In an article published in the Daily Business Review, Lazaro I. Vazquez and Francis E. Rodriguez discuss how U.S. anti-boycott laws can have consequences for those seeking to do business with foreign parties. The Israel Anti-Boycott Act, a bill in Congress considered by some to protect the interests of the United States and by others to violate the First Amendment right to free speech, has brought these issues to light.
Vazquez and Rodriguez caution practitioners negotiating cross-border deals to pay special attention to local clauses and their application to avoid penalties imposed by the U.S. Treasury. Consequences could include a partial loss of foreign tax credits and treatment of certain boycott-related income as Subpart F income. One way to avoid penalties would be to “except out” compliance penalized by U.S. law. Phrases such as “except to the extent such compliance is penalized under the law of the United States” or “except to the extent inconsistent with U.S. law” may be sufficient.
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About Francis E. Rodriguez
Francis E. “Frank” Rodríguez is the Managing Partner in the Miami office of Shutts & Bowen LLP, where he is Co-Chair of the Tax and International Law Practice Group. Frank represents non-resident individuals and foreign corporations with inbound tax planning, and U.S. individuals and domestic corporations with outbound tax planning. He counsels international families in succession planning, trust issues, and federal tax reporting, including voluntary self-disclosures. In connection with his international practice, Frank represents acquirers and sellers of multi-national businesses.
About Lazaro I. Vazquez
Lazaro I. Vazquez is an attorney in the Miami office of Shutts & Bowen, where he is a member of the Corporate Practice Group.
About Shutts & Bowen LLP
Established in 1910, Shutts & Bowen is a full-service business law firm with more than 260 lawyers with offices in Fort Lauderdale, Jacksonville, Miami, Orlando, Sarasota, Tallahassee, Tampa and West Palm Beach. Learn more about Shutts & Bowen at www.shutts.com.