2017 – Edition 2 – March 3, 2017

Table of Contents

Note: The order of material varies in hotline emails, but is always presented the same on this landing page. Readers scrolling through content on or printing this page will find it organized consistent with the table of contents.

Levanto’s Lead
Symposium 2017
ARSA Works
Legal Briefs
ARSA on the Hill
Regulatory Outlook
Quality Time
Training
Membership
AVMRO News Portal
Upcoming Events

Levanto’s Lead

Can We Hear You Now?

By Brett Levanto, Vice President of Communications

More than a decade ago – which is hard to believe – a telecommunications company boasted about the strength of its network through the questioning voice of a man on a mobile phone. At the end of each commercial, the viewer would receive confirmation that he could, in fact, be “heard” by whomever was on the other end.

For the maintenance community, being “heard” is a great and all-important challenge. Ignorance is a dangerous adversary; it begets bad publicity, harmful policy, employee indifference and general apathy. When we fail to tell our story, someone else surely will tell one about us and the ending is rarely happy.

As the voice of the global industry, ARSA works every day to break through the noise and remind regulators, policymakers and the general public that the world can’t fly without the men and women who work every day to keep aircraft safely aloft.

In 2015, Sarah MacLeod reminded us that ARSA can’t be a single voice. It needs you to join the chorus. With the 2017 Legislative Day & Annual Repair Symposium right around the corner, your goal for March is to be heard:

(1) Be heard by your elected officials. If you’re coming to Legislative Day, great. You will be able to tell your members of Congress and their staff about your work and explain, face to face, how important it is. If you can’t be here, visit arsa.org/legislative/get-involved to see how to make noise back home.

(2) Be heard by the association. ARSA’s member survey is in the field. The response data is invaluable to the association not only to improve its products and services, but also to represent your interests. The survey invitation and reminder were sent to each member’s primary contact via email, with more to follow. Contact me (brett.levanto@arsa.org) if you want to make sure you aren’t silenced.

(3) Be heard by each other. ARSA’s most powerful tool is its network of members. There is plenty you can do to help carry the association’s message expand its reach. As a first step, click here to learn about the “Members Getting Members” program; it’s the right thing to do and it could save you some money on your dues.

If you’re reading this, and you regularly review ARSA’s newsletters, emails, web posts, social media and other messages, you’re on the right track. You can hear us, which is good.

Make sure we can hear you.

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Symposium 2017

The Call to Advocacy Action

In this period of unusual political risk for repair stations, it’s more important than ever for the maintenance community to get to the nation’s capital. Listen to Christian A. Klein’s call to advocacy action … then get yourself to D.C. and take part in ARSA’s work on your behalf.

Get to the Nation’s Capital for ARSA’s Legislative Day

For information about the symposium and to register (there’s still time), click here.

Speaking for Themselves – Presenters, Panelists and Speakers

A key purpose of the symposium is to provide access to extensive technical and policy expertise. This year’s schedule brings together industry members with government officials from around the world — the association’s allies in pursuit of rational oversight and healthy aviation business:

[In order of their expected appearance…]

Josh Krotec, 2017 Government Affairs Chairman, ARSA & Senior Vice President, First Aviation Services

Martin Whitmer, Principal, Whitmer & Worrell (Invited)

Dave Marcontell, Vice President, CAVOK – A Division of Oliver Wyman

House Education & Workforce Chairman Virginia Foxx (R-N.C.)

John Barbagallo, Deputy Director, Flight Standards Policy Oversight, FAA

Timothy W Shaver, Acting Manager, Aircraft Maintenance Division, FAA

Hélio Tarquinio Júnior, General Manager, Continuous Airworthiness General Branch, Department of Airworthiness, National Civil Aviation Agency of Brazil (ANAC)

Thomas Mickler, Washington, D.C. Representative, EASA

David Hempe, Deputy Director, Aircraft Certification Service, FAA

Dr. Gerald Dillingham, Director of Civil Aviation Issues, U.S. Government Accountability Office

Andy Halsey, Chief Human Resources Officer, HAECO Americas

Daniel Riskey, Recruiter, Southwest Airlines

Jennifer Weinbrecht, Vice President of Compliance, Component Repair Technologies

Dennis Chrisbaum, Director for International Trade Finance, U.S. Small Business Administration

Elena Palei, Sector Manager, Infrastructure, Multilateral Investment Guarantee Agency, World Bank

Scott Kennedy, International Trade Specialist, U.S. Department of Commerce

Marcus Jadotte, Vice President of Public Affairs, AAR

Warner Calvo, 2017 President, ARSA & Quality & Safety Director, Coopesa, R.L.

Josh Krotec, Senior Vice President, First Aviation Services

Ray Hauck, Vice president of Military Sales, HAECO Americas

Traci Kraus, Director of Government Relations, Cummins Inc. to provide non-aviation perspective (Invited)

Miguel Marin, Acting Chief, Operational Safety Section, Air Navigation Bureau, ICAO

Paul Hawthorne, Director, Global Quality Support, MOOG

J.E. (Sandy) Murdock III, FAA Chief Counsel, Legal Advisor and Blog Editor, JDA Aviation Technology Solutions

Simone Perez, Professional Staff, House Aviation Subcommittee

Bruce Lundegren, Assistant Chief Counsel for Advocacy, U.S. Small Business Administration

Those are the pieces, to see how they fit in the agenda
and to register (there’s still time), click here.

