EAR Part 760

Restrictive Trade Practices or Boycotts

Part 760—page 1

Table of Contents

SUPPLEMENT NO. 16 TO PART 760 INTERPRETATION ......................................... 1

§ 760.1 DEFINITIONS ...................................... 1
§ 760.2 PROHIBITIONS ................................. 14
§ 760.3 EXCEPTIONS TO PROHIBITIONS . 33
§ 760.4 EVASION ........................................... 59

§ 760.1 DEFINITIONS
In this part, references to the EAR are references
to 15 CFR chapter VII, subchapter C.

§ 760.5 REPORTING REQUIREMENTS ...... 62
SUPPLEMENT NO. 1 TO PART 760 INTERPRETATIONS ....................................... 1
SUPPLEMENT NO. 2 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 3 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 4 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 5 TO PART 760 INTERPRETATION.......................................... 1

(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:

SUPPLEMENT NO. 6 TO PART 760 INTERPRETATION.......................................... 1

(1) Any partnership, corporation, company,
branch, or other form of association or
organization, whether organized for profit or
non-profit purposes;

SUPPLEMENT NO. 7 TO PART 760 INTERPRETATION.......................................... 1

(2)
Any government, or any department,
agency, or commission of any government;

SUPPLEMENT NO. 8 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 9 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 10 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 11 TO PART 760 INTERPRETATION.......................................... 1

(3)
Any trade association, chamber of
commerce, or labor union;
(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.

SUPPLEMENT NO. 12 TO PART 760 INTERPRETATION.......................................... 1

(b) Definition of “United States Person”

SUPPLEMENT NO. 13 TO PART 760 INTERPRETATION.......................................... 1

(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

SUPPLEMENT NO. 14 TO PART 760 INTERPRETATION.......................................... 1
SUPPLEMENT NO. 15 TO PART 760 INTERPRETATION.......................................... 1

Export Administration Regulations

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person” includes both the singular and plural
and, in addition, includes:
(i) The government of the United States or
any department, agency, or commission thereof;
(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.”)
(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
Export Administration Regulations

a non-United States person or assigned to work
as an employee for, and under the direction and
control of, a non-United States person.
EXAMPLES
PERSON”

OF

“UNITED

STATES

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

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(vi) A, a foreign national, who is resident in a
foreign country and is employed by a foreign
corporation, makes occasional visits to the
United States, for purposes of exploring business
opportunities.
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
assigned 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 assignment 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.
(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 a U.S.
national and because he is not a resident outside
the United States who is employed by other than
a United States person.
Export Administration Regulations

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

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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
evidence showing that control does not, in fact,
lie with B.

Export Administration Regulations

(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
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.

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(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.

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:

(ix) U.S. bank B located in the United States
has a branch office, A, in a foreign country. A is
not separately incorporated.

(i) Two or more of the several States
(including the District of Columbia);

A is deemed to be controlled in fact by B,
because A is a branch
office of a domestic concern.

(ii) Any State (including the District of
Columbia) and any territory or possession of the
United States;

(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.

(iii) Two or more of the territories or
possessions of the United States; or

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.

(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.

(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,
because it is not controlled by a “domestic
concern.”
(d) Definition of “Activities in the Interstate or
Foreign Commerce of the United States”

Export Administration Regulations

(iv)
A State (including the District of
Columbia), territory or possession of the United
States and any foreign country.

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

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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.
(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
COMMERCE
(8) A transaction between a domestic concern’s
controlled in fact foreign subsidiary, affiliate, or
other permanent foreign establishment and a
Export Administration Regulations

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
any other transaction with a person outside the
United States where:
(i)
They are purchased by the foreign
subsidiary, affiliate, or other permanent foreign
establishment upon the receipt of an order from

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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.
(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:

Export Administration Regulations

(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 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

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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
documents indicating that the goods are of
United States origin.

Export Administration Regulations

(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.
(v) Same as (iv), except A is a bank located in
the United States and provides a construction
loan to B.

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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
country Y for construction materials. A places
an order with U.S. company B for some of the

Export Administration Regulations

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 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.
(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.
(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 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.
(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.
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.

