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x1234
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How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 7:27 pm

Due to sanctions imposed by the US in 2014 how did this affect Aeroflot's deliveries of B77W and A330 aircraft (some of them are new)? Or did the US sanctions not cover civilian aircraft like the ones on Iran & North Korea? Aeroflot has a great fleet but I'm wondering how Aeroflot paid Boeing with the sanctions?
 
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LAXintl
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 7:37 pm

Why don't you read up on the details of the sanctions

US Congress report on Russia sanctions
https://crsreports.congress.gov/product/pdf/R/R45415
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runway23
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 9:03 pm

Russia isn’t a sanctioned country.
 
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zkojq
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 9:27 pm

Most of Aeroflot's aircraft are registered in Bermuda
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Polot
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 9:31 pm

zkojq wrote:
Most of Aeroflot's aircraft are registered in Bermuda

That’s mostly to avoid Russian taxes on western aircraft though.
 
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scbriml
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 9:42 pm

zkojq wrote:
Most of Aeroflot's aircraft are registered in Bermuda


I believe that’s because they’re leased in order to avoid high taxes on imported aircraft.
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workhorse
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Mon Jul 20, 2020 11:30 pm

scbriml wrote:
zkojq wrote:
Most of Aeroflot's aircraft are registered in Bermuda


I believe that’s because they’re leased in order to avoid high taxes on imported aircraft.


Absolutely not. That's to make them easier to sell on the world market when (if) at some point in the future SU does not want them anymore.

Russian import taxes are paid regardless of the aircraft registration: if you operate it in Russia, you pay them.
 
skipness1E
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 12:20 am

workhorse wrote:
scbriml wrote:
zkojq wrote:
Most of Aeroflot's aircraft are registered in Bermuda


I believe that’s because they’re leased in order to avoid high taxes on imported aircraft.


Absolutely not. That's to make them easier to sell on the world market when (if) at some point in the future SU does not want them anymore.

Russian import taxes are paid regardless of the aircraft registration: if you operate it in Russia, you pay them.

Why does not being RA- make it easier to sell an airframe?
 
jghealey
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 6:55 am

workhorse wrote:
scbriml wrote:
zkojq wrote:
Most of Aeroflot's aircraft are registered in Bermuda


I believe that’s because they’re leased in order to avoid high taxes on imported aircraft.


Absolutely not. That's to make them easier to sell on the world market when (if) at some point in the future SU does not want them anymore.

Russian import taxes are paid regardless of the aircraft registration: if you operate it in Russia, you pay them.

A Google Search will reveal that it's actually both - from what I can tell, the import tax is avoided as Russian regulations do not require it to be paid on foreign-registered aircraft (as they aren't on the country's register... foreign airlines operating in Russia surely do not pay import taxes?!), but also because it makes it easier for the lessors to repossess the aircraft in case something goes wrong, as apparently Russian laws would make this hard to do.
 
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Dutchy
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 8:01 am

runway23 wrote:
Russia isn’t a sanctioned country.


Yes, it is and rightfully so.
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Arion640
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 8:06 am

I have no knowledge of the sanctions but my best guess would be aircraft are not covered by them.
 
runway23
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 8:36 am

Dutchy wrote:
runway23 wrote:
Russia isn’t a sanctioned country.


Yes, it is and rightfully so.


Not in the sense of the OPs first comment which was to ask why Russia isn’t like North Korea or Iran.

There is no formal sanction against trade with Russian companies - not the same story for N Korea or Iran.
 
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scbriml
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 9:00 am

workhorse wrote:
scbriml wrote:
zkojq wrote:
Most of Aeroflot's aircraft are registered in Bermuda


I believe that’s because they’re leased in order to avoid high taxes on imported aircraft.


Absolutely not. That's to make them easier to sell on the world market when (if) at some point in the future SU does not want them anymore.

Russian import taxes are paid regardless of the aircraft registration: if you operate it in Russia, you pay them.


Well, if it's so absolute, you'll be able to provide a source to backup the claim that foreign-registered, leased aircraft have to pay the same import tax as imported Russina-registered ones. How is, for example, an Aeroflot 777 easier to sell because it's been registered in Bermuda rather than Russia?

jghealey wrote:
from what I can tell, the import tax is avoided as Russian regulations do not require it to be paid on foreign-registered aircraft


Yes, that was always my understanding. If you look at any Russian or Soviet-era planes, they all carry Russian registrations, but it's pretty rare to see Western planes with Russian registrations (there are some, but mainly executive aircraft).
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Dutchy
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 11:18 am

runway23 wrote:
Dutchy wrote:
runway23 wrote:
Russia isn’t a sanctioned country.


Yes, it is and rightfully so.


Not in the sense of the OPs first comment which was to ask why Russia isn’t like North Korea or Iran.

There is no formal sanction against trade with Russian companies - not the same story for N Korea or Iran.


That's true. No sanctions on planes or spare parts as far as I know.
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AMP44
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 11:21 am

AFAIK, RA- registration is reserved for Russian (or Soviet) built plans, while VQ- is reserved for foreign planes.

Anyone can correct me if I'm wrong.
 
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Antaras
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 11:27 am

AMP44 wrote:
AFAIK, RA- registration is reserved for Russian (or Soviet) built plans, while VQ- is reserved for foreign planes.

Anyone can correct me if I'm wrong.

Those VQ (Western) airframes are registered in Bermuda or somewhere else to avoid Rus' high tax on Western airframes.
The RA is for airframes registered in Russia, and those are mainly Russian-made airframes.
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Polot
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 11:32 am

AMP44 wrote:
AFAIK, RA- registration is reserved for Russian (or Soviet) built plans, while VQ- is reserved for foreign planes.

Anyone can correct me if I'm wrong.

That is incorrect. VQ-B** and VP-B** (both extensively used by Russian airlines) are Bermuda registrations, not Russia’s. A western aircraft can be registered under RA- assuming the import taxes are paid. In fact the Russian government is generally annoyed that the airlines are registering their western aircraft overseas and bypassing the taxes and occasionally threatens that they will require Russian airlines to register them on the Russian registry. Especially when tensions flair with the west.
 
MOWairports
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 12:09 pm

Not only Aeroflot but almost all other Russian airlines have western made planes. Furthermore Aeroflot is one of few local companies who operates Sukhoi Super Jet SSJ-100 in addition to totally western fleet.

FYI Transaero and VIM-Avia had their 737 and 757 accordingly registered under RA-*****.

Nowadays their is one RA- registered Boeing 763 of Azur Air permanently flying: https://www.airliners.net/search?regist ... lay=detail

And finally 2 x A319 ACJ of Russian Special Squadron along with 2 x VIP Augusta helicopters are also registers under RA-*****.
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Pudelhund
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 12:23 pm

I remember reading on RusAvInsider that lessors and airlines do not like having their planes Russian-registered because it is more costly to operate them that way due to increased safety supervision protocols. The Russian government would much prefer it if these planes were registered in Russia.
 
workhorse
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 5:40 pm

scbriml wrote:
Well, if it's so absolute, you'll be able to provide a source to backup the claim that foreign-registered, leased aircraft have to pay the same import tax as imported Russina-registered ones.


Please : https://www.tks.ru/codex/1000000022 (Article 271)

I don't know if you can read it and have no time to translate it now (will try to do it later), but, in short, it says that if the "means of transportation" (e.g. airplane) is used to transport passengers within the borders of the Russian Federation, you are not exempt from taxes.

As another indirect proof, there is a famous case (again, will try to find references to it later) when S7 sued the Russian state because Aeroflot and Transaero could import their aircraft tax-free (because of "exceptional" tax breaks negotiaited using "connections" in the government) and S7 had to pay. And yet, all of S7's Airbuses and Boeings are foreign-registered, just like SU's and UN's.
 
workhorse
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 6:26 pm

scbriml wrote:
How is, for example, an Aeroflot 777 easier to sell because it's been registered in Bermuda rather than Russia?