Sponsor Salute: Heavy Metal

ARSA is going to make some noise about the sponsors — platinum, gold and silver — and supporters that stepped up on behalf of the maintenance industry’s premier substantive event. By investing in the voice of the maintenance community, these companies help it to carry:

[To learn more about an individual company, click its logo.]

2017 Platinum Sponsor

2017 Gold Sponsors

2017 Silver Sponsors

2017 Supporters

Click here to see the value of this investment and
and to register to benefit (there’s still time).

The Weston Award

While working during the event to ensure the maintenance community’s future, the association often takes a moment to recognize a leader who has been instrumental in realizing its present.

The Leo Weston Award for Excellence in Government Service

First bestowed on Leo Weston himself in 2005, the Weston award honors an instrumental figure in ARSA’s birth by recognizing individuals who embody his commitment to the industry’s safety and success. The symposium provides a venue for association members and invited guests from around the world to network and discuss issues that matter to the aviation maintenance industry; It is the perfect time to respect the history of the repair station community and honor the good works of those who support it.

You can see who’s won since Weston on the award’s page and you can be on hand for the announcement of this year’s winner by registering now:

To see what else is planned and to register (there’s still time), click here.

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ARSA Works

Aviation Groups Seek Clarification on D&A Testing for Receiving Functions

On Feb. 15, a group of aviation industry members submitted a request to the FAA to clarify drug and alcohol testing requirements to individuals performing receiving functions on articles prior to their being put in stock.

Sixteen signatories, led by ARSA and representing both trade associations and private companies, asked for a legal interpretation from FAA Assistant Chief Counsel Lorelei Peter. The group requested Peter to confirm that personnel conducting tasks associated solely with receiving items for stock are not performing a safety-sensitive function under the applicable definitions in 14 CFR part 120. As such, those individuals need not be included in any government-mandated drug and alcohol testing pool.

“A receiving process simply verifies that incoming parts or materials are what they purport to be and that there are no obvious reasons to question a previous determination of airworthiness,” the letter said. “These receiving activities do not require the creation of a maintenance record because no tasks to which [14 CFR] part 43 applies are being performed; therefore, they are not safety-sensitive functions under [the drug and alcohol testing requirements of 14 CFR] part 120.”

In addition to citing the relevant regulatory definitions, the request highlighted historical standards and current agency guidance describing both the distribution and receipt of parts as not included in maintenance or preventive maintenance.

The coalition of aviation groups submitted the request after learning some auditors in the FAA’s Drug Abatement Division had indicated to certificate holders that receiving tasks were in fact safety-sensitive functions. Though such assertions were only made informally, the potential improper expansion of testing requirements would impose unnecessary costs on certificate holders without increasing safety. Additionally, it would reduce the effectiveness of current testing programs by including those who do not perform maintenance and preventive maintenance.

To read the entire request, click here.

Industry Calls on FAA, EASA for Commercial Parts Solution

On Feb. 3, a partnership of nine aviation organizations delivered a letter to the FAA requesting the agency address international issues created by the regulatory definition of “commercial parts.” The request, spearheaded by ARSA and signed by both industry interest groups and private businesses, is part of a 17-month effort to mitigate problems related to aircraft parts documentation under the U.S.-EU Bilateral Aviation Safety Agreement (BASA).

Under the United States’ regulatory framework, parts defined as “commercial” by 14 CFR § 21.1(b)(3) do not receive the same documentation (an FAA Form 8130-3) as those released by production approval holders (PAH) under the BASA and its related annexes. The same is true for so-called “commercial off the shelf” parts, which are not included in the § 21.1(b)(3) definition. This causes problems for manufacturers, distributors and maintenance providers: When commercial parts are used in maintenance subject to the agencies’ Maintenance Annex Guidance (MAG), an FAA Form 8130-3 is required.

The letter cites the FAA’s own reasoning, as expressed in a 2006 notice of proposed rulemaking, that it is “unrealistic to expect manufacturers making thousands of non-aviation [“commercial”] parts per day and relatively few aviation parts to obtain a [Parts Manufacturer Approval].” The agency admitted it would struggle to oversee commercial parts’ producers for the sake of rarely-required documentation. Considering this assessment, the group entreated the FAA to work with its bilateral partner EASA to resolve the problematic regulatory differences.

“Differences in the agencies’ rules and systems must be negotiated to ensure the result does not create an impossible situation for either authority’s industry and certificate holders,” the letter said. “In this case, the failure to address the difference in the design regulations has created an untenable situation on both sides of the Atlantic.”

In addition to ARSA, the letter was signed by representatives from the Aerospace Industries Association, the Aircraft Electronics Association, Airlines for America, the Aviation Suppliers Association, the General Aviation Manufacturers Association, Honeywell Aerospace, Moog Aircraft Group and Gulfstream Aerospace.

To read the full letter, click here.

