2023-21171. Order Renewing Temporary Denial of Export Privileges; UTair Aviation JSC, Khanty-Mansiysk Airport, Tyumen Region, Russia 628012

Pursuant to section 766.24 of the Export Administration Regulations, 15 CFR parts 730–774 (“EAR” or “the Regulations”),^[1] I hereby grant the request of the Office of Export Enforcement (“OEE”) to renew the temporary denial order (“TDO”) issued in this matter on October 3, 2022. I find that renewal of this order is necessary in the public interest to prevent an imminent violation of the Regulations and that renewal for an extended period is appropriate because UTair Aviation JSC (“UTair”) has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR.

I. Procedural History

On April 7, 2022, I signed an order denying UTair's export privileges for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The order was issued ex parte pursuant to section 766.24(a) of the Regulations and was effective upon issuance.^[2] This temporary denial order was subsequently renewed in accordance with section 766.24(d) of the Regulations.^[3] The renewal order issued on October 3, 2022 and was effective upon issuance.^[4] A second renewal order issued on March 29, 2023 and was also effective upon issuance.^[5]

On September 5, 2023, BIS, through OEE, submitted a written request for renewal of the TDO that issued on March 29, 2023. The written request was made more than 20 days before the TDO's scheduled expiration and, given the temporary suspension of international mail service to Russia, OEE has attempted to deliver a copy of the renewal request to UTair by alternative means in accordance with sections 766.5 and 766.24(d) of the Regulations. No opposition to the renewal of the TDO has been received.

II. Renewal of the TDO

A. Legal Standard

Pursuant to section 766.24, BIS may issue an order temporarily denying a respondent's export privileges upon a showing that the order is necessary in the public interest to prevent an “imminent violation” of the Regulations, or any order, license or authorization issued thereunder. 15 CFR766.24(b)(1) and 766.24(d). “A violation may be `imminent' either in time or degree of likelihood.” 15 CFR 766.24(b)(3). BIS may show “either that a violation is about to occur, or that the general circumstances of the matter under investigation or case under criminal or administrative charges demonstrate a likelihood of future violations.” Id. As to the likelihood of future violations, BIS may show that the violation under investigation or charge “is significant, deliberate, covert and/or likely to occur again, rather than technical or negligent[.]” Id. A “lack of information establishing the precise time a violation may occur does not preclude a finding that a violation is imminent, so long as there is sufficient reason to believe the likelihood of a violation.” Id.

If BIS believes that renewal of a denial order is necessary in the public interest to prevent an imminent violation, it may file a written request for renewal, with any modifications if appropriate. 15 CFR 766.24(d)(1). The written request, which must be filed no later than 20 days prior to the TDO's expiration, should set forth the basis for BIS's belief that renewal is necessary, including any additional or changed circumstances. Id. “In cases demonstrating a pattern of repeated, ongoing and/or continuous apparent violations, BIS may request the renewal of a temporary denial order for an additional period not exceeding one year.” ⁶ Id.

B. The TDO and BIS's Request for Renewal

The U.S. Commerce Department, through BIS, responded to the Russian Federation's (“Russia's”) further invasion of Ukraine by implementing a sweeping series of stringent export controls that severely restrict Russia's access to technologies and other items that it needs to sustain its aggressive military capabilities. These controls primarily target Russia's defense, aerospace, and maritime sectors and are intended to cut off Russia's access to vital technological inputs, atrophy key sectors of its industrial base, and undercut Russia's strategic ambitions to exert influence on the world stage. Effective February 24, 2022, BIS imposed expansive controls on aviation-related ( e.g., Commerce Control List Categories 7 and 9) items to Russia, including a license requirement for the export, reexport or transfer (in-country) to Russia of any aircraft or aircraft parts specified in Export Control Classification Number (“ECCN”) 9A991 (section 746.8(a)(1) of the EAR).^[7] BIS will review any export or reexport license applications for such items under a policy of denial. See section 746.8(b). Effective March 2, 2022, BIS excluded any aircraft registered in, owned, or controlled by, or under charter or lease by Russia or a national of Russia from being eligible for license exception Aircraft, Vessels, and Spacecraft (“AVS”) (section 740.15 of the EAR).^[8] Accordingly, any U.S.-origin aircraft or foreign aircraft that includes more than 25% controlled U.S.-origin content, and that is registered in, owned, or controlled by, or under charter or lease by Russia or a national of Russia, is subject to a license requirement before it can travel to Russia.

