[Federal Register Volume 88, Number 97 (Friday, May 19, 2023)]
[Notices]
[Pages 32181-32184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10750]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Oleg Sergeyevich Patsulya, 15811 Collins Ave., Unit 4102, Sunny 
Isles Beach, Florida 33160; Vasilii Sergeyevich Besedin, 2960 NE 207th 
St., Unit 502, Aventura, Florida 33160; MIC P&I, LLC, 15811 Collins 
Ave., Unit 4102, Sunny Isles Beach, FL 33160 and 2046 McKinley St., 
Ste. 4, Hollywood, FL 33020; Intermodal Maldives, 1st Floor--H. Maaram, 
Ameeru Ahmed Magu, Male, Republic of Maldives; JSC Smartavia Airlines, 
''Arkhangelsk'' Airport, 4/1, Arkhangelsk Russia, 163053; Order 
Temporarily Denying Export Privileges

    Pursuant to section 766.24 of the Export Administration Regulations 
(the ``Regulations'' or ``EAR''),\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: Oleg Sergeyevich Patsulya, Vasilii 
Sergeyevich Besedin, MIC P&I, LLC, Intermodal Maldives, and JSC 
Smartavia Airlines. OEE's request and related information indicates 
that these parties are located in the United States, the Republic of 
Maldives, and/or the Russian Federation, at the respective addresses 
listed on the caption page of this order and on pages 9-11, infra, and 
that Patsulya and Besedin are Russian nationals who own, control and/or 
are affiliated with MIC P&I, LLC.
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    \1\ The Regulations, currently codified at 15 CFR parts 730-774 
(2020), originally issued pursuant to the Export Administration Act 
(50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which lapsed on 
August 21, 2001. The President, through Executive Order 13222 of 
August 17, 2001 (3 CFR 2001 Comp. 783 (2002)), as extended by 
successive Presidential Notices, continued the Regulations in effect 
under the International Emergency Economic Powers Act (50 U.S.C. 
1701, et seq. (2012)) (``IEEPA''). 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 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 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.
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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. 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 
``[l]ack 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

    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

[[Page 32182]]

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.
    As of February 24, 2022, any item classified under any Export 
Classification Control Number (``ECCN'') in Categories 3 through 9 of 
the Commerce Control List (``CCL'') requires a license to be exported 
or reexported to Russia. See 87 FR 12226 (Mar. 3, 2022). As of April 8, 
2022, the license requirements for Russia were expanded to cover all 
items on the CCL. See 87 FR 22130 (Apr. 14, 2022). These rules were 
codified in title 15 CFR 746.8, which state, ``a license is required, 
excluding deemed exports and deemed reexports, to export, reexport, or 
transfer (in-country) to or within Russia or Belarus any item subject 
to the EAR and specified in any Export Control Classification Number 
(ECCN) on the CCL.''
    In its request, OEE has presented evidence that Oleg Sergeyevich 
Patsulya and Vasilii Sergeyevich Besedin, operating in the United 
States and working together on behalf of MIC P&I, LLC (``MIC''), have 
engaged in the attempted procurement, export, and diversion of U.S.-
origin commodities, including through Intermodal Maldives 
(``Intermodal''), for ultimate end use in Russia without the proper BIS 
export licenses. These items include civil aviation parts and 
components. OEE has also presented evidence indicating that Patsulya 
and Besedin have undertaken procurement efforts, in part, on behalf of 
Russian airline JSC Smartavia Airlines (``Smartavia''), as well as 
Rossiya Airlines \2\ and Pobeda Airlines,\3\ both Russian airlines on 
the BIS Denied Persons List (``DPL'').
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    \2\ A TDO was first issued against Rossiya Airlines on May 20, 
2022 and published in the Federal Register on May 25, 2022. See 87 
FR 31856. The TDO was renewed on November 15, 2022 and published in 
the Federal Register on November 21, 2022. See 87 FR 70780. The TDO 
was renewed again on May 12, 2023.
    \3\ A TDO was first issued against Pobeda Airlines on June 24, 
2022 and published in the Federal Register on June 29, 2022. See 87 
FR 38707. The TDO was renewed on December 20, 2022 and published in 
the Federal Register on December 23, 2022. See 87 FR 78925.
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A. Procurement Efforts for Russian Airlines

