Recent BIS Anti-Boycott Enforcement Could Signal More to Come, Law Firm Says

The Bureau of Industry and Security’s recent increase in enforcement of anti-boycott regulations signals the agency will “continue to be active in this space,” and companies may want to review their compliance programs, Arnold & Porter said in a Nov. 28 client advisory. “It may be time for U.S. companies and their foreign subsidiaries -- especially those conducting business in or involving the Middle East region -- to establish, review, and/or update their antiboycott compliance programs,” the firm said.

Arnold & Porter said it’s seeing an “uptick” in anti-boycott enforcement this year with five settlements so far, “more than double the average number of BIS anti-boycott settlements in the preceding five years. BIS fined a U.S. synthetic fiber manufacturer in November (see 2311060019) and an aircraft parts supply company in September for violations (see 2309070017).

The Israel-Hamas conflict in particular “could prompt more boycott requests in the region and increase U.S. government scrutiny on compliance with U.S. anti-boycott laws and regulations,” the firm said. It also warned that BIS may be looking to impose higher fines, pointing to a memo last year that outlined a shift toward larger penalties for more serious violations (see 2206300069 and 2210060016). “For those that currently do not have antiboycott compliance programs,” the firm said, “now may be the time to establish one.”