[Federal Register Volume 87, Number 70 (Tuesday, April 12, 2022)]
[Notices]
[Pages 21616-21619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07770]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


UTair Aviation JSC, Khanty-Mansiysk Airport, Tyumen Region, 
Russia 628012; Order Temporarily Denying Export Privileges

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (2021) (``EAR'' or ``the 
Regulations''),\1\ the Bureau of Industry and Security (``BIS''), U.S. 
Department of Commerce, through its Office of Export Enforcement 
(``OEE''), has requested the issuance of an Order temporarily denying, 
for a period of 180 days, the export privileges under the Regulations 
of: UTair Aviation JSC (``UTair''). OEE's request and related 
information indicates that UTair is headquartered at Khanty-Mansisyk 
Airport, located in Khanty-Mansisyk, Russia, with domestic hubs at 
Surgut Airport and Vnukovo Airport.
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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according to their terms until modified, superseded, set aside, or 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. 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

[[Page 21617]]

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.

II. OEE's Request for a Temporary Denial Order (``TDO'')

    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).\2\ 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).\3\ 
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.
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    \2\ 87 FR 12,226 (Mar. 3, 2022).
    \3\ 87 FR 13,048 (Mar. 8, 2022).
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    OEE's request is based upon facts indicating that UTair engaged in 
recent conduct prohibited by the Regulations by operating aircraft 
subject to the EAR and classified under ECCN 9A991.b, on flights into 
Russia after March 2, 2022, without the required BIS authorization. 
Further, since March 2, 2022, UTair has continued to operate aircraft 
subject to the EAR through domestic flights without the required BIS 
authorization.
    Specifically, OEE's investigation, including publicly available 
flight tracking information, indicates that after March 2, 2022, UTair 
operated multiple U.S.-origin aircraft subject to the EAR, including, 
but not limited to, those identified below, on flights into and out of 
Moscow and other cities in Russia from/to: Khujand and Dushanbe, 
Tajikistan; Yerevan, Armenia; Baku and Ganja, Azerbaijan; Jeddah, Saudi 
Arabia, and Tashkent, Uzbekistan, respectively. Pursuant to Section 
746.8 of the EAR, all of these flights would have required export or 
reexport licenses from BIS. UTair flights would not be eligible to use 
license exception AVS. No BIS authorizations were either sought or 
obtained by UTair for these exports or reexports to Russia. As noted 
below, a number of the aircraft continued to operate on international 
routes to and from Russia after the aircraft's first unlicensed 
reexport in further violation of the EAR. The information about those 
flights includes the following:

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                                                                         Departure/arrival
             Tail No.                Serial No.       Aircraft type            cities               Dates
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VQ-BQP...........................           37553  737-8GU (B738).....  Khujand, TJ/Surgut,  March 3, 2022.
                                                                         RU.
VQ-BQP...........................           37553  737-8GU (B738).....  Khujand, TJ/Surgut,  March 5, 2022.
                                                                         RU.
VQ-BQR...........................           36386  737-8GU (B738).....  Khujand, TJ/Surgut,  March 10, 2022.
                                                                         RU.
RA-73063.........................           27534  737-524 (B735).....  Khujand, TJ/Surgut,  March 17, 2022.
                                                                         RU.
RA-73081.........................           30435  767-224 (ER) (B762)  Dushanbe, TJ/        March 27, 2022.
                                                                         Moscow, RU.
RA-73081.........................           30435  767-224 (ER) (B762)  Dushanbe, TJ/        March 29, 2022.
                                                                         Moscow, RU.
RA-73081.........................           30435  767-224 (ER) (B762)  Dushanbe, TJ/        March 30, 2022.
                                                                         Moscow, RU.
RA-73081.........................           30435  767-224 (ER) (B762)  Dushanbe, TJ/        March 31, 2022.
                                                                         Moscow, RU.
VQ-BQQ...........................           37552  737-8GU (B738).....  Yerevan, AM/Tyumen,  March 6 ,2022.
                                                                         RU.
RA-73082.........................           30437  767-224 (ER) (B762)  Yerevan, AM/Moscow,  March 9, 2022.
                                                                         RU.
RA-73082.........................           30437  767-224 (ER) (B762)  Yerevan, AM/Moscow,  March 10, 2022.
                                                                         RU.
RA-73082.........................           30437  767-224 (ER) (B762)  Yerevan, AM/Moscow,  March 11, 2022.
                                                                         RU.
RA-73061.........................           28907  737-524 (B735).....  Yerevan, AM/Tyumen,  March 13, 2022.
                                                                         RU.
RA-73081.........................           30435  767-224 (ER) (B762)  Yerevan, AM/Moscow,  March 16, 2022.
                                                                         RU.
RA-73062.........................           28908  737-524 (B735).....  Yerevan, AM/Moscow,  March 25, 2022.
                                                                         RU.
RA-73061.........................           28907  737-524 (B735).....  Yerevan, AM/Tyumen,  March 29, 2022.
                                                                         RU.
RA-73061.........................           28907  737-524 (B735).....  Yerevan, AM/Tyumen,  March 30, 2022.
                                                                         RU.
RA-73035.........................           27315  737-524 (B735).....  Yerevan, AM/Moscow,  March 31, 2022.
                                                                         RU.
VQ-BQR...........................           36386  737-8GU (B738).....  Baku, AZ/Surgut, RU  March 9, 2022.
RA-73035.........................           27315  737-524 (B735).....  Baku, AZ/Moscow, RU  March 29, 2022.
RA-73061.........................           28907  737-524 (B735).....  Baku, AZ/Moscow, RU  March 31, 2022.
RA-73035.........................           27315  737-524 (B735).....  Ganja, AZ/Moscow,    March 30, 2022.
                                                                         RU.
VQ-BQS...........................           36387  737-8GU (B738).....  Jeddah, SA/Grozny,   March 5, 2022.
                                                                         RU.
VP-BAI/RA-73082..................           30437  767-224 (ER) (B762)  Tashkent, UZ/        March 28, 2022.
                                                                         Moscow, RU.
VP-BAI/RA-73082..................           30437  767-224 (ER) (B762)  Tashkent, UZ/        March 29, 2022.
                                                                         Moscow, RU.
VP-BAI/RA-73082..................           30437  767-224 (ER) (B762)  Tashkent, UZ/        March 30, 2022.
                                                                         Moscow, RU.
VP-BAI/RA-73082..................           30437  767-224 (ER) (B762)  Tashkent, UZ/        March 31, 2022.
                                                                         Moscow, RU.
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[[Page 21618]]

