EU sanctions tweak allows some plane owners to sell to Russia

An amendment to EU sanctions last week created a potential path for some aircraft financiers to sell jets held in Russia to the airlines now operating them without permission. The measure, published April 8, will allow EU governments to grant permission for entities in their states to keep receiving payments from Russian companies on so-called financial leases signed before Feb. 26. Ownership of the plane can be transfered once the lease is paid off. It’s not clear how many of the 500 or so foreign-owed planes stuck in Russia are potentially eligible for the exception, or which owners will be able to apply. Most of the aircraft are on operating leases, a different structure under which airlines rent planes for a set period and return them to the owner after the contract expires. Financial leases are typically financing arrangements on new Airbus and Boeing jets. Export credit agencies guarantee about 85% of the amount loaned to the operator by a syndicate of banks. They’re widely used, including by the governments of the US, UK, Germany and France, to help support aircraft sales. Under the amended provision, no economic resources can be made available to the Russian counterpart, except to transfer ownership of the plane after the EU company has been fully reimbursed. The ownership transfer is a consequence of full repayment under contract terms signed before sanctions, a spokeswoman for the European Commission said in an email. The amendment doesn’t allow any funds to be provided to Russian companies, she added, without elaborating further. <br/>