FAA To Allow Non-citizen Trusts, with Conditions

The FAA will continue to allow non-U.S. citizen owner trust aircraft registrations, according to a recently released notice of proposed policy. In mid-2010, the agency announced a moratorium on non-citizen trusts, but was persuaded by NBAA and other groups to reverse that decision while the FAA could review the practice and draft a new policy. The FAA also held a public meeting last June to solicit industry input to shape the draft policy.

Non-citizen trusts are used by U.S. corporations that own aircraft but don’t satisfy executive officer citizenship requirements or cannot determine the citizenship of shareholders. Additionally, they are used for aircraft leased by non-U.S. citizens and during aircraft sale transactions, among others. NBAA vice president of operations, education and economics Mike Nichols told AIN that the proposed policy “preserves non-U.S. resident trusts; shows a trust agreement template, clarifying what the FAA wants to see; and specifies that the trust will be responsible for communicating aircraft operator and maintenance compliance data to the FAA upon request.”

Overall, “Industry is pleased with what the FAA has done,” he said. However, NBAA is concerned about the two-business-day deadline for requested operations and maintenance data from the trust, which Nichols said might not be enough time for the trust to get the information from the operator and relay that back to the FAA. “NBAA will seek a more workable deadline,” he said.