The New UK: Post-Brexit EU-UK Aircraft Parts Transactions Are Still Up-in-the-Air (but some post-transition options remain)

With two weeks left before the end of the year – and the end of the Brexit Withdrawal Transition period – there is still no trade deal between the UK and the EU. With no trade deal, we have no basis for a continued relationship between the UK CAA and EASA.

This raises questions about what aircraft parts can be accepted between the UK CAA and EU EASA systems after December 31, 2020. This article provides preliminary advice, but this advice is current as of the time of publication. Trade negotiations between the UK and the EU are ongoing, and a concluded trade deal could either render this analysis obsolete, or it could authorize EASA and UK CAA to negotiate an obsolescence to this analysis.

UK Position

Under the UK’s EU Withdrawal Act, as amended, all EU regulations (including EASA regulations) that are active upon withdrawal will become UK regulations. This means that the EASA regulations will be adopted in the UK, so the UK will have a robust and familiar regulatory structure upon withdrawal.

The UK CAA has made it clear that they do not want to inhibit operations over legal technicalities, but instead they would like to remain laser-focused on airworthiness. With this in mind, the UK CAA has stated repeatedly that it will recognize EASA certificates, approvals and licenses for use in the UK aviation system and on UK-registered aircraft for up to two years after the exit date. This provides a cushion for UK-registered aircraft to be able to rely on EASA-approved parts, maintenance providers, and other certificates, for an extended period of time while trade negotiations continue between the UK and the EU.

EU Position

The EU has not been as generous in its acceptance of UK certificate, but it has made provision for acceptance of certain certificates and approvals as long as they are for goods put into the market before the end of the transition period.

EASA is likely to accept EASA Form 1s that are issued by certificate holders in the UK before the end of the transition period (before January 1, 2021) to support transactions in accordance with Article 41 of the Withdrawal Agreement (note that this is a different instrument from the previously-mentioned Withdrawal Act). Article 41 explains that goods “placed on the market” before the end of the transition period will continue to be considered “valid” under the laws of both parties until those goods (1) reach their end-user, or (2) are put into service (e.g. installed on a registered aircraft).

For the purposes of these provisions, “placing on the market” means the first supply of a good for distribution, consumption or use in the course of a commercial activity, whether in return or payment or free of charge.  ‘Supply of a good for distribution, consumption or use’ means that ‘an existing and individually identifiable good, after the stage of manufacturing has taken place, is the subject matter of a written or verbal agreement between two or more legal or natural persons for the transfer of ownership, any other property right, or possession concerning the good in question, or is the subject matter of an offer to a legal or natural person or persons to conclude such an agreement.”  ”Putting into service” means “the first use of a good within the Union or the United Kingdom by the end user for the purposes for which it was intended […].’

Notice to Stakeholders: Withdrawal of the United Kingdom and EU Aviation Safety Rules, Para 3.1 (Rev. 2: March 16, 2020).

You can see from this quote that an aircraft part need only be the subject of an offer of sale (or an actual sale) before January 1, 2021 to be protected under Article 41.

The end user has a burden to show that the goods were put into commerce before the end of the transition period (Under Article 42), so expect to see EU customers asking for such proof. Note that you can have goods that are subject to a sales agreement before the end of the transition period, and this may be sufficient for the goods to have been “placed on the market” under the rules. Thus, items of proof could include purchase orders, sales orders, invoices, or other commercial documents showing that the transaction was sufficiently contemplated to meet the definitions before the end of the transition period.

But aircraft parts produced under a UK production approval after December 31, 2020 will not be considered valid for installation on an EU-registered aircraft unless (1) EU promulgates a regulation or other enforceable standard permitting such installation, or (2) EU and UK conclude an agreement – like a bilateral airworthiness safety agreement – permitting such reliance. A precursor to such an aviation safety agreement may be the successful conclusion of a trade agreement between the UK and the EU (and these negotiations are still ongoing). The same issue applies to maintenance performed on an aircraft part and released by a UK CAA 145 after the end of the transition period.

To address this issue, many UK production organization approval holders have sought EASA production organization approval, and many UK maintenance providers have sought EASA maintenance organization approval. EASA plans to issue these approvals at midnight, as the transition period ends. Owners of EU-registered aircraft will be able to accept articles released under these UK-based EASA certificates just like they can accept articles released by any other EASA certificate holder.