Freight forwarder JAS Worldwide recently agreed to pay $19,200 to the Bureau of Industry and Security to settle charges that it provided prohibited information relating to the Arab League boycott of Israel. Two of the charges relate to invoices that contained a “Shippers Declaration” that the goods in the invoice are not of Israeli origin and do not contain Israeli materials.

Although these statements are fairly unambiguous violations of the anti-boycott regulations, it is significant that BIS is going after the freight forwarder here and not the shipper. According to the company’s website, the company moves annually over 100 million kilos by air and 260,000 containers by ocean. The BIS settlement suggests that freight forwarders need to scour through all shipping documents to see whether any of them contain information prohibited by the anti-boycott regulations, a burdensome, time-consuming, and, frankly, pointless task given that BIS can fine the shipper who presumably does read all of the relevant shipping documents.

Of course, BIS fines for anti-boycott violations remain well below an amount that would give an incentive to those hit with the fines to mount an administrative and judicial challenge. This is understandable given that there is considerable question as to whether the anti-boycott regulations, enacted under the now-lapsed Export Administration Act, can be validly extended by an executive order under the International Economic Emergency Powers Act (“IEEPA”), which is the only argument for their continued validity.

The third charge against JAS is, frankly, puzzling. The offending statement, as quoted in the charging documents, is this statement in the Certificate of Insurance:

The undersigned does hereby certify on behalf of the above insurance company, that the said company has a duly qualified and appointed agent or representative in Kuwait, whose name and address appear below.

Yep. That’s the offending statement. Apparently now it is illegal to tell other companies that you have an agent in Kuwait. Or maybe to reveal the agent’s address. Go figure.

One can only assume that the Certificate of Insurance said something naughty other than the quoted statement; you’ll just have to guess what it was. I suppose when you’re only able to get about $20,000 in each enforcement action, BIS doesn’t really feel it’s worth it to fuss around with the documents too much to guarantee their accuracy.

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