Order Renewing Temporary Denial of Export Privileges
| Published date | 05 April 2024 |
| Record Number | 2024-07303 |
| Citation | 89 FR 23967 |
| Court | Industry And Security Bureau |
| Section | Notices |
Federal Register, Volume 89 Issue 67 (Friday, April 5, 2024)
[Federal Register Volume 89, Number 67 (Friday, April 5, 2024)]
[Notices]
[Pages 23967-23969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07303]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Order Renewing Temporary Denial of Export Privileges
Aviastar--TU, 5 b. 7 Leningradsky prospekt, g. Moskva, 125040, Moscow,
Russia
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 April 14, 2023. 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 Aviastar--TU's (``Aviastar'') has engaged in a pattern of
repeated, ongoing and/or continuous apparent violations of the EAR.
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\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according to their terms until modified, superseded, set aside, or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).
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I. Procedural History
On April 21, 2022, I signed an order denying Aviastar 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\ The temporary denial order was subsequently renewed on
October 17, 2022,\3\ April 14, 2023,\4\ and October 6, 2023 \5\ in
accordance with section 766.24(d) of the Regulations.\6\
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\2\ The TDO was published in the Federal Register on April 26,
2022 (87 FR 24514).
\3\ The October 17, 2022 renewal order, which was effective upon
issuance, was published in the Federal Register on October 20, 2022
(87 FR 63760).
\4\ The April 14, 2023 renewal order, which was also effective
upon issuance, was published in the Federal Register on April 19,
2023 (88 FR 24162).
\5\ The October 6, 2023 renewal order, which was effective upon
issuance, was published in the Federal Register on October 13, 2023
(88 FR 70928).
\6\ Section 766.24(d) provides 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.
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On March 11, 2024, BIS, through OEE, submitted a written request
for a fourth renewal of the TDO. 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 Aviastar 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 CFR 766.24(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.'' \7\ Id.
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\7\ 88 FR 59791 (Aug. 30, 2023).
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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).\8\ 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).\9\ 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
[[Page 23968]]
requirement before it can travel to Russia.
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\8\ 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).
\9\ 87 FR 13048 (Mar. 8, 2022).
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OEE's request for renewal for a period of one year is based upon
the facts underlying the issuance of the TDO and the renewal orders
subsequently issued in this matter on October 17, 2022, April 14, 2023,
and October 6, 2023, as well as other evidence developed during this
investigation. This evidence demonstrates that Aviastar 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 21, 2022, was based on evidence that Aviastar 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, Hangzhou, China; Shenzhen, China; and Zhengzhou, China
from/to Novosibirsk, Russia and Abakan, Russia, without the required
BIS authorization.\10\ Further evidence indicated that Aviastar also
operated aircraft subject to the EAR on domestic flights within Russia,
potentially in violation of Section 736.2(b)(10) of the Regulations.
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\10\ Publicly available flight tracking information shows that
on April 10, 2022, serial number (SN) 27054 flew from Hangzhou,
China to Novosibirsk, Russia, and on April 12, 2022, SN 27054 flew
from Zhengzhou, China to Abakan, Russia. In addition, on April 12,
2022, SN 27053 flew from Shenzhen, China to Abakan, Russia.
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As discussed in the prior renewal orders, BIS presented evidence
indicating that, after the initial April 21, 2022 TDO issued, Aviastar
continued to operate aircraft subject to the EAR and classified under
ECCN 9A991.b on flights both into and within Russia, in violation of
the Regulations and the TDO itself.\11\ The October 17, 2022 order
detailed flights into and out of Russia from/to Hangzhou, China and
Zhengzhou, China.\12\ The April 14, 2023 and October 6, 2023 orders
detailed domestic flights within Russia.\13\
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\11\ Engaging in conduct prohibited by a denial order violates
the Regulations. 15 CFR 764.2(a) and (k).
\12\ Publicly available flight tracking information shows that
on May 22, 2022, SN 27054 flew from Zhengzhou, China to Novosibirsk,
Russia, and on May 25, 2022, SN 27053 flew from Hangzhou, China to
Novosibirsk, Russia. In addition, on September 22, 2022, SN 25731
flew from Irkutsk, Russia to Moscow, Russia.
\13\ Publicly available flight tracking information shows that
on February 24, 2023, SN 27053 flew from Novosibirsk, Russia to
Mirny, Russia. On March 7, 2023, SN 25696 flew from Novosibirsk,
Russia to Moscow, Russia. On September 26, 2023 SN 25731 flew from
Ulan-Ude, Russia to Moscow, Russia. In addition, SN 27054 flew from
Norilsk, Russia to Moscow, Russia.
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Since that time, Aviastar continued to engage in conduct prohibited
by the TDO and Regulations. In its March 11, 2024 request for TDO
renewal, BIS submitted evidence that Aviastar continues to operate
aircraft subject to the EAR and classified under ECCN 9A991.b, both on
flights into and within Russia, in violation of the October 6, 2023
renewal order and/or the Regulations. Specifically, BIS's evidence and
related investigation demonstrates that Aviastar continued to operate
aircraft subject to the EAR, including, but not limited to, on flights
into and out of Russia from/to Hangzhou, China as well as domestically
within Russia. Information about those flights includes, but is not
limited to, the following:
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Departure/arrival
Tail No. Serial No. Aircraft type cities Dates
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RA-73351......................... 25696 757-223 (PCF) Yuzhno-Sakhalinsk, March 15, 22024.
(B752). RU/Moscow, RU.
RA-73351......................... 25696 757-223 (PCF) Norilsk, RU/Moscow, March 5, 22024.
(B752). RU.
RA-73351......................... 25696 757-223 (PCF) Hangzhou, CN/ March 3, 22024.
(B752). Novosibirsk, RU.
RA-73351......................... 25696 757-223 (PCF) Nizhnevartovsk, RU/ February 12, 22024.
(B752). Yakutsk, RU.
RA-73351......................... 25696 757-223 (PCF) Mirny, RU/ February 6, 22024.
(B752). Krasnoyarsk, RU.
RA-73354......................... 27053 757-223 (PCF) Norilsk, RU/Moscow, March 18, 22024.
(B752). RU.
RA-73354......................... 27053 757-223 (PCF) Novosibrisk, RU/ March 6, 22024.
(B752). Moscow, RU.
RA-73354......................... 27053 757-223 (PCF) Moscow, RU/Norilsk, March 1, 22024.
(B752). RU.
RA-73354......................... 27053 757-223 (PCF) Mirny, RU/Ulan-Ude, February 9, 22024.
(B752). RU.
RA-73354......................... 27053 757-223 (PCF) Blagoveshchensk, RU/ December 27, 22023.
(B752). Moscow, RU.
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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 Aviastar 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. Therefore, renewal of the TDO 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 Aviastar, 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, Aviastar--TU, 5 b. 7 Leningradsky prospekt, g. Moskva,
125040, Moscow, Russia, 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
[[Page 23969]]
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
Aviastar 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 Aviastar 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 Aviastar 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 Aviastar 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 Aviastar 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 Aviastar, or service any item, of
whatever origin, that is owned, possessed or controlled by Aviastar 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 Aviastar 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,
Aviastar 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 Aviastar 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 Aviastar, 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.
[FR Doc. 2024-07303 Filed 4-4-24; 8:45 am]
BILLING CODE 3510-DT-P
