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Company fined $6,000 for not reporting customer's question:
"Is any of this stuff made in Israel?"
by Helen & Harry Highwater, Unknown News June 27, 2003
Why is this question forbidden?
Why is any question forbidden?
It sounds more like the USSR than the USA, to punish people for asking a forbidden question, or for not immediately reporting to the government that someone else asked a forbidden question.
A Missouri company has been fined $6,000 for not reporting a customer's question to the federal government. The question that's punished by law is: Are any of these products made in Israel, or made of Israeli materials?
The Kansas City Star reports (see sidebar) "The anti-boycott provisions bar U.S. companies from providing information about their business relationships with Israel. They also require that receipt of boycott requests be reported to the Bureau of Industry and Security, formerly known as the Bureau of
North Kansas City company settles charge related to boycott of Israel
by Dan Margolies, Kansas City Star June 25, 2003
Cook Composites and Polymers Co. has agreed to pay a $6,000 fine to settle charges that it violated Commerce Department regulations aimed at countering the Arab boycott of Israel.
The department's Bureau of Industry and Security had charged that, in response to a request from a customer in Bahrain, Cook had furnished information stating that the goods being shipped were not of Israeli origin and did not contain Israeli materials.
The bureau also charged that Cook had failed to report its receipt of the request.
Cook, of North Kansas City, neither admitted nor denied the allegations, but agreed to pay the $6,000 civil penalty.
The anti-boycott provisions bar U.S. companies from providing information about their business relationships with Israel. They also require that receipt of boycott requests be reported to the Bureau of Industry and Security, formerly known as the Bureau of Export Administration.
Cook's chief executive, Charles Bennett, was in Paris this week and unavailable for comment. A spokeswoman for the company, Rita Durocher, said the fine marked the first time Cook has had a run-in with a federal agency.
"If you go back and look at our record, we've been flawless with other government agencies," she said.
Cook makes polyester gels and other coating resins. It operates plants throughout North America.
The settlement with the Commerce Department came after the Bush administration in November warned U.S. companies not to heed calls to boycott Israeli goods and services. The warning followed a call by the 22-member Arab League to reactivate its decades-long boycott of Israel.
In a statement released at the time by the department, Commerce Undersecretary for Industry and Security Kenneth Juster reminded American companies that the "U.S. government is strongly opposed to restrictive trade practices or boycotts targeted against Israel."
Knowing violators of the anti-boycott provisions face fines of up to $50,000, or five times the value of the exports at issue, and possible imprisonment. Offenders can also be denied export privileges.
The Bureau of Industry and Security says it has imposed more than $26 million in fines for violations of the provisions.
More than a decade ago, the Commerce Department sent compliance officers to Kansas City to check out tips that Marion Merrell Dow Inc. and Marley Cooling Tower Co. may have cooperated with the Arab boycott. Nothing came of the investigation, and no penalties were imposed.
In Cook's case, the Bureau of Industry and Security charged that Cook failed to report a letter of credit it received on Dec. 1, 1997, from ABN AMRO Bank in Manama, Bahrain. The letter asked it to confirm that the goods being shipped "are not of Israeli origin nor do they contain any Israeli" material.
The bureau also charged that on Jan. 20, 1998, Cook, through its freight forwarder, provided a U.S. bank with a copy of a commercial invoice confirming that the goods were not of Israeli origin and did not contain Israeli material.
Cook, with 558 employees overall and 120 employees locally, is one of North Kansas City's biggest employers. The company bills itself as the No. 1 producer of gel coats in the world and, together with affiliated companies, the No. 2 producer of resins.
Since 1990, Cook has had a joint venture relationship with the chemicals division of TotalFinaElf, a multibillion-dollar petrochemicals giant based in Paris.
We ask: Why is this question forbidden? Why is any question forbidden?
It sounds more like the USSR than the USA, to punish people for asking a forbidden question, or for not immediately reporting to the government that someone else asked a forbidden question.
Only a few years ago, during South Africa's apartheid era, it was considered the height of good moral backbone to ask whether a product came from that country. Today, many Americans are asking such questions about products they suspect came from France, after the French government declined to join "Operation Iraqi Freedom."
The newspaper's article doesn't make it clear whether these restrictions apply only to US companies selling stuff outside the US, or whether the law applies to everyone. Either way, it's reprehensible.
