Export Alert: New Destination Control Statement Required

Under current law, the US regulations require exporters to include a destination control statement (“DCS”), on each export control document that accompanies an export shipment.  The export control documents that are required to show this statement include the invoice, the bill of lading, the air waybill, and any other export control document that accompanies the shipment from its point of origin in the United States to the ultimate consignee or end-user abroad.

This is sometimes known as the ‘non-diversion statement’ because the current version includes language stating that “diversion contrary to U.S. law is prohibited.”  The purpose of the DCS was to alert parties outside the United States that the item is subject to the US export regulations.

The rules have always held that compliance with the comparable ITAR requirement was an acceptable means of compliance where the shipment included both ITAR and EAR-controlled articles.  The comparable ITAR requirement requires slightly different language.  Many people nonetheless found the different language in each regulation to be confusing.

The Commerce Department has changed their DCS language to harmonize it with the ITAR-required-language.  This is meant to make compliance easier.  Starting on the implementation date of the rule (November 15, 2016), exporters of articles subject to BIS jurisdiction (those with ECCNs) should use the following destination control statement on all exports:

“These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations”

In addition, the DCS should show the Export Commodity Classification Number (ECCN) for any 9×515 or ‘600 series’ (nx6nn) items being exported.

There are exceptions to this DCS requirement for EAR 99 exports and also for exports under license exceptions BAG (baggage) and GFT (gift parcels and humanitarian donations), but typically these do not apply to exports of aircraft parts.

Update on MAG issue and ASA Efforts

What is the Issue?

The latest revision of the Maintenance Annex Guidance [“MAG”] creates a new system in which existing industry documentation (which is acceptable under current EU and US regulations) becomes unacceptable within US repair stations. It is objectionable because it imposes new documentation standards that do not exist in either US or European regulations, and in doing so creates a documentation requirement for aircraft parts that will render worthless significant portions of existing aircraft parts inventories.

Under current US standards, no documentation is required in order to receive an aircraft part into a repair station’s inventory. See, e.g., FAA Chief Counsel’s Opinion Letter (August 6, 2009) (stating “there is no Federal Aviation regulation that requires traceability of an aircraft part to its origin” and explaining that parts may be found airworthy based on documentation, markings, or inspection and testing).  The repair station may install the part as long as it confirms that the article will return the product to a condition “at least equal to its original or properly altered condition.” 14 C.F.R. § 43.13.

The European system is a bit different. The European system distinguishes parts into six different categories, but for purposes of this analysis only two are relevant.

The first is serviceable parts – those in a satisfactory condition. Serviceable parts must be accompanied by the European manufacturer’s document known as the EASA Form One, or an equivalent document. EASA 145.A.42(a)(1).  EASA has recognized that the FAA 8130-3 tag is an equivalent document for receipt purposes (when signed on the left side).  EASA AMC M.A.501(a) ¶ (5)(a) (documents under the terms of a bilateral agreement); Technical Implementation Procedures for Airworthiness and Environmental Certification Between the FAA and EASA, ¶ 5.1.10 (Rev. 5 Sept. 15, 2015) (the bilateral agreement).

Because there are many articles produced by US manufacturers that do not bear 8130-3 tags, a ‘safety valve’ provision allows European repair stations to accept articles without such documentation.

There is a second provision in the EASA regulations that permits “unserviceable parts” to enter into a repair station without documentation when they are intended to be maintained. EASA 145.A.42(a)(2).  The European definition of “unserviceable” includes articles that are missing “necessary information to determine the airworthiness status or eligibility for installation.” EASA M.A.504(a)(3).  Thus, any new aircraft part that is missing an EASA Form One or 8130-3 (whichever is appropriate) is deemed unserviceable and can enter a repair station without documentation. Such an article may then be inspected to serviceable condition and installed if it passes inspection. See, e.g., EASA AMC M.A.501(a) (Installation); EASA AMC M.A.613(a) (Component certificate of release to service).  It cannot be treated as serviceable until it undergoes that inspection.

