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

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Published

September 26, 2024

Issuing agencies

Commerce DepartmentIndustry and Security Bureau

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<title>Federal Register, Volume 89 Issue 187 (Thursday, September 26, 2024)</title>
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[Federal Register Volume 89, Number 187 (Thursday, September 26, 2024)]
[Notices]
[Pages 78846-78848]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21947]

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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 September 23, 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 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according to their terms until modified, superseded, set aside, or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\ The temporary denial order was subsequently renewed on
October 3, 2022,\3\ March 29, 2023,\4\ and September 23, 2023 \5\ in
accordance with section 766.24(d) of the Regulations.\6\
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\2\ The TDO was published in the Federal Register on April 12,
2022 (87 FR 21616).
\3\ The October 3, 2022 renewal order, which was effective upon
issuance, was published in the Federal Register on October 7, 2022
(87 FR 60987).
\4\ The March 29, 2023 renewal order, which was effective upon
issuance, was published in the Federal Register on April 4, 2023 (88
FR 19911).
\5\ The September 23, 2023 renewal order, which was effective
upon issuance, was published in the Federal Register on September
28, 2023 (88 FR 66802).
\6\ Section 766.24(d) provides 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. 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.
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On August 27, 2024, BIS, through OEE, submitted a written request
for renewal of the TDO that issued on September 23, 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 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.'' \7\ Id.
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\7\ 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).\8\ 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).\9\ Accordingly, any U.S.-origin

[[Page 78847]]

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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\8\ 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).
\9\ 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
orders subsequently issued in this matter, 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.\10\ 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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\10\ 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, March 29, 2023, and September
23, 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.\11\ 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.\12\ 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 (``UAE'').\13\
The September 23, 2023 renewal order outlined UTair's further 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, Istanbul, Turkey, Tashkent,
Uzbekistan, and Dubai, UAE.\14\
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\11\ Engaging in conduct prohibited by a denial order violates
the Regulations. 15 CFR 764.2(a) and (k).
\12\ 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.
\13\ 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.
\14\ Publicly available flight tracking information shows that
SN 37552 flew from Istanbul, Turkey to Grozny, Russia on September
19, 2023, SN 29936 flew from Yerevan, Armenia to Moscow, Russia on
September 15, 2023. In addition, SN 32780 flew from Dushanbe,
Tajikistan to Moscow, Russia on September 8, 2023.
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Since that time, UTair has continued to engage in conduct
prohibited by the applicable TDO and Regulations. In its August 27,
2024 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
September 23, 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 Khujand,
Tajikistan, Istanbul, Turkey, Dubai, UAE, Baku, Azerbaijan, Samarkand,
Uzbekistan, Bukhara, Uzbekistan, and Bishkek, Kyrgyzstan. Information
about those flights includes, but is not limited to, the following:

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Departure/
Tail No. Serial No. Aircraft type arrival cities Dates
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RA-73089............. 37552 737-8GU (B738).......... Khujand, TJ/ August 11, 2024.
Tyumen, RU.
RA-73089............. 37552 737-8GU (B738).......... Istanbul, TR/ September 6, 2024.
Grozny, RU.
RA-73089............. 37552 737-8GU (B738).......... Dubai, AE/ September 8, 2024.
Grozny, RU.
RA-73087............. 29936 737-8AS (B738).......... Samarkand, UZ/ August 5, 2024.
Moscow, RU.
RA-73087............. 29936 737-8AS (B738).......... Baku, AZ/ August 14, 2024.
Moscow, RU.
RA-73087............. 29936 737-8AS (B738).......... Baku, AZ/ September 9, 2024.
Moscow, RU.
RA-73085............. 32779 737-8AS (B738).......... Bukhara UZ/ August 3, 2024.
Moscow, RU.
RA-73085............. 32779 737-8AS (B738).......... Baku, AZ/ August 13, 2024.
Moscow, RU.
RA-73085............. 32779 737-8AS (B738).......... Samarkand, UZ/ September 10, 2024.
St Petersburg,
RU.
RA-73086............. 32780 737-8AS (B738).......... Bishkek, KG/ August 11, 2024.
Surgut RU.
RA-73086............. 32780 737-8AS (B738).......... Baku, AZ/ August 12, 2024.
Moscow, RU.
RA-73086............. 32780 737-8AS (B738).......... Baku, AZ/ September 10, 2024.
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 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

[[Page 78848]]

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 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. 2024-21947 Filed 9-25-24; 8:45 am]
BILLING CODE 3510-DT-P

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