UK Aviation Remains Subject to the EASA Standards and Bilaterals Through the End of the Year

Good news!  The UK and EU have taken the position that EASA regulations will continue to apply to the UK (and in the UK) during the transition period (post-Brexit).  The transition period will last from Februrary 1, 2020 through December 31, 2020.

The EU and UK have both signed the Withdrawal Agreement.  The EU issued a formal notice announcing the Withdrawal Agreement, earlier today.  Article 127(1) of the Withdrawal Agreement states:

“Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.”

This means that the Regulation (EU) 2019/494 (which had originally been expected to control aviation safety between EU and UK) will not come into effect.

The UK CAA updated their Brexit microsite, this morning, to reflect the application of EU law during the transition period.

This is a significant relief to many; as late as January 15, the EU had published plans that stated that the UK would have no recourse to EASA rules after Brexit, explaining that for the UK aviation community:

“All current EU law-based rights, obligations and benefits cease”

The industry is breathing a collective sigh of relief that this is not coming to pass (at least not yet).

International Response

In order for this to be truly effective, the rest of the world will need to allow the UK to be covered under the EU agreements, like bilateral aviation safety agreements and working arrangements.  If they refuse to allow the EU agreements to be extended to the UK (which will no longer be a part of the EU, tomorrow) then this could cause significant issues in accepting UK-sourced aviation goods and services.  The US has taken a leadership role in this regard by announcing its acceptance of the transition-period relationship.

Earlier today, the FAA circulated a letter from FAA Associate Administrator Ali Bahrami announcing that the United States will treat the UK as remaining subject to the US-EU aviation safety agreements during the transition period.

We expect other countries to continue to honor this relationship during the transition period (as of this morning, no analogous announcements had been made by Brazil, Canada or Japan – the other three nations to have negotiated post-Brexit airworthiness agreements with the UK – but this dearth of guidance is likely due to the short timing).

The fact that other countries are likely to honor this arrangement would make aircraft parts transactions smoother for the coming year, but it is not 100% good news.   The UK-Canada bilateral aviation safety agreement (BASA) was expected to permit reciprocal acceptance of component maintenance – a dramatic leap forward in international aviation safety comity.  Transport Canada has not issued any formal statement concerning the effect of the Withdrawal Agreement, but if they do treat the UK as part of the EU for bilateral aviation safety agreement purposes (during the transition period), it may delay to an important advance.

Resources:

Transitioning UK MOA Certificates

ASA sponsored a webinar today on aircraft parts documentation expectations after Brexit.  One of the questions raised was whether the EASA certificates that will be issued to certain businesses (as third-country approval holders) will be the same as the comparable UK CAA certificates.  The short answer is that the certificate numbers will be similar, but the EASA certificates will have a different prefix in order to make them distinguishable.

As part of the webinar, we discussed the EASA offer to issue third-country certificates [like repair station certificates and production organization authorizations] to UK-based businesses.  The process is that

  1. the UK-based company applies to EASA for third-country approval;
  2. EASA assesses the company’s fitness to hold an EASA approval;
  3. The fitness assessment is carried out by EASA’s technical agent in the UK (UK CAA);
  4. EASA maintains a list of UK-based companies that will get EASA third-country approvals;
  5. Immediately after Brexit, EASA will email copies of the new approvals to the UK-based companies;
  6. The EASA approvals will be equivalent to any other EASA-third-country approvals;
  7. The UK-based companies will continue to hold their UK CAA approvals, as well.

The two most important EASA approvals, for most of ASA’s members, will Maintenance Organization Approvals (MOAs) and Production Organization Approvals (POAs).  ASA members may wish to know which of their UK-based business partners have opted to apply for EASA third-country approvals.  You can find the lists here:

Both of these lists are tentative, in that they describe applicants from the UK, who will not be issued their credentials until and unless the UK leaves the EU.

It appears that the current UK CAA MOA certificates numbers are in the form “UK.145.nnnnn” where “nnnnn” is a five-digit number.  EASA anticipates issuing MOA certificates in the format “EASA.UK.145.nnnnn” where “nnnnn” is the same five digit number that was issued by the UK CAA.  For example, Patriot Aviation Engineering’s UK CAA certificate number is UK.145.00002.  They have applied for third-country certification from EASA.  Upon Brexit, EASA intends to issue to Patriot an EASA MOA certificate number EASA.UK.145.00002.

