Boris Livshits, 9V Kuttuzi, Leningrad Oblast, St. Petersburg, Russian Federation; Svetlana Skvortsova, Yablochinkova 21, Moscow, Russian Federation; Aleksey Ippolitov, Ozernaya 46, Moscow, Russian Federation; Advanced Web Services, 417 Brightwater Court, Apt 6f, Brooklyn, NY 11235'; Strandway, LLC, 99 Wall St, Ste. 148, New York, NY 10005; Nikolaos Bogonikolos, Artemidos 36, Palaio Faliro, Attica, Greece; Aratos Group, L. Amfitheas 10, Athens, 17564, Greece. and 10 Amfitheas Avenue, 17564, Palaio Faliro, Greece; Order Renewing Temporary Denial of Export Privileges, 38813-38815 [2023-12679]
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Federal Register / Vol. 88, No. 114 / Wednesday, June 14, 2023 / Notices
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Boris Livshits, 9V Kuttuzi, Leningrad
Oblast, St. Petersburg, Russian
Federation; Svetlana Skvortsova,
Yablochinkova 21, Moscow, Russian
Federation; Aleksey Ippolitov,
Ozernaya 46, Moscow, Russian
Federation; Advanced Web Services,
417 Brightwater Court, Apt 6f,
Brooklyn, NY 11235’; Strandway, LLC,
99 Wall St, Ste. 148, New York, NY
10005; Nikolaos Bogonikolos,
Artemidos 36, Palaio Faliro, Attica,
Greece; Aratos Group, L. Amfitheas 10,
Athens, 17564, Greece. and 10
Amfitheas Avenue, 17564, Palaio
Faliro, Greece; Order Renewing
Temporary Denial of Export Privileges
Pursuant to Section 766.24 of the
Export Administration Regulations (the
‘‘Regulations’’ or ‘‘EAR’’),1 I hereby
grant the request of the Bureau of
Industry and Security (‘‘BIS’’), U.S.
Department of Commerce, through its
Office of Export Enforcement (‘‘OEE’’) to
renew the temporary denial order
(‘‘TDO’’) issued in this matter on
December 13, 2022. I find that renewal
of this order, along with the additions
and denial of the export privileges of
Nikolaos Bogonikolos (‘‘Bogonikolos’’)
and the Aratos Group (‘‘Aratos’’), are
necessary in the public interest to
prevent an imminent violation of the
Regulations.
ddrumheller on DSK120RN23PROD with NOTICES1
I. Procedural History
On December 13, 2022, I signed an
order denying the export privileges of
Boris Livshits, Svetlana Skvortsova,
Aleksey Ippolitov, Advanced Web
Services, and Strandway, LCC
1 The Regulations, currently codified at 15 CFR
parts 730–774 (2021), originally issued pursuant to
the Export Administration Act (50 U.S.C. 4601–
4623 (Supp. III 2015) (‘‘EAA’’), which lapsed on
August 21, 2001. The President, through Executive
Order 13222 of August 17, 2001 (3 CFR 2001 Comp.
783 (2002)), as extended by successive Presidential
Notices, continued the Regulations in effect under
the International Emergency Economic Powers Act
(50 U.S.C. 1701, et seq. (2012)) (‘‘IEEPA’’). On
August 13, 2018, the President signed into law the
John S. McCain National Defense Authorization Act
for Fiscal Year 2019, which includes the Export
Control Reform Act of 2018, 50 U.S.C. 4801–4852
(‘‘ECRA’’). While Section 1766 of ECRA repeals the
provisions of the EAA (except for three sections
which are inapplicable here), Section 1768 of ECRA
provides, in pertinent part, that all orders, rules,
regulations, and other forms of administrative
action that were made or issued under the EAA,
including as continued in effect pursuant to IEEPA,
and were in effect as of ECRA’s date of enactment
(August 13, 2018), shall continue in effect according
to their terms until modified, superseded, set aside,
or revoked through action undertaken pursuant to
the authority provided under ECRA. Moreover,
Section 1761(a)(5) of ECRA authorizes the issuance
of temporary denial orders.
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19:24 Jun 13, 2023
Jkt 259001
(‘‘Strandway’’) (collectively ‘‘the
Respondents’’) for a period of 180 days
on the ground that issuance of the order
was necessary in the public interest to
prevent an imminent violation of the
Regulations. The order was issued ex
parte pursuant to Section 766.24(a) of
the Regulations and was effective upon
issuance.2
On May 18, 2023, BIS, through OEE,
submitted a written request for renewal
of the TDO that was issued on December
13, 2022. OEE’s request for renewal also
contained evidence related to
Bogonikolos and Aratos.3 The written
request was made more than 20 days
before the TDO’s scheduled expiration.
A copy of the renewal request was sent
to Respondents in accordance with
Sections 766.5 and 766.24(d) of the
Regulations. No opposition to the
renewal of the TDO has been received.
