[Federal Register Volume 88, Number 118 (Wednesday, June 21, 2023)]
[Notices]
[Pages 40205-40207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13162]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Siberian Airlines d/b/a S7 Airlines, 633104, Novosibirskaya obl., 
g. Ob, prospekt Mozzherina, d. 10 ofis 201; 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according to their terms until modified, superseded, set aside, or 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 Siberian Airlines d/b/a S7 Airlines (``Siberian'') 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 38709).
    \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 78921).
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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 Siberian 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)

[[Page 40206]]

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, and evidence developed during this investigation. These 
facts and evidence demonstrate that Siberian continues to act in 
blatant disregard for U.S. export controls and the TDO. Specifically, 
the initial TDO, issued on June 24, 2022, was based on evidence that 
Siberian 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, Atyrau, Kazakhstan, Bishkek, Kyrgyzstan, and 
Urgench, Uzbekistan, without the required BIS authorization.\7\
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    \7\ Publicly available flight tracking information shows, for 
example, that on March 10, 2022, serial number (``SN'') 41400 flew 
from Atyrau, Kazakhstan to Moscow, Russia. On May 1, 2022, SN 41707 
flew from Bishkek, Kyrgyzstan to Novosibirsk, Russia and, on March 
4, 2022, SN 41841 flew from Urgench, Uzbekistan to Moscow, 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, 
Siberian 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 
Russia from Bangkok, Thailand, Antalya Turkey, and Tashkent, 
Uzbekistan.\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, that on November 30, 2022, SN 41709 flew from Bangkok, 
Thailand to Irkutsk, Russia. SN 41707 flew from Antalya, Turkey to 
Novosibirisk, Russia on November 19, 2022, and from Urgench, 
Uzbekistan to Moscow, Russia on December 10, 2022.
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    In its May 18, 2023 request for renewal of the TDO, BIS has 
submitted evidence that Siberian 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 into Russia. 
Specifically, BIS's evidence and related investigation indicates that 
after the issuance of the TDO, Siberian continued to fly aircraft into 
Russia in violation of the EAR, including flights from Bangkok, 
Thailand, Antalya, Turkey, Istanbul, Turkey, Fergana, Uzbekistan, and 
Tashkent, Uzbekistan. 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-73667.........................           41707     737-8LP (B738)  Istanbul, TR/Moscow,  May 20, 2023.
                                                                       RU.
RA-73667.........................           41707     737-8LP (B738)  Urgench, UZ/Moscow,   May 22, 2023.
                                                                       RU.
RA-73667.........................           41707     737-8LP (B738)  Antalya, TR/Moscow,   May 25, 2023.
                                                                       RU.
RA-73667.........................           41707     737-8LP (B738)  Antalya, TR/Moscow,   May 29, 2023.
                                                                       RU.
RA-73667.........................           41707     737-8LP (B738)  Urgench, UZ/Moscow,   May 31, 2023.
                                                                       RU.
RA-73667.........................           41707     737-8LP (B738)  Yerevan, AM/          June 5, 2023.
                                                                       Novosibirisk, RU.
RA-73667.........................           41707     737-8LP (B738)  Antalya, TR/Moscow,   June 12, 2023.
                                                                       RU.
RA-73668.........................           41709     737-8LP (B738)  Beijing, CN/Irkutsk,  May 27, 2023.
                                                                       RU.
RA-73668.........................           41709     737-8LP (B738)  Urgench, UZ/Moscow,   June 1, 2023.
                                                                       RU.
RA-73668.........................           41709     737-8LP (B738)  Istanbul, TR/Moscow,  June 2, 2023.
                                                                       RU.
RA-73668.........................           41709     737-8LP (B738)  Antalya, TR/Moscow,   June 6, 2023.
                                                                       RU.
RA-73668.........................           41709     737-8LP (B738)  Bangkok, TH/Irkutsk,  June 13, 2023.
                                                                       RU.
RA-73670.........................           41710     737-8LP (B738)  Bangkok, TH/Irkutsk,  May 20, 2023.
                                                                       RU.
RA-73670.........................           41710     737-8LP (B738)  Bukhara, UZ/          May 24, 2023.
                                                                       Novosibirsk, RU.
RA-73670.........................           41710     737-8LP (B738)  Dubai, AE/            May 26, 2023.
                                                                       Novosibirsk, RU.
RA-73670.........................           41710     737-8LP (B738)  Antalya, TR/          May 31, 2023.
                                                                       Novosibirsk, RU.
RA-73670.........................           41710     737-8LP (B738)  Beijing, CN/Irkutsk,  June 1, 2023.
                                                                       RU.
RA-73670.........................           41710     737-8LP (B738)  Fergana, UZ/          June 10, 2023.
                                                                       Novosibirsk, 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 Siberian 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 Siberian, 
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, Siberian Airlines d/b/a S7 Airlines, 633104, Novosibirskaya 
obl., g. Ob, prospekt Mozzherina, d. 10 ofis 201, 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,

[[Page 40207]]

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 
Siberian 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 Siberian 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 Siberian 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 Siberian 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 Siberian 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 Siberian, or service any item, of 
whatever origin, that is owned, possessed or controlled by Siberian 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 Siberian 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, 
Siberian 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 Siberian 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 Siberian, 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. 2023-13162 Filed 6-20-23; 8:45 am]
BILLING CODE 3510-DT-P