Breaking News

Coty Warns of Possible Israel Boycott Violations

September 18, 2013

UAE unit could have violated US laws.

Fragrance and Middle East politics don't mix. Coty may face penalties that result in a material loss after its United Arab Emirates unit possibly violated US laws that prohibit participating in a boycott of Israeli products. The subsidiary may have certified on some invoices that its shipments didn’t contain any materials of Israeli origin, the New York-based cosmetics company said today in a filing with the US Securities and Exchange Commission. Such certifications are part of the Arab League's boycott of Israel and may violate US laws against participating in unsanctioned boycotts, Coty said.

“A penalty or penalties that would result in a material loss are reasonably possible” because of the potential infractions, Coty said in the filing, adding that no reserve to cover those charges has been created. The company said it will incur costs to improve its compliance procedures as well.
 

Coty also said its UAE unit reshipped some products to Syria and Iran, possibly violating US export laws. Coty said those incidents didn't violate trade sanctions and that it voluntarily reported them to US government authorities. The company also provided the government with the results of an internal investigation into goods sold in a more than four-year period through March 2012. It disclosed the probes in earlier filings.
 

“These investigations relate to a very small portion of our sales," Catherine Walsh, a Coty spokeswoman, said in an e-mail to Bloomberg. ‘‘The investigations are in an early phase and we are cooperating with the authorities in the ordinary course. As noted in our filings, we cannot predict when the investigations will conclude, whether fines will be assessed or the order of magnitude if assessed.’’

Related End-User Markets:

blog comments powered by Disqus
  • Why Look Good, When You Can Look Perfect?

    Why Look Good, When You Can Look Perfect?

    Tom Branna, Editorial Director||April 4, 2016
    A new way to try-before-you buy is capturing the attention of consumers and the beauty industry.

  • NYSCC Explores Product Innovation

    NYSCC Explores Product Innovation

    Christine Esposito, Associate Editor||March 14, 2016
    New product development, formulation expertise and proper preservation are topics of discussion at February monthly meeting.

  • What

    What's on Tap for 2016?

    Nancy Jeffries, Contributing Editor||February 8, 2016
    CEW and NPD present their beauty industry review and preview.

  • Who Makes That?

    Who Makes That?

    Tom Branna, Editorial Director||April 1, 2016
    From concept and formulation to testing and filling, today’s contract manufacturers perform a range of services for marketers

  • The Essence of Individuality

    The Essence of Individuality

    Melissa Meisel , Associate Editor||April 1, 2016
    Fragrance sales are fueled by unique facets.

  • Makeup Magic

    Makeup Magic

    Melissa Meisel, Associate Editor||March 1, 2016
    Sales get a lift from novel ingredients and endorsements from the likes of Gwen Stefani.