ARSA, Industry Partners Seek More Comment Time on Form 8130 AC

On Feb. 27, an ARSA-led coalition of industry partners asked the FAA to extend the comment period on Draft Advisory Circular 43-ARTS, “Use of FAA Form 8130-3 for Approval to Return to Service Under Part 43.”

The group, which included 15 signatories from both trade associations and private aviation companies, requested an additional 90 days beyond the original March 13 deadline:

“Draft [AC] 43-ARTS significantly revises the agency’s interpretation of the requirements for using FAA Form 8130-3 for approving articles for return to service,” the request said. “Because the draft AC does not mirror the maintenance recordkeeping regulations and conflicts with existing agency policy, additional time is required for industry to develop comprehensive substantive comments.”

To read the complete request, click here.

ARSA Analysis Shows U.S.-wide Benefit of International Maintenance Trade

Workers and companies in almost every state benefit from international trade in aviation maintenance services, according to a new analysis by ARSA.  The findings underscore the broad economic impact of the aviation maintenance industry in communities throughout the United States, as well as the benefits of bilateral aviation safety agreements (BASA) that make government oversight more efficient.

The long-standing U.S.-EU BASA allows U.S. repair stations certificated by the FAA to more easily receive and maintain approval to work on European-registered aircraft and related components.  The BASA also makes oversight more efficient for government and industry by allowing the FAA and European regulators to share responsibilities. In addition to the EU, the United States has bilateral agreements with several other countries covering maintenance, flight operations and aircraft and environmental certification.

The ARSA analysis of the EASA’s list of U.S. approval holders found there are 1,460 repair stations spread across 47 of the 50 states authorized to work on European aircraft and components.  ARSA correlated the EASA data with industry employment figures developed by Oliver Wyman for the association and found that, collectively, there are more than 162,000 Americans employed by repair stations in the 25 states with the most EASA approvals (see table below).

“The positive impact of international trade on small businesses and workers in the aviation maintenance sector is one of the U.S. economy’s best kept secrets,” ARSA Executive Vice President Christian Klein said.  “When considering tax, trade, aviation or regulatory policy, it’s important for the White House and lawmakers on Capitol Hill to understand and consider that back-home impact.  Anything that undermines economic activity in this area is going to have negative repercussions in communities around the country.”

According to Oliver Wyman’s industry analysis, the vast majority of US. repair stations are small-medium-sized businesses and repair stations employ more than 186,000 workers nationwide.  When aircraft parts manufacturing and distribution and air carrier maintenance personnel are taken into account, the aviation maintenance industry has more than 277,000 workers and accounts for more than $44 billion in economic activity.

To learn more about the maintenance community and its place in the international marketplace, visit ARSA’s economic data center.

Filler, Poteet Helping ‘Transform’ AIR

On Feb. 7, Marshall S. Filler, ARSA’s managing director and general counsel, and Ryan Poteet, ARSA’s regulatory affairs director, joined officials from the FAA, MITRE and representatives from every facet of the aviation industry to discuss the transformation of the FAA’s Aircraft Certification Service.

The meeting’s focus was on industry and its assessment of how certification activities should proceed in the future. This monumental undertaking could not be accomplished in a vacuume and industry perspective is essential to avoiding pitfalls and ensuring each segment of the aviation safety system works in unison.

The industry-FAA collaboration will continue with the addition of working groups to analyze discrete regulatory and policy issues. Filler is slated to lead the International Working Group, which is tasked with analyzing ICAO obligations, the FAA’s role in shaping global standards and agency partnerships with other NAAs, among other things. Poteet has been chosen to participate on the Accountability Framework Working Group, which is tasked with analyzing compliance models, how the FAA will oversee certification projects and the development of agency guidance.

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Legal Briefs

Editor’s note: This material is provided as a service to association members for educational and informational purposes only. It does not constitute legal or professional advice and is not privileged or confidential.

Pragmatism: A Global Perspective

By Ryan M. Poteet, Regulatory Affairs Director

The Russian Federal Air Transport Agency (FATA) recently revised its equivalent to 14 CFR part 145. The update allows FAA, EASA and TCCA-certificated repair stations and approved maintenance organizations to perform maintenance on Russian-registered aircraft without additional certification. Given the current political climate, any praise for the Russian government will likely raise eyebrows but this enlightened change in policy represents a global mindset that all NAAs should embrace.

Since the economic boom of the early 1990s, nations have increasingly exercised their ICAO obligations to directly regulate civil aviation. Indeed, that is exactly what the Chicago Convention intended by requiring signatories to implement international standards for the safe operation and continued airworthiness of aircraft across a vast array of jurisdictions. But in 1944 there were only fifty-two signatories and a handful of NAAs directly regulating civil aviation; now there are 191 signatories and 160 NAAs.

This explosion of regulatory jurisdictions has profoundly impacted the aviation maintenance industry because each state where an aircraft is registered is responsible for ensuring its continued airworthiness. When one state does not find the certification of another “acceptable,” (a concept known as validation) it forces maintenance providers—both large and small—to obtain certification from multiple authorities. The burden of obtaining multiple approvals is compounded by the hassle and expense of duplicative compliance audits by numerous jurisdictions. More importantly, there’s no added safety value.