Main reason is that FAA and JAA do not recognize maintenance records of aircraft on Russian register, making any aircraft that went through RA- registration effectively unsellable outside of Russia/CIS.

See, for example, comments from industry experts here: https://abnews.ru/2015/11/05/zagrannik- ... -rubezhom/
 
workhorse
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 10:44 pm

workhorse wrote:
scbriml wrote:
Well, if it's so absolute, you'll be able to provide a source to backup the claim that foreign-registered, leased aircraft have to pay the same import tax as imported Russina-registered ones.


Please : https://www.tks.ru/codex/1000000022 (Article 271)

I don't know if you can read it and have no time to translate it now (will try to do it later), but, in short, it says that if the "means of transportation" (e.g. airplane) is used to transport passengers within the borders of the Russian Federation, you are not exempt from taxes.


jghealey wrote:
A Google Search will reveal that it's actually both - from what I can tell, the import tax is avoided as Russian regulations do not require it to be paid on foreign-registered aircraft (as they aren't on the country's register... foreign airlines operating in Russia surely do not pay import taxes?!), but also because it makes it easier for the lessors to repossess the aircraft in case something goes wrong, as apparently Russian laws would make this hard to do.



OK, here is my (very clumsy) translation:

(Customs code of Russian Federation)
Article 271. Temporary import of means of transportation

1. Temporary import of means of transportation in the customs territory of Russian Federation with full exemption from custom duties is allowed when the following conditions are fulfilled:
- the means of transportation is registered as property of a foreign individual / legal entity and (or) in a foreign country
- the means of transportation is imported in the customs territory of Russian Federation and is used by the foreign individual / legal entity with the exception of cases when the means of transportation is used by a Russian individual / legal entity that has been appropriately mandated by the foreign individual / legal entity
- the means of transportation is not used on the customs territory of Russian Federation for domestic transport
- the means of transportation, after its introduction in the customs territory of Russian Federation is not leased (or subleased, if it was already leased when imported) with the exception of cases when the leasing (subleasing) contract has been made with the aim to terminate the operation by way of an immediate exit


So, basically, you can lease an Irish-registered aircraft from an Irish company and import it tax-free in Russia, but as soon as your aircraft carries once one paying passenger from A to B in Russia, your tax exemption is dead.

On the other hand, Aeroflot (and, previously, Transaero) have imported tax-free loads of foreign aircraft but that had nothing to do with foreign registration and everything to do with their "hands" in the government. This made S7 very unhappy: https://www.kommersant.ru/doc/429812
Last edited by workhorse on Tue Jul 21, 2020 11:05 pm, edited 2 times in total.
 
workhorse
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Re: How does Aeroflot have the B77W and A330 with sanctions?

Tue Jul 21, 2020 11:03 pm

scbriml wrote:
How is, for example, an Aeroflot 777 easier to sell because it's been registered in Bermuda rather than Russia?


skipness1E wrote:
Why does not being RA- make it easier to sell an airframe?


jghealey wrote:
but also because it makes it easier for the lessors to repossess the aircraft in case something goes wrong, as apparently Russian laws would make this hard to do.


https://abnews.ru/2015/11/05/zagrannik- ... -rubezhom/

Evgeny Tsarev, chief of leasing subcommittee of the Russian Chamber of commerce:

"A foreign-made aircraft has already been operated somewhere abroad, it has a maintenance history. Given that we have "holes" in our reglamentation and sometimes we lack people who can translate the technnical documentation, it is registered abroad. Otherwise, it will lack maintenance history".

Elsewhere in the article:

"The reason for foreign registration of airliners in Russia lies mainly with the leasing companies. When an airplane is registered in Russian Federation it is guaranteed to loose its value. Of course, this is unacceptable for the leasing company who will have hard time selling the aircraft later on. Leasing companies do not trust Russian registration. Our technical and flightworthiness standards are very different from international ones, and not for the best. Another factor that deters people from Russian registration is too much bureaucracy and acute corruption problem in our country."

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