Understanding the U.S.-EC Airworthiness Agreement

1. Understanding the U.S.-EC Airworthiness Agreement U.S-EU Feedback Forum

2. Overview • Status of Negotiations • The Proposed Executive Agreement • Annexes • Airworthiness and Environmental Certification • Technical Implementation Procedures

3. Status of Negotiations • After several rounds of informal discussions since October 2003 and five formal negotiations, the U.S. and EU negotiating teams have a draft proposal for the Executive Agreement. --Formal coordination with Member States is expected to begin after U.S./Commission negotiation next week (June 14-15, 2006).

4. Status of Negotiations • The Executive Agreement is applicable to all EU Member States. • It applies to entities within the U.S. and the territory of the European Union. • The application of the Annexes is limited to specified Member States. • New agreement will have similar structure to a BASA… ... but will be presented together with Annexes to be ratified by the European Community (European Parliament and Council.)

5. Status of Negotiations • Because the U.S. and EU regulatory systems are different in several key areas, a treaty level document is necessary in Europe in order to provide a derogation from Community law. • Involves formal ratification process in European Community. • Expected to take at least 6 months. • Agreement would remain an Executive Agreement in U.S. structure (not treaty level).

6. Agreement Format • Three-tier concept was proposed by EU and accepted by agreed by U.S. • Tiers 1 & 2 will be ratified by the European Parliament and Council. These documents are binding on all Parties, including the National Aviation Authorities. Safety Agreement between US/EU Technical Implementation Procedures 3 Exec. Agreement Annexes FAA EASA 1 2 + Guidance Materials • Annex 1: Airworthiness & Environmental Certification • Annex 2: Maintenance

7. The Draft Executive Agreement • New items in draft Executive Agreement: • Regulatory cooperation • Formal oversight board mechanism • More detailed dispute resolution provisions

8. The Draft Executive Agreement • Contents: • 19 Articles • ARTICLE I: Definitions • ARTICLE II: Purpose and Scope • ARTICLE III: Executive Management • ARTICLE IV: General Provisions • ARTICLE V: Annexes • ARTICLE VI: Regulatory Cooperation and Transparency • ARTICLE VII: Cooperation in Quality Assurance and Standardization Inspection Activities • ARTICLE VIII: Cooperation in Enforcement Activities • ARTICLE IX: Exchange of Safety Data • ARTICLE X: Applicable Requirements, Procedures, and Guidance Material

9. The Draft Executive Agreement • Contents (continued): • ARTICLE XI: Protection of Proprietary Data and Requests for Information • ARTICLE XII: Applicability • ARTICLE XIII: Unimpeded Access • ARTICLE XIV: Fees • ARTICLE XV: Preservation of Regulatory Authority • ARTICLE XVI: Other Agreements • ARTICLE XVII: Consultations and Settlement of Disputes • ARTICLE XVIII: Suspension of Acceptance of Findings • ARTICLE XIX: Entry into Force, Amendments, and Termination

10. The Draft Executive Agreement ARTICLE I: Key Definitions “Aviation Authority” -- a responsible government agency or entity of a European Union Member State that exercises legal oversight on behalf of the European Community over regulated entities and determines their compliance with applicable standards, regulations, and other requirements within the jurisdiction of the European Community. “Technical Agent”-- for the United States, the Federal Aviation Administration (FAA); and for the European Community, the European Aviation Safety Agency (EASA. “Regulated entity” -- any natural or legal person whose civil aviation safety and environmental testing and approval activities are subject to the statutory and regulatory jurisdiction of one or both of the Parties.

11. The Draft Executive Agreement ARTICLE II: Purpose and Scope The agreement currently covers reciprocal acceptance related to: • Airworthiness certification • Environmental certification • Maintenance With the possibility of additional areas in the future.

12. The Draft Executive Agreement ARTICLE III: Executive Management • The agreement creates a Bilateral Oversight Board (BOB) • U.S. represented by FAA • EU represented by European Commission, assisted by EASA • Major functions of the BOB: • Oversee functioning of the agreement • Dispute resolution • Amendment of the Annexes and adoption of new Annexes • “Early warning” of draft regulations or legislation • Discussion forum for safety issues

13. Responsibilities Agreement USA EU Council +EP FAA (BOB) EC (BOB) Annexes FAA Technical Implementation Procedures EASA

14. The Draft Executive Agreement ARTICLE IV: General Provisions: • Terms and conditions for the reciprocal acceptance of findings and approvals are defined in the Annexes. • Recognize each other’s systems of delegation to designees or regulated entities existing as of the date of entry into force of the Agreement. • New delegation systems are subject to confidence building. • Agreement, including its Annexes, are binding.

