PJSC Aeroflot, 1 Arbat St., 119019, Moscow, Russia; Order Renewing Temporary Denial of Export Privileges

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Published

September 25, 2024

Issuing agencies

Commerce DepartmentIndustry and Security Bureau

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<title>Federal Register, Volume 89 Issue 186 (Wednesday, September 25, 2024)</title>
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[Federal Register Volume 89, Number 186 (Wednesday, September 25, 2024)]
[Notices]
[Pages 78283-78286]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21948]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

PJSC Aeroflot, 1 Arbat St., 119019, Moscow, Russia; Order
Renewing Temporary Denial of Export Privileges

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 7, 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 PJSC Aeroflot (``Aeroflot'') 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superseded, set aside, or revoked through action undertaken pursuant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 April 7, 2022, I signed an order denying Aeroflot 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 21611).
\3\ The October 3, 2022 renewal order, which was effective upon
issuance, was published in the Federal Register on October 7, 2022
(87 FR 60985).
\4\ The March 29, 2023 renewal order, which was also effective
upon issuance, was published in the Federal Register on April 3,
2023 (88 FR 19609).
\5\ The September 23, 2023 renewal order, which was effective
upon issuance, was published in the Federal Register on September
28, 2023 (88 FR 66807).
\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 a fourth renewal of the TDO. 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 Aeroflot 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

[[Page 78284]]

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 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 TDO and the renewal orders
subsequently issued in this matter on October 3, 2022, March 29, 2023,
and September 23, 2023, as well as other evidence developed during this
investigation. This evidence demonstrates that Aeroflot 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 Aeroflot 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, Beijing, China, Delhi, India, and Dubai, United Arab Emirates,
without the required BIS authorization.\10\ Further evidence indicated
that Aeroflot also operated aircraft subject to the EAR on domestic
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 6, 2022, serial number (SN) 65309 flew from Beijing, China
to Moscow, Russia, and SN 41690 flew from Dubai, UAE to Moscow,
Russia. In addition, on March 7, 2022, SN 63511 flew from Delhi,
India to Moscow, Russia.
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As discussed in the prior renewal orders, BIS presented evidence
indicating that, after the initial TDO issued, Aeroflot 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.\11\ The October 3, 2022 order detailed flights into
and out of Russia from/to Minsk, Belarus, Delhi, India, and Istanbul,
Turkey, as well as within Russia.\12\ The March 29, 2023 order detailed
flights into and out of Russia from/to Yerevan, Armenia, Shanghai,
China, Bangkok, Thailand, and Urgench, Uzebekistan, as well as within
Russia.\13\ Similarly, the September 23, 2023 order detailed flights
into and out of Russia from/to Beijing, China, Delhi, India, and
Antalya, Turkey.\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
SN 41690 flew from Istanbul, Turkey to Moscow, Russia on September
20, 2022 and from Delhi, India to Moscow, Russia on September 23,
2022. In addition, on September 1, 2022, SN 41214 flew from Minsk,
Belarus to Moscow, Russia. On September 13, 2022, SN 41214 flew from
Moscow, Russia to Sochi, Russia.
\13\ Publicly available flight tracking information shows that
SN 41214 flew from Yerevan, Armenia to Moscow, Russia on February
16, 2023 and from Urgench, Uzbekistan to Moscow, Russia on March 1,
2023. In addition, on March 2, 2023, SN 41214 flew from Moscow,
Russia to Sochi, Russia. On February 4, 2023, SN 41690 flew from
Bangkok, Thailand to Moscow, Russia. On March 5, 2023 and March 19,
2023, respectively, SNs 65309 and 41690 flew from Shanghai, China to
Moscow, Russia.
\14\ Publicly available flight tracking information shows that
on August 31, 2023, SN 41690 flew from Beijing, China to Moscow
Russia. On September 19, 2023, SN 65309 flew from Delhi, India to
Moscow, Russia. On September 17, 2023, SN 65307 flew from Antalya,
Turkey to Moscow, Russia.
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Since that time, Aeroflot continued to engage in conduct prohibited
by the TDO and Regulations. In its August 27, 2024 request for TDO
renewal, BIS submitted evidence that Aeroflot 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 September 23, 2023
renewal order and/or the Regulations. Specifically, BIS's evidence and
related investigation demonstrates that Aeroflot continued to operate
aircraft subject to the EAR, including, but not limited to, on flights
into and out of Russia from/to Antalya, Turkey, Guangzhou, China, and
Bangkok, Thailand as well as domestically within Russia. 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-73126...................... 41214 737-8LJ (B738).. Nizhny Novgorod, September 10, 2024.
RU/Antalya, TR.
RA-73126...................... 41214 737-8LJ (B738).. Moscow, RU/Ufa, September 8, 2024.
RU.
RA-73126...................... 41214 737-8LJ (B738).. Moscow, RU/ August 14, 2024.
Tashkent, UZ.
RA-73126...................... 41214 737-8LJ (B738).. Antalya, TR/ August 13, 2024.
Novosibirsk, RU.
RA-73126...................... 41214 737-8LJ (B738).. Sharm el-Sheikh, August 9, 2024.
EG/Moscow, RU.
RA-73144...................... 41690 777-3M0 (ER) Antalya, TR/ September 10, 2024.
(B77W). Moscow, RU.
RA-73144...................... 41690 777-3M0 (ER) Vladivostok, RU/ September 9, 2024.
(B77W). Moscow, RU.
RA-73144...................... 41690 777-3M0 (ER) Moscow, Russia/ August 10, 2024.
(B77W). Guangzhou,
China.
RA-73144...................... 41690 777-3M0 (ER) Istanbul, TR/ August 6, 2024.
(B77W). Moscow, RU.

