Can a Disassembler Convert U.S. Aircraft Paper Records to Electronic Format?

More and more of ASA’s members are parting-out aircraft.  Our members have asked, “when a distributor that intends to part-out an end-of-life aircraft receives paper records from the last owner/operator, what are the rules with respect to conversion of those records to electronic format?”

Short Answer

When a U.S. company – like a distributor – becomes the owner of an aircraft with the intent to disassemble it for parts (and not to operate the aircraft), it has certain record retention obligations for as long as the aircraft remains U.S.-registered; however those records may be converted into, and retained in, an electronic format so long as the electronic versions accurately reflect the correct information, and (b) remain reasonably accessible to those who are supposed to have access under the regulations (like the government).  This answer does not address the wide-range of industry commercial concerns, like the potential commercial desires of any subsequent owner of the parts removed from the aircraft.

Discussion

We typically think of “original records” as the paper records.  But companies that own aircraft and wish to disassemble them for their parts may wish to convert the paper records to electronic format, such as by scanning them.  Reducing the records to an electronic format allows them to be stored more conveniently, it facilitates management of record retention policies, and it also makes it easier to share information with potential buyers.

This article is limited only to those situations where a business that does not hold an FAA certificate takes possession of an aircraft (e.g. the aircraft is not listed on an operating certificate) with the intent to disassemble the aircraft and not to operate the aircraft.  This article is not legal advice with respect to any particular fact pattern.  Your actual fact pattern may vary, so you should use the article as a tool for recognizing issues to discuss with your aviation attorney.

US Rules on Records

There are a number of US laws and policies that encourage the use of electronic records and alternative information technologies.  Some of the applicable laws include:

These laws and policies typically require that the government must accept electronic records, but they permit the government agencies to develop standards for implementing electronic records systems.

US law today makes it clear that if a statute, regulation, or other rule of law requires retention of a transaction record then one way to meet the record retention policy is to retain an electronic record of the information that (a) accurately reflects the information set forth in the record, and (b) remains reasonably accessible to all persons entitled by law to access the record. 15 U.S.C. § 7001(d)(1).

The FAA has established policy for records that are required by FAA regulations.  They make it clear that their policy does not apply to records that are not required under FAA regulations.  E.g. FAA Order 8900.1 chg 466 vol. 3, Chap. 31, Section 2, ¶ 3-3001

Under FAA regulations, certificate holders need FAA approval for certain electronic manuals and/or other electronic records (e.g. 14 C.F.R. § 121.683(c)), and other electronic manuals and/or other electronic records need to be in systems that are acceptable to the FAA (e.g. 14 C.F.R. § 145.219(a)).

The FAA has clarified that when FAA rules require some sort of record to document an event, this is considered to be a “record” under FAA regulations, and the system for keeping that record is a recordkeeping system.  Under FAA guidance, though, a system that collects information that does not preserve the evidence of an event – that is not a “record” – is not a recordkeeping system; it is an information management system.  The FAA does not regulate such information management systems.

What makes this difficult is that there is some common data – some records – that are regulated by the FAA; and there are some data that are not.  For example, the owner of an aircraft must keep records of the current status of life-limited parts (14 C.F.R. § 91.417(a)(2)(ii)), current status of airworthiness directive implementation (14 C.F.R. § 91.417(a)(2)(v)), and copies of the maintenance records for major alterations (14 C.F.R. § 91.417(a)(2)(vi)).  On the other hand, there is some information that is commonly kept that is not directly regulated by the FAA.  For example, the FAA does not specifically regulate incident/accident statements (note that the FAA does require the owner/operator to keep flight recorder/voice recorder data for 60 days after an accident, but this is different from the traditional incident/accident statements).  Both of these sorts of information (regulated and unregulated) are going to be found in a typical aircraft data package.

The Part 91 record retention requirements apply as long as the aircraft is a US-registered civil aircraft.  14 C.F.R. § 91.401.  So one strategy for ending any FAA-record-keeping requirements is to de-register the aircraft.  One problem with this strategy is that commercially-typical removal tags indicate the registry number of the aircraft from which the part was removed.  In order to allow a relationship between the registry of the aircraft and the part that was removed from that aircraft, it is typical to wait to de-register the aircraft until after the expected disassembly process has been completed.  Which means that the owner continues to have regulatory record-keeping obligations.

Despite the fact that an owner typically retains both regulated “records” and unregulated “information” the retention mechanisms for both are largely unregulated for owners who do not hold certificates (like operating certificates).  The requirements for owners’ maintenance records are found in 14 C.F.R. § 91.417.  That regulation requires the records to be kept, but it does not specify a system for keeping the records, nor does it specify that such a system must be approved by or acceptable to the FAA.  It also does not require “original” records.  This means that an owner can convert records to an electronic format (such as by scanning them) and that owner will typically remain in compliance with the 14 C.F.R. § 91.417 (subject to the previously-mentioned caveats).

Commercial and Non-US Concerns

It is important to recognize that commercial norms may impose de facto requirements for additional record-keeping, and that different customers may have different commercial expectations.  It is therefore important to know and understand the marketplace expectations with respect to any parts that are removed from an aircraft for sale.

Some nations have laws or policies that may impose additional record-keeping expectations.  For example, under AC-120-FS-058 Rev. 3, China now requires that where parts have been removed from an aircraft and are subsequently intended to be installed on Chinese-registered aircraft, such parts must have been removed by a CCAR 145 organization (and thus must have the correlative removal documentation).

Similarly, there are laws and regulations concerning fraud that will prohibit any sort of material misrepresentation, so it is important to ensure that any electronic version of the data is an accurate portrayal of the underlying records.

No, Aircraft Disassembly is Not a Maintenance Activity Under the FAA Regulations

Many ASA members have entered the exciting world of aircraft disassembly.  A member recently reported that he has encountered some customers who believe that aircraft disassembly can only be performed by a repair station under FAA regulations. This belief is untrue.

Part 43 of the FAA’s regulations requires that alteration, rebuilding, maintenance, and preventative maintenance be performed only by parties authorized to do so under the regulations. 14 C.F.R. § 43.3(a). Other functions that are not specifically regulated by the FAA remain unregulated functions.

Aircraft Disassembly is Not Regulated Under Part 43 nor Part 145

It should be obvious that disassembly of an aircraft does not constitute alteration or rebuilding. But could it be a maintenance or preventative maintenance task?

Maintenance is defined in the regulations to be “inspection, overhaul, repair, preservation, and the replacement of parts….” 14 C.F.R. § 1.1 (definition of “maintenance”). This definition also specifically excludes preventive maintenance, which is defined separately.

Aircraft disassembly is different from inspection, overhaul, repair, preservation, and the replacement of parts, so aircraft disassembly is not a species of maintenance under U.S. law.

Preventative maintenance is defined in the regulations to mean “simple or minor preservation operations and the replacement of small standard parts not involving complex assembly operations.” 14 C.F.R. § 1.1 (definition of “preventative maintenance”). This definition is further refined in Appendix A to Part 43. That appendix limits the scope of preventive maintenance only to certain listed functions (this is explicitly described as a limitation so it cannot expand the definition of preventative maintenance). It clarifies that the removal, installation and repair of landing gear tires is a preventative maintenance function (but this only applies in the context of simple or minor preservation operations, and disassembly alone is not a preservation operation). So removal, alone, without any effort to preserve, is not a preventative maintenance function.

Aircraft disassembly is neither a preservation operations nor the replacement of small standard parts, so aircraft disassembly is not a species of preventative maintenance under U.S. law.

Whereas aircraft disassembly is neither alteration, rebuilding, maintenance, nor preventative maintenance, it is not regulated under Part 43, and therefore is not one of the functions reserved to only certain certificate holders,

Thus, it is clear that the FAA Part 43 regulations (and by extension the Part 145 regulations) do not apply to disassembly of aircraft.

The unregulated nature of disassembly is one of the reasons that the Aircraft Fleet Recycling Association AFRA) stepped in and offered their Best Management Practices (BMP) for disassembly of aircraft in order to encourage practices designed to preserve airworthiness as well as to guard the environment.  The AFRA BMP provides guidance, and the AFRA auditing program supports compliance to the standard.

This does not mean that repair stations are prevented from disassembling aircraft for their parts. Because this is an unregulated function, repair stations may also perform the disassembly function if they wish.

No Obligation Imposed by Advisory Circular

Some have taken text in FAA’s AC 20-62 out of context and suggested that it might impose restrictions on removal of parts. The text in question (take alone and out of context) states: “Parts with removal records showing traceability to a U.S. certificated aircraft, signed by an appropriately certificated person.” But look at this text in its full context and you see a different picture:

8. INFORMATION RELEVANT TO USED PARTS. The following information may be useful when assessing maintenance records and part status.

d. Seller’s Designation. The seller may be able to provide documentation that shows traceability to an FAA-approved manufacturing procedure for one of the following:

(1) Parts produced by an FAA-PAH by TC, PC, PMA, TSOA.

(2) Parts produced by a foreign manufacturer (in accordance with part 21 subpart N).

(3) Standard parts produced by a named manufacturer.

(4) Parts distributed with direct ship authority.

(5) Parts produced, for the work being accomplished, by a repair station to accomplish a repair or alteration on a specific TC’d product.

(6) Parts produced by an owner or operator for installation on the owner’s or operator’s aircraft (i.e., by a certificated air carrier).

(7) Parts with removal records showing traceability to a U.S. certificated aircraft, signed by an appropriately certificated person.”

Eligibility, Quality, and Identification of Aeronautical Replacement Parts, FAA AC 20-62E, para 8(d) (December 23, 2010).

In its full context, it is obvious that this text is just one of a list of types of parts that are considered acceptable. Most parts removed from aircraft that are intended for reuse will fit into category one (TC, PC, PMA, TSOA), and therefore the analysis will never get to category seven. That category exists for articles that do not fit within one of the first six categories.  Note also that this text harkens back to the time when it was assumed that any part removed from an aircraft was a good part – modern practice recognizes that mistakes are made at installation and therefore modern disassembly procedure scrutinizes each part and its records to properly identify it without making unsubstantiated assumptions.

Further, the FAA does not have any removal record, and has no regulations reflecting removal records. For this reason, no certificate is necessary in order to sign a removal record.

 

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