Exporting Parts for UAVs and/or Drones

June 3, 2026 by Leave a comment

Drones and other unmanned vehicles are becoming more and more prevalent. They are being used for defense purposes as well as a wider variety of civil aviation purposes. If you plan to export an article for installation on an unmanned aerial vehicle (UAV), then there is a chance you might need to check the export compliance status for this transaction!

This list of questions is intended to help examine an article export where the article may be destined for installation on a UAV:

  1. Is the part intended for use in the design, development, production, operation, installation, maintenance, repair, overhaul, or refurbishment of a UAV? If “no” then go to Question #5.
  2. If the Answer to Question #1 is Yes, then is the UAV capable of a range of at least 300 kilometers? If “no” then go to Question #5.
  3. If the Answer to Question #2 is Yes, then does the transaction have any nexus to a country listed in 15 C.F.R. Part 740. Suppl. No. 1, Country Group D:4? If “no” then go to Question #5.
  4. If the Answer to Question #3 is Yes, then you should consult with a professional because your transaction may require a license.
  5. Is the part intended for delivery of chemical weapons, biological weapons, or nuclear weapons by a UAV? If the Answer to this Question #5 is Yes, then you should consult with a professional because your transaction may require a license.
  6. If the part is destined for installation on a UAV with any nexus to a country listed in 15 C.F.R. Part 740. Suppl. No. 1, Country Group D:4, but you cannot identify the range (per question 2) and you cannot identify whether the UAV will be used for delivery of chemical weapons, biological weapons, or nuclear weapons (per question 5), then this uncertainty will also drive a licensing obligation.

For the full regulation on UAV special use rules, see 15 C.F.R. § 744.3.

This is just one of the many export regulations that we will be examining at the ASA/AFRA Annual Conference, on June 14-16, in Las Vegas, Nevada. Check out the conference agenda for full details on this and many other workshops available at the conference!

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Special Rules for Aircraft Parts Exports

July 27, 2023 by Leave a comment

Do you export aircraft parts? If you do, then you may need to complete the EXTRA compliance checks that apply to foreign aircraft. Often, the export compliance analysis required leads to a need to specifically identify the foreign aircraft on which the parts will be installed.

When you export aircraft parts from the U.S., and the parts are intended for installation on a foreign registered aircraft, you need to perform an extra layer of analysis to ensure export law compliance. The U.S. export regulations specify that you need to identify and check all of these locations:

  • The country to which the part is being exported (which is part of the normal export assessment);
  • Any intermediate nations (also part of the normal export assessment);
  • The country in which the foreign aircraft is located (15 C.F.R. § 744.7(a)(1));
  • The country in which the aircraft is registered – you can often check the tail number against the country’s aircraft registry to confirm this information (15 C.F.R. § 744.7(a)(2));
  • The country which is currently controlling, leasing, or chartering the vessel or aircraft (this applies if a nation has operational control of the aircraft) (15 C.F.R. § 744.7(a)(3)); and
  • The country of the person who is currently controlling, leasing, or chartering the aircraft (this applies if a person has operational control of the aircraft – this country can be the incorporation location of a business or the nationality of a natural person) (15 C.F.R. § 744.7(a)(3)).

For each of the locations that you identified based on the bullet points above, you need to assess whether you can export to that location without a license (“No License Required” or “NLR”), or under an applicable license exception. If the answer is “no” for any of the locations, then the transaction typically needs to be licensed.

As an example, assume that you are exporting a garden-variety aircraft part for installation in a private aircraft that is registered in Ireland and owned by an Irish leasing company. The part is controlled under ECCN 9A991. The aircraft is currently located in Ireland, where it is awaiting service at an Irish repair station. The aircraft is leased and operated by a Russian citizen. You need to perform an analysis of this export as if it were going to Ireland (which it is) and also as if it were going to Russia. There is typically no license required to export this part to Ireland, but exporting the same part to Russia is restricted under the Russia/Belarus rules. Because of the interaction between the Russia/Belarus rules (15 C.F.R. § 746.8) and the foreign aircraft rules (15 C.F.R. § 744.7), a license would be required to export this part for installation on an aircraft controlled/leased by a Russian citizen. Note that this transaction would not be able to benefit from license exception AVS under the limits of the Russia/Belarus rules (15 C.F.R. § 746.8) because of the specific limits imposed on AVS under that rule.

