[Federal Register Volume 70, Number 134 (Thursday, July 14, 2005)]
[Rules and Regulations]
[Pages 40872-40877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13762]



[[Page 40871]]

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Part IV





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 43



Implementing the Maintenance Provisions of Bilateral Agreements; Final 
Rule

  Federal Register / Vol. 70, No. 134 / Thursday, July 14, 2005 / Rules 
and Regulations  

[[Page 40872]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 43

[Docket No.: FAA-2004-17683; Amendment No. 43-40]
RIN 2120-AI19


Implementing the Maintenance Provisions of Bilateral Agreements

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This rule amends the regulations governing maintenance, 
preventive maintenance, and alterations performed on U.S. aeronautical 
products by certain Canadian persons. The amendment removes specific 
regulatory references and other requirements unique to that work when 
performed in Canada. The United States and Canada have entered into an 
international agreement called a Bilateral Aviation Safety Agreement 
(BASA) that is in line with BASAs negotiated with other countries. The 
FAA and Canada are negotiating Maintenance Implementation Procedures 
(MIP) to accompany the BASA. The current rule contains specific 
regulatory language that constrains developing a standardized MIP. The 
MIP will require compliance with the applicable Canadian regulations 
plus special conditions that will ensure a level of safety equivalent 
to that provided by the FAA's regulations. This action is necessary for 
the MIP to proceed.

DATES: These amendments become effective concurrent with the date the 
MIP accompanying the BASA between the United States and Canada enters 
into force. The FAA will publish a notice in the Federal Register 
announcing the effective date of this final rule.

FOR FURTHER INFORMATION CONTACT: William D. Scott, Flight Standards, 
Aircraft Maintenance Division, AFS-300, Federal Aviation 
Administration, 800 Independence Avenue SW., Washington, DC 20591; 
telephone (502) 671-4015; facsimile (502) 671-4003, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) Web page (http://dms.dot.gov/search);
    (2) Visiting the Office of Rulemaking's Web page at http://www.faa.gov/avr/arm/index.cfm; or
    (3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.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 amendment number or docket number of this 
rulemaking.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
http://dms.dot.gov.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. If you are a small entity and you have a 
question regarding this document, you may contact its local FAA 
official, or the person listed under FOR FURTHER INFORMATION CONTACT. 
You can find out more about SBREFA on the Internet at http://www.faa.gov/avr/arm/sbrefa.htm, or by e-mailing us at [email protected].

Authority for this Rulemaking

    The FAA's authority to issue rules on aviation safety is found in 
Title 49 of the United States Code. Subtitle I, section 106 describes 
the authority of the FAA Administrator. Subtitle VII, Aviation 
Programs, describes in more detail the scope of the agency's authority.
    This rulemaking is promulgated under the authority described in 
subtitle VII, part A, subpart III, section 44701, ``General 
requirements.'' Under that section, the FAA is charged with promoting 
safe flight of civil aircraft in air commerce by prescribing--
     Minimum standards required for safety in the design and 
performance of aircraft;
     Regulations and minimum standards for safety in 
inspecting, servicing, and overhauling aircraft; and
     Regulations for other practices, methods, and procedures 
the Administrator finds necessary for safety in air commerce.
    This regulation is within the scope of that authority because it 
prescribes'
     New requirements for Canadian maintenance organizations 
and aviation maintenance engineers to meet when performing maintenance 
on U.S. aeronautical products.
     The new requirements are in line with requirements imposed 
on other foreign entities by BASA/MIPs.
     That compliance with the BASA/MIP is considered an 
equivalent level of safety to the requirements of this chapter.

