Pobeda Airlines – Limited Export License Available

Pobeda Airlines has been sanctioned as both a TDO and a SDN. The State Department has offered a limited license for tying-up transactions that were legal under the TDO standards, but are now forbidden under the newly-imposed SDN standards.

The Commerce Department issued a Temporary Denial Order (TDO) against Pobeda Airlines in 2022. They noted that Pobeda’s majority shareholder was Aeroflot, and the Russian government was the majority shareholder of Aeroflot. The ultimate violation giving rise to the TDO, though, was use of aircraft in operations that violated US law. As is normal for TDOs, the standards go beyond merely prohibiting exports; the TDO also prohibits acquisition of articles from Pobeda. There is a US-based limit on the TDO, which is based on the limits of the Commerce Department’s jurisdiction.

For U.S.-based companies, please remember that it is illegal to support an export transaction that has violated U.S. law or that will violate U.S. law. Working through a foreign agent will not relieve you of this compliance obligation.

On May 1, 2024, the State Department designated Pobeda Airlines as a Specially Designated National (SDN). This imposed additional sanctions but the TDO already effectively made it illegal for American companies to do business with Pobeda. There is only a narrow range of transactions that were permitted under the TDO that were made illegal by the SDN designation, such as foreign transactions by non-US parties involving parts produced outside of the United States and that never entered the United States. The SDN designation adds this narrow range of transactions to the list of transactions that are forbidden under US law.

LIMITED LIABILITY COMPANY AVIAKOMPANIYA POBEDA (Cyrillic: ОБЩЕСТВО С ОГРАНИЧЕННОЙ ОТВЕТСТВЕННОСТЬЮ АВИАКОМПАНИЯ ПОБЕДА) (a.k.a. LLC BUDGET CARRIER (Cyrillic: ООО БЮДЖЕТНЫЙ ПЕРЕВОЗЧИК); a.k.a. POBEDA AIRLINES), Kilometr Kievskoe Shosse 22-I (P Moskovskii), Domovladen 4, Stroenie 1, Moskovsky 108811, Russia; Secondary sanctions risk: this person is designated for operating or having operated in a sector of the Russian Federation economy determined to support Russia’s military-industrial base pursuant to section 11 of Executive Order 14024, as amended by Executive Order 14114.; Tax ID No. 9705001313 (Russia); Registration Number 5147746103380 (Russia) [RUSSIA-EO14024].

The State Department has issued a general license authorizing “tying-up” transactions with Pobeda. This is identified as General License No. 95. This will be most useful for non-U.S. companies that were engaged in the very narrow range of transactions that were permitted under the TDO (such as transactions involving parts produced outside of the United States and that never entered the United States). Under the license provisions, a limited range of transactions may be concluded as long as they are concluded before the end of July (specifically, 12:01 a.m. eastern daylight time, July 30, 2024).

The General License authorizes transactions involving goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes. Any payment that is intended to be made to Pobeda Airlines must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations.

This general license authorizes actions that would otherwise violate State Department regulations. It DOES NOT authorize violations of the Commerce Department regulations. Any transaction that is blocked under the Pobeda Airlines TDO remains blocked.