Over the past few months, I have encountered a number of PMA exporters, and European PMA importers, who have asked for clear guidance on how to distinguish a “critical” PMA parts from a “non-critical” PMA part.
This is an important distinction because under the Bilateral Airworthiness Safety Agreement (BASA) that was signed between the United States and the European Union, there are three types of PMA parts that are accepted in the European Union (for installation on products certified or validated by EASA) without further showing. Those three “acceptable” situations, as described in the BASA Technical Implementation Procedures (TIP) are:
(1) The PMA part is not a “critical component”; or
(2) The PMA part conforms to design data obtained under a licensing agreement from the TC or STC holder according to 14 CFR §21.303; or
(3) The PMA holder is the holder of an EASA STC which incorporates the PMA part.
Thus, non-critical PMA parts are directly acceptable (and they should have text on their export 8130-3 tag that states “This PMA part is not a critical component”). So there is a significant advantage to having a clear understanding of when a PMA part is critical and when it is not critical.
This can be a little confusing if you don’t know where to look. The FAA has used the term “criticality” to define different categories of parts for approval purposes, and to set differnt levels of FAA involvement in the approval process. The distinct use of the term means that we need to look in the right place for the definition of “critical” that applies to our export/import transactions.
For purposes of US exports of PMA parts that are imported into the European Union, the controlling guidance is found in the BASA’s Technical Implementation Procedures for Airworthiness And Environmental Certification (BASA TIP). The definition of critical component for purposes of that document is found in Section 1.6(i) of the BASA TIP:
“Critical Component” means a part identified as critical by the design approval holder during the product type validation process, or otherwise by the exporting authority. Typically, such components include parts for which a replacement time, inspection interval, or related procedure is specified in the Airworthiness Limitations section or certification maintenance requirements of the manufacturer’s maintenance manual or Instructions for Continued Airworthiness.
Don’t fall for the temptation draw a semantic difference between a “critical component” and a “critical part.” The PMA acceptance procedures found in section 2.8.2(a)(1) of the BASA TIP explicitly cross reference the definition in section 1.6(i).
In light of this definition found in the BASA TIP, the question of whether a PMA part is “critical” will be based on the decision of the FAA (the exporting authority) about whether it was critical at the time of approval.
The regulatory guidance for critical parts is found in the marking requirements discussion in section 45.15(c) of the FAA’s regulations. That section makes it clear that an article is “critical” if it has a hard time specified in the Airworthiness Limitations section of the manual (instructions for continued airworthiness), like a life limit, then it is a critical part (or critical component).
Under normal circumstances, there are two methods for specifying such a limit on a PMA part. The first is during the FAA approval process (usually as an airworthiness limitation published in the instructions for continuous airworthiness), when the airworthiness limitation section associated with the part would be approved. The second is by an FAA airworthiness directive issued after initial approval in response to an identified safety issue.
Thus the best source for identifying whether a PMA article is “critical” is the PMA manufacturer, who should be able to tell customers whether there were any such hard times associated with the article as part of the approval process (or review of the PMA manufacturer’s instructions for continuous airworthiness). If the FAA did not establish that the part was critical at the time of approval, and if they did not subsequently issue an airworthiness limit (such as through an airworthiness directive), then the part is not critical.
The FAA is has amended the airworthiness standards for airplane propellers to require TC applicants to identify critical parts.
The FAA claims that this new requirement will increase the margin of safety and also harmonize the U.S. rules with those of Europe.
The rule change affects subsections (c) and (d) of section 35.15 of the FAA regulations by revising them to the following language:
c) The primary failures of certain single propeller elements (for example, blades) cannot be sensibly estimated in numerical terms. If the failure of such elements is likely to result in hazardous propeller effects, those elements must be identified as propeller critical parts.
(d) For propeller critical parts, applicants must meet the prescribed integrity specifications of Sec. 35.16. These instances must be stated in the safety analysis.
The change in subsection (c) is that the prior language merely said that in such cases compliance may
be shown by reliance on the prescribed integrity requirements of part 35 – now these parts will have to be defined as “critical.” In particular, single failure elements of a propeller whose failure is likely to result in a hazardous propeller effect would be described as “critical.”
The prior subsection (d) says that if the propeller relies on a safety system to prevent failure, then the failure analysis must assess the possibility of a failure in the safety system. Under the new language, The new language will defer the analysis of critical parts to the new language of 35.16.
The rule change added a new section 35.16 that reads as follows:
Sec. 35.16 Propeller Critical Parts.
The integrity of each propeller critical part identified by the safety analysis required by Sec. 35.15 must be established by:
(a) A defined engineering process for ensuring the integrity of the propeller critical part throughout its service life,
(b) A defined manufacturing process that identifies the requirements to consistently produce the propeller critical part as required by the engineering process, and
(c) A defined service management process that identifies the continued airworthiness requirements of the propeller critical part as required by the engineering process.
