[Federal Register Volume 88, Number 118 (Wednesday, June 21, 2023)]
[Notices]
[Pages 40200-40202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13161]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Pobeda Airlines, 108811, Russian Federation, Moscow, p. 
Moskovskiy, Kievskoe shosse, 22nd km, 4/1. Moscow, Russia; 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 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 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according to their terms until modified, superseded, set aside, or 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 Pobeda Airlines (``Pobeda'') 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 38707).
    \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.
    \4\ The December 20, 2022 renewal order was published in the 
Federal Register on December 23, 2022 (87 FR 78925).
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    On May 18, 2023, BIS, through OEE, submitted a written request for 
renewal of the 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 Pobeda in 
accordance with Sections 766.5 and 766.24(d) of the Regulations. No 
opposition to the renewal of the TDO has been received.

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.

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).
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    \5\ 87 FR 12226 (Mar. 3, 2022).
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    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), and as part 
of the same rule, imposed a license requirement for the export, 
reexport, or transfer (in-country) of all items

[[Page 40201]]

controlled under CCL Categories 3 through 9 to Belarus.\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 or Belarus.
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    \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 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 Pobeda 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, Antalya, Turkey, Gazipasa, Turkey, and Istanbul, Turkey, without 
the required BIS authorization.\7\
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    \7\ Publicly available flight tracking information shows, for 
example, that on March 6, 2022, serial number (``SN'') 64862 flew 
from Antalya, Turkey to Moscow, Russia. On March 7, 2022, SN 64863 
flew from Gazipasa, Turkey to Moscow, Russia, and, on March 6, 2022, 
SN 64864 flew from Istanbul, Turkey to Mineralnye Vody, Russia.
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    As discussed in the December 20, 2022 renewal order, evidence 
presented by BIS indicated that, after the renewal order issued, Pobeda 
continued to operate aircraft subject to the EAR and classified under 
ECCN 9A991.b on flights into Russia, in violation of the Regulations 
and the TDO itself.\8\ Specifically, the December 20, 2022 renewal 
order detailed Siberian's continued operation of aircraft subject to 
the EAR, including, but not limited to, on flights into and between 
Belarus and Russia.\9\
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    \8\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.1(a) and (k).
    \9\ Publicly available flight tracking information shows, for 
example, the following flights: (1) on November 26, 2022, SN 61793 
flew from Minsk, Belarus to Moscow, Russia; (2) on December 3, 2023, 
SN 41238 flew from Minsk, Belarus to Moscow, Russia; and (3) on 
November 24, 2022, SN 64866 flew from Minsk, Belarus to Moscow, 
Russia.
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    In its May 18, 2023 request for renewal of the TDO, BIS has 
submitted evidence that Pobeda 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 indicates that after the 
issuance of the TDO, Pobeda continued to fly aircraft into Russia in 
violation of the EAR, including flights from Gyumri, Armenia, Antalya, 
Turkey, and Dubai, United Arab Emirates, as well as between Russia and 
Belarus. 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-73242.........................           41227     737-8LJ (B738)  Istanbul, TR/Moscow,  May 24, 2023.
                                                                       RU.
RA-73242.........................           41227     737-8LJ (B738)  Dubai, AE/Moscow, RU  May 28, 2023.
RA-73242.........................           41227     737-8LJ (B738)  Gazipasa, TR/Moscow,  June 3, 2023.
                                                                       RU.
RA-73242.........................           41227     737-8LJ (B738)  Gyumri, AM/Moscow,    June 9, 2023.
                                                                       RU.
RA-73242.........................           41227     737-8LJ (B738)  Dubai, AE/Moscow, RU  June 13, 2023.
RA-73248.........................           41238     737-8LJ (B738)  Istanbul, TR/Moscow,  May 22, 2023.
                                                                       RU.
RA-73248.........................           41238     737-8LJ (B738)  Gyumri, AM/Moscow,    May 24, 2023.
                                                                       RU.
RA-73248.........................           41238     737-8LJ (B738)  Istanbul, TR/Moscow,  May 27, 2023.
                                                                       RU.
RA-73248.........................           41238     737-8LJ (B738)  Dubai, AE/Moscow, RU  May 31, 2023.
RA-73248.........................           41238     737-8LJ (B738)  Minsk, BY/Moscow, RU  June 4, 2023.
RA-73248.........................           41238     737-8LJ (B738)  Gazipasa, TR/Moscow,  June 7, 2023.
                                                                       RU.
RA-73250.........................           41242     737-8LJ (B738)  St. Petersburg, RU/   May 30, 2023.
                                                                       Minsk, BY.
RA-73250.........................           41242     737-8LJ (B738)  Minsk, BY/St.         May 30, 2023.
                                                                       Petersburg, RU.
RA-73250.........................           41242     737-8LJ (B738)  Minsk, BY/Moscow, RU  June 1, 2023.
RA-73250.........................           41242     737-8LJ (B738)  Istanbul, TR/Moscow,  June 4, 2023.
                                                                       RU.
RA-73250.........................           41242     737-8LJ (B738)  Antalya, TR/Perm, RU  June 10, 2023.
RA-73250.........................           41242     737-8LJ (B738)  Minsk, BY/St.         June 12, 2023.
                                                                       Petersburg, RU.
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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 Pobeda 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 Pobeda, in 
connection with export and reexport transactions involving items 
subject to the Regulations and in connection with any other activity 
subject to the Regulations.

IV. Order

    It is therefore ordered:
    First, Pobeda Airlines, 108811, Russian Federation, Moscow, p. 
Moskovskiy, Kievskoe shosse, 22nd km, 4/1. Moscow, 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

[[Page 40202]]

    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 
Pobeda 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 Pobeda 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 Pobeda 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 Pobeda 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 Pobeda 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 Pobeda, or service any item, of 
whatever origin, that is owned, possessed or controlled by Pobeda 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 Pobeda 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, 
Pobeda 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 Pobeda 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 Pobeda, 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. 2023-13161 Filed 6-20-23; 8:45 am]
BILLING CODE 3510-DT-P