The problem with the MAG is that it closes the safety valve that allows acceptance of new parts without an 8130-3 or EASA Form One. It does this by establishing two different categories that are inconsistent with the “serviceable/ unserviceable” categories established under European law. The two categories are “new” and “used.” Under existing European law, a new part without the correct documentation can be received as unserviceable, and subsequently inspected to serviceable condition, but under the MAG, a new part is required to have an 8130-3 or EASA Form One. There is no exception under the MAG for new parts without the designated documentation – they are simply excluded.

So How Does this Affect Members?

Actual implementation has already shown that the language of the MAG is being enforced by FAA field inspectors as mandatory even though there is no regulatory basis under US or EU law for such enforcement. Thus, the real implementation has been that all US repair stations with EASA credentials are required to have a written manual (known as a Supplement) requiring them to exclude new parts without 8130-3 documents or EASA Form One documents – even though both US and EU regulations permit acceptance of these new parts.

This is starting to have a real world effect that will be expanded with the October 1, 2016 implementation.  Distributors are finding that parts that they could sell with manufacture’s trace (or other reasonable trace) are no longer “good enough.” Repair stations are starting to demand 8130-3 tags on everything (including parts that are not eligible for 8130-3 tags).

What is ASA Doing About It?

ASA continues to work with the FAA to achieve a solution.  FAA management recognizes that this is a potential problem, and they have been optimistic about finding a solution.

Our first efforts were to find a way to “grandfather” existing aircraft parts inventories.  FAA supported this solution, but EASA opposed it.

We have also asked for guidance explaining that repair stations can apply US standards to parts destined for US registered aircraft, but early implementers have shown that this idea is not consistent with what FAA inspectors are requesting so it is likely to be ineffective.  In addition, it creates a logistical problem for component repair stations who may not know the ultimate destination of the components on which they are working.

We are now looking at new ways to obtain 8130-3 tags for good inventory.  This will not be a 100% solution to the impediment created by the documentation requirements, but it should help preserve the value of some inventories.  We expect to continue discussions of this proposal with the FAA, next week.

On the legal front, we continue to pursue a halt to the MAG documentation requirements.  This would not affect the EASA regulations – they still apply where appropriate – but to the extent that the MAG imposes additional standards that would be enforced by the FAA, we have asked the DC Circuit Court to issue a “Stay” that would prevent the FAA-enforcement of these new documentation requirements.

Today, as part of this effort, we filed this Motion for a Stay.  We would like to thank the many ASA members who worked with us to develop  affidavits explaining the factual situation of 8130- 3tags and aircraft parts inventories.

Do NOT state “domestic shipment only” or “not an export approval” on an 8130-3 tag

On June 28 the FAA issued a policy memo (AIR100-16-110-PM04) that forbade parties from stating “domestic shipment only” or “not an export approval” on the 8130-3 tag.

“This memorandum provides clarification on the use of “domestic shipment only” and “not an export approval” in block 12 of FAA Form 8130-3 (hereafter, tags). Inspectors, designees, delegated organizations, and persons authorized in accordance with a production approval holder’s approved quality system to issue tags are directed to not add “domestic shipment only” and “not an export approval” to block 12.”

This language tended to impede subsequent exports.  Many people mistakenly thought that this language was meant to prevent a subsequent export.


Use of this sort of language also ignored the original purpose of the “domestic tag.”  It was originally meant to create a kludge that made 8130-3 tags available to exporters.  It was called a “domestic” tag because it only certified compliance to domestic US standards, and not to any special import requirements of an importing nation.

Years ago, distributors were unable to obtain an export tag for parts. The reason for this began in 1963, the FAA published a Notice of Proposed Rulemaking (NPRM) to establish the rules for export airworthiness approvals (Subpart L of 14 C.F.R. Part 21).   They classified the world of aircraft assets into three classes:

(1) A Class I product is a complete aircraft, aircraft engine, or propeller, which—

(i) Has been type certificated in accordance with the applicable Federal Aviation Regulations and for which Federal Aviation Specifications or type certificate data sheets have been issued;
(ii) Is identical to a type certificated product specified in paragraph (b)(1)(i) of this section in all respects except as is otherwise acceptable to the civil aviation authority of the importing state.

