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American Firms Violating Anti-Boycott Legislation
- NEW YORK — More
than half of the American
corporations that did busi-
ness in the Middle East last
year complied with Arab
requests to boycott Israeli
goods and facilities — even
LOU'S PLUMBING
though U.S. law specifically
forbids such practices.
Repairs & Alterations
The cooperation of U.S.
Reasonable.
firms with the Arab eco-
nomic
boycott of Israel was
Licensed Master Plumber.
revealed in a story by Ed-
- 557-8688
ward A. Gargan-in the New
York Times last week.
TAROTS
The Times article cited
CUSTOM PAINTING
Commerce Department fig-
Interior - Exterior
ures which show that last
Reasonable Price
year American companies
Quality Work
acceded to more than 60
Free Estimates
References
percent of such Arab re-
552-0488 "
quests as to refrain from
using blacklisted ships,
banks or goods of Israeli
origin. The companies' ac-
quiescende in these requests
involved trade with the
ROOFING & SIDING
Middle East valued at
nearly $7 billion a year, the
GUTTERS
department estimated.
In most cases, their ac-
STORM WINDOWS
quiescence did not viol-
ate Federal law, but hun-
Licensed
dreds of other instances
are under investigation
Call Ken Cameron
as possibly illegal.
Several persons familiar
542-2609
with the operation of 'the
anti-boycott law have ques-*
METRO WINDOW
tioned its effectiveness. One
CLEANING AND
man who was a senior
HOME CARE
Commerce Department of-
Experts on aluminum storms.
ficial during the Carter
carpet, floor, furniture cleaning.
Administration asserted:
Wall washing, custom painting
"Business on the whole has
interior-exterior.
complied with the boycott.
The law allows the boycott
541-0278
to go forward."
RESIDUMAL WIDOW CLEARING
By contrast, Gargan says
Wall washing and
business spokesmen gener-
ally complain that the law,
gutter cleaning.
enacted in 1978, has caused
Quality Service
American companies to lose
Free Estates s.
substantial sales. The Is-
547-2418
raeli government says that,
although the law is not per-
NICE JEWISH BOY
fect, it has generally had a
Expertly repairs automatic positive effect.
washers & dryers: Ken-
The variety of views is not
more & Whirlpool our spe- surprising. Though the sta-
cialty. Very reasonable.
tute forbids compliance
with the Arab boycott, it
357-0119
also contains exceptions
CALL SAM THE PAINTER
that allow most American
& DECORATOR
commercial transactions
Interior & Exterior
with Arab countries to in-
clude contract wording ac-
642-0337
ceptable to the Arabs.
FREE ESTIMATES
"If they want the goods,
Reasonable.
Arab countries will ac-
commodate
themselves
CHUCK'S PAINTING SERVICE
on language," said
Interior-Exterior
Richard Seppa, who
Patch Plastering
heads the Office of Anti-
Reasonable
boycott Compliance in
12 yrs. experience
the Commerce Depart-
Work Guaranteed
CHUCK
. 292-3885
- -Ffidi,-octobW
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After 4:30 p.m.
ment. "It doesn't happen
in every case, but by and
large an arrangement
can be made."
Arab countries have
boycotted Israeli products
from the beginning, but in
1955 they started blacklist-
ing persons and companies
doing business with Israel.
Any company that does so
may be placed on the
blacklist by the Central
Office of the Boycott of Is-
rael. The office is in Damas-
cus, Syria.
For decades, according to
Gargan, it has been U.S.
policy to oppose all boycotts
aimed against friendly na-
tions, but only in 1978 did it
become illegal for American
companies to participate di-
rectly in the Arabs' boycott
of Israel.
Since then, the number of
companies fined for comply-
ing with this boycott has
risen every year. In the fis-
cal year ended Sept. 30, a
total of $384,500 in fines
was collected from 20 com-
panies.
About 130 other com-
panies are now under
active investigation, ac-
cording to the Commerce
Department, which is re-
sponsible for monitoring
the anti-boycott law. But
a senior official of the de-
partment, who asked not
to be identified, said
enforcement was "not a
top priority" of the Re-
agan Administration.
"We don't want any witch
hunts," he said.
Illegal compliance with
the boycott, according to the
Times, is usually discovered
by Commerce Department
officials only through the
law's requirement that
companies report any re-
quest from a country to eng-
age in a restrictive trade
practice. Among the cases
that were settled during the
last year were these:
• Minnesota Mining and
Manufacturing was fined
$137,500 for 230 violations.
• Rockwell International
was fined $71,000 for 127
violations. It was accused of
furnishing information to
an Arab country about
other persons or companies
that were believed to have
been restricted from doing
business with Israel.
