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Beginning in the 1970s, the widespread use of foreign aircraft and components by U.S. airlines, particularly the regional commuter airlines, became commonplace. Concurrently, routine and customary maintenance practices with respect to these aircraft were developed to accomodate the maintenance needs of the U.S. airlines operating these foreign aircraft and components. Airlines routinely shipped their foreign components back to foreign original equipment manufacturers for warranty and other repairs, because it was felt that the capability to conduct maintenance on some foreign components resided only with the foreign manufacturers. Also with respect to warranty maintenance, it was felt that the responsibility to conduct that maintenance resided with the manufacturer.

In 1986, following special safety investigations of the U.S. airline industry as a whole and some carriers in particular, the FAA concluded that there was widespread misunderstanding of and noncompliance with the foreign repair station regulations. The FAA also found that what had become common industry practices was also resulting in non-FAA certificated and documented parts entering the U.S. fleet raising some safety concerns.

In response to this situation, the FAA issued what are known as Draft Action Notices. These Draft Action Notices were internal FAA directives to FAA inspection offices delineating how the foreign repair station regulation should be applied in the field. These notices were issued in draft form so that the industry and foreign governments would be aware of the FAA's most recent regulatory interpretation. The Draft Action Notices basically iterated a strict interpretation of the regulation, in essence saying that FAA inspectors should not permit much of what had developed into common industry practices with respect to maintenance at foreign repair stations.

Foreign governments, foreign airlines and foreign manufacturers, U.S. aircraft manufacturers, foreign repair stations, as well as the U.S. airline industry all objected to the FAA's approach believing that the FAA's actions represented a significant change in regulation without the normal rulemaking process, its privileges and protections. These groups also maintained that the interpretation made by the FAA violated the multilateral agreement on Trade in Civil Aircraft, to which the United States was a signatory by imposing artificial barriers to trade in maintenance services.

It was also pointed out that strict application of the 1949 regulations to the contemporary aviation environment produced some regulatory anomolies that are irrational in today's aviation world. For instance, the FAA certificates a foreign aircraft as safe, but the foreign repair station regulations did not permit the manufacturer of that aircraft to conduct maintenance on that aircraft. Also for example, the FAA accepts the maintenance done by a foreign repair station on a U.S. aircraft operated abroad as safe

enough for U.S. passengers, but that aircraft could not be routinely introduced into domestic U.S. service. Also, a foreign subsidiary of a U.S. manufacturer of engines could not do maintenance on those engines if they were to be flown on U.S. domestic aircraft.

During 1986 and 1987, U.S. and foreign aeronautical authorities held numorous discussions on FAA regulation of foreign repair stations. Also, requests for exemptions by U.S. airlines and foreign manufacturers to the foreign repair stations became numerous. In December 1986, the Air Transport Association, representing the U.S. airlines, petitioned the FAA to initate a rulemaking proceeding to permit any and all maintenance, on any and all U.S. aircraft to be conducted by foreign repair stations meeting U.S. standards. In Spring 1987, the discussion of this issue became elevated to the U.S. Secretary of Transportation and British Transport Minister level, and following these discussions, it was announced that the FAA would develop a Notice of Proposed Rulemaking (NPRM) to make suggested changes to the foreign repair station regulations along the lines for what the airlines had petitioned. The FAA also announced it would grant exemptions to the rules expeditiously until the rules could be changed.

In June 1987, the transportation leadership of the House wrote Secretary of Transportation Dole expressing concerns about anticipated changes to the foreign repair station rules. leadership was concerned about the implications for safety regulation if airlines moved to take a signifcant amount of maintenance abroad. The leadership suggested that FAA resources may not be adequate to conduct the necessary safety inspection and surveillance under a new regulatory regime. The leadership was also concerned about the impact on U.S. industry and jobs if the rules were changed.


In November 1987, the FAA issued the NPRM on foreign repair stations. It proposed that maintenance and repairs of U.S. domestic aircraft could be conducted at foreign repair stations certified by the Federal Aviation Administration.

