Department of Commerce’s Bureau of Industry and Security Charges Russian Oligarch Abramovich with Violating Russia Export Controls
The Department of Commerce’s Bureau of Industry and Security (“BIS”) charged Russian oligarch Roman Abramovich with violating U.S. export controls by exporting U.S.-origin aircraft to Russia. In a precedent setting action, BIS issued a charging letter, the first letter under a new enforcement policy, outlining the specific facts in support of the charges.
As described in the charging letter, two of Abramovich’s private planes flew to and from Russia in March 2022, days after BIS announced new export controls on Russia-related aircraft. Specifically, Abramovich’s U.S.-origin Gulfstream aircraft flew from Turkey to Russia on March 12 and 15, 2022. His second airplane, a U.S.-origin Boeing 787-8, flew from the United Arab Emirates to Russia on March 4, 2022.
On February 24, 2022, BIS adopted expansive controls on aviation-related (CCL 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 designated in ECCN 9A991, Section 746.8(a)(1) of the Export Administration Regulations. BIS will review any license application under this category for such items under a policy of denial.
As of 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. As a result, any U.S.-origin aircraft or foreign aircraft that includes more than 25 percent controlled U.S.-origin content, and that is registered in, own or controlled by, or under charter or lease by Russia or a Russian national, is subject to a license requirement.
After the imposition of these restrictions, Abramovich failed to apply for an export license needed to fly U.S.-origin airplanes to Russia. Abramovich was a passenger on the flights.
BIS emphasized that export licenses are required before export of restricted U.S.-origin airplanes can travel to Russia. The Commerce Department’s Office of Export Enforcement head, Matt Axelrod, stated that OEO will “continue to take swift action to deny Russian airlines and oligarchs the means to continue to operate aircraft in violation of U.S. export regulations.”
BIS’ new policy of publicizing charging letters is intended to promote transparency and deterrence. BIS can issue a maximum penalty of $328,000 per violation, or twice the value of each airplane. The Boeing plane is worth $350 million and the Gulfstream is worth $50 million.
As part of a coordinated enforcement action, the Department of Justice issued a seizure warrant for both of Abramovich’s plans. DOJ stated that the two aircrafts “flouted export controls that prohibited those plans to pass into Russian territory.” The planes have not been seized yet but can be seized in the future.
DOJ publicized the seizure notice to seek assistance from the public and other governments to confiscate the planes. Any entity or person who assists Abramovich in moving these assets could be charged with obstruction of a federal investigation.