What about a foreign airline that wants to obtain parts for stock? If that airline only flies non-U.S. registered aircraft, and the part is destined for installation on their fleet, then you reasonably know that the part is destined for installation on a non-U.S. registered aircraft and you ought to be performing this analysis. Ask the airline to verify that the part will only be used on their fleet (confirm the countries of registry for their fleet), and ask them to identify where their maintenance is performed (location of aircraft at time of installation). The jurisdictions identified (registry, aircraft location and operator’s nationality) can be scrutinized to determine whether the requirements of 744.7 are met for the entire fleet; this allows you to support the airline without knowing the specific identity of the target aircraft.

What about domestic transactions? The foreign aircraft rule only applies to export transactions to, or for the use of, a foreign aircraft. So it does not apply to domestic (non-export) transactions, including domestic transactions that anticipate installation on a foreign aircraft while it is legally in the United States. But there are exceptions, including the one we will cover in the next paragraph.

What if I am selling to someone that I know will violate the export laws? It is important to remember that if you support someone else’s export, while knowing that they intend to violate the export laws, then this is also a violation. This restriction is known as General Prohibition Ten. It means that if you sell a part to someone else, knowing that they intend to export it illegally, then you have committed a violation, yourself.

Let’s look at an example: S7 Airlines is currently subject to a temporary denial order under the Export Administration Regulations. You are contacted by a U.S.-based distributor who tells you that it is buying parts for export to S7 Airlines. The part that the distributor is seeking from you is subject to the Export Administration Regulations (most civil aircraft parts are subject to the Export Administration Regulations). This distributor asks you to engage in a wholly domestic transaction by shipping the part to their location in New Jersey. If you sold a part entirely within the United States, to a domestic distributor, after that distributor had said that it intends to export the part to S7 Airlines (who is subject to a BIS denial order), then you would have violated General Prohibition Ten, even though your transaction was not an export. The reason for this is because your sale is made with knowledge that the aircraft part will be exported in violation of the Export Administration Regulations.

Conclusion

Exporting aircraft parts is tricky and sometimes an aircraft part export transaction requires special research and analysis to identify the correct compliance path. There can be more than one regulatory regime that applies to the transaction. If you are not sure whether you are doing the right thing, then take a step back and make sure that you are complying with the correct laws and regulations.

ASA has a number of resources to support your efforts. We provide export compliance training on a regular basis – ASA is next planning to hold export compliance training for its members in October.

My law firm also supports export compliance by helping companies to build compliance systems, by auditing their existing compliance systems, and by analyzing tough transactions to help identify the correct compliance path (we also support companies in seeking licenses from the US government, as necessary).

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Russia Sanctions FAQ: Return of Goods

February 28, 2022 by 1 Comment

QUESTION – RETURN OF GOODS: I was managing repairs for a Russian air carrier and I still have aircraft articles from Russia in my inventory.  Can I just return them to Russia?

There are new requirements that apply to this sort of transaction. Even though these requirements have not yet been published in the Federal Register, they are effective as of February 24. The new BIS requirements can be found online.

A license will typically be required for the return to Russia of anything in CCL Categories 3 through 9.  Most aircraft articles fall into an ECCN in CCL categories 3 through 9 (for example, many aircraft articles are identified in ECCN 9A991, which is in CCL Category 9).  Such articles are subject to the new licensing requirements.  So this means that you typically cannot return the articles to a Russian airline unless you obtain a license.

There is currently a presumption of denial on Russia licenses under the new BIS rules, so you will need a compelling reason to be able to obtain a license.

Only certain special license exceptions can be used to overcome this licensing provision.  15 C.F.R. § 746.8(c). For the aviation industry, the most useful of these is typically AVS, which is for aircraft parts. SPOILER ALERT: You can’t use AVS to overcome the new Russia sanctions and send something to a Russian airline for use on their planes.

