement does not constitute a boycott-based
agreement to discriminate against U.S. persons on
the basis of race, religion, sex, or national origin,
because the clause requires exclusion on the basis
of citizenship, residency, and nationality only.
(iv) U.S. construction company A enters into a
contract to build a school in boycotting country
Y. Y's representative orally tells A that no
persons of country X origin are to work on the
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project.
A may not comply, because to do so would
constitute discrimination on the basis of national
origin. It makes no difference that A learned of
Y's requirement orally. It makes no difference
how A learns about Y's discriminatory
requirement.
(v) Boycotting country Y tenders an invitation
to bid on a construction project in Y. The tender
requires that the successful bidder's personnel
will be interviewed and that persons of a
particular religious faith will not be permitted to
work on the project. Y's requirement is based on
its boycott of country X, the majority of whose
citizens are of that particular faith.
Agreement to this provision in the tender
document by a U.S. person would constitute a
prohibited agreement to engage in boycott-based
discrimination against U.S. persons of a particular
religion.
(vi) Same as (v), except that the tender
specifies that "women will not be allowed to work
on this project."
Agreement to this provision in the tender by a
U.S. person does not constitute a prohibited
agreement to engage in boycott-based
discrimination, because the restriction against
employment of women is not boycott-based.
Such an agreement may, however, constitute a
violation of U.S. civil rights laws.
(vii) A is a U.S. investment banking firm. As a
condition of participating in an underwriting of
securities to be issued by boycotting country Y, A
is required to exclude investment banks owned by
persons of a particular faith from participation in
the underwriting. Y's requirement is based on its
boycott of country X, the majority of whose
citizens are of that particular faith.
A's agreement to such a provision constitutes a
prohibited agreement to engage in boycott-based
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discrimination against U.S. persons on the basis
of religion. Further, if A requires others to agree
to such a condition, A would be acting to require
another person to engage in such discrimination.
(viii) U.S. company A is asked by boycotting
country Y to certify that A will not use a
six-pointed star on the packaging of its products
to be imported into Y. The requirement is part of
the enforcement effort by Y of its boycott against
country X.
A may not so certify. The six-pointed star is a
religious symbol, and the certification by A that it
will not use such a symbol constitutes a statement
that A will not ship products made or handled by
persons of that religion.
(ix) Same as (viii), except that A is asked to
certify that no symbol of boycotted country X
will appear on the packaging of its products
imported into Y.
Such a certification conveys no statement about
any person's religion and, thus, does not come
within this prohibition.
(c)
Furnishing information about race,
religion, sex, or national origin
PROHIBITION AGAINST FURNISHING
INFORMATION ABOUT RACE, RELIGION,
SEX, OR NATIONAL ORIGIN

(iii) Knowingly agree to furnish information
about the race, religion, sex, or national origin of
any United States person; or
(iv) Knowingly agree to furnish information
about the race, religion, sex, or national origin of
any owner, officer, director, or employee of any
corporation or other organization which is a United States person.
(2) This prohibition shall apply whether the
information is specifically requested or is offered
voluntarily by the United States person. It shall
also apply whether the information requested or
volunteered is stated in the affirmative or the
negative.
(3) Information about the place of birth of or the
nationality of the parents of a United States
person comes within this prohibition, as does
information in the form of code words or symbols
which could identify a United States person's
race, religion, sex, or national origin.
(4) This prohibition, like all others, applies only
with respect to a United States person's activities
in the interstate or foreign commerce of the United States and only when such activities are
undertaken with intent to comply with, further, or
support an unsanctioned foreign boycott.
EXAMPLES OF THE PROHIBITION AGAINST FURNISHING DISCRIMINATORY
INFORMATION

(1) No United States person may:
(i) Furnish information about the race, religion,
sex, or national origin of any United States
person;
(ii) Furnish information about the race,
religion, sex, or national origin of any owner,
officer, director, or employee of any corporation
or other organization which is a United States
person;

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The following examples
guidance in determining
which the furnishing
information is prohibited.
not comprehensive.

are intended to give
the circumstances in
of discriminatory
They are illustrative,

(i) U.S. company A receives a boycott
questionnaire from boycotting country Y asking
whether it is owned or controlled by persons of a
particular faith, whether it has any persons on its
board of directors who are of that faith, and what
the national origin of its president is. The
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information is sought for purposes of enforcing
Y's boycott against country X, and A knows or
has reason to know that the information is sought
for that reason.
A may not answer the questionnaire, because A
would be furnishing information about the
religion and national origin of U.S. persons for
purposes of complying with or supporting Y's
boycott against X.
(ii) U.S. company A, located in the United
States, is asked by boycotting country Y to certify
that A has no persons of a particular national
origin on its board of directors. A knows that Y's
purpose in asking for the certification is to
enforce its boycott against country X.
A may not make such a certification, because A
would be furnishing information about the
national origin of U.S. persons for purposes of
complying with or supporting Y's boycott against
X.
(iii) U.S. company A believes that boycotting
country Y will select A's bid over those of other
bidders if A volunteers that it has no
shareholders, officers, or directors of a particular
national origin. A's belief is based on its
knowledge that Y generally refuses, as part of its
boycott against country X, to do business with
companies owned, controlled, or managed by
persons of this particular national origin.
A may not volunteer this information, because it
would be furnishing information about the
national origin of U.S. persons for purposes of
complying with or supporting Y's boycott against
X.
(iv) U.S. company A has a contract to construct
an airport in boycotting country Y. Before A
begins work, A is asked by Y to identify the
national origin of its employees who will work on
the site. A knows or has reason to know that Y is
seeking this information in order to enforce its
boycott against X.
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A may not furnish this information, because A
would be providing information about the
national origin of U.S. persons for purposes of
complying with or supporting Y's boycott against
X.
(v) Same as (iv), except that in order to
assemble its work force on site in Y, A sends visa
forms to its employees and asks that the forms be
returned to A for transmittal to Y's consulate or
embassy. A, itself, furnishes no information
about its employees, but merely transmits the visa
forms back and forth.
In performing the ministerial function of
transmitting visa forms, A is not furnishing
information about any U.S. person's race,
religion, sex, or national origin.
(vi) Same as (iv), except that A is asked by Y
to certify that none of its employees in Y will be
women, because Y's laws prohibit women from
working.
Such a certification does not constitute a
prohibited furnishing of information about any
U.S. person's sex, since the reason the
information is sought has nothing to do with Y's
boycott of X.
(vii)
U.S. company A is considering
establishing an office in boycotting country Y. In
order to register to do business in Y, A is asked to
furnish information concerning the nationalities
of its corporate officers and board of directors.
A may furnish the information about the
nationalities of its officers and directors, because
in so doing A would not be furnishing
information about the race, religion, sex, or
national origin of any U.S. person.

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(d) Furnishing information about business
relationships with boycotted countries or
blacklisted persons
PROHIBITION AGAINST FURNISHING
INFORMATION ABOUT BUSINESS
RELATIONSHIPS WITH BOYCOTTED
COUNTRIES OR BLACKLISTED PERSONS
(1) No United States person may furnish or
knowingly agree to furnish information
concerning his or any other person's past, present
or proposed business relationships:
(i) With or in a boycotted country;
(ii) With any business concern organized under
the laws of a boycotted country;
(iii) With any national or resident of a
boycotted country; or
(iv) With any other person who is known or
believed to be restricted from having any business
relationship with or in a boycotting country.
(2) This prohibition shall apply:
(i) Whether the information pertains to a
business relationship involving a sale, purchase,
or supply transaction; legal or commercial
representation; shipping or other transportation
transaction; insurance; investment; or any other
type of business transaction or relationship; and
(ii) Whether the information is directly or
indirectly requested or is furnished on the
initiative of the United States person.
(3) This prohibition does not apply to the
furnishing of normal business information in a
commercial context.
Normal business
information may relate to factors such as financial
fitness, technical competence, or professional
experience, and may be found in documents
normally available to the public such as annual
reports, disclosure statements concerning
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securities, catalogs, promotional brochures, and
trade and business handbooks. Such information
may also appear in specifications or statements of
experience and qualifications.
(4) Normal business information furnished in a
commercial context does not cease to be such
simply because the party soliciting the
information may be a boycotting country or a
national or resident thereof. If the information is
of a type which is generally sought for a
legitimate business purpose (such as determining
financial fitness, technical competence, or
professional experience), the information may be
furnished even if the information could be used,
or without the knowledge of the person supplying
the information is intended to be used, for boycott
purposes.
However, no information about
business relationships with blacklisted persons or
boycotted countries, their residents or nationals,
may be furnished in response to a boycott request,
even if the information is publicly available.
Requests for such information from a boycott
office will be presumed to be boycott-based.
(5) This prohibition, like all others, applies only
with respect to a United States person's activities
in the interstate or foreign commerce of the United States and only when such activities are under
taken with intent to comply with, further, or
support an unsanctioned foreign boycott.
EXAMPLES CONCERNING FURNISHING
OF INFORMATION
The following examples are intended to give
guidance in determining the circumstances in
which the furnishing of information is prohibited.
They are illustrative, not comprehensive.
(i) U.S. contractor A is considering bidding for
a contract to build a dam in boycotting country Y.
The invitation to bid, which appears in a trade
journal, specifies that each bidder must state that
he does not have any offices in boycotted country
X. A knows or has reason to know that the
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requirement is boycott-based.
A may not make this statement, because it
constitutes information about A's business
relationships with X.
(ii) U.S. contractor A is considering bidding
for a contract to construct a school in boycotting
country Y. Each bidder is required to submit
copies of its annual report with its bid. Since A's
annual report describes A's worldwide operations,
including the countries in which it does business,
it necessarily discloses whether A has business
relations with boycotted country X. A has no
reason to know that its report is being sought for
boycott purposes.
A, in furnishing its annual report, is supplying
ordinary business information in a commercial
context.
(iii) Same as (ii), except that accompanying the
invitation to bid is a questionnaire from country
Y's boycott office asking each bidder to supply a
copy of its annual report.
A may not furnish the annual report despite its
public availability, because it would be furnishing
information in response to a questionnaire from a
boycott office.
(iv) U.S. company A is on boycotting country
Y's blacklist. For reasons unrelated to the
boycott, A terminates its business relationships
with boycotted country X. In exploring other
marketing areas, A determines that boycotting
country Y offers great potential. A is requested to
complete a questionnaire from a central boycott
office which inquires about A's business relations
with X.
A may not furnish the information, because it is
information about A's business relationships with
a boycotted country.
(v) U.S. exporter A is seeking to sell its
products to boycotting country Y. A is informed
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by Y that, as a condition of sale, A must certify
that it has no salesmen in boycotted country X. A
knows or has reason to know that the condition is
boycott-based.
A may not furnish the certification, because it is
information about A's business relationships in a
boycotted country.
(vi) U.S. engineering company A receives an
invitation to bid on the construction of a dam in
boycotting country Y. As a condition of the bid,
A is asked to certify that it does not have any
offices in boycotted country X. A is also asked to
furnish plans for other dams it has designed.
A may not certify that it has no office in X,
because this is information about its business
relationships in a boycotted country. A may
submit plans for other dams it has designed,
because this is furnishing normal business
information, in a commercial context, relating to
A's technical competence and professional
experience.
(vii) U.S. company A, in seeking to expand its
exports to boycotting country Y, sends a sales
representative to Y for a one week trip. During a
meeting in Y with trade association
representatives, A's representative desires to
explain that neither A nor any companies with
which A deals has any business relationship with
boycotted country X. The purpose of supplying
such information is to ensure that A does not get
blacklisted.
A's representative may not volunteer this
information even though A, for reasons unrelated
to the boycott, does not deal with X, because A's
representative would be volunteering information
about A's business relationships with X for
boycott reasons.
(viii) U.S. company A is asked by boycotting
country Y to furnish information concerning its
business relationships with boycotted country X.
A, knowing that Y is seeking the information for
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boycott purposes, refuses to furnish the
information asked for directly, but proposes to
respond by supplying a copy of its annual report
which lists the countries with which A is
presently doing business. A does not happen to
be doing business with X.
A may not respond to Y's request by supplying its
annual report, because A knows that it would be
responding to a boycott-based request for
information about its business relationships with
X.
(ix) U.S. company A receives a letter from a
central boycott office asking A to "clarify" A's
operations in boycotted country X. A intends to
continue its operations in X, but fears that not
responding to the request will result in its being
placed on boycotting country Y's blacklist. A
knows or has reason to know that the information
is sought for boycott reasons.
A may not respond to this request, because the
information concerns its business relationships
with a boycotted country.
(x) U.S. company A, in the course of
negotiating a sale of its goods to a buyer in
boycotting country Y, is asked to certify that its
supplier is not on Y's blacklist.
A may not furnish the information about its
supplier's blacklist status, because this is
information about A's business relationships with
another person who is believed to be restricted
from having any business relationship with or in
a boycotting country.
(xi) U.S. company A has a manufacturing plant
in boycotted country X and is on boycotting country Y's blacklist. A is seeking to establish
operations in Y, while expanding its operations in
X. A applies to Y to be removed from Y's
blacklist. A is asked, in response, to indicate
whether it has manufacturing facilities in X.

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A may not supply the requested information,
because A would be furnishing information about
its business relationships in a boycotted country.
(xii) U.S. bank A plans to open a branch office
in boycotting country Y. In order to do so, A is
required to furnish certain information about its
business operations, including the location of its
other branch offices. Such information is
normally sought in other countries where A has
opened a branch office, and A does not have
reason to know that Y is seeking the information
for boycott reasons.
A may furnish this information, even though in
furnishing it A would disclose information about
its business relationships in a boycotted country,
because it is being furnished in a normal business
context and A does not have reason to know that
it is sought for boycott reasons.
(xiii) U.S. architectural firm A responds to an
invitation to submit designs for an office complex
in boycotting country Y. The invitation states
that all bidders must include information
concerning similar types of buildings they have
designed. A has not designed such buildings in
boycotted country X. Clients frequently seek
information of this type before engaging an
architect.
A may furnish this information, because this is
furnishing normal business information, in a
commercial context, relating to A's technical
competence and professional experience.
(xiv) U.S. oil company A distributes to
potential customers promotional brochures and
catalogs which give background information on
A's past projects. A does not have business
dealings with boycotted country X.
The
brochures, which are identical to those which A
uses throughout the world, list those countries in
which A does or has done business. In soliciting
potential customers in boycotting country Y, A
desires to distribute copies of its brochures.

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A may do so, because this is furnishing normal
business information, in a commercial context,
relating to professional experience.
(xv) U.S. company A is interested in doing
business with boycotting country Y. A wants to
ask Y's Ministry of Trade whether, and if so why,
A is on Y's blacklist or is otherwise restricted for
boycott reasons from doing business with Y.
A may make this limited inquiry, because it does
not constitute furnishing information.
(xvi) U.S. company A is asked by boycotting
country Y to certify that it is not owned by
subjects or nationals of boycotted country X and
that it is not resident in boycotted country X.
A may not furnish the certification, because it is
information about A's business relationships with
or in a boycotted country, or with nationals of a
boycotted country.
(xvii) U.S. company A, a manufacturer of
certain patented products, desires to register its
patents in boycotting country Y. A receives a
power of attorney form required to register its
patents. The form contains a question regarding
A's business relationships with or in boycotted
country X. A has no business relationships with
X and knows or has reason to know that the
information is sought for boycott reasons.
A may not answer the question, because A would
be furnishing information about its business
relationships with or in a boycotted country.
(xviii) U.S. company A is asked by boycotting
country Y to certify that it is not the mother
company, sister company, subsidiary, or branch
of any blacklisted company, and that it is not in
any way affiliated with any blacklisted company.
A may not furnish the certification, because it is
information about whether A has a business
relationship with another person who is known or
believed to be restricted from having any business
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relationship with or in a boycotting country.
(e) Information concerning association with
charitable and fraternal organizations
PROHIBITION AGAINST FURNISHING
INFORMATION ABOUT ASSOCIATIONS
WITH CHARITABLE AND FRATERNAL
ORGANIZATIONS
(1) No United States person may furnish or
knowingly agree to furnish information about
whether any person is a member of, has made
contributions to, or is otherwise associated with
or involved in the activities of any charitable or
fraternal organization which supports a boycotted
country.
(2) This prohibition shall apply whether:
(i) The information concerns association with
or involvement in any charitable or fraternal
organization which (a) has, as one of its stated
purposes, the support of a boycotted country
through financial contributions or other means, or
(b) undertakes, as a major organizational activity,
to offer financial or other support to a boycotted
country;
(ii) The information is directly or indirectly
requested or is furnished on the initiative of the
United States person; or
(iii) The information requested or volunteered
concerns membership in, financial contributions
to, or any other type of association with or
involvement in the activities of such charitable or
fraternal organization.
(3) This prohibition does not prohibit the
furnishing of normal business information in a
commercial context as defined in paragraph (d) of
this section.
(4) This prohibition, like all others, applies only
with respect to a United States person's activities
in the interstate or foreign commerce of the UnitJanuary 2004

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ed States and only when such activities are
undertaken with intent to comply with, further, or
support an unsanctioned foreign boycott.
EXAMPLES OF PROHIBITION AGAINST
FURNISHING INFORMATION ABOUT
ASSOCIATIONS WITH CHARITABLE OR
FRATERNAL ORGANIZATIONS
The following examples are intended to give
guidance in determining the circumstances in
which the furnishing of information concerning
associations with charitable or fraternal
organizations is prohibited. They are illustrative,
not comprehensive.
(i) U.S. engineering firm A receives an
invitation to bid from boycotting country Y. The
invitation includes a request to supply
information concerning any association which A's
officers have with charitable organization B, an
organization which is known by A to contribute
financial support to boycotted country X. A
knows or has reason to know that the information
is sought for boycott reasons.
A may not furnish the information.

The furnishing of a resume by A is not a
boycott-related furnishing of information about
his association with charitable organizations
which support boycotted country X.
(f) Letters of credit
PROHIBITION AGAINST IMPLEMENTING
LETTERS OF CREDIT CONTAINING
PROHIBITED CONDITIONS OR
REQUIREMENTS
(1) No United States person may pay, honor,
confirm, or otherwise implement a letter of credit
which contains a condition or requirement
compliance with which is prohibited by this part,
nor shall any United States person, as a result of
the application of this section, be obligated to
pay, honor or otherwise implement such a letter
of credit.
(2) For purposes of this section, "implementing"
a letter of credit includes:

(ii) U.S. construction company A, in an effort
to establish business dealings with boycotting
country Y, proposes to furnish information to Y
showing that no members of its board of directors
are in any way associated with charitable
organizations which support boycotted country X.
A's purpose is to avoid any possibility of its being
blacklisted by Y.
A may not furnish the information, because A's
purpose in doing so is boycott-based. It makes no
difference that no specific request for the
information has been made by Y.
(iii) A, a citizen of the United States, is
applying for a teaching position in a school in
boycotting country Y. In connection with his
application, A furnishes a resume which happens
to disclose his affiliation with charitable
Export Administration Regulations

organizations. A does so completely without
reference to Y's boycott and without knowledge
of any boycott requirement of Y that pertains to
A's application for employment.

`

(i) Issuing or opening a letter of credit at the
request of a customer;
(ii) Honoring, by accepting as being a valid
instrument of credit, any letter of credit;
(iii) Paying, under a letter of credit, a draft or
other demand for payment by the beneficiary;
(iv) Confirming a letter of credit by agreeing to
be responsible for payment to the beneficiary in
response to a request by the issuer;
(v) Negotiating a letter of credit by voluntarily
purchasing a draft from a beneficiary and
presenting such draft for reimbursement to the
issuer or the confirmer of the letter of credit; and

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(vi) Taking any other action to implement a
letter of credit.

LETTERS OF CREDIT TO WHICH
THIS SECTION APPLIES

(3) In the standard international letter of credit
transaction facilitating payment for the export of
goods from the United States, a bank in a foreign
country may be requested by its customer to issue
a revocable or irrevocable letter of credit in favor
of the United States exporter. The customer
usually requires, and the letter of credit provides,
that the issuing (or a confirming) bank will make
payment to the beneficiary against the bank's
receipt of the documentation specified in the
letter of credit. Such documentation usually
includes commercial and consular invoices, a bill
of lading, and evidence of insurance, but it may
also include other required certifications or
documentary assurances such as the origin of the
goods and information relating to the carrier or
insurer of the shipment.

(6) This prohibition, like all others, applies only
with respect to a United States person's activities
taken with intent to comply with, further, or
support an unsanctioned foreign boycott. In
addition, it applies only when the transaction to
which the letter of credit applies is in United
States commerce and the beneficiary is a United
States person.

Banks usually will not accept drafts for payment
unless the documents submitted therewith comply
with the terms and conditions of the letter of
credit.
(4) A United States person is not prohibited
under this section from advising a beneficiary of
the existence of a letter of credit in his favor, or
from taking ministerial actions to dispose of a
letter of credit which it is prohibited from
implementing.
(5) Compliance with this section shall provide an
absolute defense in any action brought to compel
payment of, honoring of, or other implementation
of a letter of credit, or for damages resulting from
failure to pay or otherwise honor or implement
the letter of credit. This section shall not
otherwise relieve any person from any obligations
or other liabilities he may incur under other laws
ore regulations, except as may be explicitly
provided in this section.

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IMPLEMENTATION OF LETTERS OF
CREDIT IN THE UNITED STATES
(7) A letter of credit implemented in the United
States by a United States person located in the
United States, including a permanent United
States establishment of a foreign bank, will be
presumed to apply to a transaction in United
States commerce and to be in favor of a United
States beneficiary where the letter of credit
specifies a United States address for the
beneficiary.
These presumptions may be
rebutted by facts which could reasonably lead the
bank to conclude that the beneficiary is not a
United States person or that the underlying
transaction is not in United States commerce.
(8) Where a letter of credit implemented in the
United States by a United States person located in
the United States does not specify a United States
address for the beneficiary, the beneficiary will be
presumed to be other than a United States person.
This presumption may be rebutted by facts which
could reasonably lead the bank to conclude that
the beneficiary is a United States person despite
the foreign address.
IMPLEMENTATION OF LETTERS OF
CREDIT OUTSIDE THE UNITED STATES
(9) A letter of credit implemented outside the
United States by a United States person located
outside the United States will be presumed to
apply to a transaction in United States commerce
and to be in favor of a United States beneficiary
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where the letter of credit specifies a United States
address for the beneficiary and calls for
documents indicating shipment from the United
States or otherwise indicating that the goods are
of United States origin. These presumptions may
be rebutted by facts which could reasonably lead
the bank to conclude that the beneficiary is not a
United States person or that the underlying
transaction is not in United States commerce.
(10) Where a letter of credit implemented outside
the United States by a United States person
located outside the United States does not specify
a United States address for the beneficiary, the
beneficiary will be presumed to be other than a
United States person. In addition, where such a
letter of credit does not call for documents
indicating shipment from the United States or
otherwise indicating that the goods are of United
States origin, the transaction to which it applies
will be presumed to be outside United States
commerce. The presumption that the beneficiary
is other than a United States person may be
rebutted by facts which could reasonably lead the
bank to conclude that the beneficiary is a United
States person.
The presumption that the
transaction to which the letter of credit applies is
outside United States commerce may be rebutted
by facts which could reasonably lead the bank to
conclude that the underlying transaction is in
United States commerce.
EXAMPLES OF THE PROHIBITION
AGAINST IMPLEMENTING
LETTERS OF CREDIT
The following examples are intended to give
guidance in determining the circumstances in
which this section applies to the implementation
of a letter of credit and in which such
implementation is prohibited.
They are
illustrative, not comprehensive.

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IMPLEMENTATION OF LETTERS OF
CREDIT IN UNITED STATES COMMERCE
(i) A, a U.S. bank located in the United States,
opens a letter of credit in the United States in
favor of B, a foreign company located outside the
United States. The letter of credit specifies a
non-U.S. address for the beneficiary.
The beneficiary is presumed to be other than a
U.S. person, because it does not have a U.S.
address. The presumption may be rebutted by
facts showing that A could reasonably conclude
that the beneficiary is a U.S. person despite the
foreign address.
(ii) A, a branch of a foreign bank located in the
United States, opens a letter of credit in favor of
B, a foreign company located outside the United
States. The letter of credit specifies a non-U.S.
address for the beneficiary.
The beneficiary is presumed to be other than a
U.S. person, because it does not have a U.S.
address. The presumption may be rebutted by
facts showing that A could reasonably conclude
that the beneficiary is a U.S. person despite the
foreign address.
(iii) A, a U.S. bank branch located outside the
United States, opens a letter of credit in favor of
B, a person with a U.S. address. The letter of
credit calls for documents indicating shipment of
goods from the United States.
The letter of credit is presumed to apply to a
transaction in U.S. commerce and to be in favor
of a U.S. beneficiary because the letter of credit
specifies a U.S. address for the beneficiary and
calls for documents indicating that the goods will
be shipped from the United States. These
presumptions may be rebutted by facts showing
that A could reasonably conclude that the
beneficiary is not a U.S. person or that the
underlying transaction is not in U.S. commerce.