15. The Draft Executive Agreement ARTICLE V: Annexes • Defines the contents required to be in each Annex. ARTICLE VI: Regulatory Cooperation • Develop and adopt procedures, based on US/EU joint guidelines. • Procedures must include: • “the opportunity for consultation and participation by one Party’s Technical Agent and industry experts with the other Party’s Technical Agent, whenever possible in the early stages of drafting civil aviation regulatory materials. “

16. The Draft Executive Agreement ARTICLE VII, VIII IX and X: Areas for Specific Cooperation • Participation in standardization and quality assurance inspections • Cooperation in enforcement proceedings • Timely exchange of safety data related to accidents and incidents • Notification of applicable guidance

17. The Draft Executive Agreement ARTICLE XI: Protection of Proprietary Data • Commits both Parties to protect intellectual property, confidential business data, proprietary data, etc. unless otherwise required by law (e.g. a court action). “Neither Party shall copy, release, or show information identified as restricted to anyone other than an employee of that Party without prior written consent of the person or entity possessing confidentiality interests in the restricted information.” • European Community will ensure that Aviation Authorities similarly protect data. • Also addresses how requests from the public for information will be handled.

18. The Draft Executive Agreement • ARTICLE XII Applicability-- the United States and the European Community. • ARTICLE XIII Access -- commits both Parties to assist with access to facilities of regulated entities. • ARTICLE XIV: Fees – reasonable and commensurate with services provided.

19. The Draft Executive Agreement ARTICLE XV: Preservation of Regulatory Authority The Parties reserve the right to take individual action as necessary within their respective systems. ARTICLE XVI: Other Agreements • Take measures to terminate or amend other bilateral agreements with Member States. • Continued validity of findings and approvals recognized under prior bilateral agreements until such approvals are amended or canceled.

20. The Draft Executive Agreement ARTICLE XVII: Consultations and Settlement of Disputes • Provisions for consultations by the Parties at any time. • Annexes will contain additional information on how the Technical Agents will consult. • Matters can be referred as necessary to the BOB. ARTICLE XVIII: Suspension of Acceptance of Findings • If consultations are not successful, Parties may suspend acceptance of findings with 30 days prior written notice.

21. Annexes In accordance with Article V, two annexes have also been negotiated. • Annex 1: Airworthiness and Environmental Certification • Annex 2: Maintenance These annexes will be submitted for ratification along with the Executive Agreement.

22. Technical Implementation Procedures • The Annexes also provide for details to be outlined in technical implementation procedures. • Two sets of procedures are drafted: • Airworthiness and environmental certification • Maintenance

23. Next Steps/Open Issues • Resolution of open items from FAA’s two assessments of EU regulatory system. • Closure of FAA’s findings may take until December 2006. • Resolution of open items in the Maintenance Annex text and completion of Technical Implementation Procedures and Guidance Material for Maintenance. • Agreed text of the agreement and its annexes will need to be translated into the other 19 official EU languages and ratified by the European Community.

24. THE AIRWORTHINESS AND ENVIRONMENTAL CERTIFICATION ANNEX

25. Airworthiness Annex The airworthiness and environmental certification annex contains the specific rights and obligations related to acceptance of findings, approvals and documentation for: • airworthiness and continued airworthiness of civil aeronautical products (aircraft, aircraft engines, propellers, and appliances including parts); and • noise, fuel venting, and exhaust emissions.

26. Airworthiness Annex – The Vision The negotiating team worked to identify: • Industry concerns, • Redundancy, • Areas where streamlining would be beneficial. The proposed annex creates a framework for greater reciprocal acceptance in the future.

27. TC/Amended TCs VALIDATION STC/Amended STCs, TSOs & Certain Major Changes/Repairs All other design approvals: PMA, repairs, alterations, etc. Airworthiness Annex – The Vision Under the new agreement, validation would be limited to fewer items.

28. Airworthiness Annex • Annex has 8 Articles • Article 1: Scope • Article 2: Joint Coordination Body • Article 3: Implementation • Article 4: Acceptance of Findings and Approvals • Article 5: Communications • Article 6: Technical Consultations • Article 7: Technical Assistance • Article 8: Notification of Investigation or Enforcement Action In the following slides,  denotes a new feature of this agreement

29. Airworthiness Annex • Drafted as high level binding text, with procedural details in the third level technical implementation procedures. 1. SCOPE: • Reciprocal acceptance of findings of compliance, approvals, and documentation • Technical assistance

30. Airworthiness Annex 2. Establishes a Certification Oversight Board as a Joint Coordination Body.  • Certification Oversight Board is accountable to the BOB • Jointly led by FAA and EASA • Meets regularly to ensure functioning of this Annex • Reports unresolved issues to the BOB and ensures the implementation of decisions from the BOB

31. Airworthiness Annex • Functions of the Certification Oversight Board • Approve and revise the technical implementation procedures • Share information • Resolve technical issues within its responsibilities; examine other issues • Develop means for cooperation and exchange of info on certification, environmental standards, quality management & standardization • Propose amendments of this Annex to the BOB

32. Airworthiness Annex • Implementation section contains 4 subsections: 3.1 General 3.2 Design Approvals 3.3 Continued Airworthiness 3.4 Production 3.5 Export Airworthiness Certification These are the principles underlying all activities related to airworthiness and environmental certification between the U.S. and the European Community

33. Airworthiness Annex 3.1General • Technical implementation procedures to address the differences between the two systems. 