During December 1987, the Congress considered the issue in the context of the FY 1988 Continuing Appropriations Resolution. The House Committee on Rules inserted a provision in the House version of the Resolution that would have prevented the implementation of the proposed rules. However, when the Resolution went to Conference Committee, the Conferees decided to only delay the effective date of any regulatory change until October 1, 1988.

In November 1988, the FAA issued its new regulations and they became effective in December.

In December, Members of the Committee wrote the FAA requesting reports on which airlines were getting maintenance at foreign repair stations beyond what was permitted under the old rule, the type of


maintenance involved, and at which foreign repair stations the maintenance was being conducted. The first report, sent on June 20, is attached. The report states that, "There has been no significant change in the way U.S. airlines are having maintenance performed by foreign repair stations under the new rule."

Last January, Congressman Mineta introduced HR 145 which would repeal the new regulations and return the regulatory situation to that which existed prior to the regulatory change.

In April, Congressman Watkins introduced HR 1741. This bill would direct the Secretary of Transportation to issue, within 180 days of enactment, regulations requiring the use of domestic repair stations in the performance of work involving the maintaining and altering of U.S. registered aircraft, engines and other components. The bill would permit work by foreign original equipment manufacturers if the work was necessary for the safe transit of the aircraft while it was outside the U.S.

The Subcommittee will receive testimony from Members of Congress and representatives of the following organizations:

Federal Aviation Administration

Department of Transportation

Department of Commerce

Department of State

International Association of Machinists

Transport Workers Union

American Airlines

United Airlines

Federal Express

Aerospace Industries Assocation
Regional Airline Association
National Air Carrier Association
Assocation of European Airlines
Orient Airlines Association

British Airways

Lufthansa German Airlines

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This is in response to your request for periodic information concerning recent revisions to the Federal Aviation Regulations governing the certification of foreign repair stations. This is the first report covering the period from December 22, 1988, through May 1989.

You requested that the Federal Aviation Administration (FAA) supply you with quarterly reports on which airlines are getting maintenance performed beyond what was permitted under the old rule, the type of maintenance involved, and at which foreign repair station the maintenance is being performed. You also requested a periodic assessment of how these new rules are affecting the FAA inspection work force.

There has been no significant change in the way U.S. airlines are having maintenance performed by foreign repair stations under the new rule. Surveys conducted by the Air Transport Association of America, the Regional Airline Association, and the Aerospace Industries of America confirm this and continue to indicate that a significant number of foreign air carriers have maintenance performed by U.S. air carriers and repair stations in the United States. As of May 19, we have received 81 applications for foreign repair station certification. We have issued guidance material to ensure that certification priorities will not exceed our ability to conduct surveillance of those facilities.

Seventy-eight of the 81 applicants are located in Europe; the remaining three are in the Pacific area. We have identified 12 applicants from the European list that meet the requirements of that guidance material. In selecting these 12 applicants, we also assessed the priorities of U.S. operators and determined that these facilities would provide the most support for products used by them and the least impact on FAA resources. We have selected a team to certify those 12 applicants and, tentatively, plan to begin site visits by June 26. Completion of certification action is expected by July 30. These facilities. for the most part, are either aircraft manufacturers or suppliers

to aircraft manufactured in foreign countries.

There have also been additional ratings issued to three existing foreign repair stations in the European area. Our staffing increases projected for late FY 89 and FY 90 will assure an ongoing surveillance capability.

In addition, we have certificated one repair station and are in the process of
certificating two additional repair stations in the Pacific area.
Surveillance capability is not an issue as our projected work force in the
Western-Pacific Region is more than adequate to cover this increase.

We will continue to give you a periodic assessment of these issues. If we can be of further assistance, please let us know.

Identical reports have been sent to the other signatories of the December 21, 1988, letter.


Robert E. Whittington
Acting Administrator


Action Notice 8310.2

March 3 Memo on Foreign Repair Station Certification Procedures

Foreign Repair Station Certification Priority Listing

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