You’ve Been Asked To Boycott – What To Know Before You Self‑Disclose

Companies engaged in international trade occasionally encounter requests that raise red flags under the U.S. anti‑boycott regulations. Whether the request appears in a tender document, a purchase order, a letter of credit, oral agreement, verbal request to furnish particular information, or a casual email, the moment you spot boycott‑related language, and become aware that your organization has complied with the request, the clock starts ticking to self-disclose to the Office of Antiboycott Compliance (OAC). One of the most powerful tools available to companies is the Voluntary Self‑Disclosure (VSD) process under 15 C.F.R. § 764.8, administered by the Office of Antiboycott Compliance (OAC). Used correctly, a VSD can dramatically mitigate penalties and demonstrate a strong compliance posture. 

Timing, content, and execution matter. Here’s what you need to know before you self‑disclose. 

Timing 

A VSD must be submitted before the government learns of the same potential violation through other channels: 

1) Its own investigation of the same conduct 

2) Receipt of information from another source (i.e., whistleblower, competitor, etc.) 

If you’ve already triggered another form of disclosure or inquiry, you may lose eligibility for the benefits of a VSD. 

A VSD will not be accepted if the individual making the disclosure did so without the full knowledge and authorization of the firm’s senior management or a person with authority to make such disclosures.  

Procedure 

Step 1: Initial Notification 

While you might be alarmed that you’ve received a reportable request, don’t write to the Office of Export Enforcement (OEE) before conducting a thorough review of all transactions within the past five years from either the date the company receives the boycott-related request or requirement, or the date of the initial notification – whichever captures the broadest look-back. Once your review is complete, the company must submit the initial notification in writing (mailed or e-mailed) to the contact provided by OEE. This notification should include the name of the person making the disclosure and a brief description of the suspected violations. The notification should also describe the general nature and extent of the violations. However, to avoid inadvertently submitting a completed disclosure when you only intended to file an initial notification, refrain from sharing the complete narrative account, explained below, during this first notification. Where it is not practical to make an initial notification in writing, the person making the notification should confirm the oral notification in writing as soon as possible. 

Step 2: Full Narrative 

A strong VSD is more than a confession—it’s a structured, persuasive submission that shows your company takes compliance seriously. Each VSD must contain, 1) the written narrative, 2) the requisite documentation, and 3) a certification. The full narrative account must be received by OEE within 180 days of the initial notification date, absent an extension from the Director of the OEE. Failure to furnishthe full narrative to the OEE in a timely manner can reduce or eliminate the mitigating impact of the voluntary disclosure. 

The Narrative 

Every written narrative must identify how the boycott request was received, clearly and chronologically; explain how the company responded (or failed to respond) and outline all corrective actions that were taken or will be taken. The narrative must also comprehensively identify individuals and organizations (i.e., names, complete addresses, etc.) of the individuals and organizations – foreign or domestic – involved in the activities that gave rise to the violations. Finally, the narrative allows you to describe other mitigating factors in your favor (i.e., no prior violations, novice exporter, etc).  

Requisite Documentation 

OAC expects supporting materials related to the violation(s), which may include: 

• Copies of the boycott request, certifications, or declarations 

• Emails, contracts, or other correspondence 

• Internal reports or compliance assessments 

• Policies or training materials relevant to the incident 

• Other evidence of written or oral communications and negotiations 

• Purchase orders, invoices, bid requests, letters of credit and brochures 

Certification 

A senior official must sign and certify that all of the representations made in connection with the voluntary self-disclosure are true and correct to the best of that person’s knowledge and belief. 

Oral Presentations (Rarely Needed) 

While OAC may allow oral presentations, they are almost never required and rarely recommended unless the facts are unusually complex or sensitive. Most cases are resolved entirely on the written record. 

When OAC Takes Action & What Happens After You File 

Once OAC receives your VSD, it evaluates the submission under the criteria in Supplement No. 2 to Part 766 of the EAR. During this process, OAC transmits all contents of the VSD to the Bureau of Industry and Security (BIS), which is the agency that ultimately makes penalty determinations in the settlement of administrative enforcement cases. The factors influencing BIS’ decisions include: i) the nature and degree of seriousness of the violation; ii) whether the violation was intentional, iii) the company’s compliance history; iv) the quality and completeness of the VSD; and v) whether remedial actions taken.  

Typically, in cases that do not involve knowing violations, BIS will seek a settlement for payment of a civil penalty (unless the matter is resolved with a warning letter – explained below). However, in cases involving knowing violations, conscious disregard of the antiboycott provisions, or other such serious violations, BIS is more likely to seek a denial of export privileges or an exclusion from practice, and/or a greater monetary penalty, as BIS considers such violations particularly egregious.  

While the “seriousness” of the violation is staggered into three categories – A (the most serious), B, and C – BIS is not obligated to follow the penalties respective to each. Meaning, BIS could determinethat the violation was only a Category B offense, but impose Category A penalties (i.e., large monetary penalties, or revocation of export privileges) because the company failed to adequately mitigate past offenses or prevent future incidents. 

Mitigation Impact: Why a VSD Matters 

A properly filed VSD can significantly reduce penalties. In many cases, a VSD can mean the difference between a civil penalty and a warning—or even no action at all. 

BIS also recognizes other non-VSD actions as mitigating factors to a boycott-related penalty: an effective compliance program, limited business with or within boycotted or boycotting countries, history of compliance with the antiboycott provisions, cooperation with the investigation, clarity of request to furnish prohibited information, passive refusal to do business in connection with the agreement, and isolated occurrence of violations.  

Possible Outcomes 

While OAC does not publish comprehensive statistics, historical enforcement trends provide insight into the range of outcomes: 

1. No Action 

• Occurs when the violation is minor, unintentional, and fully remediated. 

• More likely when the VSD is thorough and timely; rarely occurs when alleged violating party does not meet the definition of “US Person.” 

2. Warning Letter 

• Common for first‑time or low‑severity violations. 

• Signals that OAC expects improved compliance but imposes no penalty. 

3. Charging Letter + No Penalty / Settlement 

• OAC may issue a charging letter but agree to settle with no monetary penalty. 

• Often reflects strong cooperation and corrective action. 

4. Charging Letter + Settlement with Penalty 

• Monetary penalties may be imposed, though often significantly mitigated. 

• Penalties can vary widely depending on the severity and number of violations. 

5. Referral to DOJ for Criminal Prosecution 

• Reserved for knowing and willful violations. 

• Extremely rare in the boycott context but possible in egregious cases. 

Final Thoughts: Don’t Navigate This Alone 

A boycott request can put your company at risk for reputational and severe financial harm, even if you never intended to violate U.S. law. The VSD process is a powerful tool—but only when used correctly, strategically, and promptly. 

At Diaz Trade Law, we have extensive experience in helping companies  

• Assess whether a VSD is appropriate 

• Prepare complete, persuasive disclosures 

• Communicate effectively with OAC, and 

• Strengthen compliance programs to prevent future issues 

If you’ve received a boycott request—or think you may have—contact us today before taking action. The earlier you act, the more options you have. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.