II. Renewal of the TDO
A. Legal Standard
Pursuant to Section 766.24, BIS may
issue an order temporarily denying a
respondent’s export privileges upon a
showing that the order is necessary in
the public interest to prevent an
‘‘imminent violation’’ of the
Regulations. 15 CFR 766.24(b)(1) and
766.24(d). ‘‘A violation may be
‘imminent’ either in time or degree of
likelihood.’’ 15 CFR 766.24(b)(3). BIS
may show ‘‘either that a violation is
about to occur, or that the general
circumstances of the matter under
investigation or case under criminal or
administrative charges demonstrate a
likelihood of future violations.’’ Id. As
to the likelihood of future violations,
BIS may show that the violation under
investigation or charge ‘‘is significant,
deliberate, covert and/or likely to occur
again, rather than technical or
negligent[.]’’ Id. A ‘‘[l]ack of information
establishing the precise time a violation
may occur does not preclude a finding
that a violation is imminent, so long as
there is sufficient reason to believe the
likelihood of a violation.’’ Id.
B. The TDO and BIS’s Request for
Renewal
The U.S. Commerce Department,
through BIS, responded to the Russian
Federation’s (‘‘Russia’s’’) further
invasion of Ukraine by implementing a
sweeping series of stringent export
controls that severely restrict Russia’s
access to technologies and other items
that it needs to sustain its aggressive
2 The TDO was published in the Federal Register
on December 16, 2022 (87 FR 77067).
3 In the renewal request, OEE also noted that a
TDO request related to Bogonikolos and the Aratos
Group was forthcoming.
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Sfmt 4703
38813
military capabilities. These controls
primarily target Russia’s defense,
aerospace, and maritime sectors and are
intended to cut off Russia’s access to
vital technological inputs, atrophy key
sectors of its industrial base, and
undercut Russia’s strategic ambitions to
exert influence on the world stage.
As of February 24, 2022, any item
classified under any Export
Classification Control Number
(‘‘ECCN’’) in Categories 3 through 9 of
the Commerce Control List (‘‘CCL’’)
required a license to be exported or
reexported to Russia. See 87 FR 12226
(Mar. 3, 2022). As of April 8, 2022, the
license requirements for Russia were
expanded to cover all items on the CCL.
See 87 FR 22130 (Apr. 14, 2022). These
rules were codified in Title 15 CFR
746.8, which state, ‘‘a license is
required, excluding deemed exports and
deemed reexports, to export, reexport,
or transfer (in-country) to or within
Russia or Belarus any item subject to the
EAR and specified in any Export
Control Classification Number
(‘‘ECCN’’) on the CCL.’’
OEE’s request for renewal is based
upon the facts underlying the issuance
of the initial TDO and the evidence
developed over the course of this
investigation, which demonstrate the
existence of an extensive procurement
network conspiring to violate U.S.
export control laws by unlawfully
procuring and shipping military and
sensitive dual-use technologies from
U.S. manufacturers to Russian end
users. As detailed in its May 18, 2023
request for renewal of the TDO, OEE’s
investigation, which remains ongoing,
has revealed evidence that this illicit
network and its reach are broader in
scope and more extensive than initially
realized. As a result, the renewal of this
order, along with the issuance of an
order temporarily denying the export
privileges of Nikolaos Bogonikolos and
the Aratos Group, are necessary.
1. The Basis for the Initial TDO
On or about September 12, 2022, and
as detailed in the initial TDO issued on
December 13, 2022, Livshits,
Skvortsova, and Ippolitov, along with
co-conspirators Yevgeniy Grinin,4 were
each indicted on multiple counts in the
United States District Court for the
Eastern District of New York. The
4 Grinin is the owner and operator of Photon Pro,
LLP (‘‘Photon’’), which was placed on the BIS
Entity List on March 9, 2022, with a policy of denial
for all items subject to the EAR (87 FR 13141).
Grinin and Photon have also both been identified
as Specially Designated Nationals (SDNs) by the
U.S. Treasury Department, Office of Foreign Assets
Control (‘‘OFAC’’) pursuant to Executive Order
14024 (87 FR 20505).
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38814
Federal Register / Vol. 88, No. 114 / Wednesday, June 14, 2023 / Notices
charges included, but were not limited
to, conspiring to violate U.S. export
control laws in connection with the
unlicensed export of electronic signal
generator and measurement equipment,
among other items, to BIS-listed entities
in Russia, including OOO Serniya
Engineering (‘‘Serniya’’),5 a wholesale
machinery and equipment company
located in Moscow, Russia.
As further detailed in the initial TDO,
Serniya heads an illicit procurement
network (collectively, the ‘‘Serniya
Network’’) operating under the direction
of Russia’s intelligence services to evade
U.S. sanctions to acquire sensitive
military grade and dual-use
technologies, including advanced
semiconductors, for the Russian
military, defense sector, and research
institutions. The initial TDO was also
based on evidence that Livshits and the
other Respondents were engaged in
unlawfully procuring and shipping
military and sensitive dual-use
technologies from U.S. manufacturers to
Russian end users, including the
Serniya Network. These items included
advanced electronics and sophisticated
testing equipment, some of which can
be used in military applications. As
stated in the initial TDO, the
procurement activity occurred from at
least January 2017 through October
2022, and Respondents actively sought
to conceal their unlawful export-related
activities in order to evade detection by
law enforcement.
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2. Basis for Renewal and Additions of
Bogonikolos and the Aratos Group
In its May 18, 2023 request for
renewal of the TDO, OEE has presented
evidence that the scope of the Serniya
Network is broader, and its conduct
more extensive, than initially realized.