"The anti-boycott provisions of the Export Administration Regulations (EAR) apply to all "U.S. persons," defined to include individuals and companies located in the United States and their foreign affiliates. ..."
And here's a press release from the US Department of Commerce:
"Commerce Under Secretary for Industry and Security Kenneth I. Juster today reiterated to U.S. companies that the Department will vigorously enforce its regulations prohibiting U.S. persons from taking any action in support of foreign government boycotts against Israel. ..."
If K-Mart is having a sale on cheap plastic chess sets and we ask the clerk whether the board or pieces were made in Israel, is the clerk allowed to answer? Must the store promptly file a form with the Bureau of Industry and Security reporting that we asked?
Well, we'll be asking the forbidden question in every store we enter. Not because we're boycotting Israel -- we're not. Heck, if we were boycotting products from countries whose policies are abhorrent, we'd start by boycotting anything marked "made in USA."
We'll be asking the forbidden question because we believe in freedom. In a free society, the government doesn't tell people what questions they can ask, and what questions they can't, and what questions must be promptly reported to the authorities.
We had heard of this law before -- banning people from even asking about boycotting Israeli products -- but we had foolishly assumed it wasn't often enforced.
According to the article, though, "more than $26 million in fines" have been levied for violations of this law, suggesting that enforcement of the Forbidden Question Law is not at all uncommon. The fine in this case was $6,000, so assuming that's average and doing the math, more than 4,000 Americans or American companies have been fined -- for asking the forbidden question, or failure to report that someone else asked the forbidden question.
Antiboycott Laws: During the mid-1970's the United States adopted two laws that seek to counteract
the participation of U.S. citizens in other nation's economic boycotts or
embargoes. These "antiboycott" laws are the 1977 amendments to the
Export Administration Act (EAA) and the Ribicoff Amendment to the 1976 Tax
Reform Act (TRA).
Objectives: The antiboycott laws were adopted to encourage, and in specified cases, require
U.S. firms to refuse to participate in foreign boycotts that the United States
does not sanction. They have the effect of preventing U.S. firms from being
used to implement foreign policies of other nations which run counter to U.S.
policy.
Primary Impact: The Arab League boycott of Israel is the principal foreign economic boycott
that U.S. companies must be concerned with today. The antiboycott laws, however,
apply to all boycotts imposed by foreign countries that are unsanctioned by
the United States.
Who Is Covered by the Laws? The antiboycott provisions of the Export Administration Regulations (EAR)
apply to all "U.S. persons," defined to include individuals and
companies located in the United States and their foreign affiliates. These
persons are subject to the law when their activities relate to the sale, purchase,
or transfer of goods or services (including information) within the United
States or between the U.S. and a foreign country. This covers U.S. exports
and imports, financing, forwarding and shipping, and certain other transactions
that may take place wholly offshore.
Generally, the TRA applies to all U.S. taxpayers (and their related companies).
The TRA's reporting requirements apply to taxpayers' "operations"
in, with, or related to boycotting countries or their nationals. Its penalties
apply to those taxpayers with foreign tax credit, foreign subsidiary deferral,
FSC (Foreign Sales Corporation), and IC-DISC (Interest Charge-Domestic International
Sales Corporation) benefits.
What do the Laws Prohibit? Conduct that may be penalized under the TRA and/or prohibited under the EAR
includes:
Agreements to refuse or actual refusal to do business with or in Israel
or with blacklisted companies.
Agreements to discriminate or actual discrimination against other persons
based on race, religion, sex, national origin or nationality.
Agreements to furnish or actual furnishing of information about business
relationships with or in Israel or with blacklisted companies.
Agreements to furnish or actual furnishing of information about the race,
religion, sex, or national origin of another person.
Implementing letters of credit containing prohibited boycott
terms or conditions.
The TRA does not "prohibit" conduct, but denies tax benefits ("penalizes")
for certain types of boycott-related agreements.
What Must Be Reported? The EAR requires U.S. persons to report quarterly requests they have received
to take certain actions to comply with, further, or support an unsanctioned
foreign boycott.
The TRA requires taxpayers to report "operations" in, with, or
related to a boycotting country or its nationals and requests received to
participate in or cooperate with an international boycott. The Treasury Department
publishes a quarterly list of "boycotting countries."
