Notice2024-13257
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 17, 2024
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 117 (Monday, June 17, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 117 (Monday, June 17, 2024)]
[Notices]
[Pages 51305-51307]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13257]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Order Temporarily Denying Export Privileges
Turboshaft FZE, Q3-117 Saif Zone 9732, Sharjah, UAE;
Treetops Aviation, Office #4801, Marina Pinnacle Tower, Dubai, UAE;
#1575 New Agents Bldg., Cargo Village P.O. Box 62369, Dubai, UAE;
Black Metal FZE, Q3-117 Saif Zone 9732, Sharjah, UAE;
Timur Badr, Q3-117 Saif Zone 9732, Sharjah, UAE;
Elaine Balingit, Office #4802, Marina Pinnacle Tower, Dubai, UAE;
Q3-117 Saif Zone 9732, Sharjah, UAE
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: Turboshaft
FZE (``Turboshaft''), Treetops Aviation (``Treetops''), Black Metal FZE
(``Black Metal''), Timur Badr, and Elaine Balingit (collectively, the
``Respondents''). OEE's request and related information indicate that
the parties are located in the United Arab Emirates (``UAE''), at the
respective addresses listed on the caption page of this order, and that
Badr, a Russian national, owns or controls Turboshaft FZE and Treetops
Aviation.
---------------------------------------------------------------------------
\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 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.
[[Page 51306]]
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 the shipment of various U.S.-origin
commodities, including certain aircraft parts classified as ECCN
9A991.d, to Russia, including to parties on the BIS Denied Persons List
(``DPL'').
A. Badr Conduct Prior to the February 2022 Russian Invasion of Ukraine
In May 2019, Export Enforcement (EE) personnel met with Badr at his
office in Sharjah, UAE. Badr informed the EE personnel that his
business consisted of trading in civilian aviation electronics and
parts--specifically purchasing the parts at low prices and then
reselling them for use in the urgent repair of grounded aircraft.\4\ He
stated that he stored aircraft parts at a property he owned in Moscow,
Russia and admitted he purchased a Boeing 737 and tore it down for
parts. The EE personnel informed Badr that the failure to secure export
licenses prior to exporting controlled items, such as aircraft parts,
could result in criminal prosecution. The EE personnel also advised
Badr to conduct due diligence by obtaining end-user statements from his
customers. Badr replied that he would lose customers if he required
them to provide end-user statements.
---------------------------------------------------------------------------
\4\ During the May 2019 meeting, Badr informed the OEE personnel
that his business' name changed from Turboshaft to Black Metal FZE
due to debts incurred under the Turboshaft name.
---------------------------------------------------------------------------
B. Badr/Turboshaft/Treetops/Balingit Conduct After the February 2022
Russian Invasion of Ukraine
In February 2023, the head of the transportation department for S7
Engineering, an arm of Siberian Airlines,\5\ contacted a U.S. freight
forwarder regarding the status of an aircraft part--a hydromechanical
fuel unit used in Airbus aircraft--it ordered from Turboshaft.\6\ The
communication included a Turboshaft invoice billed to S7 Engineering at
a Russian Federation address. The communication established that the
item was shipped from the United States, through the UAE, and along to
Russia.
---------------------------------------------------------------------------
\5\ Siberia Airlines, doing business as S7 Airlines, is itself
the subject of a TDO. The first TDO against Siberia Airlines was
effective upon its issuance on June 24, 2022, and published in the
Federal Register on June 29, 2022 (87 FR 38709). 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 86626).
\6\ During an August 2023 meeting, Badr informed OEE personnel
that he changed his business name from Black Metal FZE back to
Turboshaft due to customer and bank familiarity with the Turboshaft
name.
---------------------------------------------------------------------------
A social media profile associated with Elaine Balingit lists her as
Turboshaft's logistics officer. Additionally, U.S. export records
indicate that Balingit was listed as the ultimate consignee contact
person for 18 shipments of aircraft parts and equipment to Turboshaft
between January and July 2023. Balingit was likewise listed as the
ultimate consignee contact person for 18 shipments of aircraft parts
and equipment to Treetops between September and November 2023.
D. Ongoing and Pending Exports
As detailed in OEE's request and related information, Badr,
Turboshaft, Treetops, Black Metal, and Balingit continue to engage in
prohibited conduct. Import data reveals that 502 separate shipments, at
least some of which consisted of aircraft parts, arrived in Russia
between April 2022 and December 2023 in the name of Turboshaft,
Treetops, or Black Metal.
Import data shows that between January 2, 2023 and December 29,
2023, Turboshaft was listed as the supplier on 136 imports of goods
into Russia worth a claimed $1.6 million. Moreover, Turboshaft received
89 exports from the United States, worth almost $2.1 million since the
implementation of enhanced licensing requirements imposed on exports to
Russia on February 24, 2022. Throughout November and December 2023,
Turboshaft attempted to purchase two Air Data Inertial Reference Units,
valued at nearly $400,000 each, from a U.S. supplier. The most recent
shipment occurred on May 8, 2024.
Import data shows that between January 2, 2023 and December 29,
2023, Treetops was listed as the supplier on 244 imports of goods into
Russia worth a claimed $4.46 million. Siberia Airlines, an entity
subject to a TDO, received many of these shipments--which included
items produced by U.S. aerospace manufacturers. Additionally, Treetops
received 29 exports from the United States worth a claimed $626,755
between September 12, 2023 and April 23, 2024. On April 26, 2024, U.S.
Customs and Border Protection seized a shipment of aircraft parts meant
for Treetops due to the submission of false Electronic Export
Information (EEI) through the Automated Export System (AES). Lastly,
Treetops is listed as the intermediate consignee of a September 2023
shipment of aircraft parts to Turboshaft.
Import data shows that between March and December 2022, Black Metal
was listed as the supplier on 122 imports of goods into Russia.
Moreover, Black Metal received 16 exports from the United States, worth
almost $461,000 since the implementation of enhanced licensing
requirements imposed on exports to Russia on February 24, 2022. As
indicated above, Badr toggles between operating as Black Metal or
Turboshaft to facilitate his procurement efforts.
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
[[Page 51307]]
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, Turboshaft FZE, Q3-117 Saif Zone 9732, Sharjah, UAE;
Treetops Aviation, Office #4801, Marina Pinnacle Tower, Dubai, UAE and
#1575 New Agents Bldg., Cargo Village P.O. Box 62369, Dubai, UAE; Black
Metal FZE, Q3-117 Saif Zone 9732, Sharjah, UAE; Timur Badr, Q3-117 Saif
Zone 9732, Sharjah, UAE; and Elaine Balingit, Office #4802, Marina
Pinnacle Tower, Dubai, UAE and Q3-117 Saif Zone 9732, Sharjah, UAE,
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
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 sections 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. 2024-13257 Filed 6-14-24; 8:45 am]
BILLING CODE 3510-DT-P
</pre></body>
</html>Indexed from Federal Register on June 17, 2024.
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.