OEE has presented additional evidence
demonstrating that the procurement
network extends to multiple coconspirators and countries. For
instance, OEE’s investigation has
identified other co-conspirators and
procurement agents for the Serniya
Network, including Nikolaos
Bogonikolos, the founder and president
of the Aratos Group, a network of
defense-related companies in the
Netherlands and Greece.
As noted in OEE’s request for
renewal, a superseding indictment was
5 On March 3, 2022, Serniya, along with OOO
Sertal (‘‘Sertal’’), another Moscow-based machinery
and equipment company and part of the Serniya
Network, were both placed on the BIS Entity List,
section 744.11 and Supplement No. 4 to part 744
of the Regulations, because they ‘‘have been
involved in, contributed to, or otherwise supported
the Russian security services, military and defense
sectors, and military and/or defense research and
development efforts’’ (87 FR 13141).
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19:24 Jun 13, 2023
Jkt 259001
filed on or about December 5, 2022,
charging Livshits, Skvortsova, Ippolitov,
Grinin and three additional coconspirators with, among other charges,
conspiring to violate U.S. export control
laws. On or about May 2, 2023, in the
United States District Court for the
Eastern District of New York,
Bogonikolos was charged by complaint
with smuggling and other related
offenses. As alleged in the complaint,
Bogonikolos assisted Grinin and
Ippolotov in their efforts to procure U.S.
origin items on behalf of the Serniya
Network, including the procurement of
tactical military antennas, which were
classified under ECCN 3A611.x,
controlled for national security reasons,
and required a license for export to
Russia. Specifically, after Grinin and
Ippolotov identified U.S. origin items
for procurement, Bogonikolos assisted
the Serniya Network by purchasing the
items and concealing the true end user
by claiming the items would be used by
Aratos in the Netherlands.
On May 22, 2023, a second
superseding indictment was filed in the
United States District Court for the
Eastern District of New York charging
Livshits, Skvortsova, Ippolitov, Grinin,
and Bogonikolos, and others, with
smuggling and conspiracy to violate
U.S. export control laws, inter alia. As
detailed in the second superseding
indictment, Bogonikolos, a Greek
national, is the founder and president of
the Aratos Group, a defense
conglomerate in the Netherlands and
Greece. Bogonikolos purchased
sensitive military and dual-use items
from U.S. companies on behalf of
Serniya and Sertal and routed the
shipments through the Aratos Group to
various transshipment points to conceal
the true Russian end users.
As further alleged in the second
superseding indictment, Bogonikolos,
who provided false end use statements
to U.S. companies, was recruited as a
procurement agent by the Serniya
Network in 2017. As part of the
arrangement and at Ippolitov’s
direction, Bogonikolos agreed to work
exclusively with Grinin, advising that
he understood that Ippolitov sought to
purchase sensitive items. Bogonikolos
also advised Grinin about ways to
obtain such items in furtherance of the
conspiracy. For instance, in February
2018, after Grinin advised that he was
having difficulty obtaining a certain
product specification, Bogonikolos
recommended that he add other items
and alter them from Grinin’s prior order
in an attempt to obtain the shipment
and evade detection. On another
occasion, Bogonikolos advised Grinin
that he signed a false end-use statement,
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Frm 00006
Fmt 4703
Sfmt 4703
stating that certain items were only for
use in the Netherlands.
OEE’s investigation also reveals that
Bogonikolos and employees of the
Aratos Group tracked orders for the
Serniya Network by excel spreadsheet.
These orders, which occasionally listed
the applicable ECCN, included orders
with related invoices for either Serniya
or Photon. Moreover, one such
spreadsheet included a column related
to export controls and information about
U.S. and European export control
restrictions, demonstrating knowledge
and familiarity with export control laws.
Since the issuance of the TDO on
December 13, 2022, arrest warrants have
been issued for Respondents Boris
Livshits, Svetlana Skvortsova, and
Aleksey Ippolotov. The parties are
presently fugitives from U.S. law
enforcement and reside in the Russian
Federation. Because they have not yet
been apprehended, OEE has reason to
believe that their illicit procurement
efforts will remain ongoing, given the
length and nature of the conduct
identified to date. Significantly, OEE’s
investigation has revealed that they are
familiar with methods of concealment
and are likely to use increasingly
sophisticated methods to avoid
detection by law enforcement.
Additionally, given the size and scope
of the Serniya procurement network,
including newly identified parties and
entities, such as Bogonikolos 6 and the
Aratos Group, that span multiple
countries including the Netherlands and
Greece, there is substantial risk that
continued evasion efforts will be
successful, absent the renewal of the
TDO and addition of Bogonikolos and
the Aratos Group as respondents.
III. Findings
I find that the evidence presented by
BIS demonstrates that a violation of the
Regulations by the above-captioned
parties is imminent in both time and
degree of likelihood. As such, a TDO is
needed to give notice to persons and
companies in the United States and
abroad that they should cease dealing
with Boris Livshits, Svetlana
Skvortsova, Aleksey Ippolitov,
Advanced Web Services, Strandway,
LCC, Nikolaos Bogonikolos, and the
Aratos Group in export or reexport
transactions involving items subject to
the EAR. Such a TDO is consistent with
the public interest to preclude future
violations of the Regulations given the
deliberate, covert, and determined
6 Bogonikolos was arrested in Paris, France in
May 2023 based on the criminal charges pending
in the U.S. District Court for the Eastern District of
New York.