PMA manufacturers that produce propeller parts will want to look carefully at the effect this could have on future designs, and on their ability to get the FAA to approved those parts if they are deemed to be critical parts. It is also worth noting that EASA applies different standards to the import of PMAed critical parts (they are not automatically accepted and the exporter needs to obtain an EASA STC for the parts) so it will important to consider what affect this might have on your exports.
This final rule becomes effective as of March 19, 2013.
The U.S. Commerce Department will hold a webinar on November 29 to discuss the effect of European Evironmental Regulations on U.S. Aerospace companies.
The European Union has a regulation called the REACH regulation. REACH stands for Registration, Evaluation, Authorisation & restriction of CHemicals.
REACH imposes certain obligations on companies that manufacture certain chemicals in Europe, and on companies that import certain chemicals into Europe. Under REACH, the continued marketing of substances of Very High Concern (SVHCs) requires an authorization. Businesses active in the aerospace marketplace use a number of substances that are being considered for SVHC classification, and unauthorized import into Europe of such substances could violate REACH.
For more information, see the notice on the Commerce Department website.
Need to meet with air carriers about your PMA parts? They will be at the 2012 MARPA Conference, and they will be looking for PMA solutions.
MARPA has 40 pre-registered air carrier representatives from 17 different air carriers attending the 2012 Annual Conference in Las Vegas:
For a complete look at the pre-registered attendees for the Conference, please be sure to check out our pre-registration list, which was published on September 22. This list is not complete, as we always have had a significant numbers of attendees who register in the lat week or at the door; but it does provide a reasonable look at the businesses that have already made a commitment to attend.
The MARPA 2012 Conference will be held in a month, on October 3-5, 2012 at the Renaissance Las Vegas Hotel. But the deadline for making hotel reservations at the discounted rate is Monday, September 3!
We have negotiated a room rate of $129.00 per night (not including taxes) for single/double occupancy. This rate applies on a limited basis for rooms up to three days before and after the event, for those who wish to extend their stay. This is the lowest rate available to any group at the Conference Hotel during this time period! In order to qualify for this special rate, you must book your room by Monday, September 3, 2012. Click here for a link to the hotel for the MARPA room block. Clicking this link should automatically reference the 2012 MARPA discount code (which is mrpmrpa).
You can also call the hotel directly at (800) 750-0980. Make sure to ask for the “MARPA” rate in order to get our discounted rate!
MARPA has reported on, and vocally supported, the Administration’s plans to revise the U.S. export rules in a way that makes it less complex to export aircraft parts.
The Hill Reports that the Administration is getting ready to publish the first of these export revisions.
Those of you who’ve seen me speak on export law in the past year know that I have been predicting that the Administration will take far less than the normal 18 months to publish the final rule in the export reform provisions. While most people deride election cycle politics for its emphasis on form over substance, and a tendency for both parties to block partisan gains that might help the other earn votes, this is one situation where election year politics work in our favor. The Administration would like to be able to take credit for making it easier for businesses to export products, in order to show that they are not anti-business. The export reforms will do just that.
If the final rule looks like the proposal, then it will ease unnecessary burdens on the export of many dual-use aircraft parts. With many dual-use aircraft parts (replacement parts that can be installed on both civilian and military aircraft), their precise placement into BIS or DDTC jurisdiction can be ambiguous, and can be based on facts that are not readily available to many exporters. For example, the mechanism for obtaining a license to export a replacement part that is listed on both a military engine design and a civilian engine design (approved by the FAA) is very ambiguous, because it can be unclear whether the FAA exception applies [originally published in the 1979 Export Administion Act section 17(c), the exception has been turned into a rubik's cube with contradictory guidance].
The proposed rule would move all of the dual use aircraft parts into BIS jurisdiction, leaving only parts with a clear defense mission in the jurisdiction of DDTC.
This is important to exporters because (1) many BIS exports do not need a license while nearly all DDTC exports require a license, and (2) even if a license is necessary, it is far quicker and easier to obtain a license from BIS than it is from DDTC. It is also useful because there has been a lot of confusion about which agency’s rules must be followed for certain aircraft parts, and the reform would make the pathway to compliance much more clear.
The MARPA 2012 Conference will be held October 3-5, 2012 at the Renaissance Las Vegas Hotel. Please make your reservations early for the Conference: the hotel has sold out early for the past several years and we expect the hotel to sell out again this year.
We have negotiated a room rate of $129.00 per night (not including taxes) for single/double occupancy. This rate applies on a limited basis for rooms up to three days before and after the event, for those who wish to extend their stay. This is the lowest rate available to any group at the Conference Hotel during this time period!
In order to qualify for this special rate, you must book your room by Monday, September 3, 2012. Click here for a link to the hotel for the MARPA room block. Clicking this link should automatically reference the 2012 MARPA discount code (which is mrpmrpa).
You can also call the hotel directly at (800) 750-0980. Make sure to ask for the “MARPA” rate in order to get our discounted rate!
