[Federal Register Volume 67, Number 116 (Monday, June 17, 2002)]
[Proposed Rules]
[Pages 41302-41304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15195]



[[Page 41301]]

-----------------------------------------------------------------------

Part II





Department of Transportation





-----------------------------------------------------------------------



Federal Aviation Administration



-----------------------------------------------------------------------



14 CFR Part 47



Aircraft Registration Requirements; Clarification of ``Court of 
Competent Jurisdiction''; Proposed Rule

  Federal Register / Vol. 67, No. 116 / Monday, June 17, 2002 / 
Proposed Rules  

[[Page 41302]]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 47

[Docket No. FAA-2002-12377; Notice No. 02-10]
RIN 2120-AH75


Aircraft Registration Requirements; Clarification of ``Court of 
Competent Jurisdiction''

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

-----------------------------------------------------------------------

SUMMARY: FAA proposes to amend language in the aircraft registration 
regulations governing aircraft last previously registered in a foreign 
country. This proposal is needed to clarify the term ``court of 
competent jurisdiction.'' This action is intended to clearly describe 
what constitutes satisfactory evidence to the Administrator that 
foreign registration of an aircraft has ended or is invalid.

DATES: Send your comments on or before July 17, 2002.

ADDRESSES: Address your comments to the Docket Management System, U.S. 
Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., 
Washington, DC 20590-0001. You must identify the docket number FAA-
2002-12377 at the beginning of your comments, and you should submit two 
copies of your comments. If you wish to receive confirmation that FAA 
received your comments, include a self-addressed, stamped postcard.
    You may also submit comments through the Internet to http://dms.dot.gov. You may review the public docket containing comments to 
these proposed regulations in person in the Dockets Office between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The 
Dockets Office is on the plaza level of the NASSIF Building at the 
Department of Transportation at the above address. Also, you may review 
public dockets on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: Julie A. Stanford, Aircraft 
Registration Branch, AFS-750, Civil Aviation Registry, Flight Standards 
Service, Federal Aviation Administration, Post Office Box 25504, 
Oklahoma City, OK 73125; Telephone (405) 954-3131.

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested persons are invited to participate in the making of the 
proposed action by submitting such written data, views, or arguments as 
they may desire. Comments relating to the environmental, energy, 
federalism, or economic impact that might result from adopting the 
proposals in this document also are invited. Substantive comments 
should be accompanied by cost estimates. Comments must identify the 
regulatory docket or notice number and be submitted in duplicate to the 
DOT Rules Docket address specified above.
    All comments received, as well as a report summarizing each 
substantive public contact with FAA personnel concerning this proposed 
rulemaking, will be filed in the docket. The docket is available for 
public inspection before and after the comment closing date.
    All comments received on or before the closing date will be 
considered by the Administrator before taking action on this proposed 
rulemaking. Comments filed late will be considered to the extent 
possible without incurring expense or delay. The proposals in this 
document may be changed in light of the comments received.
    Commenters wishing the FAA to acknowledge receipt of their comments 
submitted in response to this document must include a pre-addressed, 
stamped postcard with those comments on which the following statement 
is made: ``Comments to Docket No. FAA-2000-12377.'' The postcard will 
be date stamped and mailed to the commenter.

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by taking the 
following steps:
    (1) Go to the search function of the Department of Transportation's 
electronic Docket Management System (DMS) web page (http://dms.dot.gov/search).
    (2) On the search page type in the last four digits of the Docket 
number shown at the beginning of this notice. Click on ``search.''
    (3) On the next page, which contains the Docket summary information 
for the Docket you selected, click on the document number of the item 
you wish to view.
    You can also get an electronic copy using the Internet through 
FAA's web page at http://www.faa.gov/avr/arm/nprm/nprm.htm or the 
Government Printing Office's web page at http://www.access.gpo.gov/su_docs/aces/aces140.html.
    You can also get a copy by submitting a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the docket number, notice number, or amendment number 
of this rulemaking.