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Federal Register / Vol. 88, No. 114 / Wednesday, June 14, 2023 / Notices
nature of the misconduct and clear
disregard for complying with U.S.
export control laws.
This Order is being issued on an ex
parte basis without a hearing based
upon BIS’s showing of an imminent
violation in accordance with Section
766.24 and 766.23(b) of the Regulations.
It is therefore ordered:
First, that BORIS LIVSHITS, with an
address at 9V Kuttuzi, Leningrad Oblast,
St. Petersburg, Russian Federation;
SVETLANA SKVORTSOVA, with an
address at Yablochinkova 21 Moscow,
Russian Federation; ALEKSEY
IPPOLITOV, with an address at
Ozernaya 46 Moscow, Russian
Federation; ADVANCED WEB
SERVICES, with an address at 417
Brightwater Court, Apt 6f Brooklyn, NY
11235; STRANDWAY, LLC, with an
address at 99 Wall St, Ste. 148 New
York, NY 10005; NIKOLAOS
BOGONIKOLOS, with an address at
Artemidos 36, Palaio Faliro, Attica,
Greece; and the ARATOS GROUP, with
addresses at L. Amfitheas 10, Athens,
17564, Greece and 10 Amfitheas
Avenue, 17564, Palaio Faliro, Greece;
and when acting for or on their behalf,
any successors or assigns, agents, or
employees (each a ‘‘Denied Person’’ and
collectively the ‘‘Denied Persons’’) may
not, directly or indirectly, participate in
any way in any transaction involving
any commodity, software or technology
(hereinafter collectively referred to as
‘‘item’’) exported or to be exported from
the United States that is subject to the
EAR, or in any other activity subject to
the EAR including, but not limited to:
A. Applying for, obtaining, or using
any license, License Exception, or
export control document;
B. Carrying on negotiations
concerning, or ordering, buying,
receiving, using, selling, delivering,
storing, disposing of, forwarding,
transporting, financing, or otherwise
servicing in any way, any transaction
involving any item exported or to be
exported from the United States that is
subject to the EAR, or in any other
activity subject to the EAR; or
C. Benefitting in any way from any
transaction involving any item exported
or to be exported from the United States
that is subject to the EAR, or in any
other activity subject to the EAR.
Second, that no person may, directly
or indirectly, do any of the following:
A. Export, reexport, or transfer (incountry) to or on behalf of a Denied
Person any item subject to the EAR;
B. Take any action that facilitates the
acquisition or attempted acquisition by
a Denied Person of the ownership,
possession, or control of any item
subject to the EAR that has been or will
VerDate Sep<11>2014
19:24 Jun 13, 2023
Jkt 259001
be exported from the United States,
including financing or other support
activities related to a transaction
whereby a Denied Person acquires or
attempts to acquire such ownership,
possession or control;
C. Take any action to acquire from or
to facilitate the acquisition or attempted
acquisition from a Denied Person of any
item subject to the EAR that has been
exported from the United States;
D. Obtain from a Denied Person in the
United States any item subject to the
EAR with knowledge or reason to know
that the item will be, or is intended to
be, exported from the United States; or
E. Engage in any transaction to service
any item subject to the EAR that has
been or will be exported from the
United States and which is owned,
possessed or controlled by a Denied
Person, or service any item, of whatever
origin, that is owned, possessed or
controlled by a Denied Person if such
service involves the use of any item
subject to the EAR that has been or will
be exported from the United States. For
purposes of this paragraph, servicing
means installation, maintenance, repair,
modification or testing.
Third, that, after notice and
opportunity for comment as provided in
section 766.23 of the EAR, any other
person, firm, corporation, or business
organization related to Boris Livshits,
Svetlana Skvortsova, Aleksey Ippolitov,
Advanced Web Services, Strandway,
LCC, Nikolaos Bogonikolos, and/or the
Aratos Group by affiliation, ownership,
control, or position of responsibility in
the conduct of trade or related services
may also be made subject to the
provisions of this Order.
In accordance with the provisions of
Section 766.24(e) of the EAR, Boris
Livshits, Svetlana Skvortsova, Aleksey
Ippolitov, Advanced Web Services,
Strandway, LCC, Nikolaos Bogonikolos,
and the Aratos Group may, at any time,
appeal this Order by filing a full written
statement in support of the appeal with
the Office of the Administrative Law
Judge, U.S. Coast Guard ALJ Docketing
Center, 40 South Gay Street, Baltimore,
Maryland 21202–4022.
In accordance with the provisions of
Section 766.24(d) of the EAR, BIS may
seek renewal of this Order by filing a
written request not later than 20 days
before the expiration date. Respondents
Boris Livshits, Svetlana Skvortsova,
Aleksey Ippolitov, Advanced Web
Services, Strandway, LCC, Nikolaos
Bogonikolos, and the Aratos Group may
oppose a request to renew this Order by
filing a written submission with the
Assistant Secretary for Export
Enforcement, which must be received
PO 00000
Frm 00007
Fmt 4703
Sfmt 4703
38815
not later than seven days before the
expiration date of the Order.
