BIS Enforces Antiboycott Regulations for a US Company Requested to Refrain from Importing Goods of Foreign Origin

Anne Liese Heinichen
ERAI, Inc.

On September 30, the United States Department of Commerce, Bureau of Industry and Security announced a civil penalty of $151,875.00 against Quantum Corporation, a California-based data storage solutions company. The penalty addresses forty-five violations of the Export Administration Regulations (EAR) that occurred between 2018 and 2020 where Quantum failed to report requests made by their customer to engage in restrictive trade practices. Quantum had received purchase orders from their United Arab Emirates-based customer which specified that “product with COO from ‘Israel’ is not acceptable.”

Although Quantum did not report the boycott-related requests when they received the purchase orders, they later voluntarily self-disclosed the violations to BIS, cooperated during the investigation, and enacted remedial measures in their company, resulting in a reduction to the financial penalty.

Per Section 760.5 Reporting requirements, “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.” Regardless of whether or not a US person intends on complying with boycott-related requests, US persons are obliged to report to BIS’ Office of Antiboycott Compliance (OAC).

Additionally, the OAC maintains a “Requester List” which names parties that have been reported to OAC as the source of boycott-related requests. US persons are not necessarily restricted from transacting with parties named on the list, rather the list names parties that are likely to make boycott-related requests.

Organizations should ensure that all relevant personnel are trained on export compliance laws and regulations and ensure that their organization’s trade compliance program provides for continued and updated training when regulations are updated.

For more information on the antiboycott provisions of the EAR, the OAC Advice Line can be contacted at 202-482-2381 and through their online portal at https://www.bis.doc.gov/index.php/component/rsform/form/23?task=forms.edit%22%20\t%20%22_blank.

Read the BIS press release: https://www.bis.gov/press-release/bis-imposes-penalty-quantum-corporation-resolve-alleged-violations-antiboycott

Read the order, settlement agreement and proposed charging letter against Quantum Corporation: https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2024/1643-a776/file

Read 15 CFR 760.5 of the EAR: https://www.ecfr.gov/current/title-15/subtitle-B/chapter-VII/subchapter-C/part-760/section-760.5

Learn more about OAC: https://www.bis.gov/OAC

Report a Boycott Request: https://www.bis.doc.gov/index.php/enforcement/oac?id=300

Access OAC’s Requester List: https://www.bis.gov/media/documents/oac-requester-list-sept-2024-pdf

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