(2) A Class II product is a major component of a Class I product (e.g., wings, fuselages, empennage assemblies, landing gears, power transmissions, control surfaces, etc), the failure of which would jeopardize the safety of a Class I product; or any part, material, or appliance, approved and manufactured under the Technical Standard Order (TSO) system in the ‘‘C’’ series.

(3) A Class III product is any part or component which is not a Class I or Class II product and includes standard parts, i.e., those designated as AN, NAS, SAE, etc.

This can be found today in older versions of the Code of Federal Regulations.  But this distinction no longer exists in the modern regulations.

The original 1963 NPRM suggested that export airworthiness approvals would be available for Class I and Class II products. It explained that export airworthiness approvals would not be necessary for Class III products, and that exporters could self-certify airworthiness with respect to those units.   This dramatically limited the impact of the proposed rule, because most articles fell into class III.

During the comment period for this new rule, a manufacturer wrote to the FAA and said that it could foresee a possible need in the future to apply for Class III export airworthiness approvals for its own articles.  The stated purpose of the rule was to facilitate trade, so when the Final Rule was published in 1964, the FAA added a clause stating that manufacturers could also apply for Class III export airworthiness approvals in order to meet the request of the commenter.  This was 30 years before ASA existed, so ASA was not around to broaden the language to include non-manufacturer exporters.

Years later, as the export 8130-3 tag became more popular in international commerce, and the FAA signed international agreements promising to provide the 8130-3 tags with exports,the distribution community began to see a need for the tags to facilitate their trade.  But the regulatory language only permitted manufacturers to apply for the export 8130-3 tag.  So the “domestic tag” was born in order to provide a tag that distributors could seek.  The “domestic tag” only certified compliance to US domestic standards – it did not certify compliance to any special import standards of any importing nation (it was up to the exporter to address such conditions, and at the time foreign trading partners were happy to take this tag).

The domestic tag also quickly became popular among domestic users in the US (notably, Northwest Airlines in the late 1990s was an early proponent of the use of the 8130-3 tag for domestic transactions).

For a short time, this limiting language (“domestic shipment only”) actually appeared in an earlier version of Order 8130.21. ASA sought clarification from FAA Management at the time.  We pointed out that the original purpose was to facilitate export for distributors, and FAA Management agreed that this language was inappropriate.   FAA Management confirmed that the inclusion of that language had been a mistake, because it contradicted the original purpose of the domestic tag.

In order to discern the reason for this errant language, FAA Management called in the employee who was responsible for the text of the Order and asked “why did you include this language?”  The FAA employee’s reply was to shrug his shoulders and say “I don’t know … it seemed like a good idea at the time.”  The language was removed from the next revision of 8130.21, but it continued to find its way into 8130-3 tags.

Over the years, the FAA has recognized that this language impeded export transactions without offering any redeeming value.  The policy memo closes the loop on this language by forbidding it.

ASA members who encounter parties who want to print “domestic shipment only” or “not an export approval” in block 12 of FAA Form 8130-3, should draw the issuing party’s attention to this FAA policy memo.

Export 8130-3s No Longer Need (Country) Destination Designation

The FAA has published a new policy memo (AIR100-16-110-DM04) that changes the way that the FAA treats export 8130-3 tags.  This policy memo will alter export 8130-3 tags so that they no longer identify the specific destination country.  An additional policy memo specifies that so-called “Domestic Tags” do not need to be so-identified.

The Problem

The industry has had problems with export 8130-3 tags for many years.  The typical export 8130-3 tag will identify a destination country.  This becomes a problem when the parties want to re-export the article to a third nation.

