Notice2022-13876
Nordwind Airlines, Leningradskaya str., building 25, office 27. 28, Moscow region, Khimki city, 141402, Russia; Order Temporarily Denying Export Privileges
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 29, 2022
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 124 (Wednesday, June 29, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 124 (Wednesday, June 29, 2022)]
[Notices]
[Pages 38704-38707]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-13876]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Nordwind Airlines, Leningradskaya str., building 25, office 27.
28, Moscow region, Khimki city, 141402, Russia; Order Temporarily
Denying Export Privileges
Pursuant to Section 766.24 of the Export Administration
Regulations, 15 CFR parts 730-774 (2021) (``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 Russian airline Nordwind Airlines (``Nordwind''). OEE's request and
related information indicates that Nordwind is headquartered in Moscow,
Russia.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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, 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
[[Page 38705]]
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\
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
OEE's request is based upon facts indicating that Nordwind engaged
in conduct prohibited by the Regulations by operating multiple aircraft
subject to the EAR and classified under ECCN 9A991, including but not
limited to those below, on international flights, including from
Yerevan, Armenia, Istanbul, Turkey, and Sharm el-Sheikh, Egypt to
Russia after March 2, 2022, without the required BIS authorization.
Pursuant to Section 746.8 of the EAR, all of these flights would have
required export or reexport licenses from BIS. Nordwind flights would
not be eligible to use license exception AVS. No BIS authorizations
were either sought or obtained by Nordwind for these exports or
reexports to Russia.
Additionally, Nordwind's continued use of such U.S.-origin aircraft
on domestic routes within Russia runs afoul of General Prohibition 10,
which (among other restrictions) prohibits the continued use of an item
that was known to have been exported or reexported in violation of the
EAR. See General Prohibition 10 of the EAR at 15 CFR 736.2(b)(10).\4\
Specifically, OEE's investigation, including publicly available flight
tracking information, indicates that after March 2, 2022, Nordwind
continued to operate multiple U.S.-origin aircraft following their
unauthorized export or reexport to Russia in violation of the EAR,
including, but not limited to, those identified below, domestically on
flights into and out of Russian cities, including Beslan, Russia;
Makhachkala, Russia; Moscow, Russia; St. Petersburg, Russia; and Sochi,
Russia. The information about those flights includes the following:
---------------------------------------------------------------------------
\4\ Section 736.2(b)(10) of the EAR provides: General
Prohibition Ten--Proceeding with transactions with knowledge that a
violation has occurred or is about to occur (Knowledge Violation to
Occur). You may not sell, transfer, export, reexport, finance,
order, buy, remove, conceal, store, use, loan, dispose of,
transport, forward, or otherwise service, in whole or in part, any
item subject to the EAR and exported or to be exported with
knowledge that a violation of the Export Administration Regulations,
the Export Administration Act or any order, license, License
Exception, or other authorization issued thereunder has occurred, is
about to occur, or is intended to occur in connection with the item.
Nor may you rely upon any license or License Exception after notice
to you of the suspension or revocation of that license or exception.
There are no License Exceptions to this General Prohibition Ten in
part 740 of the EAR. (emphasis in original).
----------------------------------------------------------------------------------------------------------------
Departure/arrival
Tail No. Serial No. Aircraft type cities Dates
----------------------------------------------------------------------------------------------------------------
VQ-BJA/RA-73340.................. 28520 777-212 (ER) (B772) Samana, DO/Moscow, March 7, 2022.
RU.
RA-73340......................... 28520 777-212 (ER) (B772) Moscow, RU/Sochi, June 20, 2022.
RU.
RA-73340......................... 28520 777-212 (ER) (B772) Sochi, RU/Moscow, June 21, 2022.
RU.
RA-73340......................... 28520 777-212 (ER) (B772) Moscow, RU/Sochi, June 23, 2022.
RU.
VP-BSE/RA-73315.................. 40236 737-8KN (B738)..... Sharm el-Sheikh, EG/ March 7, 2022.
Moscow, RU.
RA-73315......................... 40236 737-8KN (B738)..... Makhachkala, RU/St. June 20, 2022.
Petersburg, RU.
RA-73315......................... 40236 737-8KN (B738)..... Makhachkala, RU/St. June 22, 2022.
Petersburg, RU.
RA-73315......................... 40236 737-8KN (B738)..... St. Petersburg, RU/ June 23, 2022.
Moscow, RU.
