Brexit Update: EASA Makes Things a Little Easier

The European Commission published a Notice to Stakeholders detailing the consequences of the UK’s withdrawal from the European Union’s aviation safety rules.  That Notice to Stakeholders had painted a bleak picture of the near future between the UK CAA and EASA, cancelling all UK approval and refusing to recognize any UK-sourced EASA Form One after March 29.  Recent updates to Brexit policy, though, have set much more reasonable short-term policies for the EU.

We’ve discussed the fact that one of the biggest problems facing aircraft parts professionals in the wake of Brexit will be getting parts from the UK (parts made in the UK or overhauled in the UK) onto aircraft registered in EU nations.  Europe has recognized that this is an issue whose effect is worse for the EU than it is for the UK.  This recognition has resulted in authority for EASA to do something about it.  EASA executives has been sitting on the edge of their seats, waiting for an opportunity to do the right thing, and they have published new guidance that countermands the earlier Notice to Stakeholders.  The official European Commission position suggests that EASA will recognize continued validity for some approval documents.  The caveats are that (1) this is a limited time offer, and (2) EASA insists on UK CAA reciprocity for recognition of EU approvals [which the UK CAA has already stated it intends to offer].

The Commission will propose measures ensuring continued validity of such certificates for a limited period of time. These measures will be subject to the condition that the United Kingdom applies similar measures. Likewise, the Commission will propose measures ensuring that parts and appliances placed on the Union market before the withdrawal date based on a certificate issued by a legal and natural person certified by the UK Civil Aviation Authority may still be used under certain circumstances.

European Commission Communication – Contingency Plan

How limited is the offer to accept approvals after March 29? It appears likely that the EU will continue to recognize certain EASA-issued approvals in the UK for nine months.  This includes type certificates (TCs), supplemental type certificates (STCs), repair design approvals (RDAs), European Technical Standard Order Authorizations (ETSOAs), and design organization approvals (DOAs).  In addition, they will recognize certain approvals issued by UK approval-holders – this mostly means that EASA Form One issued by a UK-based approved maintenance organization (AMO, a.k.a. MRO).  This last provision needs to have some details filled-in by EASA, like when the EASA Form One can have been issued and still remain acceptable in the EU (is there a sunset?).

Here is the text that EASA has published on the subject:

On 19/12/2018 the Commission has adopted two measures that will avoid full interruption of air traffic between the EU and the UK in the event of no deal. These measures will only ensure basic connectivity and in no means replicate the significant advantages of membership of the Single Aviation Market. This is subject to the UK conferring equivalent rights to EU air carriers, as well as the UK ensuring conditions of fair competition.

  • A proposal for a Regulation to ensure temporarily (for 12 months) the provision of certain air services between the UK and the EU.
  • A proposal for a Regulation to extend temporarily (for 9 months) the validity of certain aviation safety licences.

This second proposal provides the validity extension of the following safety certificates and approvals:

The following certificates issued by EASA to natural or legal persons having their principal place of business in the UK shall remain valid for 9 months from the date of application of the Regulation:

  • Type certificates and restricted type certificates,
  • Approval of changes to type certificates and restricted type certificates,
  • Supplemental type certificates,
  • Approval in respect of repairs,
  • European Technical Standard Order authorisations,
  • Design organisation approvals.

The following certificates issued by any natural or legal persons certified by the competent authorities of the UK concerning the use of products, parts and appliances shall remain valid:

  • Authorised Release Certificates for products, parts and appliances,
  • Certificates of release to service in respect of completion of maintenance,
  • Airworthiness review certificates for ELA 1 aircraft,
  • Certificates of release to service on completion of maintenance,
  • Airworthiness review certificates for ELA 1 aircraft,
  • Airworthiness review certificates and extensions thereof.

 

In addition to the plan to contnue to recognize certain UK approvals after March 29, EASA has also reiterated that it will be willing to issue third-county approvals to UK-based approval holders (like holders of POA and MOA).  Third-county EASA approvals would permit UK-based approval holders to continue to operate under EASA jursidiction, and to enjoy the benefits of EASA’s regulations and  agreements.  This could help to ensure that the goods and services of such UK approval holders continued to be acceptable in the EU.

