Last August, Oleg Patsulya, a Russian citizen living near Miami, emailed a Russian airline that had been cut off from Western technology and materials with a tempting offer.
It could help circumvent global sanctions imposed on Rossiya Airlines after Russia’s invasion of Ukraine by swapping out desperately needed parts and electronics for planes through a network of companies based in Florida, Turkey and Russia.
“In light of the sanctions imposed against the Russian Federation, we have successfully resolved the current challenges,” Patsulya wrote, according to a criminal complaint filed Friday with the US District Court in Arizona.
Mr. Patsulya and his business partner were arrested Thursday on charges of violating US export controls and international money laundering in a case illustrating global networks trying to help Russia circumvent broader technological controls. of history.
Since Russia’s invasion of Ukraine, the United States has acted in partnership with nearly 40 other governments to impose sanctions on Russia, including limits on Moscow’s access to weapons, computer chips, aircraft parts and other products needed to boost its economy and its war. The sanctions also applied to Russian airlines, including Aeroflot, its Rossiya subsidiary and others.
But despite these far-reaching sanctions, thousands of shipments of aircraft parts were successfully sent to Russia last year, according to a trove of Russian customs data obtained by The New York Times.
The data, which was compiled and analyzed by import geniusa US-based trade data aggregator, shows that tens of millions of dollars worth of aircraft parts were shipped to Russian airlines explicitly sanctioned by the Biden administration, including Rossiya Airlines, Aeroflot, Ural Airlines, S7 Airlines, Utair Aviation and Pobeda Airlines.
Those shipments were made possible by illicit networks like Patsulya’s, which sprang up to try to circumvent restrictions by passing goods through a series of front men, often in the Middle East and Asia.
For example, dozens of shipments of copper wire, bolts, graphite and other parts marked as made in the United States by Boeing entered Aeroflot warehouses last year. They traversed obscure business enterprises, free trade zones and industrial parks in the United Arab Emirates and China, then traveled to Russia to help repair Aeroflot’s dilapidated fleet.
The data captures more than 5,000 individual shipments of aircraft parts to Russia over an eight-month period in 2022, from simple screws to a $290,000 Honeywell-brand aircraft engine starter.
In all, it shows that $14.4 million worth of US-made aircraft parts were shipped to Russia during the eight months, including $8.9 million worth of parts described as being made or registered by the aircraft manufacturer. American Boeing aircraft and sold to Russia through third parties.
Boeing said it had fully complied with US sanctions and had suspended supplying parts, maintenance and technical support to customers in Russia in early 2022. Aviation supply chain experts said the parts likely they came from a variety of sources, such as existing stocks abroad from airlines and repair facilities or resellers who deal in discarded parts.
Most of the goods were routed through countries including the United Arab Emirates, Turkey, China and the Maldives, according to the data. But a handful of shipments, including to Rossiya, were shipped directly from the United States or Europe.
Shipments have also surged over the course of the past year, as Russia enlisted global companies to help it circumvent sanctions. The trend suggests that “sanctions evasion networks were slow to establish during the immediate post-export control fight, but are now in a position to help Russian airlines obtain some key pieces,” said William George, research director at Import. genius.
The Russian nationals detained Thursday began laying out their plan last May to ship US aircraft parts to Russia in violation of export regulations, according to the criminal complaint.
The men are accused of submitting requests for parts, including expensive brake systems for a Boeing 737, from at least three Russian airlines, including two that had been strictly prohibited from buying US-made products through a so-called temporary refusal order issued by the Department of Commerce. FBI agents raided a condominium owned by the men’s company at Trump Towers in Sunny Isles Beach, Florida, on Thursday. The Miami Herald reported.
Lawyers for the men did not immediately respond to a request for comment.
Despite the level of sanctions evasion, aircraft shipments to Russia remain significantly lower than before the war. US officials say Russian airlines have been forced to cannibalize planes, breaking them down for parts to keep others running, as well as resorting to iran for maintenance and spare parts.
