BIS Issues Denial Orders for Russian Airlines
The Bureau of Industry and Security on April 7 suspended the export privileges of three Russian airlines for violating U.S. export controls against Russia. The agency issued 180-day temporary denial orders for Aeroflot, Azur Air and UTair, barring the airlines from participating in transactions with items subject to the Export Administration Regulations, BIS said.
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BIS said the airlines continued to fly without a license after their planes were added to the agency’s list of restricted Russian aircraft last month (see 2203300046 and 2203300041). The temporary denial orders represent the “first enforcement action” taken by BIS against Russia since it began its war in Ukraine, Matthew Axelrod, the agency’s senior export enforcement official, said during a call with reporters.
The orders will block the airlines from accessing any EAR items, Axelrod said, which will over time render much of their fleets “unable to continue flying either internationally or domestically, as they are now cut off from the international support and the U.S. parts and related services they need to maintain and support their fleets.” Don Graves, Commerce Department deputy secretary, said the orders send a “clear” message to people or entities looking to evade U.S. restrictions. “Defy our export controls at your own peril,” he said.
The planes violated U.S. restrictions by operating flights to China, India, Turkey, the United Arab Emirates, Vietnam and other destinations, BIS said, including in and out of Moscow. Azure Air could be most affected by the restrictions because each of its 34 planes are U.S.-origin, a senior Commerce official said. “If they abide by the order,” the person said, “that should stop them from flying altogether.”
About 48 of UTair’s 63 planes are U.S. origin, the official said, and 59 of Aeroflot’s 187 planes are from the U.S. All the planes were manufactured by Boeing, the person said. “For any of the U.S. origin planes, they can't be serviced, they can’t be maintained,” the official said. “The only question is how long it will take for that to degrade their ability to continue to fly.”
Limited exceptions will be available for exports and services related to the planes, Commerce officials said. Officials said they may grant license exceptions to provide support or parts to the airlines for a “safety of flight” issue that doesn't aid the Russian military. BIS will assess those applications case by case.
If the three airlines continue to fly the planes without licenses, BIS said, “criminal consequences” could follow. “I don't want to prejudge anything or talk about any particular company,” the senior official said. “But if people violate our rules, we take action.”
The agency declined to say how many license applications involving the restricted planes it has received, but said aircraft owners can "submit disclosures and seek authorization to continue to operate aircraft once out of Russia and Russian Control." A senior Commerce official said a "number of owners" have already gone through that disclosure process.
Officials also declined to say whether BIS plans to announce more denial orders but said its agents are prioritizing violations of Russian export controls. “We are taking, as you might expect, a very aggressive enforcement posture,” the official said. Another official said: “This is sending a signal to companies in Russia, as well as any others around the world, that we mean business.”