Pegas Touristik Update

I have answered a number of questions from members about Pegas Tourstik. We’ve talked about this in several of ASA’s meetings but I just realized that we have not yet written anything on it in the blog.

Pegas Tourstik was recently the target of US Government enforcement investigations.

In an order issued June 15, 2023, and then published in the Federal Register on June 21, 2023, the Government issued a Temporary Denial Order (TDO) against Pegas Touristik.  The stated basis was that Pegas Touristik is a “related person” relative to Nordwind Airlines (Pegas Touristik either owns Nordwind or has a commonality of ownership), and Nordwind Airlines was already subject to the TDO, which was issued against Nordwind on June 24, 2022.

A few days after the TDO was issued, on June 30, 2023, BIS announced that Pegas Touristik would  be removed from the TDO at the request of the BIS’ Office of Export Enforcement (OEE).  The reason given in the Federal Register for this removal was that “OEE has since requested that Pegas Touristik be removed from the TDO to allow the opportunity for additional administrative process under part 766 of the Regulations.”

Based on the statement, at the time, it appeared that the matter was under an ongoing enforcement process.  Today’s Federal Register confirmed this and provided a small measure of closure (but not necessarily finality) to the matter.

Today’s Federal Register published a decision confirming that Pegas Touristik is not currently subject to the Nordwind TDO. It explained that the removal of Pegas from the TDO happened “following discussions and an exchange of information between BIS and Pegas.”

The issue appears to have come before the administrative law system when Pegas sued to force the U.S. government to issue a statement that says (1) “Pegas Touristik was erroneously added as a related person to the June 15 Order and to the List of Denied Persons” and (2) “Pegas Touristik has never been subject to a valid denial order imposed by the U.S. Department of Commerce’s Bureau of Industry and Security.” The administrative law judge denied the request, and explained that “the regulations do not grant [the judge] authority to issue an order retroactively nullifying the addition of Pegas as a related party in the June 15, 2023, TDO.”

Ordering Federal Register publication of an administrative law judge’s order is an unusual step, but it is possible that the government is trying to send a clear message that Pegas Tourstik is NOT subject to sanctions.

It is unclear whether Pegas Tourstik might – in the future – be subject to a TDO, but today’s Federal Register clarifies that Pegas Tourstik is not currently subject to any TDO.