Here is an example.  It is not unusual to establish a forward stocking warehouse to hold inventory destined to be distributed in a particular part of the world.  Let’s say that the warehouse is in Singapore.  Parts bound for this Singapore warehouse would bear 8130-3 tags that specify that they meet the special import requirements of Singapore.  But the Singapore warehouse will be used to supply parts to customers in other nations, like Indonesia, Malaysia, Thailand and Viet Nam.  These parts are sometimes rejected because they name Singapore as the destination rather than any of the other nations.  Replacing the Singapore 8130-3 tags with tags naming other destinations is a needless expense that adds no safety value to the transactions.

The State of the Industry

If you go back to the 1963 NPRM that established the rules for export airworthiness approvals, you will see that the original intent of the tag was to facilitate export transactions.  The FAA has recognized that this current process adds no value, and that 8130-3 tags are impeding transactions, rather than facilitating them.

The FAA has found that the current practice of including the specific destination information and the word “EXPORT” on the tag impedes global trade, explaining:

“Requiring this statement needlessly complicates the issuance of the tag and hinders the global shipment of engines, propellers, and articles, especially when they are exported multiple times.”

The FAA has examined the European system, in which the manufacturers issue EASA Form One themselves, and there is a single EASA Form One (there is no distinction that creates a separate export EASA Form one).  The FAA has recognized that this system appears to work better than having distinct export 8130- 3 tags that name a destination country.

The Solution

The FAA has issued a Deviation Memo that eliminates the destination country from the export 8130-3 tag.  The Memo does more than permit dropping the destination from the tag – it actually directs that those who complete 8130-3 tags for articles should NOT include the specific export information:

“• Do not use the statement, “Export airworthiness approval – This article meets the special requirements of (enter country),” from paragraph 4-5 L(9), in block 12.
• Do not use the statements in Appendix A, Figures A-14, A-15, A-16, and A-17 (“Export airworthiness approval – This article meets the special requirements of (enter country)” and “EXPORT.”
• Do not use the statement, “Export airworthiness approval. No special import
requirements for [enter name of country or jurisdiction] stated at time of issuance,” from paragraph 4-5 L(10), in block 12.
• An exporter must continue to include any other statements required by FAA Order 8130.21 and the applicable bilateral agreements.”

The above-quoted language is specific to articles, but similar language is published in the Deviation Memo that applies to engines and propellers, as well.  The language represents a devisation from FAA Order 8130.21H.  It is effective as of June 24, 2016.

ASA members will want to ensure that they communicate with their global business partners to educate them about this change.  At first, there may be some reluctance to accept the new 8130-3 tags, but a review of the new FAA Deviation Memo will show trading partners that the FAA no longer permits inclusion of the language that historically has designated a destination nation.

“Domestic Shipment Only”

In a similar vein, on June 28 the FAA issued a policy memo (AIR100-16-110-PM04) that forbade parties from stating “domestic shipment only” or “not an export approval” on the 8130-3 tag.

“This memorandum provides clarification on the use of “domestic shipment only” and “not an export approval” in block 12 of FAA Form 8130-3 (hereafter, tags). Inspectors, designees, delegated organizations, and persons authorized in accordance with a production approval holder’s approved quality system to issue tags are directed to not add “domestic shipment only” and “not an export approval” to block 12.”

This language impeded subsequent exports; many people thought that this language was meant to prevent a subsequent export.  Use of this sort of language also ignored the original purpose of the “domestic tag” which was to facilitate export for parties who were unable at the time to apply for export 8130-3 tags (it circumvented a regulatory anomaly that prevented distributors from applying for export 8130-3 tags – the exporting distributor was expected to ensure compliance with the importing nation’s special import requirements).  For a short time, this limiting language actually appeared in an earlier version of Order 8130.21.  ASA sought clarification from FAA Management at the time and FAA Management confirmed that the inclusion of that language had been a mistake, because it contradicted the original purpose of the domestic tag.

ASA members who encounter parties who want to print “domestic shipment only” or “not an export approval” in block 12 of FAA Form 8130-3, should draw the issuing party’s attention to this policy memo.

