[Federal Register Volume 88, Number 197 (Friday, October 13, 2023)]
[Notices]
[Pages 70925-70928]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22604]


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 DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Renewing Temporary Denial of Export Privileges; URAL 
Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 620025

    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 April 10, 2023. 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 URAL Airlines JSC (``URAL'') 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. Sec.  
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superseded, set aside, or revoked through action undertaken pursuant 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 October 13, 2022, I signed an order denying URAL'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.

[[Page 70926]]

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 April 10, 2023 and was 
effective upon issuance.\4\
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    \2\ The TDO was published in the Federal Register on October 19, 
2022 (87 FR 63477).
    \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.
    \4\ The April 10, 2023 renewal order was published in the 
Federal Register on April 13, 2023 (88 FR 22406).
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    On September 15, 2023, BIS, through OEE, submitted a written 
request for renewal of the TDO that issued on April 10, 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 serve a copy of the renewal 
request on URAL 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.
    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.'' \5\ Id.
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    \5\ 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).\6\ 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).\7\ 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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    \6\ 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).
    \7\ 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, the renewal 
orders subsequently issued in this matter, and evidence that continues 
to develop during this investigation. These facts and evidence 
demonstrate that URAL 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 October 13, 2022, was 
based on evidence that URAL 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, Bishkek, 
Kyrgyzstan; Dushanbe, Tajikistan; Khudzhand, Tajikistan; and Tamchy, 
Kyrgyzstan without the required BIS authorization.\8\ Further evidence 
submitted by BIS indicated that URAL was also 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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    \8\ Publicly available flight tracking information shows 
multiple flights into Russia, including the following: on September 
10, 2022, SN 5055 flew from Dushanbe, Tajikistan to Irkutsk, Russia, 
and on September 6, 2022, SN 5055 flew from Khudzhand, Tajikistan to 
Sochi, Russia. In addition, on October 6, 2022, serial number (SN) 
5055 flew from Bishkek, Kyrgyzstan to Samara, Russia.
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    As discussed in the April 10, 2023 renewal order, evidence 
presented by BIS indicated that, after the initial October 13, 2022 TDO 
issued, URAL continued to operate aircraft subject to the EAR and 
classified under ECCN 9A991.b on flights both into and within Russia, 
in violation of the Regulations and the TDO itself.\9\ Specifically, 
the April 10, 2023 renewal order detailed URAL's continued operation of 
aircraft subject to the EAR, including, but not limited to, on flights 
into and out of Russia from/to Bishkek, Kyrgyzstan, Dushanbe, 
Tajikistan, and Khujand, Tajikistan, as well as within Russia.\10\
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    \9\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \10\ Publicly available flight tracking information shows that 
SN 5055 flew from Dushanbe, Tajikistan to Ufa, Russia on March 20, 
2023 and from Osh, Kyrgyzstan to Krasnoyarsk, Russia on March 19, 
2023. In addition, on March 19, 2023, SN 2376 flew from Bishkek, 
Kyrgyzstan to Yekaterinburg, Russia. On March 6, 2023, SN 1941 flew 
from Khujand, Tajikistan to Yekaterinburg, Russia. On March 16, 
2023, SN 1941 flew from Sochi, Russia to Moscow, Russia.
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    Since that time, URAL has continued to engage in conduct prohibited 
by the

[[Page 70927]]

TDO and Regulations. In its September 15, 2023, request for renewal of 
the TDO, BIS submitted evidence that URAL continues to operate aircraft 
subject to the EAR and classified under ECCN 9A991.b, both on flights 
into and within Russia, in violation of the April 10, 2023 TDO and/or 
the Regulations. Specifically, BIS's evidence and related investigation 
demonstrates that URAL has continued to operate aircraft subject to the 
EAR, including, but not limited to, on flights into and out of Russia 
from/to Dushanbe, Tajikistan, Tamchy, Kyrgyzstan, and Bishkek, 
Kyrgyzstan, as well as domestically within Russia. 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-73817..............            5055        A320-232  Bishkek, KG/        August 7, 2023.
                                                         Yekaterinburg, RU.
RA-73817..............            5055        A320-232  Kulob, TJ/Moscow,   August 15, 2023.
                                                         RU.
RA-73817..............            5055        A320-232  Irkutsk, RU/        August 17, 2023.
                                                         Yekaterinburg, RU.
RA-73817..............            5055        A320-232  Osh, KG/            September 1, 2023.
                                                         Krasnoyarsk, RU.
RA-73817..............            5055        A320-232  Dushanbe, TJ/       September 5, 2023.
                                                         Yekaterinburg, RU.
RA-73817..............            5055        A320-232  Yekaterinburg, RU/  September 8, 2023.
                                                         Sochi, RU.
RA-73817..............            5055        A320-232  Bishkek, KG/        September 12, 2023.
                                                         Yekaterinburg, RU.
RA-73817..............            5055        A320-232  Bishkek, KG/        September 22, 2023.
                                                         Yekaterinburg, RU.
RA-73817..............            5055        A320-232  Khujand, TJ/        September 30, 2023.
                                                         Yekaterinburg, RU.
RA-73818..............            2376        A320-232  Tamchy, KG/Moscow,  August 21, 2023.
                                                         RU.
RA-73818..............            2376        A320-232  Kulob, TJ/Moscow,   August 22, 2023.
                                                         RU.
RA-73818..............            2376        A320-232  Khujand, TJ/        August 30, 2023.
                                                         Yekaterinburg, RU.
RA-73818..............            2376        A320-232  Dushanbe, TJ/       September 2, 2023.
                                                         Sochi, RU.
RA-73818..............            2376        A320-232  Beslan, RU/Moscow,  September 3, 2023.
                                                         RU.
RA-73818..............            2376        A320-232  Kulob, TJ/Moscow,   September 7, 2023.
                                                         RU.
RA-73818..............            2376        A320-232  Sochi, RU/          September 14, 2023.
                                                         Yekaterinburg, RU.
RA-73818..............            2376        A320-232  Khujand, TJ/        September 24, 2023.
                                                         Yekaterinburg, RU.
RA-73844..............            1941        A321-231  Dushanbe, TJ/       August 25, 2023.
                                                         Moscow, RU.
RA-73844..............            1941        A321-231  Dushanbe, TJ/       August 30, 2023.
                                                         Moscow, RU.
RA-73844..............            1941        A321-231  Osh, KG/Moscow, RU  September 3, 2023.
RA-73844..............            1941        A321-231  Osh, KG/Moscow, RU  September 6, 2023.
RA-73844..............            1941        A321-231  Bishkek, KG/        September 4, 2023.
                                                         Moscow, RU.
RA-73844..............            1941        A321-231  Kaliningrad, RU/    September 8, 2023.
                                                         Moscow, RU.
RA-73844..............            1941        A321-231  Bishkek, KG/        September 12, 2023.
                                                         Moscow, RU.
RA-73844..............            1941        A321-231  Kulob, TJ/Moscow,   September 29, 2023.
                                                         RU.
RA-73844..............            1941        A321-231  Bishkek, KG/        October 1, 2023.
                                                         Moscow, 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 demonstrates that URAL 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. Moreover, I find that renewal for an extended 
period is appropriate because URAL 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 URAL, 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, URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 
620025, 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 
URAL 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 URAL 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 URAL 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 URAL 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;

[[Page 70928]]

    D. Obtain from URAL 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 URAL, or service any item, of 
whatever origin, that is owned, possessed or controlled by URAL 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 URAL 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, 
URAL 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 URAL 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 URAL 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. 2023-22604 Filed 10-12-23; 8:45 am]
BILLING CODE 3510-DT-P