U.S. Investigation Could Lead to Extraordinary Aircraft Parts Tariffs

May 10, 2025 by 1 Comment

This week, the U.S. will start a process that could impose restrictions on the U.S. import of foreign aircraft and their parts; this could affect Airbus, Embraer and Bombardier aircraft and it could affect non-U.S. components from well-known companies like BAE Systems, Safran, Thales, etc. You have an opportunity to do something about it.

The Federal Register announcement starting the process is expected to be published on May 13th.

Section 232 Investigation

The United States is opening a “section 232 investigation” into the commercial aviation market (the formal scope is “Commercial Aircraft and Jet Engines and Parts for Commercial Aircraft and
Jet Engines”). This is a process that could authorize the President to take extraordinary action to affect trade in civil aviation (including special aircraft parts tariffs). An announcement of this investigation is expected to be published in the Federal Register on May 13. Industry will likely only have 21 days to file comments.

When a “section 232 investigation” is opened, the Commerce Department has 270 days to prepare a report advising the President on whether the targeted product is being imported “in such quantities or under such circumstances as to threaten to impair the national security” of the United States.  Commerce is expected to provide recommendations based on its findings.

Past section 232 investigations into steel and aluminum led to the 25% tariffs on these materials and certain articles made from steel and aluminum.  The tariffs on automobiles and certain automotive parts were also a response to a section 232 investigation initiated in President Trump’s first term as President.

There are a number of tools available to the President if a section 232 investigation suggests a threat to national security.  The President can enter into negotiations to secure supplies necessary to the United States, the President can also establish tariffs intended to protect domestic market from non-US competition.  The President can also establish other import limits (like embargoes) designed to protect the domestic market. 

There are a number of elements that the United States must take into account under Section 232.  These include:

  • domestic production needed for projected national defense requirements
  • capacity of domestic industries to meet such requirements
  • existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense
  • the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth
  • the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements
  • the impact of foreign competition on the economic welfare of individual domestic industries
  • any substantial unemployment, decrease in revenues of government, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive imports

If you think that restriction on the import of non-US aircraft and aircraft goods could be a problem for your business, or if you support such a restriction, then you should file comments to the docket at www.regulations.gov.  The regulations.gov ID for this investigation is BIS-2025-0027 (this link will not be live until the Federal Register publication). Please refer to XRIN 0694-XC127 in all comments.

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EU Proposes Tariff Targets – Some (But Not All) Aircraft Parts Would be Affected

May 8, 2025 by Leave a comment

The European Union has published an updated list of proposed tariff targets. The title of this list is “List of the products originating in or from the United States which could be subject to possible commercial policy measures.” The link is to version 1.1 so be wary that the EU could further update this list.

The EU is seeking public comment on their proposed list of tariff targets. If the negotiations between the US and the EU do not yield an elimination of the duty imposed on all products of the EU, then the EU could implement these tariffs to impose a duty on products of the United States.

The proposed list is estimated to reflect imports from the US worth €95 billion.

The proposed list includes complete aircraft under headings 8802 (helicopters and airplanes) and 8806 (unmanned aircraft). Aircraft parts under heading 8807 are NOT included on the proposed list.

It is important to remember that many aircraft parts are NOT classified under heading 8807 because there is a more specific tariff heading that applies to them. Some aircraft parts would be affected by the proposed EU reciprocal tariffs. For example, the following aircraft parts classifications are included on the EU tariff proposal (this is a list of examples and is not meant to be exhaustive):

Tariff SubheadingDescription
40113000 new pneumatic tires, of rubber, of a kind used for aircraft
40121300 retreaded pneumatic tires, of rubber, of a kind used on aircraft
70071190toughened “tempered” safety glass, of size and shape suitable for incorporation in aircraft, spacecraft, vessels or other vehicles
85443000 ignition wiring sets and other wiring sets for vehicles, aircraft or ships
90142080 instruments and appliances for aeronautical or space navigation (excl. inertial navigation systems, compasses and radio navigational equipment)
91040000 instrument panel clocks and clocks of a similar type for vehicles, aircraft, vessels and other vehicles
94019110parts of seats used for aircraft, of wood, n.e.s
94019910 parts of seats used for aircraft, n.e.s.

The EU has explained its position in a press release.

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Tariffs DELAYED on Canadian and Mexican Goods

March 7, 2025 by Leave a comment

The President has issued two new executive orders providing some relief from tariffs on products of Canada and Mexico.