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(vii) Same as (vi), except A purchases all the
components from non-U.S. sources.
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.
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.
(ix) Same as (viii), except that in anticipation
of the order from Y, A orders and receives the
necessary materials from the United States.
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
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

Export Administration Regulations

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 provided to Y by A in fulfillment of its
contract with Y.

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(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. A engages C, a U.S. shipping company,
to transport the typewriters from P to Y.

Export Administration Regulations

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
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.

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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.

(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.

(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.

(7)
In seeking to determine whether the
requisite intent exists, all available evidence will
be examined.

(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.

(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.

(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 intent does not
exist.

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.

Export Administration Regulations

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.

(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.

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A’s action in bidding was not taken with intent
to comply with Y’s boycott, because the boycott
was not a reason for A’s action.
(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.
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.

Export Administration Regulations

(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.
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.
(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.
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 and send it in with the bid. The

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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 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.

(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.

§ 760.2 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 person’s selection
is boycott-based.

Export Administration Regulations

(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
person, in providing such services, does not act
to exclude a person or country from the
transaction for boycott reasons, or otherwise

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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 in the interstate or foreign commerce
of the United States and only when such
activities are undertaken with intent to comply
Export Administration Regulations

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
U.S. insurer, to insure the shipment of its goods
to Y.

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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
business dealings with boycotted country X. In

Export Administration Regulations

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 a contract to build an office complex in

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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
Export Administration Regulations

they are blacklisted or not. (But see §760.4 on
“Evasion”.)
(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 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,

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

Export Administration Regulations

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 to 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
Export Administration Regulations

handle letters of 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. A may agree to this
contract provision. Agreeing to a “buy local”
contract provision is not an agreement to refuse
to do business, because A’s agreement is not
made for boycott reasons.
Export Administration Regulations

(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.
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. 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.
(b) Discriminatory actions
PROHIBITIONS AGAINST TAKING

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DISCRIMINATORY ACTIONS

(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;

(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.

(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;

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.

(iii) Knowingly agree to take any of the
actions described in paragraph (b)(1)(i) and (ii)
of this section; or

(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.”

(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.

A’s agreement constitutes a prohibited boycott-based agreement to discriminate against
U.S. persons, among others, on the basis of
national origin.

(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.

(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.”

(3) The section does not supersede or limit the
operation of the civil rights laws of the United
States.

(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 project.

(1) No United States person may:

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.
Export Administration Regulations

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.

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.

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(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.

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
(1) No United States person may:
(i)
Furnish information about the race,
religion, sex, or national origin of any United
States person;

(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 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.

(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;

(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

(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

Export Administration Regulations

(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.

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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
The following examples are intended to give
guidance in determining the circumstances in
which the furnishing of discriminatory
information is prohibited. They are illustrative,
not comprehensive.
(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
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
Export Administration Regulations

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.
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.

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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.
(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;
Export Administration Regulations

(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 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,

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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 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.
Export Administration Regulations

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
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.

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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.

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.

(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.

(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’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
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
Export Administration Regulations

A may not respond to this request, because the
information concerns its business relationships
with a boycotted country.

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.
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,

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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.
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.
Export Administration Regulations

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 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

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Restrictive Trade Practices or Boycotts

fraternal organization
boycotted country.

which

Part 760—page 28

supports

a

(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.

(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.
(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.

(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.

(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
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.

EXAMPLES OF PROHIBITION AGAINST
FURNISHING INFORMATION ABOUT
ASSOCIATIONS WITH CHARITABLE OR
FRATERNAL ORGANIZATIONS

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.

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.

(f) Letters of credit

Export Administration Regulations

PROHIBITION AGAINST IMPLEMENTING
LETTERS OF CREDIT CONTAINING
PROHIBITED CONDITIONS OR
REQUIREMENTS

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(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:
(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
(vi) Taking any other action to implement a
letter of credit.
(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
Export Administration Regulations

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.
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 or
regulations, except as may be explicitly provided
in this section.
LETTERS OF CREDIT TO WHICH
THIS SECTION APPLIES
(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.
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

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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
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
Export Administration Regulations

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.
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.

