March 16, 2021
NBAA is working with industry partners and government regulators to evaluate the complex regulations and procedures required for aircraft exports, and ensure business aviation is represented in the discussions.
The sale or lease of aircraft to foreign owners, or basing a U.S. registered aircraft outside of the country (regardless of ownership), requires regulatory compliance with multiple agencies, including the FAA, the U.S. Department of Commerce’s Census Bureau and Customs and Border Protection. Failure to comply with export regulations has recently been cited in a federal criminal indictment. Not complying with electronic export information (EEI) filings, licensing requirements and restricted end-user and end-use limitations feature prominently in the case.
“Recent seizures of aircraft by law enforcement have highlighted the need for everyone involved in exporting aircraft from the U.S., including sellers, buyers, brokers and trust companies, to work with qualified advisors to ensure that transactions comply with applicable laws and regulations,” said Scott O’Brien, NBAA’s senior director of government affairs.
Although aircraft must adhere to FAA export regulations and may even remain on the FAA registry when based abroad, the sale or lease of aircraft to a foreign party follows many of the basic export requirements for manufactured goods transported as freight. This means that generally aircraft being exported from the U.S. with the intent to be based abroad for more than a year require an EEI filing.
The EEI, which generally is filed before the permanent physical export of the aircraft from the U.S., contains details such as the parties to a transaction and ultimate consignee, the export classification of the item, the value and other data that is both for statistical and law enforcement purposes.
“Generally, the principal party to the transaction (e.g., U.S. seller or foreign buyer) that is responsible for arranging the export from the U.S. is also responsible for making the EEI filing. Such filing is typically made through a customs broker or freight forwarder who is appointed as an authorized agent to make such filing – but in practice, given the myriad of different types of aircraft transactions, determining whether the EEI filing needs to be made and by whom can be difficult as the relevant rules were written primarily for the movement of goods as cargo,” explained Jonathan Epstein, chairman of NBAA’s Regulatory Issues Advisory Group and partner in the law firm of Holland & Knight LLP.
“The rules and procedures for exporting an aircraft, particularly when it is a permanent export, can add to the complexity of a sale or lease of an aircraft, so NBAA is developing resources to help the business aviation community navigate this process,” added O’Brien.
“NBAA also has joined with industry partners and government agencies to make sure that the business aviation community fully understands the requirements for the legal export of aircraft and that regulators and law enforcement agencies appreciate the unique circumstances of an aircraft transaction and consistently apply the requirement,” O’Brien said.