- 21 Apr 2021
- Dave Higdon
If you've found that the best aircraft for you is registered overseas, David Wyndham explains the process and possible pitfalls for importing it to the US.Back to Articles
A very active pre-owned sales market is making it harder to find the right aircraft to acquire, with more buyers looking at international markets...
According to JETNET, the average age of aircraft for sale is increasing as younger models are being purchased faster than the market is being replenished.
As of early May, JETNET data showed 6.7% of the business jet fleet for sale. Most sales professionals consider 10% to represent a balanced market between seller and buyer.
According to JETNET, 82.4% of all 2020 aircraft sales transactions were in the US. Much of this was COVID-related, with travel being limited or forbidden during the lock-downs.
With the current market shortages, some buyers may be considering broadening their search to outside of US for quality pre-owned aircraft. Acquiring an aircraft located outside your home nation is more complicated (from a regulatory perspective), since the aircraft needs to be imported and re-registered.
There are often different languages and different legal concerns at play between each of the parties, too. But with proper planning, and an experienced team of professionals at your side, the process is manageable.
Experienced Aircraft Broker
The team starts with your broker. When searching outside the US, your broker will need to be experienced in international transactions, and preferably be specifically experienced in the country or region where your prospective aircraft is based.
Your broker needs to be knowledgeable of what documentation is required, and who to contact to get a deal successfully accomplished. A multi-lingual skill-set will be helpful. Ultimately, a well-chosen broker can be the key facilitator for the entire transaction.
Legal Counsel is Critical
The seller (or possibly even their broker) located outside the US is not likely to be familiar with all of the US requirements for importing a business jet. So an experienced aviation legal representative will be invaluable.
They need to have knowledge and experience of the transaction process on both sides, and be able to help ensure the aircraft is unencumbered by any liens, claims, or litigation. Skilled counsel knows what to ask, how to ask it, and how to structure contractual language to work in both countries.
Airworthiness Conformity and the DAR
You may also consider working with a company that’s able to look at the airworthiness and conformity issues with a non-US-based or registered aircraft.
The last item before getting your US N-registration number will be getting an FAA approved DAR (Designated Airworthiness Representative) to issue a US Certificate of Airworthiness (CoA). Before that can be done, however, the aircraft and all its records must be in proper order, reflecting the physical and regulatory airworthiness of the aircraft.
All Airworthiness Directives (ADs) associated with that model must be addressed as either being completed, or not applicable.
That means all ADs issued by the FAA under that Type Certificate need to be considered, not just the ones associated with the particular variant you are purchasing.
You need more than just a DAR, though. According to Bob Beaumont of Air Conformity, a compliance and regulatory consultancy, “Only when confident the aircraft is safe for its intended flight, and the records, audits and documents are completed, would you then contract and arrange for a DAR to perform its inspections and records-review in order to issue the required documents and certificate.”
The jet may also need a ferry permit to bring it into to the US for additional maintenance prior to receiving its final CoA. If it requires an FAA Special Flight Permit, there must be a log entry signed by an FAA A&P that the aircraft has been inspected as a condition for safe operation for its intended flight.
Companies such as Air Conformity can arrange all of these compliance services regardless of the type of aircraft, registration, or country. Once a US CoA is received, then the final registration can be accomplished.
The Role of the Customs Broker
A US Customs and Border Protection (CBP) authorization is needed if you’re importing any merchandise valued over $2,500. Requirements include electronic filings and delivery of documents or data to CBP, the submission of a Customs Bond, and the payment of duties, taxes and fees, if applicable.
This is necessary when an aircraft is purchased overseas and brought into the US by the buyer, or if an aircraft is flown to the US for inspection, repairs, and sale to a US buyer.
Entry forms, such as Customs Form 3461 (Entry) and Customs Form 7501 (Entry Summary), must be filed along with any other documents required by the port of entry (i.e., a pro forma invoice, a bill of sale, airworthiness certificate, and/or eAPIS manifest).
If the aircraft is being flown to the US for the Pre-Purchase Inspection, talk with your sales broker and customs broker about doing an Import of the aircraft prior to the PPI to expedite the final stages of the acquisition process.
If goods such as a business jet are imported into the US, and an entry was required but never made, CBP could seize the goods and assess liquidated damages, based upon the value. A qualified customs broker with aviation experience can efficiently handle all of the filings.
Don’t forget all the other details, such as financial and tax planning, and plan on the extra time needed to handle all the details. With a team experienced in international aircraft sales transactions, the process can result in you acquiring the right aircraft at a fair price, and a happy aircraft ownership.