How the FAA’s Sanctions on Russia Really Work

Who’s on the no-fly list? How hard is it to repossess an aircraft?

One expert says the process of repossessing a Russian aircraft in the midst of this conflict isn’t as easy as it might sound. [File Photo: Shutterstock]

Since Russia invaded Ukraine a couple of weeks ago, governments have done everything in their power to severely limit Russia and most of its influential citizens from doing business in the world. The FAA has also found ways to bring pressure to bear by limiting the travel plans of specific Russian individuals of influence and who could appeal to the Russian president.

On March 2, the U.S. government barred all Russian citizens who own or lease aircraft in the United States from operating them in the country's airspace. 

"All aircraft, regardless of the state of registry, owned, chartered, leased, operated, or controlled by, for, or for the benefit of, a person who is a citizen of the Russian Federation are prohibited from operating to, from, within or through U.S. territorial airspace, except for aircraft engaged in humanitarian or SAR [search and rescue] operation specifically authorized by the FAA," the agency said.

But how does that work? 

The No-Fly List

The NOTAM stated that non-compliant aircraft could be "intercepted, and their pilots and other crew members detained and interviewed by law enforcement or security personnel."

This was consistent with NOTAM that other foreign allies mandated, intending to keep Russians of interest grounded. 

"...if you operate an airplane for the benefit of somebody who is on the sanction list, you’re going to be in trouble.”

Doug Carr, senior vice president of safety, security, sustainability, and international operations for the National Business Aviation Association (NBAA)

But one incident last week in Canada caused some confusion. 

The National Post reported that a charter airplane carrying two Russian civilians en route to the High Arctic was grounded in Yellowknife, Northwest Territories. Officials later discovered that Vasily Shakhnovsky, a prominent Russian oil executive, and Vasily Yelagin, a mountaineer, were on the airplane. The Canadian government collectively fined the occupants, two pilots, and the owner of the aircraft more than $20,000 and allowed the airplane to return to Switzerland without the passengers on board.

Doug Carr, the senior vice president of safety, security, sustainability, and international operations for the National Business Aviation Association (NBAA), explained to FLYING that officials wanted to clarify the extent of the travel ban because it seemed to include regular Russian citizens. 

Carr said his association received word Thursday afternoon that the FAA has updated its position to specify that only Russian persons of interest were on the no-fly list.

"It was unclear the depth and breadth that the government was intending, and [on Thursday] the FAA released the clarity to that, which points to a restriction on persons or entities identified in the International Trade Admission Administration's Consolidated Screening List—a well-known list of sanctioned individuals and companies, not just in Russia, but globally. 

“If you're on that list, you're not going to be flown in the United States," Carr said.

He explained that the list would ensure that average Russian citizens weren't penalized for flying on scheduled air carriers and even charter aircraft if they choose to.

As to whether persons of interest might be able to bypass scrutiny by leveraging other means of air travel such as charter, Carr said the restriction applied to anybody operating an aircraft.

"It's not just private individuals. It's not just airlines charters, as well. Everybody who operates an airplaneuse that definition as widely as you canif you operate an airplane for the benefit of somebody who is on the sanction list, you're going to be in trouble."

How Will an Oligarch’s Jet Be Repossessed?

A lot has been written about lessors of Russian aircraft trying to repossess their aircraft in light of the conflict and the sanctions that have followed. FLYING asked Carr to explain how possible it would be for aircraft OEMs to repossess their original equipment or for the oligarchs to offload their assets. 

The solution isn't straightforward. While airline lessors are actively trying to secure their assets that are in Russia, wealthy billionaires are doing what they can to abscond from justice. 

This was evident last week, when the teenager who tracked Elon Musk's jet and broadcasted the billionaire's movement to a Twitter feed expanded his watch to Russian oligarchs who began flying to various corners of the world as sanctions rolled out.

While it's possible to know where oligarchs are fleeing to, Carr says the challenge isn't getting hold of the airplanes but rather closing the deal. As part of the economic sanctions, the financial assets and accounts of billionaires were also frozen, and Russia was also banned from the SWIFT banking platform.  

"The challenge, I think, is not so much the asset, but the transfer of money that I think is going to be the even harder component of this," Carr said. "Selling the airplane, re-registering it somewhere else with a different owner isn't technically difficult at all. It happens all the time. The question is going to be how the money is going to get from the buyer to the seller when so much of Russia's ability to transact has been cut off."

This means the repo process could end up being long-winded. During a similar conflict, it took Russia's Gennady Timchenko from 2014 when sanctions were imposed to 2016 to sell his jet to another owner after Gulfstream stopped providing maintenance services.

Could Wealthy Individuals Bypass the Law?

A report from the Washington Post suggests that the FAA has lapsed in its efforts to prevent bad actors from registering their aircraft in the U.S. due to poor management of its registry system. This is of concern because, as the Post reported, some wealthy individuals may use this to bypass justice. 

That's why in 2017, the Aircraft Ownership Transparency Act bill was introduced that would require the FAA to track what the bill calls "beneficial owner"—those who controlled the asset. The 2019 provision of the bill also sought to restrict the sale of the jets to limit offenders from using the proceeds to fund their other activities.

Of broader concern will be tracking and limiting the other means that businesses have to register their jets in the U.S. with protective barriers, which the department of transportation first brought to light in a 2013 report

While things continue to escalate in Ukraine, this loophole could make it hard for the FAA to enforce its new NOTAM on persons of interest.

Michael Wildes holds a master’s degree in Logistics & Supply Chain Management, and a bachelor’s degree in Aeronautical Science, both from Embry-Riddle Aeronautical University. Previously, he worked at the university’s flight department as a Flight Check Airman, Assistant Training Manager, and Quality Assurance Mentor. He holds MEI, CFI & CFII ratings. Follow Michael on Twitter @Captainwildes.

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