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FAA rule change impacts non-resident pilots and aircraft owners

In 2023 the FAA began the rule making process which will impact individuals with foreign addresses or no U.S. physical address on file with the FAA and who hold or have applied for certain licenses, ratings or authorizations. The rule making (Docket No: FAA-2023-1194, Amendment No 3-3) will require those individuals to designate a U.S. agent to receive FAA documents. The U.S. agent will receive service of FAA documents on the certificate holder or applicant’s behalf. This rule facilitates the FAA’s ability to accomplish prompt and cost-effective service of process and service of other safety-critical or time-sensitive documents to individuals abroad through service on their U.S. agents.

There are approximately 115,000 individuals outside of the U.S. who hold certificates, ratings or authorizations and who do not have a US physical address. The FAA believes that the cost of servicing these people imposes additional costs onto the FAA. This rule will eliminate most costs affecting international service and transfer some of these costs back to the individual. The FAA estimates that the annual cost of hiring a professional U.S. agent to deliver the service could cost between USD $50 and $200.

Previously, only U.S. air carriers, foreign air carriers and foreign persons operating a U.S.-registered aircraft in common carriage solely outside the United States were required to designate a U.S. agent for service of FAA documents. However, individuals across the world can hold and apply for FAA certificates, ratings, and authorizations. As of July 2022, there were approximately 115,000 individuals holding certificates, ratings, or authorizations issued under 14 CFR part 47, 61, 63, 65, 67, or 107 who had a foreign address and did not have a U.S. physical address of record on file with the FAA. Serving certain documents on these individuals outside of the U.S. presented a challenge for the FAA. Accomplishing valid service of process abroad requires compliance with international service requirements under multi-lateral treaties or by other means that comport with the receiving country’s laws and the U.S.’s applicable laws regulating extraterritorial service.

The FAA’s service of process abroad triggers these international service requirements, specifically when the FAA sends documents abroad that compel compliance and are subject to administrative or judicial review. Such documents may include notices of proposed civil penalties, orders of suspension or revocation and emergency orders of suspension or revocation. International service requirements can significantly delay service of these documents for months (and in some cases over a year) and also impose additional costs on the FAA. Document recipients cannot waive these international service requirements, nor can they be circumvented with electronic service.

The Notice Proposed Rule Making (NPRM) proposed that a U.S. agent would receive service of process and other time-sensitive or safety-critical documents from the FAA on behalf of the individual certificate, rating, or authorization holder or applicant. The U.S. agent would be responsible for timely transmitting all documents the FAA served to the U.S. agent to the individual who designated them. For this reason, the NPRM proposed the requirement that a U.S. agent be mentally competent to assume this duty. The NPRM also proposed that an individual must ensure their U.S. agent understands the requirements for serving as a U.S. agent and agrees to serve in that capacity. As explained in the NPRM, the responsibility for ensuring these requirements are met would fall on the individual designating the U.S. agent. Individuals designating U.S. agents would be required to certify to the FAA, that a U.S. agent has accepted the responsibility of receiving FAA service on behalf of the individual.

Additionally, the NPRM emphasized that the individual who designates a U.S. agent would be responsible for ensuring that the FAA can serve documents to their U.S. agent. An individual designating a U.S. agent for service would be required to provide: the U.S. agent’s full name; their U.S. address; their email address, should electronic service be feasible; their fax number (optional); and their telephone number (optional), in the event of service issues. Individuals would be required to keep their U.S. agent designation current. The FAA would consider service on an individual’s U.S. agent the equivalent of service directly on the individual, triggering all appeal and reply deadlines provided in the document being served (absent of extraordinary circumstances).

The NPRM has addressed why email service was not a viable alternative to this rule. Specifically, the NPRM explained that international service conventions do not expressly authorize email service of process abroad and that email service abroad could violate the domestic law of the receiving state and potentially result in judgments that are unenforceable in foreign courts. Accordingly, the FAA did not adopt the commenter’s proposed email alternative to a U.S. agent.

This final rule changes the compliance date noted in the NPRM, which was six months after the date of publication in the Federal Register to nine months after the date of publication in the Federal Register. The final rule clarifies there are two compliance dates. The compliance dates for this final rule are as follows: January 6, 2025, for applicants of any certificate, rating, or authorization issued under part 47, 61, 63, 65, 67, or 107, and July 7, 2025 for holders of any certificate, rating, or authorization issued under part 47, 61, 63, 65, 67, or 107. This additional time for current certificate, rating, or authorization holders is provided to ensure FAA preparedness for the collection of U.S. agent designations and to provide more time for individuals to come into compliance with the final rule.