On June 5, 2017, Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Egypt, and Yemen, alleging that Qatar is funding terrorism and breaking regional unity, cut off diplomatic relations with the Qatari government and established a de facto blockade of Qatar’s air, sea, and land routes. The intent behind these collective actions is to politically isolate Qatar and adversely impact its government and economy in what could amount to a boycott of Qatar (‘Qatar Boycott’).
Since the initial actions by the five countries above, numerous additional countries, including Mauritius, Mauritania, the Maldives, and Libya’s eastern-based government have severed ties with Qatar. To date, the US government has not formally sanctioned the Qatar Boycott. Because many companies have operations in, or related to, these countries, companies should consider and monitor the developments in the region. Companies should also monitor any US government actions, and consider how the anti-boycott provisions of US tax law under Section 999 might apply.