Background

    On August 9, 1946, the United States became a party to the 
Convention on International Civil Aviation, 61 Stat. 1180 (Chicago 
Convention). Under the Chicago Convention, the contracting parties 
agreed on certain principles and arrangements so that international 
civil aviation could be developed in a safe and orderly manner.
    In considering the orderly registration of aircraft, Chapter III--
NATIONALITY OF AIRCRAFT, Article 17 of the Chicago Convention, provides 
that ``aircraft have the nationality of the State in which they are 
registered.'' Therefore, ``an aircraft cannot be validly registered in 
more than one State, but its registration may be changed from one State 
to another'' (Article 18). The rules for accomplishing a change in 
registration mandate that ``the registration or transfer of 
registration of aircraft in any contracting State shall be made in 
accordance with its laws and regulations'' (Article 19).
    Before registering an aircraft, an importing State must first 
ensure that the exporting State has removed the aircraft form its 
registry. Upon request, the contracting State of last registration, in 
accordance with Article 21 of the Chicago Convention, furnishes 
information to the importing State that the registration of a specific 
aircraft has ended and the aircraft is no longer on that State's 
registry.
    In promulgating Sec. 47.37, the Administrator determined that for 
purposes of United States registration, satisfactory evidence of 
termination of foreign registration included ``a final judgment or 
decree of a court of competent jurisdiction that determines, under the 
law of the country concerned, that the registration has in fact become 
invalid'' (14 CFR 47.37(b)(2)).
    The Administrator has interpreted the phrase ``court of competent 
jurisdiction'' to be a court of the country where the aircraft was last 
registered. In each of two recent cases (IAL Aircraft Holding, Inc. v. 
Federal Aviation Administration, 206 F.3d 1042, vacated, 216 F.3d 1304 
(11th Cir. 2000) [hereinafter referred to as IAL Aircraft] and Air One 
Helicopters, Inc. v. Federal Aviation Admin., 86 F.3d 880 (9th Cir. 
1996) [hereinafter referred to as Air One]), a divided panel of the 
court interpreted the phrase ``court of competent jurisdiction'' 
differently from the FAA. In Air One, the Ninth Circuit implicitly 
decided that a United States

[[Page 41303]]

court of appeals was itself a ``court of competent jurisdiction'' 
capable of rejecting the position of Spanish registry officials that 
the aircraft's Spanish registry was valid. In IAL Aircraft, the 
Eleventh Circuit held expressly that a state trial court having 
jurisdiction over the aircraft in rem was a ``court of competent 
jurisdiction'' that could determine that a Brazilian registration was 
invalid, despite Brazil's continued insistence that its registration 
remained valid. On July 6, 2000, the Eleventh Circuit vacated its 
earlier decision on the grounds that the court lacked Article III 
jurisdiction at the time the decision was issued, in light of IAL 
Aircraft's undisclosed sale of the aircraft while the case was pending 
before the court.
    The FAA does not agree with these decisions rejecting its 
interpretation of its own regulation, an interpretation that, under 
governing principles of administrative law, should have been given 
deference by the courts. However, the FAA does not believe that 
adhering to its position and continuing to litigate is worth the 
potential harm done to international relations by possible additional 
judicial decisions forcing the FAA to register aircraft that remain 
under foreign registration. These judicial decisions may simply 
``encourage foreign courts to rule, in subsequent cases, that aircraft 
registered by the FAA in the United States are in fact `validly' 
registered here'' (Air One, O'Scannlain, J., dissenting).

General Discussion of the Proposal

    The panel majority in IAL Aircraft suggested the FAA consider 
amending or clarifying the regulation. Accordingly, the FAA is 
proposing in this NPRM to amend Sec. 47.37(b)(2) to clarify the phrase 
``court of competent jurisdiction.'' The proposed amendment would add 
language to Sec. 47.37(b)(2) to more clearly describe that the ``court 
of competent jurisdiction'' must be a court of the country where the 
aircraft was last registered. As discussed under the background 
section, this amendment is necessary for FAA compliance with the 
obligations contained in the Chicago Convention.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the FAA consider the impact of paperwork and other information 
collection burdens imposed on the public. We have determined that there 
are no new information collection requirements associated with this 
proposed rule.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
reviewed the corresponding ICAO Standards and Recommended Practices and 
has identified no differences with this proposed regulation. As stated 
previously, this amendment is necessary for FAA compliance with the 
agreements contained in the Convention.

