The Electronic Records/Signature Law (ESIGN) turns 18

The Electronic Signatures in Global and National Commerce Act (ESIGN) was signed into law on June 30, 2000.  That makes the law 18 years old on Sunday.  If there was any justice in the world, we’d all be buying the law a cigar and allowing it to vote.

ESIGN established a general rule of validity for electronic records, electronic contracts, and electronic signatures.  Prior to the law, many courts had refused to recognize electronic signatures and they questioned electronic records.

ESIGN applies to transactions “in interstate commerce,” which is a term of art meaning that the transaction is open to being regulated by Congress under the Interstate Commerce Clause of the Constitution (most transactions, today, are subject to the Interstate Commerce Clause of the Constitution).  Generally, it explains that when records and agreements are required to be in writing, an electronic version of them counts as a “writing.”

ESIGN also applies to federal and state government agencies.  They are forbidden from adopting record-keeping rules that would “impose unreasonable costs on the acceptance and use of electronic records.”  The law explains that if an agency wants to require paper records (to the exclusion of electronic), then the agency needs to show “there is a compelling governmental interest relating to law enforcement or national security for imposing such requirement.”

Eighteen years after the law was enacted, the aviation industry still struggles with full implementation of the law.  Even though it is clear that aviation records can be recorded and transmitted electronically, the aviation industry remains wedded to paper.  Nowhere is this more clear than with respect to parts documentation.  While distributors are now more comfortable reducing paper 8130-3 tags, and paper material certifications to electronic format for archival storage, transactional records remains stubbornly rooted to a paper paradigm.

One reason for this paper paradigm is because most aircraft parts are unserialized, and therefore it can be difficult to uniquely tie an electronic record to a particular (unserialized) part. A paper record, on the other hand, can be literally, physically, connected to the part to which it applies.  In a world in which we deal with so many different parts coming and going through our warehouses, paper records provide a level of comfort that we are connecting the uniquely correct record to the uniquely correct part.

The FAA has repeatedly said  that commercial documentation paradigms (like back-to-birth traceability) are not required by FAA regulations.  They have specifically stated that there is no Federal Aviation regulation that requires traceability of an aircraft part to its origin, and the FAA does not require back-to-birth records even for life-limited parts.  The FAA has explained that a part may be identified as having been released by a manufacturer as an airworthy part using  “a shipping document, a manufacturer’s certificate of conformance or material certification, or an FAA Airworthiness Approval Tag, Form 8130-3,”  but that in the absence of such documentation, “the part may be submitted for inspection and testing to determine conformity.”

Despite the best efforts of the FAA’s lawyers, the industry remains stubbornly rooted to a paperwork paradigm.  There are many commercial reasons for this, but one important pseudo-regulatory reason is that FAA inspectors frequently insist that the manuals for FAA certificate holders feature documentation requirements.  Once these requirements are published in the manuals, then these FAA-approved manuals drive the documentation requirements which are flowed-down throughout the industry.  And because these documentation requirements are not directly tied to FAA regulations, there is no opportunity to apply the ESIGN mandates and protections to them.

Through recent conversations with both the FAA and EASA, we are starting to see a new understanding of the value of several important paperwork paradigms:

  • limiting documentation ‘requirements’ only to those that are actually valuable to safety;
  • making acceptable safety information more readily available through available (and trusted) industry channels; and
  • permitting greater reliance on electronic information where availability of such data supports safety.

This is likely to be related to the greater reliance of the rest of the world on electronic data (a reliance that was facilitated by ESIGN), but it is also related to the fact that senior decision-makers in the FAA and EASA are more comfortable with electronic records than were their predecessors (again, a comfort that was facilitated by the impact of ESIGN on other parts of the world of data).  And they are also thinking more critically about what information supports safety (and should be encouraged) and what information does not support safety (and therefore becomes unnecessary to the FAA’s mission).

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Electronically Applied Signatures on 8130-3 Tags

Recently, some customers have been approaching distributors , asking them for evidence of “FAA approval” of their electronic signature systems.  Specifically, the customers have been saying that they are “unable to accept a computer generated signature on FAA Authorized Release Certificates” unless the customer is provided with copies of the documents by which the FAA had approved electronic signature system.  Although the FAA does approve certain types of electronic record systems, they do not currently need to approve systems for applying signatures to paper 8130-3 tags.

The United States published the Government Paperwork Elimination Act (GPEA) in order to make sure that government agencies permitted and encouraged the use of electronic forms.  In the wake of the Government Paperwork Elimination Act, the White House Office of Management and Budget (OMB) developed guidance on electronic signatures.  The OMB guidance explains that the purpose of the GPEA was to “preclude agencies or courts from systematically treating electronic documents and signatures less favorably than their paper counterparts.” The OMB guidance goes on to explain:

“GPEA states that electronic records and their related electronic signatures are not to be denied legal effect, validity, or enforceability merely because they are in electronic form. It also encourages Federal government use of a range of electronic signature alternatives.”

Against this backdrop, the FAA has issued a number of documents concerning electronic documents and signatures.

For records required to be kept by certain certificate holders, the FAA has created guidance on the record-keeping systems.  AC 120-78 explains how the FAA approved electronic manual systems and record-keeping systems for operators and repair stations.  But this guidance does not apply to the generation of 8130-3 tags, because Order 8130.21G provides more specific information for 8130-3 tags.

For the 8130-3 tag, there is a difference  between an electronically generated signature (something printed on a paper copy of the tag) and a digital signature (on an electronic representation of the data from a tag).  The OMB guidance directs agencies to use risk assessment techniques for identifying appropriate controls for controlling electronic transfer of documents.  Clearly, one of the reasons for the difference between electronic application of a signature to a paper 8130-3 and digitally transferred data sets (whose electronic systems are accepted by the FAA) is the fact that in the former, the 8130-3 tag remains in a paper state and the risk of fraud remains nearly identical to the risk associated with a paper form with a handwritten signature (advances in printing and imaging technology have made the two indistinguishable in many cases).

The FAA has guidance on the development of a mechanism for generating and transferring digital 8130-3 tags.  These “tags” are actually data sets meeting ATA Spec 2000 Chapter 16, and they reflect a different medium for storing and transferring airworthiness data (instead of paper).  The guidance for such systems is found in FAA Order 8130.21G chapter 5.  Although a number of companies have started investigating this mechanism, a number of factors have prevented it from catching-on broadly across the industry.  Thus, while the FAA has  mechanism for approving these digital 8130-3 tag systems, it has not yet been used by a substantial portion of the industry.  But this remains as an available option, and repair stations may wish to consider this as a reasonable mechanism for creating and storing 8130-3 tags.

For electronically generated signatures (printed on a paper copy of the tag) on 8130-3 tags, though, electronically applying a signature is permitted under Order 8130.21 and is considered something different than the FAA approval of a digital 8130-3 tag system with digital signatures.  Specifically, section 1-9(c) of the “G” revision and section 1-12(c) of the “H” revision (which become effective in February 2014) state “Automation and use of an electronic signature on FAA Form 8130-3 is allowed by all persons who issue the form.”  Thus, no one should not be looking for FAA approval for electronic application of signatures to 8130-3 tags, because the FAA does not need to issue such approval under current policy standards.

Got 8130-3 Questions?

For over 20 years we have been involved in the development of the 8130-3 and its instruction in Order 8130.21, as well as the harmonization of the form with EASA’s and TCCA’s corollaries; so if you have 8130-3 questions, then please feel free to call us!

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