US ANTI-BOYCOTT LAWS MAY COME INTO PLAY IN CRISIS
US, France, EU voice support for Kuwait mediation
DOHA, July 13, (Agencies): US Secretary of State Rex Tillerson left Qatar on Thursday after a tour of Gulf Arab countries aimed at easing the worst regional dispute in years, but made no comment on whether any progress had been made in resolving the month-long crisis.
Tillerson declined questions after meeting Qatar’s Amir, Sheikh Tamim bin Hamad al-Thani, to discuss Doha’s feud with four Arab states that cut ties with it on June 5 over allegations it funds extremist groups and is allying with their arch-foe Iran. Qatar denies this. “Hope to see you again under better circumstances,” the Amir’s brother, Sheikh Mohammad bin Hamad al-Thani said, seeing Tillerson off at the airport in Doha.
On Wednesday, Tillerson left the Saudi Red Sea city of Jeddah after talks with ministers from Saudi Arabia, Bahrain, the United Arab Emirates and Egypt, the four countries which have imposed travel and commercial sanctions on Qatar.
He had earlier signed a USQatari accord on terrorism financing in an effort to help ease the crisis, but Qatar’s opponents said it fell short of allaying their concerns. “No wavering on the 13 demands” the headline of the Abu Dhabi government-linked al-Ittihad newspaper read on Thursday, refering to a list of demands the Arab states had put to Qatar.
Tripartite talks aimed at resolving the Gulf rift through dialogue and diplomacy were held on Thursday between the representatives of Qatar, the US and Kuwait. The talks included Qatar’s Foreign Minister Sheikh Mohammad bin Abdulrahman al-Thani, Tillerson and Kuwait’s State Minister for Cabinet Affairs and Acting Information Minister Sheikh Mohammad Al-Abdallah Al-Sabah.
The meeting, which discussed the crisis amid Kuwaiti and international efforts to mediate a solution, was held in the attendence of the Amir of Qatar Sheikh Tamim bin Hamad al-Thani. The US chief diplomat, Tillerson, arrived in Doha earlier on Thursday bound from Kuwait, where he voiced support of Kuwait’s mediation efforts on the affair.
In Kuwait, he met with Acting Prime Minister and Foreign Minister Sheikh Sabah Khaled Al-Hamad Al- Sabah. Thursday’s talks come after Tillerson met his counterparts from Saudi Arabia, the UAE, Bahrain and Egypt in Jeddah in a bid to defuse tensions between that Arab quartet and Qatar.
Kuwait mediation hailed
EU High Representative Federica Mogherini and French President Emmanuel Macron discussed the situation in the Gulf during their meeting at the sidelines of the Balkan summit in the Italian city of Trieste Wednesday evening. “The importance of resolving the current crisis through political dialogue and support for mediation of Kuwait was highlighted”, said a statement released by Mogherini’s office in Brussels.
Last July 4th, Mogherini said the European Union was actively supporting the Kuwaiti mediation efforts to resolve the ongoing crisis in the Gulf. The EU foreign policy chief in a statement said she was taking part in a number of high level engagements to de-escalate the situation with the backing of the 28 EU Member States and she was in contact on a daily basis with all the relevant players including the foreign ministers of Kuwait, UAE, Saudi Arabia and Qatar.
US anti-boycott laws
As the Arabian Gulf crisis drags into a second month, a four-country boycott of Qatar is raising questions about whether American businesses that follow suit could unwittingly run afoul of US anti-boycott laws.
Under obscure tax and export provisions designed decades ago to protect Israel, US companies can be punished if they accept a foreign country’s demand to comply with a boycott not supported by the United States.
The provisions were established to ensure American firms aren’t used to advance another nation’s foreign policy.
Qatar has been under siege since early June, when Saudi Arabia, Bahrain, the United Arab Emirates and Egypt severed ties over claims the small, gas-rich monarchy was funding terrorism and breaking regional unity. They cut Qatar’s air, sea and land routes, creating a de facto blockade of the country. They are vowing to isolate Qatar economically until it heeds their demands.
Anti-boycott laws are complicated, but here’s the basic premise: If South Korea, for example, told American companies that to make money in South Korea, they can’t trade with North Korea, that probably wouldn’t cause problems. The US already restricts almost all commerce with North Korea. But if the Kremlin, for example, said the price of business in Russia is ending any business in neighboring Ukraine, a company agreeing to that would be violating American law. The US isn’t boycotting Ukraine.
While President Donald Trump has voiced support for the Saudi-led bloc, the United States isn’t backing the Qatar boycott. Tillerson has been shuttling around the Arabian Gulf region this week, seeking a diplomatic resolution.
