Notice2024-13258
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 51302-51305]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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
</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.