The essence of the two executive orders is that Canadian and/or Mexican goods that are subject to general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS) may be entered under the duty-free provisions of that note. The note implements the trade agreement between the United States, Mexico, and Canada. This represents an alternative path to the one traditionally taken by aircraft parts importers, who often rely on the traditional zero-duty provisions that apply to many aircraft parts.

The good news is that many aircraft parts from these two jurisdictions are likely to be covered under this general note 11, so they can continue to enter duty-free until the expiration of this executive order. There is no stated expiration in either executive order; however the President has announced in social media that this forbearance shall only last until April 2, 2025.

The bad news is that there may be different documentation and analysis required to properly claim the duty-free treatment, so it may require importers to perform some additional due diligence and paperwork to support the claim of duty-free treatment.

In each case, the tariffs apply to products of Canada and Mexico, so aircraft parts that are products of these countries will be affected; and the dutiable value of maintenance that is performed in these two countries may also be affected.

As always, the implementation in the Federal Register could vary from the language of the executive order, so pay careful attention to the actual Federal Register publication implementing these executive orders.

Resources

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New Tariffs Will Increase Costs for Certain Parts

February 1, 2025 by 1 Comment

The United States has issued new tariffs on products from Canada, China, and Mexico.  These new tariffs go into effect for all products from those countries.  This includes aircraft, aircraft engines, and aircraft parts. The announced tariffs will apply a duty of 25% on products of Canada and Mexico and 10% on products of China. These duties represent a tax on the value of the goods that must be paid by the importer.

If your company is importing goods from one of these jurisdictions, then you will need to make sure that the proper tariff codes are declared, and the duties are paid. Typically, the importer must make sure that the import-declarations identify the base tariff code for the good in question, and also identify any additional special tariff codes, such as the codes for these country-based tariffs. The proper tariff codes for these additional tariffs have not yet been published, but we hope that we will be able to identify and publish them soon for your benefit.

These tariffs will apply to aircraft, engines and parts that are manufactured in Canada, China or Mexico (in addition to all other goods from those jurisdictions).  Normally, most aircraft parts are imported into the United States duty-free, so the duties imposed by the new tariffs will be a significant change.

Canadian aerospace product examples include (this is not a complete list!):

  • Bell helicopters manufactured in Mirabel, Quebec
  • Bombardier Aircraft
  • De Havilland Aircraft of Canada
  • Diamond Aircraft
  • Pratt & Whitney Canada Engines

In 2023, the Canadian aerospace manufacturing industry exported over $19B of aerospace products.

Hours after the announcement, Canada and Mexico announced that they would both be issuing retaliatory tariffs. At present those tariffs do not appear to include aircraft parts, but that could change.

Many aircraft parts from China are already subject to a 25% tariff under tariff code 9903.88.01; the new 10% tariff will be in addition to the existing 25% tariff.

The new U.S. duties go into effect as of 12:01 a.m. eastern time on Tuesday, February 4, 2025. 

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Export Enforcement is Earning High Level Attention

September 24, 2024 by Leave a comment

The G7 is taking an interest in export enforcement, and this could affect everyone in aviation.

The G7 has announced new cooperation and new guidance for the world’s exporting community. The G7 is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The European Union also participates in the Group.

The G7 Sub-Working Group on Export Control Enforcement met today (September 24) and published new guidance on the prevention of diversion of high priority goods to Russia. Russia is a particular focus of this group partly because of the Ukrainian invasion, but also partly because of the significant efforts that Russia has made to circumvent sanctions.

The identified high priority goods included aircraft parts (Tariff Code 8807.30), avionics (Tariff Code 9014.20) and other navigational instruments and appliance (Tariff Code 9014.80). Thus, this reaffirms that aviation is a high priority target for diversion and it is also a high priority target for government enforcement.