Executive Order 12866 and DOT Regulatory Policies and Procedures

    Executive Order 12866, Regulatory Planning and Review, directs the 
FAA to assess both the costs and benefits of a regulatory change. We 
are not allowed to propose or adopt a regulation unless we make a 
reasoned determination that the benefits of the intended regulation 
justify the costs.
    The issues addressed by the proposed change occur infrequently. FAA 
is aware of only two cases where judgments were pursued and obtained in 
countries other than where the aircraft was last registered (IAL 
Aircraft Holding, Inc. v. Federal Aviation Administration, 206 F.3d 
1042, 1045, vacated, 216 F.3d 1304 (11th Cir. 2000) and Air One 
Helicopters, Inc. v. Federal Aviation Admin., 86 F.3d 880 (9th Cir. 
1996). This would indicate that any other similar situations would have 
been in accordance with FAA's interpretation of the regulation, i.e., 
the judgment was obtained in the country where the aircraft was last 
registered.
    If adopted, the proposed change would affect only those few cases 
which otherwise might have been filed within the United States rather 
than in the country where the aircraft was last registered. While there 
may be some additional costs associated with those cases, such costs 
would vary according to the country of last registration and in some 
cases may be less than those normally associated with obtaining a 
proper judgment from a court of the United States.
    The proposed change offers the benefits of compliance with 
international treaty (Convention on International Civil Aviation, 61 
Stat. 1180) and Section 44102 of Title 49, United States Code. The 
benefits of complying with international law appear to justify 
additional costs, if any, associated with obtaining a judgment from a 
court in the country where the aircraft was last registered. 
Accordingly, our assessment of this proposal indicates that its 
economic impact is minimal.
    Since its costs and benefits do not make it a ``significant 
regulatory action'' as defined in the Order, we have not prepared a 
``regulatory evaluation,'' which is the written cost/benefit analysis 
ordinarily required for all rulemaking proposals under the DOT 
Regulatory Policies and Procedures. We do not need to do the latter 
analysis where the economic impact of a proposal is minimal.

Economic Evaluation, Regulatory Flexibility Determination, 
International Trade Impact Assessment, and Unfunded Mandates Assessment

    Proposed changes to Federal regulations must undergo several 
economic analyses. First, Executive Order 12866 directs that each 
Federal agency shall propose or adopt a regulation only upon a reasoned 
determination that the benefits of the intended regulation justify its 
costs. Second, the Regulatory Flexibility Act of 1980 requires agencies 
to analyze the economic impact of regulatory changes on small entities. 
Third, the Trade Agreements Act (19 U.S.C. section 2531-2533) prohibits 
agencies from setting standards that create unnecessary obstacles to 
the foreign commerce of the United States. In developing U.S. 
standards, this Trade Act also requires agencies to consider 
international standards and, where appropriate, use them as the basis 
of U.S. standards. And fourth, the Unfunded Mandates Reform Act of 1995 
requires agencies to prepare a written assessment of the costs, 
benefits and other effects of proposed or final rules that include a 
Federal mandate likely to result in the expenditure by State, local or 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year (adjusted for inflation.)
    However, for regulations with an expected minimal impact above-
specified analyses are not required. The Department of Transportation 
Order DOT 2100.5 prescribes policies and procedures for simplification, 
analysis, and review of regulations. It is determined that the expected 
impact is so minimal that the proposal does not warrant a full 
Evaluation as statement to that effect and the basis for it is included 
in proposed regulation. Since this final rule revises and clarifies FAA 
rulemaking procedures, the expected outcome is to have a minimal impact 
with positive net benefits. The FAA requests comments with supporting

