Russia moves Bermudian-registered aircraft to domestic listing in bid to dodge sanctions
Russia has re-registered Bermudian-registered airliners in an attempt to avoid sanctions imposed after the country invaded Ukraine.
But the Bermuda Civil Aviation Authority said the Russian move broke international law because aircraft cannot not be registered in two countries.
The BCAA explained: “The Russian Federation has issued a directive to have Bermuda-registered aircraft re-registered in the Russian Federation without first being deregistered by BCAA and a number of Bermuda-registered aircraft have already been illegally re-registered in Russia.”
A spokesman for the BCAA said the International Civil Aviation Organisation’s Convention on International Civil Aviation allowed the transfer of registration, but dual registration was banned.
He added: “In this regard, BCAA is, and will continue to, deregister aircraft on request from the registered owner, in accordance with relevant BCAA legislation and procedures that ensures an aircraft is not deregistered until a registered mortgage or ICAO Cape Town — irrevocable deregistration and export request authorisation — is discharged.”
The clash came after the BCAA announced that international sanctions against Russia meant it was unable to confirm the planes were airworthy.
The BCAA said all Bermudian-registered aircraft in Russia had their certificates of airworthiness suspended on Sunday.
Aircraft are not permitted to fly without airworthiness certificates.
But flight tracking website FlightRadar24 showed several of the Bermudian-registered aircraft were still in use after the suspension.
Many of the aircraft flown by Russian airlines are owned by leasing companies based in Ireland, as well as in other countries.
Lawrence Scott, the Minister of Transport, told the House of Assembly on Monday that the sanctions had raised a number of problems for lessors of planes.
He said: “Lessors continue to terminate aircraft leases and make attempts to retrieve the aircraft.
“However, there has been mixed success due to the level of co-operation with the states in which the aircraft are located at the time.”
Fortune magazine said consultancy firm IBA had revealed that foreign lessors had 523 aircraft rented to Russian operators, but the EU had set a March 28 deadline for the companies to terminate their leases and recover their planes from Russian airlines.
The value of the Irish-owned aircraft leased to Russian airlines alone is estimated to be between $3.8 billion and $4.9 billion.
The loss of airworthiness certificates would be a blow to leasing companies as it would cause the value of the aircraft to fall.
But the re-registration of the planes in Russia could be an even bigger threat as it increased the chances of Russia seizing the aircraft — which could trigger a mass default in the aircraft leasing industry.
The British Broadcasting Corporation reported that the new Russian legislation would allow foreign jets to be registered in Russia "to ensure the uninterrupted functioning of activities in the field of civil aviation".
The change, signed into law by Vladimir Putin, the Russian president, will allow Russian airlines to certify the safety of the aircraft on home soil and for them to be used on domestic routes.
Russian airlines face looming European sanctions that include a ban on sales of aircraft, spare parts and related equipment.
David Burt, the Premier, said this month that 740 of the about 900 aircraft on the Bermuda registry were used by Russian operators — and that the aircraft would be “greatly impacted“ by sanctions.
Mr Scott earlier told the House of Assembly that the BCAA could take a $25 million hit over the next 12 months because of measures imposed by Britain to punish Moscow for the invasion of Ukraine.
Mr Scott later gave a revised figure of $4 million and explained that the $25 million estimate was based on a “worst-case scenario” where 85 per cent of the aircraft on the Bermuda registry were grounded.
Italian police have seized a $578 million Bermuda-linked yacht owned by Andrey Melnichenko, a sanctioned Russian billionaire.
The 469ft Sailing Yacht A — the world’s largest sail-assisted yacht — is owned by Bermudian-based Valla Yachts and is registered in the Isle of Man.
The yacht, built in 2017 by German shipbuilder Nobiskrug, features a spa, gym and underwater observation pod along with ten cabins with space for up to 20 guests.
Mr Melnichenko, a wealthy industrialist who owned majority stakes in fertiliser producer Eurochem and coal energy company SUEK, was sanctioned by the EU on March 9.
He later stepped down from his positions at both companies and withdrew as a beneficiary.