On Tuesday, OFAC issued General License 40 authorizing certain Russian transactions that are necessary to ensure the safety of civil aviation.
This General License may permit some transactions that have been restricted under recent sanctions provisions. Remember that the General License 40 works to overcome OFAC sanctions, but it has no effect on BIS sanctions, like those under 15 C.F.R. 746.8. You must comply with both OFAC export regulations and also BIS export regulations for exporting civil aviation parts! But if you obtain a BIS license to perform an export transaction into Russia, then this General License might be particularly useful to you to address the related OFAC sanctions.
Here is a checklist for using this new General License:
- Identify the customer/end user
- There is a list of 17 named blocked parties in the Annex to General License 40. Your customer/end user must be a party that is listed in this Annex to General License 40 (this include both the list of 17 named entities, and also any party that is blocked because of ownership by one of the 17 named entities – a ‘flow-down sanction’).
- Identify the target aircraft on which the aircraft part will be installed:
- The aircraft must be registered in a jurisdiction other than Russia
- The aircraft must be operated solely for civil aviation purposes
- Consider the aircraft part you intend to export
- The aircraft part must support safe civil aviation operations
- Ensure that none of these exceptions apply (an exception could cause the license to be inapplicable to your transaction:
- Transactions prohibited by Directive 2 under E.O. 14024 (Prohibitions Related to Certain Foreign Financial Institutions)
- Transactions prohibited by Directive 4 under E.O. 14024 (Prohibitions Related to certain Russian governmental entities)
- Any transactions otherwise prohibited by the Russian Harmful Foreign Activities
Sanctions Regulations, 31 C.F.R. Part 587. This includes transactions with blocked persons who are not listed on the Annex of entities associated with General License 40.
- Don’t forget to check compliance with other regulatory regimes, including compliance with BIS export administration regulations under 15 C.F.R. 746.8.
Because of the BIS restrictions on export transactions with Russia, the OFAC General License may be inadequate, alone, to permit certain transactions for civil aircraft parts exported to Russia. But when coupled with BIS license exceptions or licenses, this provision may be quite useful in permitting the industry to export aircraft parts to Russia in support of civil aviation flight safety.
Here is the list of blocked entities that are described in the Annex to General License 40:
(a) Public Joint Stock Company United Aircraft Corporation;
(b) Irkut Corporation Joint Stock Company;
(c) Energotsentr Irkut;
(d) Irkut-Avtotrans;
(e) Irkut-Remstroi;
(f) Irkut-Stanko Service;
(g) Rapart Servisez;
(h) Sportivno-Ozdorovitelnyi Tsentr Irkut-Zenit;
(i) Tipografiya Irkut;
(j) Joint Stock Company Ilyushin Finance Company;
(k) Open Joint Stock Company Ilyushin Aviation Complex;
(l) Public Joint Stock Company Taganrog Aviation Scientific-Technical Complex N.A. G.M. Beriev;
(m) Joint Stock Company Flight Research Institute N.A. M.M. Gromov;
(n) Tupolev Public Joint Stock Company;
(o) Limited Liability Company Kapo-Avtotrans;
(p) Limited Liability Company Kapo-Zhilbitservis;
(q) Limited Liability Company Networking Company Irkut; or
(r) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.