Jeffrey S. Towers, General Counsel
If an aircraft closing occurs while the aircraft is in the US and it is then relocated to a home base outside the US, the parties to the transaction must make sure that a proper export filing is made, and the related tasks are accomplished. The best practice is to include an export filing as part of your pre-closing checklist. Handling an export properly is neither expensive nor difficult, but the failure to file could result in closing delays, significant penalties, and seizure of the aircraft. Knowledge of a few rules and access to a good aviation lawyer or US Customs broker can help avoid these bad results.
1) What types of aircraft exports require a US Customs filing? A filing is required when:
a. An aircraft that has been based in the US or was imported into the US leaves to be primarily based outside the US for 1 year or more.
b. A foreign-based aircraft leaves the US after receiving improvements costing more than $2500. In this situation, the value of the export equals the value of the improvements.
However, an export filing for the aircraft is not required when an aircraft is merely being flown out of the country for routine purposes such as carrying passengers or freight.
2) Who are the responsible parties in an aircraft export? From the government’s perspective all parties to a US transaction in which the aircraft will be moved to and based outside the US should make sure the aircraft is properly exported. However, the Customs regulations include the following specific responsibilities and designate which parties have which roles:
a. United States Principal Party in Interest (USPPI) – The USPPI is generally the party in the US who receives the “primary benefit, monetary or otherwise” from the transaction that precedes the export. If there is a delay between the closing of the aircraft and the aircraft’s departure from the US, the party in the US who receives the primary benefit from the relocation of the aircraft would be the USPPI. The USPPI will either be a party based in the US, such as a US company that is the seller or lessor of an aircraft, in which case the filing would include the entity’s US tax identification number, or a foreign entity, such as a buyer or lessee, having a representative temporarily in the US with authority to accept the aircraft, in which case the filing would include the foreign individual’s passport number. The USPPI is responsible for providing certain information to the authorized agent for the export filing and to retain records regarding the export in case the government has questions. A party who qualifies as the USPPI may not ignore its responsibilities.
b. Filing Party – Whichever party is controlling the removal of the aircraft from the US has the filing responsibilities. Therefore, the USPPI is the filing party only if it controls the removal of the aircraft from the US and the non-US person or entity acquiring the aircraft is the filing party if it is responsible for moving the aircraft. The filing party hires the authorized agent to make the filing and must make sure the filing is done correctly.
c. Exporter – The USPPI is almost always the exporter, with one limited exception. The exporter is responsible for determining whether any licenses or other US government authorizations are required for the export and to obtain such licenses and authorizations prior to the export, if needed.
d. Authorized Agent – The US licensed customs broker or freight forwarder hired by the filing party is the Authorized Agent for the export.
3) What needs to be filed with US Customs, when and by whom? The export filing, called the Electronic Export Information (EEI), is filed electronically through the Automated Export System
(AES). It must be filed before the aircraft is flown out of the US. The filing is made by the authorized agent on behalf of the filing party and contains such information as the name and address of the USPPI, the description and value or the aircraft and the name of the person or entity who will receive the exported aircraft at its destination. The successful filing will be evidenced by the issuance of a Customs Internal Transaction Number (ITN). The crew will need to meet US Customs at their last US port and provide them with the ITN number.
4) Need more information? This article is intended as general information about exports. NBAA members can access additional guidance free on the NBAA website. Also, TVPX offers free one-on-one webinars to explain the export process. Please contact Tobias Kleitman below to schedule. For information about the particular export requirements for an upcoming transaction, please contact an aviation attorney or US Customs broker who is familiar with aircraft exports.
TVPX Inc. is a licensed US Customs broker specializing in aircraft imports and exports.
Please call or email Tobias Kleitman for assistance at +1.978.610.1150 or tobias@tvpx.com.
