The Bass, Berry & Sims international trade team is actively monitoring the situation in Russia and Ukraine and providing real-time advice to clients on managing the situation. This post summarizes new U.S. sanctions and export restrictions as of April 1. This post supplements our previous summaries, which are available by following the links at the bottom of this page.

Commerce Department Updates List of Tainted U.S.-Origin Aircraft

On March 30, the U.S. Commerce Department, Bureau of Industry & Security (BIS) issued a press release to update the restrictions and prohibitions it announced on March 18 pertaining to U.S.-origin aircraft operated in violation of the Export Administration Regulations (EAR). Please see our blog post here for more details on that March 18 notice.

As was the case with the aircraft listed by BIS on March 18, the 73 aircraft identified on March 30 are subject to extensive restrictions. Thus, without authorization from BIS, no person, regardless of location or nationality, is permitted to engage in service, maintenance, repair, operation, or virtually any other transaction involving one of these designated aircraft.

Note that BIS announced that 12 planes were removed from the list announced on March 18. BIS explained that:

BIS’s March 18 aircraft listing led to several companies submitting voluntary disclosures regarding concerns over possible EAR violations and requesting permission to engage in activities that may otherwise be prohibited. BIS granted these authorizations in order to allow these aircraft to leave Russia, thereby preventing the Russian government from maintaining operational control over the aircraft.

This statement lays out what BIS views as the process for potentially obtaining de-listing of an aircraft. Namely, there is a two-step process involving:

1. A voluntary disclosure to BIS of the violation, and
2. A request for authorization, which appears to be a reference to a request for a waiver under section 764.5(f) of the EAR.

We expect BIS to continue to update the list of designated aircraft, including removals of aircraft from the list as needed, periodically. BIS also has emphasized that other aircraft owned, chartered, or operated by a Russian party are also subject to the restrictions under General Prohibition 10, even if the aircraft is not on the list, if the aircraft was flown into Russia after March 2.