MAG Threatens to Prevent Parts from Entering Repair Stations

FAA and the European Aviation Safety Agency (EASA) have been discussing new ways to document and transfer aircraft articles across international borders.  This ends up affecting the rest of the world, because it sets standards for how both of those authorities will operate that they then incorporate into their other international relationships.

Some issues have arisen in the industry that find their roots in the FAA-EASA Maintenance Annex Guidance (MAG).  This MAG document is meant to reflect the working procedures for shared maintenance oversight between FAA and EASA.  In theory, it should not add any new legal requirements – those are supposed to already exist in the regulations.  But in practice, the MAG has recently evolved into a document that is setting new legal standards that do not exist in the regulations of either FAA or EASA.  Because inspectors for the two authorities are requiring compliance to the MAG, it is important to review it and understand what new standards are included in that document.

The MAG changes are motivated in part by a recent change in US law that has permitted US production approval holders (PAHs) to issue their own 8130-3 tags for their articles.  This is found at 14 C.F.R. 21.137(o).  Those who take advantage of this option would no longer need to rely on the legal fiction of designees.  This was meant to ease the process of creating 8130-3 tags, which have recently been viewed by the FAA as an administrative matter that merely documents a finding of airworthiness that is made whether the tag is created or not.  This change also helps to harmonize with EASA, which has permitted European manufacturers to issue EASA Form One since EASA’s inception.

Although this new privilege should permit more manufacturers to issue 8130- 3 tags, thus creating a wider pool of articles documented with 8130-3 tags, the fact remains that many existing aircraft articles do not bear EASA Form One or 8130-3 tags.  Real-world implementation hurdles have mean that manufacturers needed some time before they could start issuing the tags.  In addition, there is a huge quantity of existing articles in distributors’, air carriers’, and repair stations’ inventories.  Many of those existing articles do not bear EASA Form One or 8130-3 tags.

The industry has struggled for the last twenty years to obtain these documents, or in the alternative to find ways to receive aircraft articles into inventory without these magic documents. In many cases, the easiest path has been to find a way to determine airworthiness without the Form One or 8130-3 documentation – this is a path that remains legal under United States law because we have no general documentation requirements for articles under the FAA regulations.

Historically, repair stations with EASA 145 credentials have taken advantage of the EASA regulatory clause that permits articles to enter the repair station’s systems when they are unserviceable (EASA 145.A.42(a)(2)).  The definition of unserviceable includes articles with inadequate documentation (M.A. 504(a)(3)):

M.A.504 Control of unserviceable components

(a) A component shall be considered unserviceable in any one of the following circumstances:

3. absence of the necessary information to determine the airworthiness status or eligibility for installation;

These articles are not required to have any specific documentation and could enter a repair station undocumented.  The repair station would then perform an analysis / inspection of the article to confirm its airworthiness (such as an inspection to a serviceable condition – an inspection is defined as a species of maintenance under both the EASA system and the FAA system).  Repair stations could therefore receive new articles without a Form One or an 8130-3, so long as the repair station independently evaluated airworthiness of the article.

The MAG appears to put an end to this practice by distinguishing new parts and specifically requiring them to have specific documentation even when received under EASA 145.A.42(a)(2) – thus closing the industry’s normal safety valve for receipt of articles that typically do not bear 8130-3 tags.

FAA Solution Rejected By EASA

The FAA was open to the idea of a grandfather clause for existing inventory.  Such a grandfather clause would have extended to all articles produced before October 1, 2016 (the date by which the FAA believes many US PAHs will issue their own 8130-3 tags).  They were also open to the idea that a distributor could certify that the article existed before October 1, 2016 on the grounds that it existed in the distributor’s inventory before October 1, 2016 (the installer would still need to make a determination of airworthiness prior to installation – the distributor’s certification would merely have indicated eligibility for treatment under the grandfather clause).

Remember that distributors typically pass along documents, packaging and markings that can help the installer make his or her own determination of airworthiness. So the sole purpose of the distributor’s certification would have been to show that the article existed  before October 1, 2016 and was thus eligible for treatment under the grandfather clause.  Nothing more.

