What's Happening?
The Federal Aviation Administration (FAA) has grounded all aircraft registered through Southern Aircraft Consultancy Inc (SACI) using a non-Citizen Trust Agreement (NCT). The FAA determined that the certificates
of registration for these aircraft are invalid due to violations of U.S. citizenship requirements. SACI, based in the UK, registered aircraft for U.S. citizens and foreign nationals using trust agreements, which require the trustee to be a U.S. citizen or a resident alien. The FAA has instructed SACI to surrender all registration certificates within 21 days. This decision affects the mandatory insurance coverage for the owners/operators of these aircraft, as a valid certificate is required for compliance.
Why It's Important?
This grounding has significant implications for aircraft owners and operators who relied on SACI for registration. The invalidation of certificates disrupts operations, potentially leading to financial losses and logistical challenges. Aircraft owners must now seek alternative registration solutions, either through another country's registry or by reapplying with the FAA. This situation underscores the importance of compliance with FAA regulations, particularly regarding citizenship requirements for aircraft registration. The decision also highlights the complexities of international aircraft registration and the potential risks involved in using trust agreements.
What's Next?
Affected aircraft owners must re-register their aircraft to resume operations legally. They can apply for registration with the FAA, providing evidence of ownership and paying the necessary fees. Temporary authority to operate within the U.S. will be granted until the FAA processes the application. However, this temporary authority does not extend to international flights. Owners operating outside the U.S. must submit a Declaration of International Operations for expedited processing. The FAA's decision may prompt other registration companies to review their compliance with citizenship requirements to avoid similar issues.