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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.
(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.

Export Administration Regulations

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.
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

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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 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.”)

(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
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.)

(vii) [Reserved]
(xi) [Reserved]
Export Administration Regulations

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(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.

(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.
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.

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.

(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.

(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 not confirm or otherwise implement this
letter of credit, because it contains a condition
with which a U.S. person may not comply.

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.

§ 760.3 EXCEPTIONS TO
PROHIBITIONS

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

Export Administration Regulations

(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;

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

of parts produced in X, because the import laws
of Y prohibit the importation of goods
manufactured in X.

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

(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.”

(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.”)
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.

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 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.

For the purpose of filling this order, A may
substitute comparable component parts in place
Export Administration Regulations

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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
comply with requirements of that country which
prohibit the shipment of goods:

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.
(i)
A is a U.S. exporter from whom
boycotting 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

Export Administration Regulations

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.

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(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.

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;

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.

(ii) The name and nationality of the carrier;
(iii) The route of the shipment;

(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.”

(iv) The name, residence, or address of the
supplier of the shipment;

A may agree to this contract provision, because
it pertains to the carrier of a boycotted country.

(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.

(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.
(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.

(v) The name, residence, or address of the
provider of other services.

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.

(c) Import and shipping document
requirements

(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.

COMPLIANCE WITH IMPORT AND
SHIPPING DOCUMENT REQUIREMENTS

A may not supply such a certification in
negative terms but may identify instead the

Export Administration Regulations

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country of origin of the goods in positive terms
only.
(ii) Same as (i), except that Y requires that the
shipping documentation accompanying the
goods specify the country of origin of the goods.
A may furnish the information.
(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.”
(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.
Export Administration Regulations

A may not comply with the request but may
supply a certification stating, in positive terms
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

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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
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
(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.

Export Administration Regulations

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.
(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
(6) The provision of so-called “pre-selection” or
“pre-award” services, such as providing lists of
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.

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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:

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.

(i) Physical presence in the country;

DUTY OF INQUIRY

(ii)
Whether residence is needed for
legitimate business reasons;
(iii) Continuity of the residency;
(iv) Intent to maintain the residency;
(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.

(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
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

Note to paragraph (d)(8) of this section: No
one of the factors is dispositive. All the
circumstances will be examined closely to
Export Administration Regulations

(13) This exception applies only to compliance
with selections of certain types of suppliers of

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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.

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

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
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
Export Administration Regulations

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.

The following examples are intended to give
guidance in determining what constitutes a
unilateral selection and the circumstances in
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

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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.
(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
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.

Export Administration Regulations

(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.
(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 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.

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(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.
(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.

Export Administration Regulations

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 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.)

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(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.)
(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
Export Administration Regulations

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
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.

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(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.
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.

Export Administration Regulations

(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 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

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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
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
Export Administration Regulations

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
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

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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.

(e) Shipment and transshipment of exports
pursuant to a boycotting country’s
requirements

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.

COMPLIANCE WITH A BOYCOTTING
COUNTRY’S REQUIREMENTS
REGARDING SHIPMENT AND TRANSSHIPMENT OF EXPORTS

(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.

(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:

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 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.

(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) This exception permits compliance with
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

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(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.
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
Export Administration Regulations

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.
(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.

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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 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

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
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
actions
must
be
undertaken
on
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.

COMPLIANCE WITH IMMIGRATION,
Export Administration Regulations

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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 be assigned 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.
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.
Export Administration Regulations

(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
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.

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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.

(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) 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.
EXAMPLES OF BONA FIDE RESIDENCY

(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 person’s residency is temporary.
(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;

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
two factors, instead of all relevant factors. They
are illustrative, not comprehensive.
(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;
Export Administration Regulations

(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.

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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.
A’s personnel in Y are not bona fide residents of
Y, because A does not yet have a permanent
business operation in Y.
(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.
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 only to firms resident in a boycotting
country before January 18, 1978.
(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.