That could put American companies in a difficult position, even if so far there haven’t been any public indications of Saudi Arabia or its allies issuing a Qatar-or-us ultimatum. “If you’re a company operating in those countries, your compliance people should be thinking about those questions, because you can stumble into those issues unknowingly,” said Brian Egan, who was the State Department’s top lawyer until January and now focuses on sanctions and export control at law firm Steptoe & Johnson.
Some groups, sympathetic to the concerns about Qatar, have been pressuring US businesses to cut ties. The Counter Extremism Project, which includes former Sen. Joe Lieberman and is run by former UN Ambassador Mark Wallace, sent letters to American Airlines and others warning them to stop dealing with Qatar earlier this month.
American Airlines wouldn’t say Wednesday if it would comply. Dozens of US companies do big business in Qatar, especially major energy conglomerates like Chevron Corp, ConocoPhillips and Exxon Mobil Corp — formerly run by Tillerson. Despite its anti-boycott laws, the United States has tried to pressure other countries into adhering to American embargoes. European nations complained for years about US efforts to get them to limit trade with Cuba. Washington has gone after foreign companies violating US sanctions on Iran, North Korea and other countries. But the US is the world’s largest market and has far more leverage than the four Arab countries squaring off against Qatar.
Given Trump’s position on the crisis, it’s unclear if his administration would punish US companies for cutting ties with Qatar. Eugene Cottilli, spokesman for the Commerce Department’s Bureau of Industry and Security, declined to comment on whether the anti-boycott provisions apply in this case. “Considering that we’re talking about national security and foreign policy, there’s a wide amount of discretion available to the administration,” said Dan Pickard, a trade attorney and anti-boycott expert at Wiley Rein. “However, if people engage in activity that’s prohibited, they do so at their peril.” The Qatar dispute looks set to drag on.
Tillerson spoke on the matter with Saudi Arabia’s king on Wednesday and will return to the Qatari capital of Doha Thursday, but US officials aren’t expecting a quick breakthrough. US anti-boycott provisions date back to the 1970s, when Arab League countries boycotted Israel. Infuriated by US support for the Jewish state in the 1973 Mideast War, Saudi Arabia and other Arab nations enacted an oil embargo against the United States. Fuel prices surged, most famously in the 1973 oil crisis.
US businesses must keep two laws in mind: the Export Control Act and the tax code. Violations can lead to businesses losing out on tax credits from the Treasury Department. But the Commerce Department can deliver more serious consequences, including fines, ending export privileges and referring potentially criminal violations to the Justice Department.
A few times each year, the US publishes a list of countries known to require participation in boycotts. The most recent list, from late March, includes Saudi Arabia and the UAE. Companies also must report to the US government any foreign requests to comply with a boycott. A Commerce Department website offers examples of problematic questions or clauses that Saudi Arabia and others have tried to stick into contracts over the years to force companies to join their Israel boycott.
Profits to be hit
Qatar Airways’ outspoken boss Akbar Al-Baker accused neighbouring Gulf states Thursday of “bullying” his country during the region’s political crisis and said his company’s profits would be hit by the dispute. Baker insisted that Qatar could sustain the impact of what he called a blockade imposed on Doha, but conceded that an impact on profits was inevitable for the Gulf carrier. “It has to (affect profits) because we have additional costs to operate in and out of the country,” he said.
“And this is normal when you are blockading somebody. They will have additional costs to operate in and out of the region.” Pressed on how much of an impact there would be, Baker declined to give numbers. Last month the airline announced profits of $540 million for the financial year to March 2017, a 22 percent increase on the previous 12-month period. But the airline faces a hit after the June 5 decision by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt to impose sanctions on Qatar, over accusations it supports Islamist extremism and was too close to Iran.
Among the sanctions was a decision to close the airspace of the countries to Qatar Airways. This means the Doha-based carrier can no longer continue its lucrative services to Dubai and Saudi Arabia, and has to divert some fl ights on longer routes because of airspace restrictions. Qatar denies the charges. Baker said Qatar could endure the crisis for “as long as it is there”.
“All the people have a normal life, all the supplies are available, actually more than what it was before, so what is the problem? “We need our neighbours to know that this kind of bullying doesn’t work because the people of Qatar are very robust and we have no issue to have our normal life. “This is a loss for them not for us.” He was speaking at a ceremony in Doha to show his company’s support for Qatari Amir Sheikh Tamim bin Hamad al-Thani. Qatar Airways unveiled the latest in a growing number of huge billboards that have sprung up around Doha depicting a profile of the Amir, with the words “Tamim the glory”. The image has become the symbol of the country’s defiance during the crisis and Qataris and non-Qataris have queued up to sign the boards expressing their support for the government.