 

When Will EASA Issue Third Country Approvals?

EASA cannot issue third country approval for UK-based businesses until the UK is actually a third country; but our sources have said that for UK-based businesses whose applications have been processed by or before March 29, EASA intends to email the approval to the applicant on March 30 and mail a hard-copy approval to follow shortly afterward.

The European Commission Communication – Contingency Plan Annexes states the need to wait until the UK is a third-country:

Regarding aviation safety, for certain aeronautical products (ʻtype certificatesʼ) and companies (ʻorganisation approvalsʼ), the European Aviation Safety Authority (EASA) will only be able to issue certificates once the United Kingdom has become a third country. The Commission will propose measures ensuring continued validity of such certificates for a limited period of time. These measures will be subject to the condition that the United Kingdom applies similar measures. Likewise, the Commission will propose measures ensuring that parts and appliances placed on the Union market before the withdrawal date based on a certificate issued by a legal and natural person certified by the UK Civil Aviation Authority may still be used under certain circumstances. The Commission has invited EASA to start processing certain applications from UK entities in preparation of the withdrawal of the United Kingdom.

How Much Will Third Country Approvals Cost?

Cost represents some of the best news from EASA.  Normally, third country approvals are prohibitively expensive, but EASA has capped the initial cost for UK approval holders who wish to obtain EU third country approvals.  The fee will be capped at eight hours, times the authorized rate.  The base authorized rate appears to be € 221 per hour, but it is modified by inflation adjustments so the final figure appears to be € 230.18 Euro per hour for calendar year 2019.  This appears to allow a qualified UK applicant to obtain an EASA third country approval for about € 1841.44.  Be sure to check with EASA, as these figure are subject to change at the EU’s discretion.

EASA stresses that the fee is non-refundable, regardless of the outcome of the application, and regardless of the outcome of Brexit negotiations.  If you need to send in a revised application, after initial payment of the fee, then the revised application will be considered as a new application, and you will have to pay a second fee for the ‘new’ application.

Because the UK applicants will be entities that were previously fully recognized by EASA, EASA intends to apply a “desk review procedure.”  Because it is an abbreviated review, EASA expects to process these applications in a matter of weeks (EASA sources have suggested two weeks as a target).

Subsequent recurrent charges will follow the fee schedule found in Commission Regulation (EU) No 319/2014, Annex Part I (Table 8 for POAs, and Table 9 for MOAs).

 

What Do I Get, if I Apply for a Third Country Approval as a UK Approval Holder?

EASA is permitting a wide variety of certificates to fall within this program.  The two most important to our readers are Production Organisation Approvals (POA) and Maintenance Organisation Approvals (MOA).

As a successful applicant, you would get an MOA or POA (depending on what you sought) with identical scope and privileges as your base UK approval.  If your application includes a variance from your UK approval , then you still can only obtain an EASA approval that correlates to your UK privileges.

As long as the application processing is complete by March 29, EASA expects to send a copy of the approval by email on March 30th.  The certificate will be valid as of March 30th .

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As the MAG 6 Implementation Date Looms, Repair Stations Adopt MAG 6 Documentation Limits

We have received multiple copies of an email from AAR from a number of ASA members. It is obvious that the letter has just gone out today (based on the number of ASA members forwarding it to us).

The AAR letter concerns “expectations around MAG 6.”  It confirms that AAR’s understanding is that they need FAA 8130-3 or EASA Form One with anything that is not a standard part.  The letter permits no deviations.

AAR is a leading company in the aviation repair station industry so their interpretation of the MAG 6 provisions is quite important.

The FAA issued FAA Notice 8900.380 to temporarily reopen the safety valve that was closed by MAG 6.  It specifically authorizes dual-certificated repair stations in the United States to accept parts without 8130-3/Form One and to inspect the parts to ensure airworthy condition (and then use them).

