Renewing Delegated Privileges During the Shutdown

Delegated privileges for DARs, DERs and DMIRs need to be periodically renewed. Normally, the renewal period is annual (every twelve months).  This affects many people in the aircraft parts community, including the DARs who issue 8130-3 tags for aircraft parts.

Under current guidance, a designee that is not renewed by their expiration date will be automatically placed in expired status.  When a designee is placed in expired status, he or she is not permitted to exercise the delegated functions.

A designee in expired status has a 90 day window.   During that 90 day period, the managing office is expected to determine a follow-on action, that is, either reappointment or termination.  In the event no FAA action is taken, then the action defaults to termination.

This could be a real problem for those designees whose expiration arises during the current lapse in funding (aka the shutdown), because there is likely nobody in the local office who can renew their delegated privileges.

To remedy this, we have asked the FAA senior management to issue a memo that tolls the expiration date of DAR, DER and DMIR delegated privileges.  This would have the effect of freezing the privileges as they existed on December 21, and if they were scheduled to expire between that date and the resumption of funding, then the privileges  would continue in place through the tenth business day after funding resumes (to permit a window of time to process the backlog).

This is a proposal only – and it is likely that the FAA will be unable to issue this proposed memo during the shutdown.

After the 2013 shutdown, FAA issued extensions and deviations once the government was reopened – we expect that this is the approach that will be used again in 2019.  Although the precise nature of the extensions and deviations that will be issued after the shutdown cannot be predicted, we hope that ASA’s draft memo tolling the expiration date of expiring delegations will be used as a template to endorse DAR work performed during the shutdown.

Advertisements

Government Shutdown Advice: DARs May Continue Functioning

We continue to get inquiries about designee functions during the government shutdown.

Generally, DARs should go back to their authorizing documents and ensure that they do not have any restrictions that would forbid exercise of authority during the shutdown. As long as there is no limitation/prohibition, and as long as the DAR has general authority to issue 8130-3 tags, it should be acceptable for the DAR to continue issuing 8130-3 tags during the government shutdown in the same manner that the DAR did before the shutdown.

For a complete discussion of this issue, please see our article: DAR Privileges, During the Shutdown

Exporting During the Shutdown

The Federal Government continues to be shut down while our elected officials debate how to tackle our nation’s debt.  This has the potential to adversely affect exports, so it is important to have strategies for ensuring you can export in the absence of new licenses.

As a result of the shutdown, the Department of Commerce Bureau of Industry and Security (BIS) is no longer accepting export license applications.  All pending export license applications are being held without action by BIS until the shutdown ends.  This can have a significant effect on some distributors who need export licenses in order to support their customer base.

If you are an applicant who needs a license for national security reasons, then you can request emergency processing of your export license application by submitting an email request to Deputy Assistant Secretary for Export Administration Matthew Borman at Matthew.Borman@bis.doc.gov; however most civil aviation export licenses are not related to national security.

So what can you do to support a non-US customer need for parts that does NOT have national security implications, but that would ordinarily require a license?

The best way to approach the transaction is to think about how to structure it to make use of a license exception.  There are a number of license exceptions that can apply to common aircraft parts transactions, including the Replacement Parts/Servicing and Replacement Exception [RPL] (15 C.F.R. 740.10) and the Aircraft and Vessel Exception [AVS] (15 C.F.R. 740.15).  We’ve covered the use of these exceptions in ASA Workshops and during the ASA Annual Conference, but if you’ve missed the presentations, then we ordinarily advise potential exception-users to read the regulatory language carefully before using the exceptions.  Make sure that you can meet each and every requirement for the use of the exceptions.

For example, use of the AVS exception is often limited based on details related to the aircraft on which the part is expected to be installed. If the aircraft on which the part is to be installed is identified, then you should collect the following information:

  • The country in which the aircraft is located, and
  • The country in which the aircraft is registered, or will be registered in the case of an aircraft being manufactured, and
  • The country of citizenship of whoever currently owns, controls, leases, and/or charters the aircraft (more the one country may be implicated by this analysis).

These data will serve as an important foundation for the analysis implied by the requirements for the AVS exception.

If no exception would apply to your transaction, then another option might be to find someone with an existing license that will permit the export of your article, and include that party in your transaction as the exporter of record.  While you cannot use a third party exporter for purposes that circumvent the law (for example, a Denied Party cannot use a third party to circumvent their Denied Party status), it is permissible to sell the parts to an intermediary and have the intermediary export to your customer under the intermediary’s existing (applicable) license, as long as it is not for the purpose of circumventing legal prohibitions that would have prohibited you from getting a license.  The danger of this advice is that an intermediary who is also a copmetitor may use this as an opportunity to steal customers, so be careful to only deal with an intermediary whose business ethics are trustworthy.

Once you are in a position to be able export, you may run into some problems in assembling the data that you need to complete the electronic export information requirements on AESDIrect.  For example, the the Schedule B search engine on http://www.census.gov is not available. During this time you may use the following alternate address to identify schedule B numbers: https://uscensus.prod.3ceonline.com/.

As always, the Washington Aviation Group continues to provide export advice.  So if you need to get really creative, please give the Washington Aviation Group a call and let them work with you to find a solution.

Another issue that is facing the industry is the new release of the 600-series ECCNs that becomes effective tomorrow (to facilitate the movement of certain articles from the US Munitions List (USML) to the Commerce Control Lists (CCLs).  We will talk about that in tomorrow’s blog post.

%d bloggers like this: