Assessing Aircraft Leases Prior to Adding Aircraft to an AOC

54 Pages·2010·0.29 MB·English

Regulatory Policy – CEO PN008-2010
Management of Article 83 Bis
Applications
Sponsor: Executive Manager Operations
Policy Issue No: One
Policy Issue Date: July 2010
Policy Review Date: July 2011
Reason for the Policy
The purpose of this Policy Notice is to advise of the procedures for entering into Article 83
bis agreements.

Background
The Civil Aviation Act defines an 83 bis agreement to mean an agreement entered into under
Article 83 bis of the Chicago Convention. That article relevantly states:

Transfer of certain functions and duties

(a) when an aircraft registered in a Contracting State is operated pursuant to an agreement for the
lease, charter or interchange of the aircraft or any similar arrangement by an operator who has his
principal place of business or, if he has no such place of business, his permanent residence in
another Contracting State, the State of Registry may, by agreement with such other State, transfer
to it all or part of its functions and duties as State of Registry in respect of that aircraft under
Articles 12, 30, 31 and 32(a). The State of Registry shall be relieved of responsibility in respect of
the functions and duties transferred.
ICAO recommends that if because of the circumstances of the type outlined in the article, the
State of Registry is unable to or it would be difficult to discharge adequately its regulatory
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and oversight responsibilities in relation to specific aircraft, it may agree with another
Contracting State to transfer some of its functions or duties to the other Contracting State.

Foreign Aircraft
Section 4A(2) of the Civil Aviation Act provides that a provision of the Act or Regulations
may apply to an aircraft registered in a Contracting State as if it were an Australian aircraft if
an 83 bis agreement has the effect of transferring a function of the Contracting State to
Australia. For example, if a Philippine aircraft is operating solely in Australia, CASA may
seek to enter into an 83 bis agreement with the Philippines, which may, depending on the
terms of the agreement, mean that only the Australian legislation will have application to the
aircraft with the result that the Philippine legislation will not.
Australian Aircraft
Section 4A(3) of the Civil Aviation Act provides that a provision of the Act or Regulations
does not apply to an Australian aircraft if an 83 bis agreement has the effect of transferring a
function of Australia to a Contracting State. For example, if an Australian aircraft is operating
solely in America, CASA may seek to enter into an 83 bis agreement with the FAA, which
may, depending on the terms of the agreement, mean that the Australian legislation will have
no application to the aircraft with the result that the American legislation will.

Policy
A process for the management of Article 83 bis agreements has been developed and is
currently held by CASA Operations Division.
Should a staff member receive an application from a foreign regulatory authority requesting
Australia to enter into an Article 83 bis agreement, the application is to be referred to the
Executive Manager Operations for consideration and determination of a response. A
procedure is in place for the assessment of such an application and this and the subsequent
responses will be managed by the Executive Manager Operations. Should Regional Office
support be required, including the deployment of inspectors, the relevant Regional Manager
will be advised accordingly.
This Policy Notice has been developed as an interim measure while the AOCM is being re-
written. This Policy Notice will be withdrawn in December 2010 when the AOCM and
Inspector’s Handbook will be published and the contents of the Policy Notice and associated
procedures included into that document.

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Management of Article 83 Bis Applications

Signed
John F. McCormick
Director of Aviation Safety

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Appendix 3
A
AO ICAO ARTICLE 83 bis PROCEDURES

1.0 International Aircraft Transfer Arrangements

(Transfer of Regulatory and Oversight Responsibilities between Contracting States under
the Terms of Article 83 bis of the Convention on International Civil Aviation Chicago
1944)
1.1 Summary
Article 83 bis agreement enables certain regulatory oversight responsibilities for
individual aircraft to be transferred from one regulatory authority to another for limited
periods.
An Article 83 bis agreement can only be initiated by the State of Registry, that is, the
regulatory authority which has the subject aircraft on its register.
The regulatory authority of the State of Registry can, assuming that the regulatory
authority of the State of the Operator agrees, transfer some of its regulatory oversight
responsibilities to the regulatory authority of the State of the Operator if the aircraft is
transferred to a location where normal regulatory oversight by the regulatory authority of
the State of Registry is difficult or impracticable. Strict conditions, limitations and
reporting requirements apply to such an arrangement.
Article 83 bis does not cover other bilateral or multi-lateral arrangements or agreements
between regulatory authorities that may relate to leased or transferred aircraft.
1.2 Definitions
For the purposes of clarity when assessing documents provided by an operator and in
order to prevent misunderstandings between CASA inspectors and foreign operators
and/or regulatory authorities, the following definitions have been included.
1.2.1 Article 83 bis Agreement (to the Chicago Convention 1944): An agreement
between two Contracting States whereby the oversight responsibilities of one
Contracting State are transferred by arrangement to the other Contracting State in order
to maintain effective airworthiness and operational control of an aircraft registered in the
first Contracting State but operating within the jurisdiction of the second Contracting
State.
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1.2.2 Bilateral Agreement: an agreement between CASA and the regulatory
authority of another Contracting State concerning the management and regulatory
oversight responsibilities for an aircraft or aircraft as appropriate. This does not include
transfer oversight arrangements made under ICAO Article 83 bis agreements.
1.2.3 Lessor: The organisation or person financing an aircraft lease and providing an
aircraft to a lessee.
1.2.4 Lessee: The organisation or person to whom an aircraft is leased. In most cases
this will be the AOC holder and the Registered Operator of an aircraft.
1.2.5 Operator/Airline Operator/Air Carrier: An AOC holder engaged in
commercial air transport activities carrying passengers, freight or both.
1.2.6 State of Registry: The State on whose register an aircraft is entered.
1.2.7 State of the Operator: The State in which an aircraft operator’s principal place
of business is located and registered.
1.2.8 Transfer - International: A transfer of an aircraft between operators in two
different States of Registry. This could be the transfer of an Australian registered aircraft
to an operator in a foreign State or, a foreign registered aircraft transferred to an
Australian operator.
1.3 Article 83 bis Background

ICAO Article 83 bis of the Convention on International Civil Aviation (Chicago 1944)
(hereafter referred to as Article 83 bis) entered into force on 20 June 1997. The purpose
of Article 83 bis is to provide better regulation and oversight over air safety in cases of
international lease, charter, transfer or interchange of aircraft.
Although the ICAO Convention allocates certain safety oversight functions to the State
of Registry which that State is entitled and obligated to discharge, ICAO recognised that
the State of Registry may be unable to fulfil its responsibilities adequately in instances
where aircraft are leased, chartered or interchanged by an operator of another State and
that the ICAO Convention may not adequately specify the rights and obligations of the
State of the Operator in such instances.
Accordingly, ICAO recommends that in the above mentioned instances where the State
of Registry finds itself unable to discharge adequately its regulatory and oversight
responsibilities, it delegates to the State of the Operator, subject to acceptance by the
latter State, those functions of the State of Registry that can more adequately be
addressed by the State of the Operator.
Article 83 bis establishes that agreements for the transfer of certain oversight
responsibilities from the State of Registry to the State of the Operator shall be recognised
by all Contracting States which have ratified this Article. Australia ratified Article 83 bis
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on 2 December 1994 – Section 4A of the Civil Aviation Act 1988 refers. The transfer of
responsibility may involve functions and duties under ICAO Articles: 12 – Rules of the
Air; 30 – Radio Equipment Installed on Aircraft; 31 – Recognition of Certificates of
Airworthiness; 32a – Recognition of Flight Crew Licences; and 33 – Recognition of all
other Relevant Certificates and Licences.
If the duties and functions normally attached to the State of Registry are transferred
pursuant to Article 83 bis, the State of the Operator will be internationally responsible
and liable for them and will implement them in accordance with its own laws and
regulations. The aircraft will therefore, in principle, be subject to two different sets of
national rules, the respective scope of which will depend upon the extent of the transfer.
This may seem rather complex to conclude such an agreement when it is understood that
the States involved may have filed varying differences in respect to specific ICAO
Standards and Recommended Practices. However, these matters must be considered
during the notification of such agreements.
In entering into an Article 83 bis agreement, the State of the Operator must render valid
all certificates and licences associated with the transfer and all other Contracting States
must accept these as valid if they have been informed of and on the proviso that they
fully meet the requirements of ICAO Annexes 1 to 8. To this end, all Article 83 bis
agreements must be registered with ICAO prior to their commencement.
1.4 International Aircraft Leasing and Transfer under Article 83
bis

