Major Changes Involving 8130-3 Tags

Any ASA member who has attended an ASA Board Meeting or an ASA Quality Assurance Committee meeting in the past three months knows that an important topic of discussion has been the recent FAA and EASA changes affecting 8130-3 tags.

Two significant changes in the regulations and policy have affected 8130-3s this Fall.  Both have the potential to impact the business models of distributors.  This post analyzes the two sets of changes and provides guidance for aircraft parts distributors who may be impacted by those changes.

International Agreements

The first significant change was published in the latest revision to the Maintenance Annex Guidance (revision 5). The United States has a Bilateral Airworthiness Safety Agreement (BASA) with the European Union (EU). The EU-BASA explains how the United States and the European Union will share safety duties and permit products and articles to be freely moved between jurisdictions.

The EU-BASA is interpreted by several guidance documents. One of those guidance documents is the Maintenance Annex Guidance (MAG). The MAG explains how the US and EU will share oversight of repair stations that hold authority from both jurisdictions. Under the MAG, repair stations in the US that hold EASA 145 acceptance will be subject to oversight by the FAA, and the FAA will assess compliance to both the US and the EU regulatory requirements.

In order to facilitate compliance to both standards, the MAG includes two sample supplements for the repair station manual (for US-based repair stations) or the Maintenance Organization Exposition (for EU-based repair stations). Repair stations are expected to adopt such supplements in order to ensure that their work will meet the requirements of both jurisdictions; however they are expected to be able to make changes to the sample supplement; in fact the guidance explains that:

“The applicant must customise [sic] the supplement to reflect the specific repair station operation and related procedures.”

Although the supplements are explicitly described as “samples,“ experience has shown that many FAA employees treat these samples as the only acceptable language (this was most recently re-confirmed by repair station personnel at the ASA Quality Assurance Committee Meeting in Dallas who continue to experience this phenomenon).  This is not a new phenomenon – many complaints were raised when the FAA had an advisory circular that featured sample language for the repair station’s Inspection Procedures Manual (IPM) – and ultimately the FAA found it necessary to cancel the IPM AC because safety inspectors were requiring adherence to the sample as if it were a legal requirement.  The net result in cases like this is that the “samples” become de facto regulations, because they are being enforced as if they were required by regulation. I won’t get into all of the Federal laws that are being violated when the FAA enforces a domestic record-keeping requirement that imposes new regulatory standards not previously found in US law.

With the Supplement “samples” being treated as if they were requirements, we find a number of requirements being imposed that are not required under US law, and a few that are not required under either US law or EU law (thus making MAG rev. 5 a source of brand new quasi-legal obligations).

The most significant elements for distributors are found in the MAG rev. 5 requirements for acceptance of new parts.  The language that applies to US based repair stations (who need the supplement to retain their EASA privileges) includes this text:

New components must be traceable to the OEM as specified in the Type Certificate (TC) holder’s Parts Catalogue and be in a satisfactory condition for installation. A release document issued by the OEM or Production Certificate (PC) holder must accompany the new component. The release document must clearly state that it is issued under the approval of the relevant AA under whose regulatory control the OEM or PC holder works.

The acceptance language that applies to standard parts provides an exception for those parts, but PMA parts enjoy no such exception which means that independent PMA parts (which are typically are not included in the type certificate holder’s parts catalogue) appear to be unacceptable (violating EASA standards and conflicting with the existing Technical Implementation Procedures).

More importantly, all new components will have to be accompanied by a “release document issued by the OEM or Production Certificate (PC) holder.”  Today, most 8130-3 tags are issued by the FAA (usually through its designees).  This provision would cause the rejection of existing FAA 8130-3 tags because they were not issued by the OEM or Production Certificate holder (instead, until now, they have always been issued by the FAA, directly or through designees).  This could have a tremendous impact on existing inventories, which would not meet the acceptance requirements described in the supplement even if they were accompanied by 8130-3 tags issued by the FAA.

The FAA and EASA have agreed to delay the implementation of MAG rev. 5 until March 29, 2016.  This was meant to permit time for manufacturers to start issuing 8130-3 tags for new parts.

8130-3 Tag Regulations

Under the new regulations, a production approval holder (PAH) will be permitted to issue its own 8130-3 tags. These tags will be known as “authorized release documents.”  This privilege will be permissive and not mandatory, so some manufacturers may choose not to issue authorized release documents.  The FAA has issued guidance that says that once a production approval holder has set up a system for issuing authorized release documents, the production approval holder will be required to surrender its ODA privileges or other designated privileges that permit issuance of an FAA 8130-3 tag.  Thus, for manufacturers, the choice of issuing 8130-3 tags under the manufacturer’s own authority or obtaining them through designees will be an ‘either-or’ choice, without the opportunity to use both systems.

