The US government has imposed a civil penalty on a Pennsylvania-based firm after one of its overseas subsidiaries repeatedly violated American legal restrictions regarding the Arab boycott of Israel.
In a settlement announced last month, Colorcon, Inc., a century-old manufacturer of inks and coatings for the food and pharmaceutical industries, agreed to pay $39,000 in fines to settle charges leveled against it by the US Department of Commerce's Bureau of Industry and Security (BIS).
The BIS, which oversees enforcement of US antiboycott regulations, had alleged that Colorcon's wholly-owned subsidiary in the United Kingdom had committed 21 violations of the law between 2001 and 2005 in a series of dealings with Syria.
These included providing written assurances to the Syrians that the company's products did not contain materials manufactured in Israel, as well as an undertaking that Colorcon would comply with Damascus's boycott of Israel.
According to the Commerce Department, the company also failed to report the receipt of requests from Syria "to engage in a restrictive trade practice or boycott."
Various Muslim and Arab states regularly ask foreign firms to supply documentation confirming that they have no business or financial ties to Israel. US law requires American companies, as well as their subsidiaries, to report requests for such information to the Commerce Department.
Afterward, the company voluntarily disclosed the violations to the government, which acknowledged that Colorcon had "cooperated fully with the subsequent investigation."
In an interview with The Jerusalem Post, Pam Lehrer, general counsel for the Berwind Group, a private investment firm that owns Colorcon, said the violations had been the result of an oversight.
"This matter occurred at Colorcon's UK subsidiary," she said. "The requests were typically in the fine print of the terms and conditions, and the UK subsidiary's employees were not aware of the requirement to look carefully for these matters and report them.
"We became aware of the issue through an internal audit review," Lehrer said, adding: "We felt it was important to review our compliance with the antiboycott laws and performed an audit of our subsidiaries. As a result, we found the issue and voluntarily reported it to the US Commerce Department."
Lehrer said a number of steps have since been taken to ensure that the firm complies with US antiboycott laws.
"We adopted a more stringent compliance program and trained all relevant Colorcon and Colorcon UK employees to ensure full compliance," she said.