What Every Multinational Should Know About … Conducting an Antiboycott Self-Check
As detailed in Part I of this risk-assessment self-check series, we are publishing a series of self-check assessment guides covering the key regulatory and contractual risk areas for multinational companies. This article provides Part IV, which is a self-check assessment for conducting a supply chain contracts review. Previous self-check risks assessments are found in Part I (general compliance), Part II (buy-side contracts review), Part III (sell-side contracts review), and Part IV (supply chain integrity compliance self-check).
Antiboycott compliance presents a specialized but important risk for multinational companies engaged in cross-border trade. Unlike many trade controls that focus on what a company ships or where it ships, antiboycott exposure often arises from what a company is asked to say, certify, or agree to in the course of ordinary business. Prohibited requests can appear in contracts, purchase orders, letters of credit, tender documents, shipping instructions, or routine customer questionnaires, and may require a company to refuse to do business with certain countries or parties, furnish boycott-related information, or make certifications about origin, ownership, or business relationships.
In practice, the vast majority of antiboycott compliance issues encountered by U.S. companies involve requests associated with the Arab League boycott of Israel. Since the 1970s, various Arab League member states have maintained a multilateral boycott targeting Israel, and participants in this boycott have required foreign companies to furnish certifications, negative origin statements, or other assurances as a condition of doing business in the region. These requests — which may appear in letters of credit, shipping documents, or contract clauses — remain the most commonly reported category of boycott-related activity under both the Export Administration Regulations administered by the Bureau of Industry and Security and the antiboycott provisions of the Internal Revenue Code enforced by the Office of Antiboycott Compliance within the Internal Revenue Service (IRS).
These risks are often overlooked because the underlying transaction may otherwise appear commercially routine. Enforcement authorities increasingly focus on whether companies have practical controls to identify, escalate, and respond to boycott-related requests before they are accepted or acted upon.
This self-test is designed to help companies assess whether they have a functioning, risk-aligned antiboycott compliance framework. It focuses on governance, risk assessment, contract and document review, training, escalation, and response mechanisms, with an emphasis on whether boycott-related controls are embedded in day-to-day business activity. A “no” answer does not automatically indicate a violation, but it may signal a program gap that warrants further review or compliance enhancement.
I. Risk Assessment & Program Design
- Has your company conducted a documented antiboycott risk assessment tailored to its products, services, customers, and geographic footprint?
- Does the assessment consider relevant antiboycott risk factors, including: (1) business in or involving jurisdictions where boycott-related requests may be more common; (2) use of distributors, agents, freight forwarders, or other intermediaries; (3) customer contracts, tenders, purchase orders, and letters of credit; (4) requests for certifications relating to country of origin, vessel calls, ownership, nationality, or business relationships; and (5) business functions most likely to encounter boycott language, such as sales, contracting, shipping, finance, and customer service?
- Are antiboycott risks reassessed when the business changes, including: (1) entry into new markets; (2) expansion of distributor or channel relationships; (3) new customer segments or government-related business; or (4) changes in applicable law, guidance, or enforcement activity?
II. Policies & Practical Guidance
- Does your company maintain clear, accessible antiboycott policies tailored to its business model and transaction flows?
- Do policies go beyond general prohibitions and provide practical guidance on: (1) identifying boycott-related requests; (2) reviewing contracts, letters of credit, and shipping documents; (3) escalating questionable language; (4) handling prohibited certifications or questionnaires; and (5) reporting obligations where applicable?
- Are policies reviewed and updated periodically to reflect changes in law, guidance, business practices, and transaction risk?
III. Contracting, Documentation & Transaction Controls
- Are contracts, tenders, purchase orders, letters of credit, shipping instructions, and other transaction documents reviewed on a risk-based basis for boycott-related language?
- Are employees equipped to identify problematic requests involving: (1) agreements not to do business with certain countries or blacklisted parties; (2) certifications regarding business relationships with certain countries or persons; (3) requests to disclose ownership, management, nationality, religion, or similar information for boycott-related purposes; and (4) shipping or routing instructions designed to support a boycott?
- Are procedures in place to reject, strike, or revise prohibited boycott-related terms before the company proceeds with the transaction?
- Are boycott-related requests and their disposition documented and retained in accordance with company procedures and legal requirements?
IV. Training & Awareness
- Is antiboycott training provided on a risk-based basis, with enhanced focus for sales, contract management, legal, trade compliance, logistics, finance, procurement, and customer-facing personnel?
- Does training include realistic scenarios relevant to your company’s operations (e.g., boycott clauses in purchase orders, problematic letter-of-credit terms, end-customer certifications, or routing instructions tied to restricted destinations)?
- Is training tracked and documented?
V. Escalation, Reporting & Oversight
- Do employees know when antiboycott review is required and how to escalate suspect language or requests to compliance personnel, legal counsel, or senior management?
- Is there a defined process for reviewing boycott-related requests promptly so that business teams can address them before shipment, payment, or contract execution?
- Does your company have a process for identifying and meeting applicable antiboycott reporting obligations when reportable requests are received?
- Does the company periodically test or review whether antiboycott controls are functioning in practice, including through audits or spot checks of relevant documents and transactions?
VI. Incident Response & Continuous Improvement
- Are potential antiboycott issues investigated promptly, with appropriate documentation of the request, response, business impact, and remediation?
- Are control failures, missed escalations, or improper responses addressed through corrective action, retraining, and process improvements?
- Are lessons learned from incidents, audits, business changes, or enforcement developments fed back into risk assessments, training, and program design?
- Does the company periodically evaluate whether its antiboycott compliance framework remains aligned with its current markets, customers, and transaction patterns?
Would you like more practical compliance tips like these? The Foley International Trade & National Security Team is monitoring all international trade, enforcement, and compliance developments, which we post as they occur on our Tariff & International Trade Resources blog. Click Here to Register for our email list to receive future emails and practical international regulatory compliance tips, including our weekly Tariff-ied! This Week in International Trade and What Every Multinational Should Know articles.
Our white paper on Managing Import and Tariff Risks During a Trade War outlines a 12-step plan to provide practical steps to help importers navigate the tariff and international trade risks in the current tariff and trade environment, while the companion white paper on Managing Supply Chain Integrity Risks provides practical advice to deal with heightened supply chain risks pertaining to goods imported into the United States, including the increasing use of detentions by Customs.