ASA has expressed concern to the FAA that efforts like FAA Notice 8900.380 could be ineffective because (1) repair stations already submitted their changes months ago at the behest of their PMIs and they may be unable to once again change their systems, and (2) many industry participants view the MAG as operating at a “higher level” than the Notice and therefore discounted the Notice’s effect (right or wrong – this is still a popular industry perception).

There are parts that are necessary to safe operation of aircraft, but that will not have 8130-3 tags, despite the fact that they are susceptible to airworthiness determination under normal FAA Part 43 standards.  Remember – it only takes one small part to interfere with an entire maintenance function.  I fear that firm documentation positions like those expressed by AAR could lead to one of two possible resolutions:

  • Air carriers will have to ground aircraft because the airworthy part does not have an 8130-3 tag (or Form One), and therefore can’t be accepted and installed by the repair station; or,
  • Repair stations will circumvent their own written systems in order to bring in parts without 8130-3 tags, despite language in the system requiring such a tag.

Neither of these options is desirable.  I am afraid that the (B) option will be the one that occurs most in the real world.  I fear that this will occur because the parts are thought to be good and the maintenance needs to be performed.  I am afraid of this occurrence because once companies start circumventing their written systems, those written systems start to lose their integrity.  At a time when the industry and FAA are examining greater reliance on Safety Management Systems, anything that undermines the safety culture of following the company’s written system is detrimental to the future of aviation safety.

Distributors who are supporting dual-certified (FAA/EASA) repair stations should remind those customers that FAA Notice 8900.380 explicitly permits receipt of parts without 8130-3/Form One when the repair station inspects them for airworthiness (as has always been the case); and guidance like FAA Advisory Circular 20-62E still is effective in recommending reliance on other indicia of airworthiness, such a manufacturer’s certificate of conformity.  The Notice is temporary but we are still working with FAA to establish a better resolution to the issues facing the industry.  Ask your affected business partners to ensure that their systems are consistent with FAA Notice 8900.380, and ask them to announce their willingness to accept parts for inspection when those parts bear other indicia of airworthiness.

New FAA MAG Guidance Corrects Some Problems; But Documentation Challenges Remain

Revision Six of the Maintenance Annex Guidance (MAG)  has been released.  ASA has been working with both FAA and EASA contacts to make changes to the prior revision (rev. 5), because it included unnecessary restrictions that were not based on either US-FAA or EU-EASA regulations.

Many will remember that the MAG rev. 5 language included a number of unacceptable requirements.  Unacceptable provisions included a requirement that the part number be found in the TC holder’s parts catalogue (which would have excluded many PMA and TSOA parts, as well as OEM parts issued in advance of IPC changes) as well as a requirement limiting 8130-3 tags to those issued by PAHs (discounting 8130-3 tags issued by the FAA itself through its designees).  Most of the unacceptable language has been removed and/or remedied in revision 6.  The replacement language for new parts in MAG rev. 6 looks like this:

(a) New components must be traceable to the Production Approval Holder
(PAH) and be in a satisfactory condition for installation. An authorized
release document, as detailed below, must accompany the new
component.

This language is found in sections 10(k)(1)(a) (for US-based Repair Stations) and 7(c)(1)(a) (for EU-based Repair Stations) of the appropriate Sample Supplements in the MAG.  It explicitly requires traceability, without defining what sort of traceability is acceptable.   This is a potential problem: the FAA is taking an industry term for which there is no set meaning (and about which industry experts disagree) and is trying to use it as if it were an objective standard.  They have done this in other guidance, like FAA Order 8130.21H, and it has resulted in disagreements and confusion.  The traceability requirement also belies the various FAA Chief Counsel Opinion letters which have repeatedly asserted that there is no FAA regulation that requires traceability of an aircraft part to its origin.

Repair Station Experience

At the ASA Quality Committee meeting last Fall, members with repair stations expressed that their local FAA FSDO inspectors were requiring strict compliance with the exact language of the MAG Supplement (despite the fact that the language is explicitly labelled as a sample).  Repair station representatives also explained that they were being required by their FAA inspectors to have a single receiving inspection system.  This means that all of the parts that they receive would have to meet the EASA requirements and the MAG requirements (including parts ultimately destined for installation in FAA-registered aircraft).  They would NOT be permitted to receive parts that met FAA requirements (but not EASA requirements) for installation on FAA-registered aircraft (despite the fact that the regulations still permit this).