The new regulations permit reliance on the first two subsections of the AVS license exception (15 C.F.R. § 740.15(a) and (b)). AVS permits the export of aircraft parts for permanent use on an aircraft, when those parts are necessary for the proper operation of the aircraft (such as parts included on the type design). Typically, to use this AVS exception you need to know the destination aircraft. This license exception does not apply to an aircraft registered in, owned or controlled by, or under charter or lease to a country included in Country Group D:1, Cuba, or a national of any of these countries. Russia is found in country group D:1, so you cannot use AVS for a Russian-owned/controlled aircraft but you could potentially use it to support a non-Russian aircraft.

The licensing obligation also generally applies to Russia-destined re-exports (such as things that started in the US, and are now contemplated to be exported from a non-US country to Russia). Your actual fact pattern can complicate things so if this is a potential issue for you, then you should be asking a lawyer for advice on your specific facts.

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When is an End User Statement like the BIS-711 Required?

January 24, 2022 by Leave a comment

When you export articles, do you ask the ultimate consignee and/or purchaser to complete a supporting statement?  These sorts of statements can be found under a number of different names, like:

  • BIS-711
  • Statement by Ultimate Consignee and Purchaser
  • End Use/End User Statement
  • Non-Diversion Pledge
  • Import Certificate

No matter what you call it, though, we are typically talking about a statement from the intermediate user and/or the end user of an export in which that person pledges not to use or re-export the article in violation of U.S. export laws.

Statements of this sort have become fairly standard in export transactions involving aircraft parts.  I frequently get asked about what is required, and the is a tremendous difference between when these statements are required and when they are merely advisable.  This article explains both conditions.

When is the Statement Required?

The United States has published a form – the BIS-711 – that is used for obtaining this sort of information.  That form (or a permissible substitute) is required when the following conditions are met:

  • The exporter is seeking a license
  • The license is for 600-series Major Defense Equipment
  • The export is destined for any place other than China

When the conditions are met, the BIS-711 is completed by the ultimate consignee/purchaser and is submitted as part of the license application.  This is the only situation in which the BIS-711 is required.  15 C.F.R. § 748.11.

Even when the form appears to be required, there are exceptions.  For example, when exporting 600-series aircraft parts to China that need a license and are valued at more than $50,000, the exporter is expected to work with the importer to obtain the PRC End-User Certificate from the Chinese government.  15 C.F.R. § 748.10.  There are circumstances where 600-series aircraft parts worth between $50,000 and $75,000 can be documented on a BIS-711 in lieu of the PRC End-User Certificate.  15 C.F.R. § 748.11(a)(2).  As a matter of practice, I have seen license applications (for goods destined for China) that were accepted with bespoke certifications created by an attorney, instead of the PRC End-User Certificate that is called-out in the regulations.

Another exception exists where the ultimate consignee/purchaser signs a statement on company letterhead that includes the important elements of BIS-711 (a complete list of the elements can be found in Supplement No. 3 to Part 748 of the Commerce Department regulations. 

BIS is allowed to require the BIS-711 on a case-by-case basis.  So if BIS tells you to obtain the BIS-711 for your license application, then this imposes the requirement even if the regulations did not previously impose it.

The purpose of the BIS-711 (or other letter) is to provide information on the foreign importer receiving the U.S. article and on how the article will be utilized. The BIS-711 or letter is intended to provide assurances from the importer that the article will not be misused, transferred or re-exported in violation of the U.S. export regulations.  Obviously, this sort of information can be useful even in situations where the form is not required.  So there are situations where the form becomes advisable.

When is the Statement (Merely) Advisable?

It is easy to see that the BIS-711, and statements similar to that form, are completed in many aircraft parts export situations where such forms are not required by the BIS’ regulations.  It is more common to see bespoke statements in these other situations, but I have seen a good number of requesters who claim that the form is “required by regulation,” when it often is not so-required.

So if the form isn’t required by the regulations then why do we need to get a signature?

