Documents required for an N-reg aircraft

The FARs list various documents that must be carried. These are

Certificate of Airworthiness
Certificate of Registration
Radio station authorisation (for the aircraft - required for an N-reg flown outside the USA)
FCC Restricted Radiotelephony Operator Permit (for each pilot)
POH (Pilot Operating Handbook, known in the USA as the "Flight Manual")
Weight and Balance schedule (usually contained within the POH)
Pilot Identification (a passport is the only legal option for non-Americans - ref: FAR 61.3 (a) (2))
Insurance Certificate showing the appropriate coverage area and the amount of cover

Plus:

Pilot's License showing the privileges for the aircraft being flown and the conditions of the flight (e.g. an IR if arriving IFR)
Pilot's medical certificate

The Radio Station Authorisation is normally obtained from the N-reg trustee. He may charge for this; mine charged US$ 140 (2005).

The FCC Restricted Radiotelephony Operator Permit is obtained direct from the FCC online for a fee of US$ 60 (2007). This is required for each pilot flying under the privileges of an FAA license outside U.S. airspace, so if the aircraft is shared by e.g. four FAA PPL licensed pilots, each of them needs to obtain this certificate.

Obtaining your FCC Restricted Radio Operators Permit for operating a radio in an N-Reg aircraft flown outside the USA
(Step by step guide kindly supplied by another pilot)

Step 1 – Go to www.fcc.gov website and on the left hand side, in the yellow box area, click on the Forms link
Step 2 – Scroll down the page ¾ of the way and you will see
(Quick-Form Application for Authorization in the Ship, Aircraft, Amateur, Restricted and Commercial Operator, and General Mobile Radio Services) form 605. Click on Electronic Filing link.
Step 3 – On the next page you will click on the second link, being Online Filing
Step 4 – The following page asks for you FRN and pin. If you have one enter it here, if not click on the link Need an FRN? Register with the FCC.
Step 5 – Highlight the Register Now circle and then click Continue
Step 6 – You will be registering as an individual and check the appropriate response to the address with in the U.S. question.
Step 7 – Enter your appropriate information in the following page
Step 8 – The next page your FRN number will be displayed. Write this down or print for future reference. Click the back button four times or go to the FCC home page and using steps 1 through 3 to return to the page that ask for your FRN number. Enter your number here along with your password you submitted in the previous steps.
Step 9 – The following page will have an option to Apply for a new license. Click here.
Step 10 – This will take you to a page on which you must select the radio service for which you will be applying. Scroll down the list until you reach ( RR-Recruited Operator ). Continue
Step 11 – On the Applicant Questions page leave everything as is. It should say Regular on type and No you’re not exempt from application fees or license fees. Continue
Step 12 – Address located outside the U.S. check appropriate field. Continue.
Step 13 – Fill out your information for you license on this page. Continue
Step 14 – Click that you are eligible for employment in the U.S. Continue
Step 15 – Check that all your information is accurate and then continue.
Step 16 – Agree to all the above statements then Continue.
Step 17 – Give your electronic signature by filling in the boxes. Continue
Step 18 – Print your application and continue to Form 159
Step 19 – Fill in your FRN number and password and Continue
Step 20 – On form 159 you can either pay credit card or if you select to view form 159 you can mail in a payment. Select your choice and proceed.
Step 21 – The following page you will be able to print form 159 after your credit card has been approved.

This is the completion of you FCC Radio Telephone Operators Permit Application. You should receive you license in the mail within 2-3 weeks.

In addition to the above documents, if one plans to land anywhere within the EU, one needs to carry evidence that EU VAT has been paid on the aircraft when it originally entered the EU. The French are particularly fussy about this, causing all sorts of problems for pilots of airplanes that land in France. They particularly harrass N-reg planes, probably because an EU Directive dated 2002 limits them to VAT inspections on French or non-EU aircraft. They can however inspect all the other documents, regardless of aircraft registration.

There is a view that an N-reg aircraft is statistically more likely to have been flown over straight from the USA without having been declared for VAT. This is bogus because the CAA doesn't notify UK Customs of an N to G transfer so somebody could have flown over from the USA and transferred to G without UK Customs knowing anything about it. Same with boats of course...

The following is the best information I've been able to get my hands on, and has been compiled with some help from a senior UK Customs officer.

It has often been said that a VAT invoice from the dealer is sufficient. One may get away with this but it certainly is not sufficient. It may show the VAT paid to the dealer but this is no evidence of whether the VAT (or any VAT) has been paid upon the original import into the UK. For that, one needs either a form C88 or IM4, or a Certificate of Free Circulation (CFC).

A C88/IM4 is the most authoritative but cannot be obtained too far retrospectively (past 2-3 years) because UK Customs don't keep the records for long. It also probably cannot be obtained on an EU-manufactured plane (e.g. Socata) because these tend to enter the UK under an arrangement called Community Acquisition where no VAT is actually handed over. Also, dealers don't like handing out a C88 since is reveals how much the dealer has paid for the aircraft.

A CFC is the next best thing and for most pilots is the only realistic option. Unfortunately, UK Customs have recently stopped issuing these. They can still be obtained via certain contacts. Please email me if you need one. One needs to carry the original, plus a number of photocopies to give to anyone who wants to take them away.

It is very clear that anybody purchasing a new aircraft must insist that the dealer supplies one of the above documents!

The Right to get a Certificate of Free Circulation

The following information was compiled by a very well informed colleague, in 2005, who obtained a legal opinion from a law firm:

UK-based Aircraft, Rights of Free Circulation in the EU and the policy of UK and French Customs
A Paper addressing two specific questions of interest to the GA Community

Question 1: In early 2005, UK Revenue and Customs (HMRC) stopped issuing Letters of Free Circulation to qualifying UK aircraft owners. Were they entitled to withdraw this facility? Many UK aircraft owners were familiar with the helpful service of the Southampton office of HMRC, which issued "Letters of Free Circulation" allowing them to exercise rights established in EU and UK law at the time of the creation of the Single Market in 1992. This facility was withdrawn in the first quarter of 2005. I personally spoke to the Southampton office and was given various explanations, including ?lack of resources? and ?our lawyers said it was an unofficial scheme and we are not allowed to continue it?. However, it is a well established point in EU law that where an EU right exists, a Member State should ensure that it has implemented a remedy in its national legislation that is no less favourable than the EU right demands, and not virtually impossible or excessively difficult for a claimant to exercise.

Qualifying aircraft owners in the UK have rights under Article 28n of the EU Sixth Directive relating to Free Circulation. The withdrawal of the Free Circulation letter facility, and the lack of any alternative facility, means that HMRC have made it "virtually mpossible or excessively difficult" for a UK aircraft owner to exercise their rights. The UK is thus in contravention of the applicable EU directives, and, under further EU law, an Aircraft owner suffering as a result is entitled to damages (see para 6 of the appendix below). It appears that EU law, as well as common sense and the accountability of a government agency to its public stakeholders, require that the UK's HMRC re-instate the issuing of Free Circulation letters. In practice, and in the context of Question 2 below, the ideal solution would be for them to reissue C88 documents in place of the former Letters.

Question 2: French Customs have, in recent years, earned a reputation for vigorously enforcing regulations concerning visiting aircraft, especially those on the N-register. AOPA has established that an IM4 (the relevant version of the C88 "Single Administrative Document") is acceptable as the sole means of documenting that an Aircraft is in EU free circulation. In the case of Aircraft lacking a C88/IM4, are French Customs obliged to accept a UK Customs Letter of Free Circulation, or are they able to insist upon a C88? This question is important for a significant category of aircraft owners who have a Letter of Free Circulation (issued under the former HMRC policy), but no original C88 or any means of obtaining a duplicate.

The EU's 6th Directive has given UK citizens the relevant rights under Article 28n. It has also given UK Customs discretion as to how to implement Article 28n. In the case where UK Customs have done so by issuing a letter of Free Circulation, a taxpayer is entitled to rely on the effectiveness of the directive; and French Customs should not be able to substitute its own requirements (e.g. insisting on a C88) in place of those accepted by UK Customs.

I must emphasise that the French Customs Service, in a formal reply to my lawyers, has fully accepted the Free Circulation letter as a sole means of compliance. This section is merely intended as a case study, to advise UK Aircraft owners of rights that apply in every EU country.

However, whilst the C88 is a globally standard document, recognised by both the EU and the United Nations, the Free Circulation Letter is a typed reference to an obscure piece of legislation. It would be surprising if every douanier in the EU had the nuances of Directive 92/111 re. 6th Directive Art 28n at his fingertips. Hence my suggestion that HMRC should document compliance with Free Circulation rights by issuing C88s rather than Letters.

Appendix: Legal Background

This is based on the work of the lawyer I engaged, so I should not take credit for anything in it that is accurate. However, because I have made changes and added some text and interpretation, it should not be treated as a qualified legal opinion, or even an informal legal view. It is the amateur, informal research of a UK private pilot and no more.

The Law firm were very professional and cost-effective, both in the Tax and EU Law advice, and in corresponding with French Customs and getting official Consular translations of documents into French. I will pass their contact details to any reader seeking to engage a commercial law firm in aviation work of this sort.

1. Creation of the Single Market

On the 1st January 1993 the regime for EU aircraft on temporary importation from other Member States ceased and all aircraft were then deemed to be imported into the EU. Thus from the 1st January 1993 the position was that owners with aircraft in the EU, had to either;

- pay the VAT on aircraft;
- prove that VAT had been paid and not recovered;
- claim exemption under a set of conditions explained below; or
- Export the aircraft from the EU.

The EU legislation that empowered this "deemed importation" was Article 28n of the European Sixth Directive. Each Member State was at liberty to interpret this Article as it saw fit and impose a set of rules which would determine the treatment of
aircraft in its jurisdiction.

