On July 26, 2023, Matthew Axelrod, the Assistant Secretary for Export Enforcement, issued a memorandum on “Strengthening Antiboycott Reporting and Compliance.” The memorandum announced two new measures. First, the Commerce Department is amending the boycott reporting form to require U.S. persons to report the identity of the party that made a boycott request. Previously, the report only required the country from which the boycott request originated. The memorandum notes that Commerce will use the information to investigate and hold accountable parties that make boycott requests. For U.S. persons who receive a boycott request from a commercial counterparty, the requirement to report the requestor’s identity could create tension in ongoing relationships. U.S. persons may want to get out in front of this risk by reiterating their commitment to antiboycott compliance with their commercial counterparties, particularly those located in higher risk jurisdictions.
The second measure adds antiboycott policy statements on the Acquisition Management websites. The policy statements recommend U.S. government contractors understand and comply with antiboycott requirements. While not mandating particular action, the policy statements suggest that failure to comply with antiboycott requirements could jeopardize a contractor’s ongoing U.S. government contracts or ability to contract for new opportunities in the future.
Coupled with the October 2022 “Enhanced Enforcement of the Antiboycott Rules” memorandum and recent enforcement actions, this new memorandum demonstrates the Commerce Department’s renewed focus on antiboycott compliance. U.S. companies should ensure they have adequate compliance policies in place now before potentially getting caught in the enhanced enforcement activity down the road.
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