The Export-Import Bank of the United States announced a new policy that permits the bank to support the export of PMA parts intended for use on Airbus aircraft.
The policy was announced in a press release last week but the new policy was just formally posted on Ex-Im’s website, today.
Historically, the Export-Import Bank has been unable to provide official export credit support for U.S. goods and services exports that were intended for use in the production, or operation, of Airbus aircraft. This restriction was instituted in 1972 when the U.S. and Europe were the only two markets with manufacturers of commercially viable large aircraft in the world. The restriction applied to items sold both to aircraft manufacturers (like Airbus) and to end-users (like non-US airlines) that intended to use the U.S. exports on Airbus aircraft (e.g., aftermarket purchases).
The Ex-Im Bank decided to change this policy because of their recognition that the landscape for large aircraft manufacturers is rapidly changing. New manufacturers are entering the market for large commercial aircraft (like Bombardier in Canada and COMAC in China). These aircraft will compete directly with Boeing and Airbus aircraft. They will provide new opportunities for U.S. manufacturers, including PMA manufacturers.
Ex-Im is particularly interested in supporting small business manufacturers, which is why they are so eager to open their services to more PMA manufacturers.
In response to requests made by US exporters, and in an effort to expand U.S. export opportunities, on May 25th Ex-Im Bank announced an expansion of its aviation-industry export policy.. When we spoke to Ex-Im representatives, they admitted that there was no formal exposition of the policy at that time (other than the press release). This morning, the new policy was published on the Ex-Im website and we confirmed by phone that this is the only formal exposition of the new policy.
The new “A-B-C large aircraft policy” permits Ex-Im to:
Ex-Im will not finance exports of U.S. produced goods and services directly to foreign large aircraft manufacturers if the U.S. exporter is not an SBA defined small business. Ex-Im notes that this policy currently applies to Airbus, Bombardier’s C-Series, and COMAC’s C919 aircraft.
Valuable services offered by the Ex-Im Bank include (this is just a sample):
We have been looking into the EASA Fees and Charges rule, and examining the effect it has on the PMA community.
Europe does not currently issue approvals that are analogous to the FAA PMA. Under the bilateral airworthiness safety agreement between the U.S. and the European Community, PMA parts from the United States are generally acceptable in Europe, unless the parts are “critical.” The term “critical” includes parts with life limits (parts that must be removed from service after a set number of hours or cycles because of fatigue life due to repetitive stress or other reasons). “Critical” PMA parts from the U.S. are acceptable in Europe if they are (1) produced by the type certificate holder or the type certificate holder’s licensees or (2) produced by a third party who has applied for and received a Supplemental Type Certificate (STC) from EASA.
Thus, if an independent U.S. company produces “critical” parts under a FAA PMA, it is required to obtain a PMA in order to sell those parts to a customer for use on a European-registered aircraft.
If the PMA parts reflected a major change to type design, then it would be required to have a STC in the United States. Most PMA parts, though, do not require an STC in the United States because they are not major changes to type design (because they typically are drop-in replacements that do not change the operational characteristics of the aircraft or engine). Thus “critical” PMA parts will generally require a European STC, despite the fact that the STC repeats the design approval process associated with obtaining the PMA from the FAA.
The EASA charge for a Supplemental Type Certificate is a flat fee of 767.71 Euro[i] plus an hourly fee of 111.77 Euro per hour.[ii] The hourly fee is charges for hours of service performed by EASA technical experts (its own employees) and /or the EASA’s contractors (employees of the National Aviation Authorities). In addition, the US applicant must pay for all travel charges associated with the certification project.
The industry is replete with horror stories about U.S. companies who felt they had been “held hostage” to the European application process. These stories, whether true or not, have resulted in many smaller U.S. companies concluding that application to EASA for a STC related to a “critical” PMA part would be futile, in that the net cost of the STC would exceed any potential gain from being able to export the part for use in Europe.
With this in mind, we have several questions on which we could use advice from industry:
• Do any of you have any experience with the EASA Fees and Charges system that you are willing to share? What is your impression of the size of the fees actually charged, and/or the amount of certification or validation time taken by EASA?
• Have any of you made any business decisions based on the EASA Fees and Charges rule (like a decision to keep a part out of the European Market)? Has the EASA Fees and Charges rule had a chilling effect on your entry into the European Market?
• Do you agree that this is something on which MARPA should comment?
Some resources that you may find useful in your own investigations:
Thank you for letting me know your concerns!
[i] This figure is based on the base fee of 680 Euro, indexed to inflation. Indexing is accomplished pursuant to Part V of the Annex to Commission Regulation (EC) No 593/2007. The 2012 cumulative inflation factor is a multiple of 1.12898.
[ii] This figure is based on the base fee of 99 Euro per hour indexed to inflation. Indexing is accomplished pursuant to Part V of the Annex to Commission Regulation (EC) No 593/2007. The 2012 cumulative inflation factor is a multiple of 1.12898.
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. Hee 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.