The newest G7 guidance includes a list of red flags that should cause additional scrutiny if they arise in your transactions:

  • Sudden changes in business activity after 24 February 2022, or after subsequent changes in export controls/sanctions
  • False, inaccurate, or missing documentation
  • Concealing the end user (remember, there is a U.S. legal obligation to show end use compliance when exporting aircraft parts intended for installation on foreign aircraft (15 C.F.R. § 744.7))
  • Inconsistencies in the transaction
  • Vague details and/or incomplete information
  • Dividing an invoice value into smaller amounts to remain under value limits of sanctioned goods or export controls
  • Suspicious customer information
  • Customer has connections of concern
  • Concerning business practices
  • Last-minute changes to parties involved with the transaction from an entity in Russia or Belarus to an entity in another country
  • Payments from entities located in third countries that are not otherwise involved with the transactions, particularly through a sanctioned country
  • Customer unwilling to provide certification that it will not sell items to Russia or sanctioned parties in third countries

There are examples in the G7 document for each of these bullets so be sure to click through and look at the full list of red flags and examples. Many of the latest red flag examples represent fact patterns that we’ve seen arise in the aviation community.

There is also a recommended due diligence outline in the G7 document, but this is a very short outline that might be inadequate for most aircraft parts transactions subject to U.S. law.

The Aviation Suppliers Association will be covering export compliance analysis and due diligence topics during its popular Export Week! seminars on October 7-11, 2024. These are short (30 minutes of content followed by a 15 minute question period) lunch-time (11:30 am eastern time) session designed to educate the community about export compliance without overwhelming the audience with jargon and a mountain of regulations. The seminars are free for ASA members! I hope to see you all, there!

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ASA in Japan to Support the Airline Community

September 19, 2024 by Leave a comment

ASA spent the day today with All Nippon Airways (ANA), meeting with several different departments at both the airport offices and the downtown offices. This is part of ASA’s continuing global commitment to aircraft parts education.

We held Q&A sessions at both sites with a mix of pre-solicited and live questions from ANA staff. Topics included FAA parts approval (including PMA and TSOA), documentation, designees, traceability norms, distributor accreditation, bilateral airworthiness safety agreements, the application of US export law to parts transactions, contract issues – just to name a few of them!

We were able to address some of the concerns that might have otherwise inhibited an air carrier like ANA from buying airworthy parts from sources outside of Japan. By keeping the lines of communication open, we hope to keep the purchasing lines open between ANA and our other members.

Tomorrow (Friday), ASA will join MARPA in hosting the Japan Aircraft Parts Education Seminar. This seminar sold out at 130 seats with attendance by Japanese air carriers, MROs and manufacturers. The speakers come from American Airlines, Chromalloy, Delta Air Lines, the FAA, Heico, Jet Parts Engineering, Mid-American Aerospace and Wencor.

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Does the European Deforestation Regulation (EUDR) Affect Aircraft Parts Businesses?

September 3, 2024 by Leave a comment

Does the European Deforestation Regulation (EUDR) affect your business? The EUDR has been the subject of discussion in the aircraft parts community and is leading to questions about the compliance strategies that aviation companies should be taking. 

Background

The EU is continuing to work with partner countries and companies to ensure a successful transition to deforestation-free supply chains.  As part of this, the deforestation rule  (EUDR) was promulgated to prevent the import of articles that are the product of a deforestation event.

The EUDR goes into effect on December 30, 2024, and Europeans are taking steps to prepare for the new rule.  These steps include European companies sending messages to their non-European partners asking them to support compliance.  If you get a note from a European partner about the new rule, then here are the things you need to know:

  1. The scope of the rule is limited and very few aircraft parts appear to be affected;
  2. If you are exporting a product that is potentially affected (see the chart below) then you will need to assess whether that product contains one of the relevant commodities (cattle, cocoa, coffee, oil palm, rubber, soy or wood);
  3. If you are exporting an affected product and it contains one of the relevant commodities then you will have an obligation to ensure the commodity is not sourced from land subject to deforestation after December 31, 2020.

What Products Are Affected?

The good news for the aviation community is that very little in our community can be affected by this new rule.

The scope of the rule is tied to Combined Nomenclature (CN) codes. CN codes are analogous to the harmonized tariff codes used in other countries. The new rule will affect products whose CN code falls into one of the listed categories (found in annex I to the new rule), but only when the relevant product contains, has been fed with, or has been made using one of the following: cattle, cocoa, coffee, oil palm, rubber, soy or wood.

We thus will start with the CN codes.  This is important because many aircraft parts are under CN codes that are not affected by the new rule, so the fact that they are made from an affected commodity (like rubber) will not matter when their CN code is not subject to the rule..