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.
(viii) Same as (vii), except that A has just
been established in Y and has not yet begun
operations.
A is a bona fide resident of Y, because it is
present in Y for legitimate business reasons and
it intends to reside continuously.
(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 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.

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.

(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

(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.

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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;
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.
Export Administration Regulations

(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 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.

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(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.
(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.

Export Administration Regulations

(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
(i) U.S. construction company A, a bona fide
resident of boycotting country Y, has a contract
to 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

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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.
(v) Same as (iv), except that in making its
responses, A asks B to compile some of the
information.
A may not comply, because the gathering of the
necessary information takes place partially
outside Y.

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

(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:

A may not comply, because the agreement
would govern activities of A which are not
exclusively within Y.

(i) The items are for his own use or for his use
in performing contractual services within that
country; and

DISCRIMINATION AGAINST
UNITED STATES PERSONS

(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:

(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.

Export Administration Regulations

(a) Uniqueness of design or appearance; or
(b)
Trademark, trade name, or other
identification normally on the items themselves,
including their packaging.

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(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 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:

Export Administration Regulations

(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 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

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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.
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
Export Administration Regulations

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
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

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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
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

Export Administration Regulations

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 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

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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
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.

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.
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 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.

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.

(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.

(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

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.

Export Administration Regulations

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(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.

§ 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
Export Administration Regulations

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 18, 1978 is
presumed not to constitute evasion if the
provision had been customarily used by that
person prior to January 18, 1978.
(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

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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.

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.

(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 “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.

(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
questionnaire so it arranges for a local agent in
Y to supply the necessary information.

Absent additional facts justifying A’s action, A’s
action constitutes evasion of this part.

(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.

(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
Export Administration Regulations

A’s action constitutes evasion of this part,
because it is a device to mask prohibited activity
carried out on A’s behalf.

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.

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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 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.

Export Administration Regulations

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 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.

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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.
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.
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
Export Administration Regulations

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
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
(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

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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
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.

Export Administration Regulations

(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
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

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Restrictive Trade Practices or Boycotts

expressly requires compliance
country’s boycott laws.

Part 760—page 64

with

that

(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.

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

(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
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
Export Administration Regulations

(1) Each reportable request must be reported.
However, if more than one document (such as an
invitation to bid, purchase order, or letter of
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

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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.

Request for Restrictive Trade Practice or
Boycott, 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)).

(4) Reports may be submitted by mail or
electronically. Mailed paper reports must be
submitted in duplicate to:

Electronic reports may be submitted only on the
single
transaction
form,
which
will
electronically reproduce the reporting person’s
identifying information to facilitate reporting of
multiple transactions.

Report Processing Staff
Office of Antiboycott Compliance
U.S. Department of Commerce, Room 6098
Washington, D.C. 20230
Electronic reports must be submitted in
duplicate, by following the prompts on the
screen, through the Office of Antiboycott
Compliance webpage of the BIS website,
http://bis.doc.gov/index.php/enforcement/oac?id
=300.
Each submission, whether paper or electronic,
must be made in accordance with the following
requirements:
(i) Where the person receiving the request is a
United States person located in the United
States, each report of requests must be
postmarked or electronically date-stamped 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 or electronically date-stamped 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).

(6) Reports, whether submitted on the paper
single transaction form or on the paper multiple
transaction form, or submitted electronically,
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, whether
submitted by mail or electronically, must be
accompanied by two copies of the relevant
page(s) of any document(s) in which the request
appears (see, paragraph (c)(2) of this section).
For mail submissions, the relevant pages shall be
attached in paper format to the report form; for
electronic submissions, the relevant pages shall
be attached in PDF format to the electronic
submission. Reports, whether paper or
electronic, may also be accompanied by any
additional information relating to the request as
the reporting person desires to provide
concerning his response to the request. For
electronic
submissions,
such
additional
information should be provided as a PDF
attachment.

(5) Mailed paper reports may, at the reporting
person’s option, be submitted on either a single
transaction form (Form BIS-621P, Report of
Export Administration Regulations

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(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
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.
EXAMPLES

Export Administration Regulations

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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

Export Administration Regulations

C was chosen 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.

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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.
Export Administration Regulations

(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.

