Christopher Yukins of Counsel at Arnold & Porter’s Washington office gave an update on the “Buy American” issue that AICC Professional Committee has been tracking for the past six months. His firm has been retained by Israel’s Ministry of Industry Trade & Labor to determine legal aspects of Israeli company participation in Economic Recovery Act funded projects that are intended to put Americans to work. He led a seminar in Tel Aviv last week sponsored by the Israel-America Chamber of Commerce that was attended by some 70 manufacturers in Israel who are very concerned about this issue.
Yukins pointed out that while Israel enjoys special status through the US-Israel Free Trade Agreement of 1985, and 37 US states agreed to join the Federal Government Procurement Agreement (GPA), the Israeli companies must be able to prove that “substantial transformation” has been done to their product in the US to qualify and defend against the threat of the civil fraud statute for false claims. The EPA has produced a checklist that can provide guidance on compliance, and while there is no safe harbor for the Israeli companies, they could claim that they are Economic Recovery Act compliant by following these procedures. For view of this document, click here.