OEE's request for renewal for a period of one year is based upon the facts underlying the issuance of the initial TDO and the renewal order subsequently issued in this matter on October 3, 2022, as well as other evidence developed during this investigation. These facts and evidence demonstrate that UTair has continued, and continues, to act in blatant disregard for U.S. export controls and the terms of previously issued TDOs. Specifically, the initial TDO, issued on April 7, 2022, was based on evidence that UTair engaged in conduct prohibited by the Regulations by operating multiple aircraft subject to the EAR and classified under ECCN 9A991.b on flights into Russia after March 2, 2022 from destinations including, but not limited to, Jeddah, Saudi Arabia, Yerevan, Armenia, and Tashkent, Uzbekistan, without the required BIS authorization.^[9] Further evidence submitted by BIS indicated that UTair was continuing to operate aircraft subject to the EAR domestically on flights within Russia, potentially in violation of section 736.2(b)(10) of the Regulations.

As discussed in the October 3, 2022 and March 29, 2023 renewal orders, evidence presented by BIS indicated that, after the initial order issued, UTair continued to operate aircraft subject to the EAR and classified under ECCN 9A991.b on flights both into and out of Russia, in violation of the Regulations and the TDO itself.^[10] Specifically, the October 3, 2022 renewal order detailed UTair's continued operation of aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Yerevan, Armenia, Baku, Azerbaijan, and Tashkent, Uzbekistan.^[11] Similarly, the March 29, 2023 renewal order detailed UTair's continued operation of aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Yerevan, Armenia, Baku, Azerbaijan, Dushanbe, Tajikistan, and Dubai, United Arab Emirates.^[12]

Since that time, UTair has continued to engage in conduct prohibited by the applicable TDO and Regulations. In its September 5, 2023 request for renewal of the TDO, BIS submitted evidence that UTair is operating aircraft subject to the EAR and classified under ECCN 9A991.b, both on flights into and within Russia, in violation of the March 29, 2023 TDO and/or the Regulations. Specifically, BIS's evidence and related investigation demonstrates that UTair has continued to operate aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Yerevan, Armenia, Baku, Azerbaijan, Dushanbe, Tajikistan, Istanbul, Turkey, Tashkent, Uzbekistan, and Dubai, United Arab Emirates. Information about those flights includes, but is not limited to, the following:

