Comments on: U.S. Threatens Secondary Boycott of Companies Doing Business in Iran

By: ExportLawBlog » OMV to State: Pound Sand

ExportLawBlog » OMV to State: Pound Sand — Tue, 19 Jun 2007 00:36:39 +0000

[...] Last week we reported on increased jawboning by the State Department, which has been threatening to impose sanctions under the Iran Sanctions Act on foreign oil companies that do business in Iraq. One target singled out by State is the Austrian oil company OMV. In a daily press briefing, State Department spokesman Sean McCormack had this to say: Well, we have talked to I think — the company is OMV. We’ve talked to the Austrian Government about these negotiations. I understand that OMV has recently signed a preliminary deal . . . [W]e would question why at this point given Iran’s behavior in the international community . . . [it] would want to encourage these sorts of business dealings with Iran at this . . . particular time. [...]

By: Clif Burns

Clif Burns — Thu, 14 Jun 2007 15:41:34 +0000

No, Mike, the analysis in that article would not lead to the conclusion that the DPL and SDN list violate the GATT. First, remember that primary boycotts against non-WTO members (such as Iran) don’t violate the GATT in the first place. Second, the issue for both primary and secondary boycotts is whether the fit within the exception under Article XXI relating to national security. A better argument can be made under Article XXI for a primary boycott than for a secondary boycott since trading with the WTO-member firm doesn’t directly pose a security threat to the US. So there is a colorable argument for the SDN list; not so much for a secondary boycott applied to firms in WTO member states.

By: Hackmed Shalalobod

Hackmed Shalalobod — Thu, 14 Jun 2007 15:19:01 +0000

I think it will help lower gas prices in the US.

By: Mike Deal

Mike Deal — Thu, 14 Jun 2007 14:49:42 +0000

The professor’s article does not entirely accurately describe the boycott. While third country companies can be blacklisted because of their relationship with Israel, a CIA report dated 1982 that I saw when still at Commerce in the mid80s founf that the vast majority of US companies on the blacklist were there because of procedural violations of the boycott, most notably failure to reply to a boycott questionnaire or similar name inquiry, rather than because of their trade with Israel. Thus, the blacklist is in part equivalent to the Commerce DPL and OFAC’s SDNL, which, if the balance of the professor’s article is correct in its analysis, would also violate WTO rules.

By: Mike Deal

Mike Deal — Thu, 14 Jun 2007 14:38:40 +0000

It should be remembered that the EU has already adopted blocking legislation, EU Regulation 96/2271, and certain members have adopted even more comprehensive blocking legislation, such as the UK Protection of Trading Interests Act. An appendix to 96/2271 specifically identified the predecessor to ISA, ILSA, as foreign legislation, compliance with which would violate 96/2271. Enforcement of ISA would trigger EU 96/2271, which, among other things would prevent cooperation with US enforcement actions and agencies, customs cooperation treaties notwithstanding, by both government agencies and businesses and individuals. Indeed, under the EU reg, an EU person has an enforceable right to demand non-compliance with a US investigation or enforcement action. If the Bushies make good on their threat of unilateral sanctions, this could set up a dispute that would make the Siberian gas pipeline dispute in the early 80s under Reagan look like a friendly disagreement.

By: ExportLawBlog: U.S. Threatens Secondary Boycott of Companies Doing Business in Iran » Royal Dutch Shell plc .com

Thu, 14 Jun 2007 12:27:13 +0000

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