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RA-73144...................... 41690 777-3M0 (ER) Phuket, TH/ July 30, 2024.
(B77W). Moscow, RU.
RA-73146...................... 65309 777-300 (ER) Antalya, TR/ September 10, 2024.
(B77W). Moscow, RU.
RA-73146...................... 65309 777-300 (ER) Yuzhno- September 6, 2024.
(B77W). Sakhalinsk, RU/
Moscow, RU.
RA-73146...................... 65309 777-300 (ER) Antalya, TR/ August 13, 2024.
(B77W). Moscow, RU.
RA-73146...................... 65309 777-300 (ER) Male, MV/Moscow, August 5, 2024.
(B77W). RU.
RA-73146...................... 65309 777-300 (ER) Bangkok, TH/ August 4, 2024.
(B77W). Moscow, RU.
RA-73150...................... 65307 777-3M0 (ER) Antalya, TR/ September 6, 2024.
(B77W). Moscow, RU.
RA-73150...................... 65307 777-3M0 (ER) Petropavlovsk- September 5, 2024.
(B77W). Kamchatsky, RU/
Moscow, RU.
RA-73150...................... 65307 777-3M0 (ER) Vladivostok, RU/ August 13, 2024.
(B77W). Moscow, RU.
RA-73150...................... 65307 777-3M0 (ER) Istanbul, TR/ August 11, 2024.
(B77W). Moscow, RU.
RA-73150...................... 65307 777-3M0 (ER) Antalya, TR/ August 10, 2024.
(B77W). 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 Aeroflot 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 Aeroflot 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 Aeroflot, 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, PJSC Aeroflot, 1 Arbat St., 119019, Moscow, Russia, 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
Aeroflot 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 Aeroflot 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 Aeroflot 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 Aeroflot 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 Aeroflot 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 Aeroflot, or service any item, of
whatever origin, that is owned, possessed or controlled by Aeroflot 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 Aeroflot 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,
Aeroflot 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 Aeroflot 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.

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A copy of this Order shall be provided to Aeroflot, 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. 2024-21948 Filed 9-24-24; 8:45 am]
BILLING CODE 3510-DT-P

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