FAA headquarters has said that these are misinterpretations by the field offices and that they reflect unintended consequences; but when pressed about how they plan to remedy this, the FAA Headquarters representatives could only  suggest that we bring these situations to their attention on a case-by-case basis.  They had no plans to remedy these “unintended consequences.”

In light of this experience, ASA members should expect that most repair stations will be pressured by the FAA to strictly comply with the MAG language as if it were a regulation.  This means that the normal protections of the law may not apply to your transactions, and an appeal to the regulations may fall upon deaf ears!  If you encounter a repair station customer that has been pressured to limit their receiving inspection system in a manner that is more narrow than required by the regulations, then please talk to ASA and we will put you in touch with the right people at the FAA.

A New Source of 8130-3 tags

Last Fall, the FAA promulgated a new rule that permits production approval holders to issue their own 8130-3 tags. The MAG changes are meant to reflect this new privilege.  There are a lot of problems with this:

  1. The 8130-3 privilege was an option – not a requirement – so many manufacturers might choose not to issue 8130-3 tags (and this makes it difficult for distributors to economically and conveniently obtain those forms).
  2. While the EU has agreed to accept manufacturer’s 8130-3 tags, all of the other the US bilateral agreements require FAA 8130-3 tags.  This means that other trading partners might reject manufacturer 8130-3 tags as unacceptable.  When ASA met with the Civil Aviation Administration of China (CAAC) in March, CAAC expressed reservations about manufacturer 8130-3 tags and reminded us that the China-US bilateral agreement did not authorize acceptance based on manufacturer 8130-3 tags.
  3. The MAG rev. 5 language failed to adequately address the significant existing inventory that was not documented according to the new standards.
  4. Even if the other hurdles had not existed, the governments did not permit enough time to ramp-up 8130-3 tag issuance in order to meet the new demand imposed by the MAG revision.

The limits and burdens associated with this privilege have cause some manufacturers to decide that they are not going to issue these tags.  Large manufacturers like Boeing have said that they feel more comfortable sticking with their ODA program as a source of 8130-3 tags.  Smaller manufacturers fear that their local MIDO inspectors may impede them from issuing 8130-3 tags, and plan to stick with issuing their traditional commercial certificates of conformity.

The reason this new source of 8130-3 tags is important is because it was supposed to be a driving force behind the MAG rev. 5 changes.  And the fact that some manufacturers will not issue manufacturer-8130-3 tags on components means that the the FAA and EASA are operating under false assumptions as they manipulate the receiving requirements of repair stations.

Existing Inventory Problem – Grandfather Clause Failure

A significant disappointment in all of this is that the FAA and EASA recognized the need for a grandfather clause for existing inventory, but they failed to create a grandfather clause with enough breadth to reflect the realities of existing inventory.

In recognition of the fact that the new manufacturer-based 8130-3 tag-privilege was supposed to remedy a past lack of 8130-3 tags, the FAA and EASA agreed upon a grandfather clause that would apply to parts produced before October 1, 2016.  The grandfather clause was meant to apply to demonstrably airworthy parts without 8130-3 tags, that were produced before the October 1 date.  In order to take advantage of the grandfather clause, the parts were supposed to bear (1) evidence of airworthiness and (2) evidence of manufacturer before October 1.

Evidence of airworthiness is well understood and necessary in the industry. But the new grandfather clause requirement is that the evidence must consist of “a document or statement (containing the same technical information as an FAA Form 8130-3) issued by the PAH or supplier with direct ship authority.”  So common documents that would be excluded might include (but not be limited to):

  • Airline trace for new surplus parts (not issued by the PAH);
  • OEM C of C (typically does not contain all of the technical information contained in an FAA Form 8130-3);
  • OEM inventory list for a lot purchase (typically does not contain all of the technical information contained in an FAA Form 8130-3);
  • Spec 106 Form from the OEM-authorized distributor (even if it includes all of the technical information contained in an FAA Form 8130-3, it was not dated by the PAH).