A similar pattern emerges for POAs.  The current UK CAA POA certificates numbers are in the form “UK.21G.nnnn” where “nnnn” is a four-digit number.  EASA anticipates issuing POA certificates in the format “EASA.UK.21G.nnnn” where “nnnn” is the same four-digit number that was issued by the UK CAA.  For example, Dunlop Aircraft Tyres’ UK CAA certificate number is UK.21G.2008  They have applied for third-country certification from EASA.  Upon Brexit, EASA intends to issue to Dunlop an EASA POA certificate number EASA.UK.21G.2008.

As we discussed today in the webinar, which authority is responsible for the documentation can have a dramatic effect on which authorities are able to accept that paperwork.  Look carefully at the documentation you receive, so you know whether the documentation is signed-off under the UK CAA approval number or under the EASA approval number.

ASA Workshop in London, with Special Guest Neil Williams of the UK CAA

Need to know the latest changes in the rules that apply to aircraft parts transactions?  Your trade association is here for you!

I will be teaching a regulatory workshop in London later this month (on October 23).  The workshops will deal with the following topics:

  • Aircraft Parts Regulations (European and US)
  • Recent and Prospective Changes in European Law (and how these changes affect the global community
  • Brexit (Neil Williams of the UK CAA plans to join us to discuss the latest developments)
  • International Documentation (and where the norms come from)
  • Compliance with US Import and Export Laws (and how these laws affect international commerce)

As you can see, the broad focus is on compliance standards to help ensure your domestic and international transactions are conducted properly.  As usual, we will focus on some recent and upcoming changes so that the members can plan for those changes and help ensure their business models keep up with the ever-changing world of aircraft parts.

Need to register for the workshop?  You can find workshop details and registration information on ASA’s website.

Can’t make it to London?  No problem!  I am teaching a total of six workshops this Fall:

  • September 20, 2019 – Los Angeles Airport area
  • September 24, 2019 – Singapore Airport area
  • October 23, 2019 – London Heathrow Airport area
  • November 19, 2019 – Ft Lauderdale Airport area
  • December 3, 2019 – Chicago, IL area
  • December 5, 2019 – Dallas, TX area

While I am in London, I will be visiting Aviationweek’s MRO Europe Conference.   If you will be in London and want to meet, then send me (or Katt Brigham) an email and let’s set up a time.  I look forward to seeing you there!

Brexit Update – September 3, 2019

UK politics are getting more interesting.  As we predicted a month ago, the UK Parliament will be prorogued next week.  This means that the current Parliamentary session (which is already the longest in history) will end and a new session will be started five weeks later.  The five week period includes a three week scheduled recess, so it really only eliminates two work weeks; but it also terminates all legislative proposals that remain incomplete at the end of the session (Americans will be familiar with the corollary in Congress, and they will likewise be familiar with the notion that unfinished bills simply get reintroduced in the next session).

With just days left in the current Parliament, Labor leaders have announced plans to take steps to prevent a “no-deal” Brexit, and several prominent conservatives appear ready to support that effort.  This could spell the end for Prime Minister Boris Johnson’s government – potentially leading to snap elections in the middle of the Brexit uncertainty (although the Labour Party has said that it would not vote for a snap election if that would help Johnson deliver a no-deal Brexit.).  If elections happen, Johnson could win a majority, strengthening his negotiating position and supporting his “do or die” pledge to leave the EU; or the “stay” contingent could win a majority which might result in a further delay of Brexit pending further negotiations, or even a revocation of the Article 50 declaration (which would keep the UK in the EU).  It is equally possible that snap elections (if they happen at all) could lead to a new parliament with the same problem: a slim majority that favors leaving the EU, but another majority that rejects a “no-deal” exit.  This is all part of a triangular political battle pitching Boris Johnson and “leave” proponents on one side, British Liberals and other “stay” proponents on another, and the EU on a third side.  And right in the middle of the triangle are the people of the UK – waiting to see how it will all lay out.  But outside the triangle is another constituency waiting to see the results: the rest of the word (including the global aviation community).

Things are heating up and the next week could see some dramatic action in UK politics.

While the pace of the news about Brexit seems to be getting more frenetic, the scenarios for aviation remain largely unchanged.  Our latest guidance and recommendations concerning aircraft parts inventories and transactions continue to be valid, and readers should refers back to the August 8 article for tips and guidance.

The most important thing to know is that the UK CAA, and the other global aviation authorities, have seen this coming for a long time.  Preparations have been made for a both “deal” and “no-deal” scenarios.  We fully expect issues, because change always creates unforeseen issues, but we also expect that aviation business – on a grand scale – will go on.

Brexit is Coming – How Will It Affect Aircraft Parts?