A copy of this Order shall be served
on each denied person and shall be
published in the Federal Register.
This Order is effective immediately
and shall remain in effect for 180 days.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export
Enforcement.
[FR Doc. 2023–12679 Filed 6–13–23; 8:45 am]
BILLING CODE 3510–DT–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–588–850]
Carbon and Alloy Seamless Standard,
Line, And Pressure Pipe (Over 41⁄2
Inches) From Japan: Continuation of
the Antidumping Duty Order
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
AGENCY:
As a result of the
determinations by the U.S. Department
of Commerce (Commerce) and the U.S.
International Trade Commission (ITC)
that revocation of the antidumping duty
(AD) order on carbon and alloy seamless
standard, line, and pressure pipe (over
41⁄2 inches) (large diameter pipe) from
Japan would likely lead to the
continuation or recurrence of dumping
and material injury to an industry in the
United States, Commerce is publishing
a notice of continuation of this AD
order.
SUMMARY:
DATES:
Applicable June 6, 2023.
FOR FURTHER INFORMATION CONTACT:
Nicholas Czajkowski, AD/CVD
Operations, Office I, Enforcement and
Compliance, International Trade
Administration, U.S. Department of
Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone:
(202) 482–1395.
SUPPLEMENTARY INFORMATION:
Background
On June 26, 2000, Commerce
published in the Federal Register the
AD order on large diameter pipe from
Japan.1 On October 3, 2022, the ITC
1 See Notice of Antidumping Duty Orders: Certain
Large Diameter Carbon and Alloy Seamless
Standard, Line and Pressure Pipe from Japan; and
Certain Small Diameter Carbon and Alloy Seamless
Standard, Line and Pressure Pipe from Japan and
the Republic of South Africa, 65 FR 39360 (June 26,
2000) (Order).
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Agencies
[Federal Register Volume 88, Number 114 (Wednesday, June 14, 2023)]
[Notices]
[Pages 38813-38815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-12679]
[[Page 38813]]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Boris Livshits, 9V Kuttuzi, Leningrad Oblast, St. Petersburg,
Russian Federation; Svetlana Skvortsova, Yablochinkova 21, Moscow,
Russian Federation; Aleksey Ippolitov, Ozernaya 46, Moscow, Russian
Federation; Advanced Web Services, 417 Brightwater Court, Apt 6f,
Brooklyn, NY 11235'; Strandway, LLC, 99 Wall St, Ste. 148, New York, NY
10005; Nikolaos Bogonikolos, Artemidos 36, Palaio Faliro, Attica,
Greece; Aratos Group, L. Amfitheas 10, Athens, 17564, Greece. and 10
Amfitheas Avenue, 17564, Palaio Faliro, Greece; Order Renewing
Temporary Denial of Export Privileges
Pursuant to Section 766.24 of the Export Administration Regulations
(the ``Regulations'' or ``EAR''),\1\ I hereby grant the request of the
Bureau of Industry and Security (``BIS''), U.S. Department of Commerce,
through its Office of Export Enforcement (``OEE'') to renew the
temporary denial order (``TDO'') issued in this matter on December 13,
2022. I find that renewal of this order, along with the additions and
denial of the export privileges of Nikolaos Bogonikolos
(``Bogonikolos'') and the Aratos Group (``Aratos''), are necessary in
the public interest to prevent an imminent violation of the
Regulations.
---------------------------------------------------------------------------
\1\ The Regulations, currently codified at 15 CFR parts 730-774
(2021), originally issued pursuant to the Export Administration Act
(50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which lapsed on
August 21, 2001. The President, through Executive Order 13222 of
August 17, 2001 (3 CFR 2001 Comp. 783 (2002)), as extended by
successive Presidential Notices, continued the Regulations in effect
under the International Emergency Economic Powers Act (50 U.S.C.
1701, et seq. (2012)) (``IEEPA''). On August 13, 2018, the President
signed into law the John S. McCain National Defense Authorization
Act for Fiscal Year 2019, which includes the Export Control Reform
Act of 2018, 50 U.S.C. 4801-4852 (``ECRA''). While Section 1766 of
ECRA repeals the provisions of the EAA (except for three sections
which are inapplicable here), Section 1768 of ECRA provides, in
pertinent part, that all orders, rules, regulations, and other forms
of administrative action that were made or issued under the EAA,
including as continued in effect pursuant to IEEPA, and were in
effect as of ECRA's date of enactment (August 13, 2018), shall
continue in effect according to their terms until modified,
superseded, set aside, or revoked through action undertaken pursuant
to the authority provided under ECRA. Moreover, Section 1761(a)(5)
of ECRA authorizes the issuance of temporary denial orders.
---------------------------------------------------------------------------
I. Procedural History
On December 13, 2022, I signed an order denying the export
privileges of Boris Livshits, Svetlana Skvortsova, Aleksey Ippolitov,
Advanced Web Services, and Strandway, LCC (``Strandway'') (collectively
``the Respondents'') for a period of 180 days on the ground that
issuance of the order was necessary in the public interest to prevent
an imminent violation of the Regulations. The order was issued ex parte
pursuant to Section 766.24(a) of the Regulations and was effective upon
issuance.\2\
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\2\ The TDO was published in the Federal Register on December
16, 2022 (87 FR 77067).
