Trade Ministry’s Industry and Security Bureau Accuses Russian Oligarch Abramovich of Violating Russian Export Controls | The Volkov Legal Group
The Commerce Department’s Bureau of Industry and Security (“BIS”) has accused Russian oligarch Roman Abramovich of violating US export controls by exporting US-made aircraft to Russia. In a precedent-setting action, BIS issued a letter of accusation, the first letter under a new enforcement policy, outlining the specific facts supporting the charges.
As described in the indictment, two of Abramovich’s private planes flew to and from Russia in March 2022, days after the BIS announced new export controls on Russian-linked planes. Specifically, Abramovich’s US-origin Gulfstream aircraft flew from Turkey to Russia on March 12-15, 2022. His second aircraft, an US-origin Boeing 787-8, flew from the United Arab Emirates to Russia on March 4, 2022.
On February 24, 2022, the BRI enacted expanded controls on aviation-related items (CCL Categories 7 and 9) to Russia, including a licensing requirement for export, re-export or transfer ( in-country) to Russia of any aircraft or aircraft part designated in ECCN 9A991, Section 746.8(a)(1) of the Export Administration Regulations. BIS will consider any license request in this category for such items under a denial policy.
Since March 2, 2022, the BRI has excluded any aircraft registered, owned or controlled by, or under charter or lease by Russia or a Russian national. Accordingly, any U.S.-origin or foreign-origin aircraft that includes more than 25% controlled U.S.-origin content, and that is registered, owned, or controlled by, or chartered or leased by Russia or a Russian national, is subject to a licensing requirement.
After these restrictions were imposed, Abramovich did not apply for the export license needed to fly US-origin aircraft to Russia. Abramovich was a passenger on the flights.
The BRI stressed that export licenses are required before the export of restricted aircraft of American origin can travel to Russia. Matt Axelrod, head of the Commerce Department’s Office of Export Enforcement, said OEO “will continue to take swift action to deprive Russian airlines and oligarchs of the means to continue operating aircraft in violation of U.S. regulations. in terms of export”.
The BRI’s new policy of publishing charge letters aims to promote transparency and deterrence. BIS can impose a fine of up to $328,000 per violation, or double the value of each aircraft. The Boeing plane is worth $350 million and the Gulfstream is worth $50 million.
As part of a coordinated enforcement action, the Justice Department issued a seizure warrant for Abramovich’s two plans. The DOJ said the two planes “flouted export controls that prohibited these planes from entering Russian territory.” The planes have not yet been seized but may be in the future.
The DOJ issued the notice of seizure asking for help from the public and other governments in confiscating the planes. Any entity or person who helps Abramovich move these assets could be charged with obstructing a federal investigation.