[Federal Register Volume 87, Number 201 (Wednesday, October 19, 2022)]
[Notices]
[Pages 63477-63479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22675]


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 DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Temporarily Denying Export Privileges; URAL Airlines JSC, 
Utrenniy Lane 1-g, Yekaterinburg, Russia 620025

    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 Russian airline URAL Airlines JSC (``URAL''). OEE's request and 
related information indicates that URAL is headquartered in 
Yekaterinburg, Russia.
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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according to their terms until modified, superseded, set aside, or 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 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

[[Page 63478]]

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 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).
    \3\ 87 FR 13048 (Mar. 8, 2022).
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    OEE's request is based upon facts indicating that URAL engaged in 
conduct prohibited by the Regulations by operating multiple aircraft 
subject to the EAR and classified under ECCN 9A991, including but not 
limited to those below, on international flights, including from 
Bishkek, Kyrgyzstan; Dushanbe, Tajikistan; Khudzhand, Tajikistan and 
Tamchy, Kyrgyzstan to Russia after March 2, 2022, without the required 
BIS authorization. Pursuant to section 746.8 of the EAR, all of these 
flights would have required export or reexport licenses from BIS. URAL 
flights would not be eligible to use license exception AVS. No BIS 
authorizations were either sought or obtained by URAL for these exports 
or reexports to Russia.
    The information about these international and domestic flights 
includes the following:

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                                                                      Departure/arrival
             Tail No.                 Serial No.     Aircraft type          cities                 Dates
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RA-73817..........................            5055        A320-232  Bishkek, KG/Samara,    October 6, 2022.
                                                                     RU.
RA-73817..........................            5055        A320-232  Dushanbe, TJ/Irkutsk,  September 10, 2022.
                                                                     RU.
RA-73817..........................            5055        A320-232  Khudzhand, TJ/Sochi,   September 6, 2022.
                                                                     RU.
RA-73817..........................            5055        A320-232  Tamchy, KG/Moscow, RU  September 5, 2022.
RA-73817..........................            5055        A320-232  Bishkek, KG/           September 3, 2022.
                                                                     Yekaterinburg, RU.
RA-73817..........................            5055        A320-232  Dushanbe, TJ/          September 1, 2022.
                                                                     Krasnoyarsk, RU.
RA-73818..........................            2376        A320-232  Khudzhand, TJ/         October 6, 2022.
                                                                     Yekaterinburg, RU.
RA-73818..........................            2376        A320-232  Khudzhand, TJ/         September 12, 2022.
                                                                     Yekaterinburg, RU.
RA-73818..........................            2376        A320-232  Dushanbe, TJ/          September 9, 2022.
                                                                     Mineralnye Vode, RU.
RA-73818..........................            2376        A320-232  Tamchy, KG/Moscow, RU  September 9, 2022.
RA-73818..........................            2376        A320-232  Dushanbe, TJ/          September 5, 2022.
                                                                     Chelyabinsk, RU.
RA-73818..........................            2376        A320-232  Bishkek, KG/Sochi, RU  September 5, 2022.
RA-73844..........................            1941        A321-231  Khudzhand, TJ/Moscow,  October 5, 2022.
                                                                     RU.
RA-73844..........................            1941        A321-231  Bishkek, KG/Moscow,    September 12, 2022.
                                                                     RU.
RA-73844..........................            1941        A321-231  Khudzhand, TJ/Moscow,  September 11, 2022.
                                                                     RU.
RA-73844..........................            1941        A321-231  Bishkek, KG/Moscow,    September 8, 2022.
                                                                     RU.
RA-73844..........................            1941        A321-231  Bishkek, KG/Moscow,    August 29, 2022.
                                                                     RU.
RA-73844..........................            1941        A321-231  Bishkek, KG/Moscow,    August 25, 2022.
                                                                     RU.
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    Based upon the on-going violations by URAL, there are heightened 
concerns of future violations of the EAR, especially given that any 
subsequent actions taken with regard to any of the listed aircraft, or 
other URAL aircraft 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. Id.
    Moreover, additional concerns of future violations of the 
Regulations are raised by public information on URAL's website, 
available as of the date of this order, indicating that URAL intends to 
continue its domestic and international flight routes. Specifically, 
URAL's website continues to advertise flights within Russia,\4\ as well 
as international flights from Moscow, Russia to Bishkek and Osh, cities 
in Kyrgyzstan, and Kulyab, Tajikistan.\5\ 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 URAL will attempt to evade 
the Regulations in order to obtain new or additional aircraft parts for 
or service its existing aircraft that were exported or reexported to 
Russia in violation of section 746.8 of the Regulations in order to 
continue operating on domestic routes in Russia.
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    \4\ https://www.uralairlines.ru/en/special_offers/#42905.
    \5\ https://www.uralairlines.ru/en/special_offers/#8188.
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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 URAL took 
actions in apparent violation of the Regulations by operating 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 URAL 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, deliberate, covert and/or likely to 
occur again, rather than technical or negligent[.]'' 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 URAL, in connection with export and reexport transactions 
involving items subject to

[[Page 63479]]

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, URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 
620025 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 
URAL 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 URAL 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 URAL 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 URAL 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 URAL 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 URAL, or service any item, of 
whatever origin, that is owned, possessed or controlled by URAL 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 URAL 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, 
URAL 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 URAL 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 URAL and shall be 
published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
180 days.

Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2022-22675 Filed 10-18-22; 8:45 am]
BILLING CODE 3510-DT-P