ANTI-DEFAMATION LEAGUE OF B'NAI B'RITH, Hon. GERALD R. FORD, President of the United States, The White House, Washington, D.C. DEAR MR. PRESIDENT: The Anti-Defamation League of B'nai B'rith publicly welcomed your vigorous and timely statement last week to the American people respecting Arab boycott activities in the United States. You properly warned that foreign investment money is welcome in our country only so long as it is not used to discriminate against "certain institutions or individuals on religious or ethnic grounds". This letter, then, is pursuant to your admonition that domestic and foreign industry involved in such commercial transactions in the United States must operate within the Constitutional framework. We now report to you a concerted campaign among shipping companies, aided and abetted by American banks dealing in international commercial transactions, unlawfully to comply with Arab boycott regulations against the State of Israel. This widespread effort, in which American flag ships are participating daily violates U.S. maritime and other Federal laws. The United States Shipping Act of 1916 declares it to be unlawful for a carrier to discriminate "in any respect, for any reason, against any particular person, locality or description of traffic". (46 U.S.C. Sections 812 & 815) The U.S. Export Administration Act of 1969 declares it to be the "policy of the United States to oppose restrictive trade practices or boycotts fostered or imposed by foreign countries" against friendly nations, and requires that the Department of Commerce be notified of requests for such discriminatory compliance. Enclosed are copies of 14 documents, each a certification of boycott-compliance prepared by a different international steamship line. Each indicates unlawful participation in Arab boycott efforts against the State of Israel. Together, they constitute proof of a practice clearly in restraint of trade which affects the rights of American citizens and gains unfair advantage for those companies violating American law and public policy. The enclosures from the international steamship lines establish that it has become a custom-of-trade in transoceanic shipping to prepare boycott-compliance forms, pre-signed in mass numbers, in advance of shipments. Where so instructed by foreign buyers, American banks routinely require these forms as one of several documents to be submitted before honoring letters of credit. (Enclosed are four such bank documents which indicate participation in this concerted campaign by American banks). In other words, the banks affirmatively participate in Arab boycott by demanding boycott certifications as a prerequisite to the payment of letters of credit. With respect to the Export Administration Act, we spot-checked with four of the 14 shipping lines and were told by each that it had not complied with the reporting requirement to the U.S. Department of Commerce. In short, these boycott certifications are documented evidence of widespread and unlawful acceptance in two major industries-shipping and banking-of Arab boycott regulations which injure domestic American interests and those of a foreign nation friendly to the United States. We are forwarding a copy of this communication to the Chairman of the Federal Maritime Commission, Mrs. Helen D. Bentley, in whom reposes the responsibility for all regulatory aspects of the shipping industry. Because American-subsidized shipping lines are among the boycott participants, we are also sending a copy of this communication to Mr. Robert Blackwell, Assistant Secretary of Commerce in charge of Maritime Affairs. Copies, too, are being sent to the Chairman of appropriate Congressional Committees. May we respectifully urge that you order immediate corrective actions by the appropriate federal agencies. With personal regards, SEYMOUR GRAUBARD, National Chairman. To whom it may concern: BOISE-GRIFFIN STEAMSHIP CO., INC., To attest that the above captioned vessel is not owned by Israel or an Isareli citizen and to the best of our knowledge does not appear in the black list of the Office of Boycott of Israel deposited with the diplomatic and consular missions of Arab countries abroad. Further, this vessel will not call at any Israeli port on this voyage. BOISE-GRIFFIN STEAMSHIP CO., INC., General Agents for Concordia Line. CROSSOCEAN SHIPPING Co., INC., New York, N.Y. GENTLEMEN: We wish to confirm the above mentioned carrying vessel has not been blacklisted by the Arab countries abroad and is not scheduled to call at any Israel ports or navigate in Israeli waters prior to its arrival at the above mentioned port. Very truly yours, L. SPENCER, To Whom it May Concern: F. W. HARTMANN AND CO., INC., We hereby certify that to the best of our knowledge the above mentioned vessel is not included on the Arab boycott or Israeli black list. Nor is the vessel scheduled to call at any Israeli port during her voyage. Very truly yours, K. CROSSON, NEDLLOYD LINES