[Federal Register Volume 88, Number 118 (Wednesday, June 21, 2023)]
[Notices]
[Pages 40202-40205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13160]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Nordwind Airlines, Leningradskaya Str., Building 25, Office 27. 
28, Moscow Region, Khimki City, 141402, Russia; Pegas Touristik, a/k/a 
Pegas Touristik OOO, 5 Building 1 Volokolamsk Highway, Moscow, Russian 
Federation, 125080, and Yenig[ouml]l, Nergiz Sk. No:94/1, 
Muratpa[scedil]a/Antalya, T[uuml]rkiye, 07230; Order Renewing Temporary 
Denial of Export Privileges

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (2021) (``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 December 20, 2022. I find that renewal of this 
order, along with the addition of Pegas Touristik a/k/a Pegas Touristik 
OOO (``Pegas Touristik'') as a related person, is necessary in the 
public interest to prevent an imminent violation of the Regulations.
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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according to their terms until modified, superseded, set aside, or 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 June 24, 2022, I signed an order denying the export privileges 
of Nordwind Airlines (``Nordwind'') 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\ This temporary denial order was 
subsequently renewed in accordance with Section 766.24(d) of the 
Regulations.\3\ The renewal order issued on December 20, 2022 and was 
effective upon issuance.\4\
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    \2\ The TDO was published in the Federal Register on June 29, 
2022 (87 FR 38704).
    \3\ 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. Renewal requests may include discussion of 
any additional or changed circumstances, and may seek appropriate 
modifications to the order, including the addition of parties as 
respondents or related persons.
    \4\ The December 20, 2022 renewal order was published in the 
Federal Register on December 27, 2022 (87 FR 79725).
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    On May 18, 2023, BIS, through OEE, submitted a written request for 
renewal of the Nordwind TDO that issued on December 20, 2022. The 
written request was made more than 20 days before the TDO's scheduled 
expiration. A copy of the renewal request was sent to Nordwind in 
accordance with Sections 766.5 and 766.24(d) of the Regulations. No 
opposition to the renewal of the TDO has been received. OEE submitted a 
separate written request that Pegas Touristik be added to the TDO as a 
related person to Nordwind in accordance with Section 766.23 of the 
Regulations.

[[Page 40203]]

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.
    Pursuant to Sections 766.23 and 766.24, a TDO may also be made 
applicable to other persons if BIS has reason to believe that they are 
related to a respondent and that applying the order to them is 
necessary to prevent its evasion. 15 CFR 766.23(a)-(b) and 766.24(c). A 
``related person'' is a person, either at the time the TDO's issuance 
or thereafter, who is related to a respondent ``by ownership, control, 
position of responsibility, affiliation, or other connection in the 
conduct of trade or business.'' 15 CFR 766.23(a). Related persons may 
be added to a TDO on an ex-parte basis in accordance with Section 
766.23(b) of the Regulations. 15 CFR 766.23(b).

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).\5\ 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).\6\ 
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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    \5\ 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).
    \6\ 87 FR 13048 (Mar. 8, 2022).
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    OEE's request for renewal is based upon the facts underlying the 
issuance of the initial TDO, the renewal order subsequently issued in 
this matter on December 20, 2022, and the evidence developed over the 
course of this investigation, which indicate a blatant disregard for 
U.S. export controls, as well as the TDO. Specifically, the initial 
TDO, issued on June 24, 2022, was based on evidence that Nordwind 
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, Yerevan, Armenia, Istanbul, Turkey, and Sharm el-
Sheikh, Egypt, without the required BIS authorization.\7\
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    \7\ Publicly available flight tracking information shows, for 
example, that on March 7, 2022, serial number (``SN'') 40874 flew 
from Yerevan, Armenia to Kazan, Russia; SN 40233 flew from Istanbul, 
Turkey to Kazan, Russia; and SN 40236 flew from Sharm el-Sheikh, 
Egypt to Moscow, Russia.
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    As discussed in the December 20, 2022 renewal order, evidence 
presented by BIS indicated that, after the initial order issued, 
Nordwind continued to operate aircraft subject to the EAR and 
classified under ECCN 9A991.b on flights both into and out of Russia, 
in violation of the Regulations and the TDO itself.\8\ Specifically, 
the December 20, 2022 renewal order detailed Nordwind's continued 
operation of aircraft subject to the EAR, including, but not limited 
to, on flights into and out of Russia from/to Sharm el-Sheikh, Egypt, 
Hurghada, Egypt, and Bokhtar, Tajikistan.\9\
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    \8\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \9\ Publicly available flight tracking information shows that on 
December 3, 2022, SN 42059 flew from Sharm el-Sheikh, Egypt to 
Orenberg, Russia and on December 2, 2022, SN 40874 flew from 
Hurghada, Egypt to Moscow, Russia. In addition, on November 29, 
2022, SN 35700 flew from Bokhtar, Tajikistan to Moscow, Russia.
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    In its May 18, 2023 request for renewal of the TDO, BIS has 
submitted evidence that Nordwind continues to operate in violation of 
the December 20, 2022 TDO and/or the Regulations by operating aircraft 
subject to the EAR and classified under ECCN 9A991.b. Specifically, 
BIS's evidence and related investigation demonstrates that Nordwind has 
continued to operate aircraft subject to the EAR, including, but not 
limited to, on flights into and out of Russia from/to Bokhtar, 
Tajikistan, Tehran, Iran, and Osh, Kyrgyzstan. 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-73313.........................           35700     737-82R (B738)  Bokhtar, TJ/Orsk, RU  June 2, 2023.
RA-73313.........................           35700     737-82R (B738)  Bokhtar, TJ/Orsk, RU  June 3, 2023.
RA-73313.........................           35700     737-82R (B738)  Bokhtar, TJ/Orsk, RU  June 4, 2023.
RA-73313.........................           35700     737-82R (B738)  Bokhtar, TJ/Orsk, RU  June 11, 2023.
RA-73317.........................           40874     737-82R (B738)  Tehran, IR/Moscow,    May 16, 2023.
                                                                       RU.
RA-73317.........................           40874     737-82R (B738)  Dushanbe, TJ/UFA, RU  June 8, 2023.