This creates an initial challenge but there is some good news.  In an earlier publication of the guidance, found in FAA Notice 8900.360, the PAH documentation needed to have been dated prior to October 1, 2016.  This meant that undated PAH documentation was not usable.  This has been changed in the new version of the language.  This is important because it means that a distributor who possesses adequate evidence of airworthiness (meeting the guidance of the MAG) can produce their own evidence of manufacturer before October 1 by specifying that the article was released before October 1.

We wish that the FAA had been explicit that this was meant to ‘fix’ 8900.360, because we fear that some people will not realize that the later language of MAG rev. 6 was meant to be a remedy to incorrect language in the earlier Notice.  Based on our discussions with the FAA, the change in the date language was explicitly intended to remedy the earlier flaw in the Notice 8900.360 language.  Today, anyone ought to be able to look at a calendar, see that the date is before October 1, and certify that an existing article was manufactured by that date.  And distributors ought to be able to do this for their entire inventories by flagging those parts received by September 30, 2016 (a secure flag in the electronic inventory system ought to be adequate to serve as a basis for a distributor’s C of C that states that the part was received before October 1, 2016 and was therefore released prior to October 1, 2016).

More Unintended Consequences?

An interesting effect of this is that the United States may be somewhat increasing the US trade deficit in the near future.

Let’s say that we have two identical parts that were both produced by the same US production approval holder.  One of them was sold to a new parts distributor in the United States and it bore a standard Certificate of Conformity (which does not include all of the same technical information as an 8130-3 tag).  The other one was sold to a new parts distributor in Europe and it bore an export 8130-3 tag.  Now, a US repair station needs that part.  Existing inventory held by new parts distributors in the United States may not bear the right documentation to receive it under the MAG.  Even if the part is needed for a US-registered aircraft, FAA FSDO norms of requiring repair stations to apply the MAG to all received parts would preclude the part from entering the repair station’s system.  The new parts distributor in Europe, with the export 8130-3 tag on the part, will be the only one who can make the sale to the US repair station!

The FAA’s role is to protect aviation safety.  They do not have responsibility for protecting US competitiveness.  But this change appears to do nothing to enhance safety.  It does not address any known safety issue – it merely adds de facto documentation requirements that appear to circumvent the formalities of the Paperwork Reduction Act.  It is a little shocking that the FAA continues to publish documents that chip-away at US competitiveness without doing anything to enhance safety.

So What Does it All Mean?

EASA has approved about 1480 repair stations in the United States.  That is a very significant chunk of the US domestic repair station market, and it probably represents a substantially high percentage of the commercial aircraft repair market in the US.  This means that a substantial percentage of the commercial aviation repair stations in the US will be affected by this guidance (approaching all of them).  For US distributors, it is important to understand how to navigate through this.

If you have repair station customers that have written their manuals and supplements to require EASA-documentation for all parts received – including those destined for installation on US-registered aircraft – then you should counsel the repair station to revisit its procedures.  But for component repair stations who may not always know the final installation destination of the components on which they work, they may be stuck with applying EASA documentation standards.  Because the FAA is enforcing these EASA standards, the 8130-3 tag (and the EASA Form One) now become a transaction requirement in the commercial aviation market – including for purely domestic transactions where the FAA inspector has insisted on a single receiving system.

US distributors should be particularly aggressive in seeking out 8130-3 tags for inventory.  For inventory without 8130-3 tags, distributors need to ensure that they have access to a DAR (and also a back-up DAR) in order to ensure that they will be able to obtain 8130-3 tags as necessary.  If there are not enough DARs in your area, then please let ASA know so we can bring this fact to the attention of FAA Headquarters.

Due to commercial norms, non-US distributors typically obtain export 8130-3 tags when they receive parts from the United States.  This may give those distributors an advantage over their US counterparts who find it difficult to obtain 8130-3 tags for existing inventory.  Non-US distributors should take advantage of this while they can!

Finally, let us know what you think the effect of this guidance will be.  Will you be able to sell you inventory or does this threaten to devalue or block your inventory?  We would like to hear from the members about the real-world effects in order to judge our next steps.