Article 83 bis does not entail automatic transfer rights or responsibilities between States.
Agreements for transfer must be negotiated between the two States concerned with an
aircraft lease. Only Contracting States which are signatories to Article 83 bis can
undertake regulatory oversight responsibility transfers under this provision.
Article 83 bis Agreements can only apply to specific individual aircraft and operators for
set periods. This provision does not apply to agreements made between regulatory
authorities relating to ‘blanket’ arrangements for the regulatory oversight of each others’
aircraft. Such agreements can be made under Article 83 and must be registered with the
ICAO Council once that have been made. Details for implementing an Article 83
Agreement are not covered in this Part.
In the following guidance information, Australia could be either the State of Registry or
the State of the Operator depending upon whether an Australian registered aircraft is
being leased and operated overseas or, if a foreign aircraft is being leased and operated
within Australia. In the former case, Australia is the State of Registry and in the latter,
the State of the Operator.
The State of Registry will always initiate the process for an Article 83 bis agreement
between itself and the State of the Operator.
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1.5 Components of an Article 83 bis Agreement
When an aircraft leasing arrangement is being considered possibly utilising Article 83
bis provisions, the viability and practicality of such an agreement must be considered and
negotiated between:
• an aircraft’s Certificate of Registration holder/ Registered Operator;
• the foreign operator intending to operate the aircraft overseas;
• the regulatory authority on whose Register the aircraft is recorded
• (State of Registry); and
• the foreign regulatory authority under whose jurisdiction the aircraft will be operated
(State of the Operator).
Once it has been established that an Article 83 bis agreement is the best solution for
maintaining effective airworthiness control and regulatory oversight of a particular
aircraft that is subject to an international leasing arrangement, there are six mandatory
components that must be addressed before an Article 83 bis agreement can come into
force. These are:
1.5.1 A Formal Agreement between the two Contracting States, specifying who will
be responsible for what. This agreement will be signed by the Director of Civil Aviation
[however described] for the foreign regulatory authority; and, for Australia, the CASA
Director of Aviation Safety.
1.5.2 An exchange of letters of undertakings between the two Contracting States:
• One letter from the State of Registry for the aircraft being transferred, requesting
that the State in which the aircraft will be operated will undertake some specified
regulatory oversight responsibilities. This will be signed by the equivalent of the
CASA Executive Manager Operations.
• One letter from the State in which the aircraft will be operated (State of the
Operator) confirming to the State of Registry that it will indeed undertake the
regulatory oversight responsibilities requested and agreed upon. This will be
signed by the Head of the Maintenance Department or, in the case of CASA, the
CASA Executive Manager Operations.
1.5.3 A Delegations Agreement between the two Contracting States specifying in
detail the transfer and on-going arrangements including the delegation of functions and
responsibilities from one party to the other. This agreement will be signed by the
Director of Civil Aviation [however described] for the foreign authority and for CASA,
the Director of Aviation Safety.
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1.5.4 An Agreement regarding the airworthiness responsibilities of each
Contracting State, concerning the particular transferred aircraft. This Agreement should
be signed by the Head of Airworthiness for the foreign authority and, for CASA, the
CASA Executive Manager Operations.
1.5.5 Once all parts of the agreement have been signed by the various parties, CASA,
if it is the State of Registry, must register the Article 83 bis Agreement with the
Council of ICAO. If the foreign Contracting State is the State of Registry and CASA
the State of the Operator, the foreign CAA must register the agreement with ICAO.
1.5.6 When Australia has entered into an Article 83 bis agreement, CASA must
publish a notice in the Commonwealth of Australia Gazette, setting out the
particulars of the Article 83 bis agreement or amendment. (Note: When the agreement is
amended or ceases to be in force, a Gazette Notice should also be published to this
effect.)
Generally, Australia will only enter into an Article 83 bis agreement for an Australian
Registered aircraft to be operated by a foreign operator on a foreign AOC if:
• it is practical to do so;
• If there are no differences registered with ICAO by Australia as the State of
Registration against the Standards and Recommended Practices published in the
Annexes which would directly affect the regulatory oversight of the aircraft by
the foreign State of the Operator;
• the Australian Registered aircraft will be based overseas where it is impractical or
not cost-effective for CASA inspectors to conduct appropriate regulatory
oversight;
• CASA has sufficient confidence in the foreign operator’s competence to safely
operate and maintain the aircraft; and
• CASA has sufficient confidence that the foreign regulatory authority under
whose jurisdiction the aircraft will be operated is technically capable of
undertaking the regulatory oversight work required and also has adequate
resources to meet the obligations imposed by the Article 83 bis agreement.
Similarly, CASA will only enter into an Article 83 bis agreement for a foreign
registered aircraft to be operated within Australia under an Australian AOC or
private operation if:
• It is practical to do so;
• If there are no differences registered with ICAO by the foreign State of
Registration against the Standards and Recommended Practices published in the
Annexes which would directly affect the regulatory oversight of the aircraft.