Tail No.	Serial No.	Aircraft type	Departure/arrival cities	Dates
RA–73089	37552	737–8GU (B738)	Dushanbe, TJ/Moscow, RU	August 28, 2023.
RA–73089	37552	737–8GU (B738)	Khujand, TJ/Moscow, RU	August 29, 2023.
RA–73089	37552	737–8GU (B738)	Tashkent, UZ/Ufa, RU	August 31, 2023.
RA–73089	37552	737–8GU (B738)	Istanbul, TR/Grozny, RU	September 2, 2023.
RA–73089	37552	737–8GU (B738)	Istanbul, TR/Grozny, RU	September 4, 2023.
RA–73089	37552	737–8GU (B738)	Samarkand, UZ/Moscow, RU	September 5, 2023.
RA–73089	37552	737–8GU (B738)	Istanbul, TR/Grozny, RU	September 19, 2023.
RA–73087	29936	737–8AS (B738)	Dushanbe, TJ/Moscow, RU	August 28, 2023.
RA–73087	29936	737–8AS (B738)	Baku, AZ/Moscow, RU	September 1, 2023.
RA–73087	29936	737–8AS (B738)	Samarkand, UZ/Moscow, RU	September 2, 2023.
RA–73087	29936	737–8AS (B738)	Yerevan, AM/St. Petersburg, RU	September 5, 2023.
RA–73087	29936	737–8AS (B738)	Baku, AZ/St. Petersburg, RU	September 7, 2023.
RA–73087	29936	737–8AS (B738)	Antalya, TR/Surgut, RU	September 11, 2023.
RA–73087	29936	737–8AS (B738)	Yerevan, AM/Moscow, RU	September 15, 2023.
RA–73085	32779	737–8AS (B738)	Baku, AZ/Moscow, RU	August 28, 2023.
RA–73085	32779	737–8AS (B738)	Baku, AZ/Moscow, RU	August 30, 2023.
RA–73085	32779	737–8AS (B738)	Dubai, AE/Tyumen, RU	September 1, 2023.
RA–73085	32779	737–8AS (B738)	Baku, AZ/Moscow, RU	September 6, 2023.
RA–73085	32779	737–8AS (B738)	Bukhara, UZ/Moscow, RU	September 12, 2023.
RA–73085	32779	737–8AS (B738)	Baku, AZ/Moscow, RU	September 15, 2023.
RA–73086	32780	737–8AS (B738)	Samarkand, UZ/Moscow, RU	August 26, 2023.
RA–73086	32780	737–8AS (B738)	Istanbul, TR/Grozny, RU	August 29, 2023.
RA–73086	32780	737–8AS (B738)	Baku, AZ/Moscow, RU	September 3, 2023.
RA–73086	32780	737–8AS (B738)	Samarkand, UZ/Moscow, RU	September 6, 2023.
RA–73086	32780	737–8AS (B738)	Dushanbe, TJ/Moscow, RU	September 8, 2023.
RA–73086	32780	737–8AS (B738)	Yerevan, AM/St. Petersburg, RU	September 12, 2023.
RA–73086	32780	737–8AS (B738)	Baku, AZ/Moscow, RU	September 16, 2023.

III. Findings

Under the applicable standard set forth in section 766.24 of the Regulations and my review of the entire record, I find that the evidence presented by BIS convincingly demonstrates that UTair has acted in violation of the Regulations and the TDO; that such violations have been significant and deliberate; and that given the foregoing and the nature of the matters under investigation, there is a likelihood of imminent violations. Moreover, I find that renewal for an extended period is appropriate because UTair has engaged in a pattern of repeated, ongoing and/or continuous apparent violations of the EAR. Therefore, renewal of the TDO for one year is necessary in the public interest to prevent imminent violation of the Regulations and to give notice to companies and individuals in the United States and abroad that they should avoid dealing with UTair, in connection with export and reexport transactions involving items subject to the Regulations and in connection with any other activity subject to the Regulations.

IV. Order

It is therefore ordered:

First, UTair Aviation JSC, Khanty-Mansiysk Airport, Tyumen Region, Russia 628012, when acting for or on their behalf, any successors or assigns, agents, or employees may not, directly or indirectly, participate in any way in any transaction involving any commodity, software or technology (hereinafter collectively referred to as “item”) exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR including, but not limited to:

A. Applying for, obtaining, or using any license (except directly related to safety of flight), license exception, or export control document;

B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations, or engaging in any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or

C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or from any other activity subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations.

Second, that no person may, directly or indirectly, do any of the following:

A. Export, reexport, or transfer (in-country) to or on behalf of UTair any item subject to the EAR except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;

B. Take any action that facilitates the acquisition or attempted acquisition by UTair of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby UTair acquires or attempts to acquire such ownership, possession or control except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;

C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from UTair of any item subject to the EAR that has been exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations;

D. Obtain from UTair in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations; or

E. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by UTair, or service any item, of whatever origin, that is owned, possessed or controlled by UTair if such service involves the use of any item subject to the EAR that has been or will be exported from the United States except directly related to safety of flight and authorized by BIS pursuant to section 764.3(a)(2) of the Regulations. For purposes of this paragraph, servicing means installation, maintenance, repair, modification, or testing.

Third, that, after notice and opportunity for comment as provided in section 766.23 of the EAR, any other person, firm, corporation, or business organization related to UTair by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business may also be made subject to the provisions of this Order.