    OEE's ongoing investigation has revealed that, between in or around 
September and October 2022, Patsulya and Besedin, who live in the 
United States, attempted to procure more than two million dollars of 
U.S. origin civilian aircraft parts from one U.S. supplier, including 
large quantities of wheels, tires, and brakes. In particular, OEE has 
presented evidence that Patsulya and Besedin, acting as representatives 
of MIC, attempted to procure multiple quantities of an aircraft brake 
assembly, identified as Goodrich Part number 2-1740-1 (the ``Goodrich 
brake assembly''), which is classified as ECCN 9A991.d, controlled for 
Anti-terrorism reasons, and would require a license for export to 
Russia. After Patsulya, Besedin, and MIC failed in their attempts to 
purchase the Goodrich brake assembly from this supplier, they 
subsequently purchased the brake assembly from another U.S. supplier.
    OEE's investigation has also determined that, beginning in and 
around May 2022, shortly prior to these procurement efforts, Patsulya 
began communicating with various Russian entities, including parties on 
the DPL, about supplying them with various aircraft parts and 
components. For example, OEE has presented evidence that, in June 2022, 
Smartavia provided Patsulya with a list of aircraft parts it sought to 
obtain, including the Goodrich brake assembly. On July 14, 2022, 
Patsulya emailed Smartavia with a quotation for delivery of various 
aircraft parts and components to Smartavia in Moscow, including two 
units of the Goodrich brake assembly. In August 2022, immediately after 
receiving a quotation for the Goodrich brake assemblies from a U.S. 
company, Patsulya emailed Smartavia again to offer two units for 
$105,000 per unit. On August 16, 2022, Smartavia provided Patsulya with 
a purchase order for the two units. Patsulya responded with an invoice, 
identified as PI-0017-022, reflecting a unit price of $105,000 and then 
subsequently sent himself an invoice, also identified as PI-0017-022, 
purportedly from an intermediary company to MIC.
    On August 22, 2022, Besedin received an email from a U.S. parts 
supplier with information about five units of the Goodrich brake 
available for purchase. Besedin provided the information to Patsulya, 
who in turn sent Smartavia an invoice for five units of the Goodrich 
brake assembly, reflecting a total cost of $515,000. On August 30, 
2022, Smartavia provided Patsulya with proof of a wire transfer 
reflecting a payment of $515,000.
    OEE's request is also based on facts demonstrating that Patsulya 
began communicating with representatives of Rossiya Airlines and Pobeda 
Airlines about procurement of U.S. origin aircraft parts and components 
while both airlines were on the DPL. Specifically, on August 31, 2022, 
while Rossiya Airlines was subject to a TDO, Patsulya emailed a Rossiya 
Airlines representative to offer procurement of U.S. origin aircraft 
parts and supplies, representing himself and MIC as a supplier for 
Smartavia and Russian Ministry of Defense affiliates. Additionally, in 
October 2022, while Pobeda Airlines was subject to a TDO, Patsulya 
communicated with a Pobeda Airlines representative about payment 
options for the Goodrich brake assembly and the TDO imposed against the 
airline.