The categories most likely to affect the aircraft parts community include:

CN CodeProduct
4011New pneumatic tires, of rubber
4012Retreaded or used pneumatic tires of rubber; solid or cushion tires, tire treads and tire flaps, of rubber
4013Rubber inner tubes
4016Other articles of vulcanised rubber other than hard rubber, not elsewhere specified in chapter 40
4017Hard rubber (e.g. ebonite) in all forms including waste and scrap; articles of hard rubber
4415Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood (not including packing material used exclusively as packing material to support, protect or carry another product placed on the market)
4417Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood
49xxPrinted books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans, of paper

Note that this is not a complete list of affected products (for example, leather or rubber that is used as a raw material is likely to be covered under this new rule).  If you want to look at the entire list then you can find it in annex I of the EUDR rule, or you can find a reproduction of Annex I here, on duracert’s website. It is worth noting that an aircraft part that is imported as an aircraft part under CN heading 8807 will not be affected by this new rule because it falls under a CN code that is not listed.

Are There Affected Aircraft Parts?

There will be some aircraft parts that could be affected by the EUDR. They key will be the CN code that applies to the parts. For example, O-rings made of rubber may fall within heading HTSUS 4016 under U.S. law (the link is to a U.S. Customs ruling distinguishing synthetic rubber O-rings from those made of plastics). This means that they are likely to also fall within CN Code 4016 under EU law, which is within the scope of the deforestation regulation.

Be careful to classify your article correctly! One of the U.S. customs rulings specifies that O-rings made of Viton and silicone were not rubber products and fell within HTSUS heading 3926 (the corollary CN Code would be outside of the scope of the EUDR.

Other articles that could be classified under the rubber headings include neoprene rubber plugs which are likely to fall within heading 4016.

[NOTE: the links in this section are all to US Customs rulings; these are not binding on EU CN Code classifications, but they are analogous so they are used to demonstrate the scope of particles that could be classified under the deforestation regulations ]

What if I am Exporting a Relevant Product to the Europe Union?

If you discover that you are exporting a relevant product to the EU, and that the relevant product contains one of the affected commodities, then you will have an obligation to ensure that the relevant product does not contain (and was not made from) affected commodities that were produced on land subject to deforestation after 31 December, 2020.

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BIS Recommends New Export Screening Steps

July 10, 2024 by Leave a comment

Today, the Department of Commerce’s Bureau of Industry and Security (BIS) has published new guidance reminding the export community about the dangers of divergence of goods to Russia.  This new BIS guidance outlines additional recommendations for screening transactions.

High Priority List (Including Aircraft Parts)

BIS has identified a list of 50 Common High Priority List (CHPL) items.  These are items that Russia has been procuring to support its weapons programs.  For this reason, these 50 items have been identified as special focus items for scrutiny to avoid divergence of shipments to Russia.  This list includes aircraft parts (particularly those subject to HTSUS 8807.30), bearings (particularly those subject to HTSUS Heading 8482) and certain instruments and appliances subject to HTSUS Heading 9014. Exporters should be sure to look at the full list to get an idea of the full scope of this CHPL list.

The CHPL list is meant to drive a heightened scrutiny of certain transactions, to ensure that they cannot be diverted to Russia.  BIS expects that exporters will ensure compliance for every export, but has asked for extra diligence in the scrutiny applied to transaction in the 50 CHPL articles.

Additional Screening Recommendations

BIS has recommended that for CHPL items, exporters screen the transaction parties against the Trade Integrity Project (TIP) website.

The TIP website includes a list of companies that have exported certain materials into Russia.  TIP was developed by the UK-based Open-Source Centre for monitoring trade with Russia. The TIP website specifically focuses on trade in CHPL items, and displays entities that have shipped CHPL items to Russia since 2023. It is based on publicly available trade data. TIP does not reflect all exports into Russia, and it may not include some companies that have exported aircraft parts into Russia.  The TIP website is meant to support export diligence investigations, but it should not be your only resource.

We have recommended Import Genius as another good resource for identifying companies that have exported goods to Russia; but we have also warned that this is also a starting point for scrutiny; we have heard about U.S. companies who are falsely listed as the source of goods by the actual exporters, so it is important to check out the data you find. Using Import Genius is NOT part of the latest BIS screening recommendation.

If you discover that the partner in question has been selling to Russia, then this may reflect a red flag that needs to be cleared before the transaction can be completed. For example, if you are selling to a distributor who is on the TIP list, but they ask you to drop ship the goods directly to a legal end user in a place like the UK (particularly if you get a signed end-use-statement from the end user validating the compliance elements), then this might be sufficient to clear a red flag that would otherwise casts a shadow over other transactions.