    Based on this information, there are heightened concerns of future 
violations of the EAR, given that any subsequent actions taken with 
regard to any of the listed aircraft, or other UTair aircraft illegally 
exported or reexported to Russia after March 2, 2022, may violate the 
EAR. Such actions include, but are not limited to, refueling, 
maintenance, repair, or the provision of spare parts or services. See 
General Prohibition 10 of the EAR at 15 CFR 736.2(b)(10).\4\ Even 
UTair's continued use of such U.S.-origin aircraft only on domestic 
routes within Russia runs afoul of General Prohibition 10, which (among 
other restrictions) prohibits the continued use of an item that was 
known to have been exported or reexported in violation of the EAR. For 
example, publicly available flight tracking data shows that on March 25 
and March 28, 2022, aircraft RA-73063 (SN 27534) flew on flights into 
and out of Surgut, Russia to/from Samara, Russia and, on March 26 and 
March 28, 2022, aircraft RA-73061 (SN 28907) flew on flights into and 
out of Moscow, Russia to/from Syktykar, Russia and Ukhta, Russia.
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    \4\ Section 736.2(b)(10) of the EAR provides: General 
Prohibition Ten--Proceeding with transactions with knowledge that a 
violation has occurred or is about to occur (Knowledge Violation to 
Occur). You may not sell, transfer, export, reexport, finance, 
order, buy, remove, conceal, store, use, loan, dispose of, 
transport, forward, or otherwise service, in whole or in part, any 
item subject to the EAR and exported or to be exported with 
knowledge that a violation of the Export Administration Regulations, 
the Export Administration Act or any order, license, License 
Exception, or other authorization issued thereunder has occurred, is 
about to occur, or is intended to occur in connection with the item. 
Nor may you rely upon any license or License Exception after notice 
to you of the suspension or revocation of that license or exception. 
There are no License Exceptions to this General Prohibition Ten in 
part 740 of the EAR. (emphasis in original).
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    Moreover, additional concerns of future violations of the 
Regulations are raised by public information indicating efforts by 
UTair to have aircraft re-registered in Russia and assigned Russian 
tail numbers. These efforts suggest that UTair intends not only to 
maintain control over the aircraft, but also to continue operating them 
in likely violation of the EAR. Public information available as of the 
signing of this order on UTair's own website also indicates that its 
fleet consists of 63 aircraft, of which 48 are U.S.-origin; the 
remainder are manufactured outside of Russia and may be subject to the 
EAR based on containing more than 25% U.S.-origin controlled 
content.\5\ UTair's website indicates that it currently operates 
international flights to Tajikistan, Turkey, Azerbaijan, and Armenia, 
and that while flights to the south of Russia are limited, there are 
cities that can be reached with UTair.\6\ Given BIS's review policy of 
denial under Section 746.8(a) of the Regulations for exports and 
reexports to Russia, it is foreseeable that UTair will attempt to evade 
the Regulations in order to obtain new or additional aircraft parts or 
service its existing aircraft that were exported or reexported to 
Russia in violation of Section 746.8 of the Regulations.
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    \5\ https://www.utair.ru/en/about/aircrafts/.
    \6\ https://media.utair.ru/spring-in-russia.
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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 UTair took 
actions in apparent violation of the Regulations by exporting or 
reexporting the aircraft cited above, among many others, on flights 
into Russia after March 2, 2022, without the required BIS 
authorization. Moreover, the continued operation of these aircraft by 
UTair, even on domestic routes within Russia, and the company's on-
going need to acquire replacement parts and components, many of which 
are U.S.-origin, presents a high likelihood of imminent violations 
warranting imposition of a TDO. I further find that such apparent 
violations have been significant and deliberate. Therefore, issuance 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 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.
    This Order is being issued on an ex parte basis without a hearing 
based upon BIS's showing of an imminent violation in accordance with 
Section 766.24 and 766.23(b) of the Regulations.

IV. Order

    It is therefore ordered:
    FIRST, UTair Aviation JSC, Khanty-Mansiysk Airport, Tyumen Region, 
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 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,

[[Page 21619]]

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 
180 days.

    Dated: April 7, 2022.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2022-07770 Filed 4-11-22; 8:45 am]
BILLING CODE 3510-DT-P