END OF MODEL YEAR
CLEARANCE
U.S. Levies Fine
Against L'Oreal
/-
\_Th
Washington (JTA) — In a clear
sign that the United States will
continue to enforce laws banning
compliance with the Arab boycott
of Israel, the Commerce Depart-
ment has levied the second
largest fine since enforcement be-
gan more than 25 years ago.
American affiliates of L'Ore-
al agreed to pay $1.4 million to
settle an investigation of the in-
ternational cosmetics giant. As is
customary in such settlements,
the firms did not admit comply-
ing with the boycott.
The investigation should re-
mind the exporting community
that the Arab boycott of Israel "is
not yet consigned to history," said
John Despres, assistant secretary
of commerce for export enforce-
ment.
Anti-boycott laws "will contin-
ue to be enforced vigorously un-
til the boycott is completely ended
and U.S. law has been changed
accordingly," he said.
The Commerce Department
had charged L'Oreal affiliates in
the United States with supplying
information about their com-
mercial relations in Israel to
L'Oreal's Paris headquarters in
the late 1980s to assist the firm
in dealing with Arab boycott au-
thorities. The settlement was
based on three documents con-
taining 144 alleged violations.
According to the settlement,
Parbel of Florida will pay
$1,387,000; Cosmair Inc. will pay
$9,000; and Bruce Mishkin, as-
sociate corporate counsel for Cos-
mair and the former vice
president of Helena Rubinstein,
will pay $50,400. All are affiliates
of L'Oreal.
The charges against L'Oreal
and its affiliates were among the
most significant ever made by the
Commerce Department, Despres
said.
"The allegations are very seri-
ous, extensive and numerous.
The magnitude of the violation
is reflected by the size of the pay-
ments being made," Mr. Despres
said.
Only Baxter International,
which paid more than $6 million
in fines in 1993, has paid more to
the Commerce Department.
L'Oreal's attorneys maintain
that the company and its affili-
ates are innocent.
"This is a settlement of con-
tested charges. We deny that
there was any violation of the
law," said Stanley Marcuss, an
attorney representing L'Oreal.
Jewish organizations were
quick to praise the Commerce De-
partment.
"Furnishing information is a
serious allegation. The lifeblood
of the boycott is built around in-
formation received," said Jess
Hordes, Washington director of
the Anti-Defamation League.
"The Commerce Department did
a good job in enforcing U.S. anti-
boycott laws."
Although praising the Com-
merce Department for its inves-
tigation of the case, American
Jewish Congress officials noted
that L'Oreal has substantially in-
creased its investments in Israel.
"L'Oreal has demonstrated with-
in the past year a complete aban-
donment of its former policies by
developing a very large econom-
ic program in Israel," said Will
Maslow, former editor of the now
defunct AJCongress newsletter,
Boycott Report.
One member of Congress who
has been outspoken on the boy-
cott welcomed the settlement.
"The Arab economic boycott is
not only illegal, it is immoral and
any company that supports it
must be brought to justice," said
Rep. Charles Schumer, D-N.Y.,
who chairs the Congressional
Task Force to End the Boycott.
While L'Oreal officials main-
tain their affiliates did nothing
wrong, company officials ac-
knowledged that L'Oreal should
not have sent letters in the late
1980s to the boycott office in
Damascus, which detailed the
company's involvement with Is-
rael.
In a letter to ADL National Di-
rector Abraham Foxman, L'Ore-
al's chairman apologized for its
past relationship with the boy-
cott office in Damascus.
"An international company
like L'Oreal should have refused
to place itself in such an unac-
ceptable position and should not
have replied to boycott inquiries,"
L'Oreal Chairman Lindsay
Owen-Jones wrote. "I am sorry
such correspondence was ever
sent. I also want to inform you
that I have taken measures to as-
sure that such action will not
happen again."
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