[Federal Register Volume 80, Number 172 (Friday, September 4, 2015)]
[Notices]
[Pages 53489-53490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21978]


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 DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[15-BIS-001]


Order Relating to Air Bashkortostan, LTD.

    In the Matter of:

Air Bashkortostan, LTD. with a last known address of:

142001, Moscow Region, City of Domodedovo, Centralny District, 
Promyshlennaya Street, 11B, Russian Federation, Respondent.

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS''), has notified Air Bashkortostan, LTD., of Bashkortostan, 
Russia (``Air Bashkortostan''), that it has initiated an administrative 
proceeding against Air Bashkortostan pursuant to Section 766.3 of the 
Export Administration Regulations (the ``Regulations''),\1\ and Section 
13(c) of the Export Administration Act of 1979, as amended (the 
``Act''),\2\ through the issuance of a Charging Letter to Air 
Bashkortostan that alleges that Air Bashkortostan committed four 
violations of the Regulations. Specifically, the charges are:
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    \1\ The Regulations are currently codified in the Code of 
Federal Regulations at 15 CFR parts 730-774 (2015). The charged 
violations occurred in 2009. The Regulations governing the 
violations at issue are found in the 2009 version of the Code of 
Federal Regulations (15 CFR parts 730-774 (2009)). The 2015 
Regulations set forth the procedures that apply to this matter.
    \2\ 50 U.S.C. app. Sec. Sec.  2401-2420 (2000). Since August 21, 
2001, the Act has been in lapse and the President, through Executive 
Order 13,222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), 
which has been extended by successive Presidential Notices, the most 
recent being that of August 7, 2015 (80 FR 48,233 (Aug. 11, 2015)), 
has continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. 1701, et seq. (2006 & Supp. 
IV 2010).
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Charges 1-4: 15 CFR 764.2(a)--Engaging in Prohibited Conduct

    On four occasions between on or about January 7, 2009, and on or 
about March 19, 2009, Air Bashkortostan engaged in conduct prohibited 
by the Regulations when on each occasion it reexported a Boeing 757 
aircraft from Russia to Iran without the required U.S. Government 
authorization. These four U.S.-origin aircraft were subject to the 
Regulations, classified under Export Control Classification Number 
(``ECCN'') 9A991.b, and controlled for anti-terrorism reasons pursuant 
to Sections 742.8 and 746.7 of the Regulations. The transactions were 
valued at a total of $4.5 million.
    The aircraft were reexported pursuant to lease agreements between 
Air Bashkortostan and Eram Air, an airline based in Iran, and were 
operated on flights into and out of Iran, a Country Group E:1 
destination under the Regulations.\3\ During the period of the leases, 
the maintenance of the aircraft was performed in Iran.
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    \3\ See Supplement No. 1 to 15 CFR part 740 (2009).
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    At all times pertinent hereto, Sections 742.8 and 746.7 of the 
Regulations imposed a BIS license requirement for the reexport of these 
aircraft from any foreign country, including Russia, to Iran. In order 
to avoid duplication, reexporters were not required under the

[[Page 53490]]

Regulations to seek authorization from both BIS and the Treasury 
Department's Office of Foreign Assets Control (``OFAC'') for exports 
and reexports subject to both the Regulations and the Iranian 
Transactions Regulations (``ITR'') administered by OFAC.\4\ 
Accordingly, an authorization granted by OFAC would have been 
considered authorization for purposes of the EAR as well. However, Air 
Bashkortostan did not seek or obtain authorization from BIS, or from 
OFAC, in connection with any of the transactions at issue.
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    \4\ 31 CFR part 560 (2009). By Federal Register notice dated 
October 22, 2012, the Department of the Treasury's Office of Foreign 
Assets Control renamed the ITR as the Iranian Transactions and 
Sanctions Regulations and reissued the set of regulations in its 
entirety. 77 FR 64,664 (Oct. 22, 2012).
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    In engaging in the activity alleged above, Air Bashkortostan 
committed four violations of Section 764.2(a) of the Regulations.
    Whereas, BIS and Air Bashkortostan have entered into a Settlement 
Agreement pursuant to Section 766.18(b) of the Regulations, whereby 
they agreed to settle this matter in accordance with the terms and 
conditions set forth therein; and
    Whereas, I have approved of the terms of such Settlement Agreement;
    It is therefore ordered:
    First, Air Bashkortostan shall be assessed a civil penalty in the 
amount of $350,000, all of which shall be suspended for a period of one 
year from the date of this Order, and thereafter shall be waived, 
provided that during this one-year probationary period, Air 
Bashkortostan has committed no violation of the Act, or any regulation, 
order, license, or authorization issued thereunder. If Air 
Bashkortostan commits a violation of the Act or any regulation, order, 
license, or authorization issued thereunder, during the probationary 
period under this Order, the suspension of the civil penalty may be 
modified or revoked by BIS and the $350,000 made due and owing 
immediately.
    Second, that for a period of one (1) year from the date of this 
Order, Air Bashkortostan LTD., with a last known address of 142001, 
Moscow Region, City of Domodedovo, Centralny District, Promyshlennaya 
Street, 11B, Russian Federation, and when acting for or on its behalf, 
its successors, assigns, directors, officers, employees, 
representatives, or agents, (hereinafter collectively referred to as 
``Denied Person''), 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 Regulations, or 
in any other activity subject to the Regulations, including, but not 
limited to:
    A. Applying for, obtaining, or using any license, 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 Regulations, or in any other 
activity subject to 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 Regulations, or in any other activity subject to the Regulations.
    Third, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of the Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Denied Person of the ownership, possession, or 
control of any item subject to the Regulations that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby the Denied Person acquires 
or attempts to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from the Denied Person in the United States any item 
subject to the Regulations with knowledge or reason to know that the 
item will be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the 
Regulations that has been or will be exported from the United States 
and which is owned, possessed or controlled by the Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by the Denied Person if such service involves the use of any 
item subject to the Regulations that has been or will be exported from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Fourth, that, after notice and opportunity for comment as provided 
in Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to the Denied Person by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services may also be made subject to the provisions of 
the Order.
    Fifth, Air Bashkortostan shall not take any action or make or 
permit to be made any public statement, directly or indirectly, denying 
the allegations in the Charging Letter or the Order. The foregoing does 
not affect Air Bashkortostan's testimonial obligations in any 
proceeding, nor does it affect its right to take legal or factual 
positions in civil litigation or other civil proceedings in which the 
U.S. Department of Commerce is not a party.
    Sixth, that the Charging Letter, the Settlement Agreement, and this 
Order shall be made available to the public.
    Seventh, that this Order shall be served on Air Bashkortostan, and 
shall be published in the Federal Register.
    This Order, which constitutes the final agency action in this 
matter, is effective immediately.\5\
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    \5\ Review and consideration of this matter have been delegated 
to the Deputy Assistant Secretary of Commerce for Export 
Enforcement.

    Issued this 28th day of August, 2015.
Richard R. Majauskas,
Deputy Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2015-21978 Filed 9-3-15; 8:45 am]
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