INC., To Whom it May Concern: New York, N.Y. This is to certify that the above named vessel is not an Israeli vessel nor is she scheduled to call at any Israeli ports nor will she transit any Israeli waters during her present voyage. JOHN SALLEVELT, PERALTA SHIPPING CORP., New York, N.Y. To Whom it May Concern: We, the undersigned, certify that the vessel on the bill of lading is not the property of Israel or an Israeli subject and is not a black listed ship. In addition, this vessel, even if not belonging to Israel or to an Israeli subject, is not scheduled to call at an Israeli port before the discharge of the merchandise at the port of To Whom it May Concern: H. PAMINO, KERR STEAMSHIP CO., "This is to certify that the above vessel is not an Israeli ship. Nor is it scheduled to call at any Israeli port, or will she traverse Israeli waters during her voyage, and also that she is not to our best knowledge and belief, boycotted by the Arab League or blacklisted by an Arabian Government." Very truly yours, To Whom It May Concern: HELLENIC LINES LIMITED, Gentlemen: the following information concerning this vessel is true and correct. Flag: 1. This vessel is registered under the Greek flag. Israeli clause: 2. It will not call at any Israeli port prior to calling at the port of discharge named in the bill of lading. Arab League: 3. It is not blacklisted by the Arab League. Jordan: 4. It is not blacklisted by the government of Jordan. Cuban Clause: 5. This vessel has not called at any port in Cuba since January 1, 1963. Aid ban: 6. The vessel owner or operator certifies that the vessel which will perform under this contract is not a vessel which has been banned by AID for transporting and financed goods. The vessel operator further certifies that he assumes full responsibility for any claim filed by AID Washington or any other authority in case of violation of the requirement. 7. This vessel is a liner within the meaning of the institute classification clause. Very truly yours, F. VIVONA, Manager (Bill of Lading Dept.). BARBER STEAMSHIP LINES, INC., To Whom It May Concern: With reference to the vessel under caption, we hereby certify to the following: The vessel not owned by Israel. The vessel is not owned by an Israeli citizen. To the best of our knowledge the vessel does not appear in the black list of the office boycott of Israel, deposited with the diplomatic and consular missions of Arab countries abroad. The vessel is not scheduled to call at any Israeli port during her voyage. Manager, Bill of Lading Dept. STATES MARINE-ISTHMIAN AGENCY, INC., To Whom It May Concern: GENTLEMEN: The following information concerning this vessel is true and correct. Flag: 1. This vessel is enrolled under the United States Flag. Israel clause: 2. It will not call at any Israeli port prior to calling at the port of discharge named in this Bill of Lading. Arab League: 3. It is not blacklisted by the Arab League. Jordan: 4. It is not on the black list of the Government of Jordan. Liner 5. This shipment is based on Liner Terms and no Demurrage or despatch has been incurred at port of loading, nor will be incurred at discharge port. Cuban clause: 6. This vessel has not called at any port in Cuba, since January 1, 1963. Aid ban: 7. The vessel owner or operator, certifies that the vessel which will perform under this contract in not a vessel which has been banned by AID for transporting AID financed goods. The vessel owner or operator further certifies that they assume full responsibility for any claim filed by AID/Washington or any other Authority in case of violation of the requirement. Very truly yours, A. C. KELTY, BARBER STEAMSHIP LINES, INC., New York, N.Y. To Whom It May Concern: We wish to advise that this vessel is not an Israeli flag vessel and confirm that it will not call at any Israeli ports and is now blacklisted by the Saudi Arabian Government. To Whom It May Concern: IRVIN W. SHIELDS. CENTRAL GULF STEAMSHIP CORP., New York, N.Y. This is to certify that the above vessel is not scheduled to call at any Israeli Ports, nor is this vessel of Israeli registry. Yours very truly, WILLIAM G. MACK, Manager, Bill of Lading Department. To Whom It May Concern: AMERICAN EXPORT ISBRANDTSEN LINES INC., Shipment was not effected by an Israeli means of transportation. This vessel is not to call at any Israeli port and will not pass through the territorial waters of Israeli, prior to unloading in Lebanon, unless the ship is in distress or subject to force majeure. No transhipment is allowed unless the vessel is unable to proceed to destination because it is in distress or subject to force majeure. We hereby certify that the the best of our knowledge the vessel carrying the above mentioned goods is not included on the Arab Boycott Blacklist. Very truly yours, J. REYES-MONTBLANC, Manager, Outward Documentation and Rates. JAN C. UITERWYK Co., INC., This is to certify that the above vessel is a classified vessel plying in the regular liner service of south shipping lines (Iran Line) which is a member of the Regional Cooperative Development Service (R.C.D.), an agreement between Turkey, Iran, and Pakistan. To Whom It May Concern: LYKES BROS. STEAMSHIP Co., INC., New York, N.Y. We hereby certify that above named vessel is not of Israeli origin and will not call at any Israeli ports of call nor is it to the best of our knowledge blacklisted by the Arab Boycott Bureau of Israeli. Very truly yours, M. LATERZA. Senator WILLIAMS. Our next witness is Louis Aronson, president of the Ronson Corp. We are grateful for your appearance here, Mr. Aronson. STATEMENT OF LOUIS V. ARONSON, PRESIDENT, RONSON CORP. Mr. ARONSON. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, I am Louis V. Aronson II, president and key executive officer of Ronson Corp. I thank you for inviting me here today and welcome the opportunity to testify on S. 425, the Foreign Investment Act of 1975, introduced by Senator Harrison A. Williams, Jr. To aid your understanding of comments that I will make today related to S. 425, my opening remarks provide brief information about Ronson Corp. During the past two decades, Ronson has become a diversified, multinational corporation. Today Ronson has about 7,000 employees, more than half of whom are employed abroad in eight wholly owned foreign operating subsidiaries. Ronson's consolidated sales last year were about $128 million and our assets totaled about $100 million. In the early 1950's, Ronson was known as a one-product company associated with the Ronson cigarette lighter. Since that time, we have diversified our product line. Today our product line includes gas and electric appliances, rare earth metals and alloys, helicopter operations and services in the State of New Jersey, and hydraulic and pneumatic components for the aerospace industry. I would like at this time to give you some brief background about Ronson Corp. being a target company in a contested foreign tender offer and subsequent proxy contest. On May 31, 1973, a few hours after Ronson's annual meeting of stockholders had adjourned, Liquifin Aktiengesellschaft, Liechtenstein, a shell company of Liquigas S.p.A.. Italy, without prior notice and after many months of secret preparation, announced a tender offer to acquire 51.9 percent of the Ronson Corp. stock in order to gain control of the company. The company opposed the Liquifin offer, believing it to be illegal for, among other reasons, its (a) misleading statements, omissions, and insufficient disclosure of many material facts; and (b) noncompliance with various regulations of U.S. Government agencies, including those related to foreign control of U.S. corporations. In addition, the company's opposition was based on its belief that the Liquifin offering price was grossly inadequate and not in the best interest of the stockholders. Following a trial in the U.S. District Court for the District of New Jersey in early January 1974, a preliminary injunction granted on July 5, 1973, against the Liquifin tender offer was vacated on January 16, 1974, by order of the U.S. district court. This permitted Liquifin to solicit tenders and acquire Ronson shares pursuant to the tender offer. As a result of the tender offer being permitted to proceed, Liquigas acquired beneficial ownership of 1,604,000 shares of Ronson, or 36.4 percent of Ronson's outstanding stock. The contested tender offer, which was expired on May 10, 1974, was followed by a proxy contest during May-July 1974, causing the Ronson management to become engaged in further costly litigation. This litigation continues as well as the litigation resultant from the earlier tender offer and the various proceedings before certain Federal agencies. The proxy contest was won by the Ronson management in July 1974. The experience of a contested foreign tender offer has given me definite opinions about bill S. 425 as well as the current Williams Act. I believe it is appropriate in making my comments today on S. 425 to comment as well on the Williams Act, in that S. 425 and the Williams Act are inseparable. It is also appropriate that my comments focus on foreign investment made through a tender offer for control of, or as a substantial investment in, a public U.S. company, in particular, an offer conceived and formulated in secrecy. I prepared a statement of an outline of the points that I wished to make. This statement has two main purposes: First, to advise that Ronson supports S. 425 as a desirable effort to strengthen the Williams Act, and, secondly, to suggest additional provisions and modifications which, in our opinion, would complement and strengthen S. 425. There are eight separate areas in which recommendations are made. These are: 1. To change Federal regulations to require offeror to give several months' advance notice to the target company. 2. To require affirmative presidential action in order to permit a foreign investment of more than 5 percent to proceed. |