Using I/A/W on Approval for Return to Service

A member of the ASA community recently inquired about acceptable language for approval for return to service documents following repairs.  The member asked whether it is acceptable, on an approval for return to service document, to state in the description of work performed that the work was performed in accordance with (“I/A/W”) a reference from a manufacturer’s manual and ALSO state that other work was done pursuant to another source?

The short answer to this question is “Yes.”

Currently, the two most common approval for return to service documents are the FAA Form 8130-3 and the EASA Form One.  Each of these are used by repair stations to document work primarily subject to FAA or EASA regulations (respectively).

The instructions for the EASA Form One are found in the regulatory appendices, so these instructions are regulatory in nature.  The EASA Form One regulatory appendix requires the completer of the EASA Form One to “[d]escribe the work … either directly or by reference to supporting documentation, necessary for the user or installer to determine the airworthiness of item(s) in relation to the work being certified.” Examples of information to be entered in the remarks block of the EASA Form One include the maintenance data used, including the revision status and reference, as well as any other repairs or modification accomplished. The EASA guidance clearly anticipates remarks to describe the work performed that are written in the format “Repaired I/A/W [reference] and also [list of additional repairs or alterations].”

Thus, it is safe to say that it is acceptable to use the phrase “repaired I/A/W [reference]” when work beyond the specific manuals limits is performed, as long as additional language is added to clarify the additional work or the exceptions to the manual instructions.  Think of these sort of entries as ‘composite’ entries because they reference more than one source of data.

What you want to avoid is language that ONLY says “repaired I/A/W [reference]” when the work has diverged from the reference (either through additional work or through exceptions to the reference provisions). The reason you want to avoid such abbreviated recordkeeping is because it could misleadingly imply that you EXACTLY followed the reference, when a more accurate description would clarify the divergences.

We arrive at a similar result under the FAA system. The most important guidance when completing an 8130-3 tag as an approval for return to service is the language of 14 C.F.R. 43.9. This regulations requires “[a] description (or reference to data acceptable to the Administrator) of work performed.” Order 8130.21H provides additional guidance, although it should be noted that this is an internal FAA Order and therefore not a binding interpretation applicable to the public. In reference to the description of work performed, that guidance states, “This can be done either directly or by reference to supporting documentation.” Thus, a description of the actual work is permitted, and the reference to manufacturer’s manuals or other sources is a permissible shortcut. I have seen 8130-3 tags that state “I/A/W [reference]” and then include additional provisions, and I have also seen “I/A/W [reference] except [list of exceptions].” For example, I have seen logbook entries (which are governed by the same FAA rules) that stated “Repaired I/A/W [OEM manual reference] except used PMA Parts Number [PMA Part Number].”

Examples of acceptable composite language (assuming that the language accurately describes the work performed) could include:

  • Overhauled I/A/W [OEM manual reference] except used PMA Parts Number [state PMA Part Numbers used]
  • Repaired I/A/W [OEM manual reference] and also repaired I/A/W DER Repair [state DER Repair identifier]
  • Repaired I/A/W [OEM manual reference] except repaired I/A/W DER Repair [state DER Repair identifier] instead of [the specific elided OEM manual reference]
  • Repaired I/A/W [OEM manual reference] and also performed service bulletins [state service bulletin identifiers]

An example of potentially unacceptable language would be a situation where work that materially diverged from the OEM manual was performed, but the description of work performed only said:

  • Repaired I/A/W [OEM manual reference]

This could be potentially unacceptable under U.S. law if disclosure of the divergence was necessary to allow the installer to make a determination concerning airworthiness.  For example, if a service-bulletin-based alteration was performed that changed the dash number on the part, then that sort of work probably needs to be disclosed in the approval for return to service.  Similarly, a major alteration based on independent DER-approved data (so, something that was not in the OEM manual) would likely need to be separately disclosed on the approval for return to service.

 

This discussion is general in nature and is not based upon any particular fact pattern. It does not constitute legal advice and it does not create an attorney-client relationship.

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