VP-BSC/RA-73314.................. 40233 737-8KN (B738)..... Istanbul, TR/Kazan, March 7, 2022.
RU.
RA-73314......................... 40233 737-8KN (B738)..... Sochi, RU/Surgut, June 20, 2022.
RU, RU.
RA-73314......................... 40233 737-8KN (B738)..... Sochi, RU/ June 21, 2022.
Ulyanovsk, RU.
RA-73314......................... 40233 737-8KN (B738)..... Sochi, RU/Samara, June 23, 2022.
RU.
RA-73314......................... 40233 737-8KN (B738)..... Samara, RU/Sochi, June 23, 2022.
RU.
VP-BSO/RA-73317.................. 40874 737-82R (B738)..... Yerevan, AM/Kazan, March 7, 2022.
RU.
RA-73317......................... 40874 737-82R (B738)..... Moscow, RU/Beslan, June 21, 2022.
RU.
RA-73317......................... 40874 737-82R (B738)..... Orsk, RU/Moscow, RU June 21, 2022.
RA-73317......................... 40874 737-82R (B738)..... Moscow, RU/Beslan, June 22, 2022.
RU.
RA-73317......................... 40874 737-82R (B738)..... Orsk, RU/Moscow, RU June 23, 2022.
----------------------------------------------------------------------------------------------------------------
Based upon the on-going violations by Nordwind, there are
heightened concerns of future violations of the EAR, especially given
that any subsequent actions taken with regard to any of the listed
aircraft, or other Nordwind aircraft exported or reexported to Russia
after March 2, 2022, may violate the EAR. Such actions include, but are
not
[[Page 38706]]
limited to, refueling, maintenance, repair, or the provision of spare
parts or services. Id.
Moreover, additional concerns of future violations of the
Regulations are raised by public information on Nordwind's website,
available as of the date of the signing of this order, indicating that
Nordwind continues operating domestically, suggesting that Nordwind
intends not only to maintain control over the aircraft but also to
continue operating them in likely violation of the EAR. Specifically,
Nordwind's website states that its worldwide network includes more than
200 destinations and that the airline ``fl[ies] to 75 cities in 7
countries'' and ``operate[s] 500 flights weekly.'' \5\ Given BIS's
review policy of denial under Section 746.8(a) of the Regulations for
exports and reexports to Russia, it is foreseeable that Nordwind will
attempt to evade the Regulations in order to obtain new or additional
aircraft parts for or service its existing aircraft that were exported
or reexported to Russia in violation of Section 746.8 of the
Regulations.
---------------------------------------------------------------------------
\5\ <a href="https://nordwindairlines.ru/en/about-company">https://nordwindairlines.ru/en/about-company</a>.
---------------------------------------------------------------------------
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 Nordwind took
actions in apparent violation of the Regulations by operating the
aircraft cited above, among many others, on flights into and within
Russia after March 2, 2022, without the required BIS authorization.
Moreover, the continued operation of these aircraft by Nordwind, even
on domestic routes within Russia, and the company's on-going need to
acquire replacement parts and components, many of which are U.S.-
origin, presents a high likelihood of imminent violations warranting
imposition of a TDO. I further find that such apparent violations have
been ``significant, deliberate, covert and/or likely to occur again,
rather than technical or negligent[.]'' Therefore, issuance 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 Nordwind,
in connection with export and reexport transactions involving items
subject to the Regulations and in connection with any other activity
subject to the Regulations.
This Order is being issued on an ex parte basis without a hearing
based upon BIS's showing of an imminent violation in accordance with
Section 766.24 and 766.23(b) of the Regulations.
IV. Order
It is therefore ordered:
First, Nordwind Airlines, Leningradskaya str., building 25, office
27. 28, Moscow region, Khimki city, 141402, 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
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
Nordwind 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 Nordwind 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 Nordwind 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 Nordwind 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 Nordwind 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 Nordwind, or service any item, of
whatever origin, that is owned, possessed or controlled by Nordwind 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 Nordwind 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,
Nordwind 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 Nordwind 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 Nordwind and shall be
published in the Federal Register.
[[Page 38707]]
This Order is effective immediately and shall remain in effect for
180 days.
Dated: June 24, 2022.
Matthew S. Axelrod,
Assistant Secretary of Commerce Export Enforcement.
[FR Doc. 2022-13876 Filed 6-28-22; 8:45 am]
BILLING CODE 3510-DT-P
</pre></body>
</html>Indexed from Federal Register on June 29, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.