In accordance with the provisions of sections 766.24(e) of the EAR, UTair may, at any time, appeal this Order by filing a full written statement in support of the appeal with the Office of the Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 South Gay Street, Baltimore, Maryland 21202–4022.

In accordance with the provisions of section 766.24(d) of the EAR, BIS may seek renewal of this Order by filing a written request not later than 20 days before the expiration date. A renewal request may be opposed by UTair as provided in section 766.24(d), by filing a written submission with the Assistant Secretary of Commerce for Export Enforcement, which must be received not later than seven days before the expiration date of the Order.

A copy of this Order shall be provided to UTair, and shall be published in the Federal Register .

This Order is effective immediately and shall remain in effect for one year.

Matthew S. Axelrod,

Assistant Secretary of Commerce for Export Enforcement.

Footnotes

1.  On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which includes the Export Control Reform Act of 2018, 50 U.S.C. 4801–4852 (“ECRA”). While section 1766 of ECRA repeals the provisions of the Export Administration Act, 50 U.S.C. App. 2401 et seq. (“EAA”), (except for three sections which are inapplicable here), section 1768 of ECRA provides, in pertinent part, that all orders, rules, regulations, and other forms of administrative action that were made or issued under the EAA, including as continued in effect pursuant to the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq. (“IEEPA”), and were in effect as of ECRA's date of enactment (August 13, 2018), shall continue in effect according to their terms until modified, superseded, set aside, or revoked through action undertaken pursuant to the authority provided under ECRA. Moreover, section 1761(a)(5) of ECRA authorizes the issuance of temporary denial orders. 50 U.S.C. 4820(a)(5).

2.  The TDO was published in the Federal Register on April 12, 2022 (87 FR 21616).

3.  At the time of the renewal, section 766.24(d) provided that BIS may seek renewal of a temporary denial order for additional 180-day renewal periods, if it believes that renewal is necessary in the public interest to prevent an imminent violation. Renewal requests are to be made in writing no later than 20 days before the scheduled expiration date of a temporary denial order.

4.  The October 3, 2022 renewal order was published in the Federal Register on October 7, 2022 (87 FR 60987).

5.  The March 29, 2023 renewal order was published in the Federal Register on April 4, 2023 (88 FR 19911).

6.  88 FR 59791 (Aug. 30, 2023).

7.  87 FR 12226 (Mar. 3, 2022). Additionally, BIS published a final rule effective April 8, 2022, which imposed licensing requirements on items controlled on the Commerce Control List (“CCL”) under Categories 0–2 that are destined for Russia or Belarus. Accordingly, now all CCL items require export, reexport, and transfer (in-country) licenses if destined for or within Russia or Belarus. 87 FR 22130 (Apr. 14, 2022).

8.  87 FR 13048 (Mar. 8, 2022).

9.  Publicly available flight tracking information shows that on March 5, 2022, serial number (SN) 36387 flew from Jeddah, Saudi Arabia to Grozny, Russia, and on March 30, 2022, SN 28907 flew from Yerevan, Armenia to Tyumen, Russia. In addition, on March 31, 2022, SN 30437 flew from Tashkent, Uzbekistan to Moscow, Russia.

10.  Engaging in conduct prohibited by a denial order violates the Regulations. 15 CFR 764.2(a) and (k).

11.  Publicly available flight tracking information shows that on September 19, 2022, SN 30437 flew from Tashkent, Uzbekistan to Moscow, Russia, and SN 30435 flew from Yerevan, Armenia to Moscow, Russia. In addition, on September 21, 2022, SN 28912 flew from Baku, Azerbaijan to Moscow, Russia.

12.  Publicly available flight tracking information shows that SN 37752 flew from Yerevan, Armenia to Moscow, Russia on March 23, 2023 and from Dubai, United Arab Emirates to Grozny, Russia on March 28, 2023. In addition, on March 29, 2023, SN 30437 flew from Dushanbe, Tajikistan to Moscow Russia and on March 7, 2023, SN 28912 flew from Baku, Azerbaijan to Ufa, Russia.