[Federal Register Volume 88, Number 187 (Thursday, September 28, 2023)]
[Notices]
[Pages 66802-66805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21171]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Renewing Temporary Denial of Export Privileges; UTair 
Aviation JSC, Khanty-Mansiysk Airport, Tyumen Region, Russia 628012

    Pursuant to section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (``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 October 3, 2022. I find that renewal of this order is 
necessary in the public interest to prevent an imminent violation of 
the Regulations and that renewal for an extended period is appropriate 
because UTair Aviation JSC (``UTair'') has engaged in a pattern of 
repeated, ongoing and/or continuous apparent violations of the EAR.
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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according to their terms until modified, superseded, set aside, or 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 April 7, 2022, I signed an order denying UTair's export 
privileges 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 October 3, 2022 and was effective upon issuance.\4\ A 
second renewal order issued on March 29, 2023 and was also effective 
upon issuance.\5\
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    \2\ The TDO was published in the Federal Register on April 12, 
2022 (87 FR 21616).
    \3\ At the time of the renewal, section 766.24(d) provided 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 October 3, 2022 renewal order was published in the 
Federal Register on October 7, 2022 (87 FR 60987).
    \5\ The March 29, 2023 renewal order was published in the 
Federal Register on April 4, 2023 (88 FR 19911).
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    On September 5, 2023, BIS, through OEE, submitted a written request 
for renewal of the TDO that issued on March 29, 2023. The written 
request was made more than 20 days before the TDO's scheduled 
expiration and, given the temporary suspension of international mail 
service to Russia, OEE has attempted to deliver a copy of the renewal 
request to UTair by alternative means 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 CFR766.24(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

[[Page 66803]]

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.
    If BIS believes that renewal of a denial order is necessary in the 
public interest to prevent an imminent violation, it may file a written 
request for renewal, with any modifications if appropriate. 15 CFR 
766.24(d)(1). The written request, which must be filed no later than 20 
days prior to the TDO's expiration, should set forth the basis for 
BIS's belief that renewal is necessary, including any additional or 
changed circumstances. Id. ``In cases demonstrating a pattern of 
repeated, ongoing and/or continuous apparent violations, BIS may 
request the renewal of a temporary denial order for an additional 
period not exceeding one year.'' \6\ Id.
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    \6\ 88 FR 59791 (Aug. 30, 2023).
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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).\7\ 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).\8\ 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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    \7\ 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).
    \8\ 87 FR 13048 (Mar. 8, 2022).
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    OEE's request for renewal for a period of one year is based upon 
the facts underlying the issuance of the initial TDO and the renewal 
order subsequently issued in this matter on October 3, 2022, as well as 
other evidence developed during this investigation. These facts and 
evidence demonstrate that UTair has continued, and continues, to act in 
blatant disregard for U.S. export controls and the terms of previously 
issued TDOs. Specifically, the initial TDO, issued on April 7, 2022, 
was based on evidence that UTair 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, Jeddah, Saudi 
Arabia, Yerevan, Armenia, and Tashkent, Uzbekistan, without the 
required BIS authorization.\9\ Further evidence submitted by BIS 
indicated that UTair was continuing to operate aircraft subject to the 
EAR domestically on flights within Russia, potentially in violation of 
section 736.2(b)(10) of the Regulations.
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    \9\ Publicly available flight tracking information shows that on 
March 5, 2022, serial number (SN) 36387 flew from Jeddah, Saudi 
Arabia to Grozny, Russia, and on March 30, 2022, SN 28907 flew from 
Yerevan, Armenia to Tyumen, Russia. In addition, on March 31, 2022, 
SN 30437 flew from Tashkent, Uzbekistan to Moscow, Russia.
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    As discussed in the October 3, 2022 and March 29, 2023 renewal 
orders, evidence presented by BIS indicated that, after the initial 
order issued, UTair 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.\10\ 
Specifically, the October 3, 2022 renewal order detailed UTair's 
continued operation of aircraft subject to the EAR, including, but not 
limited to, on flights into and out of Russia from/to Yerevan, Armenia, 
Baku, Azerbaijan, and Tashkent, Uzbekistan.\11\ Similarly, the March 
29, 2023 renewal order detailed UTair's continued operation of aircraft 
subject to the EAR, including, but not limited to, on flights into and 
out of Russia from/to Yerevan, Armenia, Baku, Azerbaijan, Dushanbe, 
Tajikistan, and Dubai, United Arab Emirates.\12\
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    \10\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \11\ Publicly available flight tracking information shows that 
on September 19, 2022, SN 30437 flew from Tashkent, Uzbekistan to 
Moscow, Russia, and SN 30435 flew from Yerevan, Armenia to Moscow, 
Russia. In addition, on September 21, 2022, SN 28912 flew from Baku, 
Azerbaijan to Moscow, Russia.
    \12\ Publicly available flight tracking information shows that 
SN 37752 flew from Yerevan, Armenia to Moscow, Russia on March 23, 
2023 and from Dubai, United Arab Emirates to Grozny, Russia on March 
28, 2023. In addition, on March 29, 2023, SN 30437 flew from 
Dushanbe, Tajikistan to Moscow Russia and on March 7, 2023, SN 28912 
flew from Baku, Azerbaijan to Ufa, Russia.
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    Since that time, UTair has continued to engage in conduct 
prohibited by the applicable TDO and Regulations. In its September 5, 
2023 request for renewal of the TDO, BIS submitted evidence that UTair 
is operating aircraft subject to the EAR and classified under ECCN 
9A991.b, both on flights into and within Russia, in violation of the 
March 29, 2023 TDO and/or the Regulations. Specifically, BIS's evidence 
and related investigation demonstrates that UTair has continued to 
operate aircraft subject to the EAR, including, but not limited to, on 
flights into and out of Russia from/to Yerevan, Armenia, Baku, 
Azerbaijan, Dushanbe, Tajikistan, Istanbul, Turkey, Tashkent, 
Uzbekistan, and Dubai, United Arab Emirates. Information about those 
flights includes, but is not limited to, the following:

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       Tail No.           Serial No.                   Aircraft type                Departure/arrival cities                     Dates
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RA-73089..............           37552  737-8GU (B738)............................  Dushanbe, TJ/Moscow, RU.  August 28, 2023.
RA-73089..............           37552  737-8GU (B738)............................  Khujand, TJ/Moscow, RU..  August 29, 2023.
RA-73089..............           37552  737-8GU (B738)............................  Tashkent, UZ/Ufa, RU....  August 31, 2023.
RA-73089..............           37552  737-8GU (B738)............................  Istanbul, TR/Grozny, RU.  September 2, 2023.
RA-73089..............           37552  737-8GU (B738)............................  Istanbul, TR/Grozny, RU.  September 4, 2023.
RA-73089..............           37552  737-8GU (B738)............................  Samarkand, UZ/Moscow, RU  September 5, 2023.

[[Page 66804]]

 
RA-73089..............           37552  737-8GU (B738)............................  Istanbul, TR/Grozny, RU.  September 19, 2023.
RA-73087..............           29936  737-8AS (B738)............................  Dushanbe, TJ/Moscow, RU.  August 28, 2023.
RA-73087..............           29936  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  September 1, 2023.
RA-73087..............           29936  737-8AS (B738)............................  Samarkand, UZ/Moscow, RU  September 2, 2023.
RA-73087..............           29936  737-8AS (B738)............................  Yerevan, AM/St.           September 5, 2023.
                                                                                     Petersburg, RU.
RA-73087..............           29936  737-8AS (B738)............................  Baku, AZ/St. Petersburg,  September 7, 2023.
                                                                                     RU.
RA-73087..............           29936  737-8AS (B738)............................  Antalya, TR/Surgut, RU..  September 11, 2023.
RA-73087..............           29936  737-8AS (B738)............................  Yerevan, AM/Moscow, RU..  September 15, 2023.
RA-73085..............           32779  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  August 28, 2023.
RA-73085..............           32779  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  August 30, 2023.
RA-73085..............           32779  737-8AS (B738)............................  Dubai, AE/Tyumen, RU....  September 1, 2023.
RA-73085..............           32779  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  September 6, 2023.
RA-73085..............           32779  737-8AS (B738)............................  Bukhara, UZ/Moscow, RU..  September 12, 2023.
RA-73085..............           32779  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  September 15, 2023.
RA-73086..............           32780  737-8AS (B738)............................  Samarkand, UZ/Moscow, RU  August 26, 2023.
RA-73086..............           32780  737-8AS (B738)............................  Istanbul, TR/Grozny, RU.  August 29, 2023.
RA-73086..............           32780  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  September 3, 2023.
RA-73086..............           32780  737-8AS (B738)............................  Samarkand, UZ/Moscow, RU  September 6, 2023.
RA-73086..............           32780  737-8AS (B738)............................  Dushanbe, TJ/Moscow, RU.  September 8, 2023.
RA-73086..............           32780  737-8AS (B738)............................  Yerevan, AM/St.           September 12, 2023.
                                                                                     Petersburg, RU.
RA-73086..............           32780  737-8AS (B738)............................  Baku, AZ/Moscow, RU.....  September 16, 2023.
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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 UTair has 
acted in violation of the Regulations and the TDO; that such violations 
have been significant and deliberate; and that given the foregoing and 
the nature of the matters under investigation, there is a likelihood of 
imminent violations. Moreover, I find that renewal for an extended 
period is appropriate because UTair has engaged in a pattern of 
repeated, ongoing and/or continuous apparent violations of the EAR. 
Therefore, renewal of the TDO for one year 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 UTair, 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, UTair Aviation JSC, Khanty-Mansiysk Airport, Tyumen Region, 
Russia 628012, 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 
UTair 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 UTair 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 UTair 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 UTair 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 UTair 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 UTair, or service any item, of 
whatever origin, that is owned, possessed or controlled by UTair 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 UTair by ownership, control, position 
of

[[Page 66805]]

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, 
UTair 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 UTair 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 UTair, and shall be 
published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
one year.

Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2023-21171 Filed 9-27-23; 8:45 am]
BILLING CODE 3510-DT-P