Document ID: BIS-2023-0023-0001
Agency: bis
Document Type: Rule
Title: Temporary Denial Order Provisions to Allow for Extended Renewals in Certain Circumstances
Posted Date: 2023-08-30T04:00Z

[Federal Register Volume 88, Number 167 (Wednesday, August 30, 2023)]
[Rules and Regulations]
[Pages 59791-59793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18772]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 766

[Docket No. 230824-0204]
RIN 0694-AJ36

Revisions of Temporary Denial Order Provisions To Allow for 
Extended Renewals in Certain Circumstances

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

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SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) 
amends the Export Administration Regulations (EAR) to create an 
additional option for the renewal of temporary denial orders (TDOs) by 
allowing BIS, under certain circumstances, to request that the 
Assistant Secretary for Export Enforcement renew an existing TDO for a 
period of no more than one year, rather than the current renewal period 
of no more than 180 days. This final rule also makes some conforming 
changes to remove references to the ``EAA,'' the Export Administration 
Act (EAA), and add in their place references to ``ECRA,'' the Export 
Control Reform Act (ECRA), to reflect the EAR's current statutory 
authority.

DATES: This rule is effective on August 29, 2023.

FOR FURTHER INFORMATION CONTACT: John Sonderman, Director, Office of 
Export Enforcement, Bureau of Industry and Security, Phone: (202) 482-
5079, Email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

A. Amendment of Temporary Denial Order Provisions To Allow for Extended 
Renewals in Certain Circumstances

    This final rule amends Sec.  766.24 of the EAR (15 CFR parts 730 
through 774) by adding an additional sentence after the first sentence 
of paragraph (d)(1). Specifically, this final rule creates an 
additional option for the renewal of temporary denial orders (TDOs) by 
allowing BIS, under certain circumstances, to request that the 
Assistant Secretary for Export Enforcement renew an existing TDO for a 
period of no more than one year, rather than the current renewal period 
of no more than 180 days.
    This final rule does not change the current language set forth in 
the first sentence of paragraph (d)(1), which allows BIS to request the 
renewal of a TDO for a period of 180 days by demonstrating that such a 
renewal is necessary in the public interest to prevent an imminent 
violation of the EAR. Rather, this final rule allows BIS to request the 
renewal of a TDO for an extended period by demonstrating that a party 
that is subject to an existing TDO has engaged in a pattern of 
repeated, ongoing and/or continuous apparent violations of the EAR.
    Under the current standard set forth in Sec.  766.24(d)(1), a 
``violation may be `imminent' either in time or degree of likelihood'' 
(15 CFR 766.24(b)(3)), and 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

[[Page 59792]]

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.
    By contrast, this new standard requires BIS to show that since the 
issuance of a TDO, the respondent has engaged in a pattern of repeated, 
ongoing and/or continuous apparent violations of the EAR, including the 
terms of the TDO, and that renewal of the TDO for an extended period is 
appropriate to address such continued apparent violations. Such a 
showing should demonstrate not just the likelihood of future imminent 
violations of the EAR but should include specific facts demonstrating 
past apparent violations of the EAR.
    An extended renewal is appropriate, for instance, in cases where a 
respondent has acted in apparent blatant disregard of the EAR, where a 
respondent has attempted to circumvent or has otherwise appeared to 
violate the restrictions of a TDO or the EAR, or has otherwise acted in 
a manner demonstrating a pattern of apparent noncompliance with the 
requirements of the EAR.
    This final rule also makes conforming changes to paragraphs (a), 
(b)(1) and (e)(5) of Sec.  766.24 to remove references to the `EAA' and 
add in their place references to `ECRA' to reflect the EAR's current 
statutory authority.

B. Importance of TDOs To Address Entities That Have Engaged in a 
Pattern of Repeated, Ongoing, and/or Continuous Apparent Violations of 
the Russia- or Iran-Related Restrictions

