[Federal Register Volume 89, Number 117 (Monday, June 17, 2024)]
[Notices]
[Pages 51302-51305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13258]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Temporarily Denying Export Privileges

SkyTechnic, Kiyevskoye Shosse 22-Y, Moskovsky Settlement, Moscow, 
Russia 108811;
Skywind International Limited, Room 2403A 24/F Lippo CTR Tower One, 89 
Queensway, Admiralty, Hong Kong;
Hong Fan International, Shop 102, Level 1, One Exchange Square, Hong 
Kong;
AND
Room A 11/F Henfa Commercial Building, 348-350 Lockhart Road, Hong 
Kong;
AND
Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, 
British Virgin Islands;
Lufeng Limited, Room A 11/F Henfa Commercial Building, 348-350 Lockhart 
Road, Hong Kong;
AND;
Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, 
British Virgin Islands;
Unical dis Ticaret Ve Lojistik JSC, 34140 Zeytinlik Mh. Halcki Sk, Iten 
Han Gue Carsi Blok No 28/58, Bakirkoy, Istanbul, Turkey;
AND
Room A 11/F Henfa Commercial Building, 348-350 Lockhart Road, Hong 
Kong;
Izzi Cup DOO, Koste Cukia 14, Zemun 200915, Serbia;
AND
Jl.Danau Tondano No. 55, 80228 Sanur--Bali, Indonesia;
Alexey Sumchenko, Hong Kong;
Anna Shumakova, Russia;
Branimir Salevic, Koste Cukia 14, Zemun 200915, Serbia;
AND
Jl.Danau Tondano No. 55, 80228 Sanur--Bali, Indonesia;
Danijela Salevic, Koste Cukia 14, Zemun 200915, Serbia;
AND
Jl.Danau Tondano No. 55, 80228 Sanur--Bali, Indonesia

    Pursuant to section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (``EAR'' or ``the Regulations''),\1\ 
the Bureau of Industry and Security (``BIS''), U.S. Department of 
Commerce, through its Office of Export Enforcement (``OEE''), has 
requested the issuance of an Order temporarily denying, for a period of 
180 days, the export privileges under the Regulations of: Alexey 
Sumchenko (``Sumchenko''), Anna Shumakova (``Shumakova''), Branimir 
Salevic (``Branimir''), Danijela Salevic (``Danijela''); SkyTechnic, 
Skywind International Limited (``Skywind''), Hong Fan International 
(``Hong Fan''), Lufeng Limited (``Lufeng''), Unical dis Ticaret Ve 
Lojistik LSC (``Unical''), and Izzi Cup DOO (``Izzi Cup'') 
(collectively, the ``Respondents''). OEE's request and related 
information indicate that these parties are located in the Russian 
Federation, Hong Kong, the British Virgin Islands, Turkey, Serbia, and 
Indonesia at the respective addresses listed on the caption page of 
this order. OEE's request and related information further indicates 
that SkyTechnic, a Russian aircraft parts supplier, has developed and 
continues to utilize a network of Hong Kong-based shell companies, 
including Skywind, Hong Fan, and Lufeng, to obtain civil aircraft parts 
from the United States and obfuscate the ultimate end users of those 
parts in Russia, contrary to the requirements of the Regulations.
---------------------------------------------------------------------------

    \1\ The Regulations, currently codified at 15 CFR parts 730-774 
(2021), originally issued pursuant to the Export Administration Act 
(50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which lapsed on 
August 21, 2001. The President, through Executive Order 13222 of 
August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), as extended by 
successive Presidential Notices, continued the Regulations in effect 
under the International Emergency Economic Powers Act (50 U.S.C. 
1701, et seq. (2012)) (``IEEPA''). 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 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 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.
---------------------------------------------------------------------------

I. 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. 15 CFR 766.24(b)(1) and

[[Page 51303]]

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 
``[l]ack 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.

II. OEE's Request for a Temporary Denial Order (``TDO'')

    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).\2\ 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).\3\
---------------------------------------------------------------------------

    \2\ 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).
    \3\ 87 FR 13048 (Mar. 8, 2022).
---------------------------------------------------------------------------

    In its request, OEE presented evidence indicating that the 
Respondents seek to procure various U.S.-origin commodities, including 
certain aircraft parts classified as ECCN 9A991.d, and transship them 
to Russia without seeking the required authorization from BIS, contrary 
to the requirements in the Regulations. Some of the parties to the 
transactions facilitated by Respondents included denied persons on the 
BIS Denied Persons List (``DPL''), which are parties prohibited from 
participating in exports from the United States and other activities 
subject to the Regulations. Specifically, within months of the BIS 
comprehensive export controls on Russia, SkyTechnic began using the 
Skywind, Hong Fan, and Lufeng aliases in Hong Kong in an effort to 
conceal its Russian connections and transship U.S. aircraft parts 
through Hong Kong to Russia.

A. Alexey Sumchenko

    Business records list Sumchenko as the owner of Skywind, Hong Fan, 
and Lufeng. Furthermore, bank records show that in February 2023, 
Sumchenko directed a third company to pay Lufeng approximately $450,000 
for services rendered to Skywind.