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(iv) A, a U.S. bank branch located outside the
United States, opens a letter of credit which
specifies a beneficiary, B, with an address outside
the United States and calls for documents
indicating that the goods are of U.S.-origin. A
knows or has reason to know that although B has
an address outside the United States, B is a U.S.
person.
The letter of credit is presumed to apply to a
transaction in U.S. commerce, because the letter
of credit calls for shipment of U.S.-origin goods.
In addition, the letter of credit is presumed to be
in favor of a beneficiary who is a U.S. person,
because A knows or has reason to know that the
beneficiary is a U.S. person despite the foreign
address.
(v) A, a U.S. bank branch located outside the
United States, opens a letter of credit which
specifies a beneficiary with a U.S. address. The
letter of credit calls for documents indicating
shipment of foreign-origin goods.
The letter of credit is presumed to be in favor of a
U.S. beneficiary but to apply to a transaction
outside U.S. commerce, because it calls for
documents indicating shipment of foreign-origin
goods. The presumption of non-U.S. commerce
may be rebutted by facts showing that A could
reasonably conclude that the underlying
transaction involves shipment of U.S.-origin
goods or goods from the United States.
PROHIBITION AGAINST IMPLEMENTING
LETTERS OF CREDIT
(i) Boycotting country Y orders goods from
U.S. company B. Y opens a letter of credit with
foreign bank C in favor of B. The letter of credit
specifies as a condition of payment that B certify
that it does not do business with boycotted
country X. Foreign bank C forwards the letter of
credit it has opened to U.S. bank A for
confirmation.

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A may not confirm or otherwise implement this
letter of credit, because it contains a condition
with which a U.S. person may not comply.
(ii) Same as (i), except U.S. bank A desires to
advise the beneficiary, U.S. company B, of the
letter of credit.
A may do so, because advising the beneficiary of
the letter of credit (including the term which
prevents A from implementing it) is not
implementation of the letter of credit.
(iii) Same as (i), except foreign bank C sends a
telegram to U.S. bank A stating the major terms
and conditions of the letter of credit. The
telegram does not reflect the boycott provision.
Subsequently, C mails to A documents setting
forth the terms and conditions of the letter of
credit, including the prohibited boycott condition.
A may not further implement the letter of credit
after it receives the documents, because they
reflect the prohibited boycott condition in the
letter of credit. A may advise the beneficiary and
C of the existence of the letter of credit (including
the boycott term), and may perform any
essentially ministerial acts necessary to dispose of
the letter of credit.
(iv) Same as (iii), except that U.S. company B,
based in part on information received from U.S.
bank A, desires to obtain an amendment to the
letter of credit which would eliminate or nullify
the language in the letter of credit which prevents
A from paying or otherwise implementing it.
Either company B or bank A may undertake, and
the other may cooperate and assist in, this
endeavor. A could then pay or otherwise
implement the revised letter of credit, so long as
the original prohibited boycott condition is of no
force or effect.
(v) Boycotting country Y requests a foreign
bank in Y to open a letter of credit to effect
payment for goods to be shipped by U.S. supplier
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B, the beneficiary of the letter of credit. The
letter of credit contains prohibited boycott
clauses. The foreign bank forwards a copy of the
letter of credit to its branch office A, in the
United States.
A may advise the beneficiary but may not
implement the letter of credit, because it contains
prohibited boycott conditions.
(vi) Boycotting country Y orders goods from
U.S. company B. U.S. bank A is asked to
implement, for the benefit of B, a letter of credit
which contains a clause requiring documentation
that the goods shipped are not of boycotted
country X origin.
A may not implement the letter of credit with a
prohibited condition, and may accept only a
positive certificate of origin as satisfactory
documentation. (See §760.3(c) on "Import and
Shipping Document Requirements.")
(vii) [Reserved]
(viii) B is a foreign bank located outside the
United States. B maintains an account with U.S.
bank A, located in the United States. A letter of
credit issued by B in favor of a U.S. beneficiary
provides that any negotiating bank may obtain
reimbursement from A by certifying that all the
terms and conditions of the letter of credit have
been met and then drawing against B's account. B
notifies A by cable of the issuance of a letter of
credit and the existence of reimbursement
authorization; A does not receive a copy of the
letter of credit.
A may reimburse any negotiating bank, even
when the underlying letter of credit contains a
prohibited boycott condition, because A does not
know or have reason to know that the letter of
credit contains a prohibited boycott condition.
(ix) Same as (viii), except that foreign bank B
forwards a copy of the letter of credit to U.S.
bank A, which then becomes aware of the
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prohibited boycott clause.
A may not thereafter reimburse a negotiating
bank or in any way further implement the letter of
credit, because it knows of the prohibited boycott
condition.
(x) Boycotting country Y orders goods from
U.S. exporter B and requests a foreign bank in Y
to open a letter of credit in favor of B to cover the
cost. The letter of credit contains a prohibited
boycott clause. The foreign bank asks U.S. bank
A to advise and confirm the letter of credit.
Through inadvertence, A does not notice the
prohibited clause and confirms the letter of credit.
A thereafter notices the clause and then refuses to
honor B's draft against the letter of credit. B sues
bank A for payment.
A has an absolute defense against the obligation
to make payment under this letter of credit.
(Note: Examples (ix) and (x) do not alter any
other obligations or liabilities of the parties under
appropriate law.)
(xi) [Reserved]
(xii) Boycotting country Y orders goods from
U.S. company B. A letter of credit which contains
a prohibited boycott clause is opened in favor of
B by a foreign bank in Y. The foreign bank asks
U.S. bank A to advise and confirm the letter of
credit, which it forwards to A.
A may advise B that it has received the letter of
credit (including the boycott term), but may not
confirm the letter of credit with the prohibited
clause.
(xiii) Same as (xii), except U.S. bank A fails to
tell B that it cannot process the letter of credit. B
requests payment.
A may not pay. If the prohibited language is
eliminated or nullified as the result of
renegotiation, A may then pay or otherwise
implement the revised letter of credit.
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(xiv) U.S. bank A receives a letter of credit in
favor of U.S. beneficiary B. The letter of credit
requires B to certify that he is not blacklisted.
A may implement such a letter of credit, but it
may not insist that the certification be furnished,
because by so insisting it would be refusing to do
business with a blacklisted person in compliance
with a boycott.
(xv) A, a U.S. bank located in the U.S. opens a
letter of credit in favor of U.S. beneficiary B for
B's sale of goods to boycotting country Y. The
letter of credit contains no boycott conditions, but
A knows that Y customarily requires the seller of
goods to certify that it has dealt with no
blacklisted supplier. A, therefore, instructs B that
it will not make payment under the letter of credit
unless B makes such a certification.

§760.3
EXCEPTIONS TO PROHIBITIONS
(a) Import requirements of a boycotting
country
COMPLIANCE WITH IMPORT
REQUIREMENTS OF A BOYCOTTING
COUNTRY
(1) A United States person, in supplying goods or
services to a boycotting country, or to a national
or resident of a boycotting country, may comply
or agree to comply with requirements of such
boycotting country which prohibit the import of:
(i) Goods or services from the boycotted
country;

A's action in requiring the certification from B
constitutes action to require another person to
refuse to do business with blacklisted persons.

(ii) Goods produced or services provided by
any business concern organized under the laws of
the boycotted country; or

(xvi) A, a U.S. bank located in the U.S., opens
a letter of credit in favor of U.S. beneficiary B for
B's sale of goods to boycotting country Y. The
letter of credit contains no boycott conditions, but
A has actual knowledge that B has agreed to
supply a certification to Y that it has not dealt
with blacklisted firms, as a condition of receiving
the letter of credit in its favor.

(iii) Goods produced or services provided by
nationals or residents of the boycotted country.

A may not implement the letter of credit, because
it knows that an implicit condition of the credit is
a condition with which B may not legally comply.
(xvii) Boycotting country Y orders goods from
U.S. company B. Y opens a letter of credit with
foreign bank C in favor of B. The letter of credit
includes the statement, "Do not negotiate with
blacklisted banks." C forwards the letter of credit
it has opened to U.S. bank A for confirmation.
A may not confirm or otherwise implement this
letter of credit, because it contains a condition
with which a U.S. person may not comply.
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(2) A United States person may comply or agree
to comply with such import requirements whether
or not he has received a specific request to
comply. By its terms, this exception applies only
to transactions involving imports into a
boycotting country. A United States person may
not, under this exception, refuse on an
across-the-board basis to do business with a
boycotted country or a national or resident of a
boycotted country.
(3) In taking action within the scope of this
exception, a United States person is limited in the
types of boycott-related information he can
supply.
(See §760.2(d) of this part on
"Furnishing Information About Business
Relationships with Boycotted Countries or
Blacklisted Persons" and paragraph (c) of this
section on "Import and Shipping Document
Requirements.")
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EXAMPLES OF COMPLIANCE WITH
IMPORT REQUIREMENTS
OF A BOYCOTTING COUNTRY
The following examples are intended to give
guidance in determining the circumstances in
which compliance with the import requirements
of a boycotting country is permissible. They are
illustrative, not comprehensive.
(i) A, a U.S. manufacturer, receives an order
from boycotting country Y for its products.
Country X is boycotted by country Y, and the
import laws of Y prohibit the importation of
goods produced or manufactured in X. In filling
this type of order, A would usually include some
component parts produced in X.
For the purpose of filling this order, A may
substitute comparable component parts in place of
parts produced in X, because the import laws of Y
prohibit the importation of goods manufactured in
X.
(ii) Same as (i), except that A's contract with Y
expressly provides that in fulfilling the contract A
"may not include parts or components produced
or manufactured in boycotted country X."
A may agree to and comply with this contract
provision, because Y prohibits the importation of
goods from X. However, A may not furnish
negative certifications regarding the origin of
components in response to import and shipping
document requirements.
(iii) A, a U.S. building contractor, is awarded a
contract to construct a plant in boycotting country
Y. A accepts bids on goods required under the
contract, and the lowest bid is made by B, a
business concern organized under the laws of X,
a country boycotted by Y. Y prohibits the import
of goods produced by companies organized under
the laws of X.
For purposes of this contract, A may reject B's bid
and accept another, because B's goods would be
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refused entry into Y because of Y's boycott
against X.
(iv) Same as (iii), except that A also rejects the
low bid by B for work on a construction project in
country M, a country not boycotted by Y.
This exception does not apply, because A's action
is not taken in order to comply with Y's
requirements prohibiting the import of products
from boycotted country X.
(v) A, a U.S. management consulting firm,
contracts to provide services to boycotting
country Y. Y requests that A not employ
residents or nationals of boycotted country X to
provide those services.
A may agree, as a condition of the contract, not to
have services furnished by nationals or residents
of X, because importation of such services is
prohibited by Y.
(vi) A, a U.S. company, is negotiating a
contract to supply machine tools to boycotting
country Y. Y insists that the contract contain a
provision whereby A agrees that none of the
machine tools will be produced by any business
concern owned by nationals of boycotted country
X, even if the business concern is organized under
the laws of a non-boycotted country.
A may not agree to this provision, because it is a
restriction on the import of goods produced by
business concerns owned by nationals of a
boycotted country even if the business concerns
themselves are organized under the laws of a
non-boycotted country.
(b) Shipment of goods to a boycotting country
COMPLIANCE WITH REQUIREMENTS
REGARDING THE SHIPMENT OF GOODS
TO A BOYCOTTING COUNTRY
(1) A United States person, in shipping goods to
a boycotting country, may comply or agree to
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comply with requirements of that country which
prohibit the shipment of goods:

country Y is importing goods. Y directs that the
goods not pass through a port of boycotted
country X.

(i) On a carrier of the boycotted country; or
(ii) By a route other than that prescribed by the
boycotting country or the recipient of the
shipment.
(2) A specific request that a United States person
comply or agree to comply with requirements
concerning the use of carriers of a boycotted
country is not necessary if the United States
person knows, or has reason to know, that the use
of such carriers for shipping goods to the
boycotting country is prohibited by requirements
of the boycotting country. This exception applies
whether a boycotting country or the purchaser of
the shipment:
(i) Explicitly states that the shipment should
not pass through a port of the boycotted country;
or
(ii) Affirmatively describes a route of shipment
that does not include a port in the boycotted
country.
(3) For purposes of this exception, the term
"carrier of a boycotted country" means a carrier
which flies the flag of a boycotted country or
which is owned, chartered, leased, or operated by
a boycotted country or by nationals or residents of
a boycotted country.
EXAMPLES OF COMPLIANCE WITH THE
SHIPPING REQUIREMENTS
OF A BOYCOTTING COUNTRY
The following examples are intended to give
guidance in determining the circumstances in
which compliance with import and shipping
document requirements of a boycotting country is
permissible.
They are illustrative, not
comprehensive.

A may comply with Y's shipping instructions,
because they pertain to the route of shipment of
goods being shipped to Y.
(ii) A, a U.S. fertilizer manufacturer, receives
an order from boycotting country Y for fertilizer.
Y specifies in the order that A may not ship the
fertilizer on a carrier of boycotted country X.
A may comply with this request, because it
pertains to the carrier of a boycotted country.
(iii) B, a resident of boycotting country Y,
orders textile goods from A, a U.S. distributor,
specifying that the shipment must not be made on
a carrier owned or leased by nationals of
boycotted country X and that the carrier must not
pass through a port of country X enroute to Y.
A may comply or agree to comply with these
requests, because they pertain to the shipment of
goods to Y on a carrier of a boycotted country
and the route such shipment will take.
(iv) Boycotting country Y orders goods from
A, a U.S. retail merchant. The order specifies
that the goods shipped by A "may not be shipped
on a carrier registered in or owned by boycotted
country X."
A may agree to this contract provision, because it
pertains to the carrier of a boycotted country.
(v) Boycotting country Y orders goods from A,
a U.S. pharmaceutical company, and requests
that the shipment not pass through a port of
country P, which is not a country boycotted by Y.
This exception does not apply in a non-boycotting
situation. A may comply with the shipping
instructions of Y, because in doing so he would
not violate any prohibition of this part.

(i) A is a U.S. exporter from whom boycotting
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(vi) Boycotting country Y orders goods from
A, a U.S. manufacturer. The order specifies that
goods shipped by A “must not be shipped on
vessels blacklisted by country Y”.
A may not agree to comply with the this condition
because it is not a restriction limited to the use of
carriers of the boycotted country.
(c) Import and shipping document
requirements
COMPLIANCE WITH IMPORT AND
SHIPPING DOCUMENT REQUIREMENTS
OF A BOYCOTTING COUNTRY
(1) A United States person, in shipping goods to
a boycotting country, may comply or agree to
comply with import and shipping document
requirements of that country, with respect to:
(i) The country or origin of the goods;

EXAMPLES OF COMPLIANCE
WITH IMPORT AND SHIPPING
DOCUMENT REQUIREMENTS
The following examples are intended to give
guidance in determining the circumstances in
which compliance with the import requirements
of a boycotting country is permissible. They are
illustrative, not comprehensive.
(i) Boycotting country Y contracts with A, a
U.S. petroleum equipment manufacturer, for
certain equipment. Y requires that goods being
imported into Y must be accompanied by a
certification that the goods being supplied did not
originate in boycotted country X.
A may not supply such a certification in negative
terms but may identify instead the country of
origin of the goods in positive terms only.

(ii) The name and nationality of the carrier;

(ii) Same as (i), except that Y requires that the
shipping documentation accompanying the goods
specify the country of origin of the goods.

(iii) The route of the shipment;

A may furnish the information.

(iv) The name, residence, or address of the
supplier of the shipment;
(v) The name, residence, or address of the
provider of other services.
(2) Such information must be stated in positive,
non-blacklisting, non-exclusionary terms except
for information with respect to the names or
nationalities of carriers or routes of shipment,
which may continue to be stated in negative terms
in conjunction with shipments to a boycotting
country, in order to comply with precautionary
requirements protecting against war risks or
confiscation.

(iii) [Reserved]
(iv) A, a U.S. apparel manufacturer, has
contracted to sell certain of its products to B, a
national of boycotting country Y. The form that
must be submitted to customs officials of Y
requires the shipper to certify that the goods
contained in the shipment have not been supplied
by "blacklisted" persons.
A may not furnish the information in negative
terms but may certify, in positive terms only, the
name of the supplier of the goods.
(v) Same as (iv), except the customs form
requires certification that the insurer and freight
forwarder used are not "blacklisted."
A may not comply with the request but may
supply a certification stating, in positive terms

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only, the names of the insurer and freight
forwarder.
(vi) A, a U.S. petrochemical manufacturer,
executes a sales contract with B, a resident of
boycotting country Y. A provision of A's contract
with B requires that the bill of lading and other
shipping documents contain certifications that the
goods have not been shipped on a "blacklisted"
carrier.
A may not agree to supply a certification that the
carrier is not "blacklisted" but may certify the
name of the carrier in positive terms only.
(vii) Same as (vi), except that the contract
requires certification that the goods will not be
shipped on a carrier which flies the flag of, or is
owned, chartered, leased, or operated by
boycotted country X, or by nationals or residents
of X.
Such a certification, which is a reasonable
requirement to protect against war risks or
confiscation, may be furnished at any time.

A may comply at any time, because the statement
is not required to be made in negative or
blacklisting terms.
(xi) A, a U.S. exporter, is negotiating a contract
to sell bicycles to boycotting country Y. Y insists
that A agree to certify that the goods will not be
shipped on a vessel which has ever called at a
port in boycotted country X.
As distinguished from a certification that goods
will not be shipped on a vessel which will call
enroute at a port of boycotted country X, such a
certification is not a reasonable requirement to
protect against war risks or confiscation, and,
hence, may not be supplied.
(xii) Same as (xi), except that Y insists that A
agree to certify that the goods will not be shipped
on a carrier that is ineligible to enter Y's waters.
Such a certification, which is not a reasonable
requirement to protect against war risks or
confiscation may not be supplied.
(d) Unilateral and Specific Selection

(viii) Same as (vi), except that the contract
requires that the shipping documents certify the
name of the carrier being used.
A may, at any time, supply or agree to supply the
requested documentation regarding the name of
the carrier, either in negative or positive terms.
(ix) Same as (vi), except that the contract
requires a certification that the carrier will not
call at a port in boycotted country X before
making delivery in Y.
Such a certification, which is a reasonable
requirement to protect against war risks or
confiscation, may be furnished at any time.
(x) Same as (vi), except that the contract
requires that the shipping documents indicate the
name of the insurer and freight forwarder.

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COMPLIANCE WITH UNILATERAL AND
SPECIFIC SELECTION
(1) A United States person may comply or agree
to comply in the normal course of business with
the unilateral and specific selection by a
boycotting country, a national of a boycotting
country, or a resident of a boycotting country
(including a United States person who is a bona
fide resident of a boycotting country) of carriers,
insurers, suppliers of services to be performed
within the boycotting country, or specific goods,
provided that with respect to services, it is
necessary and customary that a not insignificant
part of the services be performed within the
boycotting country. With respect to goods, the
items, in the normal course of business, must be
identifiable as to their source or origin at the time
of their entry into the boycotting country by (a)
uniqueness of design or appearance or (b)
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trademark, trade name, or other identification
normally on the items themselves, including their
packaging.
(2) This exception pertains to what is permissible
for a United States person who is the recipient of
a unilateral and specific selection of goods or
services to be furnished by a third person. It does
not pertain to whether the act of making such a
selection is permitted; that question is covered,
with respect to United States persons, in
paragraph (g) of this section on "Compliance with
Local Law." Nor does it pertain to the United
States person who is the recipient of an order to
supply its own goods or services. Nothing in this
part prohibits or restricts a United States person
from filling an order himself, even if he is
selected by the buyer on a boycott basis (e.g.,
because he is not blacklisted), so long as he does
not himself take any action prohibited by this
part.
UNILATERAL AND SPECIFIC CHARACTER
OF THE SELECTION
(3) In order for this exception to apply, the
selection with which a United States person
wishes to comply must be unilateral and specific.
(4) A "specific" selection is one which is stated
in the affirmative and which specifies a particular
supplier of goods or services.
(5) A "unilateral" selection is one in which the
discretion in making the selection is exercised by
the boycotting country buyer. If the United States
person who receives a unilateral selection has
provided the buyer with any boycott-based
assistance (including information for purposes of
helping the buyer select someone on a boycott
basis), then the buyer's selection is not unilateral,
and compliance with that selection by a United
States person does not come within this
exception.
(6) The provision of so-called "pre-selection" or
"pre-award" services, such as providing lists of
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qualified suppliers, subcontractors, or bidders,
does not, in and of itself, destroy the unilateral
character of a selection, provided such services
are not boycott-based.
Lists of qualified
suppliers, for example, must not exclude anyone
because he is blacklisted. Moreover, such
services must be of the type customarily provided
in similar transactions by the firm (or industry of
which the firm is a part) as measured by the
practice in non-boycotting as well as boycotting
countries. If such services are not customarily
provided in similar transactions or such services
are provided in such a way as to exclude
blacklisted persons from participating in a
transaction or diminish their opportunity for such
participation, then the services may not be
provided without destroying the unilateral
character of any subsequent selection.
SELECTION TO BE MADE BY
BOYCOTTING COUNTRY RESIDENT
(7) In order for this exception to be available, the
unilateral and specific selection must have been
made by a boycotting country, or by a national or
resident of a boycotting country. Such a resident
may be a United States person. For purposes of
this exception, a United States person will be
considered a resident of a boycotting country only
if he is a bona fide resident. A United States
person may be a bona fide resident of a
boycotting country even if such person's
residency is temporary.
(8) Factors that will be considered in determining
whether a United States person is a bona fide
resident of a boycotting country include:
(i) Physical presence in the country;
(ii) Whether residence is needed for legitimate
business reasons;
(iii) Continuity of the residency;
(iv) Intent to maintain the residency;

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(v) Prior residence in the country;
(vi) Size and nature of presence in the country;
(vii) Whether the person is registered to do
business or incorporated in the country;
(viii) Whether the person has a valid work visa;
and
(ix) Whether the person has a similar presence
in both boycotting and non-boycotting foreign
countries in connection with similar business
activities.
Note to paragraph (d)(8) of this section: No
one of the factors is dispositive. All the
circumstances will be examined closely to
ascertain whether there is, in fact, a bona fide
residency. Residency established solely for
purposes of avoidance of the application of this
part, unrelated to legitimate business needs, does
not constitute bona fide residency.
(9) The boycotting country resident must be the
one actually making the selection. If a selection
is made by a non-resident agent, parent,
subsidiary, affiliate, home office or branch office
of a boycotting country resident, it is not a
selection by a resident within the meaning of this
exception.
(10) A selection made solely by a bona fide
resident and merely transmitted by another person
to a United States person for execution is a
selection by a bona fide resident within the
meaning of this exception.
DUTY OF INQUIRY
(11) If a United States person receives, from
another person located in the United States, what
may be a unilateral selection by a boycotting
country customer, and knows or has reason to
know that the selection is made for boycott
reasons, he has a duty to inquire of the
transmitting person to determine who actually
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made the selection. If he knows or has reason to
know that the selection was made by other than a
boycotting country, or a national or resident of a
boycotting country, he may not comply. A course
or pattern of conduct which a United States
person recognizes or should recognize as
consistent with boycott restrictions will create a
duty to inquire.
(12) If the United States person does not know or
have reason to know that the selection it receives
is boycott-based, its compliance with such a
selection does not offend any prohibition and this
exception is not needed.
SELECTION OF SERVICES
(13) This exception applies only to compliance
with selections of certain types of suppliers of
services-carriers, insurers, and suppliers of
services to be performed "within the boycotting
country." Services to be performed wholly within
the United States or wholly within any country
other than the boycotting country are not covered.
(14) For purposes of this part, services are to be
performed "within the boycotting country" only
if they are of a type which would customarily be
performed by suppliers of those services within
the country of the recipient of those services, and
if the part of the services performed within the
boycotting country is a necessary and not
insignificant part of the total services performed.
(15) What is "customary and necessary" for these
purposes depends on the usual practice of the
supplier of the services (or the industry of which
he is a part) as measured by the practice in
non-boycotting as well as boycotting countries,
except where such practices are instituted to
accommodate this part.
SELECTION OF GOODS
(16) This exception applies only to compliance
with selections of certain types of goods--goods
that, in the normal course of business, are
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identifiable as to their source or origin at the time
of their entry into the boycotting country. The
definition of "specifically identifiable goods" is
the same under this section as it is in paragraph
(g) of this section on "Compliance with Local
Law."
(17) Goods "specifically identifiable" in the
normal course of business are those items which
at the time of their entry into a boycotting country
are identifiable as to source or origin by
uniqueness of design or appearance; or trademark,
trade name, or other identification normally on
the items themselves, including their packaging.
Goods are "specifically identifiable" in the
normal course of business if their source or origin
is ascertainable by inspection of the items
themselves, including their packaging, regardless
of whether inspection takes place. Goods are not
considered to be "specifically identifiable" in the
normal course of business if a trademark, trade
name, or other form of identification not normally
present is added to the items themselves,
including their packaging, to accommodate this
part.

which compliance with such a selection is
permissible. They are illustrative, not
comprehensive.
SPECIFIC AND UNILATERAL SELECTION
(i) A, a U.S. manufacturer of road-grading
equipment, is asked by boycotting country Y to
ship goods to Y on U.S. vessel B, a carrier which
is not blacklisted by Y. A knows or has reason to
know that Y's selection of B is boycott-based.
A may comply with Y's request, or may agree to
comply as a condition of the contract, because the
selection is specific and unilateral.
(ii) A, a U.S. contractor building an industrial
facility in boycotting country Y is asked by B, a
resident of Y, to use C as the supplier of air
conditioning equipment to be used in the facility.
C is not blacklisted by country Y. A knows or has
reason to know that B's request is boycott-based.
A may comply with B's request, or may agree to
comply as a condition of the contract, because the
selection of C is specific and unilateral.

