Transitioning UK MOA Certificates

ASA sponsored a webinar today on aircraft parts documentation expectations after Brexit.  One of the questions raised was whether the EASA certificates that will be issued to certain businesses (as third-country approval holders) will be the same as the comparable UK CAA certificates.  The short answer is that the certificate numbers will be similar, but the EASA certificates will have a different prefix in order to make them distinguishable.

As part of the webinar, we discussed the EASA offer to issue third-country certificates [like repair station certificates and production organization authorizations] to UK-based businesses.  The process is that

  1. the UK-based company applies to EASA for third-country approval;
  2. EASA assesses the company’s fitness to hold an EASA approval;
  3. The fitness assessment is carried out by EASA’s technical agent in the UK (UK CAA);
  4. EASA maintains a list of UK-based companies that will get EASA third-country approvals;
  5. Immediately after Brexit, EASA will email copies of the new approvals to the UK-based companies;
  6. The EASA approvals will be equivalent to any other EASA-third-country approvals;
  7. The UK-based companies will continue to hold their UK CAA approvals, as well.

The two most important EASA approvals, for most of ASA’s members, will Maintenance Organization Approvals (MOAs) and Production Organization Approvals (POAs).  ASA members may wish to know which of their UK-based business partners have opted to apply for EASA third-country approvals.  You can find the lists here:

Both of these lists are tentative, in that they describe applicants from the UK, who will not be issued their credentials until and unless the UK leaves the EU.

It appears that the current UK CAA MOA certificates numbers are in the form “UK.145.nnnnn” where “nnnnn” is a five-digit number.  EASA anticipates issuing MOA certificates in the format “EASA.UK.145.nnnnn” where “nnnnn” is the same five digit number that was issued by the UK CAA.  For example, Patriot Aviation Engineering’s UK CAA certificate number is UK.145.00002.  They have applied for third-country certification from EASA.  Upon Brexit, EASA intends to issue to Patriot an EASA MOA certificate number EASA.UK.145.00002.

A similar pattern emerges for POAs.  The current UK CAA POA certificates numbers are in the form “UK.21G.nnnn” where “nnnn” is a four-digit number.  EASA anticipates issuing POA certificates in the format “EASA.UK.21G.nnnn” where “nnnn” is the same four-digit number that was issued by the UK CAA.  For example, Dunlop Aircraft Tyres’ UK CAA certificate number is UK.21G.2008  They have applied for third-country certification from EASA.  Upon Brexit, EASA intends to issue to Dunlop an EASA POA certificate number EASA.UK.21G.2008.

As we discussed today in the webinar, which authority is responsible for the documentation can have a dramatic effect on which authorities are able to accept that paperwork.  Look carefully at the documentation you receive, so you know whether the documentation is signed-off under the UK CAA approval number or under the EASA approval number.

Brexit Update

Here is a quick run-down of the latest Brexit news:

  • Remember, barring an agreed delay, Brexit is schedule to happen on October 31
  • Parliament was unable to secure a Brexit deal by the recent deadline of October 19
  • As directed by Parliament, Prime Minister Boris Johnson sent a letter to the EU asking for an extension to the October 31 date (the current withdrawal date)
  • Prime Minister Boris Johnson sent a second letter to the EU, saying that he believes a delay would be a mistake
  • EU Council President Donald Tusk is consulting with EU leaders on how to react
  • Boris Johnson has negotiated a deal with the EU, and tried to create a fast track mechanism to get it approved through Parliament before October 31
  • The deal is far from perfect, and includes a few elements that have significant opposition in the UK, including
    • a customs and regulatory border between Northern Ireland and Great Britain
    • The European Court of Justice will continue to have jurisdiction over UK
    • Language on workers rights is vague (many MPs wanted more concrete language)
  • The fast track mechanism for Parliamentary approval of the Withdrawal Agreement Bill was rejected today
  • Under normal timetables, it seems difficult to get the Withdrawal Agreement Bill passed before October 31

ASA will hold a Brexit webinar on October 28 at 11:00 am.  We will discuss the current state of the political solutions, the most likely upcoming scenarios, and how these scenarios will affect aircraft parts transactions.  The webinar will include a look at common parts documentation, and explain how to parse the documentation to identify critical elements that are related to Brexit.  We will focus on US-UK and EU-UK acceptance of aircraft parts (especially those manufactured in, or maintained in, the UK) in an effort to help you comply with the post-Brexit parts acceptance rules.