Brexit – the withdrawal of the United Kingdom from the European Union – will occur at 11 pm on Friday, March 29, 2019 (known as the withdrawal date).  In the past few weeks, we’ve met with representatives from the UK CAA, EASA and the FAA.  We’ve had a chance to talk about post-Brexit expectations.  It is clear that there are still a lot of unknowns.

One of the most significant unknowns revolves around the uncertainty in the future of UK-EU relations.  The UK CAA feels that there are generally two possible options.

The Two Options for Brexit

Option one is a Brexit that is reflected by an agreement between the United Kingdom and the EU. The EU and the UK negotiators have a draft of such an agreement, but early statements suggest that it may face some difficulty being ratified by the UK Parliament.

If there is a broad agreement between the two parties before the withdrawal date, then there is a reasonable chance that EU will permit UK CAA to participate in EASA.  EASA already has several non-EU participants that participate in EASA – like Norway and Switzerland – and the EU could permit the United Kingdom to join EASA as a non-EU member state.  In such a case, UK could continue to issue certificates recognized by EASA and certificate holders could continue to issue the EASA Form 1.  This option could make things simple, but as each day passes without a ratified high-level UK-EU agreement, the likelihood of this happening diminishes.

In addition, UK CAA has suggested that EASA may be unable to negotiate with UK CAA at any level under after the withdrawal date (because UK remains a part of the EU until then); so even if the plan is for UK CAA to participate in EASA, there may be a gap between the withdrawal date and UK CAA’s subsequent participation in EASA.

Option two arises if there is no deal between the United Kingdom and the European Union.  In such a case, UK CAA believes that EASA will not be permitted to negotiate with UK CAA on a formal basis. UK CAA would have to rebuild its own independent regulatory framework; it is already hiring additional qualified staff to be prepared to do this.

Under option two, and even under some versions of option one, there may be no aviation safety agreement between UK and EU.  If there is no agreement, then the European Commission published a Notice to Stakeholders detailing the consequences of the UK’s withdrawal from the European Union’s aviation safety rules.  The Notice to Stakeholders paints a bleak picture of the near future between the UK CAA and EASA.

European Union Treatment of Parts Produced or Maintain in the UK

The European Notice to Stakeholders explains that when the UK leaves the European Union (EU), then from an EU perspective, this action will (1) invalidate all certificates issued by the UK CAA, and (2) invalidate all certificates issued by the UK CAA certificate holders.  Certificates will be invalid as of the withdrawal date, which is currently set for 11pm (UK time) on March 29, 2019.

The Notice explains that “[t]he products, parts and appliances concerned will no longer be considered as certified in accordance with Article 5 of the Basic Regulation.”  Article 5 of the Basic Regulation provides the legal foundation for the issue of an EASA Form 1 for a part or appliance.

This means that UK production approvals will become invalid, as far as the EU is concerned.  But this does not just apply to parts made after March 29.  It also applies to parts made before the withdrawal date.

Under European regulations, acceptable parts are required to bear appropriate documentation (such as EASA Form 1).  EASA Forms 1 issued before the withdrawal date under UK CAA authority become invalid as of the withdrawal date.  This means that parts in your inventory today – parts that are perfectly acceptable for installation on European-registered aircraft, today – will no longer be acceptable, after withdrawal, under EASA documentation rules because the UK CAA certificates will become invalid after the withdrawal.

After March 29, one may not install a part that is documented solely under a UK CAA EASA Form 1 into an EU-registered aircraft.  It would appear likely that this also would apply to aircraft registered in non-EU nations (like Norway) that have agreed to follow EASA regulations.  This would include:

  • New parts with UK CAA EASA Form 1
  • Maintained parts released to service on a UK CAA EASA Form 1

In a practical sense, if you have an EASA Form 1 for a new part, and it was issued in the UK, then the EU will no longer recognize it as a valid document after Brexit.  This means that parts in your inventory that bear EASA Form 1 may have to be segregated and identified as “UK” and “EU,” in order to ensure that if they are still in inventory after Brexit, then they can be directed to customers who are legally able to use those parts.

How does a distributor tell if its EASA Form 1 certificates are affected?  Check block 1 of the form.  This is the block with the name of the regulatory authority.  If it says “UK CAA” in block one, then the EU will no longer recognize it as a valid tag after the withdrawal date (unless there is an agreement that changes the circumstances).  As an example, here is a link to a form issued under the legal authority granted by France’s DGAC; and here is a link to an overhaul tag issued under the legal authority granted by the UK CAA.