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On May 18, 2023, BIS, through OEE, submitted a written request for
renewal of the TDO that was issued on December 13, 2022. OEE's request
for renewal also contained evidence related to Bogonikolos and
Aratos.\3\ The written request was made more than 20 days before the
TDO's scheduled expiration. A copy of the renewal request was sent to
Respondents in accordance with Sections 766.5 and 766.24(d) of the
Regulations. No opposition to the renewal of the TDO has been received.
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\3\ In the renewal request, OEE also noted that a TDO request
related to Bogonikolos and the Aratos Group was forthcoming.
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II. Renewal of the TDO
A. Legal Standard
Pursuant to Section 766.24, BIS may issue an order temporarily
denying a respondent's export privileges upon a showing that the order
is necessary in the public interest to prevent an ``imminent
violation'' of the Regulations. 15 CFR 766.24(b)(1) and 766.24(d). ``A
violation may be `imminent' either in time or degree of likelihood.''
15 CFR 766.24(b)(3). BIS may show ``either that a violation is about to
occur, or that the general circumstances of the matter under
investigation or case under criminal or administrative charges
demonstrate a likelihood of future violations.'' Id. As to the
likelihood of future violations, BIS may show that the violation under
investigation or charge ``is significant, deliberate, covert and/or
likely to occur again, rather than technical or negligent[.]'' Id. A
``[l]ack of information establishing the precise time a violation may
occur does not preclude a finding that a violation is imminent, so long
as there is sufficient reason to believe the likelihood of a
violation.'' Id.
B. The TDO and BIS's Request for Renewal
The U.S. Commerce Department, through BIS, responded to the Russian
Federation's (``Russia's'') further invasion of Ukraine by implementing
a sweeping series of stringent export controls that severely restrict
Russia's access to technologies and other items that it needs to
sustain its aggressive military capabilities. These controls primarily
target Russia's defense, aerospace, and maritime sectors and are
intended to cut off Russia's access to vital technological inputs,
atrophy key sectors of its industrial base, and undercut Russia's
strategic ambitions to exert influence on the world stage.
As of February 24, 2022, any item classified under any Export
Classification Control Number (``ECCN'') in Categories 3 through 9 of
the Commerce Control List (``CCL'') required a license to be exported
or reexported to Russia. See 87 FR 12226 (Mar. 3, 2022). As of April 8,
2022, the license requirements for Russia were expanded to cover all
items on the CCL. See 87 FR 22130 (Apr. 14, 2022). These rules were
codified in Title 15 CFR 746.8, which state, ``a license is required,
excluding deemed exports and deemed reexports, to export, reexport, or
transfer (in-country) to or within Russia or Belarus any item subject
to the EAR and specified in any Export Control Classification Number
(``ECCN'') on the CCL.''
OEE's request for renewal is based upon the facts underlying the
issuance of the initial TDO and the evidence developed over the course
of this investigation, which demonstrate the existence of an extensive
procurement network conspiring to violate U.S. export control laws by
unlawfully procuring and shipping military and sensitive dual-use
technologies from U.S. manufacturers to Russian end users. As detailed
in its May 18, 2023 request for renewal of the TDO, OEE's
investigation, which remains ongoing, has revealed evidence that this
illicit network and its reach are broader in scope and more extensive
than initially realized. As a result, the renewal of this order, along
with the issuance of an order temporarily denying the export privileges
of Nikolaos Bogonikolos and the Aratos Group, are necessary.
1. The Basis for the Initial TDO
On or about September 12, 2022, and as detailed in the initial TDO
issued on December 13, 2022, Livshits, Skvortsova, and Ippolitov, along
with co-conspirators Yevgeniy Grinin,\4\ were each indicted on multiple
counts in the United States District Court for the Eastern District of
New York. The
[[Page 38814]]
charges included, but were not limited to, conspiring to violate U.S.
export control laws in connection with the unlicensed export of
electronic signal generator and measurement equipment, among other
items, to BIS-listed entities in Russia, including OOO Serniya
Engineering (``Serniya''),\5\ a wholesale machinery and equipment
company located in Moscow, Russia.
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\4\ Grinin is the owner and operator of Photon Pro, LLP
(``Photon''), which was placed on the BIS Entity List on March 9,
2022, with a policy of denial for all items subject to the EAR (87
FR 13141). Grinin and Photon have also both been identified as
Specially Designated Nationals (SDNs) by the U.S. Treasury
Department, Office of Foreign Assets Control (``OFAC'') pursuant to
Executive Order 14024 (87 FR 20505).
\5\ On March 3, 2022, Serniya, along with OOO Sertal
(``Sertal''), another Moscow-based machinery and equipment company
and part of the Serniya Network, were both placed on the BIS Entity
List, section 744.11 and Supplement No. 4 to part 744 of the
Regulations, because they ``have been involved in, contributed to,
or otherwise supported the Russian security services, military and
defense sectors, and military and/or defense research and
development efforts'' (87 FR 13141).