Duplicative oversight activities have been reduced through bilateral agreements but the purpose of such agreements is rapidly eroding. Bilateral agreements are supposed to recognize the equivalency of regulatory systems; however, the burgeoning use of special conditions threatens to undermine that purpose. Most special conditions, or quasi-special conditions created by guidance, do not improve aviation safety (e.g., MAG Change 6’s parts documentation requirements) and only increase the burden on both regulators and industry.

The success of the aviation industry requires regulators to embrace a global mindset, to contemplate the underlying purpose of bilateral agreements, and revaluate whether global aviation safety and security really needs each nation to create an independent system under its ICAO responsibilities. The Russian government’s revision of FAP 145 (now FAP 285) acknowledged that it could independently certificate AMOs but recognized that a majority of maintenance providers are already certificated by the FAA, EASA, and/or TCCA. If those systems work, why make it any more complicated—or expensive—to work on Russian aircraft? Perhaps the Russian’s lesson in pragmatism won’t get lost in political rhetoric.

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ARSA on the Hill

FAA Reauthorization, Workforce, Tax Issues Take Center Stage

By Christian A. Klein, Executive Vice President

ARSA has been busy on Capitol Hill in recent weeks. There are many new members of Congress and staffers who know nothing about the aviation maintenance industry and need to be educated about how policy decisions they make affect repair station business, industry employment and aviation safety. Pending action on FAA, tax, workforce and regulatory reform legislation also pose both risks and opportunities for repair stations and ARSA is making sure lawmakers know where it stands on key issues.

With an FAA reauthorization on the agenda for this year, the association is prioritizing House and Senate aviation subcommittee staff as well as the personal offices of subcommittee members. We’ve been told that lawmakers plan to pursue a full-blown, multi-year reauthorization bill, not a short-term extension of FAA funding like the one signed into law last summer.

The starting point for reauthorization policy discussions will be the FAA bills proposed in the House and Senate last year. ARSA is reviewing those pieces of legislation with an eye towards ways to improve FAA oversight and prevent unnecessary new congressional mandates on repair stations.

Have you reviewed last year’s FAA bills? Let us know what you see as the good, the bad, and the ugly.

As far as timing on an FAA bill, we’re not expecting fast action. There are new members of the aviation subcommittees in both the House and Senate who need to be brought up to speed on the issues and given the opportunity to weigh in. The Trump administration, which is still staffing up and getting its political bearings, will almost certainly also have aviation policy proposals. That being said, the process is definitely underway, as demonstrated by the fact that the House held its first FAA reauthorization hearing of the year on Feb. 15 to examine the state of aviation manufacturing.

One theme we’re sounding is the importance of international trade to small businesses involved in aviation maintenance. On Feb. 14, ARSA released a report breaking down EASA approvals on a state-by-state basis. Forty-seven of the 50 states have facilities with EASA approval. ARSA is using the data to underscore the value of bilateral aviation safety agreements in reducing regulatory compliance costs for industry and making oversight more efficient. Our goal is blunt any effort in the FAA reauthorization to undermine existing bilaterals and to get congressional buy-in on adopting new agreements.

But aviation policy isn’t the only thing on ARSA’s agenda. In recent weeks, our legislative team also participated in a coalition meeting with House Education & Workforce Committee staff to discuss the status of Perkins reauthorization. The Perkins Act is the core federal career technical education (CTE) law. The reauthorization process offers an important opportunity to improve technical training, particularly by enhancing coordination between employers, schools and local government and giving better recognition and support to shorter-term training programs that teach critical skills.

The main takeaway from the coalition meeting is that both Democrats and Republicans on the committee are committed to moving a bill similar to the one that passed the House last year with a large, bipartisan majority. The Committee’s new chairman, Rep. Virginia Foxx (R-N.C.) is a former community college president and a leading CTE advocate. But as with the FAA bill, the committee needs to give new members a chance to participate in policy development process.

ARSA is also having conversations with policymakers involved in tax reform. One issue we’ve honed in on is the border adjustment tax (BAT) proposed by House Republicans. Under a BAT, imported goods could no longer be deducted as a cost by U.S. companies, while exports would be exempt from revenue calculations. The practical effect would be to penalize imports and subsidize exports. ARSA hasn’t taken a position on the BAT one way or another, but we are examining the potential impact on aviation maintenance companies serving an international customer base and moving aviation products back and forth across borders. We’d welcome member input on the issue.

All these issues are going to take center stage at ARSA’s Legislative Day on March 15 and Symposium on March 16 and 17. We hope you’ll be with us to learn, network, and advocate for your industry.

House Aviation Subcommittee Talks Certification, Workforce in First Hearing

The House Transportation & Infrastructure Committee’s Subcommittee on Aviation held its first hearing of the 115^th Congress on Feb. 15, to discuss the “State of American Aviation Manufacturing.”  The hearing was the first in the ongoing series “Building a 21^st Century Infrastructure for America,” focusing on FAA reauthorization and reform and the modernization of America’s aviation system.  

The witnesses included FAA Aviation Safety Office leadership as well as industry representatives from Pratt and Whitney, Boeing and Textron Aviation. Certification process reform dominated the hearing and testimony, with both the agency and industry strongly supporting the part 23 rewrite and expansion of the organizational designation authorization (ODA) process.