Background

    Section 43.17 of Title 14 of the Code of Federal Regulations (CFR) 
applies to maintenance activities performed on U.S.-registered aircraft 
and U.S. aeronautical products by authorized Canadian persons. Among 
other requirements, it specifies the particular FAA maintenance 
regulations to be followed when that work is performed in Canada. At 
present, this is the only regulation in part 43 that imposes specific 
requirements for maintenance work performed in a named country. It is 
also the only regulation that permits a person in a named country and 
not holding a United States airman or air agency certificate to perform 
maintenance, preventive maintenance, or alterations on U.S. 
aeronautical products. The regulation is the result of a long-standing 
reciprocal maintenance arrangement between the United States and 
Canada. The United States does not allow such work on U.S.-registered 
aircraft or U.S. aeronautical products in other countries except when 
the person there holds an FAA-issued airman or air agency (foreign 
repair station) certificate.
    The Proposal: The United States recently concluded an executive 
agreement called a Bilateral Aviation Safety Agreement (BASA) with 
Canada. This BASA, with the working details to be spelled out in 
associated Maintenance Implementation Procedures (MIP), will provide a 
revised reciprocal maintenance arrangement. With this agreement, 
authorized persons in each country will continue to be allowed to work 
on aircraft and aeronautical products under the regulatory control of 
the other country. The MIP will spell out the requirements that 
maintenance providers in each country will have to follow. To 
accommodate developing the United States/Canada MIP, the FAA published 
a Notice of Proposed Rulemaking, ``Implementing the Maintenance 
Provisions of Bilateral Agreements'' on

[[Page 40873]]

May 11, 2004 (69 FR 26254). The essence of the proposal was to amend 14 
CFR 43.17(d)(2) and (d)(4) to remove references to specific regulations 
to be followed by authorized Canadian persons when performing and 
recording their work because the applicable maintenance requirements 
will be spelled out in the MIP. The NPRM proposed to amend that section 
to require that the work would be performed ``in accordance with an 
agreement between the United States and Canada.'' The FAA believed that 
leaving the specific regulatory reference and other requirements in the 
rule would provide constraints that would inhibit developing the MIP. 
BASAs and MIP are already in effect with several other countries, and 
these are not affected by similar constraints in the regulations. The 
FAA received one comment opposed to this change. This comment and the 
FAA's response are discussed in the Summary of Comments. Because of the 
comment, we have changed the language in the rule to reference 
specifically the BASA/MIP that will provide a level of safety 
equivalent to that provided by the FAA's rules.
    The FAA also proposed to remove the requirement in Sec.  
43.17(c)(2) that, for a Canadian Approved Maintenance Organization 
(AMO) to be able to work on U.S. aeronautical products located in 
Canada, those products must have been transported to Canada from the 
United States. Under the proposal, when a product is located outside 
the United States, it no longer would have to be transported first to 
the United States and then to Canada. This change will extend the same 
privileges to Canadian maintenance organizations that now apply to FAA-
certificated domestic and foreign repair stations. We are adopting this 
change as proposed.
    The preamble to the NPRM noted that the new BASA would ``expand * * 
* the maintenance that can be performed in the U.S. and Canada.'' 
Specifically, the NPRM continued: ``Revisions proposed in this 
rulemaking will allow maintenance in Canada, with respect to U.S.-
registered aircraft to be more in line with the maintenance allowed by 
other foreign repair stations * * *. [the] FAA proposes changes to 
Sec.  43.17 that will bring this regulation into line with a negotiated 
agreement.'' One of the changes proposed, but not discussed in the 
preamble, was the removal of the requirement in Sec.  43.17(c)(2) that, 
for a Canadian AMO (including an authorized employee performing work 
for such a company) to be authorized to perform maintenance, preventive 
maintenance, and alterations on U.S.-registered aircraft or other U.S. 
aeronautical products, the aircraft or aeronautical product had to be 
located in Canada. The removal of this requirement would have permitted 
authorized Canadian personnel to work on U.S.-registered aircraft or 
aeronautical products in the U.S. No comments addressed that part of 
the proposal.
    Upon further consideration of that part of the proposal, however, 
the FAA has decided to keep the current restriction that the aircraft 
or aeronautical product must be located in Canada. As discussed below 
under History, 49 U.S.C. 44711(a)(2)(A) prohibits a person from serving 
in any capacity as an airman with respect to a civil aircraft, aircraft 
engine, propeller, or appliance without holding an airman certificate 
(for example, a mechanic or repair station certificate). One category 
of ``airman'' is an individual ``directly in charge of inspecting, 
maintaining, overhauling, or repairing aircraft, aircraft engines, 
propellers, or appliances.'' In other words, in general, an individual 
not holding an FAA-issued airman certificate may not perform 
maintenance on U.S.-registered aircraft or aeronautical products and 
return them to service. The statute, however, provides for an exception 
to this requirement when the maintenance performed is outside the 
United States. Under 49 U.S.C. 40102(a)(8)(B) (definition of 
``airman''), the Administrator of the FAA may make an exception ``for 
individuals employed outside the United States.'' By virtue of this 
provision, certain Canadian persons and maintenance organizations not 
holding U.S. airman certificates have been authorized to perform 
maintenance, preventive maintenance, and alterations on U.S.-registered 
aircraft and U.S. aeronautical products located in Canada.
    Because 49 U.S.C. 40102(a)(8)(B) does not grant the FAA authority 
to except a mechanic performing maintenance on a U. S.-registered civil 
aircraft or U.S. aeronautical product located within the United States 
from the definition of ``airman,'' and a Canadian AMO representative 
performing maintenance on a U.S.-registered aircraft or aeronautical 
product would be serving in the capacity of an airman, we are keeping 
the restriction presently found in Sec.  43.17(c)(2) that the aircraft 
or aeronautical product be ``located in Canada.''
    Another change proposed for Sec.  43.17(c)(2) was to remove the 
phrase ``a person who is an authorized employee'' of an AMO for the 
stated reason that, when the rule was written, the FAA used that 
language to be consistent with the Canadian rule. Noting that the 
Canadian rule had since been changed, the FAA proposed to remove the 
reference. In addition, the proposed text also removed the phrase 
immediately following it, that is, ``performing work for such a 
company.'' Through an oversight, those words were omitted from the 
discussion in the preamble to the NPRM. Because the two phrases must be 
read together, and the reason for removing them is the same as noted 
above, the entire phrase is being removed in this amendment as 
proposed.
    While the removal of the phrase in Sec.  43.17(c)(2) discussed 
immediately above was addressed in the preamble to the NPRM, other 
changes to the proposed amendatory text for that section were not 
discussed or explained. In the existing rule, certain criteria had to 
be met by an AMO before it could perform work on a U.S.-registered 
aircraft or U.S. aeronautical product in Canada. In particular, the AMO 
had to have a ``system of quality control for the maintenance, 
alteration, and inspection of aeronautical products that had been 
approved by the Canadian Department of Transport'' as a prerequisite to 
performing the maintenance, preventive maintenance, or alterations. 
Instead, the proposed rule stated, in pertinent part, that an AMO 
``holding appropriate ratings may, with respect to U.S.-registered 
aircraft or other U.S. aeronautical products, perform maintenance, * * 
*.''
    The FAA unintentionally omitted from the NPRM a discussion of why 
the agency was proposing to delete the reference to an AMO having to 
have an approved ``system of quality control for the maintenance, 
alteration, and inspections * * *'' before it was authorized to perform 
that work. The FAA determined that if the referenced prerequisite 
remained in the regulation, it would present another constraint to 
developing the BASA/MIP. To make the United States/Canada BASA/MIP 
align with the format of other existing BASA/MIPs, the agency sought to 
place such specific requirements in the MIP. Under the terms of the 
MIP, Canada would watch the AMOs for compliance with the requirements 
set forth in the MIP. Therefore, that part of the rule is adopted as 
proposed.
    In addition to the above changes, the FAA proposed to delete the 
reference throughout the regulation to ``Canadian Department of 
Transport,'' the former name of the Canadian agency, and to replace it 
with ``Transport Canada Civil Aviation (TCCA),'' the current name of 
the Canadian civil aviation authority.

[[Page 40874]]

We also proposed to clarify the rule by replacing the word ``work'' in 
Sec.  43.17(d)(2), (d)(3), and (d)(4) with ``maintenance, preventive 
maintenance, or alteration.'' Those changes are being adopted as 
proposed.
    History: As described more fully in the NPRM, the U.S./Canadian 
reciprocal maintenance arrangement came about after World War II. At 
that time, the number of U.S.-registered aircraft flying in Canadian 
airspace increased and a need developed for maintenance on those 
aircraft while they were in Canada. Recognizing the similarities of 
their respective maintenance regulations, the two countries developed 
reciprocal arrangements. Those arrangements allowed authorized persons 
in each country to perform maintenance on aircraft under the regulatory 
control of the other country under specified conditions.
    On November 13, 1951, the Civil Aeronautics Board (CAB) issued 
Special Civil Air Regulation No. SR-377 (SR-377), titled ``Mechanical 
Work Performed on United States Registered Aircraft by Certain Canadian 
Mechanics.'' The regulation allowed Canadian maintenance persons who 
did not hold U.S. airman certificates to perform work on U.S.-
registered aircraft located in Canada. The preamble to SR-377 noted the 
CAB considered the Canadian standards to be of a ``high caliber'' and 
to ``compare favorably with those in force in the United States.'' The 
CAB relied on section 1(6) of the Civil Aeronautics Act of 1938 to 
exempt Canadian mechanics employed outside the United States from the 
definition of ``airman'' and thus from the requirement to hold a valid 
U.S. airman certificate. A similar exception now exists in 49 U.S.C. 
40102(a)(8).
    Under current U.S. law, an individual may not serve in any capacity 
as an airman performing maintenance on a U.S.-registered aircraft or 
aeronautical product without holding a U.S. airman certificate. This 
prohibition is found at 49 U.S.C. 44711(a)(2)(A). Current 49 U.S.C. 
40102(a)(8)(B) defines an airman as an individual ``who is directly in 
charge of inspecting, maintaining, overhauling, or repairing aircraft, 
aircraft engines, propellers, or appliances.'' This means that each 
person who performs maintenance on and returns an aircraft or 
aeronautical product to service must hold a U.S. airman certificate; 
this would not apply to a non-certificated person who was being 
supervised by a certificated airman. As in the 1938 Act referenced 
above, current 49 U.S.C. 40102(a)(8)(B) contains a similar exception in 
its definition of airman. Specifically, that section provides that the 
Administrator of the FAA ``may provide otherwise for individuals 
employed outside the United States.''
    In October 1964, SR-377 was reissued as Special Federal Aviation 
Regulation (SFAR) No. 10, and on April 13, 1966, it was codified as 14 
CFR 43.17.
    In 1984, the United States and Canada signed the current Agreement 
Concerning the Airworthiness and Environmental Certification, Approval, 
or Acceptance of Imported Civil Aeronautical Products (the U.S./Canada 
Bilateral Airworthiness Agreement (BAA)). The BAA provided for an 
agency-to-agency Schedule of Implementation Procedures (IP), that, 
among other requirements, would specify in detail both maintenance and 
aircraft certification procedures. The IP was completed and signed on 
May 18, 1985; it was revised on May 18, 1988. Together, the BAA/IP 
allows authorized persons and companies in each country to perform 
maintenance, alterations, and modifications on aircraft under the 
regulatory control of the other country. Such work must be performed 
following the laws, regulations, standards, and requirements of the 
country regulating the airworthiness of the affected aircraft or 
product.
    Bilateral Aviation Safety Agreements: In recent years, the United 
States has entered into BASAs with several countries to improve 
cooperation and increase efficiency in matters relating to civil 
aviation safety. The agreements provide for developing an IP between 
the aviation authorities of each respective country. The IP address the 
technical details of the agreement in areas such as certification, 
maintenance, simulators, and airline operations. Maintenance 
Implementation Procedures (MIP) outline the terms and conditions under 
which the FAA and the foreign civil aviation authority can accept each 
other's inspections and evaluations of maintenance facilities for 
findings of compliance. Their purpose is to reduce redundant regulatory 
oversight without adversely affecting aviation safety. MIP set forth 
parameters and requirements for maintenance and alterations performed 
in the country that does not have regulatory control of the product. 
MIP typically are structured to assure a level of safety equivalent to 
that provided by the FAA's regulation. They do this by requiring the 
foreign person to follow the applicable regulations of that country 
plus enumerated special conditions. From the United States' standpoint, 
the foreign country's regulations plus the listed special conditions 
provide a regulatory scheme that the FAA has determined is sufficiently 
equivalent to the FAA's.
    A key difference between the United States/Canada BASA/MIP and 
those with other countries is that the latter provide for the 
certification by the FAA of repair stations in those countries that 
will be maintaining U.S.-registered aircraft and U.S. aeronautical 
products. No such FAA certification of either Canadian airmen or 
Canadian maintenance organizations exists or is planned. As explained 
above, the current reciprocal maintenance arrangement with Canada was 
established, in part, because the Canadian regulations were determined 
to compare favorably from a safety standpoint with those of the United 
States.
    Generally, FAA-certificated repair stations in foreign countries 
(foreign repair stations) must follow the U.S. repair station 
regulations set forth in 14 CFR part 145 when working on U.S.-
registered aircraft or U.S. aeronautical products. In those countries 
where a BASA with the United States is in effect, the requirements 
repair stations must follow are spelled out in the BASA and associated 
MIP. These typically require compliance with the applicable regulations 
of the country where the repair station is located plus special 
conditions that address any differences between that country's 
regulations and the FAA's. Because those repair stations hold FAA-
issued air agency certificates, the FAA may take enforcement action 
against the stations for violations of the regulations.
    United States/Canada BASA: In June 2000, the United States 
concluded a BASA with Canada. The goal was to replace the older BAA and 
to have an agreement with Canada that is more akin to the new 
``umbrella'' format of bilateral agreements the United States has with 
other countries. On October 18, 2000, the FAA and its Canadian 
counterpart, TCCA, signed an IP for Design Approval, Production 
Activities, Export Airworthiness Approval, Post Design Approval 
Activities, and Technical Assistance Between Authorities. That IP 
replaces the earlier Schedule of Implementation Procedures, dated May 
18, 1988, except for Chapter 4, Maintenance, Alteration, or 
Modification of Aeronautical Products, which remains in effect until 
MIP are concluded.
    The U.S./Canada BASA recognizes ``that the standards and systems 
for airworthiness and environmental approvals and airworthiness 
acceptance of maintenance approvals and modifications or alterations, 
as established in the Agreement for

