Last week, the U.S. Department of Commerce removed the United Arab Emirates ("UAE") from its list of countries boycotting Israel in response to the formal termination of the UAE's participation in the Arab League boycott of Israel.
Under Commerce's updated rules, a request for information, action, or agreement from the UAE made after August 16, 2020 is no longer presumed to be boycott-related and, consequently, is not prohibited or reportable unless the request is facially boycott-related. For example, if a UAE company requests that a U.S. company provide information on the nationality of its board members, that request is no longer presumed to be boycott-related - the U.S. company may respond to the request and does not need to report the receipt of the request to Commerce. In contrast, if a request from the UAE (or any other country) references "blacklisted companies," "Israel boycott list," "non-Israeli goods," or other phrases indicating a boycott purpose, compliance with that request generally remains prohibited and the request must be reported to the Commerce Department. The updates to Commerce's rules followed a similar change to the Treasury Department's antiboycott regulations, which reduced reporting obligations related to the UAE for U.S. taxpayers.
While these updates represent a liberalization of U.S. antiboycott rules applicable to the UAE, U.S. companies and taxpayers must remain vigilant for requests that are facially boycott-related from the UAE and other countries, even if the countries do not officially participate in the Arab League boycott of Israel.
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