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(xvi)
Same as (xiv), except that the
manufacturer fails to supply a required negative
certificate of origin, and A is subsequently asked
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.
Export Administration Regulations

(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

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legend that A’s goods, invoices, and packaging
must not bear a six-pointed star or other symbol
of boycotted country X.

forwarder B asks A to supply the certification in
order to satisfy the requirements of the letter of
credit.

A’s receipt of the order is reportable, because it
contains a request to comply with Y’s boycott
requirements.

The request to A is reportable by A, because it is
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.

(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.

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
Export Administration Regulations

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.
(xxx) Same as (xxix), except that A does not
know when B began using the provision.
Unless A receives information from B that B
introduced the term prior to January 18, 1978, A
must report receipt of the request.
(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.
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.

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(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.
(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.

Export Administration Regulations

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.)
(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.
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 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.

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Restrictive Trade Practices or Boycotts

Supplement No. 1 to Part 760—page 1

SUPPLEMENT NO. 1 TO PART 760 - 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:

(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.”
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) and contained in the 15
CFR edition revised as of January 1, 1979.

Export Administration Regulations

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:

(i) With or in a boycotted country;

1

This prohibition, like all others under part 760,
applies only with respect to a U.S. 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. (§760.2(d)(5) of this part.)

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

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Supplement No. 1 to Part 760—page 2

supplier/manufacturer, that certain parts or
components of the goods described in the
attached certificate of origin are the products
of such country or countries, other than the
country named therein as specifically
indicated hereunder:

any boycotted country port enroute to its
boycotting country destination.
“The undersigned further declares that said
vessel is otherwise eligible to enter into the
ports of the boycotting country in conformity
with its laws and regulations.

Country of origin and percentage of value of
parts or components relative to total shipment

Sworn to before me, this _____ day of
_______, 20 ___. Notary Seal.”

1.
____________________________________.
2.
____________________________________.
3.
____________________________________.
Dated: ______________________.
Signature _________________________.
Sworn to before me, this ______ day of
____________, 20___. Notary Seal.”

INTERPRETATION
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.

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
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

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Supplement No. 1 to Part 760—page 3

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 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
________, 20 ____. Notary Seal.”

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
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
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
performance
of
this
contract
the
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

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Restrictive Trade Practices or Boycotts

Supplement No. 1 to Part 760—page 4

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 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.”

INTERPRETATION
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

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.
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.”

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.

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Restrictive Trade Practices or Boycotts

Supplement No. 2 to Part 760—page 1

SUPPLEMENT NO. 2 TO PART 760 - 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 EAR1, 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:

(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.

1

The Department originally issued this interpretation
on April 21, 1978 (43 FR 16969) pursuant to the Export
Administration Amendments Act of 1977 (Public Law 9552) and the regulations on restrictive trade practices and
boycotts (15 CFR 369) published on January 25, 1978 (43
FR 3508) and contained in the 15 CFR edition revised as of
January 1, 1979.

Export Administration Regulations

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 anyone other than an insurer or carrier of

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Restrictive Trade Practices or Boycotts

Supplement No. 2 to Part 760—page 2

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.

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Restrictive Trade Practices or Boycotts

Supplement No. 3 to Part 760—page 1

SUPPLEMENT NO. 3 TO PART 760 - 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 or the 15 CFR edition revised as of January
1, 1979). 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.

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Restrictive Trade Practices or Boycotts

Supplement No. 4 to Part 760—page 1

SUPPLEMENT NO. 4 TO PART 760 - 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.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 5 to Part 760—page 1

SUPPLEMENT NO. 5 TO PART 760 - 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 boycotting countries.
Export Administration Regulations

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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Restrictive Trade Practices or Boycotts

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).
4. The information provided must be that which
is ordinarily known to the person establishing

Export Administration Regulations

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.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 6 to Part 760—page 1

SUPPLEMENT NO. 6 TO PART 760 - 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 sixpointed 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
Export Administration Regulations

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.
(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

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 6 to Part 760—page 2

reportable because it is not boycott-related.
There 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

