6694 Federal Register / Vol. 77, No. 27 / Thursday, February 9, 2012 / Proposed Rules 

send your request to your principal inspector 

or local Flight Standards District Office, as 

appropriate. If sending information directly 

to the manager of the ACO, send it to the 

attention of the person identified in the 

Related Information section of this AD. 

(2) Before using any approved AMOC, 

notify your appropriate principal inspector, 

or lacking a principal inspector, the manager 

of the local flight standards district office/ 

certificate holding district office. 

(j) Related Information 

(1) For more information about this AD, 

contact Marc Ronell, Aerospace Engineer, 

Engine and Propeller Directorate, ANE–150, 

FAA, New England Aircraft Certification 

Office (ACO), 12 New England Executive 

Park, Burlington, Massachusetts 01803; 

phone: 781–238–7776; fax: 781–238–7170; 

email: marc.ronell@faa.gov. 

(2) For service information identified in 

this AD, contact Goodrich Corporation, 

Sensors and Integrated Systems, 100 Panton 

Road, Vergennes, Vermont 05491; phone: 

802–877–4580; fax: 802–877–4444; email: 

les.blades@goodrich.com; Internet: http:// 

www.goodrich.com/TechPubs. You may 

review copies of the referenced service 

information at the FAA, Transport Airplane 

Directorate, 1601 Lind Avenue SW., Renton, 

Washington. For information on the 

availability of this material at the FAA, call 

425–227–1221. 

Issued in Renton, Washington, on January 

23, 2012. 

Kalene C. Yanamura, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service. 

[FR Doc. 2012–3036 Filed 2–8–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Chapter I 

[Docket No. FAA–2011–0012] 

Notice of Proposed Policy Clarification 

for the Registration of Aircraft to U.S. 

Citizen Trustees in Situations Involving 

Non-U.S. Citizen Trustors and 

Beneficiaries 

AGENCY: Federal Aviation 

Administration, DOT. 

ACTION: Notice of Proposed FAA Policy. 

SUMMARY: Notice is hereby given of the 

FAA’s proposed policy regarding the 

registration of aircraft to U.S. Citizen 

Trustees in situations involving NonU.S. citizen trustors and beneficiaries. 

DATES: Written public comments 

regarding this FAA proposed policy 

should be submitted by March 31, 2012, 

via email to ladeana.peden@faa.gov. 

FOR FURTHER INFORMATION CONTACT: 

LaDeana Peden at 405–954–3296, Office 

of Aeronautical Center Counsel, Federal 

Aviation Administration. 

SUPPLEMENTARY INFORMATION: The FAA 

has been reviewing policies and 

practices regarding the registration of 

aircraft in the United States involving 

U.S. citizen trustees and non-U.S. 

citizen trustors and beneficiaries. Such 

arrangements are commonly referred to 

as non-citizen trusts. The FAA began its 

review in part because of problems the 

FAA has experienced in obtaining 

important operational and maintenance 

information concerning such aircraft 

from the registered owners, i.e., the 

owner trustees. The problems in 

obtaining such information in turn 

affected the FAA’s ability to conduct 

fully effective oversight of such aircraft 

when operated outside the United 

States, and to provide foreign civil 

aviation authorities with information on 

those operations in support of the safety 

oversight activities of those authorities. 

The FAA also undertook the review of 

non-citizen trusts because of concerns 

that some of those arrangements may 

not have complied with FAA 

requirements for non-citizen trusts. 

As part of its review of non-citizen 

trusts, the FAA published a notice of 

public meeting inviting members of the 

public to discuss the use of non-citizen 

trusts to register aircraft in the United 

States. See 76 FR 23353 (April 26, 

2011). In the notice, the FAA set forth 

several questions in order to elicit a 

robust discussion of the issues. Among 

other things, the FAA summarized the 

requirements in existing U.S. law that 

only an ‘‘owner’’ may register an 

aircraft, and that generally speaking 

only citizens of the United States that 

are owners are eligible to register 

aircraft. Thus, the FAA Aircraft Registry 

is an ‘‘ownership’’ registry. It is not an 

‘‘operator’’ registry. 