One reason that companies sometimes use forms that look like the BIS-711 is to ensure that they are getting the right information from their business partners, and to ensure that their business partner is committed to the facts that it has provided:

  • This can help to establish the facts.  Some people will gloss over facts until they are required to certify to them.  But once they are asked to sign a form they may look more carefully and then they may update any incorrect information.
  • This can help support a decision that no license is required by the fact pattern.
  • This can help support a license application even if it is not required.
  • This can help to commercially protect the exporter.  The exporter often relies on facts provided by the importing business partner.  By asking the ultimate consignee/purchaser to sign a certification form, this helps to provide the exporter with some assurance that the stated facts are correct.
  • This can help to legally protect the exporter.  In the unlikely event that the exporter is accused of some malfeasance, the fact that the exporter relied on facts provided in a signed certification form, helps to suggest that the exporter did not willfully violate the laws.  This won’t negate clear-and-contrary evidence of intent but where intent is unclear, this can help make it more clear.  Intent is especially important for criminal sanctions, but it can help influence BIS in civil penalty situations, too.

It is important to identify why someone is seeking an advisable version of the certification, because sometimes the bespoke certifications include language that is not useful to the transaction (such as a proposed certification that is not true, or a proposed statement that is not useful, like a limit on performing otherwise legal activities). In those cases, a clear understanding of the intent of the form creator can help address language disputes.

I have also seen companies seeking BIS-711s or bespoke export certifications for purely domestic (non-export) transactions.  There is no export law that requires this, but some of the bulleted reasons for advisable statements may apply to the transaction. If they don’t and your business partner insists on an export certification for a purely domestic transaction, then you may need to work with the business partner to establish reasonable transaction parameters.

Resources:

The BIS-711 form is available for download as a fillable pdf form on the BIS web site:

http://www.bis.doc.gov/licensing/BIS711.pdf

Typically, exporters submit this form electronically using the BIS SNAP-R system.

This article provides general rules that apply to the export of aircraft parts subject to the BIS export regulations, but it does not address all possible special conditions or alternatives.  Do not rely on it for legal advice – instead consult with a law firm that regularly assists companies with export questions (like ours).  Your actual facts may affect the advice that is given.

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Cuba: Open for Aircraft Parts Business (sort of) ….

September 30, 2015 by 2 Comments

Many of ASA’s are wondering whether they can begin selling aircraft parts to Cuban operators. The short answer is yes (if you obtain a license).

Americans are still generally prohibited from doing business or investing in Cuba unless licensed by the Treasury Department’s Office of Foreign Asset Control (OFAC).  For articles subject to Commerce Department jurisdiction, a license from the Bureau of Industry and Security is also typically necessary.  The problem?  There is a general policy of denial that applies to such licenses.

But as of September 21, 2015, there is special licensing program that permit the sale of aircraft parts.  This program is similar in scope to the program that permitted licenses to be issued for aircraft parts transactions to Iran.  It permits licenses to be issued on a case-by-case basis for the export to Cuba of:

(6) … items to ensure safety in civil aviation, including the safe operation of commercial passenger aircraft ….  15 C.F.R. § 746.2(b)(6).

The new rules have also removed Cuba from Country Group E:1 (terrorist supporting countries) in Supplement No. 1 to Part 740 of the EAR.  80 Federal Register 43314 (July 22, 2015). This is an important removal because it makes Cuba potentially subject to certain useful license exceptions.  Look carefully at the license exceptions before using them, because some special Cuba-related-provisions have been added to some of the useful license exceptions.  80 Federal Register 56898 (Sept. 21, 2015).
An OFAC general license (a form of published exception) is a special exception to the rules.  There is an OFAC general license that authorizes the export from the United States to Cuba in those cases where the export is already licensed or otherwise authorized by the Commerce Department’s Bureau of Industry and Security (BIS). 15 C.F.R. § 515.533(a)(1).  This general license restricts payment methods to either cash-in-advance or financing by a banking institution located in a third country (not the US or Cuba).  15 C.F.R. § 515.533(a)(2).
Interested in visiting potential customers in Cuba?  U.S. trade delegations are now authorized to travel to Cuba in limited situations.  For example, travel to Cuba is authorized when it is incidental to exporting authorized goods.  This includes “market research, commercial marketing, sales negotiation,accompanied delivery, or servicing in Cuba of items consistent with the export or re export licensing policy of the Commerce Department.”  31 CFR § 515.533(d).

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Iran Civil Aircraft Parts Transactions – Not Dead Yet!

November 26, 2014 by Leave a comment

On November 24, we reminded the community that the program permitting licenses to ship parts to Iran was expiring. Last night (November 25), that program was extended through June 30, 2015.

The program is based on a Joint Plan of Action (JPOA) reached by China, France, Germany, Russia, the U.K. and the U.S. (the P5+1) and Iran.  The JPOA is intended to help permit some trading relationships while an agreement is being negotiated, and was an inducement to encourage Iran to join the negotiations.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published some additional guidance on this program which is specifically related to this extension:

Aircraft parts suppliers who wish to sell civil aircraft parts to Iranian purchasers are able to apply for and exercise the privileges of an export license through June 30, 2015.  This licensing authority is limited to civil aircraft parts, and excludes anything intended for military aircraft.  The licensing authority also extends to safety related inspections and repairs.

Reports suggest that there is some optimism about the US and Iran finally reaching an accord by the Spring – so now is the time to start developing relationships with Iranian customers!

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Window of Opportunity for Doing Business in Iran

February 4, 2014 by Leave a comment

For a limited time, Iran could be a great source of business for the aircraft parts distribution community.

Two weeks ago, we posted about the relaxation of sanctions against Iran, particularly as those sanctions apply to civil aircraft parts.

Yesterday,  AviationPros reported that Iran will start importing aircraft parts in two weeks (this was based on a February 1 article from Trend News).  The article explains that Iran’s Civil Aviation Organization head Alireza Jahangirian has asked the Iranian National Development Fund to release $400 million to purchase aircraft parts.

The AviationPros article also carries an implicit warning for anyone who sells to Iran – it quotes Managing Director of Qeshm Airline, Hefzollah Ataherian as saying “Most of the [Iranian] airlines are indebted and their revenues are not enough to pay their debts.”  This suggests that aircraft parts sellers should be particularly cautious about the payment arrangements for parts to ensure they are among those who get paid.

Licenses from the Treasury Office of Foreign Asset Control (OFAC) are likely to be necessary for most aircraft parts being shipped to Iran. Treasury has already issued guidance on its Iran Licensing Policy; the guidance clarifies that licenses are still necessary but that “license applications will also be evaluated in light of the Iran-Iraq Arms Non-Proliferation Act and any other relevant statutes, as appropriate.”  The guidance also notes that the authority is temporary – licenses issued under this authority will expire June 20 of this year (so right now there is a limited window for these transactions).

OFAC has also released guidance explaining that the U.S. Government “will not impose correspondent or payable-through account sanctions on foreign financial institutions that … conduct or facilitate financial transactions relating to [covered aircraft parts transaction].”  One important caveat is that these payments will only be authorized if the exporting activities are initiated and completed entirely within the period covered by the agreement (the six-month period beginning on January 20, 2014, and ending July 20, 2014).

Another important factor in the payment licensing policy is that the favorable treatment of payments will only be granted if the transaction does not involve any party on the Specially Designated Nationals (SDN) list.  As a special exception, SDN-party Iran Air *is* permitted to engage in transactionsm as is any Iranian depository institution that is listed as an SDN solely pursuant to Executive Order 13599.

The Commerce Department’s Bureau of Industry and Security (BIS) has published its regulations on Iran at 15 C.F.R. § 746.7.  This section continues to impose restrictions on shipments to Iran; however it also permits a single license from OFAC to cover BIS requirements as well as OFAC requirements.  15 C.F.R. § 746.7(a)(2).  There are limitations on this authority – for example the subject of the license must be an article subject to OFAC limitations – but most aircraft parts that are licensed for export to Iran by OFAC ought to be exempt from any further licensing obligations under the BIS regulations.

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