Scott Burgess participated in a consultative capacity to the Aviation Working Group, and attended the Federal Aviation Administration's meeting on June 1, 2011, in
Oklahoma City, Oklahoma, concerning the U.S. registration of aircraft in the name of owner trustees. The FAA was represented at the meeting by Marc Warren, Deputy Chief Counsel for the Federal Aviation Administration; Joseph Standell, Chief Counsel, Aeronautical Center Counsel's Office; Jeff Klang, FAA International and Regional Counsel for the Great lakes Region; Joseph Conte, Special Emphasis Investigation Team (SEIT) counsel, Mark Bury, Deputy Counsel of FAA's international law staff; Brenden Kelly, Eastern Region FAA Legal for Special Investigations; Dale Donegan, SEIT; Misty Pena, Senior Investigator for SEIT; and Wally Brinkley, Manager, Aircraft Registration Branch of the Civil Aviation Registry.
The FAA's perspective was presented by Marc Warren, who indicated that approximately 10,000 aircraft are registered pursuant to Non-Citizen Owner Trusts, as
provided for in 14 CFR §47.7 ("NCTs"). The FAA believes that (1) the current NCT arrangement frustrates FAA's attempts at operational oversight, since they do not have readily available information as to the operator or lessee of aircraft registered pursuant to NCTs, which causes the FAA concern in several areas, including national security, law enforcement efforts, and international treaty compliance; and (2) in certain circumstances, the existence of side agreements (and, sometimes, the trust documents themselves) dilute the trustee's independence by restricting their decision-making authority or amplifying the trustor's power to remove the trustee.
The Aviation Working Group presented the industry's responses to seven questions posed by the FAA in its Public Notice published in the Federal Register on
April 26, 201 1 (
http://www.qpo.qov/fdsys/pkq/FR-2011-04-26/html/2011-10013.htm). Much of the discussion that followed centered on differing perspectives as to whether the trustee has an obligation to know the identity of the party with operational control over an aircraft, and whether the owner trustee should be obligated to oversee and ensure that aircraft maintenance and use complies with the Federal Aviation Regulations.
The Aircraft Working Group and other industry representatives called upon the FAA to recognize the commercial need to preserve the use of NCTs, and requested that the FAA continue "business as usual" until such time as the collaborative process is concluded in a manner satisfactory to the FAA and the aviation industry. In the interim, the Aircraft Working Group has offered its assistance to the FAA in an effort to define the knowledge and information requirements (e.g., address of operator, location of maintenance records, and principal hangar location) that might be imposed upon trustees of NCTs, and the limitations on a trustor's control over a trustee of a NCT, including the trustor's right to remove the trustee.
The FAA has not indicated any time frame within which it will promulgate new rules or regulations, but we will endeavor to make you aware of any significant developments as they occur.