Exporting Dual Use Aircraft Parts? Simpler Rules are Around the Corner!

Many ASA members have found themselves overwhelmed by U.S. regulation compliance. The Administration is acting to alleviate some of these export concerns.

Dual-use parts are a particular problem for ASA members.  Dual-use aircraft parts are replacement parts that can be installed on both civilian and military aircraft.  Their precise placement into Bureau of Industry and Security (BIS) or Directorate of Defense Trade Control (DDTC) jurisdiction can be ambiguous, and can be based on facts that are not readily available to distributor-exporters. For example, the mechanism for obtaining a license to export a replacement part that is listed on both a military engine design and a civilian engine design (approved by the FAA) is very ambiguous, because it can be unclear whether the FAA exception applies [originally published in the 1979 Export Administration Act section 17(c), the exception has been turned into a puzzle that rivals a Rubik’s cube by contradictory guidance and misleading].

We’ve been vocal supports of these changes, having spoke with both Commerce Department and White House officials about reforms.  The Administration has developed and is implementing a plan to revise the U.S. export rules in a way that makes it less complex to export dual-use aircraft parts.

Those of you who’ve seen me speak on export law in the past year know that I have been predicting that the Administration will take far less than the normal 18 months to publish the final rule in the export reform provisions. While most people deride election cycle politics for its emphasis on form over substance, and a tendency for both parties to block partisan gains that might help the other earn votes, this is one situation where election year politics work in our favor. The Administration would like to be able to take credit for making it easier for businesses to export products, in order to show that they are not anti-business. The export reforms will do just that.

The Hill Reports that the Administration is getting ready to publish the first of these export revisions.

If the final rule looks like the proposal, then it will ease unnecessary burdens on the export of many dual-use aircraft parts by clarifying who has jurisdiction over various aircraft parts and reserving the most onerous rules only for those parts that serve a clear defense mission.  The proposed rule would move all of the dual use aircraft parts into BIS jurisdiction, leaving only parts with a clear defense mission in the jurisdiction of DDTC.

This is important to exporters because (1) many BIS exports do not need a license while nearly all DDTC exports require a license, and (2) even if a license is necessary, it is far quicker and easier to obtain a license from BIS than it is from DDTC. It is also useful because there has been a lot of confusion about which agency’s rules must be followed for certain aircraft parts, and the reform would make the pathway to compliance much more clear.

In the current political climate, we hope that the Administration will issue these rule changes before the November elections.

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About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

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