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BIS Issues Temporary Denial Order Against Additional Russian Airline and Adds Aircraft to List of Aircraft Subject to General Prohibition 10

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On May 20, 2022, the US Commerce Department’s Bureau of Industry and Security (“BIS”) announced the issuance of a temporary denial order denying the export privileges of the airline Rossiya to participate in transactions subject to the Export Administration Regulations (“EAR”), including exports and reexports from the United States.  BIS previously issued similar orders covering Aeroflot, Azur Air, UTair, and Aviastar-TU.  Aeroflot is a majority shareholder of Rossiya, and both airlines own and operate a number of US-origin aircraft, many requiring US-origin replacement parts and components.

In addition, BIS also added a second aircraft owned by Russian oligarch Roman Abramovich to the list of aircraft that have recently flown into Belarus or Russia in apparent violation of the EAR (the “List”).  The May 20 listings follow previous listings (on March 18, 2022, March 30, 2022, and April 14, 2022) of Russian aircraft that have flown into Belarus or Russia in apparent violation of the EAR. 

In addition, BIS removed several aircraft from the List on May 26, 2022.  The current version of the List can be found here.  BIS did not issue a statement with the reasoning for these removals.  Our prior blog post regarding the publication of the initial List on March 18, 2022 and subsequent updates can be found here and here.

The List is published by BIS as a notice to the general public that the provision of services, whether by a US or non-US person, relating to the listed aircraft is subject to General Prohibition 10 (§ 736.2(b)(10) of the EAR) and requires authorization from BIS.  General Prohibition 10 would appear to prohibit the sale, transfer, export, lease, financing, refueling, service, maintenance, repair, or provision of spare parts relating to the listed aircraft.  Restrictions on such services make international flights by these aircraft outside of Russia and Belarus virtually impossible.  BIS has also emphasized that General Prohibition 10 applies whenever any person (whether US or non-US) has knowledge that an EAR violation has occurred, is about to occur, or is intended to occur in connection with an aircraft or other items that are subject to the EAR, even if the aircraft or other items are not on the List.

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Jennifer Trock is chair of Baker McKenzie's International Commercial Practice Group and a member of its Global Aviation Group in Washington, DC. She co-leads the Firm's unmanned aircraft systems (UAS) focus team and is the Chair of the ABA's Forum Air & Space Law. Jennifer has been recognized by Chambers USA, Aviation Regulatory – National (2007-2019) and has also received honors from Euromoney’s Guide to the World’s Leading Aviation Lawyers, Infrastructure Journal and The Washingtonian.

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Terry Gilroy is a partner in the New York office of Baker McKenzie and a member of the Compliance and Investigations Practice Group. Prior to joining the Firm in 2018, Terry served as Americas Head of the Financial Crime Legal function at Barclays. Terry advises businesses and individuals on white collar and financial crime issues and has significant experience conducting investigations relating to compliance with the US Foreign Corrupt Practices Act (FCPA) and related bribery and corruption statutes, economic sanctions regulations as administered by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), and the Bank Secrecy Act and related anti-money laundering (AML) regulations and statutes. Terry spent six years on active duty in the United States Army as a Field Artillery officer.

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Alex advises clients on compliance with US export controls, trade and economic sanctions, export controls (Export Administration Regulations (EAR); International Traffic in Arms Regulations (ITAR)) and antiboycott controls. He counsels on and prepares filings to submit to the US Government's Committee on Foreign Investment in the United States (CFIUS) with respect to the acquisition of US enterprises by non-US interests. Moreover, Alex advises US and non-US companies in the context of licensing, enforcement actions, internal investigations, compliance audits, mergers and acquisitions and other cross-border transactions, and the design, implementation, and administration of compliance programs. He has negotiated enforcement settlements related to both US sanctions and the EAR.

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Alex primarily works with transportation industry clients on transactional, public policy and regulatory matters, including before the US DOT, FAA, CBP, TSA and NTSB. Alex represents domestic and foreign air carriers, airport operators, airport sponsors, technology companies and drone/unmanned aircraft system stakeholders. He has experience handling regulatory counsel for transportation industry transactions, DOT and FAA authorization matters, antitrust immunity proceedings, rulemakings and policy changes, consumer protection issues, and regulatory enforcement matters. Alex also advises on federal and state public policy and government relations.

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Andrea practices international commercial law with a focus on cross-border transactions including post-acquisition integration IP migrations and technology licensing. She also advises companies on export controls, sanctions, customs and international corporate compliance. Andrea also has an active pro bono practice, including helping organizations with international constitutional matters and victims of domestic abuse.

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