[[Page 40875]]

reciprocal acceptance of airworthiness and environmental approval, 
effected by exchange of notes at Ottawa on August 31, 1984, are already 
sufficiently equivalent to permit acceptance by each Party of findings 
of the other Party.'' In recent years, TCCA had changed its regulations 
to harmonize more closely with those of the FAA, thus facilitating the 
BASA/MIP process.
    The FAA and TCCA are in the process of negotiating the associated 
MIP. The MIP will set forth the provisions for accepting maintenance, 
preventive maintenance, or alterations. As with other MIP, the U.S./
Canada MIP will include specific conditions required by the civil 
aviation authorities of both countries. For work done on U.S.-
registered aircraft and U.S. aeronautical products, the MIP will be 
structured to assure a level of safety equivalent to that provided by 
the FAA's regulations. It will require the authorized Canadian 
maintenance persons and organizations to follow the applicable Canadian 
regulations plus enumerated special conditions. The MIP thereby will 
provide a regulatory scheme essentially equivalent to the FAA's.
    As explained in the NPRM, leaving the specific regulatory 
references in Sec.  43.17 would inhibit the development and any later 
modification of the MIP. Part of the MIP process would be for the 
United States and Canada to evaluate each other's regulatory system. 
The FAA would certify that the Canadian regulations provide an 
equivalent level of safety for maintenance, preventive maintenance, or 
alterations. Any differences thought to be significant will be 
addressed through special conditions. This amendment to Sec.  43.17 
will promote negotiating and any future revising of the MIP. It will 
also result in the MIP being more in line with MIP concluded with other 
countries that were not constrained by the existence of specific 
regulatory references directed to maintenance providers in those 
countries.

