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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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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Proposed ITAR Amendment Would Change the Regulations that Apply to Brokers

January 26, 2012 by Leave a comment

The Department of State has published a proposed rule that seeks to to amend the International Traffic in Arms Regulations (ITARs) as they apply to brokers and brokering activities.

Brokering is distinguished under the regulations from exporting. Thus, those who might negotiate a deal as an agent, or finance a deal, but who never get involved in the actual exporting of ITAR-controlled articles and services, are nonetheless subject to the State Department’s regulations.

Under the current rules, persons who broker exports of ITAR-controlled articles and services are required to register, and also in many cases to obtain licenses before they engage in brokering. This is meant to curb arms-dealing, but in practice it affects export of many aircraft parts that are controlled under the ITARs.

The recently-proposed changes to the ITARs would help by removing many dual-use parts as well as defense-related parts that do not serve a unique defense purpose from the scope of the ITARs.

The proposed rule would change (“clarify”) the definitions of the terms “broker” and “brokering activities.” It would also provide additional exemptions from the regulations for certain brokering activities. Here are the proposed new definitions:

§ 129.2 Definitions.
(a) Broker means any person (as defined by § 120.14 of this subchapter) who engages in brokering activities.

(b) Brokering activities means any action to facilitate the manufacture, export, reexport, import, transfer, or retransfer of a defense article or defense service. Such action includes, but is not limited to:

(1) Financing, insuring, transporting, or freight forwarding defense articles and defense services, or
(2) Soliciting, promoting, negotiating, contracting for, arranging, or otherwise assisting in the purchase, sale, transfer, loan, or lease of a defense article or defense service.

(c) For the purposes of this subchapter, engaging in the business of brokering activities requires only one action as described above.

(d) The activities subject to part 129 include brokering activities:

(1) by any U.S. person wherever located;
(2) by any foreign person located in the United States;
(3) by any foreign person located outside the United States involving a U.S.-origin defense article or defense service;
(4) by any foreign person located outside the United States involving the import into the United States of any defense article or defense service; or
(5) by any foreign person located outside the United States acting on behalf of a U.S. person.

(e) Brokering activities do not include:

(1) Activities by a U.S. person in the United States that are limited exclusively to U.S. domestic sales or transfers (e.g., not for export, which includes transfer in the United States to a foreign person);
(2) Activities by employees of the U.S. Government acting in an official capacity; or
(3) Activities that do not extend beyond administrative services, such as providing or arranging office space and equipment, hospitality, advertising, or clerical, visa, or translation services, or activities by an attorney that do not extend beyond providing legal advice to a broker.

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ASA Supports FAA ICA Policy

December 5, 2011 by Leave a comment

More than ever, it is important for the aircraft parts distribution community that repair vendors have access to the latest maintenance instructions for rotable parts. ASA members are ferquently relying on repair stations to overhaul parts that will be made available to the aviation industry to support safe flight. Today, ASA filed comments on the Proposed FAA ICA Policy (Policy Statement, PS-AIR-21.50-01: Inappropriate DAH Restrictions on the Use and Availability of ICA). ASA’s comments supported the policy, but requested that the FAA policy better reflect the new need for Commercial Parts Lists to be made available. ASA’s comments will be made available on ASA’s website.

The FAA policy was written in response to the growing practice of manufacturers licensing their manuals on the condition that the licensee repair station or air carrier/operator pledge to refrain from using competitive products like DER repairs or PMA parts. This can make it more difficult for ASA members to find qualified repair stations to overhaul aircraft parts, and it increases the total cost of obtaining repairs by creating a monopolistic environment that permits the manufacturer to charge monopolistic prices for parts and technologies that are needed for repairs. This undermines competition, innovation and safety.

The FAA retains the power to influence the method of distribution for ICAs, because the regulatory appendices that describe the minimum standards for such ICAs require the ICA-publisher to have a mechanism for distributing the ICAs and their amendments, and to submit that mechanism to the FAA. This permits the FAA to establish standards for what will be considered acceptable or unacceptable among such distribution mechanisms.

The FAA policy makes it clear that it is not acceptable for manufacturers to license their ICAs using restrictive licenses that preclude competition. For example, an engine manufacturer may not license its ICAs on the condition that the licensee agree not to purchase PMA parts for the engines.

ASA supports practices that make it easier for repair stations to ensure tha their repairs reflect the latest technologies, and methods for achieving safety.  Thus, ASA is very supportive of the FAA policy.

ASA exhorts the entire aviation community to file comments with the FAA supporting the FAA ICA Policy Memo. Comments may be filed by sending an email to John.Cerra@FAA.gov.

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