Russian Aircraft Likely to be Hit by US Export Controls, Says Industry Rep
The controls imposed by the Obama administration on U.S. defense and dual-use exports to Russia are most likely to impact the civilian aerospace industry, but tangible impacts won’t be felt until next year, said Daniel Russell, president of the U.S.-Russia Business Council, during a Sept. 25 National Foreign Trade Council event. The April export control sanctions affect only new licenses, so the existing licenses are still able to run their course (see 14042812). The controls target high-tech item sales to sanctioned companies and “tighten” restrictions on sales that could be provided to the Russian military, said Russell. “Russia is a huge market for civilian aircraft,” he said. “Boeing … [United Technology Corporation] … all the usual suspects … are the ones who are most heavily vested there and certainly the export controls will have an impact on that, but I think on the civilian side.”
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Many of those licenses will expire in the coming year, and companies would then be unable to renew them if the current restrictions stay in place. U.S. military sales are, however, not likely to take a hit because Russia produces virtually all it needs in that sector, he added. Meanwhile, U.S. manufacturers may be eyeing Russian agricultural growth, in the wake on its ban of Western products, as an opportunity for more sales. Russia has signaled it will try to build its agricultural industry to strengthen food security and compensate for lost imports (see 14081417). Russian President Vladimir Putin gave the go-ahead in August for an import ban on a wide range of agricultural products from the U.S., EU, Canada, Australia and Norway, all countries that have sanctioned Russia for its role in the ongoing Ukrainian conflict. There is no guarantee Russia is able to foster that level of development in its agricultural sector though, said Russell. “Russian agricultural is really behind other sectors in the country,” he said. “If you had a growth in domestic agriculture, it will obviously result in demand for more modernization and more machinery.”