The subcommittee’s membership expressed a strong bipartisan desire to reform and streamline the certification process. Promoting aviation workforce development was also raised by several members, with witnesses voicing strong support for government-industry-educational institution partnerships, particularly those with community colleges aimed at expanding America’s skilled trade workforce.

Among other topics discussed were the extension of bilateral certification agreements and the ongoing implementation of the Next-Gen program.

“As the aviation industry expands its international reach, and introduces new technologies and innovations, it is critical that the FAA certification and regulatory process adapt and respond.” Subcommittee chairman Frank LoBiondo (R-N.J.), said in a statement. “The FAA must leverage the expertise of the private sector and fully utilize all the authorities it has been granted.”

To see everything that happened during the hearing, click here.

Stay tuned to ARSA as the House continues to work on improving the American aviation system. For more information on T&I’s continuing series of hearings, visit transportation.house.gov/calendar.

ARSA Joins Multi-Industry Letter Urging Congressional Regulatory Reform

On Feb. 6, a broad coalition of industry groups led by the U.S. Chamber of Commerce delivered a letter to Senate leadership urging passage of the Regulatory Accountability Act of 2017 (RAA – H.R. 5). ARSA joined the effort supporting the legislation to improve the federal rulemaking process.

With regulatory reform high on the agenda for the Republican Congress, regulated entities in every industry are pushing hard to push lawmakers to reestablish their oversight of the executive branch. The RAA, introduced by Rep. Bob Goodlatte (R-Va.) and already passed by the House, revises federal rulemaking procedures under the Administrative Procedures Act (APA) to require agencies to make evidence-based determinations and more-deeply consider the impact of rules on regulated entities. Similar bills have been introduced in each of the last two Congresses, but had little-to-no chance of becoming law.

“Now is the time for Congress to reclaim its constitutional legislative authority by ensuring agencies implement congressional intent, not the intent of the agency,” the letter said. “With both the new presidential administration and the U.S. House of Representatives agreeing on the urgent need for regulatory reform, the Senate is presented with a once-in-a-generation opportunity to pass much-needed modernization of the [APA], whose rulemaking provisions have remained virtually unchanged since it was enacted in 1946.”

ARSA will continue to support efforts to reform the rulemaking process. In the meantime, repair stations should ensure they are informed by:

(1) Reading the full Feb. 6 letter (click here).
(2) Reviewing the summaries of the RAA (click here).
(3) Check out the association’s training resources on rulemaking (click here) and regulatory reform (click here).

Special Training – What to Expect from Trump & Congress

This session, which was held on March 1, overviews what to expect from the Trump administration and Congress in 2017. Christian A. Klein, ARSA’s executive vice president, discusses the predicted agenda of key congressional committees and leadership, as well as the new administration. He also explores further down the road to the 2018 midterm elections and their looming impact on current Congress.

Registrants for ARSA’s Legislative Day receive discounted access to the recording (contact Brett Levanto for details) – let ARSA’s training team help you maximize your time on Capitol Hill.

Click here to register and get access for 90 days (“Advocacy 2017” bundle available).

Registration for an ARSA-provided training session includes:

• Unlimited access for 90 days to the recording made available after the live session is complete.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A certificate upon completion of the class, as well as any test material.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

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Regulatory Outlook

White House Order Brings Some Form to Regulatory Reform

By Brett Levanto, Vice President of Communications

On Feb. 24, President Donald Trump issued an executive order providing general instruction for staffing and procedure to execute his policies for controlling regulatory burden.

The order directs the head of each agency to designate a regulatory reform officer (RRO) to oversee implementation of reform initiatives. Each RRO will chair a to-be-established regulatory reform task force to evaluate existing regulations for recommended repeal, replacement or modification.

In performing this assessment, each task force must seek out rules that, among other things, eliminate jobs, “impose costs that exceed benefits” or are “outdated, unnecessary or ineffective.” The boards are further instructed to “seek input and other assistance…from entities significantly affected by federal regulations, including…small businesses, consumers, non-governmental organizations and trade associations.”

ARSA is uniquely positioned to offer counsel on behalf of repair stations and eager to help thoroughly review existing regulations. Through service on the Aviation Rulemaking Advisory Committee (ARAC) and other stakeholder bodies, the association can serve as the voice of the maintenance community to help the FAA comply with White House directive.

The executive order provides the first insight into logistics for the president’s regulatory reform initiatives. In a series of actions taken during his first week in office, Trump froze regulatory activity and made good on his “two for one” campaign promise – consistent but vague expressions of a sea change in oversight policy. As that reform begins to take real shape, a lingering question remains: What exactly is a “regulation”? More than a thought exercise for an ARSA training session, the White House’s Jan. 30 executive order left the issue open by use of an expansive definition:

“Sec. 4.  Definition.  For purposes of this order the term ‘regulation’ or ‘rule’ means an agency statement of general or particular applicability and future effect designed to implement, interpret or prescribe law or policy or to describe the procedure or practice requirements of an agency, but does not include:

(a)  regulations issued with respect to a military, national security, or foreign affairs function of the United States;
(b)  regulations related to agency organization, management, or personnel; or
(c)  any other category of regulations exempted by the Director.”

