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

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September 28, 2023

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Commerce DepartmentIndustry and Security Bureau

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<title>Federal Register, Volume 88 Issue 187 (Thursday, September 28, 2023)</title>
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[Federal Register Volume 88, Number 187 (Thursday, September 28, 2023)]
[Notices]
[Pages 66802-66805]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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according to their terms until modified, superseded, set aside, or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

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