“Preliminary” opinion: RD-180 engine doesn’t violate U.S. sanctions

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WASHINGTON — The Pentagon’s acquisition chief said Feb. 23 that a preliminary opinion from the Treasury Department indicates the use of Russian rocket engines on United Launch Alliance’s Atlas 5 rocket does not violate U.S sanctions.

Earlier this month, Sen. John McCain (R-Ariz.) asked the Air Force to revisit a 2014 legal opinion on whether purchases of the RD-180 rocket engine violates U.S. sanctions following Russia’s recent reorganization of its space industry.

U.S. government agencies, led by the Treasury Department, have been studying the issue for less than a month, but speaking at the Washington Space Business Roundtable, Frank Kendall, the undersecretary of defense, said a preliminary opinion from the Treasury Department found that “at this point in time, as far as we can tell” the sale of engines is not a violation.

Kendall said he expected a formal opinion “fairly soon.”

The Air Force relies on ULA’s Atlas 5 rocket to launch a majority of national security satellites. ULA buys the RD-180, the first stage engine for the rocket, from Florida-based RD-AMROSS, a joint venture between Energomash and Pratt and Whitney of Hartford, Connecticut. RD-AMROSS, in turn, buys the engines from NPO Energomash of Khimki, Russia.

In a Feb. 10 letter to Kendall and Air Force Secretary Deborah Lee James, McCain singled out two high-ranking Russian officials, claiming their new roles overseeing Russia’s state-run space sector could make them beneficiaries of RD-180 exports.

However, Kendall said a preliminary opinion found that the sanctioned officials ties to RD-AMROSS do not violate Treasury’s thresholds for enforcement , which include majority ownership and control of the company in question.

“The requirement is ownership — more than 50 percent ownership — and control,” he said. “It does not appear that, so far, either of them apply.”

Russia reorganized its space sector late last year by placing the Russian space industry and the space agency Roscosmos under a new state corporation, also named Roscosmos. Russian Deputy Prime Minister Dmitry Rogozin is the chairman of the new Roscosmos. Sergei Chemezov, an adviser to Russian President Vladimir Putin is also on the board.

The White House punished both men with sanctions during the Crimean crisis in 2014. Neither man is permitted to enter the United States and any U.S.-based assets they own are frozen.

RD-AMROSS spokesman Bradley Akubuiro said Rogozin and Chemezov are not members of the RD-AMROSS or NPO Energomash boards, nor do they financially benefit from RD-180 sales.