Discussion of Comments

    The FAA received five timely comments on the NPRM. We also received 
comments from two law students that were prepared for an aviation law 
class project. These comments were submitted over three and three and a 
half months late, respectively. Because of their untimeliness, we will 
not address them further. Four of the five commenters supported all or 
parts of the proposal.
    One commenter, Standard Aero, supported the proposed amendment, but 
addressed only the removal of the requirement that aeronautical 
products have to be transported from the United States to Canada. The 
commenter saw no safety benefit in the requirement, noting that the FAA 
already accepts TCCA's system of oversight.
    Two associations, the Air Transport Association of Canada and the 
Air Line Pilots Association, expressed general support for the proposed 
amendment, but neither commented on specific sections.
    Another commenter, an individual, opposed the proposal, arguing 
that it was ``in opposition to public safety and more an effort to gut 
more [A]merican jobs.'' The commenter provided no supporting 
information for his assertions. In response, the FAA notes that 
adoption of the amendment will not reduce the current level of safety. 
As discussed previously, the reciprocal maintenance arrangement between 
the United States and Canada has existed for many years. Initially, the 
CAB determined that the Canadian regulations compared favorably with 
those of the United States; moreover the Canadian regulations have been 
harmonized to closely match the current FAA regulations. Also the MIP 
will be drafted to provide special conditions that must be met to 
assure an equivalent level of safety. As noted above, an underlying 
premise for the current BASA is that the relevant standards of each 
country are ``sufficiently equivalent to permit acceptance by each 
Party of the findings of the other Party.'' As to the loss of American 
jobs, under the existing arrangement, Canadian aircraft and products 
may be maintained in the United States and vice versa. The amendment 
facilitates the development of the MIP, but does not make any 
substantive changes to the existing reciprocal maintenance arrangement 
between the two countries. The removal of the requirement to ship parts 
from the United States to Canada may, in some cases, ease the economic 
burden on United States entities that are having aviation maintenance 
work performed in Canada. The elimination of that trade barrier and the 
possible associated cost savings could have a positive impact on 
American jobs.
    Finally, one commenter, the Aviation Suppliers Association, 
supported most of the proposal but opposed the proposed changes to 
Sec.  43.17(d)(2) and (d)(4). Specifically, the organization is 
concerned about the reference to the ``agreement between the United 
States and Canada.'' As discussed previously, this ``agreement'' means 
the U.S./Canada BASA and its MIP, which is currently under negotiation. 
First, the commenter objects that the proposed change ``would 
disenfranchise the public from future comment * * * [because] an 
international agreement * * * is not subject to notice-and-comment, and 
[it] may therefore be changed without either public comment or even 
public notice.'' Second, the commenter alleges that ``future changes to 
the bilateral agreements'' would potentially ``have the effect of 
interfering with trade and the business of domestic companies.'' The 
commenter also phrases this second concern as an allegation that the 
agreement ``could establish standards that adversely affect commercial 
relationships without a commensurate safety benefit.'' Both of these 
concerns are misplaced.
    Procedural safeguards. Bilateral agreements are not rulemakings 
subject to the Administrative Procedure Act. They are nevertheless 
subject to abundant procedural safeguards. The FAA cannot enter into a 
BASA without Circular 175 authority. This is the process whereby an 
executive agency gains permission to enter into an international 
executive agreement. The Circular 175 authority for BASAs contains an 
extensive analysis of the need for and risks and benefits of such 
agreements along with a memorandum of legal sufficiency signed by the 
Legal Adviser to the Department of State. Moreover, each individual 
BASA is authorized by consensus clearance by all interested government 
agencies and the aviation industry through the Interagency Group on 
International Aviation (IGIA), chaired by the Secretary of 
Transportation and charged with coordinating U.S. negotiating positions 
on all international civil aviation matters. Any given BASA will likely 
require more than one IGIA clearance. The industry has been actively 
involved in all phases of developing BASAs and their IP.
    Unlike rules, agreements do not apply directly to regulated 
entities, but are exchanges of rights and obligations between 
governments. Moreover, an executive agreement cannot be used to modify, 
overrule, or nullify inconsistent regulations.
    Finally, all aviation agreements are reported to Congress in 
accordance with the Case Act and registered with the International 
Civil Aviation Organization (ICAO) in accord with U.S. obligations 
under the Convention on International Civil Aviation (the Chicago 
Convention).
    Interference with trade, without ``commensurate'' safety benefit. 
The BASA and its IP do not ``interfere with trade.'' On the contrary, 
they facilitate trade in aeronautical goods and services. The primary 
purpose of this latest