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As further detailed in the initial TDO, Serniya heads an illicit
procurement network (collectively, the ``Serniya Network'') operating
under the direction of Russia's intelligence services to evade U.S.
sanctions to acquire sensitive military grade and dual-use
technologies, including advanced semiconductors, for the Russian
military, defense sector, and research institutions. The initial TDO
was also based on evidence that Livshits and the other Respondents were
engaged in unlawfully procuring and shipping military and sensitive
dual-use technologies from U.S. manufacturers to Russian end users,
including the Serniya Network. These items included advanced
electronics and sophisticated testing equipment, some of which can be
used in military applications. As stated in the initial TDO, the
procurement activity occurred from at least January 2017 through
October 2022, and Respondents actively sought to conceal their unlawful
export-related activities in order to evade detection by law
enforcement.
2. Basis for Renewal and Additions of Bogonikolos and the Aratos Group
In its May 18, 2023 request for renewal of the TDO, OEE has
presented evidence that the scope of the Serniya Network is broader,
and its conduct more extensive, than initially realized. OEE has
presented additional evidence demonstrating that the procurement
network extends to multiple co-conspirators and countries. For
instance, OEE's investigation has identified other co-conspirators and
procurement agents for the Serniya Network, including Nikolaos
Bogonikolos, the founder and president of the Aratos Group, a network
of defense-related companies in the Netherlands and Greece.
As noted in OEE's request for renewal, a superseding indictment was
filed on or about December 5, 2022, charging Livshits, Skvortsova,
Ippolitov, Grinin and three additional co-conspirators with, among
other charges, conspiring to violate U.S. export control laws. On or
about May 2, 2023, in the United States District Court for the Eastern
District of New York, Bogonikolos was charged by complaint with
smuggling and other related offenses. As alleged in the complaint,
Bogonikolos assisted Grinin and Ippolotov in their efforts to procure
U.S. origin items on behalf of the Serniya Network, including the
procurement of tactical military antennas, which were classified under
ECCN 3A611.x, controlled for national security reasons, and required a
license for export to Russia. Specifically, after Grinin and Ippolotov
identified U.S. origin items for procurement, Bogonikolos assisted the
Serniya Network by purchasing the items and concealing the true end
user by claiming the items would be used by Aratos in the Netherlands.
On May 22, 2023, a second superseding indictment was filed in the
United States District Court for the Eastern District of New York
charging Livshits, Skvortsova, Ippolitov, Grinin, and Bogonikolos, and
others, with smuggling and conspiracy to violate U.S. export control
laws, inter alia. As detailed in the second superseding indictment,
Bogonikolos, a Greek national, is the founder and president of the
Aratos Group, a defense conglomerate in the Netherlands and Greece.
Bogonikolos purchased sensitive military and dual-use items from U.S.
companies on behalf of Serniya and Sertal and routed the shipments
through the Aratos Group to various transshipment points to conceal the
true Russian end users.
As further alleged in the second superseding indictment,
Bogonikolos, who provided false end use statements to U.S. companies,
was recruited as a procurement agent by the Serniya Network in 2017. As
part of the arrangement and at Ippolitov's direction, Bogonikolos
agreed to work exclusively with Grinin, advising that he understood
that Ippolitov sought to purchase sensitive items. Bogonikolos also
advised Grinin about ways to obtain such items in furtherance of the
conspiracy. For instance, in February 2018, after Grinin advised that
he was having difficulty obtaining a certain product specification,
Bogonikolos recommended that he add other items and alter them from
Grinin's prior order in an attempt to obtain the shipment and evade
detection. On another occasion, Bogonikolos advised Grinin that he
signed a false end-use statement, stating that certain items were only
for use in the Netherlands.
OEE's investigation also reveals that Bogonikolos and employees of
the Aratos Group tracked orders for the Serniya Network by excel
spreadsheet. These orders, which occasionally listed the applicable
ECCN, included orders with related invoices for either Serniya or
Photon. Moreover, one such spreadsheet included a column related to
export controls and information about U.S. and European export control
restrictions, demonstrating knowledge and familiarity with export
control laws.
Since the issuance of the TDO on December 13, 2022, arrest warrants
have been issued for Respondents Boris Livshits, Svetlana Skvortsova,
and Aleksey Ippolotov. The parties are presently fugitives from U.S.
law enforcement and reside in the Russian Federation. Because they have
not yet been apprehended, OEE has reason to believe that their illicit
procurement efforts will remain ongoing, given the length and nature of
the conduct identified to date. Significantly, OEE's investigation has
revealed that they are familiar with methods of concealment and are
likely to use increasingly sophisticated methods to avoid detection by
law enforcement. Additionally, given the size and scope of the Serniya
procurement network, including newly identified parties and entities,
such as Bogonikolos \6\ and the Aratos Group, that span multiple
countries including the Netherlands and Greece, there is substantial
risk that continued evasion efforts will be successful, absent the
renewal of the TDO and addition of Bogonikolos and the Aratos Group as
respondents.
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\6\ Bogonikolos was arrested in Paris, France in May 2023 based
on the criminal charges pending in the U.S. District Court for the
Eastern District of New York.
