[Federal Register Volume 89, Number 196 (Wednesday, October 9, 2024)]
[Notices]
[Pages 81881-81884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23351]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia 
620025; 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 URAL Airlines JSC (``URAL'') 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superseded, set aside, or revoked through action undertaken pursuant 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 October 13, 2022, I signed an order denying URAL 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 
April 10, 2023 \3\ and October 6, 2023 \4\ in accordance with section 
766.24(d) of the Regulations.\5\
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    \2\ The TDO was published in the Federal Register on October 19, 
2022 (87 FR 63477).
    \3\ The April 10, 2023 renewal order was published in the 
Federal Register on April 13, 2023 (88 FR 22406).
    \4\ The October 6, 2023 renewal order, which was effective upon 
issuance, was published in the Federal Register on October 13, 2023 
(88 FR 70925).
    \5\ 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 September 10, 2024, BIS, through OEE, submitted a written 
request for a third 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 URAL 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

[[Page 81882]]

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.'' \6\ Id.
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    \6\ 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).\7\ 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).\8\ 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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    \7\ 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).
    \8\ 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 April 10, 2023 and October 6, 
2023, as well as other evidence developed during this investigation. 
This evidence demonstrates that URAL 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 
October 13, 2022, was based on evidence that URAL 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, Bishkek, 
Kyrgyzstan; Dushanbe, Tajikistan; Khudzhand, Tajikistan; and Tamchy, 
Kyrgyzstan without the required BIS authorization.\9\ Further evidence 
indicated that URAL 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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    \9\ Publicly available flight tracking information shows 
multiple flights into Russia, including the following: on September 
10, 2022, serial number (SN) 5055 flew from Dushanbe, Tajikistan to 
Irkutsk, Russia, and on September 6, 2022, SN5055 flew from 
Khudzhand, Tajikistan to Sochi, Russia. In addition, on October 6, 
2022, SN 5055 flew from Bishkek, Kyrgyzstan to Samara, Russia.
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    As discussed in the prior renewal orders, BIS presented evidence 
indicating that, after the initial TDO issued, URAL 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.\10\ The April 10, 2023 order detailed flights into 
and out of Russia from/to Bishkek, Kyrgyzstan, Dushanbe, Tajikistan, 
and Khujand, Tajikistan, as well as within Russia.\11\ The October 6, 
2023 order detailed flights into and out of Russia from/to Dushanbe, 
Tajikistan, Tamchy, Kyrgyzstan, and Bishkek, Kyrgyzstan, as well as 
within Russia.\12\
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    \10\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \11\ Publicly available flight tracking information shows that 
SN 5055 flew from Dushanbe, Tajikistan to Ufa, Russia on March 20, 
2023 and from Osh, Kyrgyzstan to Krasnoyarsk, Russia on March 19, 
2023. In addition, on March 19, 2023, SN 2376 flew from Bishkek, 
Kyrgyzstan to Yekaterinburg, Russia. On March 6, 2023, SN 1941 flew 
from Khujand, Tajikistan to Yekaterinburg, Russia. On March 16, 
2023, SN 1941 flew from Sochi, Russia to Moscow, Russia.
    \12\ Publicly available flight tracking information shows that 
SN 5055 flew from Dushanbe, Tajikistan to Yekaterinburg, Russia on 
September 5, 2023. In addition, on August 21, 2023, SN 2376 flew 
from Tamchy Kyrgyzstan to Moscow, Russia. On September 4, 2023, SN 
1941 flew from Bishkek, Kyrgyzstan to Moscow, Russia.
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    Since that time, URAL continued to engage in conduct prohibited by 
the TDO and Regulations. In its September 10, 2024 request for TDO 
renewal, BIS submitted evidence that URAL 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 October 6, 2023 renewal 
order and/or the Regulations. Specifically, BIS's evidence and related 
investigation demonstrates that URAL continued to operate aircraft 
subject to the EAR, including, but not limited to, on flights into and 
out of Russia from/to Khujand, Tajikistan, Osh, Kyrgyzstan, and 
Dushanbe, Tajikistan as well as domestically within Russia. Information 
about those flights includes, but is not limited to, the following:

[[Page 81883]]



----------------------------------------------------------------------------------------------------------------
                                                                  Departure/
           Tail No.              Serial No.    Aircraft type    arrival cities                Dates
----------------------------------------------------------------------------------------------------------------
RA-73817......................         5055  A320-232........  Mineralnye Vody,  September 17, 2024.
                                                                RU/Khujand, TJ.
RA-73817......................         5055  A320-232........  Bishkek, KG/      September 14, 2024.
                                                                Sochi, RU.
RA-73817......................         5055  A320-232........  Chelyabinsk, RU/  September 3, 2024.
                                                                Khujand, TJ.
RA-73817......................         5055  A320-232........  Dushanbe, TJ/     September 3, 2024.
                                                                Chelyabinsk, RU.
RA-73817......................         5055  A320-232........  Sochi, RU/        September 1, 2024.
                                                                Moscow, RU.
RA-73818......................         2376  A320-232........  Bishkek, KG/      September 4, 2024.
                                                                Yekaterinburg,
                                                                RU.
RA-73818......................         2376  A320-232........  Dushanbe, TJ/     September 3, 2024.
                                                                Yekaterinburg,
                                                                RU.
RA-73818......................         2376  A320-232........  Dushanbe, TJ/     September 3, 2024.
                                                                Kazan, RU.
RA-73818......................         2376  A320-232........  Yekaterinburg,    September 2, 2024.
                                                                RU/Osh, KG.
RA-73818......................         2376  A320-232........  Bishkek, KG/      August 30, 2024.
                                                                Samara, RU.
RA-73798......................         7206  A321-231........  Moscow, RU/Osh,   September 17, 2024.
                                                                KG.
RA-73798......................         7206  A321-231........  Khujand, TJ/      September 16, 2024.
                                                                Moscow, RU.
RA-73798......................         7206  A321-231........  Osh, KG/Moscow,   September 4, 2024.
                                                                RU.
RA-73798......................         7206  A321-231........  Bishkek, KG/      September 3, 2024.
                                                                Moscow, RU.
RA-73798......................         7206  A321-231........  Dushanbe, TJ/     September 2, 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 URAL 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 URAL 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 URAL, 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, URAL Airlines JSC, Utrenniy Lane 1-g, Yekaterinburg, Russia, 
620025, 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 
URAL 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 URAL 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 URAL 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 URAL 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 URAL 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 URAL, or service any item, of 
whatever origin, that is owned, possessed or controlled by URAL 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 URAL 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, 
URAL 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

[[Page 81884]]

request may be opposed by URAL 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 URAL, 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. 2024-23351 Filed 10-8-24; 8:45 am]
BILLING CODE 3510-DT-P