Export Administration Regulations

do not interpret the term to be boycott related.
See §760.2(a)(5) and §760.5(a)(5)(v) of this
part.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 7 to Part 760—page 1

SUPPLEMENT NO. 7 TO PART 760 - 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,
Export Administration Regulations

in the normal course of business, are 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)
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

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Restrictive Trade Practices or Boycotts

Supplement No. 7 to Part 760—page 2

boycott-based rejection of goods shipped to a
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

Export Administration Regulations

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.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 8 to Part 760—page 1

SUPPLEMENT NO. 8 TO PART 760 - 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

Export Administration Regulations

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.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 9 to Part 760—page 1

SUPPLEMENT NO. 9 TO PART 760 - 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,
(h) of this part, examples (iii), (iv), and (v)..
Much of the information in the company's
possession (transaction and corporate records)
may have actually originated outside the
Export Administration Regulations

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
Department's position that the nature of the
transaction, including the inception or

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Restrictive Trade Practices or Boycotts

Supplement No. 9 to Part 760—page 2

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 other requirements are met.
The

Export Administration Regulations

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.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 10 to Part 760—page 1

SUPPLEMENT NO. 10 TO PART 760 - 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
country. Even though a negative phrase is

Export Administration Regulations

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.

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October 14, 2016

Restrictive Trade Practices or Boycotts

Supplement No. 11 to Part 760—page 1

SUPPLEMENT NO. 11 TO PART 760 - 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.

Export Administration Regulations

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

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Restrictive Trade Practices or Boycotts

Supplement No. 12 to Part 760—page 1

SUPPLEMENT NO. 12 TO PART 760 - 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
Export Administration Regulations

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 of commercial
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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Restrictive Trade Practices or Boycotts

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.
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.
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.

Export Administration Regulations

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

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Restrictive Trade Practices or Boycotts

Supplement No. 13 to Part 760—page 1

SUPPLEMENT NO. 13 TO PART 760 - 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
other
pre-award
services,
however,
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 a 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 selection of any proposed carriers,
Export Administration Regulations

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
specifically
acknowledges
that
the
aforementioned import and customs laws and
regulations of boycotting country prohibit,
among other things, the importation into
boycotting country of products or components
thereof: (A) Originating in boycotted country
(B) Manufactured, produced and furnish by
companies organized under the laws of

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Restrictive Trade Practices or Boycotts

Supplement No. 13 to Part 760—page 2

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
agreements to refuse to do business. While the
first sentence of this clause is consistent with the
Export Administration Regulations

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 contractor is asked to use his discretion in
selecting a single supplier or subcontractor for
each element of the contract. The boycotting

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Restrictive Trade Practices or Boycotts

Supplement No. 13 to Part 760—page 3

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 exercising right of unilateral and
specific selection which meets the criteria of

Export Administration Regulations

§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.

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Restrictive Trade Practices or Boycotts

Supplement No. 14 to Part 760—page 1

SUPPLEMENT NO. 14 TO PART 760 - 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
Export Administration Regulations

is within the exception for compliance with the
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)
of this part.
(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.

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Restrictive Trade Practices or Boycotts

Supplement No. 14 to Part 760—page 2

If shipment is effected by any of the above
company’s [sic] vessels, black list certificate or
evidence to that effect is not required.”
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

Export Administration Regulations

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.
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

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Supplement No. 14 to Part 760—page 3

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.
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

Export Administration Regulations

Department will consider all of the surrounding
circumstances. Particular attention will be given
to the history of the U.S. person’s business
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.

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Restrictive Trade Practices or Boycotts

Supplement No. 15 to Part 760—page 1

SUPPLEMENT NO. 15 TO PART 760 - 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
information--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 of information about U.S. persons’
Export Administration Regulations

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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Restrictive Trade Practices or Boycotts

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.

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.

While the Department does not regard the
suggested distinction between transmitting and

Export Administration Regulations

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Supplement No. 16 to Part 760—page 1

SUPPLEMENT NO. 16 TO PART 760 - 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
boycott-related
because
the

Export Administration Regulations

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.

Bureau of Industry and Security

October 14, 2016