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• CASA has confidence in the foreign regulatory authority, on whose Register the
aircraft is recorded, to meet all of the obligations and requirements to be
undertaken as specified in the Article 83 bis agreement;
• CASA has sufficient confidence in the Australian operator’s competence to
safely operate and maintain the foreign registered aircraft; and
• CASA has sufficient technical personnel available to undertake the regulatory
oversight and reporting commitments specified in the Article 83 bis agreement.
1.6 Article 83 bis Component Checklists

These checklist tables are intended as memory triggers only. For the understanding and
enactment of Article 83 bis agreements, the full text in the following pages must be
followed in order to successfully implement an agreement.
1.6.1 Table 1(a) – Foreign Contracting State Making Request to Australia for
an Article 83 bis Agreement

Request for ICAO Details of Request Comment - Notes
Article 83 bis Agreement
from Foreign
Contracting State
Foreign Contracting
State/State of Registry:
Content of Article 83 bis
request:
Aircraft Type, Model &
Serial Number:
Aircraft Registration:
Name of the Foreign
Aircraft Operator on
whose AOC the aircraft
currently is listed:
Which Australian AOC
holder is the intended
Operator of the Foreign
registered aircraft?
Does the requested
agreement relate to an
aircraft that is to be
employed in International
Commercial Air Transport
Operations?
Does the requested
agreement relate to an
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aircraft that is to be
employed in International
General Aviation
Operations?
Does the requested
agreement relate to an
aircraft that is to be
employed in International
Helicopter Operations?
Period over which the
Article 83 bis agreement
will exist:

1.6.2 Table 1(b) - Components of an agreement for a Foreign Contracting State
Making Request to Australia for an Article 83 bis Agreement

COMPONENTS OF AN Action Details Comments - Notes
ARTICLE 83 bis
AGREEMENT – Foreign
Request to Australia
Component 1: Formal agreement between Request signed by Director
(Formal request from the Foreign Contracting of Civil Aviation –
Foreign Contracting State State and Australia. Foreign Contracting State.
requesting Agreement with Response signed by CASA
Australia). Director/CEO.
Component 2: Exchange of letters Letters signed by CASA
(Formal letters from between Foreign State of Executive Manager
Foreign Contracting State Registry and Australia. Operations Division &
providing details of Head of Aircraft
aircraft/operation and Maintenance in Foreign
letter from Australia Contract State Authority.
accepting Agreement).
Component 3: Delegation of Authority Agreements signed by
(Agreement between State Agreements. Director of Civil Aviation
of Registry and Australia – Foreign Contracting
concerning Delegation of State.
Authority for Functions Response signed by CASA
identified in Convention). Director/CEO.
Component 4: Airworthiness Agreements signed by
(Agreement between State Responsibilities CASA Executive Manager
of Registry and Australia Agreement. Operations Division &
on Airworthiness Control Head of Aircraft
and Oversight). Maintenance/Operations in
Foreign Contract State
Authority.
Component 5: Registering an Article 83 Formal notification to
(Foreign State of Registry bis Agreement with ICAO. ICAO should be made by
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