    Since the imposition of sanctions on Russia in response to its 
further invasion of Ukraine in February 2022, and the imposition of 
similar sanctions on Belarus for its substantial enablement of Russia's 
invasion, BIS has imposed a number of TDOs on entities that have 
engaged in a pattern of repeated, ongoing, and/or continuous apparent 
violations of these Russia-related restrictions, most notably on a 
number of Russian and Belarusian airlines. Beginning with the issuance 
of a TDO against PJSC Aeroflot (``Aeroflot'') on April 7, 2022 (87 FR 
21611, Apr. 12, 2022), which was subsequently renewed on October 3, 
2022 (87 FR 60985, Oct. 7, 2022) and on March 29, 2023 (88 FR 19609, 
Apr. 3, 2023), BIS has issued a number of TDOs targeting Russian and 
Belarusian airlines that have repeatedly and deliberately continued to 
operate international and/or domestic flights involving aircraft 
subject to the EAR in apparent violation of the EAR and the applicable 
TDOs.
    Similarly, on March 17, 2008, BIS imposed a TDO (73 FR 15130) which 
has been repeatedly renewed, most recently on May 5, 2023 (88 FR 30078, 
May 10, 2023), against Mahan Airways in connection with its numerous 
ongoing apparent violations of the EAR. The most recent renewal of this 
TDO stated that according to publicly available information, Aeroflot 
has begun sending its aircraft to Mahan Airways for repairs and/or 
maintenance. Id. at 30085.
    Cases such as these, which involve an existing TDO combined with a 
pattern of repeated, ongoing, and/or continuous conduct that appears to 
violate a TDO or the EAR, leading to the need to repeatedly renew the 
applicable TDOs, are emblematic of the type of conduct which this 
extended renewal option is intended to address.
    Such extended renewals will serve as an enhanced deterrent for such 
actors who are engaging in such apparent violative conduct and others 
who may be inclined to engage in behavior to facilitate such 
activities. Moreover, such extended renewals will provide enhanced 
notice to companies and individuals in the United States and abroad 
that they should avoid dealing with such actors of concern in 
connection with export, reexport, and transfer (in-country) 
transactions involving items subject to the EAR and in connection with 
any other activity subject to the EAR, e.g., the provision of services 
in connection with an aircraft subject to the EAR that is operated by a 
denied person, or with respect to an aircraft that has been exported in 
violation of the EAR (see 15 CFR 736.2(b)(10)). BIS maintains a non-
exhaustive list of aircraft that have potentially been exported to 
Russia or Belarus in violation of the EAR, including aircraft operated 
by certain denied persons, which can be found on the BIS website: 
https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus.
    In the event that the Assistant Secretary determines that a request 
for renewal of a TDO does not satisfy this new standard for an extended 
renewal as described above under section A, it may nonetheless be 
extended for a period not exceeding 180 days, provided that BIS has 
demonstrated that such renewal is necessary in the public interest to 
prevent an imminent violation.

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852). ECRA provides the legal basis for BIS's principal authorities 
and serves as the authority under which BIS issues this rule.

Rulemaking Requirements

    1. This rule has been determined to be not significant for purposes 
of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to or be subject to a penalty for failure to comply 
with a collection of information, subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless 
that collection of information displays a currently valid Office of 
Management and Budget (OMB) Control Number. This regulation involves an 
information collection approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System. BIS does not 
anticipate a change to the burden hours associated with this collection 
as a result of this rule. Information regarding the collection, 
including all supporting materials, can be accessed at https://www.reginfo.gov/public/do/PRAMain.
    3. This rule does not contain policies with federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to section 1762 of the Export Control Reform Act of 
2018, this action is exempt from the Administrative Procedure Act (5 
U.S.C. 553) requirements for notice of proposed rulemaking, opportunity 
for public participation, and delay in effective date.
    5. Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule by 5 U.S.C. 
553, or by any other law, the analytical requirements of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. 
Accordingly, no regulatory flexibility analysis is required, and none 
has been prepared.

List of Subjects in 15 CFR Part 766

    Administrative practice and procedure, Confidential business 
information, Exports, Law enforcement, Penalties.

    Accordingly, part 766 of the Export Administration Regulations (15 
CFR

[[Page 59793]]

parts 730 through 774) is amended as follows:

PART 766--ADMINISTRATIVE ENFORCEMENT PROCEEDINGS

0
1. The authority citation for 15 CFR part 766 continues to read as 
follows:

    Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783.

0
2. Section 766.24 is amended by revising the third sentence of 
paragraph (a), paragraphs (b)(1), (d)(1), and the last sentence of 
paragraph (e)(5), to read as follows:

Sec.  766.24   Temporary denials.

    (a) * * * Without limiting any other action BIS may take under the 
EAR with respect to any application, order, license or authorization 
issued under ECRA, BIS may ask the Assistant Secretary to issue a 
temporary denial order on an ex parte basis to prevent an imminent 
violation, as defined in this section, of the ECRA, the EAR, or any 
order, license or authorization issued thereunder. * * *
    (b) * * * (1) The Assistant Secretary may issue an order 
temporarily denying to a person any or all of the export privileges 
described in part 764 of the EAR upon a showing by BIS that the order 
is necessary in the public interest to prevent an imminent violation of 
ECRA, the EAR, or any order, license or authorization issued 
thereunder.
* * * * *
    (d) * * * (1) If, no later than 20 days before the expiration date 
of a temporary denial order, BIS believes that renewal of the denial 
order is necessary in the public interest to prevent an imminent 
violation, BIS may file a written request setting forth the basis for 
its belief, including any additional or changed circumstances, asking 
that the Assistant Secretary renew the temporary denial order, with 
modifications, if any are appropriate, for an additional period not 
exceeding 180 days. 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. BIS's request shall be delivered to the respondent, 
or any agent designated for this purpose, in accordance with Sec.  
766.5(b) of this part unless exceptional circumstances exist, which 
will constitute notice of the renewal application.
* * * * *
    (e) * * *
    (5) * * * The issuance or renewal of the temporary denial order 
shall be affirmed only if there is reason to believe that the temporary 
denial order is required in the public interest to prevent an imminent 
violation of ECRA, the EAR, or any order, license or other 
authorization issued under ECRA.
* * * * *

Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2023-18772 Filed 8-29-23; 8:45 am]
BILLING CODE 3510-33-P