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As if the Israeli-Palestinian conflict could get any murkier, now American states are battling with American companies over the issue. South Carolina became the latest state to pass a law allowing the state to boycott businesses that boycott Israel.
While the Illinois statute is limited to compelling public-employee pension funds to divest from companies boycotting Israel, South Carolina's new measure actually prohibits the state from contracting with any companies engaged in a wide array of boycotts. Specifically:
A public entity may not enter into a contract with a business to acquire or dispose of supplies, services, information technology, or construction unless the contract includes a representation that the business is not currently engaged in, and an agreement that the business will not engage in, the boycott of a person or an entity based in or doing business with a jurisdiction with whom South Carolina can enjoy open trade.
So if your business decides to boycott Israel, the state of South Carolina is required to boycott your business.
These recent anti-boycott laws come in response to what Israeli Prime Minister Benjamin Netanyahu has identified the global trend to boycott, divest and sanction Israel, otherwise called the BDS movement. The movement aims to punish Israel for continued construction of settlements in the contested West Bank.
With other states are researching similar laws, business with state contracts and strong opinions on the conflict between Israel and Palestine may need to weigh which is more important. And companies who do business both overseas and with the state may want to consult with an experienced international law attorney before wading into the boycott waters.
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