[[Page 40876]]

evolution of the regulatory harmonization process is to avoid 
inefficient, redundant regulation through a process in which the 
parties verify that each other's systems provide equivalent levels of 
safety.
    It is consequently also incorrect to assert that BASAs have no 
``commensurate safety benefit.'' As the preamble to the NPRM states, 
the FAA does not enter into a BASA/MIP unless it is well satisfied that 
the foreign government's safety regulatory scheme provides a level of 
safety fully equivalent to that provided by the FAA.
    Indeed, the only reason that Canada has its own mention in Sec.  
43.17 is that the U.S./Canada BAA alone among all the FAA's BAAs dealt 
with maintenance activities. It did so because of the special trust 
that the FAA had developed in Canadian safety oversight over the 
decades. The purpose of this change in language is to enable the U.S./
Canada BASA to be treated as much as possible like the other BASAs. It 
corrects an anomaly that resulted from the greater confidence that the 
FAA had in Canadian oversight of maintenance facilities.
    Conclusion. The proposed changes to Sec.  43.17(d)(2) and (d)(4) 
advance the very principles on which the commenter bases its 
objection--promotion of trade without derogating safety and preserving 
public participation in the aviation safety oversight process. For 
clarification, the FAA is replacing the text in each of the two 
proposed sections that read ``an agreement between the United States 
and Canada'' with language that states ``a Bilateral Aviation Safety 
Agreement between the United States and Canada and associated 
Maintenance Implementation Procedures that provide a level of safety 
equivalent to the provisions of this chapter.''

Paperwork Reduction Act

    There are no current or new requirements for information collection 
associated with this amendment.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 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 these regulations.

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 the 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 its costs. Our assessment of this rulemaking indicates that its 
economic impact is minimal. Because the costs and benefits of this 
action do not make it a ``significant regulatory action'' as defined in 
the Order, we have not prepared a ``regulatory impact analysis.'' 
Similarly, we have not prepared a full ``regulatory evaluation,'' which 
is the written cost/benefit analysis otherwise required for all 
rulemaking under the DOT Regulatory and Policies and Procedures. We do 
not need to do a full evaluation where the economic impact of a rule is 
minimal.

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

    The FAA is amending 14 CFR 43.17. The FAA has replaced the 
Bilateral Airworthiness Agreement between the United States and Canada 
with a BASA, and plans to include a MIP with that BASA. Through the 
device of the U.S./Canada BASA/MIP, future changes in maintenance 
requirements in either country can be implemented through changes to 
the MIP. This will be a less burdensome and less costly process than 
having to amend Sec.  43.17 each time. Currently, Sec.  43.17 contains 
two provisions among its requirements that inhibit the implementation 
of a BASA/MIP agreement with Canada. The FAA is revising Sec.  43.17 by 
removing these to facilitate development of the MIP. These revisions 
are discussed below. Currently, some provisions in Sec.  43.17 provide 
requirements that are not in accordance with standards for other MIPs 
that are in place now. This final rule will remove those and make the 
implementation of the BASA/MIP more beneficial to all parties by 
providing greater flexibility to implement a MIP.
    The FAA believes that amending Sec.  43.17 results in cost savings 
to those entities that would be impacted by this rule and eliminates a 
barrier to trade. Therefore, the FAA has determined that the final rule 
will be cost-beneficial.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 establishes ``as a 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 Act requires agencies to solicit and 
consider flexible regulatory proposals and to explain the rational for 
their actions. The Act 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 substantial 
number of small entities. If the determination is that it will, the 
agency must prepare a regulatory flexibility analysis (RFA) as 
described in the Act.
    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 1980 act provides that 
the head of the agency may so certify and an RFA is not required. The 
certification must include a statement providing the factual basis for 
this determination, and the reasoning should be clear.
    The Federal Aviation Administration has determined that this final 
rule will not have a significant economic impact on a substantial 
number of small entities because it is removing a barrier, which should 
lower costs for air carriers that have aircraft maintenance performed 
in Canada.