[[Page 41304]]

justification regarding the FAA determination of minimal impact.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act (RFA) of 1980 established ``as 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide range of small 
entities, including small businesses, not-for-profit organizations and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule will have a significant economic impact on a number of small 
entities. If the determination is that it will, the agency must prepare 
a regulatory flexibility analysis described in the RFA. However, if an 
agency determines that a proposed or final rule is not expected to have 
a significant economic impact on a substantial number of small 
entities, section 605(b) of the RFA provides that the head of the 
agency may so certify and a regulatory flexibility analysis is not 
required. The certification must include a statement providing the 
factual basis for this determination, and the reasons should be clear.
    The proposed rule clarifies the term ``court of competent 
jurisdiction'' to clearly describe what constitutes satisfactory 
evidence to the Administrator that foreign registration of an aircraft 
has ended or is invalid. Its economic impact is minimal. Therefore, we 
certify that this proposed action would not have a significant economic 
impact on a substantial number of small entities.

International Trade Impact Analysis

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
engaging in any standards or related activities that create unnecessary 
obstacles to the foreign commerce of the United States. Legitimate 
domestic objectives, such as safety, are not considered unnecessary 
obstacles. The statute also requires consideration of international 
standards and where appropriate, that they be the basis for U.S. 
standards. In addition, consistent with the Administration's belief in 
the general superiority and desirability of free trade, it is the 
policy of the Administration to remove or diminish to the extent 
feasible, barriers to international trade, including, both barriers 
affecting the export of American goods and services to foreign counties 
and barriers affecting the import of foreign goods and services into 
the United States. In accordance with the above statute and policy, the 
FAA has assessed the potential affect of this proposed rule and has 
determined that it would have negligible impact and therefore no affect 
on any trade-sensitive activity.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (the Act), enacted as 
Public Law 104-4 on March 22, 1995, is intended, among other things, to 
curb the practice of imposing unfunded Federal mandates on State, 
local, and tribal governments. Title II of the Act requires each 
Federal agency to prepare a written statement assessing the effects of 
any Federal mandate on a proposed or final rule that may result in a 
$100 million or more expenditure (adjusted annually for inflation) in 
any one year by State, local, and tribal governments in the aggregate, 
or by the private sector; such a mandate is deemed to be a 
``significant regulatory action.'' The proposed rule does not contain 
such a mandate. Therefore, the requirements of Title II of the Unfunded 
Mandates Reform Act of 1995 do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. We have determined that 
this action would not have a substantial direct effect on the States, 
on the relationship between the national Government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, we have determined that this notice of 
proposed rulemaking would not have federalism implications.

Environmental Analysis

    FAA Order 1050.1D defines FAA actions that may be categorically 
excluded from preparation of a National Environmental Policy Act (NEPA) 
environmental impact statement. In accordance with FAA Order 1050.1D, 
appendix 4, paragraph 4(j), this proposed rulemaking action qualifies 
for a categorical exclusion.

Energy Impact

    The energy impact of the notice has been assessed in accordance 
with the Energy Policy and Conservation Act (EPCA) Public Law 94-163, 
as amended (42 U.S.C. 6362) and FAA Order 1053.1. It has been 
determined that the proposal is not a major regulatory action under the 
provisions of the EPCA.

List of Subjects in 14 CFR Part 47

    Aircraft, Reporting and recordkeeping requirements.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend part 47 of Title 14, Code of Federal 
Regulations, as follows:

PART 47--AIRCRAFT REGISTRATION

    1. The authority citation for part 47 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113-40114, 44101-44108, 44110-
44111, 44703-44704, 44713, 45302, 46104, 46301; 4 U.S.T. 1830.

    2. Amend Sec. 4737 by revising paragraph (b)(2) to read as follows:


Sec. 47.37  Aircraft last previously registered in a foreign country.

* * * * *
    (b) * * *
    (2) A final judgment or decree of a court of competent jurisdiction 
of the foreign country, determining that, under the laws of that 
country, the registration ahs become invalid.

    Dated: Issued in Washington, DC, on May 17, 2002.
Louis C. Cusimano,
Acting Director, Flight Standards Service.
[FR Doc. 02-15195 Filed 6-14-02; 8:45 am]
BILLING CODE 4910-13-M