FAA already relies on attorney attestation
False ownership statements in past
Outside Research more effective deterrent and better resources
In an obscure building at the Mike Monroney Aeronautical Center, in an office far down the Flight Standards Service, a grave risk is being harbored according to the Boston Globe’s “Secrets in the sky” investigative series.
The allegation by the Globe:
“The Federal Aviation Administration is facing the prospect of two outside reviews and a push from Congress for greater transparency after a report found that decades of lax oversight had left the United States vulnerable to drug dealers and even terrorists who seek to anonymously register planes here.”
“The Globe Spotlight team’s “Secrets in the sky” investigation revealed that the owners of more than 50,000 planes have used tactics that can help hide their identities in FAA registration papers, making it easier to fly anonymously.”
Congressman Stephen Lynch ‘s quote:
“There are very serious national security risks posed by the current aircraft registration system, which leaves us vulnerable to smuggling and illicit activity by criminals, and possibly terrorism,” said Lynch, who has long promoted efforts to increase corporate transparency.
Congressional activity (introducing a bill is well short of measurable ACTION):
“US Representatives Stephen Lynch of Massachusetts and Peter King and Carolyn Maloney, both of New York, have introduced a bill requiring the FAA to keep on file the true owners of all foreign-owned aircraft.”
Aircraft Ownership Transparency Act HR 3544
Despite statutory requirements for the Federal Aviation Administration (FAA) to record ownership history and lien information on civil aircraft, some aircraft owners shield their identity by registering aircraft with a trustee – a legal practice, but one that can be vulnerable to abuse, particularly when the FAA does not have information on the trustor, beneficiary, or those using the aircraft. Companies with anonymous or opaque structures can hide beneficial ownership information to mask aircraft ownership posing risks to national security and public safety. Congressman Lynch’s bipartisan Aircraft Ownership Transparency Act of 2017 requires the disclosure of beneficial ownership information for aircraft registration to ensure that the FAA has a more complete picture on who owns aircraft prior to approving a certificate of registration in the United States. H.R. 3544 is cosponsored by Congresswoman Carolyn Maloney (D-New York) and Congressman Peter King (R-New York).
Sen. John Thune’s activity—writing to DOT IG:
GAO investigation and FAA response:
“…the Government Accountability Office, the investigative arm of Congress, is reviewing how the FAA registers planes that fly under the US flag.”
“FAA officials have said they are developing a plan to increase the vigilance of its Oklahoma City-based Civil Aviation Registry, which certifies and monitors more than 300,000 US-registered planes. They admit that they don’t have the resources to determine whether all the information aircraft owners provide is accurate.
On Friday, the FAA released a statement welcoming the GAO review, which it said should ‘help to identify ways to further strengthen the integrity of the aircraft registry information.’”
49 USC §44102. “Registration requirements (a) Eligibility. —An aircraft may be registered under section 44103 of this title only when the aircraft is— (1) not registered under the laws of a foreign country and is owned by— (A) a citizen of the United States; (B) an individual citizen of a foreign country lawfully admitted for permanent residence in the United States; or (C) a corporation not a citizen of the United States when the corporation is organized and doing business under the laws of the United States or a State, and the aircraft is based and primarily used in the United States; …” [NOTE: Congress last amended §44102 in 1994]
⇒⇒Congress specifically authorized the use of a US corporation for registration with the FAA for a foreign-owned aircraft. see also 14 CFR §47.8
Aircraft Registration Branch located within the FAA’s 7,500 employee Mike Monroney Aeronautical Center. It functions very much like thousands of country/city real property title recordation offices. The staffs of all of those important governmental functions RELY on the attestations of lawyers. The Secrets of the Sky article cites instances in which the information submitted was not accurate, misleading or false. HR 3544 compels the “disclosure of beneficial ownership information”; if the registration documentation misrepresents the true ownership, how would the ARB be expected to refute the statement?
The 2013 OIG report pointed to the timing of the delivery of the true ownership:
“The FAA’s policy clarification states that trustees, upon the FAA’s request, should provide information regarding operators and beneficial owners within a set timeline. The OIG, however, believes this information should be gathered at the time of registration.”
The point of HR 3544 is to discover who or what REALLY owns the aircraft to be registered. To research back through multiple shell corporations and other deceptions intended to hide drug runners or terrorists would require extraordinary legal competence, many hours of searching records and a level of skepticism above the ordinary incredulity of a government employee. Moreover, such scrutiny would have to be employed for every US trust registration and that would delay the processing all applications. The Registration Branch does not need more registrants angry about having to wait more.
Looking back to the parallel to real estate registry, it, too, has labor intensive review requirements—liens, encumbrances on title, ancient easements, dubious metes, bounds and boundary lines. That is not within the purview of the governmental employees; the research is performed by title insurers. They have the resources and skills required to make those complex determinations.
HR 3544, the GAO, the FAA and the OIG would be well advised to consider whether an applicant for a US trust registration would have to pay for an ultimate ownership determination. A research company would make the attestation backed by a bond. The proposed organization would have highly trained researchers and techniques to cut through the legal obfuscation. Simply put: if the insurance company is not satisfied that the full legal path has been disclosed, the request would be denied. The search company would also be subject to initial authorization and periodic review.
This technically would not be outsourcing of a governmental function for it entails a new requirement in which civil servants were not previously involved. It is a recognition that the risks to national security mandate a higher level of investigation, the expense of which will borne by the entity requesting the privilege of the US Trust registration.
Makes too much sense for Congress to adopt!!!
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