The FAA met with interested 

members of the public on June 1, 2011, 

in Oklahoma City. Representatives of 

trade associations, law firms, aircraft 

manufacturers, lenders, lessors, aircraft 

operators, trustees and others were 

present. The proceedings of that 

meeting were transcribed. The transcript 

is available for members of the public to 

read. Copies of the transcript (File No. 

A505180) may be purchased through 

Atkinson-Baker, Inc., Court Reporters, 

via email at abi@depo.com or by 

contacting Customer Service at 800– 

288–3376. 

The FAA received a number of 

written comments from members of the 

public in response to the questions 

raised in the April 26, 2011 Federal 

Register notice. The FAA also received 

written comments in response to its 

request at the conclusion of the public 

meeting for additional input from the 

meeting participants and all others who 

had an interest in the issues 

surrounding non-citizen trusts. An 

organization (the Aviation Working 

Group) that represents a wide range of 

aviation industry participants on 

aviation regulatory and commercial 

issues submitted a document on May 

26, 2011, in which its members and 

other supporting entities shared their 

views concerning the various questions 

posed by the FAA in its April 26, 2011 

Federal Register notice. That 

organization also participated at the 

public meeting on June 1, 2011, and 

submitted additional written comments 

on June 30, 2011. 

The discussion at the public meeting 

and the written comments received by 

the FAA have helped it to better 

understand the practices and concerns 

of the aviation industry with regard to 

the use of non-citizen trusts to register 

aircraft in the United States. In addition, 

the FAA gained a better understanding 

of the perceptions that exist with regard 

to the regulatory obligations on a trustee 

with regard to it registering an aircraft 

in the United States using a non-citizen 

trust. The FAA’s improved 

understanding has allowed it to sharpen 

the focus of its review of non-citizen 

trusts. The FAA also believes that the 

public meeting was useful in helping 

members of the public to better 

understand the critical safety 

information that the FAA needs to 

communicate to aircraft operators, 

through owner trustees, and the critical 

information that the FAA needs to 

receive from them in order for the FAA 

to meet its safety oversight obligations 

under international and U.S. law. 

The FAA will discuss the issues in 

terms of the law and safety since the 

two are greatly intertwined. 

International law and U.S. law impose 

safety oversight responsibilities on the 

FAA, existing law restricts aircraft 

registration in the U.S. to ‘‘owners,’’ and 

existing law imposes certain safety 

requirements on aircraft owners. After 

the FAA discusses the legal issues, the 

FAA will suggest which provisions in 

trust agreements may need to be 

changed and it will suggest language 

that would enable the FAA to facilitate 

the registration of aircraft in the future 

that are owned in trust. The suggested 

language and the reasons for the 

suggested language, if adopted as the 

FAA’s final policy on this matter, will 

guide the FAA in the future in 

determining eligibility for registering 

non-U.S. citizen trusts. An example of a 

standard trust agreement with FAAmstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 77, No. 27 / Thursday, February 9, 2012 / Proposed Rules 6695 

suggested changes incorporated is 

attached at the end of this Notice. 

State of Registry Responsibilities 

Whenever an aircraft is registered in 

a country, that country becomes the 

State of Registry for that aircraft. Under 

U.S. law, the FAA has responsibility for 

the oversight of civil aircraft of the 

United States. 

Under international law, a State of 

Registry has numerous responsibilities 

with regard to each aircraft on its 

registry. A number of these 

responsibilities, which are set forth in 

the Convention on International Civil 

Aviation (the Chicago Convention) and 

its annexes, relate to how a State 

registers an aircraft and manages its 

aircraft registry. Included among these 

responsibilities is the obligation to 

provide information on the registration 

and ownership of aircraft on its registry 

when requested by another contracting 

State or by the International Civil 

Aviation Organization. 

