Saudi Arabia Pledges to Not Enforce Arab Boycott against U.S. Companies

By Fahad Saghir*

In an agreement reached between the United States and the Kingdom of Saudi Arabia (KSA), KSA has confirmed that it will not apply the secondary and tertiary aspects of the Arab Boycott of Israel. The agreement was reached on September 9, 2005 as a condition for KSA’s accession to the World Trade Organization (WTO). The General Council or the Ministerial Conference has yet to approve the accession package.

The primary boycott prohibits the importation of any Israeli goods. The secondary boycott discriminates against foreign companies that do business with Israel. The tertiary boycott prohibits business with companies that conduct business with other companies that conduct business with Israel. Since this boycott affects trade with Israel, the U.S. has always opposed the boycott.

Not all Arab countries have enforced the boycott. For example in 1996, Oman and Qatar signed trade agreements with Israel. Saudi Arabia has not always enforced the secondary and tertiary boycott. Saudi Arabia has, however, enforced the primary boycott, banning companies from exporting goods to Saudi Arabia if those goods were imported from Israel. Generally, the ban is removed once the company agrees to halt importation of Israeli goods into the Kingdom.

For more information, please contact Conan Grames at cgrames@kmclaw.com

*Fahad Saghir is a third year student at BYU's J. Reuben Clark Law School and extern with Kirton & McConkie.