The registration cut-off date is this October 24, 2019 at 5:00 pm Eastern.  There is no charge for the webinar but attendance is limited to ASA members.  You must be an ASA member to participate in the webinar – if you are not yet an ASA member then you should be!  Please contact Gabriel Maupin at 202-347-6897 if you have any registration questions.

I will be teaching the ASA London Workshop on Wednesday this week – this year’s topics include approved parts standards, documentation, export compliance, import classification, Brexit, and a discussion of some of the new and impending changes in the laws and regulations taht will affect aircraft parts distribution.  After the London Workshop, we’ll have three more ASA workshops in 2019. For complete details please visit our Workshops webpage:

  • Ft Lauderdale, FL – November 19, 2019
  • Chicago, IL – December 3, 2019
  • Dallas, TX – December 5, 2019

 

Aircraft Lavatories: Are they Hazmats?

We did a little research in response to a member question about whether aircraft lavatories (lavs) should be treated as hazardous materials when shipped.

There are two different considerations in examining lavs as potential hazmats.  The first is the chemicals that are found in the lavs.  The second is the residual human waste that might be found in the lav.

In examining the first consideration, it is important to identify the chemicals that are used in the lav, and that remain in the lav.  Most modern lavs use a non-hazardous chemical material like Blue Juice or Bio-Gem. According to the Blue Juice SDS and the Bio-Gem SDS, they are not hazmats.  However, older lavs have used Formaldehyde as their chemical. Formaldehyde (and its solutions) is typically regulated as a hazmat.

Lavs are typically emptied before being shipped, but a chemical residue is usually shipped as if the chemical remains present.  Therefore, when you have a hazmat-regulated chemical that was present in the lav, as long as there is a residue of that hazmat in the lav, the lav must be treated as hazmat for shipping purposes.  It is not enough to empty the lav – you need to purge the chemical.

Unless it contains or is suspected to contain pathogens (Division 6.2 Infectious Substances) human waste is typically not regulated as a hazardous material under US or ICAO standards.  For comparison, fecal occult blood samples are explicitly excepted from the US and ICAO definition of Infectious Substances. The US Government has explained that some of the factors behind this exception include:

These are specimens collected from healthy patients for routine testing and screening (e.g., DNA analysis, forensic studies, immunologic studies, cancer screening, and nutritional evaluations of infants, children, and adults). The specimen is placed on paper, allowed to saturate the paper, and then dried completely. The specimens pose an extremely minimal risk of infection.

In the special circumstance where you know that the lav has been exposed to specific pathogens, of course, the analysis must include and address the presence of those pathogens.

In short, before shipping the lav you should check the chemical residues in the lav.  If the chemicals and/or chemical residues are hazmats, then the lav is likely shipped as a hazmat (unless the chemicalas are purged) but if they are not hazmats then the lav might not be a hazmat for shipping purposes.

Protect Your Exports – Screen Your Business Partners, Every Time

Looking for some tips on how to ensure you remain in compliance with the US export regulations (including the re-export regulations as they apply to goods re-exported to a third country after being first exported from the United States)?

My law firm has helped build compliance programs for aviation companies for decades.  When we are helping a company build an export compliance program, we always recommend developing a mechanis to ensure that you can compare all of the relevant businesses and individuals involved in each transaction to the US Government lists that regulate exports.  Specifically, we recommend searching the business and individual names through the US Government consolidated screening list.  This list consolidates a number of different US Government lists into one screening tool: https://www.export.gov/csl-search.

We recommend searching all of the relevant parties for every transaction, every time.  The problem that arises is one of human nature battling against the company’s procedures.  If you just searched a name last week then you might decide not to search that same name again, this week.  If you’ve done business with someone for years you might feel that you have no worries about thath person.  But the lists change almost every day.  So someone who was not on the lists yesterday might have been added this morning; and if you don’t know this, then you might export to that forbidden party in violation of the law.

In order to avoid the risks that complacency can breed, we recommend to companies that they integrate an electronic search of all partners for every transactions.  This can be done by tying some aspect or your computerized system to the US Government consolidated screening list (which is designed to be a searchable database that can be integrated with outside search systems).  Make sure you tie the search to something that is enterred for EVERY transaction. Because we like to see the search done as early as possible, we sometimes recommend tying the search to the quoting system, but unless you issue a quote for EVERY transaction, this cannot be your only search.  Sometimes it also makes sense to build your system so that documents like shipping tickets and invoices cannot be generated without a completed search on the consolidated screening list.

It also helps to build a system where you must enter the names of the individuals involved in your transaction (or else have them mined from your electronic correspondence) so those names are part of the search process.