B. Intermodal Maldives

    As stated in OEE's request, OEE's investigation determined that 
shipments to Russia were being routed through Intermodal, a company in 
the Republic of Maldives. Based on evidence presented by OEE, 
Intermodal first began receiving exports from the United States in May 
of 2022 and, as of October 2022, had received approximately 212 
shipments, the majority appearing to be aircraft parts. For example, 
OEE's investigation identified the following shipments to Russia 
between June and October 2022: (1) a Russian freight forwarder used 
Intermodal to receive a shipment of U.S. origin civil aircraft parts; 
(2) a Russian customer used Intermodal to forward and route lab 
equipment to Russia without the knowledge of the U.S. exporter; and (3) 
a shipment of directional drilling tools was sent to Moscow, Russia, 
through Intermodal. None of the export control documents related to 
these three shipments indicated that the items were destined for export 
to Russia. OEE has also presented evidence that another shipment to 
Intermodal which was destined for Russia contained a rotary actuator, 
which was designated as EAR99. Although some of the non-aircraft parts 
are designated as EAR99, OEE has reason to believe that a license would 
have been required pursuant to section 746.5 of the EAR (Russian 
industry sector sanctions) and that no such license was obtained.
    OEE's request is also based on facts revealed during an end-use 
check conducted by BIS at Intermodal on February 22, 2023. For example, 
the end-use check determined that Intermodal is a designated cargo 
sales agent for PJSC Aeroflot,\4\ another Russian airline that has been 
on the BIS DPL since April 7, 2022. OEE also presented evidence that 
four of the five shipments specifically inquired about

[[Page 32183]]

went to Russia, including one destined for Pobeda Airlines and another 
for Russian airline UTair Aviation JSC (``UTair'').\5\ The destination 
of the fifth shipment could not be determined.
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    \4\ A TDO was first issued against Aeroflot on April 7, 2022 and 
published in the Federal Register on April 12, 2022. See 87 FR 
21611. The TDO was renewed on October 3, 2022 and again on March 29, 
2023. See 88 FR 19609.
    \5\ A TDO was first issued against UTair on April 7, 2022, and 
published in the Federal Register on April 12, 2022. See 87 FR 
21616. The TDO was renewed on October 3, 2022 and again on March 29, 
2023. See 88 FR 19911.
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C. MIC and Intermodal Detentions

    OEE has also presented evidence related to its November 29, 2022 
detention of a shipment destined for Intermodal. Specifically, the 
shipment detained by OEE included two units of the Goodrich brake 
assemblies, classified as ECCN 9A991.d and controlled for Anti-
terrorism reasons. OEE's ongoing investigation revealed that the brake 
assemblies were purchased by MIC and that Besedin personally traveled 
to a warehouse location to inspect the brakes. Although the brake 
assemblies would have required a license for export to Russia, no such 
license was obtained. On January 3, 2023, OEE detained another shipment 
of the Goodrich brake assemblies purchased by Patsulya and Besedin. 
Although Besedin initially told the vendor that the brake assemblies 
were destined for Intermodal, the information was later changed to 
reflect shipping to Turkey after Besedin was alerted by a U.S. freight 
forwarder of issues with shipping to Intermodal. Moreover, OEE's 
requests include facts demonstrating that Patsulya and Besedin gave 
various and conflicting information about the ultimate destination and 
end user of the Goodrich brake assemblies.

D. Risk of Imminent Violation

    As detailed in OEE's request and related information, since May 
2022, Patsulya and Besedin, through MIC, have engaged in repeated 
attempts to procure U.S. origin commodities for Russian end users, 
including parties on the DPL. These efforts have involved multiple U.S. 
suppliers, indicating that when one procurement attempt fails, Patsulya 
and Besedin will simply continue engaging other suppliers. Moreover, 
OEE's request demonstrates that they have been actively promoting 
themselves as able to supply aircraft parts and components to Russian 
airlines, including those on the DPL. As detailed above, OEE's request 
also indicates that Smartavia has attempted to obtain U.S. origin 
commodities, including the Goodrich brake assemblies, on multiple 
occasions, and that Patsulya and Besedin self-identified as Smartavia's 
supplier.
    OEE's request also reflects that between May 18, 2022 and February 
28, 2023, Intermodal was listed as the ultimate or intermediate 
consignee on 248 exports valued at over $5.1 million and that Patsulya 
and Besedin, through MIC, have made six attempts to export from the 
United States, including one to Intermodal and a second initially 
destined for Intermodal. Additionally, OEE has presented evidence that, 
as recently as April 20, 2023, Patsulya and Besedin have been emailing 
OEE agents in continued attempts to retrieve the detained aircraft 
Goodrich brake assemblies, maintaining that they were intended for use 
in Turkey and suggesting that their procurement efforts remain ongoing.

