On June 24, 2022, the Bureau of Industry and Security (“BIS”) issued orders denying the export privileges of three Russian airlines, Nordwind Airlines, Pobeda Airlines, and S7 Airlines (‘Siberian’), due to continuous apparent breaches of the Commerce Department's broad export controls imposed on Russia.
All three airlines are claimed to have flown international flights to Russia from various locations using aircraft subject to the Export Administration Regulations (“EAR”) and without the required licenses. They are also believed to be continuing to fly US-made aircraft on Russian internal routes, in violation of EAR General Prohibition 10. These three Temporary Denial Orders (“TDOs”) suspend these airlines' ability to participate in activities governed by the EAR, including exports and reexports from the United States. TDOs are valid for 180 days and can be renewed.
In response to Russia's invasion of Ukraine, BIS has led the Department of Commerce's efforts by taking a number of strong regulatory and enforcement actions, including issuing public notice of potential EAR violations in the aerospace sector and issuing TDOs on major Russian airlines Aeroflot, Aviastar, Azur Air, Rossiya, and Utair, as well as Belarus' flag carrier Belavia Airlines. It should be emphasized that the issuing of a TDO is one of the most serious civil sanctions under the EAR, and it is issued by the Assistant Secretary for Export Enforcement to limit an entity or individual's export privileges to avoid an impending or ongoing export control violation. The three BIS TDOs were issued in accordance with the provisions of the Export Control Reform Act of 2018 and the EAR.
Accordingly, BIS placed broad controls on aviation-related commodities to Russia on February 24, 2022, including a license requirement for the export, reexport, or transfer (in-country) to Russia of any aircraft or aircraft parts on the Commerce Control List. Further, BIS additionally excluded any aircraft registered in, owned, or managed by, or under charter or lease by Russia or a Russian citizen from being eligible for license exemption Aircraft, Vessels, and Spacecraft on March 2, 2022. As a result, any US-origin aircraft or foreign aircraft containing more than 25% restricted US-origin content is required to get a license if, for example, it is Russian-owned or operated and sold to Russia.
Finally, BIS reminds the public that providing any type of service to aircraft subject to the EAR that may have violated these rules in Russia or Belarus needs prior permission. Without such authorization, any person anywhere, including within Belarus or Russia, risks violating the EAR and facing BIS enforcement proceedings that may include significant jail time, fines, loss of export rights, or other limitations. International flights from Belarus or Russia on these aircraft are essentially grounded by prohibiting them from obtaining any service. As part of this endeavor, BIS updates change to tail numbers of planes on the list that have flown into Russia and/or Belarus in apparent violation of the EAR on a regular basis.
Şafak Herdem, Esra Temur