GENERAL
(18) If a unilateral selection meets the conditions
described in paragraph (d) of this section, the
United States person receiving the unilateral
selection may comply or agree to comply, even if
he knows or has reason to know that the selection
was boycott-based. However, no United States
person may comply or agree to comply with any
unilateral selection if he knows or has reason to
know that the purpose of the selection is to effect
discrimination against any United States person
on the basis of race, religion, sex, or national
origin.
EXAMPLES OF COMPLIANCE WITH A
UNILATERAL SELECTION
The following examples are intended to give
guidance in determining what constitutes a
unilateral selection and the circumstances in
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(iii) A, a U.S. manufacturer of automotive
equipment, is asked by boycotting country Y not
to ship its goods to Y on U.S. carriers, B, C, or D.
Carriers B, C, and D are blacklisted by boycotting
country Y. A knows or has reason to know that
Y's request is boycott-based.
A may not comply or agree to comply with Y's
request, because no specific selection of any
particular carrier has been made.
(iv) A, a U.S. exporter shipping goods ordered
by boycotting country Y, is provided by Y with a
list of eligible U.S. insurers from which A may
choose in insuring the shipment of its goods. A
knows or has reason to know that the list was
compiled on a boycott basis.
A may not comply or agree to comply with Y's
request that A choose from among the eligible
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insurers, because no specific selection of any
particular insurer has been made.
(v)
A, a U.S. aircraft manufacturer, is
negotiating to sell aircraft to boycotting country
Y. During the negotiations, Y asks A to identify
the company which normally manufactures the
engines for the aircraft. A responds that they are
normally manufactured by U.S. engine
manufacturer B. B is blacklisted by Y. In making
the purchase, Y specifies that the engines for the
aircraft should be supplied by U.S. engine
manufacturer C.
A may comply or agree to comply with Y's
selection of C, because Y's selection is unilateral
and specific.
(vi) A, a U.S. construction firm, is retained by
an agency of boycotting country Y to build a
pipeline. Y requests A to suggest qualified
engineering firms to be used on-site in the
construction of the pipeline. It is customary for
A, regardless of where it conducts its operations,
to identify qualified engineering firms to its
customers so that its customers may make their
own selection of the firm to be engaged. Choice
of engineering firm is customarily a prerogative
of the customer. A provides a list of five
engineering firms, B-F, excluding no firm
because it may be blacklisted, and then confers
with and gives its recommendations to Y. A
recommends C, because C is the best qualified. Y
then selects B, because C is blacklisted.
A may comply with Y's selection of B, because
the boycott-based decision is made by Y and is
unilateral and specific. Since A's pre-award
services are of the kind customarily provided in
these situations, and since they are provided
without reference to the boycott, they do not
destroy the unilateral character of Y's selection.

aircraft tire manufacturers so that Y can select the
tires to be placed on the planes. This is a highly
unusual request, since, in A's worldwide business
operations, choice of tires is customarily made by
the manufacturer, not the customer. Nonetheless,
A supplies a list of tire manufacturers, B, C, D,
and E. Y chooses tire manufacturer B because B
is not blacklisted. Had A, as is customary,
selected the tires, company C would have been
chosen. C happens to be blacklisted, and A
knows that C's blacklist status was the reason for
Y's selection of B.
A's provision of a list of tire manufacturers for Y
to choose from destroys the unilateral character of
Y's selection, because such a pre-selection service
is not customary in A's worldwide business
operations.
(viii) A, a U.S. aircraft manufacturer, receives
an order from U.S. company C, which is located
in the United States, for the sale of aircraft to
company D, a U.S. affiliate of C. D is a bona fide
resident of boycotting country Y. C instructs A
that "in order to avoid boycott problems," A must
use engines that are manufactured by company B,
a company that is not blacklisted by Y. Engines
built by B are unique in design and also bear B's
trade name.
Since A has reason to know that the selection is
boycott-based, he must inquire of C whether the
selection was in fact made by D. If C informs A
that the selection was made by D, A may comply.
(ix) Same as (viii), except that C initially states
that the designation was unilaterally and
specifically made by D.
A may accept C's statement without further
investigation and may comply with the selection,
because C merely transmitted D's unilateral and
specific selection.

(vii) A, a U.S. aircraft manufacturer, has an
order to supply a certain number of planes to
boycotting country Y. In connection with the
order, Y asks A to supply it with a list of qualified
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(x) Same as (ix), except that C informs A that it,
C, has selected B on behalf of or as an agent of its
affiliated company resident in the boycotting
country.
A may not comply with this selection, because the
decision was not made by a resident of the
boycotting country.
(xi) A, a U.S. management consulting firm, is
advising boycotting country Y on the selection of
a contracting firm to construct a plant for the
manufacture of agricultural chemicals. As is
customary in its business, A compiles a list of
potential contractors on the basis of its evaluation
of the capabilities of the respective candidates to
perform the job. A has knowledge that company
B is blacklisted, but provides Y with the names of
companies B, C, D, and E, listing them in order of
their qualifications. Y instructs A to negotiate
with C.
A may comply with Y's instruction, because Y's
selection is unilateral and specific.
(xii) A, a U.S. exporter, is asked by boycotting
country Y not to ship goods on carriers B, C, or
D, which are owned by nationals of and are
registered in country P, a country not boycotted
by Y.
A may comply or agree to comply with Y's
request even though the selection is not specific,
because A does not know or have reason to know
that the request is boycott-based. (NOTE: In
example (xii), A has violated no prohibition,
because it does not know or have reason to know
that Y's instruction is boycott-based. Therefore,
A could not act with the requisite intent to
comply with the boycott.)
(xiii) A, a U.S. construction company, receives
a contract to construct a hotel in boycotting
country Y. As part of the contract, A is required
to furnish Y with lists of qualified suppliers of
various specifically identifiable items.
A
compiles lists of various qualified suppliers
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wholly without reference to the boycott, and
thereafter Y instructs A to negotiate with, enter
into contracts with, and arrange for delivery from
each of the suppliers which Y designates. A
knows that Y's choices are made on a boycott
basis.
A may comply with Y's selections and carry out
these post-award services for Y, because Y's
selections were unilateral and specific and A's
pre-award services were provided without
reference to Y's boycott.
EXAMPLES OF BOYCOTTING COUNTRY
BUYER
(The factors in determining whether a United
States person is a "bona fide resident" of a
boycotting country are the same as in paragraph
(g) of this section on "Compliance with Local
Law." See also the examples in that section.)
(i) A, a U.S. exporter, is asked by B, a U.S.
person who is a bona fide resident of boycotting
country Y, to ship goods on U.S. carrier C. C is
not blacklisted by Y, and A knows that B has
chosen on a boycott basis in order to comply with
Y's boycott laws.
A may comply or agree to comply with B's
request, because B is a bona fide resident of Y.
(ii) A is a U.S. computer company whose
subsidiary, B, is a bona fide resident of
boycotting country Y. A receives an order from
B for specific, identifiable products manufactured
by company C in connection with a computer
which B is installing in Y.
A may comply or agree to comply with B's
unilateral and specific selection, so long as the
discretion was in fact exercised by B, not A.
(NOTE: Unilateral selection transactions
involving related United States persons will be
scrutinized carefully to ensure that the selection
was in fact made by the bona fide resident of the
boycotting country.)
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(iii) A, a U.S. engineering firm, has chief
engineer B as its resident engineer on a dam
construction site in boycotting country Y. B's
presence at the site is necessary in order to ensure
proper supervision of the project. In order to
comply with local law, B selects equipment
supplier C rather than D, who is blacklisted, and
directs A to purchase certain specific equipment
from C for use in the project.
A may comply with this unilateral selection,
because the decision was made by a bona fide
resident of Y.
(As noted above, unilateral selections involving
related United States persons will be scrutinized
carefully to ensure that the selection was in fact
made by the bona fide resident of the boycotting
country.)
(iv) B, a branch of U.S. bank A, is located in
boycotting country Y. B is in need of office
supplies and asks the home office in New York to
make the necessary purchases. A contacts C, a
U.S. company in the office supply business, and
instructs C to purchase various items from certain
specific companies and ship them directly to B.
In order to avoid any difficulties for B with
respect to Y's boycott laws, A is careful to specify
only non-blacklisted companies or suppliers. C
knows that that was A's purpose. C may not
comply with A's instruction, because the selection
of suppliers was not made by a resident of a
boycotting country.
(v) Same as (iv), except that A has given
standing instructions to B that whenever it needs
office supplies, it should specify certain suppliers
designated by A. To avoid running afoul of Y's
boycott laws, A's designations consist exclusively
of non-blacklisted firms. A receives an order
from B with the suppliers designated in
accordance with A's instructions.
A may not comply with B's selection, because the
selection was not in fact made by a bonafide
resident of the boycotting country, but by a
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person located in the United States.
EXAMPLES OF SUPPLIERS OF SERVICES
(i) A, a U.S. manufacturer, is asked by
boycotting country Y to ship goods to Y on U.S.
vessel B, a carrier which is not blacklisted by Y.
A may comply or agree to comply with Y's re
quest, because compliance with the unilateral and
specific selection of carriers is expressly
permitted under this exception.
(ii) A, a U.S. exporter shipping goods ordered
by C, a national of boycotting country Y, is asked
by C to insure the shipment through U.S. insurer
B.
A may comply or agree to comply with C's
request, because compliance with the unilateral
and specific selection of an insurer is expressly
permitted under this exception.
(iii) A, a U.S. construction company, is hired
by C, an agency of the government of boycotting
country Y, to build a power plant in Y. C
specifies that A should subcontract the foundation
work to U.S. contractor B. Part of the foundation
design work will be done by B in the United
States.
A may comply or agree to comply with Y's
designation, because a necessary and not
insignificant part of B's services are to be
performed within the boycotting country, and
such services are customarily performed on-site.
(iv) A, a U.S. contractor, is engaged by
boycotting country Y to build a power plant. Y
specifies that U.S. architectural firm B should be
retained by A to design the plant. In order to
design the plant, it is essential that B's personnel
visit and become familiar with the site, although
the bulk of the design and drawing work will be
done in the United States.

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A may comply or agree to comply with Y's
unilateral and specific selection of architectural
firm B, because a necessary and not insignificant
part of B's services are to be performed within Y,
and such on-site work is customarily involved in
the provision of architectural services. The fact
that the bulk of the actual work may be performed
in the United States is irrelevant since the part to
be performed within Y is necessary to B's
effective performance.
(v) Same as (iv), except that Y specifies that
the turbine for the power plant should be designed
by U.S. engineer C. It is neither customary nor
necessary for C to visit the site in order to do any
of his work, but C has informed A that he would
probably want to visit the site in Y if he were
selected for the job.
A may not comply or agree to comply with Y's
request, because, in the normal course of
business, it is neither customary nor necessary for
engineer C's services to be performed in Y.
(vi) A, a U.S. aircraft manufacturer, receives a
contract from boycotting country Y to
manufacture jet engines for Y's use. Y specifies
that the engines should be designed by U.S.
industrial engineering firm B.
A may not comply or agree to comply with Y's
request, because, in the normal course of
business, the services will not be performed in Y.
(vii) U.S. company A has a contract to supply
specially designed road graders to boycotting
country Y. Y has instructed A that it should
engage engineering firm B in the design work
rather than engineering firm C, which A normally
uses, because C is blacklisted. When A contacts
B, B informs A that one of B's personnel
customarily visits the location in which any
equipment B designs is used after it is in use, in
order to determine how good a design job B has
done. Such visits are necessary from B's point of
view to provide a check on the quality of its work,
and they are necessary from Y's point of view
Export Administration Regulations

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because they make it possible for Y to discuss
possible design changes should deficiencies be
detected.
A may not comply with Y's selection of B,
because the services which B would perform in Y
are an insignificant part of the total services to be
performed by B.
EXAMPLES OF SPECIFICALLY
IDENTIFIABLE GOODS
(The test of what constitutes "specifically
identifiable goods" under this exception also
applies to the term "specifically identifiable
goods" as used in paragraph (g) of this section on
"Compliance with Local Law.")
(i) A, a U.S. contractor, is constructing an
apartment complex, on a turnkey basis, for
boycotting country Y. Y instructs A to use only
kitchen appliances manufactured by U.S.
company B in completing the project. The
appliances normally bear the manufacturer's name
and trademark.
A may comply with Y's selection of B, because
Y's unilateral and specific selection is of goods
identifiable as to source or origin in the normal
course of business at the time of their entry into
Y.
(ii) Same as (i), except that Y directs A to use
lumber manufactured only by U.S. company C.
In the normal course of business, C neither
stamps its name on the lumber nor identifies itself
as the manufacturer on the packaging. In
addition, normal export packaging does not
identify the manufacturer.
A may not comply with Y's selection, because the
goods selected are not identifiable by source or
origin in the normal course of business at the time
of their entry into Y.
(iii) B, a U.S. contractor who is a bona fide
resident of boycotting country Y, is engaged in
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building roads. B retains the services of A, a U.S.
engineering firm, to assist it in procuring
construction equipment. B directs A to purchase
road graders only from manufacturer C because
other road grader manufacturers which A might
use are blacklisted. C's road graders normally
bear C's insignia.
A may comply with B's selection of C, because
the goods selected are identifiable by source or
origin in the normal course of business at the time
of their entry into Y.
(iv)
A, a U.S. company, manufactures
computer-operated machine tools. The computers
are mounted on a separate bracket on the side of
the equipment and are readily identifiable by
brand name imprinted on the equipment. There
are five or six U.S. manufacturers of such
computers which will function interchangeably to
operate the machine tools manufactured by A. B,
a resident of boycotting country Y, contracts to
buy the machine tools manufactured by A on the
condition that A incorporate, as the computer
drive, a computer manufactured by U.S. company
C. B's designation of C is made to avoid boycott
problems which could be caused if computers
manufactured by some other company were used.
A may comply with B's designation of C, because
the goods selected are identifiable by source or
origin in the normal course of business at the time
of their entry into Y.
(v)
A, a U.S. wholesaler of electronic
equipment, receives an order from B, a U.S.
manufacturer of radio equipment, who is a bona
fide resident of boycotting country Y. B orders a
variety of electrical components and specifies that
all transistors must be purchased from company
C, which is not blacklisted by Y. The transistors
requested by B do not normally bear the name of
the manufacturer; however, they are typically
shipped in cartons, and C's name and logo appear
on the cartons.
A may comply with B's selection, because the
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goods selected by B are identifiable as to source
or origin in the normal course of business at the
time of their entry into Y by virtue of the
containers or packaging used.
(vi) A, a U.S. computer manufacturer, receives
an order for a computer from B, a university in
boycotting country Y. B specifies that certain
integrated circuits incorporated in the computer
must be supplied by U.S. electronics company C.
These circuits are incorporated into the computer
and are not visible without disassembling the
computer.
A may not comply or agree to comply with B's
specific selection of these components, because
they are not identifiable as to their source or
origin in the normal course of business at the time
of their entry into Y.
(vii) A, a U.S. clothing manufacturer, receives
an order for shirts from B, a retailer resident in
boycotting country Y. B specifies that the shirts
are to be manufactured from cotton produced by
U.S. farming cooperative C. Such shirts will not
identify C or the source of the cotton.
A may not comply or agree to comply with B's
designation, because the cotton is not identifiable
as to source or origin in the normal course of
business at the time of entry into Y.
(viii) A, a U.S. contractor, is retained by B, a
construction firm located in and wholly-owned by
boycotting country Y, to assist B in procuring
construction materials. B directs A to purchase a
range of materials, including hardware, tools, and
trucks, all of which bear the name of the
manufacturer stamped on the item. In addition, B
directs A to purchase steel beams manufactured
by U.S. company C. The name of manufacturer C
normally does not appear on the steel itself or on
its export packaging.
A may comply with B's selection of the hardware,
tools, and trucks, because they are identifiable as
to source or origin in the normal course of
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business at the time of entry into Y. A may not
comply with B's selection of steel beams, because
the goods are not identifiable as to source or
origin by trade name, trademark, uniqueness or
packaging at the time of their entry into Y.
EXAMPLE OF DISCRIMINATION ON
BASIS OF RACE, RELIGION, SEX, OR
NATIONAL ORIGIN
(i) A, a U.S. paper manufacturer, is asked by
boycotting country Y to ship goods to Y on U.S.
vessel B. Y states that the reason for its choice of
B is that, unlike U.S. vessel C, B is not owned by
persons of a particular faith.
A may not comply or agree to comply with Y's
request, because A has reason to know that the
purpose of the selection is to effect religious
discrimination against a United States person.
(e) Shipment and transshipment of exports
pursuant to a boycotting country's
requirements
COMPLIANCE WITH A BOYCOTTING
COUNTRY'S REQUIREMENTS REGARDING
SHIPMENT AND TRANSSHIPMENT OF
EXPORTS
(1) A United States person may comply or agree
to comply with the export requirements of a
boycotting country with respect to shipments or
transshipments of exports to:
(i) A boycotted country;
(ii) Any business concern of a boycotted
country;
(iii) Any business concern organized under the
laws of a boycotted country; or
(iv) Any national or resident of a boycotted
country.
(2)

restrictions which a boycotting country may place
on direct exports to a boycotted country; on
indirect exports to a boycotted country (i.e., those
that pass via third parties); and on exports to
residents, nationals, or business concerns of, or
organized under the laws of, a boycotted country,
including those located in third countries.
(3) This exception also permits compliance with
restrictions which a boycotting country may place
on the route of export shipments when the
restrictions are reasonably related to preventing
the export shipments from coming into contact
with or under the jurisdiction of the boycotted
country. This exception applies whether a
boycotting country or the vendor of the shipment:
(i) Explicitly states that the shipment should
not pass through the boycotted country enroute to
its final destination; or
(ii) Affirmatively describes a route of shipment
that does not include the boycotted country.
(4) A United States person may not, under this
exception, refuse on an across-the-board basis to
do business with a boycotted country or a national
or resident of a boycotted country.
EXAMPLES OF COMPLIANCE
WITH A BOYCOTTING COUNTRY'S
REQUIREMENTS REGARDING SHIPMENT
OR TRANSSHIPMENT OF EXPORTS
The following examples are intended to give
guidance in determining the circumstances in
which compliance with the export requirements
of a boycotting country is permissible. They are
illustrative, not comprehensive.
(i) A, a U.S. petroleum company, exports
petroleum products to 20 countries, including the
United States, from boycotting country Y.
Country Y's export regulations require that
products not be exported from Y to boycotted
country X.

This exception permits compliance with

Export Administration Regulations

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A may agree to and comply with Y's regulations
with respect to the export of goods from Y to X.
(ii) Same as (i), except that Y's export
regulations require that goods not be exported
from boycotting country Y to any business
concern organized under the laws of boycotted
country X.
A may agree to and comply with Y's regulations
with respect to the export of goods from Y to a
business concern organized under the laws of X,
even if such concern is located in a country not
involved in Y's boycott of X.
(iii) B, the operator of a storage facility in
country M, contracts with A, a U.S. carrier, for
the shipment of certain goods manufactured in
boycotting country Y. A's contract with B
contains a provision stating that the goods to be
transported may not be shipped or transshipped to
boycotted country X. B informs A that this
provision is a requirement of C, the manufacturer
of goods who is a resident of boycotting country
Y. Country M is not boycotted by Y.
A may agree to and comply with this provision,
because such a provision is required by the export
regulations of boycotting country Y in order to
prevent shipment of Y-origin goods to a country
boycotted by Y.
(iv) A, a U.S. petroleum refiner located in the
United States, purchases crude oil from
boycotting country Y. A has a branch operation
in boycotted country X. Y requires, as a condition
of sale, that A agree not to ship or transship the
crude oil or products refined in Y to A's branch in
X.
A may agree to and comply with these
requirements, because they are export
requirements of Y designed to prevent Y-origin
products from being shipped to a boycotted
country.

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(v) A, a U.S. company, has a petrochemical
plant in boycotting country Y. As a condition of
securing an export license from Y, A must agree
that it will not ship or permit transshipment of
any of its output from the plant in Y to any
companies which Y lists as being owned by
nationals of boycotted country X.
A may agree to this condition, because it is a
restriction designed to prevent Y-origin products
from being exported to a business concern of
boycotted country X or to nationals of boycotted
country X.
(vi) Same as (v), except that the condition
imposed on A is that Y-origin goods may not be
shipped or permitted to be transshipped to any
companies which Y lists as being owned by
persons whose national origin is X.
A may not agree to this condition, because it is a
restriction designed to prevent Y-origin goods
from being exported to persons of a particular
national origin rather than to residents or
nationals of a particular boycotted country.
(vii) A, a U.S. petroleum company, exports
petroleum products to 20 countries, including the
United States, from boycotting country Y. Y
requires, as a condition of sale, that A not ship the
products to be exported from Y to or through
boycotted country X.
A may agree to and comply with this requirement
because it is an export requirement of Y designed
to prevent Y-origin products from coming into
contact with or under the jurisdiction of a
boycotted country.
(viii) Same as (vii), except that boycotting
country Y's export regulations require that
products to be exported from Y not pass through
a port of boycotted country X.
A may agree to and comply with Y's regulations
prohibiting Y-origin exports from passing through
a port at boycotted country X, because they are
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export requirements of Y designed to prevent
Y-origin products from coming into contact with
or under the jurisdiction of a boycotted country.
(ix) Same as (vii), except that Y's export
regulations require that A not transship the
exported products "in or at" boycotted country X.
A may agree to and comply with Y's regulations
with respect to the transshipment of goods "in or
at" X, because they are export requirements of Y
designed to prevent Y-origin products from
coming into contact with or under the jurisdiction
of a boycotted country.
(f) Immigration, passport, visa, or employment
requirements of a boycotting country
COMPLIANCE WITH IMMIGRATION,
PASSPORT, VISA,
OR EMPLOYMENT REQUIREMENTS
OF A BOYCOTTING COUNTRY
(1) A United States individual may comply or
agree to comply with the immigration, passport,
visa, or employment requirements of a boycotting
country, and with requests for information from a
boycotting country made to ascertain whether
such individual meets requirements for
employment within the boycotting country,
provided that he furnishes information only about
himself or a member of his family, and not about
any other United States individual, including his
employees, employers, or co-workers.
(2) For purposes of this section, a "United States
individual" means a person who is a resident or
national of the United States. "Family" means
immediate family members, including parents,
siblings, spouse, children, and other dependents
living in the individual's home.
(3) A United States person may not furnish
information about its employees or executives,
but may allow any individual to respond on his
own to any request for information relating to
immigration, passport, visa, or employment
Export Administration Regulations

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requirements. A United States person may also
perform any ministerial acts to expedite
processing of applications by individuals. These
include informing employees of boycotting
country visa requirements at an appropriate time;
typing, translation, messenger and similar
services; and assisting in or arranging for the
expeditious processing of applications. All such
a c t i o n s m u s t b e u n de r t a k e n o n a
non-discriminatory basis.
(4) A United States person may proceed with a
project in a boycotting country even if certain of
its employees or other prospective participants in
a transaction are denied entry for boycott reasons.
But no employees or other participants may be
selected in advance in a manner designed to
comply with a boycott.
EXAMPLES OF COMPLIANCE WITH
IMMIGRATION, PASSPORT, VISA, OR
EMPLOYMENT REQUIREMENTS OF A
BOYCOTTING COUNTRY
The following examples are intended to give
guidance in determining the circumstances in
which compliance with immigration, passport,
visa, or employment requirements is permissible.
They are illustrative, not comprehensive.
(i) A, a U.S. individual employed by B, a U.S.
manufacturer of sporting goods with a plant in
boycotting country Y, wishes to obtain a work
visa so that he may transfer to the plant in Y.
Country Y's immigration laws specify that anyone
wishing to enter the country or obtain a visa to
work in the country must supply information
about his religion. This information is required
for boycott purposes.
A may furnish such information, because it is
required by Y's immigration laws.
(ii) Same as (i), except that A is asked to
supply such information about other employees of
B.

