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Austrian CAA: FAA licenses remain valid for N-reg in Europe

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Old 16th Jun 2012, 21:13
  #41 (permalink)  
 
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The detail for Non Citizen trustors for N Reg aircraft is currently being examined by the FAA. There was a public meeting with respect to this on June 6th and the submission period for submissions following that meeting is 6th July.

http://www.gpo.gov/fdsys/pkg/FR-2012.../2012-6146.pdf

At present details of the Trustor are not recorded by the FAA, nor details of the operator of the aircraft - hence the public meeting. It also explains the interest in who is operating N-Reg aircraft based in the UK prior to a significant event such as the Olympics.

On February 9, 2012, the Federal Aviation Administration (the FAA) published its Proposed Policy Clarification (the PPC) regarding the use of non-citizen trusts (NCTs) to effect registration of an aircraft on the FAA registry.1 The PPC is a draft, prepared and published by the FAA for public comment, which includes its justifications for seeking to impose changes to the NCT registration process, and explanations and descriptions of those proposed changes, including a sample trust agreement revised to reflect the same.2 The PPC was issued after being reviewed and approved by officials of the FAA and DOT, as well as the Transportation Secretary.
The PPC includes the FAA’s general recognition of NCTs, which is a positive development. However, the PPC imposes new, and not insignificant, conditions on the use of NCTs including the allocation to the trustees of primary responsibility for certain matters as the “owner” of the aircraft. This Bulletin briefly describes the FAA’s purpose for publishing this PPC, the matters addressed in the PPC, and its likely implications.
FAA’s Compliance Concerns

The PPC repeated the concerns raised by the FAA in previous reviews of NCTs.3 Many of those concerns are not exclusive to the use of NCTs, despite the recent scrutiny. However, the use of NCTs is of particular concern because NCT-registered aircraft are frequently based, operated and maintained outside of the US and, per the FAA, impeding its national and international responsibilities to monitor, enforce and ensure compliance with the airworthiness and operational standards required of FAA-registered aircraft.4
Proposed NCT Requirements

The PPC NCT-related requirements are intended to address the FAA’s compliance concerns by requiring NCT trustees to facilitate periodic or urgent efforts by the FAA to find or verify information with respect to the “identity and whereabouts of the actual operators of aircraft and the location and nature of operation.” For that purpose, the PPC proposes revisions in the form trust agreement requiring that NCT trustees furnish the following to the FAA upon its demand:


Within 2 business days:
  • the identity of the person normally operating, or managing the operations of, the aircraft;
  • where that person currently resides or has its principal place of business;
  • the location of maintenance and other aircraft records; and
  • where the aircraft is normally based and operated.
Within 5 business days:
  • information about the operator, crew, and aircraft operations on specific dates;
  • maintenance and other aircraft records; and
  • the current airworthiness status of the aircraft.
The PPC further provides that the trustees may be required to produce the foregoing information more quickly “in the event of an emergency.”
In addition to the reporting obligations, the FAA has clarified its position regarding documents to be filed with trust agreements, and proposed new requirements related to trustee removal or resignation. In particular, the FAA notes that parties to NCTs often enter into, but do not file with the FAA, an operating agreement, pursuant to which the non-citizen beneficiary or trustor is given significant operational control over the aircraft. The FAA has proposed that these operating agreements must be submitted to the ACC with the trust agreements, but has not specified whether these agreements would be filed in the FAA ancillary files, or recorded with the FAA registry.
The trust agreement attached as an exhibit to the PPC includes suggested revisions by the FAA intended to further limit non-citizens from influencing the trustee’s control over certain aircraft matters, as well as clarifying certain perceived ambiguities in current “market” trust agreement forms. With respect to trustee resignation and removal, the FAA has proposed additional terms to be included in trust agreements. The FAA found that current NCT trust agreements give the non-citizen trustors too much discretion in removing trustees. Consequently, the FAA has proposed new terms that will limit the non-citizen trustors’ ability to remove trustees in the absence of “cause” as well as clarify the grounds that will constitute “cause” for removal. Pursuant to the PPC, trustees will be allowed to resign if the trustor is uncooperative. Parties to transactions involving NCT-registered aircraft, especially financing parties, are likely to further address the impact of any such trustee resignation or removal in the transaction documents.

