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

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Published

October 13, 2023

Issuing agencies

Commerce DepartmentIndustry and Security Bureau

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<title>Federal Register, Volume 88 Issue 197 (Friday, October 13, 2023)</title>
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[Federal Register Volume 88, Number 197 (Friday, October 13, 2023)]
[Notices]
[Pages 70925-70928]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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superseded, set aside, or revoked through action undertaken pursuant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

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