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A may not supply this information, because it is
not information about himself or his family.
(iii) A, a U.S. building contractor, has been
awarded a construction contract to be performed
in boycotting country Y. Y's immigration laws
require that individuals applying for visas must
indicate race, religion, and place of birth. The
information is sought for boycott purposes. To
avoid repeated rejections of applications for work
visas by A's employees, A desires to furnish to
country Y a list of its prospective and current
employees and required information about each
so that Y can make an initial screening.
A may not furnish such a list, because A would be
furnishing information about the race, religion,
and national origin of its employees.
(iv) Same as (iii), except that A selects for
work on the project those of its current employees
whom it believes will be granted work visas from
boycotting country Y.
A may not make a selection from among its
employees in a manner designed to comply with
the boycott-based visa requirements of Y, but
must allow all eligible employees to apply for
visas. A may later substitute an employee who
obtains the necessary visa for one who has had his
application rejected.
(v) Same as (iii), except that A selects
employees for the project and then allows each
employee individually to apply for his own visa.
Two employees' applications are rejected, and A
then substitutes two other employees who, in turn,
submit their own visa applications.
A may take such action, because in so doing A is
not acting in contravention of any prohibition of
this part.
(vi) Same as (v), except that A arranges for the
translation, typing and processing of its
employees' applications, and transmits all the
applications to the consulate of boycotting
Export Administration Regulations

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country Y.
A may take such ministerial actions, because in so
doing A is not itself furnishing information with
respect to race, religion, sex, or national origin,
but is merely transmitting information furnished
by its individual employees.
(vii) A, a U.S. contractor, selects U.S.
subcontractor B to perform certain engineering
services in connection with A's project in
boycotting country Y. The work visa application
submitted by the employee whom B has proposed
as chief engineer of this project is rejected by Y
because his national origin is of boycotted
country X.
Subcontractor B thereupon
withdraws.
A may continue with the project and select
another subcontractor, because A is not acting in
contravention of any prohibition of this part.
(g) Compliance with local law
(1) This exception contains two parts. The first
covers compliance with local law with respect to
a United States person's activities exclusively
within a foreign country; the second covers
compliance with local import laws by United
States persons resident in a foreign country.
Under both parts of this exception, local laws are
laws of the host country, whether derived from
statutes, regulations, decrees, or other official
sources having the effect of law in the host
country. This exception is not available for
compliance with presumed policies or
understandings of policies unless those policies
are reflected in official sources having the effect
of law.
(2) Both parts of this exception apply only to
United States persons resident in a foreign
country. For purposes of this exception, a United
States person will be considered to be a resident
of a foreign country only if he is a bona fide
resident. A United States person may be a bona
fide resident of a foreign country even if such
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person's residency is temporary.

two factors, instead of all relevant factors. They
are illustrative, not comprehensive.

(3)(i)
Factors that will be considered in
determining whether a United States person is a
bona fide resident of a foreign country include:
(A) Physical presence in the country;
(B)
Whether residence is needed for
legitimate business reasons;

(i) A, a U.S. radio manufacturer located in the
United States, receives a tender to bid on a
contract to supply radios for a hotel to be built in
boycotting country Y. After examining the
proposal, A sends a bid from its New York office
to Y.
A is not a resident of Y, because it is not
physically present in Y.

(C) Continuity of the residency;
(D) Intent to maintain the residency;
(E) Prior residence in the country;
(F) Size and nature of presence in the
country;
(G) Whether the person is registered to do
business or incorporated in the country;
(H) Whether the person has a valid work
visa; and
(I) Whether the person has a similar presence
in both boycotting and non-boycotting foreign
countries in connection with similar business
activities.

(ii) Same as (i), except that after receiving the
tender, A sends its sales representative to Y. A
does not usually have sales representatives in
countries when it bids from the United States, and
this particular person's presence in Y is not
necessary to enable A to make the bid.
A is not a bona fide resident of Y, because it has
no legitimate business reasons for having its sales
representative resident in Y.
(iii) A, a U.S. bank, wishes to establish a branch office in boycotting country Y. In pursuit of
that objective, A's personnel visit Y to make the
necessary arrangements. A intends to establish a
permanent branch office in Y after the necessary
arrangements are made.

(ii) No one of the factors in paragraph (g)(3) of
this section is dispositive. All the circumstances
involved will be closely examined to ascertain
whether there is, in fact, bona fide residency.
Residency established solely for purposes of
avoidance of the application of this part,
unrelated to legitimate business needs, does not
constitute bona fide residency.

A's personnel in Y are not bona fide residents of
Y, because A does not yet have a permanent
business operation in Y.

EXAMPLES OF BONA FIDE RESIDENCY

In these limited circumstances, A's personnel may
furnish the non-discriminatory boycott
information necessary to establish residency to
the same extent a U.S. person who is a bona fide
resident in that country could. If this information
could not be furnished in such limited
circumstances, the exception would be available

The following examples are intended to give
guidance in determining the circumstances in
which a United States person may be a bona fide
resident of a foreign country. For purposes of
illustration, each example discusses only one or
Export Administration Regulations

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(iv) Same as (iii), except A's personnel are
required by Y's laws to furnish certain
non-discriminatory boycott information in order
to establish a branch in Y.

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only to firms resident in a boycotting country
before January 18, 1978.

(viii) Same as (vii), except that A has just been
established in Y and has not yet begun operations.

(v) A, a U.S. construction company, receives
an invitation to build a power plant in boycotting
country Y. After receipt of the invitation, A's
personnel visit Y in order to survey the site and
make necessary analyses in preparation for
submitting a bid. The invitation requires that
otherwise prohibited boycott information be
furnished with the bid.

A is a bona fide resident of Y, because it is
present in Y for legitimate business reasons and it
intends to reside continuously.

A's personnel in Y are not bona fide residents of
Y, because A has no permanent business
operation in Y. Therefore, A's personnel may not
furnish the prohibited information.
(vi) Same as (v), except that A is considering
establishing an office in boycotting country Y.
A's personnel visit Y in order to register A to do
business in that country. A intends to establish
ongoing construction operations in Y. A's
personnel are required by Y's laws to furnish
certain non-discriminatory boycott information in
order to register A to do business or incorporate a
subsidiary in Y.
In these limited circumstances, A's personnel may
furnish non-discriminatory boycott information
necessary to establish residency to the same
extent a U.S. person who is a bona fide resident in
that country could. If this information could not
be furnished in such limited circumstances, the
exception would be available only to firms
resident in a boycotting country before January
18, 1978.
(vii) A, a subsidiary of U.S. oil company B, is
located in boycotting country Y. A has been
engaged in oil explorations in Y for a number of
years.
A is a bona fide resident of Y, because of its
pre-existing continuous presence in Y for
legitimate business reasons.

Export Administration Regulations

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(ix) U.S. company A is a manufacturer of
prefabricated homes. A builds a plant in
boycotting country Y for purposes of assembling
components made by A in the United States and
shipped to Y.
A's personnel in Y are bona fide residents of Y,
because A's plant in Y is established for
legitimate business reasons, and it intends to
reside continuously.
(x) U.S. company A has its principal place of
business in the United States. A's sales agent
visits boycotting country Y from time to time for
purposes of soliciting orders.
A's sales agent is not a bona fide resident of Y,
because such periodic visits to Y are insufficient
to establish a bona fide residency.
(xi) A, a branch office of U.S. construction
company B, is located in boycotting country Y.
The branch office has been in existence for a
number of years and has been performing various
management services in connection with B's
construction operations in Y.
A is a bona fide resident of Y, because of its
longstanding presence in Y and its conduct of
ongoing operations in Y.
(xii) U.S. construction company A has never
done any business in boycotting country Y. It is
awarded a contract to construct a hospital in Y,
and preparatory to beginning construction, sends
its personnel to Y to set up operations.
A's personnel are bona fide residents of Y,
because they are present in Y for the purposes of
carrying out A's legitimate business purposes;
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they intend to reside continuously; and residency
is necessary to conduct their business.
(xiii) U.S. company A manufactures furniture.
All its sales in foreign countries are conducted
from its offices in the United States. From time
to time A has considered opening sales offices
abroad, but it has concluded that it is more
efficient to conduct sales operations from the
United States. Shortly after the effective date of
this part, A sends a sales representative to
boycotting country Y to open an office in and
solicit orders from Y. It is more costly to conduct
operations from that office than to sell directly
from the United States, but A believes that if it
establishes a residence in Y, it will be in a better
position to avoid conflicts with U.S. law in its
sales to Y.
A's sales representative is not a bona fide resident
of Y, because the residency was established to
avoid the application of this part and not for
legitimate business reasons.
(xiv) Same as (xiii), except that it is in fact
more efficient to have a sales office in Y. In fact,
without a sales office in Y, A would find it
difficult to explore business opportunities in Y.
A is aware, however, that residency in Y would
permit its sales representative to comply with Y's
boycott laws.
A's sales representative is a bona fide resident of
Y, because A has a legitimate business reason for
establishing a sales office in Y.
(xv)
U.S. company B is a computer
manufacturer. B sells computers and related
programming services tailored to the needs of
individual clients. Because of the complex nature
of the product, B must have sales representatives
in any country where sales are made. B has a
sales representative, A, in boycotting country Y.
A spends two months of the year in Y, and the
rest of the year in other countries. B has a
permanent sales office from which A operates
while in Y, and the sales office is stocked with
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brochures and other sales materials.
A is a bona fide resident of Y, because his
presence in Y is necessary to carry out B's
legitimate business purposes; B maintains a
permanent office in Y; and B intends to continue
doing business in Y in the future.
(xvi) A, a U.S. construction engineering
company, is engaged by B, a U.S. general
contracting company, to provide services in
connection with B's contract to construct a
hospital complex in boycotting country Y. In
order to perform those services, A's engineers set
up a temporary office in a trailer on the
construction site in Y. A's work is expected to be
completed within six months.
A's personnel in Y are bona fide residents of Y,
because A's on-site office is necessary to the
performance of its services for B, and because A's
personnel are continuously there.
(xvii) A, a U.S. company, sends one of its
representatives to boycotting country Y to explore
new sales possibilities for its line of transistor
radios. After spending several weeks in Y, A's
representative rents a post office box in Y, to
which all persons interested in A's products are
directed to make inquiry.
A is not a bona fide resident of Y, because rental
of a post office box is not a sufficient presence in
Y to constitute residency.
(xviii) A, a U.S. computer company, has a
patent and trademark registered in the United
States. In order to obtain registration of its patent
and trademark in boycotting country Y, A is
required to furnish certain non-discriminatory
boycott information.
A may not furnish the information, because A is
not a bona fide resident of Y.

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(h) Activities exclusively within
a foreign country
(1) Any United States person who is a bona fide
resident of a foreign country, including a
boycotting country, may comply or agree to
comply with the laws of that country with respect
to his activities exclusively within that country.
These activities include:
(i) Entering into contracts which provide that
local law applies or governs, or that the parties
will comply with such laws;
(ii) Employing residents of the host country;
(iii) Retaining local contractors to perform
work within the host country;
(iv) Purchasing or selling goods or services
from or to residents of the host country; and
(v) Furnishing information within the host
country.
(2) Activities exclusively within the country do
not include importing goods or services from
outside the host country, and, therefore, this part
of the exception does not apply to compliance
with import laws in connection with importing
goods or services.
EXAMPLES OF PERMISSIBLE
COMPLIANCE WITH LOCAL LAW WITH
RESPECT TO ACTIVITIES EXCLUSIVELY
WITHIN A FOREIGN COUNTRY
The following examples are intended to give
guidance in determining the circumstances in
which compliance with local law is permissible.
They are illustrative, not comprehensive.
ACTIVITIES EXCLUSIVELY WITHIN A
FOREIGN COUNTRY

build a school complex in Y. Pursuant to Y's
boycott laws, the contract requires A to refuse to
purchase supplies from certain local merchants.
While Y permits such merchants to operate within
Y, their freedom of action in Y is constrained
because of their relationship with boycotted
country X.
A may enter into the contract, because dealings
with local merchants are activities exclusively
within Y.
(ii) A, a banking subsidiary of U.S. bank B, is
a bona fide resident of boycotting country Y.
From time to time, A purchases office supplies
from the United States.
A's purchase of office supplies is not an activity
exclusively within Y, because it involves the
import of goods from abroad.
(iii) A, a branch of U.S. bank B, is a bona fide
resident of boycotting country Y. Under Y's
boycott laws, A is required to supply information
about whether A has any dealings with boycotted
country X. A compiles and furnishes the
information within Y and does so of its own
knowledge.
A may comply with that requirement, because in
compiling and furnishing the information within
Y, based on its own knowledge, A is engaging in
an activity exclusively within Y.
(iv) Same as (iii), except that A is required to
supply information about B's dealings with X.
From its own knowledge and without making any
inquiry of B, A compiles and furnishes the
information.
A may comply with that requirement, because in
compiling and furnishing the information within
Y, based on its own knowledge, A is engaging in
an activity exclusively within Y.

(i) U.S. construction company A, a bona fide
resident of boycotting country Y, has a contract to
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(v) Same as (iv), except that in making its
responses, A asks B to compile some of the
information.

persons on the basis of race, religion, sex, or
national origin even if the activity is exclusively
within the boycotting country.)

A may not comply, because the gathering of the
necessary information takes place partially
outside Y.

(i) Compliance with local import law

(vi) U.S. company A has applied for a license
to establish a permanent manufacturing facility in
boycotting country Y. Under Y's boycott law, A
must agree, as a condition of the license, that it
will not sell any of its output to blacklisted
foreign firms.
A may not comply, because the agreement would
govern activities of A which are not exclusively
within Y.
DISCRIMINATION AGAINST
UNITED STATES PERSONS

(1) Any United States person who is a bona fide
resident of a foreign country, including a
boycotting country, may, in importing goods,
materials or components into that country,
comply or agree to comply with the import laws
of that country, provided that:
(i) The items are for his own use or for his use
in performing contractual services within that
country; and
(ii) In the normal course of business, the items
are identifiable as to their source or origin at the
time of their entry into the foreign country by:
(a) Uniqueness of design or appearance; or

(i) A, a subsidiary of U.S. company B, is a
bona fide resident of boycotting country Y. A
manufactures air conditioners in its plant in Y.
Under Y's boycott laws, A must agree not to hire
nationals of boycotted country X.
A may agree to the restriction and may abide by it
with respect to its recruitment of individuals within Y, because the recruitment of such individuals
is an activity exclusively within Y. However, A
cannot abide by this restriction with respect to its
recruitment of individuals outside Y, because this
is not an activity exclusively within Y.
(ii) Same as (i), except that pursuant to Y's
boycott laws, A must agree not to hire anyone
who is of a designated religion.
A may not agree to this restriction, because the
agreement calls for discrimination against U.S.
persons on the basis of religion. It makes no
difference whether the recruitment of the U.S.
persons occurs within or without Y. (NOTE: The
exception for compliance with local law does not
apply to boycott-based refusals to employ U.S.
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(b)
Trademark, trade name, or other
identification normally on the items themselves,
including their packaging.
(2) The factors that will be considered in
determining whether a United States person is a
bona fide resident of a foreign country are those
set forth in paragraph (g) of this section. Bona
fide residence of a United States company's
subsidiary, affiliate, or other permanent
establishment in a foreign country does not confer
such residence on such United States company.
Likewise, bona fide residence of a United States
company's employee in a foreign country does not
confer such residence on the entire company.
(3) A United States person who is a bona fide
resident of a foreign country may take action
under this exception through an agent outside the
country, but the agent must act at the direction of
the resident and not exercise his own discretion.
Therefore, if a United States person resident in a
boycotting country takes action to comply with a
boycotting country's import law with respect to
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the importation of qualified goods, he may direct
his agent in the United States on the action to be
taken, but the United States agent himself may
not exercise any discretion.
(4) For purposes of this exception, the test that
governs whether goods or components of goods
are specifically identifiable is identical to the test
applied in paragraph (d) of this section on
"Compliance With Unilateral and Specific
Selection" to determine whether they are
identifiable as to their source or origin in the
normal course of business.
(5) The availability of this exception for the
import of goods depends on whether the goods
are intended for the United States person's own
use at the time they are imported. It does not
depend upon who has title to the goods at the time
of importation into a foreign country.
(6) Goods are for the United States person's own
use (including the performance of contractual
services within the foreign country) if:
(i) They are to be consumed by the United
States person;
(ii) They are to remain in the United States
person's possession and to be used by that person;
(iii) They are to be used by the United States
person in performing contractual services for
another;
(iv) They are to be further manufactured,
incorporated into, refined into, or reprocessed
into another product to be manufactured for
another; or
(v) They are to be incorporated into, or
permanently affixed as a functional part of, a
project to be constructed for another.
(7) Goods acquired to fill an order for such goods
from another are not for the United States
person's own use. Goods procured for another are
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not for one's own use, even if the furnishing of
procurement services is the business in which the
United States person is customarily engaged. Nor
are goods obtained for simple resale acquired for
one's own use, even if the United States person is
engaged in the retail business. Likewise, goods
obtained for inclusion in a turnkey project are not
for one's own use if they are not customarily
incorporated into, or do not customarily become
permanently affixed as a functional part of the
project.
(8) This part of the local law exception does not
apply to the import of services, even when the
United States person importing such services is a
bona fide resident of a boycotting country and is
importing them for his own use. In addition, this
exception is available for a United States person
who is a bona fide resident of a foreign country
only when the individual or entity actually present
within that country takes action through the
exercise of his own discretion.
(9) Use of this exception will be monitored and
continually reviewed to determine whether its
continued availability is consistent with the
national interest. Its availability may be limited
or withdrawn as appropriate. In reviewing the
continued availability of this exception, the effect
that the inability to comply with local import laws
would have on the economic and other relations
of the United States with boycotting countries
will be considered.
(10) A United States person who is a bona fide
resident of a foreign country may comply or agree
to comply with the host country's import laws
even if he knows or has reason to know that
particular laws are boycott-related. However, no
United States person may comply or agree to
comply with any host country law which would
require him to discriminate against any United
States person on the basis of race, religion, sex, or
national origin, or to supply information about
any United States person's race, religion, sex, or
national origin.

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EXAMPLES OF PERMISSIBLE
COMPLIANCE WITH LOCAL IMPORT LAW
The following examples are intended to give
guidance in determining the circumstances in
which compliance with local import law is
permissible.
They are illustrative, not
comprehensive.
COMPLIANCE BY A
BONA FIDE RESIDENT
(i) A, a subsidiary of U.S. company B, is a
bona fide resident of boycotting country Y and is
engaged in oil drilling operations in Y. In
acquiring certain large, specifically identifiable
products for carrying out its operations in Y, A
chooses only from non-blacklisted firms because
Y's import laws prohibit the importation of goods
from blacklisted firms. However, with respect to
smaller items, B makes the selection on behalf of
A and sends them to A in Y.
A may choose from non-blacklisted firms,
because it is a U.S. person who is a bona fide
resident in Y. However, because B is not resident
in Y, B cannot make boycott-based selections to
conform with Y's import laws prohibiting the
importation of goods from blacklisted firms.
(ii) Same as (i), except that after making its
choices on the larger items, A directs B to carry
out its instructions by entering into appropriate
contracts and making necessary shipping
arrangements.
B may carry out A's instructions provided that A,
a bona fide resident of Y, has in fact made the
choice and B is exercising no discretion, but is
acting only as A's agent.
(NOTE: Such
transactions between related companies will be
scrutinized carefully. A must in fact exercise the
discretion and make the selections. If the
discretion is exercised by B, B would be in
violation of this part.)
(iii)

U.S. construction company A has a

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contract to build a school in boycotting country
Y. A's employees set up operations in Y for
purposes of commencing construction. A's
employees in Y advise A's headquarters in the
United States that Y's import laws prohibit
importation of goods manufactured by blacklisted
firms. A's headquarters then issues invitations to
bid only to non-blacklisted firms for certain
specifically identifiable goods.
A's headquarters' choice of non-blacklisted
suppliers is not a choice made by a U.S. person
who is a bona fide resident of Y, because the
discretion in issuing the bids was exercised in the
United States, not in Y.
(iv) Same as (iii), except that A's employees in
Y actually make the decision regarding to whom
the bids should be issued.
The choices made by A's employees are choices
made by U.S. persons who are bona fide residents
of Y, because the discretion in choosing was
exercised solely in Y.
(NOTE: Choices
purportedly made by employees of U.S.
companies who are resident in boycotting
countries will be carefully scrutinized to ensure
that the discretion was exercised entirely in the
boycotting country.)
SPECIFICALLY IDENTIFIABLE GOODS
The test and examples as to what constitutes
specifically identifiable goods are identical to
those applicable under paragraph (d) of this
section on "Compliance With Unilateral
Selection."
IMPORTS FOR U.S. PERSON'S OWN USE
WITHIN BOYCOTTING COUNTRY
(i) A, a subsidiary of U.S. company B, is a
bona fide resident of boycotting country Y. A
plans to import computer operated machine tools
to be installed in its automobile plant in
boycotting country Y. The computers are
mounted on a separate bracket on the side of the
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equipment and are readily identifiable by brand
name. A orders the tools from U.S. supplier C
and specifies that C must incorporate computers
manufactured by D, a non-blacklisted company.
A would have chosen computers manufactured by
E, except that E is blacklisted, and Y's import
laws prohibit the importation of goods
manufactured by blacklisted firms.
A may refuse to purchase E's computers, because
A is importing the computers for its own use in its
manufacturing operations in Y.
(ii) A, a subsidiary of U.S. company B, is a
bona fide resident of boycotting country Y. To
meet the needs of its employees in Y, A imports
certain specifically identifiable commissary items
for sale, such as cosmetics; and canteen items,
such as candy. In selecting such items for
importation into Y, A chooses items made only by
non-blacklisted firms, because Y's import laws
prohibit importation of goods from blacklisted
firms.
A may import these items only from
non-blacklisted firms, because the importation of
goods for consumption by A's employees is an
importation for A's own use.
(iii) A, a U.S. construction company which is a
bona fide resident of boycotting country Y, has a
contract to build a hospital complex for the
Ministry of Health in Y. Under the contract, A
will be general manager of the project with
discretion to choose all subcontractors and
suppliers. The complex is to be built on a turnkey
basis, with A retaining title to the property and
bearing all financial risk until the complex is
conveyed to Y.
In choosing specifically
identifiable goods for import, such as central air
conditioning units and plate glass, A excludes
blacklisted suppliers in order to comply with Y's
import laws. These goods are customarily
incorporated into, or permanently affixed as a
functional part of, the project.
A may refuse to deal with blacklisted suppliers of
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specifically identifiable goods, because
importation of goods by a general contractor to be
incorporated into a construction project in Y is an
importation of goods for A's own use.
(iv) Same as (iii), except that, in addition, in
choosing U.S. architects and engineers to work on
the project, A excludes blacklisted firms, because
Y's import laws prohibit the use of services
rendered by blacklisted persons.
A may not refuse to deal with blacklisted
architectural or engineering firms, because this
exception does not apply to the import of
services. It is irrelevant that, at some stage, the
architectural or engineering drawings or plans
may be brought to the site in Y. This factor is
insufficient to transform such services into
"goods" for purposes of this exception.
(v) Same as (iii), except that the project is to be
completed on a "cost plus" basis, with Y making
progress payments to A at various stages of
completion.
A may refuse to deal with blacklisted suppliers of
specifically identifiable goods, because the
importation of goods by A to be incorporated in a
project A is under contract to complete is an
importation of goods for its own use. The terms
of payment are irrelevant.
(vi) A, a U.S. construction company which is a
bona fide resident of boycotting country Y, has a
contract for the construction of an office building
in Y on a turnkey basis. In choosing goods to be
used or included in the office complex, A orders
wallboard, office partitions, and lighting fixtures
from non-blacklisted manufacturers. A likewise
orders desks, office chairs, typewriters, and office
supplies from non-blacklisted manufacturers.
Because they are customarily incorporated into or
permanently affixed as a functional part of an
office building, the wallboard, office partitions,
and lighting fixtures are for A's own use, and A
may select non-blacklisted suppliers of these
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goods in order to comply with Y's import laws.
Because they are not customarily incorporated
into or permanently affixed to the project, the
desks, office chairs, typewriters, and office
supplies are not for A's own use, and A may not
make boycott-based selections of the suppliers of
these goods.
(vii) A, a U.S. company engaged in the
business of selling automobiles, is a bona fide
resident of boycotting country Y. In ordering
automobiles from time to time for purposes of
stocking its inventory, A purchases from U.S.
manufacturer B, but not U.S. manufacturer C,
because C is blacklisted. Retail sales are
subsequently made from this inventory.
A's import of automobiles from B is not an import
for A's own use, because the importation of items
for general inventory in a retail sales operation is
not an importation for one's own use.
(viii) A, a U.S. company engaged in the
manufacture of pharmaceutical products, is a
bona fide resident of boycotting country Y. In
importing chemicals for incorporation into the
pharmaceutical products, A purchases from U.S.
supplier B, but not U.S. supplier C, because C is
blacklisted.
A may import chemicals from B rather than C,
because the importation of specifically
identifiable items for incorporation into another
product is an importation for one's own use.
(ix) A, a U.S. management company which is a
bona fide resident of boycotting country Y, has a
contract with the Ministry of Education in Y to
purchase supplies for Y's school system. From
time to time, A purchases goods from abroad for
delivery to various schools in Y.

school supplies.
(x) A, a U.S. company which is a bona fide
resident of boycotting country Y, has a contract to
make purchases for Y in connection with a
construction project in Y. A is not engaged in the
construction of, or in any other activity in
connection with, the project. A's role is merely to
purchase goods for Y and arrange for their
delivery to Y.
A is not purchasing goods for its own use,
because A is acting as a procurement agent for Y.
A, therefore, cannot make boycott selections of
suppliers of such goods.
(xi) A, a U.S. company which is a bona fide
resident of boycotting country Y, imports
specifically identifiable goods into Y for exhibit
by A at a trade fair in Y. In selecting goods for
exhibit, A excludes items made by blacklisted
firms.
A's import of goods for its exhibit at a trade fair
constitutes an import for A's own use. However,
A may not sell in Y those goods it imported for
exhibit.
(xii) A is a bona fide resident of boycotting
countries Y and Z. In compliance with Y's boycott
laws, A chooses specifically identifiable goods
for its oil drilling operations in Y and Z by
excluding blacklisted suppliers. The goods are
first imported into Y. Those purchased for A's
use in Z are then transshipped to Z.
In selecting those goods for importation into Y, A
is making an import selection for its own use,
even though A may use some of the imported
goods in Z. Further, the subsequent shipment
from Y to Z of those goods purchased for use in Z
is an import into Z for A's own use.