Some people might wonder about dual-certificated parts from the UK.  About 200 repair station in the UK have FAA Part 145 certifications, and they historically have been released to service, following maintenance, on a UK CAA EASA Form 1 that also indicates compliance with FAA Part 145 regulations.  The EU has a bilateral agreement with the United States … does this permit acceptance of the work because it was performed under US FAA standards (too)?  The answer is “no.”  The EU only accepts maintenance from the United States’ system when it also approved under the EASA 145 standards.  Because UK’s EASA 145 certificates (and all other certificates issued by the repair stations) will become invalid upon withdrawal, a dual US-UK approval will not be acceptable for introduction into the EASA system.

Possible UK Solutions

EASA has a solution.  But it may be a costly and unwieldy solution.

EASA has proposed to issue EASA certificates to businesses in the UK as “third-country.”  In fact, it started accepting applications on October 2.  “Third country” treatment means that the UK certificate holders get treated like any-old foreigners.  They need to pay as if they were foreign applicants.  They need to pay for all of the EASA-time spent in approval and oversight.

By way of comparison, the EU has a working arrangement agreement with Uzbekistan.  It is currently scheduled to have no agreement with the UK.  So the Uzbekistan CAA is scheduled to have a closer relationship with EASA than the UK CAA will have.  This doesn’t mean that the years of trust between EASA and UK CAA disappear.  In the interim between now and March 29 (while UK CAA is still a member of EASA), EASA will be relying on UK CAA to support audits of UK aviation businesses that apply for EASA certificates as third country applicants.

EASA issues a number of foreign certificates, but the two most important for aircraft parts distribution are likely to be production organization approvals and maintenance organization approvals.  Both are potentially available to UK businesses.  An EASA third-country production organization approval would permit a UK manufacturer to produce parts and issue an acceptable EASA Form 1 even after the withdrawal date.  An EASA maintenance organization approval would permit a UK repair station to maintain articles and issue an acceptable EASA Form 1 even after the withdrawal date.

The timing of third-country certificates appears to be uncertain.  It would make the most sense for EASA to issue the certificate on or before March 29 in order to allow seamless operations in support of aviation safety.  The earlier that   EASA is able to issue the certificate before March 29. the better for industry planning (including safety contingency planning).  But it is also possible that the European Union will not permit EASA to issue third-country certificates to businesses in the UK until after the withdrawal date (a lergal justification advanced for this delay is that UK is not a third country until the withdrawal date).

When a distributor looks at an EASA Form 1 certificate issued by a UK-based entity, if block 1 of the form says “EASA” then this is an indication that the relevant certificate was issued by EASA and not by the UK CAA.  If it says “EASA” in block one of the Form 1, then the EU should recognize it as a valid (“third country”) tag after the withdrawal date.

What happens to parts that were maintained or produced in the UK before withdrawal date, by a company that obtains a replacement EASA third country certification?  This would appear to establish a continuity of EASA approval; but the actual legal treatment of the certification is currently unknown.  It is equally possible that EASA could invalidate EVERYTHING with UK CAA in block one (for ease of determination) or it could decide to accept parts from UK certificate holders who subsequently obtain comparable EASA foreign approvals (causing potential complication in cases where there was a hiatus between the withdrawal date and the date on which the EASA foreign approval was issued).

US Acceptance of UK Maintenance and Production

The United States and the United Kingdom have pledged to work things out.  It is likely that there will be some difficulties at first (there always are), but both authorities seem optimistic about their desire to find a way to support safety and keep aviation flying.  They are actively negotiating a new bilateral agreement, with the understanding that they will be ready to use it if the UK CAA is unable to rely on EASA as their agent (and if the EU permits UK CAA to participate in EASA, then some of the following details will likely change).

An important element of the US-UK negotiations is the plan concerning UK-based repair stations.  As previously mentioned, there are about 200 repair stations in the UK that bear FAA credentials as well.  The plan appears to be

  1. Identify the repair stations whose FAA credentials will expire in the first six months after the withdrawal date;
  2. Renew the FAA credentials of those soon-expiring repair stations early, before the withdrawal date, so they can be renewed before March 29 under the EASA provisions;
  3. This early renewal of expiring repair station certificates in the UK allows the FAA to have a cushion of time to work-out the operating procedures with UK CAA without any emergencies forcing rash decisions;
  4. After the withdrawal date, FAA repair stations in the UK will be permitted to issue dual release 8130-3 tags under FAA and UK CAA authority.

Yes, you read that last bit correctly.  Repair stations in the UK would be permitted to issue 8130-3 tags as approval for return to service documents.  This unusual move is permitted, because FAA removed the geographic limitations on 8130-3 tags about a decade ago.  The UK repair stations in question hold FAA Part 145 certificates and are permitted to approve for return to service in accordance with 14 C.F.R. 43.9.  UK CAA is in favor of this solution because the 8130-3 tag is well-recognized internationally.