Other responsibilities under the 

Chicago Convention relate to the 

regulation and oversight of the safety of 

the aircraft and its operations. The State 

of Registry of an aircraft is responsible 

for issuing certificates of competency 

and licenses for the crewmembers of 

those aircraft and issuing a certificate of 

airworthiness to each aircraft on its 

registry. The State of Registry also is 

responsible for overseeing the 

continuing airworthiness of each aircraft 

on its registry. Because the Chicago 

Convention provides for the registration 

of an aircraft in only one State at any 

given time, there can only be a single set 

of requirements for the airworthiness 

certification of a particular aircraft or for 

the licensing of an individual 

crewmember of that aircraft. Those 

requirements apply regardless of where 

the operator is incorporated or resides 

or the location of the operation. 

With regard to the operation of 

aircraft, each contracting State to the 

Chicago Convention must require that 

every aircraft on its registry, when 

operated outside the territory of that 

State, comply with the rules and 

regulations relating to the flight and 

maneuver of aircraft there in force. Over 

international waters, the rules for the 

flight and maneuver of aircraft are set 

forth in Annex 2 to the Chicago 

Convention. (The FAA has incorporated 

these particular international 

requirements in Sections 91.703(a)(2) 

and Section 91.703(a)(3) of Title 14, 

Code of Federal Regulations.) Each 

contracting State also has undertaken to 

insure the prosecution of all persons 

violating the applicable rules for the 

flight and maneuver of aircraft. In order 

to execute its responsibilities as to 

compliance with, and enforcement of, 

flight and maneuver rules, the State of 

Registry must be able to obtain 

information about particular aircraft and 

operations in a timely manner and, in 

some cases, provide that information to 

other States. 

Depending on the circumstances, the 

State of Registry also may be the State 

of the Operator of an aircraft if the 

operator’s principal place of business is 

located in the State of Registry or, if 

there is no such place of business, the 

operator permanently resides in the 

State of Registry. The State of the 

Operator must oversee the operators of 

aircraft for which it is responsible in 

accordance with the standards set forth 

in Annex 6 to the Chicago Convention. 

Where the State of Registry and the 

State of the Operator are one and the 

same, the execution of safety oversight 

responsibilities is seamless because it 

occurs under a single regulatory system. 

However, the certification and oversight 

responsibilities of the State of the 

Operator are made more complicated 

when an operator uses an aircraft 

registered in another State. In those 

cases, the State of the Operator must 

consider and act consistently with 

certain State of Registry requirements— 

particularly with regard to the 

performance, equipage, and 

maintenance of the aircraft—when 

certifying and overseeing the operator. 

The effective execution of these 

responsibilities requires an ongoing 

exchange of information between the 

State of Registry and the State of the 

Operator. 

In the course of its review of the use 

of non-citizen trusts to register aircraft, 

the FAA determined that the basing and 

operation of such aircraft outside the 

United States frequently gives rise to 

problems in the execution of the 

oversight responsibilities. The FAA’s 

ability to carry out its State of Registry 

responsibilities for those aircraft is 

hampered by the fact that it has little or 

no presence in most foreign locations 

where the operations occur, and little or 

no information about the identity of the 

operators or the nature of the operations 

being conducted. Moreover, the United 

States is not the State of the Operator in 

many of those situations, inasmuch as 

the operators for the most part do not 

maintain their principal place of 

business or reside in the United States. 

The FAA’s lack of information about the 

identity of the operators or the nature of 

the operations substantially diminishes 

the FAA’s ability to provide information 

to the State that is either responsible for 

the oversight of the operator or the State 

where a flight operation actually occurs. 

Aircraft Owner Responsibilities 

1. Regulatory Obligations of the Owners 

of U.S.-Registered Aircraft Generally 

In the laws and regulations that 

establish and govern the FAA Aircraft 

Registry of the United States, no 

distinction is made between types or 

categories of aircraft owners for 

purposes of regulatory compliance. All 

registered owners of aircraft on the FAA 

Aircraft Registry, whether they are 

individuals, partnerships, corporations, 

or associations, any of which may act in 

the capacity of owner trustees, have the 

same obligations when it comes to 

compliance with the applicable FAA 

regulations. Once the FAA completes 

the registration process, the person to 

whom the aircraft is registered is the 

owner for all purposes under the 

regulations whether or not it acts as 

owner trustee. 