A's purchase of goods for Y's school system does
not constitute an importation of goods for A's
own use, because A is acting as a procurement
agent for another. A, therefore, cannot make
boycott-based selections of suppliers of such
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§760.4
EVASION
(a) No United States person may engage in any
transaction or take any other action, either
independently or through any other person, with
intent to evade the provisions of this part. Nor
may any United States person assist another
United States person to violate or evade the
provisions of this part.
(b) The exceptions set forth in §760.3(a) through
(i) do not permit activities or agreements (express
or implied by a course of conduct, including a
pattern of responses) which are otherwise
prohibited by this part and which are not within
the intent of such exceptions. However, activities
within the coverage and intent of the exceptions
set forth in this part do not constitute evasion
regardless of how often such exceptions are
utilized.
(c) Use of any artifice, device or scheme which is
intended to place a person at a commercial
disadvantage or impose on him special burdens
because he is blacklisted or otherwise restricted
for boycott reasons from having a business
relationship with or in a boycotting country will
be regarded as evasion for purposes of this part.
(d) Unless permitted under one of the exceptions,
use of risk of loss provisions that expressly
impose a financial risk on another because of the
import laws of a boycotting country may
constitute evasion. If they are introduced after
January 18, 1978, their use will be presumed to
constitute evasion. This presumption may be
rebutted by a showing that such a provision is in
customary usage without distinction between
boycotting and non-boycotting countries and that
there is a legitimate non-boycott reason for its
use. On the other hand, use of such a provision
by a United States person subsequent to January
21, 1978 is presumed not to constitute evasion if
the provision had been customarily used by that
person prior to January 21, 1978.
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(e) Use of dummy corporations or other devices
to mask prohibited activity will also be regarded
as evasion. Similarly, it is evasion under this part
to divert specific boycotting country orders from
a United States parent to a foreign subsidiary for
purposes of complying with prohibited boycott
requirements. However, alteration of a person's
structure or method of doing business will not
constitute evasion so long as the alteration is
based on legitimate business considerations and is
not undertaken solely to avoid the application of
the prohibitions of this part. The facts and
circumstances of an arrangement or transaction
will be carefully scrutinized to see whether
appearances conform to reality.
EXAMPLES
The following examples are intended to give
guidance to persons in determining circumstances
in which this section will apply. They are
illustrative, not comprehensive.
(i) A, a U.S. insurance company, receives a
request from boycotting country Y asking
whether it does business in boycotted country X.
Because furnishing such information is
prohibited, A declines to answer and as a result is
placed on Y's blacklist. The following year, A's
annual report contains new information about A's
worldwide operations, including a list of all
countries in which A does business. A then mails
a copy of its annual report, which has never
before contained such information, to officials of
the government of country Y.
Absent some business justification unrelated to
the boycott for changing the annual report in this
fashion, A's action constitutes evasion of this part.
(ii) A, a U.S. construction firm resident in
boycotting country Y, orders lumber from U.S.
company B. A unilaterally selects B in part
because U.S. lumber producer C is blacklisted by
Y and C's products are therefore not importable.
In placing its order with B, A requests that B
stamp its name or logo on the lumber so that A
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"can be certain that it is, in fact, receiving B's
products." B does not normally so stamp its
lumber, and A's purpose in making the request is
to appear to fit within the unilateral selection
exception of this part.
Absent additional facts justifying A's action, A's
action constitutes evasion of this part.
(iii) A, a U.S. company, has been selling
sewing machines to boycotting country Y for a
number of years. A receives a request for a
negative certificate of origin from a new
customer. A is aware that furnishing such
certificates are prohibited; therefore, A arranges
to have all future shipments run through a foreign
corporation in a third country which will affix the
necessary negative certificate before forwarding
the machines on to Y.
A's action constitutes evasion of this part, because
it is a device to mask prohibited activity carried
out on A's behalf.
(iv) A, a U.S. company, has been selling
calculators to distributor B in country C for a
number of years and routinely supplies positive
certificates of origin. A receives an order from
country Y which requires negative certificates of
origin. A arranges to make all future sales to
distributor B in country C. A knows B will step
in and make the sales to Y which A would
otherwise have made directly. B will make the
necessary negative certifications. A's warranty,
which it will continue to honor, runs to the
purchaser in Y.
A's action constitutes evasion, because the
diverting of orders to B is a device to mask
prohibited activity carried out on A's behalf.
(v) A, a U.S. company, is negotiating a
long-term contract with boycotting country Y to
meet all Y's medical supply needs. Y informs A
that before such a contract can be concluded, A
must complete Y's boycott questionnaire. A
knows that it is prohibited from answering the
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questionnaire so it arranges for a local agent in Y
to supply the necessary information.
A's action constitutes evasion of this part, because
it is a device to mask prohibited activity carried
out on A's behalf.
(vi) A, a U.S. contractor which has not
previously dealt with boycotting country Y, is
awarded a construction contract by Y. Because it
is customary in the construction industry for a
contractor to establish an on-site facility for the
duration of the project, A establishes such an
office, which satisfies the requirements for bona
fide residency. Thereafter, A's office in Y takes a
number of actions permitted under the
compliance with local law exception.
A's actions do not constitute evasion, because A's
facility in Y was established for legitimate
business reasons.
(vii) A, a controlled foreign subsidiary of U.S.
company B, is located in non-boycotting country
M. A and B both make machine tools for sale in
their respective marketing regions. B's marketing
region includes boycotting country Y. After
assessing the requirements of this part, B decides
that it can no longer make machines for sale in Y.
Instead, A decides to expand its facilities in M in
order to service the Y market.
The actions of A and B do not constitute evasion,
because there is a legitimate business reason for
their actions. It is irrelevant that the effect may
be to place sales which would otherwise have
been subject to this part beyond the reach of this
part.
(viii) A, a U.S. manufacturer, from time to time
receives purchase orders from boycotting country
Y which A fills from its plant in the United
States. A knows that it is about to receive an
order from Y which contains a request for a
certification which A is prohibited from
furnishing under this part. In order to permit the
certification to be made, A diverts the purchase
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order to its foreign subsidiary.
A's diversion of the purchase order constitutes
evasion of this part, because it is a device to mask
prohibited activity carried out on A's behalf.
(ix) A, a U.S. company, is engaged in
assembling drilling rigs for shipment to
boycotting country Y. Because of potential
difficulties in securing entry into Y of materials
supplied by blacklisted firms, A insists that
blacklisted firms take a 15 percent discount on all
materials which they supply to A. As a result, no
blacklisted firms are willing to transact with A.
A's insistence on the discount for materials
supplied by blacklisted firms constitutes evasion
of this part, because it is a device or scheme
which is intended to place a special burden on
blacklisted firms because of Y's boycott.
(x) Same as (ix), except that shortly after
January 18, 1978, A, a U.S. company, insists that
its suppliers sign contracts which provide that
even after title passes from the supplier to A, the
supplier will bear the risk of loss and indemnify A
if goods which the supplier has furnished are
denied entry into Y for boycott reasons.
A's action constitutes evasion of this part, because
it is a device or scheme which is intended to place
a special burden on blacklisted persons because
of Y's boycott.
(xi) Same as (x), except that A customarily
insisted on such an arrangement with its supplier
prior to January 18, 1978.
A's action is presumed not to constitute evasion,
because use of this contractual arrangement was
customary for A prior to January 18, 1978.
(xii) A, a U.S. company, has a contract to
supply automobile sub-assembly units to
boycotting country Y. Shortly after January 18,
1978, A insists that its suppliers sign contracts
which provide that even after title passes to A, the
supplier will bear the risk of loss and indemnify A
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`

if goods which the supplier has furnished are
denied entry into boycotting country Y for any
reason.
A's insistence on this arrangement is presumed to
constitute evasion, because it is a device which is
intended to place a special burden on blacklisted
firms because of Y's boycott. The presumption
may be rebutted by competent evidence showing
that use of such an arrangement is customary
without regard to the boycotting or non-boycotting character of the country to which it relates and
that there is a legitimate non-boycott business
reason for its use.
(xiii) Same as (vii), except that A requires that
all suppliers make in-country delivery.
A's action does not constitute evasion, because it
is an ordinary commercial practice to require
in-country delivery of goods.
(xiv) Same as (xii), except that A requires that
title remain with the supplier until delivery in Y
has been made.
A's action does not constitute evasion, because it
is ordinary commercial practice to require that
title remain with the supplier until delivery has
been made. This example is distinguishable from
example (xii), because in example (xii) A had
insisted on an extraordinary arrangement designed to require that the risk of loss remain with
the supplier even after title had passed to A.
(xv) U.S. bank A is contacted by U.S. company
B to finance B's transaction with boycotting
country Y. Payment will be effected through a
letter of credit in favor of B at its U.S. address. A
knows that the letter of credit will contain
restrictive boycott conditions which would bar its
implementation by A if the beneficiary were a
U.S. person. A advises B of the boycott condition
and suggests to B that the beneficiary should be
changed to C, a shell corporation in non-boycotting country M. The beneficiary is changed
accordingly.
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The actions of both A and B constitute evasion of
this part, because the arrangement is a device to
mask prohibited activities.
(xvi) Same as (xv), except that U.S. company
B, the beneficiary of the letter of credit, arranges
to change the beneficiary to B's foreign subsidiary
so that A can implement the letter of credit. A
knows that this has been done.

this part, because A is taking an action through
another person to mask prohibited activity on A's
part.

§760.5
REPORTING REQUIREMENTS
(a) Scope of reporting requirements

A's implementation of the letter of credit in the
face of its knowledge of B's action constitutes
evasion of this part, because A’s action is part of
a device to mask prohibited activity by both
parties.
(xvii) U.S. bank A, located in the United
States, is contacted by foreign company B to
finance B's transaction with boycotting country Y.
B is a controlled subsidiary of a U.S. company.
The transaction which is to be financed with a
letter of credit payable to B at its foreign address,
requires B to certify that none of its board
members are of a particular religious faith. Since
B cannot legally furnish the certificate, it asks A
to convey the necessary information to Y through
A's bank branch in Y. Such information would be
furnished wholly outside the letter of credit
transaction.
A's action constitutes evasion of this part, because
it is undertaken to assist B's violation of this part.
(xviii) U.S. bank A is asked by foreign
corporation B to implement a letter of credit in
favor of B so that B might perform under its
long-term contract with boycotting country Y.
Under the terms of the letter of credit, B is
required to certify that none of its suppliers is
blacklisted. A knows that it cannot implement a
letter of credit with this condition, so it tells B to
negotiate the elimination of this requirement from
the letter of credit and instead supply the
certification to Y directly.
A's suggestion to B that it provide the negative
certification to Y directly constitutes evasion of
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`

(1) A United States person who receives a
request to take any action which has the effect of
furthering or supporting a restrictive trade
practice or boycott fostered or imposed by a
foreign country against a country friendly to the
United States or against any United States person
must report such request to the Department of
Commerce in accordance with the requirements
of this section. Such a request may be either
written or oral and may include a request to
furnish information or enter into or implement an
agreement. It may also include a solicitation,
directive, legend or instruction that asks for
information or that asks that a United States
person take or refrain from taking a particular
action.
Such a request shall be reported
regardless of whether the action requested is
prohibited or permissible under this part, except
as otherwise provided by this section.
(2) For purposes of this section, a request
received by a United States person is reportable if
he knows or has reason to know that the purpose
of the request is to enforce, implement, or
otherwise further, support, or secure compliance
with an unsanctioned foreign boycott or
restrictive trade practice.
(i) A request received by a United States
person located in the United States is reportable if
it is received in connection with a transaction or
activity in the interstate or foreign commerce of
the United States, as determined under
§760.1(d)(1) through (5) and (18) of this part.
(ii) A request received by a United States
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person located outside the United States (that is,
a foreign subsidiary, partnership, affiliate, branch,
office, or other permanent foreign establishment
which is controlled in fact by any domestic
concern, as determined under §760.1(c) of this
part) is reportable if it is received in connection
with a transaction or activity in the interstate or
foreign commerce of the United States, as
determined under §760.1(d)(6) through (17) and
(19) of this part.
(iii) A request such as a boycott questionnaire,
unrelated to a particular transaction or activity,
received by any United States person is reportable
when such person has or anticipates a business
relationship with or in a boycotting country
involving the sale, purchase or transfer of goods
or services (including information) in the
interstate or foreign commerce of the United
States, as determined under §760.1(d) of this part.
(3) These reporting requirements apply to all
United States persons. They apply whether the
United States person receiving the request is an
exporter, bank or other financial institution,
insurer, freight forwarder, manufacturer, or any
other United States person subject to this part.
(4) The acquisition of information about a
boycotting country's boycott requirements
through the receipt or review of books,
pamphlets, legal texts, exporters' guidebooks and
other similar publications does not constitute
receipt of a reportable request for purposes of this
section. In addition, a United States person who
receives an unsolicited invitation to bid, or similar
proposal, containing a boycott request has not
received a reportable request for purposes of this
section where he does not respond to the
invitation to bid or other proposal.
(5) Because of the use of certain terms for
boycott and non-boycott purposes; because of
Congressional mandates to provide clear and
precise guidelines in areas of inherent
uncertainty; and because of the Department's
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`

commitment to minimize paperwork and reduce
the cost of reporting where it will not impair the
Department's ability to continue to monitor
foreign boycotts, the following specific requests
are not reportable:
(i) A request to refrain from shipping goods on
a carrier which flies the flag of a particular
country or which is owned, chartered, leased or
operated by a particular country or by nationals or
residents of a particular country, or a request to
certify to that effect.
(ii) A request to ship goods via a prescribed
route, or a request to refrain from shipping goods
via a proscribed route, or a request to certify to
either effect.
(iii) A request to supply an affirmative
statement or certification regarding the country of
origin of goods.
(iv) A request to supply an affirmative
statement or certification regarding the name of
the supplier or manufacturer of the goods shipped
or the name of the provider of services.
(v) A request to comply with the laws of
another country except where the request
expressly requires compliance with that country's
boycott laws.
(vi) A request to an individual to supply
information about himself or a member of his
family for immigration, passport, visa, or
employment purposes.
(vii) A request to supply an affirmative
statement or certification indicating the
destination of exports or confirming or otherwise
indicating that such cargo will be unloaded or
discharged at a particular destination.
(viii) A request to supply a certificate by the
owner, master, charterer, or any employee
thereof, that a vessel, aircraft, truck or any other
mode of transportation is eligible, otherwise
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eligible, permitted, or allowed to enter, or not restricted from entering, a particular port, country,
or group of countries pursuant to the laws, rules,
or regulations of that port, country, or group of
countries.
(ix) A request to supply a certificate from an
insurance company stating that the insurance
company has a duly authorized agent or
representative within a boycotting country and/or
the name and address of such agent.
(x) A request to comply with a term or
condition of a transaction that provides that the
vendor bear the risk of loss and indemnify the
purchaser if the vendor's goods are denied entry
into a country for any reason ("risk of loss
clause") if such clause was in use by the
purchaser prior to January 18, 1978.
(6) No United States person may engage in any
transaction or take any other action, either
independently or through any other person, with
intent to evade the provisions of this part.
(7) From time to time the Department will survey
domestic concerns for purposes of determining
the worldwide scope of boycott requests received
by their controlled foreign subsidiaries and
affiliates with respect to their activities outside
United States commerce. This pertains to
requests which would be reportable under this
section but for the fact that the activities to which
the requests relate are outside United States
commerce. The information requested will
include the number and nature of non-reportable
boycott requests received, the action(s) requested,
the actions(s) taken in response and the countries
in which the requests originate. The results of
such surveys, including the names of those
surveyed, will be made public.
(b) Manner of reporting
(1) Each reportable request must be reported.
However, if more than one document (such as an
invitation to bid, purchase order, or letter of
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`

credit) containing the same boycott request is
received as part of the same transaction, only the
first such request need be reported. Individual
shipments against the same purchase order or
letter of credit are to be treated as part of the same
transaction. Each different boycott request
associated with a given transaction must be
reported, regardless of how or when the request is
received.
(2) Each United States person actually receiving
a reportable request must report that request.
However, such person may designate someone
else to report on his behalf. For example, a
United States company, if authorized, may report
on behalf of its controlled foreign subsidiary or
affiliates; a freight forwarder, if authorized, may
report on behalf of the exporter; and a bank, if
authorized, may report on behalf of the
beneficiary of a letter of credit. If a person
designated to report a request received by another
receives an identical request directed to him in
connection with the same transaction, he may file
one report on behalf of himself and the other
person.
(3) Where a person is designated to report on
behalf of another, the person receiving the request
remains liable for any failure to report or for any
representations made on his behalf. Further,
anyone reporting on behalf of another is not
relieved of his own responsibility for reporting
any boycott request which he receives, even if it
is an identical request in connection with the
same transaction.
(4) Reports must be submitted in duplicate to:
Report Processing Staff
Office of Antiboycott Compliance
U.S. Department of Commerce
Room 6098
Washington, D.C. 20230
Each submission must be made in accordance
with the following requirements:

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(i) Where the person receiving the request is a
United States person located in the United States,
each report of requests must be postmarked by the
last day of the month following the calendar
quarter in which the request was received (e.g.,
April 30 for the quarter consisting of January,
February, and March).
(ii) Where the person receiving the request is a
United States person located outside the United
States, each report of requests must be
postmarked by the last day of the second month
following the calendar quarter in which the
request was received (e.g., May 31 for the quarter
consisting of January, February, and March).
(5) At the reporting person's option, reports may
be submitted on either a single transaction form
(Form BIS-621P, Report of Restrictive Trade
Practice or Boycott Request Single Transaction
(revised 10-89)) or on a multiple transaction form
(Form BIS-6051P, Report of Request for
Restrictive Trade Practice or Boycott Multiple
Transactions (revised 10-89)). Use of the
multiple transaction form permits the reporting
person to provide on one form all required
information relating to as many as 75 reportable
requests received within any single reporting
period.
(6) Reports, whether submitted on the single
transaction form or on the multiple transaction
form, must contain entries for every applicable
item on the form, including whether the reporting
person intends to take or has taken the action
requested. If the reporting person has not decided
what action he will take by the time the report is
required to be filed, he must later report the
action he decides to take within 10 business days
after deciding. In addition, anyone filing a report
on behalf of another must so indicate and identify
that other person.
(7) Each report of a boycott request must be
accompanied by two copies of the relevant
page(s) of any document(s) in which the request
appears. Reports may also be accompanied by
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`

any additional information relating to the request
as the reporting person desires to provide
concerning his response to the request.
(8) Records containing information relating to a
reportable boycott request, including a copy of
any document(s) in which the request appears,
must be maintained by the recipient for a
five-year period after receipt of the request. The
Department may require that these materials be
submitted to it or that it have access to them at
any time within that period. (See part 762 of the
EAR for additional recordkeeping requirements.)
(c) Disclosure of information.
(1) Reports of requests received on or after
October 7, 1976, as well as any accompanying
documents filed with the reports, have been and
will continue to be made available for public
inspection and copying, except for certain
proprietary information. With respect to reports
of requests received on or after August 1, 1978, if
the person making the report certifies that a
United States person to whom the report relates
would be placed at a competitive disadvantage
because of the disclosure of information
regarding the quantity, description, or value of
any articles, materials, and supplies, including
related technical data and other information,
whether contained in a report or in any
accompanying document(s), such information
will not be publicly disclosed except upon failure
by the reporting entity to edit the public
inspection copy of the accompanying
document(s) as provided by paragraph (c)(2) of
this section, unless the Secretary of Commerce
determines that the disclosure would not place the
United States person involved at a competitive
disadvantage or that it would be contrary to the
national interest to withhold the information. In
the event the Secretary of Commerce considers
making such a determination
concerning
competitive disadvantage, appropriate notice and
an opportunity for comment will be given before
any such proprietary information is publicly disclosed. In no event will requests of reporting
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persons to withhold any information contained in
the report other than that specified in this
paragraph be honored.
(2)
Because a copy of any document(s)
accompanying the report will be made available
for public inspection and copying, one copy must
be submitted intact and another copy must be
edited by the reporting entity to delete the same
information which it certified in the report would
place a United States person at a competitive
disadvantage if disclosed. In addition, the
reporting entity may delete from this copy
information that is considered confidential and
that is not required to be contained in the report
(e.g., information related to foreign consignee).
This copy should be conspicuously marked with
the legend "Public Inspection Copy." With
respect to documents accompanying reports
received by the Department on or after July 1,
1979, the public inspection copy will be made
available as submitted whether or not it has been
appropriately edited by the reporting entity as
provided by this paragraph.
(3) Reports and accompanying documents which
are available to the public for inspection and
copying are located in the:
BIS Freedom of Information Records
Inspection Facility, Room 4525
Department of Commerce
14th Street and Constitution Avenue, N.W.
Washington, D.C. 20230
Requests to inspect such documents should be
addressed to that facility.
(4) The Secretary of Commerce will periodically
transmit summaries of the information contained
in the reports to the Secretary of State for such
action as the Secretary of State, in consultation
with the Secretary of Commerce, may deem
appropriate for carrying out the policies in section
8(b)(2) of the Export Administration Act of 1979.

Export Administration Regulations

`

EXAMPLES
The following examples are intended to give
guidance in determining what is reportable. They
are illustrative, not comprehensive.
(i) A, a U.S. manufacturer, is shipping goods to
boycotting country Y and is asked by Y to certify
that it is not blacklisted by Y's boycott office.
The request to A is reportable, because it is a
request to A to comply with Y's boycott
requirements.
(ii) A, a U.S. manufacturing company, receives
an order for tractors from boycotting country Y.
Y's order specifies that the tires on the tractors be
made by B, another U.S. company. A believes Y
has specified B as the tire supplier because
otherwise A would have used tires made by C, a
blacklisted company, and Y will not take
shipment of tractors containing tires made by
blacklisted companies.
A must report Y's request for tires made by B,
because A has reason to know that B was chosen
for boycott reasons.
(iii) Same as (ii), except A knows that Y's
request has nothing to do with the boycott but
simply reflects Y's preference for tires made by B.
Y's request is not reportable, because it is
unrelated to Y's boycott.
(iv) Same as (ii), except A neither knows nor
has reason to know why Y has chosen B.
Y's request is not reportable, because A neither
knows nor has reason to know that Y's request is
based on Y's boycott.
(v) A, a controlled foreign subsidiary of U.S.
company B, is a resident of boycotting country Y.
A is a general contractor. After being supplied by
A with a list of competent subcontractors, A's
customer instructs A to use subcontractor C on
the project. A believes that C was chosen
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because, among other things, the other listed
subcontractors are blacklisted.
The instruction to A by its customer that C be
used on the project is reportable, because it is a
request to comply with Y's boycott requirements.
(vi) A, a controlled foreign subsidiary of U.S.
company B, is located in non-boycotting country
P. A receives an order for washing machines
from boycotting country Y. Y instructs A that a
negative certificate of origin must accompany the
shipment. The washing machines are made
wholly in P, without U.S. components.
Y's instruction to A regarding the negative
certificate of origin is not reportable, because the
transaction to which it relates is not in U.S.
commerce.
(vii) Same as (vi), except that A obtains
components from the United States for the
purpose of filling the order from Y. Y's
instruction to A regarding the negative certificate
of origin is reportable, because the transaction to
which it relates is in U.S. commerce.
(viii) A, a U.S. construction company, receives
in the mail an unsolicited invitation to bid on a
construction project in boycotting country Y. The
invitation to bid requires those who respond to
certify that they do not have any plants or branch
offices in boycotted country X. A does not
respond.
A's receipt of the unsolicited invitation to bid is
not reportable, because the request does not relate
to any present or anticipated business of A with
or in Y.
(ix) Same as (viii), except that A receives a
boycott questionnaire from a central boycott
office. A does not do business in any of the
boycotting countries involved, and does not
anticipate doing any business in those countries.
A does not respond.

