U.S. order temporarily denying export privileges of Russian airline

The order temporarily denying export privileges will remain in effect for 180 days.

Russian airline

The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce today released for publication in the Federal Register an order temporarily denying export privileges of a Russian airline.

The order temporarily denying export privileges [PDF 277 KB] is effective immediately and will remain in effect for 180 days. (Note that the notice is dated May 20, 2022, and scheduled to be published in the Federal Register on May 25, 2022).

Background

According to today’s notice:

  • The U.S. Commerce Department, through BIS, responded to Russia’s further invasion of Ukraine by implementing stringent export controls that primarily target Russia’s defense, aerospace, and maritime sectors.
  • Effective February 24, 2022, BIS imposed expansive controls on aviation-related 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.
  • 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. 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.
  • The Office of Export Enforcement’s request to deny export privileges is based upon facts indicating that the Russian airline engaged in prohibited conduct by operating aircraft subject to the Export Administration Regulations (EAR) and classified under ECCN 9A991 on flights into Russia after March 2, 2022, without the required BIS authorization.
  • No BIS authorizations were either sought or obtained by the Russian airline for exports or reexports to Russia.
  • Based on this information, there are heightened concerns of future violations of the EAR.


For more information on sanctions and other responses to Russia’s war on Ukraine, visit KPMG’s dedicated website.


Contact a professional with KPMG’s Trade & Customs services:

Doug Zuvich
Partner and Global Practice Leader
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
E: labad@kpmg.com

Irina Vaysfeld
Principal
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
E: aahanchian@kpmg.com

Christopher Young
Principal
E: christopheryoung@kpmg.com

Gisele Belotto
Principal
E: gbelotto@kpmg.com

George Zaharatos
Principal
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
E: adoornaert@kpmg.com

Jessica Libby
Principal
E: jlibby@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.