For FAA certificate holders, the definition could apply to any agency rule or guidance – a great but expansive opportunity to review every statement produced by the agency in execution of its duties.

In the meantime, ARSA members should:

(1) Review the entire executive order: www.whitehouse.gov/the-press-office/2017/02/24/presidential-executive-order-enforcing-regulatory-reform-agenda.
(2) Catch up on ARSA’s previous coverage of President Trump’s regulatory reform efforts: arsa.org/reg-reform-2017.
(3) Begin practicing the guidance in last month’s hotline: “Analysis for Action – Control Regulatory Costs by Reporting Them.”

FAA, Asia-Pacific Partners to Host Annual Industry Day

Each year the FAA’s Aircraft Certification Service (AIR) and the Civil Aviation Authorities in the Asia Pacific Region (APAC) gather to discuss the status of bilateral relationships with the United States, regulatory agendas and obstacles facing both industry and regulators.

Following the FAA-APAC meetings, the authorities host industry representatives to tackle issues facing the aviation community. The theme of this year’s “Industry Day” will be issues related to global manufacturing, streamlining the validation process for design approvals and how CAA-industry collaboration can improve.

Attending Industry Day is a great opportunity to engage representatives from the FAA as well as authorities from 15 Asia-Pacific nations while connecting with industry counterparts from around the world.

Industry Day will take place on March 30 in Long Beach, California. Member companies interested in participating should contact Regulatory Affairs Director Ryan M. Poteet (ryan.poteet@arsa.org; 703.739.9543 Ext. 100) for more information.

FAA/APAC Meeting Location & Schedule

Date:

March 30, 2017

Location:

Hilton Long Beach, 701 W. Ocean Blvd, Long Beach, CA

Schedule:

Wednesday, March 29, 2017 (Industry Planning Session)

Thursday, March 30, 2017 (Industry)

Bilateral Partners Dialogue and Industry Day Draft Agendas

FAA/Asia Pacific Bilateral Partners Dialogue

Industry Day

Final Documents/Your Two Cents

This list includes Federal Register publications, such as final rules, Advisory Circulars and policy statements, as well as proposed rules and policies of interest to ARSA members.

To view the list, click here.

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Quality Time

Sales to Iran – Special Opportunities and Risks for Aircraft, Parts and Services

By Thomas McVey, Esq., Williams Mullen

Editor’s note: The views and opinions expressed by contributing authors do not necessarily state or reflect those of ARSA and shall not be used for endorsement purposes. This article contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes. It is not intended and should not be construed as legal advice.

U.S. companies have long been prohibited from selling most products and services to Iran. However in 2016 the Office of Foreign Assets Control (OFAC) announced a unique exception for the U.S. aircraft industry – American firms would be permitted to apply for licenses to sell passenger aircraft to Iran. This exception also extended to licenses for the sale of aircraft parts and associated repair services for Iranian customers. If granted a license, U.S. firms would be permitted to enter for-profit transactions with a country long deprived of aircraft, parts and services under harsh international sanctions. The following is a summary of this exception and the unique opportunities – potential risks – that it presents for aeronautical repair professionals.

Iran is currently the target of a strict U.S. trade embargo under the Iran Transactions and Sanctions Regulations (ITSR – 31 CFR part 560) and related legal authority.  However, following Iran’s agreement to curtail its nuclear program (the Joint Comprehensive Plan of Action), the United States adopted a limited number of actions to curtail the Iran embargo. As part of this, OFAC announced that U.S. firms could apply for specific, favorably-considered licenses to sell commercial passenger aircraft to Iran. A firm that has been granted a license can sell aircraft, aircraft parts and related technical services to Iran in normal commercial transactions without running afoul of the sanctions program. This sanctions relief was unique to the aircraft industry – most transactions by U.S. firms in other industries continue to be prohibited.

The licenses cover the sale, lease or transfer of commercial passenger aircraft for exclusively civil aviation end-use. They would also cover the export, sale, lease or transfer of spare parts and components for commercial passenger aircraft in addition to providing associated services, including “warranty, maintenance and repair services and safety-related inspections” for passenger commercial aircraft.

Certain sales are not authorized under the sanctions relief. For example, sales to parties listed on OFAC’s List of Specially Designated Nationals and Blocked Persons (the SDN List) continue to be prohibited. Similarly, sales for uses other than commercial passenger aircraft, such as military aircraft, are not permitted. Finally, if Iranian parties are listed on the Bureau of Industry and Security’s (BIS’s) Entity List or Denied Persons List the U.S. company would be required to apply for separate authorization from BIS.

It is important to note that the right to sell to Iran under this exception is not automatic. Rather, companies must apply to OFAC for a “specific license” for the transaction in question. OFAC will then review the proposed business activity and issue a specific authorization for the transaction. The decision to grant the license is at OFAC’s discretion – it reserves the right to deny applications – but its “favorable” licensing policy will likely consider favorably most requests.