Export Administration Regulations

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A's receipt of the boycott questionnaire is not
reportable, because it does not relate to any
present or anticipated business by A with or in a
boycotting country.
(x) A, a U.S. manufacturer, is seeking markets
in which to expand its exports. A sends a
representative to boycotting country Y to explore
Y's potential as a market for A's products. A's
representative discusses its products but does not
enter into any contracts on that trip. A does,
however, hope that sales will materialize in the
future. Subsequently, A receives a boycott
questionnaire from Y.
A's receipt of the boycott questionnaire is
reportable, because the request relates to A's
anticipated business with or in a boycotting
country. For purposes of determining whether a
report is required, it makes no difference whether
A responds to the questionnaire, and it makes no
difference that actual sales contracts are not in
existence or do not materialize.
(xi) Same as (x), except that A's representative
enters into a contract to sell A's products to a
buyer in boycotting country Y. Subsequently, A
receives a boycott questionnaire from Y.
A's receipt of the boycott questionnaire is
reportable, because it relates to A's present
business with or in a boycotting country. For
purposes of determining whether a report is
required, it makes no difference whether A
responds to the questionnaire.
(xii) A, a U.S. freight forwarder, purchases an
exporter's guidebook which includes the import
requirements of boycotting country Y. The
guidebook contains descriptions of actions which
U.S. exporters must take in order to make
delivery of goods to Y.
A's acquisition of the guidebook is not reportable,
because he has not received a request from
anyone.

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(xiii) A, a U.S. freight forwarder, is arranging
for the shipment of goods to boycotting country Y
at the request of B, a U.S. exporter. B asks A to
assume responsibility to assure that the
documentation accompanying the shipment is in
compliance with Y's import requirements. A
examines an exporters' guidebook, determines
that Y's import regulations require a certification
that the insurer of the goods is not blacklisted and
asks U.S. insurer C for such a certification.
B's request to A is reportable by A, because it
constitutes a request to comply with Y's boycott
as of the time A takes action to comply with Y's
boycott requirements in response to the request.
A's request to C is reportable by C.
(xiv) A, a U.S. freight forwarder, is arranging
for the shipment of U.S. goods to boycotting
country Y. The manufacturer supplies A with all
the necessary documentation to accompany the
shipment. Among the documents supplied by the
manufacturer is his certificate that he himself is
not blacklisted. A transmits the documentation
supplied by the manufacturer.
A's action in merely transmitting documents
received from the manufacturer is not reportable,
because A has received no request to comply with
Y's boycott.
(xv) Same as (xiv), except that A is asked by
U.S. exporter B to assume the responsibility to
assure that the necessary documentation
accompanies the shipment whatever that
documentation might be. B forwards to A a letter
of credit which requires that a negative certificate
of origin accompany the bill of lading. A
supplies a positive certificate of origin.
Both A and B must report receipt of the letter of
credit, because it contains a request to both of
them to comply with Y's boycott.
(xvi)
Same as (xiv), except that the
manufacturer fails to supply a required negative
certificate of origin, and A is subsequently asked
Export Administration Regulations

`

by a consular official of Y to see to it that the
certificate is supplied. A supplies a positive
certificate of origin.
The consular official's request to A is reportable
by A, because A was asked to comply with Y's
boycott requirements by supplying the negative
certificate of origin.
(xvii) A, a U.S. manufacturer, is shipping
goods to boycotting country Y. Arrangements
have been made for freight forwarder B to handle
the shipment and secure all necessary shipping
certifications. B notes that the letter of credit
requires that the manufacturer supply a negative
certificate of origin and B asks A to do so. A
supplies a positive certificate of origin.
B's request to A is reportable by A, because A is
asked to comply with Y's boycott requirements by
providing the negative certificate.
(xviii) A, a controlled foreign subsidiary of
U.S. company B, is a resident of boycotting
country Y. A is engaged in oil exploration and
drilling operations in Y. In placing orders for
drilling equipment to be shipped from the United
States, A, in compliance with Y's laws, selects
only those suppliers who are not blacklisted.
A's action in choosing non-blacklisted suppliers is
not reportable, because A has not received a
request to comply with Y's boycott in making
these selections.
(xix) A, a controlled foreign subsidiary of U.S.
company B, is seeking permission to do business
in boycotting country Y. Before being granted
such permission, A is asked to sign an agreement
to comply with Y's boycott laws.
The request to A is reportable, because it is a
request that expressly requires compliance with
Y's boycott law and is received in connection
with A's anticipated business in Y.

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(xx) A, a U.S. bank, is asked by a firm in
boycotting country Y to confirm a letter of credit
in favor of B, a U.S. company. The letter of
credit calls for a certificate from B that the goods
to be supplied are not produced by a firm
blacklisted by Y. A informs B of the letter of
credit, including its certification condition, and
sends B a copy.
B must report the certification request contained
in the letter of credit, and A must report the
request to confirm the letter of credit containing
the boycott condition, because both are being
asked to comply with Y's boycott.
(xxi) Same as (xx), except that the letter of
credit calls for a certificate from the beneficiary
that the goods will not be shipped on a vessel that
will call at a port in boycotted country X before
making delivery in Y.
The request is not reportable, because it is a
request of a type deemed by this section to be in
common use for non-boycott purposes.
(xxii) A, a U.S. company, receives a letter of
credit from boycotting country Y stating that on
no condition may a bank blacklisted by Y be
permitted to negotiate the credit.
A's receipt of the letter of credit is reportable,
because it contains a request to A to comply with
Y's boycott requirements.
(xxiii) A, a U.S. bank, receives a demand draft
from B, a U.S. company, in connection with B's
shipment of goods to boycotting country Y. The
draft contains a directive that it is valid in all
countries except boycotted country X.
A's receipt of the demand draft is reportable,
because it contains a request to A to comply with
Y's boycott requirements.
(xxiv) A, a U.S. exporter, receives an order
from boycotting country Y. On the order is a
legend that A's goods, invoices, and packaging
Export Administration Regulations

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must not bear a six-pointed star or other symbol
of boycotted country X.
A's receipt of the order is reportable, because it
contains a request to comply with Y's boycott
requirements.
(xxv) Same as (xxiv), except the order contains
a statement that goods exported must not
represent part of war reparations to boycotted
country X.
A's receipt of the order is reportable, because it
contains a request to A to comply with Y's
boycott requirements.
(xxvi) A, a U.S. contractor, is negotiating with
boycotting country Y to build a school in Y.
During the course of the negotiations, Y suggests
that one of the terms of the construction contract
be that A agree not to import materials produced
in boycotted country X. It is A's company policy
not to agree to such a contractual clause, and A
suggests that instead it agree that all of the
necessary materials will be obtained from U.S.
suppliers. Y agrees to A's suggestion and a
contract is executed.
A has received a reportable request, but, for
purposes of reporting, the request is deemed to be
received when the contract is executed.
(xxvii) Same as (xxvi), except Y does not
accept A's suggested alternative clause and
negotiations break off.
A's receipt of Y's request is reportable. For
purposes of reporting, it makes no difference that
A was not successful in the negotiations. The
request is deemed to be received at the time the
negotiations break off.
(xxviii) A, a U.S. insurance company, is
insuring the shipment of drilling equipment to
boycotting country Y. The transaction is being
financed by a letter of credit which requires that
A certify that it is not blacklisted by Y. Freight
January 2004

Restrictive Trade Practices or Boycotts

Part 760—page 70

forwarder B asks A to supply the certification in
order to satisfy the requirements of the letter of
credit.
The request to A is reportable by A, because it is
a request to comply with Y's boycott
requirements.
(xxix) A, a U.S. manufacturer, is engaged from
time-to-time in supplying drilling rigs to company
B in boycotting country Y. B insists that its
suppliers sign contracts which provide that, even
after title passes from the supplier to B, the
supplier will bear the risk of loss and indemnify B
if goods which the supplier has furnished are
denied entry into Y for whatever reason. A
knows or has reason to know that this contractual
provision is required by B because of Y's boycott,
and that B has been using the provision since
1977. A receives an order from B which contains
such a clause.
B's request is not reportable by A, because the
request is deemed to be not reportable by these
regulations if the provision was in use by B prior
to January 18, 1978.

(xxxii) U.S. exporter A is negotiating a
transaction with boycotting country Y. A knows
that at the conclusion of the negotiations he will
be asked by Y to supply certain boycott-related
information and that such a request is reportable.
In an effort to forestall the request and thereby
avoid having to file a report, A supplies the
information in advance.
A is deemed to have received a reportable
request.
(xxxiii) A, a controlled foreign affiliate of U.S.
company B, receives an order for computers from
boycotting country Y and obtains components
from the United States for the purpose of filling
the order. Y instructs A that a negative certificate
of origin must accompany the shipment.
Y's instruction to A regarding the negative
certificate of origin is reportable by A. Moreover,
A may designate B or any other person to report
on its behalf. However, A remains liable for any
failure to report or for any representations made
on its behalf.

Unless A receives information from B that B
introduced the term prior to January 18, 1978, A
must report receipt of the request.

(xxxiv) U.S. exporter A, in shipping goods to
boycotting country Y, receives a request from the
customer in Y to state on the bill of lading that
the vessel is allowed to enter Y's ports. The
request further states that a certificate from the
owner or master of the vessel to that effect is
acceptable.

(xxxi) A, a U.S. citizen, is a shipping clerk for
B, a U.S. manufacturing company. In the course
of his employment, A receives an order for goods
from boycotting country Y. The order specifies
that none of the components of the goods is to be
furnished by blacklisted firms.

The request A received from his customer in Y is
not reportable because it is a request of a type
deemed to be not reportable by these regulations.
(A may not make such a statement on the bill of
lading himself, if he knows or has reason to know
it is requested for a boycott purpose.)

B must report the request received by its
employee, A, acting in the scope of his
employment. Although A is a U.S. person, such
an individual does not have a separate obligation
to report requests received by him in his capacity
as an employee of B.

(xxxv) U.S. exporter A, in shipping goods to
boycotting country Y, receives a request from the
customer in Y to furnish a certificate from the
owner of the vessel that the vessel is permitted to
call at Y's ports.

(xxx) Same as (xxix), except that A does not
know when B began using the provision.

Export Administration Regulations

`

January 2004

Restrictive Trade Practices or Boycotts

Part 760—page 71

The request A received from his customer in Y is
not reportable because it is a request of a type
deemed to be not reportable by these regulations.
(xxxvi) U.S. exporter A, in shipping goods to
boycotting country Y, receives a request from the
customer in Y to furnish a certificate from the
insurance company indicating that the company

Export Administration Regulations

`

has a duly authorized representative in country Y
and giving the name of that representative.
The request A received from his customer in Y is
not reportable if it was received after the effective
date of these rules, because it is a request of a
type deemed to be not reportable by these
regulations.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 1 to Part 760—page 1

INTERPRETATIONS
It has come to the Department's attention that
some U.S. persons are being or may be asked to
comply with new boycotting country
requirements with respect to shipping and
insurance certifications and certificates of origin.
It has also come to the Department's attention that
some U.S. persons are being or may be asked to
agree to new contractual provisions in connection
with certain foreign government or foreign
government agency contracts. In order to
maximize its guidance with respect to section 8 of
the Export Administration Act of 1979, as
amended (50 U.S.C. app. 2407) and part 760 of
the EAR, the Department hereby sets forth its
views on these certifications and contractual
clauses.1
I. CERTIFICATIONS
§760.2(d) of this part prohibits a U.S. person
from furnishing or knowingly agreeing to furnish:
"Information concerning his or any other person's
past, present or proposed business relationships:
(i) With or in a boycotted country;
(ii) With any business concern organized under
the laws of a boycotted country;
(iii) With any national or resident of a
boycotted country; or
(iv) With any other person who is known or
believed to be restricted from having any business
relationship with or in a boycotting country."
This prohibition, like all others under part 760,
applies only with respect to a U.S. person's

1

The Department originally issued this interpretation
pursuant to the Export Administration Amendments Act of
1979 (Public Law 95-52) and the regulations on restrictive
trade practices and boycotts (15 CFR 369) published on
January 25, 1978 (43 FR 3508).
Export Administration Regulations

`

activities in the interstate or foreign commerce of
the United States and only when such activities
are undertaken with intent to comply with,
further, or support an unsanctioned foreign
boycott. (§760.2(d)(5) of this part.)
This prohibition does not apply to the furnishing
of normal business information in a commercial
context. ( §760.2(d)(3) of this part). Normal
business information furnished in a commercial
context does not cease to be such simply because
the party soliciting the information may be a
boycotting country or a national or resident
thereof. If the information is of a type which is
generally sought for a legitimate business purpose
(such as determining financial fitness, technical
competence, or professional experience), the
information may be furnished even if the
information could be used, or without the
knowledge of the person supplying the
information is intended to be used, for boycott
purposes. (§760.2(d)(4) of this part).
The new certification requirements and the
Department's interpretation of the applicability of
part 760 thereto are as follows:
A. Certificate of origin. A certificate of origin is
to be issued by the supplier or exporting company
and authenticated by the exporting country,
attesting that the goods exported to the boycotting
country are of purely indigenous origin, and
stating the name of the factory or the
manufacturing company. To the extent that the
goods as described on the certificate of origin are
not solely and exclusively products of their
country of origin indicated thereon, a declaration
must be appended to the certificate of origin
giving the name of the supplier/manufacturer and
declaring:
"The undersigned, ____________, does hereby
declare on behalf of the above-named supplier/manufacturer, that certain parts or
components of the goods described in the
January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 1 to Part 760—page 2

attached certificate of origin are the products of
such country or countries, other than the country
named therein as specifically indicated hereunder:
Country of origin and percentage of value of
parts or components relative to total shipment

ports of the boycotting country in conformity
with its laws and regulations.
Sworn to before me, this _____ day of
_______, 19 ___. Notary Seal."

1. ____________________________________.

INTERPRETATION

2. ____________________________________.

It is the Department's position that furnishing a
certificate, such as the one set out above, stating:
(1) The name of the vessel, (2) The nationality of
the vessel, and (3) The owner of the vessel and
further declaring that the vessel: (a) Is not
registered in a boycotted country, (b) Is not
owned by nationals or residents of a boycotted
country, and (c) Will not call at or pass through a
boycotted country port enroute to its destination
in a boycotting country falls within the exception
contained in §760.3(c) for compliance with the
import and shipping document requirements of a
boycotting country. See §760.3(c) and examples
(vii), (viii), and (ix) thereunder.

3. ____________________________________.
Dated: ______________________.
Signature _________________________.
Sworn to before me, this ______ day of
____________, 19___. Notary Seal."

INTERPRETATION
It is the Department's position that furnishing a
positive certificate of origin, such as the one set
out above, falls within the exception contained in
§760.3(c) of this part for compliance with the
import and shipping document requirements of a
boycotting country. See §760.3(c) of this part
and examples (i) and (ii) thereunder.
B. Shipping certificate. A certificate must be
appended to the bill of lading stating: (1) Name of
vessel; (2) Nationality of vessel; and (3) Owner of
vessel, and declaring:
"The undersigned does hereby declare on
behalf of the owner, master, or agent of the
above-named vessel that said vessel is not
registered in the boycotted country or owned by
nationals or residents of the boycotted country
and will not call at or pass through any
boycotted country port enroute to its boycotting
country destination.
"The undersigned further declares that said
vessel is otherwise eligible to enter into the
Export Administration Regulations

`

It is also the Department's position that the owner,
charterer, or master of a vessel may certify that
the vessel is "eligible" or "otherwise eligible" to
enter into the ports of a boycotting country in
conformity with its laws and regulations.
Furnishing such a statement pertaining to one's
own eligibility offends no prohibition under this
part 760. See §760.2(f), example (xiv).
On the other hand, where a boycott is in force, a
declaration that a vessel is "eligible" or
"otherwise eligible" to enter the ports of the
boycotting country necessarily conveys the
information that the vessel is not blacklisted or
otherwise restricted from having a business
relationship with the boycotting country. See
§760.3(c), examples (vi), (xi), and (xii). Where a
person other than the vessel's owner, charterer, or
master furnishes such a statement, that is
tantamount to his furnishing a statement that he is
not doing business with a blacklisted person or is
doing business only with non-blacklisted persons.
Therefore, it is the Department's position that
January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 1 to Part 760—page 3

furnishing such a certification (which does not
reflect customary international commercial
practice) by anyone other than the owner,
charterer, or master of a vessel would fall within
the prohibition set forth in §760.2(d) unless it is
clear from all the facts and circumstances that the
certification is not required for a boycott reason.
See §760.2(d)(3) and (4). See also Part A.,
“Permissible Furnishing of Information,” of
Supplement No. 5 to this part.
C. Insurance certificate. A certificate must be
appended to the insurance policy stating: (1)
Name of insurance company; (2) Address of its
principal office; and (3) Country of its
incorporation, and declaring:
"The undersigned, _____________________,
does hereby certify on behalf of the abovenamed insurance company that the said
company has a duly qualified and appointed
agent or representative in the boycotting
country whose name and address appear below:
Name of agent/representative and address in the
boycotting country.
Sworn to before me this ____ day of ________,
19 ____. Notary Seal."

purpose of determining that the insurance
company is neither headquartered nor
incorporated in a boycotted country.
See
§760.2(d)(1)(i).
It is also the Department's position that the
insurer, himself, may certify that he has a duly
qualified and appointed agent or representative in
the boycotting country and may furnish the name
and address of his agent or representative.
Furnishing such a statement pertaining to one's
own status offends no prohibition under this part
760. See §760.2(f), example (xiv).
On the other hand, where a boycott is in force, a
declaration that an insurer "has a duly qualified
and appointed agent or representative" in the
boycotting country necessarily conveys the
information that the insurer is not blacklisted or
otherwise restricted from having a business
relationship with the boycotting country. See
§760.3(c), example (v). Therefore, it is the
Department's position that furnishing such a
certification by anyone other than the insurer
would fall within the prohibition set forth in
§760.2(d) unless it is clear from all the facts and
circumstances that the certification is not required
for a boycott reason. See §760.2(d)(3) and (4).
II. CONTRACTUAL CLAUSES

INTERPRETATION
It is the Department's position that furnishing the
name of the insurance company falls within the
exception contained in §760.3(c) for compliance
with the import and shipping document
requirements of a boycotting country. See
§760.3(c)(1)(v) and examples (v) and (x)
thereunder. In addition, it is the Department's
position that furnishing a certificate, such as the
one set out above, stating the address of the
insurance company's principal office and its
country of incorporation offends no prohibition
under this part 760 unless the U.S. person
furnishing the certificate knows or has reason to
know that the information is sought for the
Export Administration Regulations

`

The new contractual requirements and the
Department's interpretation of the applicability of
part 760 thereto are as follows:
A. Contractual clause regarding import laws of
boycotting country. "In connection with the
p e r f o r m a n c e o f t h i s c o nt r a c t t he
Contractor/Supplier acknowledges that the import
and customs laws and regulations of the
boycotting country shall apply to the furnishing
and shipment of any products or components
thereof to the boycotting country.
The
Contractor/Supplier specifically acknowledges
that the aforementioned import and customs laws
and regulations of the boycotting country
prohibit, among other things, the importation into
January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 1 to Part 760—page 4

the boycotting country of products or components
thereof: (1) Originating in the boycotted country;
(2) Manufactured, produced, or furnished by
companies organized under the laws of the
boycotted country; and (3) Manufactured,
produced, or furnished by nationals or residents
of the boycotted country."

The Department notes that a United States person
may not furnish a negative certification regarding
the origin of goods or their components even
though the certification is furnished in response to
the import and shipping document requirements
of the boycotting country. See §760.3(c) and
examples (i) and (ii) thereunder, and §760.3(a)
and example (ii) thereunder.

INTERPRETATION

B. Contractual clause regarding unilateral and
specific selection. "The Government of the
boycotting country (or the First Party), in its
exclusive power, reserves its right to make the
final unilateral and specific selection of any
proposed carriers, insurers, suppliers of services
to be performed within the boycotting country, or
of specific goods to be furnished in accordance
with the terms and conditions of this contract."

It is the Department's position that an agreement,
such as the one set out in the first sentence above,
that the import and customs requirements of a
boycotting country shall apply to the performance
of a contract does not, in and of itself, offend any
prohibition under this part 760. See §760.2(a)(5)
and example (iii) under "Examples of Agreements
To Refuse To Do Business." It is also the
Department's position that an agreement to
comply generally with the import and customs
requirements of a boycotting country does not, in
and of itself, offend any prohibition under this
part 760. See §760.2(a)(5) and examples (iv) and
(v) under "Examples of Agreements To Refuse
To Do Business." In addition, it is the
Department's position that an agreement, such as
the one set out in the second sentence above, to
comply with the boycotting country's import and
customs requirements prohibiting the importation
of products or components: (1) Originating in the
boycotted country; (2) Manufactured, produced,
or furnished by companies organized under the
laws of the boycotted country; or (3)
Manufactured, produced, or furnished by
nationals or residents of the boycotted country
falls within the exception contained in §760.3(a)
for compliance with the import requirements of a
boycotting country. See §760.3(a) and example
(ii) thereunder.

Export Administration Regulations

`

INTERPRETATION
It is the Department's position that an agreement,
such as the one set out above, falls within the
exception contained in §760.3(d) of this part for
compliance with unilateral selections. However,
the Department notes that whether a U.S. person
may subsequently comply or agree to comply
with any particular selection depends upon
whether that selection meets all the requirements
contained in §760.3(d) of this part for compliance
with unilateral selections. For example, the
particular selection must be unilateral and
specific, particular goods must be specifically
identifiable as to their source or origin at the time
of their entry into the boycotting country, and all
other requirements contained in §760.3(d) of this
part must be observed.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 2 to Part 760—page 1

INTERPRETATION
The Department hereby sets forth its views on
whether the furnishing of certain shipping and
insurance certificates in compliance with
boycotting country requirements violates the
provisions of section 8 of the Export
Administration Act of 1979, as amended (50
U.S.C. app. 2407) and part 760 of the EAR2 , as
follows:
(i) "The owner, charterer or master of a vessel
may certify that the vessel is 'eligible' or
'otherwise eligible' to enter into the ports of a
boycotting country in conformity with its laws
and regulations;"
(ii) "The insurer, himself, may certify that he
has a duly qualified and appointed agent or
representative in the boycotting country and may
furnish the name and address of his agent or
representative."
Furnishing such certifications by anyone other
than:
(i) The owner, charterer or master of a vessel,
or
(ii)
The insurer would fall within the
prohibition set forth in §760.2(d) of this part,
"unless it is clear from all the facts and
circumstances that these certifications are not
required for a boycott reason." See §760.2(d)(3)
and (4) of this part.
The Department has received from the Kingdom
of Saudi Arabia a clarification that the shipping
and insurance certifications are required by Saudi
Arabia in order to:

2

The Department originally issued this interpretation on
April 21, 1978 (43 FR 16969) pursuant to the Export
Administration Amendments Act of 1977 (Public Law 95-52)
and the regulations on restrictive trade practices and boycotts
(15 CFR 369) published on January 25, 1978 (43 FR 3508).
Export Administration Regulations

`

(i) Demonstrate that there are no applicable
restrictions under Saudi laws or regulations
pertaining to maritime matters such as the age of
the ship, the condition of the ship, and similar
matters that would bar entry of the vessel into
Saudi ports; and
(ii) Facilitate dealings with insurers by Saudi
Arabian importers whose ability to secure
expeditious payments in the event of damage to
insured goods may be adversely affected by the
absence of a qualified agent or representative of
the insurer in Saudi Arabia. In the Department's
judgment, this clarification constitutes sufficient
facts and circumstances to demonstrate that the
certifications are not required by Saudi Arabia for
boycott reasons.
On the basis of this clarification, it is the
Department's position that any United States
person may furnish such shipping and insurance
certificates required by Saudi Arabia without
violating §760.2(d) of this part. Moreover, under
these circumstances, receipts of requests for such
shipping and insurance certificates from Saudi
Arabia are not reportable.
It is still the Department's position that furnishing
such a certificate pertaining to one's own
eligibility offends no prohibition under part 760.
See §760.2(f) of this part, example (xiv).
However, absent facts and circumstances clearly
indicating that the certifications are required for
ordinary commercial reasons as demonstrated by
the Saudi clarification, furnishing certifications
about the eligibility or blacklist status of any
other person would fall within the prohibition set
forth in §760.2(d) of this part, and receipts of
requests for such certifications are reportable.
It also remains the Department's position that
where a United States person asks an insurer or
carrier of the exporter's goods to self-certify, such
request offends no prohibition under this part.
However, where a United States person asks
January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 2 to Part 760—page 2

anyone other than an insurer or carrier of the
exporter's goods to self-certify, such requests will
be considered by the Department as evidence of
the requesting person's refusal to do business with
those persons who cannot or will not furnish such
a self-certification.
For example, if an
exporter-beneficiary of a letter of credit asks his
component suppliers to self-certify, such a request
will be considered as evidence of his refusal to do
business with those component suppliers who
cannot or will not furnish such a self-certification.