Last edited by goldeneaglepilot; 16th Jun 2012 at 21:16.
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Old 16th Jun 2012, 21:30
  #42 (permalink)  
 
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Maxred - wow, you certainly are prickly if anyone has an opinion different to yours. Do you own and fly an N reg aircraft yourself?


YES. And another on G reg

Last edited by maxred; 16th Jun 2012 at 21:31.
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Old 17th Jun 2012, 06:38
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In addition, I believe the trust documents identifying the trustor are filed with the FAA, so this information is not opaque at the regulatory level
That is correct; the FAA doesn't like trusts which hide the identity of the beneficial owner (the trustor). This was stated at the lawyer's meeting I went to.

GEP's writeup of the FAA position is also consistent with their position back then. They don't like anonymous trusts, and they don't like trusts where the trustor can boot out the trustee easily (e.g. a pre-signed Bill of Sale).

Nothing new here, at all.
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Old 17th Jun 2012, 07:30
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Its an accurate reflection of the CURRENT position with respect to trusts - "nothing new" except the public meeting took place only a few days ago and its still within the submission period - how "new" do you want?

The fact is that the FAA are very aware of the legal ownership of aircraft held in trust (the trustee) but often have very little detail of the trustor and even less details of where the aircraft is, who's looking after it and even more important who the "real operator" is.
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Old 17th Jun 2012, 08:45
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They know all those things to the same extent to which they know about them in the USA.

The FAA system is one where trust is vested in suitably qualified individuals e.g. an A&P/IA or a Part 145 Repair Station to do the release to service.

They have very active offices abroad who inspect the FAA scene out there. Much more pro-active than the local CAAs especially the UK one.

Trust ownership is probably impossible to stop - even if they wanted to. At a very basic level, they cannot prevent me selling my N-reg plane to a US citizen (living anywhere), for any amount (say $1), and he loans it back to me. Is the FAA going to ban lending your plane to somebody?

I don't know who you are trying to scare, GEP.

I see some seriously dark clouds on the horizon. For example that bogus project called PRNAV, which has the potential of wiping out a huge chunk of the IFR community bigger than anything EASA might have done, due to the sheer cost of ripping out and replacing loads of perfectly good avionics, for no technical reason whatsoever. Just to get the "right paperwork".

But I am not worried about the FAA screwing the N-reg community because it is all over the world, and is a useful component of US foreign influence which costs the USA peanuts.

Last edited by peterh337; 17th Jun 2012 at 09:28.
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Old 17th Jun 2012, 09:04
  #46 (permalink)  
 
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Peter -

This is an issue which directly affects both of us, you perhaps more than me, we both operate N reg aircraft that are UK based. On a selfish note I am perhaps in a better position than you with respect to the issue of N Reg ownership and UK operation. At least I could directly register ownership with the FAA should I choose rather than a US based trust - could you?

I am not trying to scare anyone, its simply taking a look with open eyes at the whole picture rather than getting focused on small parts of the detail and missing the overall message that is being sent out by the FAA and various other authorities. Its better than us sticking our fingers in our ears and heads in the sand and then getting upset when change is forced upon us.

We can all quote small parts of the detail and get the result to match our own ideas but is that realistic? I would hope that you received notice of the public meeting - I did.
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Old 17th Jun 2012, 20:32
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MJ, stop custard chucking at the N reg community.
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Old 17th Jun 2012, 20:49
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It's really sad to see a lost cause wringing out their baggage as per MJ. I guess you would grant Prima Nocta wouldn't you MJ if Brussels said so....so sad !