In applying for licenses, parties should cover all aspects of their proposed Iran business activity, including products or services to be sold, if the company will acquire office or work facilities in country, if it will hire employees or subcontractors and how payments will be collected and remitted back to the United States. Also, if a license is granted, companies should use care to follow the terms and conditions of the license and other provisions of the ITSR closely – OFAC is continuing to pursue enforcement cases against American companies that violate other provisions of the Iran sanctions program, even after the sanctions relief following the JCPOA.

OFAC has also issued a general license that authorizes U.S. persons to engage in certain marketing activities related to aircraft, parts and services to Iran, subject to certain conditions (General License I). Unlike a “specific license,” a general license is an automatic grant of authorization and parties are not required to submit a specific application to perform covered activities. General License I is subject to a number of conditions and limitations; parties should not pursue any activities under General License I unless they have reviewed the terms and the ITSR carefully and comply with all applicable provisions.

Certain sales under the commercial aircraft exception have been publicized to date, such as Boeing’s proposed sale of $16.6 billion of commercial aircraft that was announced on December 11 (but has come under question since President Trump took office, and it is not known if any parts or services suppliers have yet been named to support the deal). OFAC generally does not publicize its specific licenses and it is difficult to identify particular business activities that have been authorized.

Notwithstanding the favorable licensing status, OFAC’s policy for the authorization of commercial aircraft sales can be amended at any time. Then-candidate Trump stated repeatedly he would consider renegotiating the JCPOA, so presumably the policy regarding commercial aircraft could be rescinded with him in office. This creates significant risk for companies: invest time and funds in pursuing business in Iran and perhaps be required to terminate on short notice.

The OFAC policy creates a unique opportunity for suppliers of aircraft parts and services in this starved market. In pursuing new business, companies should recognize the risks and use care to comply with the strict OFAC legal requirements and be ready for a change in the winds.

Thomas McVey is the Chair of the International Practice Group at Williams Mullen in Washington DC where he advises clients on export control issues under ITAR, the Export Administration Regulations and the OFAC Sanctions Laws. tmcvey@williamsmullen.com; 202 293-8118. Additional articles on export control issues are available at: http://www.williamsmullen.com/practice/itar-export-controls-ofac-sanctions# 

Training

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit potomaclaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

Part 145 – From Soup to Nuts

On Feb. 14, ARSA released its first intensive training: a four-hour exploration of 14 CFR part 145 by Executive Director Sarah MacLeod. Specially recorded with a hand-picked corps of live participants, MacLeod goes line-by-line through the repair station rule. The group’s open discussion explores the rule’s application and reviews the practical implications of obtaining and maintaining a repair station certificate.

For those in the maintenance community who demand a complete understanding of part 145, the most trustworthy source is the ARSA team that helped write it. Access the session now and receive unlimited viewing for 90 days.

Complying with Part 145 – “Soup to Nuts” (Four Hours)

Upon completion of this session, participants will have the tools to understand:

• The totality of the regulations governing the work of an entity holding a part 145 air agency certificate for a repair station from the FAA.
• How to research regulatory questions relating to work by a part 145 repair station.
• The difference between regulatory compliance and commercial obligations.

Click here to register and get immediate access.

Registration for an ARSA-provided training includes:

• Unlimited access for 90 days to the recording of the live session.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A certificate upon completion of the class, as well as any test material.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

Four-part Series on D&A Testing

Get access to Marshall S. Filler’s extensive exploration of drug and alcohol testing requirements: Study the first three sessions closely, then see how you fare against a series of case studies that Filler “ripped from the headlines” (sort of).

Interested in all four D&A sessions? Click here to purchase them together and save.

Requirements of 14 CFR part 120
This session provides basic information on the Federal Aviation Administration’s drug and alcohol testing requirements contained in Title 14 CFR part 120, Drug and Alcohol Testing Program (full description available on registration page).
Click here to register and get access for 90 days.

Requirements of 49 CFR part 40
This session provides information on the requirements of the Department of Transportation (DOT) set forth in 49 CFR part 40, Procedures for Transportation Workplace Drug and Alcohol Testing Programs (full description available on registration page).
Click here to register and get access for 90 days.

Traps for the Unwary
This session provides information on avoiding many of the common drug and alcohol-related mistakes that can subject companies to enforcement action, typically in the form of civil penalties (full description available on registration page).
Click here to register and get access for 90 days.

Case Study: Testing Your Knowledge
This session will test the participants’ knowledge of the drug and alcohol testing requirements in 14 and 49 CFR by presenting several hypothetical case studies (full description available on registration page).
Click here to register and get access for 90 days.

Registration for an ARSA-provided training session includes:

• Unlimited access for 90 days to the on-demand, recorded version of the webinar.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A completion certificate upon completion of the class.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

Avoiding ‘Self Exposure’ (Full Series)

On Feb. 15, Executive Director Sarah MacLeod provided ARSA’s second online training session on self disclosure. MacLeod had already covered the who, what, why, when, where and how of filing voluntary reports with the FAA, now she’s taught participants how to file without creating unnecessary headaches.

Interested in both sessions on self disclosure? Click here to purchase them together and save.

Self Disclosure – The Elements
This session will review the elements of self-disclosure established by the FAA. It will cover the who, what, why, when, where and how of filing a voluntary self-disclosure report with the agency. Additionally, it will cover how the agency is to handle the report and its expectations for follow up actions.
Click here to register and get access for 90 days.