BIS Warning Letters

BIS is issuing two different types of letters to warn companies about their business partners who may be violating US export laws:

  • Red Flag Letters
  • Is Informed Letters

If BIS believes that one of your partners may have violated the export laws (such as by illegally diverting goods to Russia) then BIS may send you a “red flag” letter. A “red flag” letter informs you of the BIS suspicions, and imposes on your company an additional burden to clear the red flag before continuing to do business with the partner. A company that receives a “red flag” letter should conduct additional due diligence to resolve and overcome the red flag identified by BIS before filling an order from the identified partner.

BIS may inform you that a license is required for export, reexport or transfer of items to a specified end-user because BIS has determined that there is an unacceptable risk of diversion (e.g. because of a threat of diversion to a military end user in a restricted country). This is known as an “Is Informed” letter. When you receive this sort of communication, then you are typically required to comply with the restriction (if the communication is oral then it will usually be followed by a written communication within two days). In most cases, this means that you will need a license for the transaction, and it may cancel prior licenses. From an enforcement perspective, non-compliance with an “is informed letter” is treated the same as non-compliance with any other license requirement under the regulations and may be subject to penalties.

If you receive a “red flag” letter or an “is informed” letter than you should coordinate your actions with an export attorney.

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Export Week!

October 6, 2023 by Leave a comment

Are you struggling with export compliance? ASA is here to help!

The U.S. government has been actively investigating aircraft parts export transactions. There is a concern about circumvention which could result in aircraft parts from the United States being exported or re-exported to sanctioned destinations.

As part of the Association’s ongoing commitment to compliance, ASA will be hosting Export Week! next week. Export Week! is a series of five webinars discussing export compliance for aircraft parts exporters.

  • Monday, October 9 (11:30 am ET) – Introduction to Export Compliance and OFAC Compliance
  • Tuesday, October 10 (11:30 am ET) – Aircraft Part Compliance: Distinguishing EAR Jurisdiction (BIS) from ITAR Jurisdiction (DDTC); Identifying Your ECCN and Using it to Establish the Destination Restrictions
  • Wednesday, October 11 (11:30 am ET) – Aircraft Part Compliance: Forbidden Parties, Use-based Reasons for Control, Aviation-specific rules
  • Thursday, October 12 (11:30 am ET) – Aircraft Part Compliance: Special Destination Sanctions Including the Russia Sanctions, and Anti-Boycott Provisions
  • Friday, October 13 (11:30 am ET) – Aircraft Part Compliance: Licensing and License Exceptions

Each webinar lasts 45 minutes, with 30 minutes of training and 15 minutes for questions and answers. They are scheduled for 11:30 eastern time (lunch-time on the U.S. east coast — a nice time for a coffee break in other time zones) so grab a lunch, snack, or a cup of coffee and join us to learn about how to keep out of trouble when you export aircraft parts

You can register for the webinar series on ASA’s website. The webinars are free for ASA members. If you are not an ASA member then one registration fee allows you to register for the entire series.

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United States Indicts Four in Alleged Aircraft Parts Scheme

June 30, 2022 by Leave a comment

The United States has indicted four people for fraud related to aircraft parts transactions. The indictment alleges that an air carrier employee directed aircraft parts transactions to the other defendants in exchange for kickbacks.

According to the indictment, the air carrier employee would text a part number and a “price ceiling” to the other defendants, and then the defendants would know to quote below or at the price ceiling in order to win the business. The indictment alleges that a percentage of the parts sales was paid as a kickback to the air carrier employee.

The government has accused the defendants of conspiracy to commit fraud (in that the air carrier was denied the honest services of its employee) as well as wire fraud (18 U.S.C. 1343) for using wire services to transmit the proceeds of the scheme.

The indictment names four individuals, bu not their companies, as defendants. It is important to remember that an indictment is just the government’s allegations. These factual allegations have not yet been tested against the defendants’ stories, and the actual facts adduced at trial could differ substantially from the facts alleged in the indictment.

Regardless of the facts of this matter, the matter illustrates the importance of having corporate rules that prevent buyers from taking things of substantial value from seller, and corporate rules that prevent sales agents from providing undisclosed gifts or kickbacks to buyers. If you think that a transaction could be characterized as unethical or as unfair, or if you identify any other red flags, then it is always best to consult with an attorney to ensure that the transaction does not violate any laws.

Resources:

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