[[Page 40204]]

 
RA-73317.........................           40874     737-82R (B738)  Osh, KG/Samara, RU..  June 11, 2023.
RA-73314.........................           42233     737-8KN (B738)  Dushanbe, TJ/Kazan,   June 4, 2023.
                                                                       RU.
RA-73314.........................           42233     737-8KN (B738)  Osh, KG/Tyumen, RU..  June 10, 2023.
RA-73314.........................           42233     737-8KN (B738)  Dushanbe, TJ/Kazan,   June 11, 2023.
                                                                       RU.
RA-73314.........................           42233     737-8KN (B738)  Bokhtar, TJ/Orsk, RU  June 12, 2023.
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C. Pegas Touristik as a Related Person

    OEE's investigation and open source documents establish that 
Russia-based Pegas Touristik is related to Nordwind ``by ownership, 
control, position of responsibility, affiliation, or other connection 
in the conduct of trade or business.'' Multiple press reports, 
including from Russian outlets, identify Pegas Touristik, a tour 
company headquartered in Moscow, as Nordwind's owner.\10\ A May 2023 
Russian corporate profile for Pegas Touristik lists as its founder an 
individual who is also reported to be Nordwind's founder (``Person 
A''). Additionally, a February 3, 2022 article in Kommersant, a 
national distributed daily newspaper in Russia, states in part that 
``in addition to [controlling] NordWind and Pegas Fly, Person A is also 
the founder of the tour operator Pegas Touristik.'' The same article 
also indicates that the general director of Pegas Touristik is the wife 
of Person A. OEE's on-going investigation and corporate registration 
documents reveal additional overlap in personnel, addresses, and 
management with Pegas Touristik.
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    \10\ https://seatguru.com/airlines/Nordwind_Airlines/information.php.
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    Moreover, OEE has reason to believe that Pegas Touristik has made 
additional efforts to evade export controls on Russia in part by 
entering into charter agreements with a Turkish airline that started 
shortly after the imposition of stringent Russia-related export 
controls described, supra, for international flights into Russia on 
U.S-origin aircraft without the required BIS authorization. As noted, 
supra, aircraft registered in, owned, or controlled by, or under 
charter or lease by Russia or a national of Russia are ineligible for 
license exception AVS.\11\
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    \11\ 15 CFR 746.8(c)(5).
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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 Nordwind has 
acted in violation of the Regulations and the TDO; that such violations 
have been significant, deliberate and covert; 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 Nordwind, 
in connection with export and reexport transactions involving items 
subject to the Regulations and in connection with any other activity 
subject to the Regulations. Additionally, I find that Pegas Touristik 
meets the criteria set out in Section 766.23 and should be added to the 
TDO as a related person.

IV. Order

    It is therefore ordered:
    First, Nordwind Airlines, with an address at Leningradskaya str., 
building 25, office 27. 28, Moscow region, Khimki city, 141402, Russia; 
Pegas Touristik a/k/a Pegas Touristik OOO, with addresses at 5 building 
1 Volokolamsk Highway, Moscow, Russian Federation, 125080, and 
Yenig[ouml]l, Nergiz Sk. No:94/1, Muratpa[scedil]a/Antalya, 
T[uuml]rkiye, 07230, 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 (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 a 
Denied Person 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 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 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 a Denied Person 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 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 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 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

[[Page 40205]]

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 Nordwind 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, 
Nordwind 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 Sections 766.23(c)(2) and 
766.24(e)(3) of the EAR, Pegas Touristik may, at any time, appeal their 
inclusion as a related person 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 Nordwind 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 Nordwind and Pegas 
Touristik and shall be published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
180 days.

    Dated: June 15, 2023.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2023-13160 Filed 6-20-23; 8:45 am]
BILLING CODE 3510-DT-P