B. Anna Shumakova

    U.S. visa information reveals that Shumakova is a Russian national. 
Social media lists Shumakova as the head of a logistics and material 
department in Russia. Correspondence indicates that Shumakova 
coordinated the purchase and export of aircraft parts for SkyTechnic, 
Skywind, Hong Fan, and Lufeng after the February 24, 2022 
implementation of BIS controls on the export of aircraft parts to 
Russia.

C. Izzi Cup DOO and Branimir and Danijela Salevic

    Izzi Cup is a Serbian-registered company that brokers transactions 
of aircraft parts, including aircraft parts from the United States, for 
SkyTechnic. The company owner, Branimir Salevic (``Branimir''), lives 
in and operates the business from Indonesia. By at least mid-May 2022, 
Izzi Cup knew that its brokered transactions were ultimately destined 
to Russia via transshipment points and advised SkyTechnic on how to 
address its shipment without obvious linkages to Russia. In February 
2023, Export Enforcement (``EE'') personnel emailed Izzi Cup about 
several aircraft parts shipments. Branimir responded and informed EE 
personnel that Izzi Cup is a mom-and-pop shop.\4\ U.S. visa records 
indicate that Danijela is Branimir's wife and that she conducted 
business for Izzi Cup. Branimir and Danijela coordinated with Shumakova 
to circumvent U.S. export controls by shipping aircraft parts to Russia 
on several occasions without BIS authorization.
---------------------------------------------------------------------------

    \4\ Small business owned and operated by a husband-and-wife team 
are colloquially referred to as ``mom-and-pop shops.''
---------------------------------------------------------------------------

D. SkyTechnic/Skywind/Hong Fan/Lufeng

    Following the Russian invasion of the Ukraine, and the resultant 
implementation of BIS export controls affecting the Russian aviation 
industry, the respondents engaged in a transnational scheme--involving 
multiple companies--to ship aircraft parts to Russia in circumvention 
of BIS export controls. One of the companies, SkyTechnic, is an 
aircraft parts company based in Moscow, Russia. In March 2022, 
Shumakova--on behalf of SkyTechnic--contacted a freight-forwarder about 
ways to ship aircraft parts from the United States to Russia despite 
the United States' export control restrictions.
    In May-June 2022, Shumakova asked Izzi Cup whether she--on behalf 
of SkyTechnic-- could purchase aircraft parts using Russian bank 
accounts and have the parts shipped to Russia. Izzi Cup responded that 
it could facilitate the transaction if Shumakova amended her order to 
reflect Skywind--which had a non-Russian address--as the purchaser. 
Izzi Cup also asked Shumakova to provide non-Russian contact 
information to accompany her order.
    By May 2022, SkyTechnic began using Hong Kong as a transshipment 
point for aircraft parts from the United States that were ultimately 
bound for Russia. In May 2022, Shumakova, acting on behalf of both 
SkyTechnic and Skywind, informed a freight forwarder that Skywind would 
complete purchases on behalf of Pobeda Airlines.\5\
---------------------------------------------------------------------------

    \5\ Pobeda Airlines is itself the subject of a TDO. The first 
TDO against Pobeda Airlines was effective upon its issuance on June 
24, 2022 and published in the Federal Register on June 29, 2022 (87 
FR 38707). The TDO has been renewed three times and the last 
renewal, which is effective for one year, was published in the 
Federal Register on December 14, 2023 (88 FR 86628).
---------------------------------------------------------------------------

    By June 2022, SkyTechnic began using the business name Hong Fan, a 
company owned by Sumchenko, to facilitate further exports of aircraft 
parts from the United States. Although Hong Fan is a company registered 
in Hong Kong, its website is hosted in Russia. In October 2022, Hong 
Fan attempted to

[[Page 51304]]

ship aircraft parts, meant for a company called Euro Asia,\6\ to the 
Maldives. In November 2022, Hong Fan coordinated with a freight 
forwarder to ship aircraft parts that were ultimately destined to 
Pobeda Airlines, LLC. The associated invoice was issued by SkyTechnic.
---------------------------------------------------------------------------

    \6\ Euro Asia's website previously advertised a sales 
relationship with Aeroflot-Russian Airlines (``Aeroflot''). Aeroflot 
is itself the subject of a TDO. The first TDO against Aeroflot was 
effective upon its issuance on April 7, 2022 and published in the 
Federal Register on April 12, 2022 (87 FR 21611). The TDO has been 
renewed three times and the last renewal, which is effective for one 
year, was published in the Federal Register on September 28, 2023 
(88 FR 19609).
---------------------------------------------------------------------------

    SkyTechnic also used another alias, Lufeng, in its diversionary 
scheme. Like Hong Fan, Lufeng is owned by Sumchenko and registered in 
Hong Kong. Similarly, Lufeng's electronic contact information is of 
Russian origin.\7\ In June 2022, Shumakova--on behalf of SkyTechnic--
requested a quote for aircraft parts from Izzi Cup. Danijela responded 
for Izzi Cup and upon negotiating the purchase, Shumakova asked Izzi 
Cup to instead issue an invoice to Lufeng. Additionally, correspondence 
reflects Lufeng referred to Izzi Cup as its supplier.
---------------------------------------------------------------------------