34. Airworthiness Annex 3.2Design Approvals • To benefit from reciprocal acceptance under this agreement:  • EU applicant applies to EASA; • U.S. applicant applies to FAA.

35. Airworthiness Annex 3.2Design Approvals (cont.) Validation process used for: • Design of aircraft,aircraft engines, propellers and appliances • Supplemental type certificates • Certain major changes to type designs • Acoustical and emission changes 

36. Airworthiness Annex 3.2Design Approvals (cont.) • New form of concurrent validation is introduced—joint certification process.  • Requires agreement from FAA, EASA and applicant • Applies where components of a product are designed by an entity under the authority of the other Party and where compliance demonstration and findings can be made locally. • Joint certification bases and means of compliance • Common Issue Papers/CRIs • Delegation and work sharing program

37. Airworthiness Annex 3.2Design Approvals (cont.) • Comparable systems for approval of parts, repair design data and design changes. • Accept parts, repair design data, design changes (including FAA alterations),without a separate VA (FAA/EASA) approval,once they are approved through the CA’s system. • Some exceptions are outlined in the technical implementation procedures.

38. Airworthiness Annex 3.2Design Approvals (cont.) • Certifying statements are to be defined in the technical implementation procedures. • EASA accepts U.S. procedures (Part 21) as an acceptable alternative to EU requirements for the organizational demonstration of capability (DOA). 

39. Airworthiness Annex 3.3Continued Airworthiness EASA, FAA and Aviation Authority commitments: • Address unsafe conditions and exchange information on failures, malfunctions and defects • Exercise the applicable ICAO Annex 8 responsibilities for the life cycle of the product. • Timely communicate changes to ownership or airworthiness status of certificates. 

40. Airworthiness Annex 3.4Production • Production approvals required for products to be exported between the US and EU.  • Local production approval satisfactory—no separate FAA/EASA production approval needed.  • Defines which production approvals granted or extended outside the territory of the US and EU may be recognized.

41. Airworthiness Annex 3.4Production • Defines conditions for reliance on the surveillance system of the local authority. • Surveillance assistance is requested • Manufacturing facility holds a production approval of similar scope • FAA, EASA or Aviation Authority, as applicable is willing to undertake assistance • Details of assistance are documented

42. Airworthiness Annex 3.4Production • Introduces conditions for the acceptance of each other’s authorized release certificates for parts (a local release) in lieu of FAA or EASA’s release document. • Means EASA Form 1 will be recognized for U.S. parts manufactured in the EU, and vice versa. • Privileges are granted to specific countries identified in attachment to the Annex.

43. Airworthiness Annex 3.5Export Airworthiness Certification • Defines acceptance of Certificates of Airworthiness and Authorized Release Certificates • Covers new products, rebuilt engines,  and used civil aircraft • Mandates what is to be certified, (e.g. conforms to a design approved by the importing authority, is in a condition for safe operation, etc.) • Requires specific certifying statements and records to be defined in the technical implementation procedures.

44. Airworthiness Annex 3.5Export Airworthiness Certification • Requires coordination of exceptions if requirements for issuing an airworthiness certification are not met. • Allows for import of used aircraft only if a TC holder exists to support continued airworthiness.  • Exempts U.S. parts from the European Parts Approval (EPA) marking requirements. 

45. Airworthiness Annex 4. Acceptance of Findings and Approvals • New section outlining the qualification requirements of FAA, EASA, and Aviation Authorities. • Documented system • Demonstrated knowledge of each other’s systems • Appropriately qualified staff and training • Internal quality audits and standardization inspections

46. Airworthiness Annex 4. Acceptance of Findings and Approvals • FAA and EASA meet the qualification requirements for airworthiness certification. • Confidence building process to be conducted for environmental certification. • Aviation Authorities that meet the conditions are listed in Appendix 1. • Provides for the addition of Aviation Authorities following a consultation process and action by the Bilateral Oversight Board.

47. Airworthiness Annex 5. Communications • English language • Technical Consultations • Resolve issues through consultation. • Process to be defined in technical implementation procedures • Principle is to attempt to resolve at the lowest level

48. Airworthiness Annex 7. Technical Assistance • Upon request and after mutual agreement, FAA, EASA and Aviation Authorities shall provide technical assistance to each other. • Use its own regulatory system and procedures. • Delegated organizations may conduct certain tasks. • Assistance may be requested related to import of used aircraft and obtaining information from the original manufacturer.

49. Airworthiness Annex 8. Notification of Investigation or Enforcement Action  • Prompt notification of investigation or enforcement action that may involve a product, regulated entity, or violation of this Annex. • Cooperation in sharing information needed for the investigation or enforcement action.

50. Summary • Executive Agreement is essentially complete. • Both sides have worked intensively to draft text on airworthiness and environmental certification that progresses bilateral cooperation in new areas. • Closing FAA assessment findings are key to timing of final signature.