For example, imagine you get a purchase order from Cham Wings Airline.  Before responding to the purchase order, you run a search on the consolidated screening list.  A search for “Cham Wings Airline” would yield this result:

Source Specially Designated Nationals (SDN) – Treasury Department
Entity Number 21244
Type Entity
Name CHAM WINGS AIRLINES
Remarks (Linked To: SYRIAN ARAB AIRLINES)
Source List URL http://bit.ly/1I7ipyR
Source Information URL http://bit.ly/1MLgpye
Programs
  • SYRIA
Alternative Names
  • AJNEHAT AL SHAM
  • SHAM WING AIRLINES
  • CHAM WINGS
  • AL-SHAM WINGS
Addresses Al Fardous Street
Damascus
SYSaadoon Street
Baghdad
IQ8 March Street
Lattakia
SY

Hai Al Gharbi-Alraees Street
Kamishli
SY

P.O. Box 1620 Tal-Kurdi, Adra
Damascus
SY

IDs
  1. Type: Registration ID
    Number: 14683
    Country: SY

You can see from this that Cham Wings Airline is listed as a specially designated national.  The next step is typically to perform a more direct and in-depth investigation.  In this case,  Cham Wings Airline is listed as a specially designated national so we should check the Treasury Departments list of specially designated nationals.  That list is found online at https://www.treasury.gov/ofac/downloads/sdnlist.pdf.  In that list, you will find that one of the relevant entries reads:

AJNEHAT AL SHAM (a. k.a. AL-SHAM WINGS; a.k.a . CHAM WINGS (Arabic:  أجنحة الش ام); a.k. a. CHAM WIN GS AIR LINES  (A ra bic: أجن حة الشام );  f.k.a. SHAM WING AIRLINES, Al Fardous Street, Damascus, Syria; Saadoon Street, Baghdad, Iraq; 8 March Street, Lattakia, Syria; Hai Al Gharbi -Alraees Street , Kamishli, Syria; P. O. Box 1620 Tal-Kurdi, Adra, Damascus, Syria; Registration ID 14683 (Syria) [SYRIA] ( Linked To : SYRIAN ARAB AIRLINES).

This provides more information about the specially designated national in order to help distinguish it from another party with a similar name.

How common is it to find aviation companies who are listed in restricted lists like the Treasury Department’s list of specially designated nationals?  More common than you might think.  Here is a list of just some of the airlines and aviation companies included on the SDN list (this list changes, and companies go on-and-off the list, so always confirm a company remains on the SDN list – do not rely on this as your sole source of SDN information):

  • Aero Continent
  • Aero Continente
  • Aero Courier Cargo
  • Aero Express Intercontinental
  • Aero Sky One
  • Aerocaribbean Airlines
  • Aerocomercial Alas De Columbia
  • Aerocondor
  • Aerolineas Aeroamanecer
  • Aeronautica Condor
  • Aerospace Industries Organization
  • Aerospace Research Institute
  • Al-Naser Airlines
  • Al-Sham Wings
  • Avia Group LLC
  • Avia Import
  • Aviation Capital Solutions, Ltd
  • Butembo Airlines
  • Caspian Airlines
  • Cham Wings Airlines
  • Cubana Airlines
  • Dart Airlines
  • Dena Airlines
  • Empresa Cubana de Aviacion
  • Fars Air Cargo Airline
  • Hors Airlines Ltd
  • Intercontinental de Aviacion
  • International Airline Consulting
  • Iran Air
  • Khors Air
  • Kyrgyztransavia Airlines
  • Mahan Air
  • Pouya Airlines
  • Sky Blue Airlines
  • Syrian Arab Airlines
  • Ukrainian-Mediterranean Airlines
  • UM Air
  • Yasair Cargo Airline

Substantial Deal With China; But No Relief (Yet) on Aircraft Parts Tariffs

President Trump said Friday that he had reached a “substantial deal” with China on the issues that are related to tariffs.

This is expected to prevent the United States from adding new and increased tariffs scheduled for October 15; however it does not appear that the United States is ready to remove existing punitive tariffs on Chinese goods.  Until those additional tariffs are removed, there will continue to be additional tariffs on aircraft parts

This is a “phase one” agreement that appears to address intellectual property and financial services concerns, and the United States and China plan to continue negotiations on other phases.

It appears that the aviation community may have to wait for a later phase before seeing any relief.