Export Administration Regulations

`

The Department wishes to emphasize that
notwithstanding the fact that self-certifications
are permissible, it will closely scrutinize the
activities of all United States persons who
provide such self-certifications, including insurers
and carriers, to determine that such persons have
not taken any prohibited actions or entered into
any prohibited agreements in order to be able to
furnish such certifications.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 3 to Part 760—page 1

INTERPRETATION
Pursuant to Article 2, Annex II of the Peace
Treaty between Egypt and Israel, Egypt's
participation in the Arab economic boycott of
Israel was formally terminated on January 25,
1980. On the basis of this action, it is the
Department's position that certain requests for
information, action or agreement which were
considered boycott-related by implication now
cannot be presumed boycott-related and thus
would not be prohibited or reportable under the
Regulations. For example, a request that an
exporter certify that the vessel on which it is
shipping its goods is eligible to enter Arab
Republic of Egypt ports has been considered a
boycott-related request that the exporter could not
comply with because Egypt has a boycott in force
against Israel (see 43 FR 16969, April 21, 1978).
Such a request after January 25, 1980 would not
be presumed boycott-related because the
underlying boycott requirement/basis for the

Export Administration Regulations

`

certification has been eliminated. Similarly, a
U.S. company would not be prohibited from
complying with a request received from Egyptian
government officials to furnish the place of birth
of employees the company is seeking to take to
Egypt, because there is no underlying boycott law
or policy that would give rise to a presumption
that the request was boycott-related.
U.S. persons are reminded that requests that are
on their face boycott-related or that are for action
obviously in furtherance or support of an
unsanctioned foreign boycott are subject to the
Regulations, irrespective of the country or origin.
For example, requests containing references to
"blacklisted companies", "Israel boycott list",
"non-Israeli goods" or other phrases or words
indicating boycott purpose would be subject to
the appropriate provisions of the Department's
antiboycott regulations.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 4 to Part 760—page 1

INTERPRETATION
The question has arisen how the definition of U.S.
commerce in the antiboycott regulations (15 CFR
part 760) applies to a shipment of foreign-made
goods when U.S.-origin spare parts are included
in the shipment. Specifically, if the shipment of
foreign goods falls outside the definition of U.S.
commerce, will the inclusion of U.S.-origin spare
parts bring the entire transaction into U.S.
commerce?

As used above, the term "spare parts" refers to
parts of the quantities and types normally and
customarily ordered with a product and kept on
hand in the event they are needed to assure
prompt repair of the product. Parts, components
or accessories that improve or change the basic
operations or design characteristics, for example,
as to accuracy, capability or productivity, are not
spare parts under this definition.

Section 760.1(d)(12) provides the general
guidelines for determining when U.S.-origin
goods shipped from a controlled in fact foreign
subsidiary are outside U.S. commerce. The two
key tests of that provision are that the goods were
“(i) ... acquired without reference to a specific
order from or transaction with a person outside
the United States; and (ii) ... further
manufactured, incorporated into, refined into, or
reprocessed into another product.” Because the
application of these two tests to spare parts does
not conclusively answer the U.S. commerce
question, the Department is presenting this
clarification.

Inclusion of U.S.-origin spare parts in a shipment
of products which is otherwise outside U.S.
commerce will not bring the transaction into U.S.
commerce if the following conditions are met:

In the cases brought to the Department's attention,
an order for foreign-origin goods was placed with
a controlled in fact foreign subsidiary of a United
States company. The foreign goods contained
components manufactured in the United States
and in other countries, and the order included a
request for extras of the U.S. manufactured
components (spare parts) to allow the customer to
repair the item. Both the foreign manufactured
product and the U.S. spare parts were to be
shipped from the general inventory of the foreign
subsidiary. Since the spare parts, if shipped by
themselves, would be in U.S. commerce as that
term is defined in the Regulations, the question
was whether including them with the foreign
manufactured item would bring the entire
shipment into U.S. commerce. The Department
has decided that it will not and presents the
following specific guidance.
Export Administration Regulations

`

(I) The parts included in the shipment are
acquired from the United States by the controlled
in fact foreign subsidiary without reference to a
specific order from or transaction with a person
outside the United States;
(II) The parts are identical to the corresponding
United States-origin parts which have been
manufactured, incorporated into or reprocessed
into the completed product;
(III) The parts are of the quantity and type
normally and customarily ordered with the
completed product and kept on hand by the firm
or industry of which the firm is a part to assure
prompt repair of the product; and
(IV) The parts are covered by the same order as
the completed product and are shipped with or at
the same time as the original product.
The Department emphasizes that unless each of
the above conditions is met, the inclusion of
United States-origin spare parts in an order for a
foreign-manufactured or assembled product will
bring the entire transaction into the interstate or
foreign commerce of the United States for
purposes of part 760.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 5 to Part 760—page 1

INTERPRETATION
A. Permissible Furnishing of Information
The information outlined below may be furnished
in response to boycott-related requests from
boycotting countries or others. This information
is, in the view of the Department, not prohibited
by the Regulations. Thus, a person does not have
to qualify under any of the exceptions to be able
to make the following statements.
Such
statements can be made, however, only by the
person indicated and under the circumstances
described. These statements should not be used as
a point of departure or analogy for determining
the permissibility of other types of statements.
The Department's view that these statements are
not contrary to the prohibitions contained in
antiboycott provisions of the Regulations is
limited to the specific statement in the specific
context indicated.
1. A U.S. person may always provide its own
name, address, place of incorporation
("nationality"), and nature of business.
2. A U.S. person may state that it is not on a
blacklist, or restricted from doing business in a
boycotting country. A company may not make
that statement about its subsidiaries or
affiliates--only about itself. A U.S. person may
not say that there is no reason for it to be
blacklisted. To make that statement would
provide directly or by implication information
that may not be provided. A U.S. person may
inquire about the reasons it is blacklisted if it
learns that it is on a blacklist (see §760.2(d) of
this part example (xv)).
3. A U.S. person may describe in detail its past
dealings with boycotting countries; may state in
which boycotting countries its trademarks are
registered; and may specify in which boycotting
countries it is registered or qualified to do
business. In general, a U.S. person is free to
furnish any information it wishes about the nature
and extent of its commercial dealings with
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boycotting countries.
4. A U.S. person may state that many U.S. firms
or individuals have similar names and that it
believes that it may be confused with a similarly
named entity. A U.S. person may not state that it
does or does not have an affiliation or
relationship with such similarly named entity.
5. A U.S. person may state that the information
requested is a matter of public record in the
United States. However, the person may not
direct the inquirer to the location of that
information, nor may the U.S. person provide or
cause to be provided such information.
B. Availability of the Compliance with Local
Law Exception to Establish a Foreign Branch
Section 760.3(g), the Compliance With Local
Law exception, permits U.S. persons, who are
bona fide residents of a boycotting country, to
take certain limited, but otherwise prohibited,
actions, if they are required to do so in order to
comply with local law.
Among these actions is the furnishing of
non-discriminatory information. Examples (iv)
through (vi) under "Examples of Bona Fide
Residency" indicate that a company seeking to
become a bona fide resident within a boycotting
country may take advantage of the exception for
the limited purpose of furnishing information
required by local law to obtain resident status.
Exactly when and how this exception is available
has been the subject of a number of inquiries. It
is the Department's view that the following
conditions must be met for a non-resident
company to be permitted to furnish otherwise
prohibited information for the limited purpose of
seeking to become a bona fide resident:
1. The company must have a legitimate business
reason for seeking to establish a branch or other
resident operation in the boycotting country.
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Supplement No. 5 to Part 760—page 2

(Removal from the blacklist does not constitute
such a reason.)
2. The local operation it seeks to establish must
be similar or comparable in nature and operation
to ones the company operates in other parts of the
world, unless local law or custom dictates a
significantly different form.
3. The person who visits the boycotting country
to furnish the information must be the official
whose responsibility ordinarily includes the
creation and registration of foreign operations
(i.e., the chairman of the board cannot be flown in
to answer boycott questions unless the chairman
of the board is the corporate official who
ordinarily goes into a country to handle foreign
registrations).

is ordinarily known to the person establishing the
foreign branch. Obviously, at the time of
establishment, the foreign branch will have no
information of its own knowledge. Rather, the
information should be that which the responsible
person has of his own knowledge, or that he
would have with him as incidental and necessary
to the registration and establishment process. As
a general rule, such information would not
include such things as copies of agreements with
boycotted country concerns or detailed
information about the person's dealings with
blacklisted concerns.
5. It is not necessary that documents prepared in
compliance with this exception be drafted or
executed within the boycotting country. The
restrictions on the type of information which may
be provided and on who may provide it apply
regardless of where the papers are prepared or
signed.

4. The information provided must be that which

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January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 6 to Part 760—page 1

INTERPRETATION
The antiboycott regulations prohibit knowing
agreements to comply with certain prohibited
requests and requirements of boycotting
countries, regardless of how these terms are
stated. Similarly, the reporting rules require that
a boycott related "solicitation, directive, legend or
instruction that asks for information or that asks
that a United States person take or refrain from
taking a particular action" be reported. Questions
have frequently arisen about how particular
requirements in the form of directive or
instructions are viewed under the antiboycott
regulations, and we believe that it will add clarity
to the regulations to provide a written
interpretation of how three of these terms are
treated under the law. The terms in question
appear frequently in letters of credit, but may also
be found on purchase orders or other shipping or
sale documents. They have been brought to the
attention of the Department by numerous persons.
The terms are, or are similar to, the following: (1)
Goods of boycotted country origin are prohibited;
(2) No six-pointed stars may be used on the
goods, packing or cases; (3) Neither goods nor
packing shall bear any symbols prohibited in the
boycotting country.
(a) Goods of boycotted country origin
prohibited
This term is very common in letters of credit from
Kuwait and may also appear from time-to-time in
invitations to bid, contracts, or other trade
documents. It imposes a condition or requirement
compliance with which is prohibited, but
permitted by an exception under the Regulations
(see §760.2(a) and §760.3(a)). It is reportable by
those parties to the letter of credit or other
transaction that are required to take or refrain
from taking some boycott related action by the
request. Thus the bank must report the request
because it is a term or condition of the letter of
credit that it is handling, and the
exporter-beneficiary must report the request
because the exporter determines the origin of the
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goods. The freight forwarder does not have to
report this request because the forwarder has no
role or obligation in selecting the goods.
However, the freight forwarder would have to
report a request to furnish a certificate that the
goods do not originate in or contain components
from a boycotted country. See §760.5, examples
(xii)-(xvii).
(b) No six-pointed stars may be used on the
goods, packing or cases
This term appears from time-to-time on
documents from a variety of countries. The
Department has taken the position that the
six-pointed star is a religious symbol. See
§760.2(b), example (viii) of this part. Agreeing to
this term is prohibited by the Regulations and not
excepted because it constitutes an agreement to
furnish information about the religion of a U.S.
person. See §760.2(c) of this part. If a person
proceeds with a transaction in which this is a
condition at any stage of the transaction, that
person has agreed to the condition in violation of
the Regulations. It is not enough to ignore the
condition. Exception must affirmatively be taken
to this term or it must be stricken from the
documents of the transaction. It is reportable by
all parties to the transaction that are restricted by
it. For example, unlike the situation described in
(a) above, the freight forwarder would have to
report this request because his role in the
transaction would involve preparation of the
packing and cases. The bank and exporter would
both have to report, of course, if it were a term in
a letter of credit. Each party would be obligated
affirmatively to seek an amendment or deletion of
the term.

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Supplement No. 6 to Part 760—page 2

(c) Neither goods nor packaging shall bear
any symbols prohibited
in the boycotting country
This term appears from time-to-time in letters of
credit and shipping documents from Saudi
Arabia. In our view, it is neither prohibited, nor
reportable because it is not boycott-related. There

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is a wide range of symbols that are prohibited in
Saudi Arabia for a variety of reasons, many
having to do with that nation's cultural and
religious beliefs. On this basis, we do not
interpret the term to be boycott related. See
§760.2(a)(5) and §760.5(a)(5)(v) of this part.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 7 to Part 760—page 1

INTERPRETATION
Prohibited refusal to do business.
When a boycotting country rejects for
boycott-related reasons a shipment of goods sold
by a United States person, the United States
person selling the goods may return them to its
inventory or may re-ship them to other markets
(the United States person may not return them to
the original supplier and demand restitution). The
U.S. person may then make a non-boycott based
selection of another supplier and provide the
goods necessary to meet its obligations to the
boycotting customer in that particular transaction
without violating §760.2(a) of this part. If the
United States person receives another order from
the same boycotting country for similar goods, the
Department has determined that a boycott-based
refusal by a United States person to ship goods
from the supplier whose goods were previously
rejected would constitute a prohibited refusal to
do business under §760.2(a) of this part. The
Department will presume that filling such an
order with alternative goods is evidence of the
person's refusal to deal with the original supplier.
The Department recognizes the limitations this
places on future transactions with a boycotting
country once a shipment of goods has been
rejected. Because of this, the Department wishes
to point out that, when faced with a boycotting
country's refusal to permit entry of the particular
goods, a United States person may state its
obligation to abide by the requirements of United
States law and indicate its readiness to comply
with the unilateral and specific selection of goods
by the boycotting country in accordance with
§760.3(d). That section provides, in pertinent
part, as follows:
“A United States person may comply or agree to
comply in the normal course of business with the
unilateral and specific selection by a boycotting
country ... of ... specific goods, ... provided that ...
with respect to goods, the items, in the normal
course of business, are identifiable as to their
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source or origin at the time of their entry into the
boycotting country by (a) uniqueness of design or
appearance or (b) trademark, trade name, or other
identification normally on the items themselves,
including their packaging.”
The United States person may also provide
certain services in advance of the unilateral
selection by the boycotting country, such as the
compilation of lists of qualified suppliers, so long
as such services are customary to the type of
business the United States person is engaged in,
and the services rendered are completely
non-exclusionary in character (i.e., the list of
qualified suppliers would have to include the
supplier whose goods had previously been
rejected by the boycotting country, if they were
fully qualified). See §760.2(a)(6) of this part for
a discussion of the requirements for the provision
of these services.
The Department wishes to emphasize that the
unilateral selection exception in §760.3(d) of this
part will be construed narrowly, and that all its
requirements and conditions must be met,
including the following:
-- Discretion for the selection must be exercised
by a boycotting country; or by a national or
resident of a boycotting country;
-- The selection must be stated in the affirmative
specifying a particular supplier of goods;
-- While a permissible selection may be boycott
based, if the United States person knows or has
reason to know that the purpose of the selection is
to effect discrimination against any United States
person on the basis of race, religion, sex, or
national origin, the person may not comply under
any circumstances.
The Department cautions United States persons
confronted with the problem or concern over the
boycott-based rejection of goods shipped to a
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Supplement No. 7 to Part 760—page 2

boycotting country that the adoption of devices
such as "risk of loss" clauses, or conditions that
make the supplier financially liable if his or her
goods are rejected by the boycotting country for
boycott reasons are presumed by the Department

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to be evasion of the statute and regulations, and as
such are prohibited by §760.4 of this part, unless
adopted prior to January 18, 1978. See §760.4(d)
of this part.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 8 to Part 760—page 1

INTERPRETATION
Definition of Interstate or Foreign Commerce of
the United States
When United States persons (as defined by the
antiboycott regulations) located within the United
States purchase or sell goods or services located
outside the United States, they have engaged in an
activity within the foreign commerce of the
United States. Although the goods or services
may never physically come within the geographic
boundaries of the several states or territories of
the United States, legal ownership or title is
transferred from a foreign nation to the United
States person who is located in the United States.
In the case of a purchase, subsequent resale would
also be within United States commerce.
It is the Department's view that the terms "sale"
and "purchase" as used in the regulations are not
limited to those circumstances where the goods or
services are physically transferred to the person
who acquires title. The EAR define the activities
that serve as the transactional basis for U.S.
commerce as those involving the "sale, purchase,
or transfer" of goods or services. In the
Department's view, as used in the antiboycott
regulations, "transfer" contemplates physical

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movement of the goods or services between the
several states or territories and a foreign country,
while "sale" and "purchase" relate to the
movement of ownership or title.
This interpretation applies only to those
circumstances in which the person located within
the United States buys or sells goods or services
for its own account. Where the United States
person is engaged in the brokerage of foreign
goods, i.e., bringing foreign buyers and sellers
together and assisting in the transfer of the goods,
the sale or purchase itself would not ordinarily be
considered to be within U.S. commerce. The
brokerage service, however, would be a service
provided from the United States to the parties and
thus an activity within U.S. commerce and subject
to the antiboycott laws. See §760.1(d)(3).
The Department cautions that United States
persons who alter their normal pattern of dealing
to eliminate the passage of ownership of the
goods or services to or from the several states or
territories of the United States in order to avoid
the application of the antiboycott regulations
would be in violation of §760.4 of this part.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 9 to Part 760—page 1

INTERPRETATION
Activities Exclusively Within a Boycotting
Country--Furnishing
Information
§760.3(h) of this part provides that a United
States person who is a bona fide resident of a
boycotting country may comply with the laws of
that country with respect to his or her activities
exclusively within the boycotting country. Among
the types of conduct permitted by this exception
is "furnishing information within the host
country" §760.3(h)(1)(v) of this part. For
purposes of the discussion which follows, the
Department is assuming that the person in
question is a bona fide resident of the boycotting
country as defined in §760.3(g), and that the
information to be provided is required by the laws
or regulations of the boycotting country, as also
defined in §760.3(g) of this part. The only issue
this interpretation addresses is under what
circumstances the provision of information is "an
activity exclusively within the boycotting
country."
The activity of "furnishing information" consists
of two parts, the acquisition of the information
and its subsequent transmittal. Under the terms
of this exception, the information may not be
acquired outside the country for the purpose of
responding to the requirement for information
imposed by the boycotting country. Thus, if an
American company which is a bona fide resident
of a boycotting country is required to provide
information about its dealings with other U.S.
firms, the company may not ask its parent
corporation in the United States for that
information, or make any other inquiry outside
the boundaries of the boycotting country. The
information must be provided to the boycotting
country authorities based on information or
knowledge available to the company and its
personnel located within the boycotting country at
the time the inquiry is received. See §760.3,
paragraphs (h)(iii), (iv), (v) of this part. Much of
the information in the company's possession
(transaction and corporate records) may have
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actually originated outside the boycotting
country, and much of the information known to
the employees may have been acquired outside
the boycotting country. This will not cause the
information to fall outside the coverage of this
exception, if the information was sent to the
boycotting country or acquired by the individuals
in normal commercial context prior to and
unrelated to a boycott inquiry or purpose. It
should be noted that if prohibited information
(about business relations with a boycotted
country, for example) has been forwarded to the
affiliate in the boycotting country in anticipation
of a possible boycott inquiry from the boycotting
country government, the Department will not
regard this as information within the knowledge
of the bona fide resident under the terms of the
exception. However, if the bona fide resident
possesses the information prior to receipt of a
boycott-related inquiry and obtained it in a
normal commercial context, the information can
be provided pursuant to this exception
notwithstanding the fact that, at some point, the
information came into the boycotting country
from the outside.
The second part of the analysis of "furnishing
information" deals with the limitation on the
transmittal of the information. It can only be
provided within the boundaries of the boycotting
country. The bona fide resident may only provide
the information to the party that the boycotting
country law requires (directly or through an agent
or representative within the country) so long as
that party is located within the boycotting
country. This application of the exception is
somewhat easier, since it is relatively simple to
determine if the information is to be given to
somebody within the country.
Note that in discussing what constitutes
furnishing information "exclusively within" the
boycotting country, the Department does not
address the nature of the transaction or activity
that the information relates to. It is the
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Supplement No. 9 to Part 760—page 2

Department's position that the nature of the
transaction, including the inception or completion
of the transaction, is not material in analyzing the
availability of this exception.
For example, if a shipment of goods imported into
a boycotting country is held up at the time of
entry, and information from the bona fide resident
within that country is legally required to free
those goods, the fact that the information may
relate to a transaction that began outside the
boycotting country is not material.
The
availability of the exception will be judged based
on the activity of the bona fide resident within the
country. If the resident provides that information
of his or her own knowledge, and provides it to
appropriate parties located exclusively within the
country, the exception permits the information to
be furnished.
Factual variations may raise questions about the
application of this exception and the effect of this
interpretation. In an effort to anticipate some of
these, the Department has set forth below a
number of questions and answers. They are
incorporated as a part of this interpretation.
1. Q Under this exception, can a company which
is a U.S. person and a bona fide resident of the
boycotting country provide information to the
local boycott office?
A Yes, if local law requires the company to
provide this information to the boycott office and
all the other requirements are met.
2. Q If the company knows that the local boycott
office will forward the information to the Central
Boycott Office, may it still provide the
information to the local boycott office?
A Yes, if it is required by local law to furnish the
information to the local boycott office and all the

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other requirements are met. The company has no
control over what happens to the information
after it is provided to the proper authorities.
(There is obvious potential for evasion here, and
the Department will examine such occurrences
closely.)
3. Q Can a U.S. person who is a bona fide
resident of Syria furnish information to the
Central Boycott Office in Damascus?
A No, unless the law in Syria specifically requires
information to be provided to the Central Boycott
Office the exception will not apply. Syria has a
local boycott office responsible for enforcing the
boycott in that country.
4. Q If a company which is a U.S. person and a
bona fide resident of the boycotting country has
an import shipment held up in customs of the
boycotting country, and is required to provide
information about the shipment to get it out of
customs, may the company do so?
A Yes, assuming all other requirements are met.
The act of furnishing the information is the
activity taking place exclusively within the
boycotting country. The fact that the information
is provided corollary to a transaction that
originates or terminates outside the boycotting
country is not material.
5. Q If the U.S. person and bona fide resident of
the boycotting country is shipping goods out of
the boycotting country, and is required to certify
to customs officials of the country at the time of
export that the goods are not of Israeli origin, may
he do so even though the certification relates to
an export transaction?
A Yes, assuming all other requirements are met.
See number 4 above.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 10 to Part 760—page 1

INTERPRETATION
(a) The words "Persian Gulf" cannot appear on
the document.
This term is common in letters of credit from
Kuwait and may be found in letters of credit from
Bahrain. Although more commonly appearing in
letters of credit, the term may also appear in other
trade documents.
It is the Department's view that this term reflects
a historical dispute between the Arabs and the
Iranians over geographic place names which in no
way relates to existing economic boycotts. Thus,
the term is neither prohibited nor reportable under
the Regulations.
(b) Certify that goods are of U.S.A. origin and
contain no foreign parts.
This term appears periodically on documents
from a number of Arab countries. It is the
Department's position that the statement is a
positive certification of origin and, as such, falls
within the exception contained in §760.3(c) of
this part for compliance with the import and
shipping document requirements of a boycotting

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country. Even though a negative phrase is
contained within the positive clause, the phrase is
a non-exclusionary, non-blacklisting statement.
In the Department's view, the additional phrase
does not affect the permissible status of the
positive certificate, nor does it make the request
reportable §760.5(a)(5)(iii) of this part.
(c) Legalization of documents by any Arab
consulate except Egyptian Consulate permitted.
This term appears from time to time in letters of
credit but also may appear in various other trade
documents requiring legalization and thus is not
prohibited, and a request to comply with the
statement is not reportable. Because a number of
Arab states do not have formal diplomatic
relations with Egypt, they do not recognize
Egyptian embassy actions. The absence of
diplomatic relations is the reason for the
requirement. In the Department's view this does
not constitute an unsanctioned foreign boycott or
embargo against Egypt under the terms of the
Export Administration Act. Thus the term is not
prohibited, and a request to comply with the
statement is not reportable.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 11 to Part 760—page 1

INTERPRETATION
Definition of Unsolicited Invitation to Bid
§760.5(a)(4) of this part states in part:
“In addition, a United States person who receives
an unsolicited invitation to bid, or similar
proposal, containing a boycott request has not
received a reportable request for purposes of this
section where he does not respond to the
invitation to bid or other proposal.”
The Regulations do not define "unsolicited" in
this context. Based on review of numerous
situations, the Department has developed certain
criteria that it applies in determining if an
invitation to bid or other proposal received by a
U.S. person is in fact unsolicited.
The invitation is not unsolicited if, during a
commercially reasonable period of time preceding
the issuance of the invitation, a representative of
the U.S. person contacted the company or agency
involved for the purpose of promoting business
on behalf of the company.
The invitation is not unsolicited if the U.S. person
has advertised the product or line of products that
are the subject of the invitation in periodicals or
publications that ordinarily circulate to the
country issuing the invitation during a
commercially reasonable period of time preceding
the issuance of the invitation.

has sold the same or similar products to the
company or agency issuing the invitation within a
commercially reasonable period of time before
the issuance of the current invitation.
The invitation is not unsolicited if the U.S. person
has participated in a trade mission to or trade fair
in the country issuing the invitation within a
commercially reasonable period of time before
the issuance of the invitation.
Under §760.5(a)(4) of this part, the invitation is
regarded as not reportable if the U.S. person
receiving it does not respond. The Department
has determined that a simple acknowledgment of
the invitation does not constitute a response for
purposes of this rule.
However, an
acknowledgment that requests inclusion for future
invitations will be considered a response, and a
report is required.
Where the person in receipt of an invitation
containing a boycott term or condition is
undecided about a response by the time a report
would be required to be filed under the
regulations, it is the Department's view that the
person must file a report as called for in the
Regulations. The person filing the report may
indicate at the time of filing that he has not made
a decision on the boycott request but must file a
supplemental report as called for in the
regulations at the time a decision is made
(§760.5(b)(6)).

