There has been a lot of activity in U.S. export sanctions against Russia and Belarus. Some of those new standards apply to aircraft parts. If you are an FAA-PMA manufacturer or exporter, then here is a summary of the key things you need to know about these new sanctions:
- For FAA-PMA parts exports you need to comply with both Commerce Department and Treasury Department export regulations
- Most U.S. aircraft parts exports to Russia or Belarus will need a Commerce Department license (15 C.F.R. § 746.8)
- This restriction applies to
- Aircraft parts exported to Russia/Belarus
- Aircraft parts exported with the intent to install them on aircraft located in Russia/Belarus
- Aircraft parts exported with the intent to install them on aircraft registered in Russia/Belarus
- Aircraft parts exported with the intent to install them on aircraft operated by Russia/Belarus
- Aircraft parts exported with the intent to install them on aircraft operated by a national of Russia/Belarus (e.g. an airline certificated by Russia or Belarus)
- There is a presumption of denial on Commerce Department license applications under the Russia sanctions
- Safety-of-Flight exports are analyzed on a case-by-case basis so if you can show that your proposed aircraft part export is consistent with U.S. interests then there is a chance of getting a license
- Most export license exceptions are NOT applicable to the new Commerce Department Russia sanctions regulation!
- The AVS license exception is available but has additional limits imposed under the new sanctions
- This restriction applies to
- Some U.S. aircraft parts exports are also subject to Treasury Department sanctions
- Treasury sanctions include lists of Specially Designated Nationals and persons added to Sectoral Sanctions lists
- These persons are typically blocked and their assets are frozen
- Aircraft parts transactions, financial transactions, and other transactions with blocked persons are all typically affected by the Treasury regulations
- If you have an asset that belongs to a blocked person then STOP and get legal advice
- If you are owed money by a blocked person then STOP and get legal advice
- To identify these sanctioned persons, you should check the consolidated screening list for every transaction. This list changes frequently so check your export business partners every time – even if you checked just yesterday!
- Treasury regulations on the banking industry may also inhibit your ability to get paid!
- Treasury sanctions include lists of Specially Designated Nationals and persons added to Sectoral Sanctions lists
- Be wary of transactions that appear to circumvent U.S. sanctions
- It is illegal to engage in an export transaction if you know that it will facilitate a future violation
- For example, if you ship to an intermediary who you know intends to ship to a Russian air carrier in violation of U.S. law, then you are committing a violation
I know this outline may seem long, but trust me: this is merely the outline of the Russia/Belarus standards. If you have any questions about a transaction then you should be looking for help from a law firm with experience in this area. Our firm has already worked with clients to identify attempts to circumvent U.S. regulations, and we’ve been advising clients on what they are permitted to do and how to accomplish transactions within the boundaries of the law. This is a complicated area of the law and we don’t know how long these sanctions will last, so it is important to make sure that you have a compliance plan in place, today!