This grandfather clause has been rejected by EASA.

Unfortunately, EASA did not agree with the FAA’s interpretation of a grandfather clause.  In the FAA-EASA-Industry meeting that took place on June 17, the EASA senior representative disagreed, and insisted that the grandfather clause could only extend to parts in a repair station’s inventory by October 1, 2016.  This made the grandfather clause meaningless, because articles already in inventory no longer need to be tested under the EASA 145.A.42 receiving standard.  More importantly, it meant that existing inventory in distributor’s warehouses – inventory that in some cases was produced before EASA existed – could be precluded from entering EASA 145 repair stations in the US and in Europe.  Over a thousand US repair stations bear EASA 145 credentials, and this includes nearly all of the major MROs handling commercial transport category aircraft, so this is a very serious issue.

Disappointingly, the EASA representative admitted that he knows that European repair stations accept undocumented parts, but expressed that he could not recognize those transactions because they did not fit within the EASA ideal.  He suggested that airlines and MROs could bypass distributors and buy direct from manufacturers.  This ignores a host of real-world issues, including the fact that many necessary articles are not in active production and cannot be obtained from anywhere unless they are purchased from existing distribution inventories.  Expecting manufacturers to instantly be able to produce each part that they have ever produced in the past ‘on -demand’ in simply unrealistic.

ASA and FAA Working Toward a Solution

If taken at its face value (including the EASA interpretation), the MAG could render a huge chunk of existing inventory valueless.

We have been working with the FAA to stave off this possibility.  The FAA is taking a realistic approach to this issue.  The FAA realizes that this has both financial implications (rendering existing inventory valueless) and safety implications (certain necessary parts would become unavailable, making aircraft maintenance impossible).  Because the FAA’s primary focus is on aviation safety, they are acting to ensure that demonstrably airworthy articles can be documented appropriately, so that paperwork does not get in the way of safety.

The solutions are still being discussed and developed, but industry should expect to see changes in the way that 8130-3 tags are issued for aircraft parts.  This change needs to happen very quickly in order to make sure that good inventory is not rejected because it has the wrong paperwork.

License Issues for Distributors of Explosive Materials

We often receive questions from distributors about their obligations to comply with regulations beyond those of the FAA or industry standards specifically addressing the aerospace distribution community. In many of these cases, distributors may not be perfectly clear on how to comply with certain regulations, or that those regulations even exist. Some examples of these scenarios include export licensing requirements, export reporting requirements, and hazmat or dangerous goods shipping requirements.

Recently, we have received a number of questions regarding regulatory requirements surrounding explosives regulated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).  Some people are not even aware that regulated explosive materials are present in a variety of aircraft parts or that they may be handling these parts or that the ATF imposes license and permit requirements on a wide range of people who handle such explosives. It is therefore important to understand what ATF licensing obligations apply when distributors are handling explosive materials.

In general, anyone who imports, manufactures, or deals in explosive materials must obtain a license from the ATF. Because “dealing” under the regulation means distributing explosive materials at wholesale or retail the license requirement casts an extremely wide net that encompasses any type of sales model.

The ATF explosives license is obtained by applying to the ATF using forms ATF F 5400.13, ATF F 5400.28 to identify employees authorized to possess explosive materials as applicable, and submitting the appropriate fee. Each license is valid for three years.

So where do regulated explosives appear in aircraft parts? Frequently explosives will appear in safety apparatus.  Fire suppression systems may contain explosive actuators (or “squibs”); similarly, emergency escape systems like door slides may also contain explosive squibs. Other articles that may contain explosives include the flares or other signaling devices found in survival kits. These explosives may be present in certain assemblies and components, so it is important to identify and ship them properly once they have been identified.

Although regulated explosive materials generally required the distributor to have a license in order to deal in those products, certain aviation articles may be exempted from the regulations. These exemptions are typically sought by the manufacturer of a particular article and when granted are specific to the article by part number. One common example of articles often subject to exemption is signaling devices.