How To Report: EAR reports are filed quarterly on form BIS 621-P for single requests or
BIS 6051-P for multiple requests available from the Department of Commerce?s
Office of Antiboycott Compliance (OAC) in Washington, D.C. To obtain these
forms, telephone OAC?s Reports Processing Unit at (202) 482-2448. TRA reports
are filed with tax returns on IRS Form 5713. This form is available from local
IRS offices.
Penalties: The EAR prescribe the penalties for violations of the Antiboycott Regulations
as well as export control violations. These can include:
Criminal: The penalties imposed for each "knowing" violation
can be a fine of up to $50,000 or five times the value of the exports involved,
whichever is greater, and imprisonment of up to five years. During periods
when the EAR are continued in effect by an Executive Order issued pursuant
to the International Emergency Economic Powers Act, the criminal penalties
for each "willful" violation can be a fine of up to $50,000 and
imprisonment for up to ten years.
Administrative: For each violation of the EAR any or all of the following may be imposed:
General denial of export privileges;
The imposition of fines of up to $12,000 per violation;
and/or
Exclusion from practice.
Boycott agreements under the TRA involve the denial of all or part of the
foreign tax benefits discussed above.
The $10,000 maximum per violation specified in the EAA is adjusted periodically
pursuant to law for inflation. The maximum civil penalty for any violation
committed from October 23, 1996 through November 1, 2000 is $11,000 per violation.
The maximum civil penalty for any violation committed after November 1, 2000
is $12,000 per violation. ...
We believe in liberty and justice for all, so of course, we oppose many US government policies. This doesn't mean we're anti-American, redneck scum, pinko commies, militia members, or terrorist-sympathizers. It means we believe in freedom, as more than merely a clichi.
We believe you have the right to live your own life as you choose, and others have the equal right to live their lives as they choose. It's not complicated.
We believe freedom leads to peace, progress, and prosperity, while its opposite -- oppression -- leads to war, terrorism, poverty, and misery.
We believe it's preposterously stupid to hate people because of their appearance, their race or nationality, their religion or lack of religion, how they have sex with other consenting adults, etc. There are far more apropos reasons to hate most people.
We believe in questioning ourselves, our assumptions, each other -- and we especially believe in questioning authority (the more authority, the more questions). We believe obedience is a fine quality in dogs and young children, but not in adults.
Like America's right-wingers, we believe in
individual responsibility,
hard work to get ahead,
and stern punishment for serious crimes.
We believe big government should not be blindly trusted.
But unlike most right-wing leaders, we mean it.
Like America's left-wingers, we believe in
equal treatment under law,
war as a last (not first) resort,
and sensible stewardship of natural resources.
We believe big business should not be blindly trusted.
But unlike most left-wing leaders, we mean it.
Like libertarians, we believe it's wrong and reprehensible to arrest people for what they think, believe, look like, wear, eat, smoke, drink, inhale, inject, or otherwise do to themselves.
But unlike many libertarians, we're not obsessed with the gold standard, we don't believe incorporation is humanity's highest achievement, and we don't believe everything in life comes down to dollars and cents. We've read and enjoyed Ayn Rand's novels, but we understand that they're works of fiction.
We're skeptical, and we're sick of so-called 'journalists' who aren't skeptical at all.
A reader asks, what are our solutions? We propose no solutions except common sense, which is never common. We like the principles of democracy, and the ideals broadly described as 'American'. The US Constitution is a fine and workable framework for solutions, when it's actually read and thoughtfully understood by intelligent statesmen and women. So, no manifestos from us. We don't dream that big, and if there's one thing the world doesn't need it's yet another manifesto.
Our suggestion is: think. A fact-based instead of faith-based approach leads to solutions for most of the recurring issues of our time, from abortion to global climate change, pollution to universal health care, careful but real regulation of industry and economy, hunger, war, terror, human rights for humans not for corporations, science not religious doctrine in public schools, equal protection and prosecution under law, etc. Approach problems without glorifying stupidity, without demonizing intelligence, and answers usually come into focus.
These pages are published by Harry and Helen Highwater, happily married low-income nom de plumes and rabble-rousers from Madison, Wisconsin (with a few friends scattered around the world helping out).
We try to spotlight news that hasn't gotten enough (or appropriate) attention in American media, along with our opinions and yours.
We bang our keyboards against the wall, because it doesn't hurt as much as banging our heads.