As for the rest of you chasing the legality etc of N reg and LLC's etc, you really are a sad little bunch. My best friend with thousands of jet hours runs an LLC, safely and in the sound knowledge that some witch hunt and sad pathetic little ferry / ops company won't ruin them. That's the problem, you all have never flown a jet (including MJ ) have you ?
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Old 17th Jun 2012, 20:53
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Several of the Citation series and I fly a Jetprop now, will that count?
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Old 17th Jun 2012, 21:00
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For all the scare stuff about N-reg trusts...

The FAA is happy with individual trusts, of the kind that e.g. SAC offer. What they don't like is some US bloke owning a load of planes in his own name, and what they don't like are trusts which conceal the trustor's (the beneficial owner's, in UK-speak) identity from the FAA.

Many high-end owners use trusts to conceal the owner's identity (and this includes many Americans, who could just own an N-reg in their own name) for various reasons and I guess the FAA is going to chip away around the edges to limit this.
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Old 17th Jun 2012, 21:19
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Spot on Peter, the owners have money to throw at any potential issue. Surprisingly they are extremely clued up to all of this b*llocoks. Some half baked, dim witted, vendetta guy with a few hours on a Crustation won't change the fact that no one I repeat no one gives a flying f*ck about the ramblings of some Chav hell bent on his next vendetta of N Reg. (You have failed with chavvy Ferry Guy, get over it ! )
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Old 17th Jun 2012, 21:24
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I have never seen ANY FAA official endorsment of a particular trust. Therefore one should not be seen better than another (naughty Peter - getting towards advertising for free (for a company you prefer) on PPrune)

The FAA at the 6th June Meeting did make public a draft trust agreement that they would feel happy with.

The issue the FAA seem to have with trustor's not being quickly identifiable extends to all US Trusts. Even though SAC trades from a UK address it is still an American Trust and is not above the FAA perception of issues, a quick check on the FAA website will show individual trustors are not quickly identifiable.

FAA Registry - Aircraft - Name Inquiry
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Old 17th Jun 2012, 21:29
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And who really believes a word you say after you getting d*cked about your lack of knowledge for olympic slots - thicko !
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Old 17th Jun 2012, 22:23
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Wow, what a nice chap you are. Just been having a read of your other posts. I'm on my knees now bowing to to the great aviation God... You do have such a way with words, if someone has a different opinion to you.

Perhaps you should read back through a few of the previous posts and realise that following the uncertainty and doubt created by the DfT's own people they clarified things. Perhaps you would be prepared to pass your opinion on the VFR slot allocation at Southend, and the other airports that will probably announce it during the next two weeks? Or was I drinking too much cider? Perhaps if you send me your email address then next time I'm told something I can run it past you for your advice and counsel.

Yep, I'm thick, in fact probably the village idiot, but do I care - NO. At least I can hold my head high with out the brand of obnoxious.

Toodle pip old chap, off now to munch on another turnip!!
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Old 17th Jun 2012, 23:14
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Is this FAA rule about being a citizen to register a N reg something new? The reason I ask is although I now own and fly an N reg in the UK on a FAA PPL and hold US citizenship when I bought my first plane 20 years ago while residing in the US I was neither a citizen or green card holder at the time, I simply handed the dealer the money and sent in the my registration details, I don’t recall any questions regarding citizenship. With my most recent plane I bought it in the US flew it there for a short while then had it containerized and shipped it here to the UK. again with no questions as to my citizenship from the FAA or shippers, when I went to register it to my new UK address it was a one page form and unless I missed something it never asked my citizenship either. So in a hypothetical situation of a non US citizen owning a N reg in the UK what is to stop him/her simply filling out his details on an updated aircraft registration form and sending it onto the FAA?
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Old 18th Jun 2012, 02:15
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Thomas we don't have a vendetta.

There are folk that obviously who do though who have obviously put alot of thought and effort into changing the current status quo.

We are just putting the point forward that your view that it won't happen, we don't agree with. And that legal challanges will be more than likely fruitless. And even if they do succeed the next round of legislation they will have another shot at restricting it again.

I am quite sure the owners are clued up about it. And being the sort of people they are, they will be doing a constant cost analysis. As soon as the cost of fighting it exceeds the cost of complying they will change their plans.

