Regulatory intelligence for US exporters

US Manufacturer Fined by BIS for Complying With Israeli Boycott-Related Request

The Bureau of Industry and Security fined Forta, a U.S. synthetic fiber manufacturer, $44,750 after the company violated BIS’ antiboycott regulations. Forta voluntarily disclosed the violations, which included providing its freight forwarder ahead of a trade show in Abu Dhabi with certifications that its products weren’t made with Israeli labor or raw materials.

BIS said it significantly lowered Forta’s penalty due to several mitigating factors, including its cooperation with the agency’s investigation. Forta must pay the fine within 30 days of Nov. 3 or have its export privileges revoked for one year, according to a settlement agreement released by BIS. The company also admitted to the violations, part of an effort by BIS to eliminate its use of no-admit, no-deny clauses in settlements.

Matthew Axelrod, the top BIS export enforcement official, said it’s “critically important for all companies, regardless of size, to implement antiboycott compliance programs so that they recognize boycott-related requests and take appropriate action, including by refusing to engage in prohibited boycott activity and reporting boycott-related requests.”

BIS said the violations occurred in 2019, when Forta sent its products to the United Arab Emirates for display at a trade show in the country’s capital. In its commercial invoice and packing list, which was given to its freight forwarder, the company was asked to certify its goods weren’t of Israeli origin. Forta specifically wrote: “We certify that no labor, capital, parts or raw materials of Israeli origin have been used in the printing, publishing or manufacture of these goods.” BIS also said Forta “failed to report to BIS the receipt of the request to furnish this information,” which the Export Administration Regulations’ antiboycott provisions require.

The agency settled on the penalty after taking into account that Forta voluntarily disclosed the violations. BIS also said the company cooperated with BIS’ Office of Antiboycott Compliance’s investigation and took “remedial measures after discovering the conduct at issue, all of which resulted in a significant reduction in penalty.”

BIS stressed that companies “must report” their receipt of certain boycott-related requests regardless of whether they plan to comply with them. Reporting forms can be found on the agency’s website.

Forta didn't respond to a request for comment.