    \7\ Additionally, Hong Fan and Lufeng share an address in the 
British Virgin Islands and Hong Kong.
---------------------------------------------------------------------------

E. Unical

    Unical is an Istanbul, Turkey-based logistics company that has 
facilitated shipments of aircraft parts to SkyTechnic. SkyTechnic, Hong 
Fan, and Lufeng also purchased aircraft parts from Unical, a company 
whose website is hosted in Turkey but also has electronic contact 
information of Russian origin. Correspondence, and an associated 
January 2023 invoice, reflects that Unical sold aircraft parts to 
SkyTechnic and shipped the parts to Russia. Additionally, 
communications occurring between February and March 2023 show Unical 
negotiating the purchase of aircraft parts from a repair facility 
within the United States. The parts were transshipped through Turkey 
before ultimately being delivered to Aeroflot in Russia, on behalf of 
SkyTechnic. The transaction was invoiced to Hong Fan.

F. Ongoing and Pending Exports

    As detailed in OEE's request and related information, the 
Respondents continue to engage in prohibited conduct. Export data 
reveals that between March 2022 and October 2023, Izzi Cup received 
approximately 16 shipments of aircraft parts worth a total of $226,000. 
Similarly, export data shows that between April 2022 and March 2023, 
Lufeng received approximately 22 shipments worth a total of $388,000. 
Likewise, export data indicates that between July 2022 and February 
2023, Hong Fan received approximately 27 shipments worth a total of 
$245,000.
    Moreover, Russian import data reveals that between February 2023 
and December 2023, SkyTechnic received approximately 259 imports, the 
majority of which consisted of U.S. aircraft parts. Lastly, import data 
shows that between January 2023 and May 2023, Pobeda received 
approximately 1,422 shipments, worth a total of $1.5 million, at the 
same Russian address as SkyTechnic. Most of the items contained within 
the shipments were manufactured by U.S. aircraft parts manufacturers.
    Furthermore, elements of this procurement network appear to be 
unresponsive to or unmoved by repeated outreach by the U.S. Department 
of Commerce. For example, after outreach to Izzi Cup via email during 
February and March 2023 to verify a shipment of U.S.-origin starter 
generators classified under ECCN 9A991 (a classification used for 
aircraft parts), the Department determined Izzi Cup to be an unreliable 
recipient of U.S.-origin items. The Department has also determined that 
Lufeng is an unreliable recipient of U.S.-origin items. This 
determination was based on a July 2023 end use check by BIS, in which a 
Hong Kong based U.S. Export Control Officer contacted Lufeng twice to 
schedule a meeting to verify exports of controlled items from the 
United States, and subsequently conducted an in-person visit of 
Lufeng's registered address during which Lufeng failed to provide 
information regarding the disposition of the controlled items.

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 the 
Respondents have acted in violation of the Regulations; 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. Therefore, 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 the Respondents, 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, SkyTechnic, Kiyevskoye Shosse 22-Y, Moskovsky Settlement, 
Moscow, Russia 108811; Skywind International Limited, Room 2403A 24/F 
Lippo CTR Tower One, 89 Queensway Admiralty, Hong Kong; Hong Fan 
International, Shop 102, Level 1, One Exchange Square, Hong Kong, and 
Room A 11/F Henfa Commercial Building, 348 Lockhart Road, Hong Kong, 
and Vistra Corporate Services Centre, Wickhams Cay II, Road Town, 
Tortola, British Virgin Islands; Lufeng Limited, Room A 11/F Henfa 
Commercial Building, 348 Lockhart Road, Hong Kong, and Vistra Corporate 
Services Centre, Wickhams Cay II, Road Town, Tortola, British Virgin 
Islands; Unical dis Ticaret Ve Lojistik JSC, 34140 Zeytinlik Mh. Halcki 
Sk, Iten Han Gue Carsi Blok No 28/58, Bakirkoy, Istanbul, Turkey, and, 
Room A 11/F Henfa Commercial Building, 348 Lockhart Road, Hong Kong; 
Izzi Cup DOO, Koste Cukia 14, Zemun 200915, Serbia, and Jl.Danau 
Tondano No. 55, 80228 Sanur--Bali, Indonesia; Alexey Sumchenko, Hong 
Kong; Anna Shumakova, Russia, and Branimir and Danijela Salevic, Koste 
Cukia 14, Zemun 200915, Serbia and Jl.Danau Tondano, No.55 80228, 
Sanur--Bali Indonesia, 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 51305]]

    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 
the Respondents 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 the Respondents 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 the Respondents 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 the Respondents 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 the Respondents 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 the Respondents, or service any item, 
of whatever origin, that is owned, possessed or controlled by the 
Respondents 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 Respondents 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 section 766.24(e) of the EAR, 
the Respondents 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 the Respondents 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 the Respondents and shall 
be published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
180 days.

Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2024-13258 Filed 6-14-24; 8:45 am]
BILLING CODE 3510-DT-P