The invitation is not unsolicited if the U.S. person

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January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 12 to Part 760—page 1

INTERPRETATION
The Department has taken the position that a U.S.
person as defined by §760.1(b) of this part may
not make use of an agent to furnish information
that the U.S. person is prohibited from furnishing
pursuant to §760.2(d) of this part.
Example (v) under §760.4 of this part (Evasion)
provides:
“A, a U.S. company, is negotiating a long-term
contract with boycotting country Y to meet all of
Y's medical supply needs. Y informs A that
before such a contract can be concluded, A must
complete Y's boycott questionnaire. A knows that
it is prohibited from answering the questionnaire
so it arranges for a local agent in Y to supply the
necessary information.
A's action constitutes evasion of this part, because
it is a device to mask prohibited activity carried
out on A's behalf.”
This interpretation deals with the application of
the Regulations to a commercial agent
registration requirement imposed by the
government of Saudi Arabia. The requirement
provides that nationals of Saudi Arabia seeking to
register in Saudi Arabia as commercial agents or
representatives of foreign concerns must furnish
certain boycott-related information about the
foreign concern prior to obtaining approval of the
registration.
The requirement has been imposed by the
Ministry of Commerce of Saudi Arabia, which is
the government agency responsible for regulation
of commercial agents and foreign commercial
registrations. The Ministry requires the agent or
representative to state the following:
“Declaration: I, the undersigned, hereby declare,
in my capacity as (blank) that (name and address
of foreign principal) is not presently on the
blacklist of the Office for the Boycott of Israel
and that it and all its branches, if any, are bound
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by the decisions issued by the Boycott Office and
do not (1) participate in the capital of, (2) license
the manufacture of any products or grant
trademarks or tradeware license to, (3) give
experience or technical advice to, or (4) have any
other relationship with other companies which are
prohibited to be dealt with by the Boycott Office.
Signed (name
o f c o mm e r c ial
agent/representative/distributor).”
It is the Department's view that under the
circumstances specifically outlined in this
interpretation relating to the nature of the
requirement, a U.S. person will not be held
responsible for a violation of this part when such
statements are provided by its commercial agent
or representative, even when such statements are
made with the full knowledge of the U.S. person.
Nature of the requirement. For a boycott-related
commercial registration requirement to fall within
the coverage of this interpretation it must have the
following characteristics:
1. The requirement for information imposed by
the boycotting country applies to a national or
other subject of the boycotting country qualified
under the local laws of that country to function as
a commercial representative within that country;
2. The registration requirement relates to the
registration of the commercial agent's or
representative's authority to sell or distribute
goods within the boycotting country acquired
from the foreign concern;
3. The requirement is a routine part of the
registration process and is not applied selectively
based on boycott-related criteria;
4. The requirement applies only to a commercial
agent or representative in the boycotting country
and does not apply to the foreign concern itself;
and
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Supplement No. 12 to Part 760—page 2

5. The requirement is imposed by the agency of
the boycotting country responsible for regulating
commercial agencies.

Because the requirement does not apply to the
U.S. person, no reporting obligation under §760.5
of this part would arise.

The U.S. person whose agent is complying with
the registration requirement continues to be
subject to all the terms of the Regulations, and
may not provide any prohibited information to the
agent for purposes of the agent's compliance with
the requirement.

This interpretation, like all others issued by the
Department discussing applications of the
antiboycott provisions of the Export
Administration Regulations, should be read
narrowly. Circumstances that differ in any
material way from those discussed in this notice
will be considered under the applicable provisions
of the Regulations. Persons are particularly
advised not to seek to apply this interpretation to
circumstances in which U.S. principals seek to
use agents to deal with boycott-related or
potential blacklisting situations.

In addition, the authority granted to the
commercial agent or representative by the U.S.
person must be consistent with standard
commercial practices and not involve any grants
of authority beyond those incidental to the
commercial sales and distributorship
responsibilities of the agent.

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January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 13 to Part 760—page 1

INTERPRETATION
SUMMARY
This interpretation considers boycott-based
contractual language dealing with the selection of
suppliers and subcontractors.
While this
language borrows terms from the "unilateral and
specific selection" exception contained in
§760.3(d), it fails to meet the requirements of that
exception. Compliance with the requirements of
the language constitutes a violation of the
regulatory prohibition of boycott-based refusals to
do business.
REGULATORY BACKGROUND
Section 760.2(a) of this part prohibits U.S.
persons from refusing or knowingly agreeing to
refuse to do business with other persons when
such refusal is pursuant to an agreement with,
requirement of, or request of a boycotting
country. That prohibition does not extend to the
performance of management, procurement or
o t h e r p r e - a w a r d se r v i c e s , h o w e ve r ,
notwithstanding knowledge that the ultimate
selection may be boycott-based.
To be
permissible such services: (1) must be customary
for the firm or industry involved and (2) must not
exclude others from the transaction or involve
other actions based on the boycott.
See
§760.2(a)(6) of this part, "Refusals to Do
Business", and example (xiii).
A specific exception is also made in the
Regulations for compliance (and agreements to
comply) with an unilateral and specific selection
of suppliers or subcontractors by a boycotting
country buyer. See §760.3(d) of this part. In
Supplement No. 1 to part 760, the following form
of contractual language was said to fall within
that exception for compliance with unilateral and
specific selection:
“The Government of the boycotting country (or
the First Party), in its exclusive power, reserves
its right to make the final unilateral and specific
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selection of any proposed carriers, insurers,
suppliers of services to be performed within the
boycotting country, or of specific goods to be
furnished in accordance with the terms and
conditions of this contract.”
The Department noted that the actual steps
necessary to comply with any selection made
under this agreement would also have to meet the
requirements of §760.3(d) to claim the benefit of
that exception. In other words, the discretion in
selecting would have to be exercised exclusively
by the boycotting country customer and the
selection would have to be stated in the
affirmative, naming a particular supplier. See
§760.3(d)(4) and (5) of this part.
ANALYSIS OF ADDITIONAL
CONTRACTUAL LANGUAGE
The Office of Antiboycott Compliance has
learned of the introduction of a contractual clause
into tender documents issued by boycotting
country governments. This clause is, in many
respects, similar to that dealt with in Supplement
No. 1 to part 760, but several critical differences
exist.
The clause states:
BOYCOTT OF
[NAME OF BOYCOTTED COUNTRY]
In connection with the performance of this
Agreement, Contractor acknowledges that the
import and customs laws and regulations of
boycotting country apply to the furnishing and
shipment of any products or components thereof
to boycotting country.
The Contractor
s p e c i f i ca l l y a c k n o wl e d ge s t h a t t h e
aforementioned import and customs laws and
regulations of boycotting country prohibit, among
other things, the importation in to boycotting
country of products or components thereof: (A)
Originating in boycotted country (B)
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Supplement No. 13 to Part 760—page 2

Manufactured, produced and furnish by
companies organized under the laws of boycotted
country and (C) Manufactured, produced or
furnished by Nationals or Residents of boycotted
country.
The Government, in its exclusive power, reserves
its right to make the final unilateral and specific
selection of any proposed Carriers, Insurers,
Suppliers of Services to be performed within
boycotting country or of specific goods to be
furnished in accordance with the terms and
conditions of this Contract.
To assist the Government in exercising its right
under the preceding paragraph, Contractor further
agrees to provide a complete list of names and
addresses of all his Sub-Contractors, Suppliers,
Vendors and Consultants and any other suppliers
of the service for the project.
The title of this clause makes clear that its
provisions are intended to be boycott-related.
The first paragraph acknowledges the
applicability of certain boycott-related
requirements of the boycotting country's laws in
language reviewed in part 760, Supplement No. 1,
Part II.B. and found to constitute a permissible
agreement under the exception contained in
§760.3(a) of this part for compliance with the
import requirements of a boycotting country. The
second and third paragraphs together deal with
the procedure for selecting subcontractors and
suppliers of services and goods and, in the
context of the clause as a whole, must be regarded
as motivated by boycott considerations and
intended to enable the boycotting country
government to make boycott-based selections,
including the elimination of blacklisted
subcontractors and suppliers.
The question is whether the incorporation into
these paragraphs of some language from the
"unilateral and specific selection" clause
approved in Supplement No. 1 to part 760
suffices to take the language outside §760.2(a) of
this part's prohibition on boycott-based
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agreements to refuse to do business. While the
first sentence of this clause is consistent with the
language discussed in Supplement No. 1 to part
760, the second sentence significantly alters the
effect of this clause. The effect is to draw the
contractor into the decision-making process,
thereby destroying the unilateral character of the
selection by the buyer. By agreeing to submit the
names of the suppliers it plans to use, the
contractor is agreeing to give the boycotting
country buyer, who has retained the right of final
selection, the ability to reject, for boycott-related
reasons, any supplier the contractor has already
chosen. Because the requirement appears in the
contractual provision dealing with the boycott,
the buyer's rejection of any supplier whose name
is given to the buyer pursuant to this provision
would be presumed to be boycott-based. By
signing the contract, and thereby agreeing to
comply with all of its provisions, the contractor
must either accept the buyer's rejection of any
supplier, which is presumed to be boycott-based
because of the context of this provision, or breach
the contract.
In these circumstances, the contractor's method of
choosing its subcontractors and suppliers, in
anticipation of the buyer's boycott-based review,
cannot be considered a permissible pre-award
service because of the presumed intrusion of
boycott-based criteria into the selection process.
Thus, assuming all other jurisdictional
requirements necessary to establish a violation of
part 760 are met, the signing of the contract by
the contractor constitutes a violation of §760.2(a)
of this part because he is agreeing to refuse to do
business for boycott reasons.
The apparent attempt to bring this language
within the exception for compliance with
unilateral and specific selections is ineffective.
The language does not place the discretion to
choose suppliers in the hands of the boycotting
country buyer but divides this discretion between
the buyer and his principal contractor. Knowing
that the buyer will not accept a boycotted
company as supplier or subcontractor, the
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Restrictive Trade Practices or Boycotts

Supplement No. 13 to Part 760—page 3

contractor is asked to use his discretion in
selecting a single supplier or subcontractor for
each element of the contract. The boycotting
country buyer exercises discretion only through
accepting or rejecting the selected supplier or
contractor as its boycott policies require. In these
circumstances it cannot be said that the buyer is

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exercising right of unilateral and specific
selection which meets the criteria of §760.3(d).
For this reason, agreement to the contractual
language discussed here would constitute an
agreement to refuse to do business with any
person rejected by the buyer and would violate
§760.2(a) of this part.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 14 to Part 760—page 1

INTERPRETATION
(a) Contractual clause concerning import,
customs and boycott laws
of a boycotting country
The following language has appeared in tender
documents issued by a boycotting country:
“Supplier declares his knowledge of the fact that
the import, Customs and boycott laws, rules and
regulations of [name of boycotting country] apply
in importing to [name of boycotting country].
Supplier declares his knowledge of the fact that
under these laws, rules and regulations, it is
prohibited to import into [name of the boycotting
country] any products or parts thereof that
originated in [name of boycotted country]; were
manufactured, produced or imported by
companies formed under the laws of [name of
boycotted country]; or were manufactured,
produced or imported by nationals or residents of
[name of boycotted country].”
Agreeing to the above contractual language is a
prohibited agreement to refuse to do business,
under §760.2(a) of this part. The first paragraph
requires broad acknowledgment of the application
of the boycotting country's boycott laws, rules
and regulations. Unless this language is qualified
to apply only to boycott restrictions with which
U.S. persons may comply, agreement to it is
prohibited. See §760.2(a) of this part, examples
(v) and (vi) under "Agreements to Refuse to Do
Business."
The second paragraph does not limit the scope of
the boycott restrictions referenced in the first
paragraph. It states that the boycott laws include
restrictions on goods originating in the boycotted
country; manufactured, produced or supplied by
companies organized under the laws of the
boycotted country; or manufactured, produced or
supplied by nationals or residents of the
boycotted country. Each of these restrictions is
within the exception for compliance with the
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import requirements of the boycotting country
(§760.3(a) of this part). However, the second
paragraph's list of restrictions is not exclusive.
Since the boycott laws generally include more
than what is listed and permissible under the
antiboycott law, U.S. persons may not agree to
the quoted clause. For example, a country's
boycott laws may prohibit imports of goods
manufactured by blacklisted firms. Except as
provided by §760.3(g) of this part, agreement to
and compliance with this boycott restriction
would be prohibited under the antiboycott law.
The above contractual language is distinguished
from the contract clause determined to be
permissible in supplement 1, Part II, A, by its
acknowledgment that the boycott requirements of
the boycotting country apply. Although the first
sentence of the Supplement 1 clause does not
exclude the possible application of boycott laws,
it refers only to the import and customs laws of
the boycotting country without mentioning the
boycott laws as well. As discussed fully in
Supplement No. 1 to part 760, compliance with or
agreement to the clause quoted there is, therefore,
permissible.
The contract clause quoted above, as well as the
clause dealt with in Supplement No. 1 to part 760,
part II, A, is reportable under §760.5(a)(1).
(b) Letter of credit terms removing blacklist
certificate requirement if specified vessels used
The following terms frequently appear on letters
of credit covering shipment to Iraq:
“Shipment to be effected by Iraqi State Enterprise
for Maritime Transport Vessels or by United
Arab Shipping Company (SAB) vessels, if
available.
If shipment is effected by any of the above
company's [sic] vessels, black list certificate or
evidence to that effect is not required.”
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Restrictive Trade Practices or Boycotts

Supplement No. 14 to Part 760—page 2

These terms are not reportable and compliance
with them is permissible.
The first sentence, a directive to use Iraqi State
Enterprise for Maritime Transport or United Arab
Shipping vessels, is neither reportable nor
prohibited because it is not considered by the
Department to be boycott-related. The apparent
reason for the directive is Iraq's preference to
have cargo shipped on its own vessels (or, as in
the case of United Arab Shipping, on vessels
owned by a company in part established and
owned by the Iraqi government). Such "cargo
preference" requirements, calling for the use of an
importing or exporting country's own ships, are
common throughout the world and are imposed
for non-boycott reasons. (See §760.2(a) of this
part, example (vii) AGREEMENTS TO REFUSE
TO DO BUSINESS.)
In contrast, if the letter of credit contains a list of
vessels or carriers that appears to constitute a
boycott-related whitelist, a directive to select a
vessel from that list would be both reportable and
prohibited. When such a directive appears in
conjunction with a term removing the blacklist
certificate requirement if these vessels are used,
the Department will presume that beneficiaries,
banks and any other U.S. person receiving the
letter of credit know that there is a boycott-related
purpose for the directive.
The second sentence of the letter of credit
language quoted above does not, by itself, call for
a blacklist certificate and is not therefore,
reportable. If a term elsewhere on the letter of
credit imposes a blacklist certificate requirement,
then that other term would be reportable.
(c) Information not related to a particular
transaction in U.S. commerce
Under §760.2 (c), (d) and (e), of this part U.S.
persons are prohibited, with respect to their
activities in U.S. commerce, from furnishing
certain information. It is the Department's
position that the required nexus with U.S.
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commerce is established when the furnishing of
information itself occurs in U.S. commerce. Even
when the furnishing of information is not itself in
U.S. commerce, however, the necessary
relationship to U.S. commerce will be established
if the furnishing of information relates to
particular transactions in U.S. commerce or to
anticipated transactions in U.S. commerce. See,
e.g. §760.2(d), examples (vii), (ix) and (xii) of
this part.
The simplest situation occurs where a U.S. person
located in the United States furnishes information
to a boycotting country.
The transfer of
information from the United States to a foreign
country is itself an activity in U.S. commerce.
See §760.1(d)(1)(iv) of this part. In some
circumstances, the furnishing of information by a
U.S. person located outside the United States may
also be an activity in U.S. commerce. For
example, the controlled foreign subsidiary of a
domestic concern might furnish to a boycotting
country information the subsidiary obtained from
the U.S.-located parent for that purpose. The
subsidiary's furnishing would, in these
circumstances, constitute an activity in U.S.
commerce. See §760.1(d)(8) of this part.
Where the furnishing of information is not itself
in U.S.
commerce, the U.S. commerce
requirement may be satisfied by the fact that the
furnishing is related to an activity in U.S. foreign
or domestic commerce. For example, if a
shipment of goods by a controlled-in-fact foreign
subsidiary of a U.S. company to a boycotting
country gives rise to an inquiry from the
boycotting country concerning the subsidiary's
relationship with another firm, the Department
regards any responsive furnishing of information
by the subsidiary as related to the shipment giving
rise to the inquiry. If the shipment is in U.S.
foreign or domestic commerce, as defined by the
regulations, then the Department regards the
furnishing to be related to an activity in U.S.
commerce and subject to the antiboycott
regulations, whether or not the furnishing itself is
in U.S. commerce.
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Restrictive Trade Practices or Boycotts

Supplement No. 14 to Part 760—page 3

In some circumstances, the Department may
regard a furnishing of information as related to a
broader category of present and prospective
transactions. For example, if a controlled-in-fact
foreign subsidiary of a U.S. company is requested
to furnish information about its commercial
dealings and it appears that failure to respond will
result in its blacklisting, any responsive
furnishing of information will be regarded by the
Department as relating to all of the subsidiary's
present and anticipated business activities with
the inquiring boycotting country. Accordingly, if
any of these present or anticipated business
activities are in U.S. commerce, the Department
will regard the furnishing as related to an activity
in U.S. commerce and subject to the antiboycott
regulations.
In deciding whether anticipated business
activities will be in U.S. commerce, the
Department will consider all of the surrounding
circumstances. Particular attention will be given
to the history of the U.S. person's business

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activities with the boycotting country and others,
the nature of any activities occurring after a
furnishing of information occurs and any relevant
economic or commercial factors which may affect
these activities.
For example, if a U.S. person has no activities
with the boycotting country at present but all of
its other international activities are in U.S.
commerce, as defined by the Regulations, then
the Department is likely to regard any furnishing
of information by that person for the purpose of
securing entry into the boycotting country's
market as relating to anticipated activities in U.S.
commerce and subject to the antiboycott
regulations. Similarly, if subsequent to the
furnishing of information to the boycotting
country for the purpose of securing entry into its
markets, the U.S. person engages in transactions
with that country which are in U.S. commerce,
the Department is likely to regard the furnishing
as related to an activity in U.S. commerce and
subject to the antiboycott regulations.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 15 to Part 760—page 1

INTERPRETATION
Sections 760.2 (c), (d), and (e) of this part
prohibit United States persons from furnishing
certain types of information with intent to comply
with, further, or support an unsanctioned foreign
boycott against a country friendly to the United
States. The Department has been asked whether
prohibited information may be transmitted--that
is, passed to others by a United States person who
has not directly or indirectly authored the
informat ion--without such transmission
constituting a furnishing of information in
violation of §760.2 (c), (d), and (e) of this part.
Throughout this interpretation, "transmission" is
defined as the passing on by one person of
information initially authored by another. The
Department believes that there is no distinction in
the EAR between transmitting (as defined above)
and furnishing prohibited information under the
EAR and that the transmission of prohibited
information with the requisite boycott intent is a
furnishing of information violative of the EAR.
At the same time, however, the circumstances
relating to the transmitting party's involvement
will be carefully considered in determining
whether that party intended to comply with,
further, or support an unsanctioned foreign
boycott.
The EAR does not deal specifically with the
relationship between transmitting and furnishing.
However, the restrictions in the EAR on
responses to boycott-related conditions, both by
direct and indirect actions and whether by
primary parties or intermediaries, indicate that
U.S. persons who simply transmit prohibited
information are to be treated the same under the
EAR as those who both author and furnish
prohibited information. This has been the
Department's position in enforcement actions it
has brought.
The few references in the EAR to the
transmission of information by third parties are
consistent with this position. Two examples, both
relating to the prohibition against the furnishing
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of information about U.S. persons' race, religion,
sex, or national origin (§760.2(c) of this part),
deal explicitly with transmitting information.
These examples (§760.2(c) of this part, example
(v), and §760.3(f) of this part, example (vi)) show
that, in certain cases, when furnishing certain
information is permissible, either because it is not
within a prohibition or is excepted from a
prohibition, transmitting it is also permissible.
These examples concern information that may be
furnished by individuals about themselves or their
families. The examples show that employers may
transmit to a boycotting country visa applications
or forms containing information about an
employee's race, religion, sex, or national origin if
that employee is the source of the information and
authorizes its transmission. In other words,
within the limits of ministerial action set forth in
these examples, employees' actions in
transmitting information are protected by the
exception available to the employee. The
distinction between permissible and prohibited
behavior rests not on the definitional distinction
between furnishing and transmitting, but on the
excepted nature of the information furnished by
the employee. The information originating from
the employee does not lose its excepted character
because it is transmitted by the employer.
The Department's position regarding the
furnishing and transmission of certificates of
one's own blacklist status rests on a similar basis
and does not support the contention that third
parties may transmit prohibited information
authored by another. Such self-certifications do
not violate any prohibitions in the EAR (see
Supplement Nos. 1(I)(B), 2, and 5(A)(2);
§760.2(f), example (xiv)). It is the Department's
position that it is not prohibited for U.S. persons
to transmit such self-certifications completed by
others. Once again, because furnishing the
self-certification is not prohibited, third parties
who transmit the self-certifications offend no
prohibition. On the other hand, if a third party
authored information about another's blacklist
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Supplement No. 15 to Part 760—page 2

status, the act of transmitting that information
would be prohibited.
A third example in the EAR (§760.5, example
(xiv) of this part), which also concerns a
permissible transmission of boycott-related
information, does not support the theory that one
may transmit prohibited information authored by
another. This example deals with the reporting
requirements in §760.5 of this part--not the
prohibitions--and merely illustrates that a person
who receives and transmits a self-certification has
not received a reportable request.
It is also the Department's position that a U.S.
person violates the prohibitions against furnishing
information by transmitting prohibited
information even if that person has received no
reportable request in the transaction.
For
example, where documents accompanying a letter
of credit contain prohibited information, a
negotiating bank that transmits the documents,
with the requisite boycott intent, to an issuing
bank has not received a reportable request, but
has furnished prohibited information.
While the Department does not regard the

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suggested distinction between transmitting and
furnishing information as meaningful, the facts
relating to the third party's involvement may be
important in determining whether that party
furnished information with the required intent to
comply with, further, or support an unsanctioned
foreign boycott. For example, if it is a standard
business practice for one participant in a
transaction to obtain and pass on, without
examination, documents prepared by another
party, it might be difficult to maintain that the
first participant intended to comply with a boycott
by passing on information contained in the
unexamined documents. Resolution of such
intent questions, however, depends upon an
analysis of the individual facts and circumstances
of the transaction and the Department will
continue to engage in such analysis on a
case-by-case basis.
This interpretation, like all others issued by the
Department discussing applications of the
antiboycott provisions of the EAR, should be read
narrowly. Circumstances that differ in any
material way from those discussed in this
interpretation will be considered under the
applicable provisions of the Regulations.

January 2004

Restrictive Trade Practices or Boycotts

Supplement No. 16 to Part 760—page 1

INTERPRETATION
Pursuant to Articles 5, 7, and 26 of the Treaty of
Peace between the State of Israel and the
Hashemite Kingdom of Jordan and implementing
legislation enacted by Jordan, Jordan's
participation in the Arab economic boycott of
Israel was formally terminated on August 16,
1995.
On the basis of this action, it is the Department's
position that certain requests for information,
action or agreement from Jordan which were
considered boycott-related by implication now
cannot be presumed boycott-related and thus
would not be prohibited or reportable under the
regulations. For example, a request that an
exporter certify that the vessel on which it is
shipping its goods is eligible to enter Hashemite
Kingdom of Jordan ports has been considered a
boycott-related request that the exporter could not
comply with because Jordan has had a boycott in
force against Israel. Such a request from Jordan
after August 16, 1995 would not be presumed

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boycott-related because the underlying boycott
requirement/basis for the certification has been
eliminated. Similarly, a U.S. company would not
be prohibited from complying with a request
received from Jordanian government officials to
furnish the place of birth of employees the
company is seeking to take to Jordan because
there is no underlying boycott law or policy that
would give rise to a presumption that the request
was boycott-related.
U.S. persons are reminded that requests that are
on their face boycott-related or that are for action
obviously in furtherance or support of an
unsanctioned foreign boycott are subject to the
regulations, irrespective of the country of origin.
For example, requests containing references to
"blacklisted companies", "Israel boycott list",
"non-Israeli goods" or other phrases or words
indicating boycott purpose would be subject to
the appropriate provisions of the Department's
antiboycott regulations.

January 2004