Trade Impact Assessment

    The Trade Agreements Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in 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. The FAA has assessed the 
potential effect of this final rule and determined that it will not 
constitute a barrier to international trade, including the export of 
U.S. goods and services to foreign countries or the import of foreign 
goods and services into the United States. In fact, the FAA believes it 
will remove a barrier to trade.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act) is intended, 
among other things, to curb the practice of imposing unfunded Federal 
mandates

[[Page 40877]]

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 in a proposed or final agency rule that 
may result in an expenditure of $100 million or more (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 FAA currently uses an 
inflation-adjusted value of $120.7 million in lieu of $100 million.
    This final rule does not contain such a mandate. The requirements 
of Title II of the Act, therefore, do not apply.

Executive Order 13132, Federalism

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

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 307k and involves no extraordinary 
circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this final rule under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
regulatory action'' under Executive Order 12866, as it is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy.

List of Subjects in 14 CFR Part 43

    Air carriers, Aircraft, Airmen, Air transportation, Aviation 
safety.

The Amendment

0
In consideration of the foregoing, the Federal Aviation Administration 
amends part 43 of Title 14, Code of Federal Regulations, as follows:

PART 43--MAINTENANCE, PREVENTIVE MAINTENANCE, REBUILDING, AND 
ALTERATION

0
1. The authority citation for part 43 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701, 44703, 44705, 44707, 
44711, 44703, 44717, 44725.

0
2. Revise Sec.  43.17(a), (c), (d), and (e)(2) to read as follows:


Sec.  43.17  Maintenance, preventive maintenance, and alterations 
performed on U.S. aeronautical products by certain Canadian persons.

    (a) Definitions. For purposes of this section:
    Aeronautical product means any civil aircraft or airframe, aircraft 
engine, propeller, appliance, component, or part to be installed 
thereon.
    Canadian aeronautical product means any aeronautical product under 
airworthiness regulation by Transport Canada Civil Aviation.
    U.S. aeronautical product means any aeronautical product under 
airworthiness regulation by the FAA.
* * * * *
    (c) Authorized persons. (1) A person holding a valid Transport 
Canada Civil Aviation Maintenance Engineer license and appropriate 
ratings may, with respect to a U.S.-registered aircraft located in 
Canada, perform maintenance, preventive maintenance, and alterations in 
accordance with the requirements of paragraph (d) of this section and 
approve the affected aircraft for return to service in accordance with 
the requirements of paragraph (e) of this section.
    (2) A Transport Canada Civil Aviation Approved Maintenance 
Organization (AMO) holding appropriate ratings may, with respect to a 
U.S.-registered aircraft or other U.S. aeronautical products located in 
Canada, perform maintenance, preventive maintenance, and alterations in 
accordance with the requirements of paragraph (d) of this section and 
approve the affected products for return to service in accordance with 
the requirements of paragraph (e) of this section.
    (d) Performance requirements. A person authorized in paragraph (c) 
of this section may perform maintenance (including any inspection 
required by Sec. 91.409 of this chapter, except an annual inspection), 
preventive maintenance, and alterations, provided--
    (1) The person performing the work is authorized by Transport 
Canada Civil Aviation to perform the same type of work with respect to 
Canadian aeronautical products;
    (2) The maintenance, preventive maintenance, or alteration is 
performed in accordance with a Bilateral Aviation Safety Agreement 
between the United States and Canada and associated Maintenance 
Implementation Procedures that provide a level of safety equivalent to 
that provided by the provisions of this chapter;
    (3) The maintenance, preventive maintenance, or alteration is 
performed such that the affected product complies with the applicable 
requirements of part 36 of this chapter; and
    (4) The maintenance, preventive maintenance, or alteration is 
recorded in accordance with a Bilateral Aviation Safety Agreement 
between the United States and Canada and associated Maintenance 
Implementation Procedures that provide a level of safety equivalent to 
that provided by the provisions of this chapter.
    (e) * * *
    (1) * * *
    (2) An AMO whose system of quality control for the maintenance, 
preventive maintenance, alteration, and inspection of aeronautical 
products has been approved by Transport Canada Civil Aviation, or an 
authorized employee performing work for such an AMO, may approve 
(certify) a major repair or major alteration performed under this 
section if the work was performed in accordance with technical data 
approved by the FAA.
* * * * *

    Issued in Washington, DC on July 7, 2005.
Marion C. Blakey,
Administrator.
[FR Doc. 05-13762 Filed 7-13-05; 8:45 am]
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