• The ITT Grinnell
Corp. (owned by a sub-
sidiary of International
Telephone and Tele-
graph) was fined $50,500
for 101 instances of fail-
ing to report boycott re-
quests to the Commerce
Department.
• Raytheon Co. was fined
$5,000 for providing infor-
mation about its business
relationships with Israel.
Philip A. Phalon, Rayth-
eon's vice president of in-
ternational affairs, char-
acterized the violations as
"defective language in re-
quests for proposals."
There are no precise fig-
ures by which to gauge the
economic consequences of
the anti-boycott law. The
Commerce Department has
not tried to assess the law's
impact on American com-
panies, and most of the
companies that do business
in the Middle East either
are reluctant to discuss it or
prefer to speak in
generalities.
Phalon said there had
"never been a measurable
impact on Raytheon sales or
earnings as a result of the
pre- or post-anti-boycott
provisions." But at Bechtel,
a large West Coast con-
struction concern, a •
spokesman asserted that
the law had been "an in-
hibiting factor" on Ameri-
can business.
During Congressional
debate over the anti-boycott
legislation in 1977, many
American companies vigor-
ously fought it, contending
that it would severely
hamper their ability to con-
duct business with the Arab
countries. Although trade
with the Arab world has
grown steadily since the
passage of the law, a recent
survey by the Boycott LaW
Bulletin, a law journal de-
voted to explaining the
law's implications for
businesses, found over-
whelmingly that companies
felt severely hindered by
the law.
The Israeli government
maintains that the law has
worked, at least partly. But
its officials are concerned,
as are some members of
Congress, that the Ad-
ministration in Washington
intends to reduce its
enforcement efforts as part
of its generally sympathetic
attitude, toward the busi-
ness world.
Rep. Benjamin S. Ro-
senthal (D-N.Y.), whose
House subcommittee
oversees the Commerce
Department's enforce-
ment activities, said the
law had flaws. "If we
were dealing in a purely
objective environment,"
he said, "the law ought to
be strengthened. But
with a very low priority
in Commerce under this
Administration, the
chances are zero."
The 1978 law prohibits
American companies from
furnishing information
about past, present or fu-
ture business relationships
with boycotted countries or
blacklisted persons.
The Times reported that
exceptions to the law let
companies comply with a
boycotting country's import
requirements as to where
the products originated,
with a boycotting country's
export requirements as to
where the products will
eventually go and with a
boycotting country's visa
requirements. (Many Arab
countries insist that Ameri-
cans sent to work inside
their borders not be
Jewish.)
Under the law, no
American company is
permitted to declare that
its products are not of Is-
raeli origin. Arab coun-
tries often ask for a dec-
laration of this sort.
But a company is permit-
ted to state that its products
are made wholly of Ameri-
can (or French or Japanese)
raw materials and are
manufactured entirely in
the United States (or
France or Japan). Such
roundabout language has
often been accepted as a
substitute by the principal
boycotting Arab countries
— Saudi Arabia, Syria,
Bahrain, Iraq, Jordan,
Kuwait, Lebanon, Qatar
and the United Arab Emi-
rates.
"There are probably
many people out there in a
flagrant violation of the
law, and they never get
caught," said a lawyer,
who asked that his name
not be used. "A lot of people
are simply ignorant of the
law. I suspect there are
people who are falling
through the cracks.. And a
lot of people are just not fil-
ing.
Congress' Blacks, Hispanics
Reject Saudi AWACS Sale
WASHINGTON (JTA) —
Sixteen of the 17 black
members of the House of
Representatives and alrfive
Hispanic Congressmdn
voted with the majority in
rejecting President
Reagan's proposed $8.5 bil-
lion arms package for Saudi
Arabia, it was reported by
the Black-Jewish Informa-
tion Center.
i The one member of the
Black Caucus who did not
go along with his colleagues
was Rep. Gus Savage ( D-
Ill.), who was recorded as
"not voting." Walter Faun-
troy, who represents the
District of Columbia, does
not have a vote.
A number of the black
Representatives issued
statements telling why they
opposed the AWACS deal,
among them Rep. Shirley
Chisolm (D-N.Y.), who said
the Reagan proposal would
-
r
not increase U.S. security,
or peace in the Middle East,
or stability in the region.
Foreign Minister
Says PLO TalkS
Not in Future
JERUSALEM (JTA) —
Foreign Minister Yitzhak
Shamir said Tuesday that
Israel would never
negotiate with the Pales-
tine Liberation Organiza-
tion even if the PLO recog-
nizes Israel's right to exist.
He told the Knesset's
Foreign Affairs and Secu-
rity Committee that there
was no reason for Israel to
change its policy.
Shamir's remark was an
indirect response to
President Reagan's recent
comment that the U.S.
would negotiate with the
PLO only if it recognized Is-
rael's right to exist.
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