WASHINGTON (PTI) In probably the first major action of its kind against an Indian bank operating in the United States, the U.S, Commerce department has charged the New York branch of the Bank of Baroda with 87 violations of anti-boycott provisions — relating to compliance with the Arab boycott of Israel — of the U.S. Export administration act and regulations.
U.S. Commerce acting assistant secretary for export enforcement Douglas E. Lavin made this announcement, which could mean administrative sanctions of up to 870,000 dollars could be levied against the bank and its export privileges denied if it is found to have violated U.S. Law.
The anti-boycott regulations apply to all foreign boycotts that are directed at countries friendly to the United States and that are not sanctioned by U.S, Laws or regulations,
U.S. Export administration regulations prohibit U.S. banks from implementing letters of credit that contain prohibited boycott related conditions, The regulations also prohibits American citizens from refusing to do business with others because of foreign boycotts and from furnishing information about business relationships with boycotted countries and blacklisted companies.
Most members of the Arab League, including Oman and the United Arab Emirates, boycott goods and services from Israel.
Meanwhile in a charging letter filed with an administrative law judge, U.S. Commerce has alleged that the Bank of Baroda’s New York branch implemented 41 letters of credit containing boycott related conditions, compliance with which is prohibited under U.S. Law.
The letters of credit required exporters, banks and other persons involved in export sales to refuse to deal with blacklisted banks and insurance carriers, and to provide prohibited information about business relationships with Israel.
The department also alleged that the Bank of Baroda’s New York branch, in 46 instances, failed to report to the department its receipt of boycott-related requests, United States citizens are required to report promptly their receipt of boycott-related requests.
The alleged violations occurred between January 1986 and august 1989 in connection with letters of credit the New York branch of the Bank of Baroda received from affiliated banks in the United Arab Emirates and Oman.
The administrative law judge will determine whether the anti-boycott provisions have been violated, and if so, what penalties should be imposed.
The export administration regulations prohibit U.S. banks from implementing letters of credit that contain prohibited boycott related conditions.
Article extracted from this publication >> July 17, 1992