Other than these details, it is likely that much of the UK-US bilateral will resemble the US-EASA bilateral in order to minimize the differences and mitigate the change management issues associated with Brexit.

Conclusion

It is possible that the EU and the UK will enter into an agreement that permits UK CAA to remain a part of EASA.  It is also possible that Brexit could be reversed.  But, absent some other agreement, the EU will no longer accept UK-based EASA Form 1 for new parts, even if the Form was issued while the UK was still part of the EU, after the withdrawal date.

Distributors need to be prepared by:

  1. Assessing their inventory for susceptibility to Brexit issues based on UK CAA production and/or maintenance, and potentially segregating inventory in a way that eases identification;
    • Segregation could be physical or virtual, e.g. inventory could be managed through software;
    • Remember that we might not know who is willing to accept EASA Form 1 from the UK CAA until very close to the withdrawal date;
  2. Communicating with customers to understand their post-Brexit expectations;
  3. Establishing procedures for proper handling of UK CAA-tagged articles to ensure that they do not go to customers who cannot accept such articles;
  4. Training their personnel on how Brexit impacts the business and the customers;
  5. Communicating with UK-based partners to assess how they plan to deal with the changes.  For example, will your UK-based repair stations apply for EASA 145 under the third-country provisions?  Will your UK-based manufacturers apply for EASA POA under the third-country provisions?

Bear in mind that we’ve dealt here only with the airworthiness acceptance issues in this article.  Commercial relationships will be further complicated by myriad other issues, ranging from import tariffs to continued operations of aircraft.

This is a developing issue.  ASA will be taking steps to keep members informed, and ASA hopes to host discussions about the impact of Brexit in the near future.

Watch Out for Brexit – That EASA Form One Might Have a Shelf Life!

How will Brexit affect the typical ASA member?  Although the full details are as yet unknown, the prima facie thoughts have been published by the European Commission (EC), and these thoughts could reflect future problems for ASA members.  In summary, UK-originated EASA Form 1 will be considered invalid in the EU after Brexit.

The European Commission published a Notice to Stakeholders detailing the consequences of the UK’s withdrawal from the European Union’s aviation safety rules.  The Notice explains that when the UK leaves the European Union (EU), then from an EU perspective, this action will (1) invalidate all certificates issued by the UK CAA, and (2) invalidate all certificates issued by the UK CAA certificate holders.  Certificates will be invalid as of the withdrawal date, which is currently set for 11pm on March 29, 2019.

The Notice explains that “[t]he products, parts and appliances concerned will no longer be considered as certified in accordance with Article 5 of the Basic Regulation.”  Article 5 of the Basic Regulation provides the legal foundation for the issue of an EASA Form 1 for a part or appliance.  In a practical sense, if you have an EASA Form 1 for a new part, and it was issued in the UK, then the EU will no longer recognize it as a valid document after Brexit.  This means that parts in your inventory that bear EASA Form 1 may have to be segregated and identified as “UK” and “EU,” in order to ensure that if they are still in inventory after Brexit, that they can be directed to customers who are legally able to use those parts.
There is an grandfather-clause that applies to parts that are already installed on an aircraft.  It does not provide any safe harbor for parts already in a distributor’s inventory.
What about release to service documents issued by 145 organizations located in the UK?  These are issued on EASA Form 1 tags, but they are arguably do not reflect certification “in accordance with Article 5 of the Basic Regulation.”  This technical argument is unlikely to save those tags.  Another provision in the Notice makes it clear that:
“Certificates confirming compliance with the provisions of the Basic Regulation and its implementing rules issued before the withdrawal date … will no longer be valid.”
This would appear to apply to maintenance release documents, as well, because they are described in Annex IV of the basic regulation (and also because disallowing UK certificates as “third-party certificates” is consistent with the message of the Notice).
How do you know if a Form 1 is subject to these conditions?  Look in block one (in the upper left had corner).  That block identifies the aviation authority under whose legal authority the form was issued (usually by identifying the name of the nation and/or the name of the aviation authority).  As an example, here is a link to a form issued under the legal authority granted by France’s DGAC; and here is a link to an overhaul tag issued under the legal authority granted by the UK CAA.
It is possible that further negotiations will result in an agreement between the EU and the UK to change this declaration.  It is also possible that Brexit could be reversed.  But, absent some other agreement, the EU will no longer accept UK-based EASA Form 1 for new parts, even if the Form was issued while the UK was still part of the EU, after the withdrawal date.
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