Self Disclosure – How to Avoid Self-Exposure
This session will review the best methods for investigating a potential non-compliance, including how to distinguish between business and regulatory requirements and how to use language that relates facts to the regulations without creating unnecessary consternation or scrutiny. To obtain the most from this session, participants must have a basic knowledge of the FAA’s program elements.
Click here to register and get access for 90 days.

Registration for an ARSA-provided training session includes:

• Unlimited access for 90 days to the on-demand, recorded version of the webinar.
• A copy of the presentation and all reference material with links to relevant resources and citations.
• A completion certificate upon completion of the class.

The association’s training program is provided through Obadal, Filler, MacLeod & Klein, P.L.C., the firm that manages ARSA. To go directly to OFM&K’s online training portal, visit PotomacLaw.inreachce.com. To learn more about the association’s training program and see course availability, visit arsa.org/training.

Regulatory Compliance Training

By ARSA Training and Regulatory Teams

Test your knowledge of 14 CFR § 43.12 – Maintenance records: Falsification, reproduction, or alteration.

Click here to download the training sheet.

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Membership

2017 Member Survey Reminder – A Primary Responsibility

The association’s annual survey has been emailed to the primary contact at every member organization. Don’t miss the opportunity to contribute to ARSA’s work on behalf of the industry. Early response has been good, but with unparalleled risk in Washington and around the world, it is more important than ever for members to participate.

Responses are invaluable to the association as it works with regulators and lawmakers, develops resources and addresses the challenges most impactful to the repair station community. This is your snapshot of aviation maintenance – make it useful.

Visit ARSA’s data and advocacy page to see how the association makes use of survey responses in conjunction with its annual economic data and other special reports.

Want to ensure that your company got the survey? We can help.

Make ARSA’s Voice Your Own: Advertise

ARSA has a menu of advertising opportunities for arsa.org, the hotline and the ARSA Dispatch.

Take advantage of these great opportunities today to showcase your company, a new product or event. For more information go to arsa.org/advertise.

Stand Up for ARSA by Sponsoring in 2017

In order to provide world-class resources for its members, the association depends on the commitment of the aviation community. By sponsoring events and activities, supporters can help ARSA’s work on behalf of repair stations to endure.

Need a place to start? For information about opportunities, including sponsorship of the Strategic Leadership Conference in October (click here for info), contact Vice President of Communications Brett Levanto (brett.levanto@arsa.org).

A Member Asked…

Q: If a maintenance provider receives an article that was previously maintained outside of the United States’ regulatory system, can the article be repaired and installed on a U.S. registered aircraft under 14 CFR part 43 without first being overhauled or rebuilt?

A: Yes (for the repair) and maybe (for the installation).

As for the repair, under 14 CFR § 43.13(a)-(b), maintenance providers are required to use methods, techniques and practices that are acceptable to the administrator and will return an article to its original or properly-altered condition..

Once the maintenance action is complete, § 43.5 requires a maintenance record be completed after finding the work was satisfactorily performed. The last sentence in § 43.9(a)(4) clearly indicates that the approval for return to service is limited to the “work performed.” So long as you comply with all of part 43 (work methodology, airworthiness limitations, etc.), the approval for return to service is limited to the work scope described in the required record. In other words, unless required by an airworthiness directive or another part 43 requirement, you do not need to perform an overhaul to issue a maintenance record.

Now to the installation; whether the article can be installed is a bit more complicated. Just because an article undergoes maintenance – up to and including an overhaul – does not mean that the article is eligible for installation. FAA Form 8130-3, User/Installer Responsibilities makes it abundantly clear that the presence of an authorized release certificate “alone does not automatically constitute authority to install the [article].” Eligibility determinations are, as always, the responsibility of the party actually installing the article. That decision must be based on an assessment that the article is right for the next higher assembly and/or product, that is, meets an approved design and is a condition for safe operation. It will also depend upon the maintenance requirements of the owner/operator.

Finally, to the practical and pragmatic business aspects. When a maintenance provider inducts an article that it knows was installed on a type-certificated product, but was not maintained under the U.S. regulatory system, a thorough inspection and assessment of the article is warranted. The review should take into account the safety aspects of the article, i.e., how “critical” it is to the continued safe flight and landing of an aircraft. The physical inspection will look for any obvious discrepancies and confirm that the article is what it purports to be. Once the article is identified, the repair station and customer should discuss what type of work scope is appropriate.

While commercial liability may rest on the article’s criticality or how it was previously maintained; regulatory responsibility is contained in part 43. Ultimately, whether the article can or should be worked on at all, along with the extent and nature of that work and whether it can be installed in an aircraft with a U.S. certificate of airworthiness are separate albeit interrelated inquiries.

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Resources

ARSA strives to provide resources to educate the general public about the work of the association’s member organizations; should you need to provide a quick reference or introductory overview to the global MRO industry, please utilize AVMRO.ARSA.org.

AVMRO Industry Roundup

ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations play globally by providing jobs and economic opportunities and in civic engagement. These are some of this month’s top stories highlighting the industry’s contributions.

You can explore these stories through ARSA’s Dispatch news portal.

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Industry Calendar

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