2. UK Legislation

The UK law stems from this EU legislation and allows exemption if the aircraft: -

(i) "have borne in their member state of origin of exportation the turnover or consumption taxes (including value added tax) to which goods of that class or description are normally liable and have not by reason of their exportation been subject to any exemption from, or refund of, value added tax;

(ii) "were first used before 1st January 1985; or

In general the legislation was written with aircraft under private or personal ownership in mind.

In order to see how the rules applies in practice it is necessary to look at the legislation and guidance issued by the authorities prior to 31 December 1992 and the stance taken since then for aircraft which were not dealt with by 30th June 1993, the concessionary date allowed to owners by the EU to take action.

3. Detail on the key Exemptions in UK Legislation

(i) VAT Payment
The UK law refers to an earlier VAT payment on the aircraft that was not subsequently recovered.

Private owners may have owned their aircraft for many years before 31 December 1992, paying VAT on the aircraft at the time of purchase.

A further payment of VAT on 31 December 1992 would have clearly resulted in double taxation. Therefore an owner providing proof that VAT had been paid on the aircraft prior to 31 December 1992 which was not recovered, was eligible for exemption.

A certificate providing this could be obtained which would be retained with the aircraft.

(ii) First Use before 1.1.1985
For those aircraft where evidence to support an earlier VAT payment could not be provided, a second concept of use applied. The legislation declared that if "first used before 1st January 1985" an aircraft could be regarded as exempt or "deemed VAT paid" if at 31 December 1992 it was in the EU.

In UK Customs eyes "in use" is defined as available for use or in service. They would not have regarded an aircraft under construction as in use.

4. Additional Details

Temporary Importation (TI)
EU legislation continues to allow aircraft to be temporarily imported from outside the EU. However there are strict rules regarding the use of aircraft under TI.

Export and Re-Import
European VAT authorities were clear in their guidance in early 1993. Aircraft were either to be declared and VAT paid, VAT exemption claimed or the aircraft exported outside the EU.

If owners removed an aircraft from the EU before 30th June 1993, exemption cannot be claimed when the aircraft is subsequently reimported.

Corporate Ownership
The rules at 31 December 1992 (cut-off period) apply to aircraft owned by corporate structures but only for the deemed importation at 1st January 1993.

5. UK Jurisdiction

As noted above the implementation of the new regime was left to the Customs authorities in each member state. For an aircraft which was in the UK at the relevant time it is clear that UK Customs, as opposed to, say, French Customs had the relevant jurisdiction for determining whether the aircraft justified the necessary criteria.

6. Enforceability of these Rights

It is a well established point that where an EC right exists, a Member State should ensure that it has implemented a remedy in its national legislation that is no less favourable than the EC right demands and not virtually impossible or excessively difficult for a claimant to exercise. Directives bind Member States as to the "result to be achieved" but leave the choice of form and method to Member States. The principle is illustrated in Becker v Finanzant Munster Innenstadt [1982] I CMLR 499, which concerned the exemption relating to the granting and negotiation of credit where Germany had failed to pass the necessary national legislation implementing the exemption.

Where a Member State acts in contravention of a directive the individual may be entitled to damages where:

(a) the law was intended to confer rights on individuals;

(b) the breach was sufficiently serious; and

(c) the breach of the state?s obligations and the damage sustained were directly linked.

7. Are UK Customs obliged to issue qualifying Aircraft Owners with a Letter of Free Circulation?

Yes they must, on the basis that

(a) the Directive has given UK citizens rights under Article 28n;

(b) a taxpayer is entitled to rely on the effectiveness of the directive;

a Member State should ensure that it has implemented a remedy in its national legislation that is no less favourable than the EC right demands and not virtually impossible or excessively difficult for a claimant to exercise. Directives bind Member States as to the "result to be achieved" but leave the choice of form and method to Member States

8. Is an EU Customs Agency obliged to accept a UK Letter of Free Circulation?

Yes it is, on the basis that

(d) the Directive has given UK Customs discretion as to how to implement Article 28n;

(e) UK Customs have done so by issuing a letter of free circulation;

(f) a taxpayer is entitled to rely on the effectiveness of the directive;

the principle of effectiveness and the fact that discretion has been given to UK Customs means that, for example, French Customs should not be able to substitute its own requirements (eg. insisting on a C88) in place of those accepted by UK Customs

N-reg Aircraft not based in the EU

This is the tricky subject of "temporary importation". It is important to get this right otherwise you could be forced to pay the VAT, only to (hopefully) get it back when you leave the EU!!

The UK Customs department is the National Imports Relief Unit, Custom House, Killyhevlin Industrial Estate, Enniskillen, BT74 4EJ. Phone 028 6632 2298 Fax 028 6632 4018, email niru@hmrc.gsi.gov.uk

You have to fill out a form C108 - Temporary Importation document, which needs to be stamped at the first UK port of entry. This document "should" be valid throughout Europe.

You then have to hand in the said stamped C108 at your last European port of departure to complete the process.

A C108 will cover you for up to 6 months in Europe. There is no VAT implication with this procedure.

Last edited 15th December 2009.

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