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III. Findings
I find that the evidence presented by BIS demonstrates that a
violation of the Regulations by the above-captioned parties is imminent
in both time and degree of likelihood. As such, a TDO is needed to give
notice to persons and companies in the United States and abroad that
they should cease dealing with Boris Livshits, Svetlana Skvortsova,
Aleksey Ippolitov, Advanced Web Services, Strandway, LCC, Nikolaos
Bogonikolos, and the Aratos Group in export or reexport transactions
involving items subject to the EAR. Such a TDO is consistent with the
public interest to preclude future violations of the Regulations given
the deliberate, covert, and determined
[[Page 38815]]
nature of the misconduct and clear disregard for complying with U.S.
export control laws.
This Order is being issued on an ex parte basis without a hearing
based upon BIS's showing of an imminent violation in accordance with
Section 766.24 and 766.23(b) of the Regulations.
It is therefore ordered:
First, that BORIS LIVSHITS, with an address at 9V Kuttuzi,
Leningrad Oblast, St. Petersburg, Russian Federation; SVETLANA
SKVORTSOVA, with an address at Yablochinkova 21 Moscow, Russian
Federation; ALEKSEY IPPOLITOV, with an address at Ozernaya 46 Moscow,
Russian Federation; ADVANCED WEB SERVICES, with an address at 417
Brightwater Court, Apt 6f Brooklyn, NY 11235; STRANDWAY, LLC, with an
address at 99 Wall St, Ste. 148 New York, NY 10005; NIKOLAOS
BOGONIKOLOS, with an address at Artemidos 36, Palaio Faliro, Attica,
Greece; and the ARATOS GROUP, with addresses at L. Amfitheas 10,
Athens, 17564, Greece and 10 Amfitheas Avenue, 17564, Palaio Faliro,
Greece; and when acting for or on their behalf, any successors or
assigns, agents, or employees (each a ``Denied Person'' and
collectively the ``Denied Persons'') may not, directly or indirectly,
participate in any way in any transaction involving any commodity,
software or technology (hereinafter collectively referred to as
``item'') exported or to be exported from the United States that is
subject to the EAR, or in any other activity subject to the EAR
including, but not limited to:
A. Applying for, obtaining, or using any license, License
Exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying,
receiving, using, selling, delivering, storing, disposing of,
forwarding, transporting, financing, or otherwise servicing in any way,
any transaction involving any item exported or to be exported from the
United States that is subject to the EAR, or in any other activity
subject to the EAR; or
C. Benefitting in any way from any transaction involving any item
exported or to be exported from the United States that is subject to
the EAR, or in any other activity subject to the EAR.
Second, that no person may, directly or indirectly, do any of the
following:
A. Export, reexport, or transfer (in-country) to or on behalf of a
Denied Person any item subject to the EAR;
B. Take any action that facilitates the acquisition or attempted
acquisition by a Denied Person of the ownership, possession, or control
of any item subject to the EAR that has been or will be exported from
the United States, including financing or other support activities
related to a transaction whereby a Denied Person acquires or attempts
to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition
or attempted acquisition from a Denied Person of any item subject to
the EAR that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item
subject to the EAR with knowledge or reason to know that the item will
be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the EAR
that has been or will be exported from the United States and which is
owned, possessed or controlled by a Denied Person, or service any item,
of whatever origin, that is owned, possessed or controlled by a Denied
Person if such service involves the use of any item subject to the EAR
that has been or will be exported from the United States. For purposes
of this paragraph, servicing means installation, maintenance, repair,
modification or testing.
Third, that, after notice and opportunity for comment as provided
in section 766.23 of the EAR, any other person, firm, corporation, or
business organization related to Boris Livshits, Svetlana Skvortsova,
Aleksey Ippolitov, Advanced Web Services, Strandway, LCC, Nikolaos
Bogonikolos, and/or the Aratos Group by affiliation, ownership,
control, or position of responsibility in the conduct of trade or
related services may also be made subject to the provisions of this
Order.
In accordance with the provisions of Section 766.24(e) of the EAR,
Boris Livshits, Svetlana Skvortsova, Aleksey Ippolitov, Advanced Web
Services, Strandway, LCC, Nikolaos Bogonikolos, and the Aratos Group
may, at any time, appeal this Order by filing a full written statement
in support of the appeal with the Office of the Administrative Law
Judge, U.S. Coast Guard ALJ Docketing Center, 40 South Gay Street,
Baltimore, Maryland 21202-4022.
In accordance with the provisions of Section 766.24(d) of the EAR,
BIS may seek renewal of this Order by filing a written request not
later than 20 days before the expiration date. Respondents Boris
Livshits, Svetlana Skvortsova, Aleksey Ippolitov, Advanced Web
Services, Strandway, LCC, Nikolaos Bogonikolos, and the Aratos Group
may oppose a request to renew this Order by filing a written submission
with the Assistant Secretary for Export Enforcement, which must be
received not later than seven days before the expiration date of the
Order.
A copy of this Order shall be served on each denied person and
shall be published in the Federal Register.
This Order is effective immediately and shall remain in effect for
180 days.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2023-12679 Filed 6-13-23; 8:45 am]
BILLING CODE 3510-DT-P