III. Findings

    As described above, I find that the evidence presented by BIS 
demonstrates that a violation of the Regulations by the above-captioned 
parties is imminent in both time and degree of likelihood. As such, a 
TDO is needed to give notice to persons and companies in the United 
States and abroad that they should cease dealing with Oleg Sergeyevich 
Patsulya, Vasilii Sergeyevich Besedin, MIC P&I, LLC, Intermodal 
Maldives, and Smartavia Airlines in export or reexport transactions 
involving items subject to the EAR. Such a TDO is consistent with the 
public interest to preclude future violations of the Regulations given 
the deliberate, covert, and determined nature of the misconduct and 
clear disregard for complying with U.S. export control laws.
    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 of the Regulations.
    It is therefore ordered:
    First, that OLEG SERGEYEVICH PATSULYA, with an address at 15811 
Collins Ave Unit 4102, Sunny Isles Beach, Florida 33160; VASILII 
SERGEYEVICH BESEDIN, with an address at 2960 NE 207th St, Unit 502, 
Aventura, Florida 33160; MIC P&I, LLC, with an address at 15811 Collins 
Ave, Unit 4102, Sunny Isles Beach, FL 33160 and 2046 McKinley St., Ste 
4, Hollywood, FL 33020; and INTERMODAL MALDIVES with an address at 1st 
Floor--H. Maaram Ameeru Ahmed Magu, Male, Republic of Maldives; and 
when acting for or on their behalf, any successors or assigns, agents, 
or employees (each a ``Denied Person'' and collectively the ``Denied 
Persons'') 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, 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, or in any other activity 
subject to the EAR; 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 in any other activity subject to the EAR.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of a Denied Person any item 
subject to the EAR;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a Denied Person 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 a 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 a Denied Person of any item subject to 
the EAR that has been exported from the United States;
    D. Obtain from a Denied Person 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; 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 a Denied Person, or service any item, 
of whatever origin, that is owned, possessed or controlled by a Denied 
Person if such service involves the use of any item subject to the EAR 
that has been or will be exported from the United States. For purposes 
of this paragraph, servicing means installation, maintenance, repair, 
modification, or testing.
    Third, that JSC SMARTAVIA AIRLINES with an address at 
''Arkhangelsk'' airport, 4/1 Arkhangelsk Russia, 163053, and when 
acting for or on their behalf, any successors or assigns, agents, or 
employees may not,

[[Page 32184]]

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.
    Fourth, that no person may, directly or indirectly, do any of the 
following:
    A. Export, reexport, or transfer (in-country) to or on behalf of 
Smartavia 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 Smartavia 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 Smartavia 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 Smartavia 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 Smartavia 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 Smartavia, or service any item, of 
whatever origin, that is owned, possessed or controlled by Smartavia 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.
    Fifth, 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 Oleg Sergeyevich Patsulya, Vasilii 
Sergeyevich Besedin, MIC P&I, LLC, Intermodal Maldives, or JSC 
Smartavia Airlines 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 this Order.
    In accordance with the provisions of section 766.24(e) of the EAR, 
Oleg Sergeyevich Patsulya, Vasilii Sergeyevich Besedin, MIC P&I, LLC, 
Intermodal Maldives, and JSC Smartavia Airlines 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. Respondents Oleg 
Sergeyevich Patsulya, Vasilii Sergeyevich Besedin, MIC P&I, LLC, 
Intermodal Maldives, and JSC Smartavia Airlines may oppose a request to 
renew this Order by filing a written submission with the Assistant 
Secretary 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 served on each denied person 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. 2023-10750 Filed 5-18-23; 8:45 am]
BILLING CODE 3510-DT-P