Russian imports of aircraft and aircraft parts fell from $3.45 billion annually before the invasion to only about $286 million afterward, according to The Observatory of Economic Complexitya data visualization platform that explores the dynamics of world trade.
According to the Silverado Policy Accelerator, a Washington nonprofit, China has been the top overall exporter of aircraft, spacecraft and drone parts to Russia since the invasion, accounting for about half of all shipments, followed by India.
The number of single-aisle planes in use in Russia fell by about 16 percent from summer 2021 to summer 2022, after the invasion, according to Cirium, an aviation data provider. The number of larger two-aisle planes, often used on international routes, has been reduced by 40 percent.
Aviation experts say it will be more difficult for Russian airlines to continue flying planes without access to Western suppliers and without help from Boeing and Airbus. Manufacturers regularly check with airlines to assess any damage and strictly control access to technical documentation used by mechanics.
But for now, Russian airlines have kept themselves alive with the help of international shipments and the use of hundreds of foreign planes that were stranded there after the war began.
Tens of thousands of flights are expected to pass through Russia this month, according to schedules published by Cirium. More than 21,000 flights, more than half of them operated by Russian airlines, are expected to carry passengers to and from Central Asian countries, as well as Turkey, the United Arab Emirates, Egypt, China and Thailand.
Half a dozen export control lawyers and former government officials consulted by The New York Times said many of the shipments in the Import Genius data likely violated sanctions, but planemakers like Boeing or Airbus weren’t necessarily at fault. The aviation supply chain is complex and global, and parts could come from a variety of sources.
“Clearly there is a violation,” said William Reinsch, a trade expert at the Center for Strategic and International Studies who oversaw export controls during the Clinton administration. “Less clear is the culprit.”
Aircraft parts originating from the European Union, including those marked as manufactured or registered by Airbus, were also shipped to Russia last year, according to the data.
Justin Dubon, an Airbus spokesman, said the company keeps track of genuine parts and documentation provided to its customers and performs due diligence on all parties requesting replacement parts. The restrictions in the United States and Europe mean that “there is no legal way for genuine aircraft parts, documentation and services to reach Russian carriers,” he said.
The US restrictions technically allow companies to apply for a special license to continue shipping products to Russian carriers for “flight safety” reasons, but both Boeing and Airbus said they had not applied for or received such a license. In addition, Airbus said that EU laws prevent it from shipping such products to Russia, regardless of the US license.
Current and former US officials say some shipments to Russia are expected. Kevin Wolf, a partner at the Akin Gump law firm who oversaw export controls during the Obama administration, said the restrictions “can never block everything,” but the rules were still significantly degrading Russia’s capabilities.
He added that the scope of the new rules still exceeds the current methods of monitoring and enforcement in other allied countries. Until the invasion of Ukraine, the United States and other countries did not restrict trade in aircraft parts, except for Iran, Cuba, North Korea and Syria.
“It’s getting better,” Wolf said, “but it’s still way, way behind.”
Compared with other countries that mostly limit their scrutiny to goods that cross their own borders, the United States is unparalleled in its attempt to police trade around the world.
In the past three years, the United States has imposed new technological restrictions on Russia, China, and Iran that apply extraterritorially: Products made in the United States or in foreign countries with the help of American components or technology are subject to American standards even as they change. hands on the other side of the world.
Both the United States and the European Union they have been increasing penalties for companies that violate sanctions, and dispatch officials to countries like Kazakhstan to try to persuade them to crack down on shipments to Russia through their territory. The US government has nine export control officers stationed in Istanbul, Beijing and other locations to track shipments of sensitive products, and is setting up three more offices.
But providing parts can be a lucrative business. James Disalvatore, an associate director at Kharon, a data and analytics firm that has been monitoring Russia’s efforts to circumvent sanctions, said the value of some aircraft parts imported by Russian airlines since the invasion had increased four-fold. further.
“I don’t think there’s any secret to what’s going on,” said Gary Stanley, a trade compliance expert who advises companies in the aerospace and other industries. “How long do we have sanctions on Cuba? How long have we had North Korean sanctions? How long have we had Iranian sanctions? He never seems to put these people out of business.”