US Will Impose 10% Import Duty on European Planes and 25% Import Duty on Certain European Tooling

Earlier this year, the United States won a ruling in a trade case before the World Trade Organization.  The case was related to alleged subsidies of Airbus by the European Community.  The WTO ruling authorized the United States to impose duties on European imports; and a follow-on ruling dated October 2, 2019 authorized specific duty amounts.

The United States has published a list of products that will be subject to the additional duties. The list is subject to approval by the WTO but that approval is a mere formality.  Approval is expected within two weeks.

A copy of the US tariffs list (the “Final Products List”) associated with these punitive tariffs is currently available for information purposes only; however the final list will be published in the Federal Register.  This means that the currently-available list, although reasonably reliable, could possibly be changed.

The U.S. list proposes to impose a 10% duty on aircraft imported from France, Germany, Spain, or the United Kingdom.  This is limited to aircraft imported under headings

  • 8802.40.00.40 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, passenger transport
  • 8802.40.00.60 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, cargo transport
  • 8802.40.00.70 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, other (including passenger/cargo combinations)

At present, this list does not appear to include aircraft parts; however this could cause serious burden on US airlines and leasing companies that have already committed to accepting Airbus aircraft or other European aircraft.  If this inhibits the economic ability of companies to accept Airbus aircraft in the United States, then it is possible that the expected replacement of certain aircraft in the United States could be delayed.

The US also expects to impose a 25% duty on other named goods.  The press has made much of the high-profile categories, like wines and cheeses, but other categories are far more likely to impact the aviation community.  This includes:

  • German tooling and machinery under 8467.19.10.XX, 8467.19.50.XX, 8568.80.10.XX, 8568.90.10.XX
  • UK or German tooling and machinery under 8429.52.10.XX, 8429.52.50.XX, 8467.29.00.XX
  • German tools, as follows:
    • 8201.40.60-Axes, bill hooks and similar hewing tools (o/than machetes), and base metal parts thereof
    • 8203.20.20-Base metal tweezers
    • 8203.20.60-Pliers (including cutting pliers but not slip joint pliers), pincers and similar tools
    • 8203.30.00-Metal cutting shears and similar tools, and base metal parts thereof
    • 8203.40.60-Pipe cutters, bolt cutters, perforating punches and similar tools, (except for those with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium), and base metal parts thereof
    • 8205.40.00-Screwdrivers and base metal parts thereof
    • 8211.93.00-Knives having other than fixed blades
    • 8211.94.50-Base metal blades for knives having other than fixed blades
    • 8467.19.10-Tools for working in the hand, pneumatic, other than rotary type, suitable for metal working
    • 8467.19.50-Tools for working in the hand, pneumatic, other than rotary type, other than suitable for metal working
    • 8468.80.10-Machinery and apparatus, hand-directed or -controlled, used for soldering, brazing or welding, not gas-operated
    • 8468.90.10-Parts of hand-directed or -controlled machinery, apparatus and appliances used for soldering, brazing, welding or tempering

These tariffs are expected to be applied as of October 18.

ASA Workshop in London, with Special Guest Neil Williams of the UK CAA

Need to know the latest changes in the rules that apply to aircraft parts transactions?  Your trade association is here for you!

I will be teaching a regulatory workshop in London later this month (on October 23).  The workshops will deal with the following topics:

  • Aircraft Parts Regulations (European and US)
  • Recent and Prospective Changes in European Law (and how these changes affect the global community
  • Brexit (Neil Williams of the UK CAA plans to join us to discuss the latest developments)
  • International Documentation (and where the norms come from)
  • Compliance with US Import and Export Laws (and how these laws affect international commerce)

As you can see, the broad focus is on compliance standards to help ensure your domestic and international transactions are conducted properly.  As usual, we will focus on some recent and upcoming changes so that the members can plan for those changes and help ensure their business models keep up with the ever-changing world of aircraft parts.

Need to register for the workshop?  You can find workshop details and registration information on ASA’s website.

Can’t make it to London?  No problem!  I am teaching a total of six workshops this Fall:

  • September 20, 2019 – Los Angeles Airport area
  • September 24, 2019 – Singapore Airport area
  • October 23, 2019 – London Heathrow Airport area
  • November 19, 2019 – Ft Lauderdale Airport area
  • December 3, 2019 – Chicago, IL area
  • December 5, 2019 – Dallas, TX area

While I am in London, I will be visiting Aviationweek’s MRO Europe Conference.   If you will be in London and want to meet, then send me (or Katt Brigham) an email and let’s set up a time.  I look forward to seeing you there!

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