Yes there is some scope for basing outside. Jersey/IOM parking will be full and then the other countries just outside will have more aircraft based there. But then again once the positioning costs start ramping up and the aircraft isn't ready just down the road thier views may change.

What hardware we all fly doesn't come into it.

Last edited by mad_jock; 18th Jun 2012 at 02:16.
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Old 18th Jun 2012, 10:06
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Originally Posted by piperboy84
Is this FAA rule about being a citizen to register a N reg something new? ....

So in a hypothetical situation of a non US citizen owning a N reg in the UK what is to stop him/her simply filling out his details on an updated aircraft registration form and sending it onto the FAA?
No the rule is not new, I believe it is quite long standing.

In your case, the dealer seems to have messed up. You must have either been a US Citizen, a resident alien (i.e. lawfully admitted for permanent residence), or a foreign corporation and certify that 60% (IIRC) of the flight hours are within the US, to have legally registered the aircraft. I believe (but have not checked) that in the fine print on the form it does say this.

It is a good thing you didn't crash as the aircraft was very likely unregistered during the whole of its operation.

I am not clear if you currently own an N-Reg over here, but if you are not a US citizen and you own it (as in have title) then it is not registered and not airworthy and in all likelyhood not insured. Finally, the only clear example, of which I am aware, of an insurer not paying out after a crash invovled Graham Hill's un-registered N-Reg Aztec (although the details of the rational for non-payment remain a bit obscure).

Last edited by mm_flynn; 18th Jun 2012 at 10:08.
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Old 18th Jun 2012, 10:17
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The AAIB report says nothing useful about it but Graham Hill's plane appears to have at some stage become de-registered from the US register but never placed onto a new one.

In effect, his plane didn't exist.

Since he was hardly short of money it was presumably a c0ckup by somebody who he trusted to get the papers right.

One way to achieve this nasty situation is to apply to the FAA for an Export CofA, as one would if transferring the plane to a different register, but for whatever reason not proceed with the transfer. The FAA will then (usually if not always, AFAIK) de-register the plane, without necessarily any correspondence. This could happen in a situation where you are selling the N-reg plane to a foreign seller who wants his local register on it, but he pulls out at the last minute.

Such a situation can arise with any aircraft registry which operates non-expiring CofAs (e.g. FAA, EASA, etc.) whose validity hangs purely on a Release to Service by an authorised person/company.

In GH's case, the company doing the subsequent maintenance would have had no reason to become aware of the de-registration. It would have been only had he applied for a field approval for some mod that the FAA may have refused the inbound 337....

It is believed that GH's insurer didn't pay out because the lack of registration made the CofA invalid, so the flight was illegal before it got off the ground. There may have been other reasons also but this one would have been enough.
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Old 18th Jun 2012, 10:41
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Pursuant to 49 USC § 44101, an aircraft cannot be operated unless it is registered. Regardless of how one intends to operate an aircraft, there are stringent limitations on foreign ownership of U.S. registered aircraft.


49 USC § 44102 states that an aircraft may be registered only when it is owned by a citizen of the United States, an individual citizen of a foreign country lawfully admitted for permanent residence in the United States (“Resident Alien”) or a corporation not a citizen of the United States when the corporation is organized and doing business under the laws of the United States or a State, and the aircraft is based and primarily used in the United States.

FAR 47.2 defines “U.S. Citizen” as:

(1) An individual who is a citizen of the United States or one of its possessions;

(2) A partnership of which each member is such an individual;

(3) A corporation or association created or organized under the laws of the United States or of any State, Territory, or possession of the United States, of which the president and two-thirds or more of the board of directors and other managing officers thereof are such individuals and in which at least 75 percent of the voting interest is owned or controlled by persons who are citizens of the United States or of one of its possessions.
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Old 18th Jun 2012, 10:49
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here's an info sheet I just found on the FAA homepage:

http://www.faa.gov/licenses_certific...AFS-750-94.pdf
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