The FAA implies that these documents can be used for export purposes, by explaining that when an authorized release document is issued for export purposes, the production approval holder must follow the procedures specified in § 21.331 and must comply with the responsibilities of exporters specified in § 21.335.  One of the many problems with these authorized release documents is that although they appear to now be potentially acceptable for European repair stations, our bilateral agreement with the rest of the world all require FAA-issued 8130-3 export tags.  So manufacturer’s authorized release documents would not meet the requirements of our other bilateral agreements.  In addition, the BASA Technical Implementation Procedures (TIP) with the EU anticipates that EASA can expect FAA-issued 8130-3 tags (it repeatedly uses language explaining that the FAA must certify facts on the 8130-3 tag, such as in section 5.1.6(a)(1) for TSOAed articles).

On December 17, the FAA published a correction to the final rule that explained that PAHs are permitted to start issuing 8130-3 tags as early as January 4, 2016. This is specifically intended to permit PAHs to issue 8130-3 tags to support the new requirements for 8130-3 tags that are needed for domestic repair stations that possess EASA privileges (the preamble to the rule specifically mentions MAG rev. 5 as a motivating factor for the correction).

There are already manufacturers who rely on their own certificates of conformity and do not obtain 8130-3 tags for domestic transactions.  We have spoken with manufacturers who are not sure whether they will begin issuing 8130-3 tags because of some of the problems and limits associated with the PAH-authorized release document policy; so distributors may be unable to obtain PAH authorized release documents for some parts; and will likely have extreme difficulties obtaining PAH authorized release documents for existing inventory.

How Big of an Issue is this in the United States?

According to EASA, there are 1474  valid repair stations in the US with EASA privileges (EASA Table dated Nov. 12, 2015 – this does not include ‘not valid’ and invalid EASA repair station approvals in the US).  This is about one-third of the domestic US repair stations; but as a practical matter, it is nearly all of the US repair stations that service commercial aircraft customers.  This means that most repair stations that purchase parts from ASA members will be affected by the MAG rev. 5 requirements.  Because it is easier for FAA employees to simply enforce the MAG rev. 5 sample as if it were a requirement, we should expect most of these repair stations to adopt supplements that are consistent with the language of MAG rev. 5.  This will have a very significant affect on the business of aircraft parts distribution.

What Does This Mean for Distributors?

Distributors should expect to have problems selling aircraft parts without 8130-3 tags after March 31, 2016.  This could result in devalued inventory as a consequence of the FAA’s actions (There are months yet to go before this implementation date so ASA can do little to predict, today, what the actual devaluation will be).

The authorities (FAA and EASA) have agreed that for parts released by production approval holders before April 1, 2016, those parts will not be expected to be accompanied by 8130-3 tags.  The fact that an aircraft part produced by a PAH is in a distributor’s inventory as of that date is prima facie evidence that the part was released by the production approval holder before that date.  This means that aircraft parts in a distributors inventory as of close of business on March 31, 2016 or start of business on April 1, 2016 are grandfathered from the provisions of MAG rev. 5 (although, of course, parts intended to be used on European-registered aircraft will be expected to meet the requirements of the BASA TIP).  Distributors may wish to find a way in their inventory database systems to identify all parts held as of COB March 31, 2016 in order to be able to certify that the part was released by the production approval holder before April 1, 2016.

What Can You Do to Make Things Better?

1) Communicate with your repair station customers and ask them to ensure that their EASA Supplements permit them to accept parts without 8130-3 tags (e.g. parts with a manufacturer C of C) consistent with US policy in documents like FAA AC 00-56B.  Nothing in either US or EU law should prevent them from being able to receive a demonstrably airworthy part in new condition under their FAA 145 privileges and then issuing a single release certificate for their domestic U.S. customers.

2) Communicate with your repair station customers and ask them to ensure that their EASA Supplements are consistent with EASA regulations instead of using the MAG rev. 5 language, which adds limits that are not required under EASA regulations;

3) Communicate with your repair station customers and ask them to ensure that their EASA Supplements accept all 8130-3 tags that are acceptable by European 145s under the BASA Technical Implementation Procedures;

4) Communicate with your manufacturer business partners and encourage them to release their parts with 8130- 3 tags;

5) To the greatest extent possible, obtain 8130-3 tags for parts.  Even though they are not required by law in the US, the FAA is going to impel repair stations to reject parts that do not have 8130-3 tags, which will make the 8130-3 tag a de facto requirement for selling to repair stations.

6) Share your thoughts!  ASA is eager to hear your thoughts about potential problems and solutions.

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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.

2 Responses to Major Changes Involving 8130-3 Tags

  1. Pingback: MAG rev. 6 Will Mitigate Some 8130-3 Tag Issues | ASA Web Log

  2. Pingback: FAA Delays MAG rev. 5 Provisions to Permit 8130-3 Revisions | ASA Web Log

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