Unfortunately, the ATF does not offer a searchable database of issued exemptions, but instead recommend that manufacturers provide a copy of the exemption with their exempted products. As a matter of practice, however, this is not always done, whether because the manufacturer is unaware that they are permitted to do provide the exemption, are unaware that the exemption follows the product, or even possibly for competitive reasons.  The net result is that some distributors may be handling exempt materials as though they were subject to the ATF licensing requirements. When dealing with exempt materials it is important to remember that it is the article itself that is exempted, and the exemption is not limited only to the manufacturer, so everyone can take advantage of the product’s exemption.

Finally, it is important to remember that the ATF licensing regime is separate from DOT hazmat shipping regulations.  An explosive article can be exempt from the ATF licensing provisions but still be regulated as a class one explosive for the purposes of hazmat shipping. It is always necessary to ensure compliance to each applicable regulatory regime, and that separate regulatory regimes are not necessarily consistent.

Overlapping regulatory regimes—ATF, DOT, FAA, BIS, DDTC, OFAC—can become quite confusing.  When in doubt about your licensing and compliance regulations always remember to consult an attorney who can help you make sense of these conflicting regimes and develop systems to help your business ensure ongoing compliance.

If you have questions about your compliance obligations be sure to visit us while you are at the ASA conference in Las Vegas, June 26-28!

How is FAA’s New Compliance Philosophy Related to Safety?

Many of you know that the FAA published a new compliance philosophy last summer.  The new policy, found in FAA Order 8000.373, focused on cooperative efforts to achieve compliance, rather than blind enforcement.  

Peggy Gilligan is the FAA Associate Administrator for Regulation and Safety.  She is also a lawyer.  She was part of the force behind this new policy and she explained it at the FAA/EASA Internatinal Safety Conference this week.

The aviation industry has enjoyed an impressive safety record in recent years.   But the regulators are not content to rest on their laurels.  They want to continue working on safety to make aviation ever-safer.  Most of the salient risks have already been addressed so it is harder now to identify risks to address.  In order to identify the risks, the authorities are analyzing trends that could lead to risk.  This allows them to proactively address risk before it can pose a real threat.

The regulatory authorities have been talking about the importance  of data for many years.  They attribute the industry’s recent stellar safety record to safety data collection, and effective use of that data.  Gilligan explained:

“We debuted our new philosophy on compliance. … We want to shift focus so that we and industry are working together on compliance. … We want to look for the trends that lead to systemwide risk …”

She highlighted data sharing as a key element for identifying the next generation of safety risks.  The FAA reasoning is that a cooperative environment is the best environment for encouraging voluntary data sharing.

EASA Executive Dirctor Patrick Ky agreed.  He explained:

Accidents and incidents are frequently a result of many different causal factors, so sharing data is the key to future safety.  

The new compliance program is meant to create an environment in which industry safety data can be shared freely, without fear of repercussion.  As Gilligan said on Tuesday:

“We want everyone in the system to feel free to raise their hand and say that there is something wrong”

While the FAA has decreed that safety is a cooperative effort, this does not mean that enforcement is dead.  Gilligan said “If someone is unwilling or unable to comply with safety standards then that is the highest risk in the system” and such conduct will be met with strong sanctions. 

ASA members should be particularly aware of the new compliance philosophy and what it means for the industy.  Most regulated companies have an opportunity to build a strong relationship with the the FAA, which helps to facilitate cooperation and data sharing in an effort to achieve compliance.  Unregulated distributors, on the other hand, typically do not have the same sort of strong relationships with the FAA.  

Accredited distributors rightfully feel that they are committed to safety, but FAA employees who are not familiar with the the FAA’s AC 00-56 accreditation program may not recognize that commitment.  Thus, when accredited distributors find themselves in possession of shareable safety data, then they should make sure that they take the time to educate the local FAA office about the context of their AC 00-56 quality assurance system.  This may help show that the distributor is a committed part of the aviation system-based safety process.


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