By  on January 12, 1994

PARIS -- L'Oreal is back on the firing line.

The completion on Nov. 2 of a long-awaited report concluding that the cosmetics giant broke French laws by cooperating with an Arab League boycott against Israel has reignited a nasty three-year controversy pitting L'Oreal against French-Jewish organizations and involving Israel.

In addition, the U.S. Commerce Department has been asked to look into the report, according to an executive at the American Jewish Congress.

News accounts of the report began appearing in the French press last week.

"The top managers at L'Oreal clearly expressed their intention to follow the rules of the very boycott that French legislation had no less clearly condemned," wrote David Ruzie, a French professor of international law, who prepared the report and who was a co-author of France's 1977 anti-boycott law.

Although L'Oreal agreed in December 1991 to have an independent investigator look into the closing in 1989 of a Helena Rubinstein factory in Israel and its correspondence with the Arab League, the company Monday rejected Ruzie's report.

"We never accepted Mr. Ruzie as the investigator. He showed himself to be biased from the start," said Gerard Unger, a L'Oreal spokesman.

"Furthermore, his report is incomplete and does not shed any new light on this matter," Unger continued. "We have seen all these documents before."

Ruzie conceded that he had analyzed only documents that had been leaked to the press. Most of them, including letters from L'Oreal executives responding to questionnaires from Arab officials, belonged to papers seized during court-ordered searches of L'Oreal headquarters and homes of executives in March 1991.

Ruzie said L'Oreal could not be prosecuted in France, however, because the law's three-year statute of limitations had expired.

According to Will Maslow, general counsel of the American Jewish Congress in New York, the Commerce Department is weighing a request to investigate whether Cosmair Inc., the American licensee of L'Oreal, violated U.S. laws prohibiting participation in the Arab League boycott of Israel.

The request was made two months ago by Gil Frydman, a nephew of Jean and David Frydman, who were involved in a dispute that is at the root of the controversy.

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