The owners of U.S.-registered aircraft 

have a substantial role in the FAA’s 

system for overseeing the safety of those 

aircraft and their operation. For 

example, the regulations specify that the 

application for an airworthiness 

certificate must be submitted by the 

owner of the aircraft. 14 CFR 21.173. 

The regulations also impose certain 

maintenance responsibilities on owners 

of aircraft as well as the actual operators 

of the aircraft. 14 CFR 91.403(a) and 

91.405. 

The importance of the owner’s role in 

the FAA’s safety oversight system may 

be best illustrated by Airworthiness 

Directive (AD) process. In situations 

involving unsafe conditions or defects 

in an aircraft type, the FAA issues 

ADs—frequently on an emergency 

basis—to the registered owners of such 

aircraft. Sometimes in the interests of 

safety, those ADs, which are mandatory 

rules, require the grounding of the 

aircraft while critical airworthiness 

inspections are conducted or while 

important repairs or alterations are 

made to the aircraft. The FAA requires 

aircraft owners to comply with the 

requirements of an AD. All owners, 

including owner trustees, must be able 

to communicate critical safety 

information in an AD in a timely 

manner to those who can take 

appropriate action. 

2. Treating an Owner as the Operator of 

an Aircraft in Certain Circumstances 

The FAA may also communicate with 

the registered owner of aircraft when 

conducting an investigation about 

suspected operational or maintenance 

violations in situations where the 

identity of the pilot or operator of the 

aircraft is not readily apparent. Where a 

registered owner has caused or 

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1Operate, with respect to aircraft, means use, 

cause to use or authorize to use aircraft, for the 

purpose (except as provided in § 91.13) of air 

navigation including the piloting of aircraft, with or 

without the right of legal control (as owner, lessee, 

or otherwise). 

authorized another person to operate his 

aircraft and where the owner has not 

cooperated with the FAA in providing 

information about such operation, the 

FAA has taken enforcement action 

against the owner as an ‘‘operator’’ 

using the broadly defined term 

‘‘operate’’ in part 1 of the Federal 

Aviation Regulations.1 In In the Matter 

of Fenner, FAA Order No. 96–17 (May 

3, 1996) aff’d, Fenner v. FAA, 113 F.3d 

1251 (11th Cir. 1997), the registered 

aircraft owner personally knew who had 

operated his aircraft dangerously, but 

refused to provide that person’s name to 

the FAA. The FAA Administrator used 

the long-standing, broad definition of 

‘‘operate’’ to find that the owner, by 

authorizing the use of the aircraft was 

responsible for the operation of the 

aircraft. The owner was assessed a 

$4000 civil penalty for the operation of 

the aircraft. 

In Fenner, the FAA Administrator 

held that: ‘‘While aircraft owners might 

not be held liable for all infractions 

committed in their aircraft, they can be 

held liable for infractions committed by 

a pilot who had permission to use their 

aircraft. The FAA has the statutory duty 

to protect the public from dangerous 

actions. Moreover, holding aircraft 

owners responsible in cases like this 

may help ensure that aircraft owners 

grant permission to use their aircraft 

only to persons they know to be 

responsible.’’ Fenner, at p. 3 

In a letter to Edward M. Plaza from 

Assistant Chief Counsel for Regulations 

and Enforcement Carl B. Schellenberg, 

March 28, 1979, the FAA stated that a 

lessor could be considered to have 

operated an aircraft and be considered 

in violation of [now section 91.13] when 

the lessee flew the aircraft in a careless 

or reckless manner.) (FAA Interpretation 

No. 1979–11) 

In In the Matter of Gatewood, FAA 

Order No. 2001–1, (February 3, 2000), 

an aircraft owner was found to have 

‘‘operated’’ an unairworthy aircraft 

where an inexperienced mechanic made 

an erroneous airworthiness finding and 

the mechanic/pilot flew the aircraft. 

In most circumstances the FAA will 

prefer to focus on the actual operator of 

an aircraft when conducting an 

investigation or taking enforcement 

action. However, an aircraft owner is 

expected to cooperate fully in providing 

information in support of the FAA’s 

investigatory and enforcement efforts. 

3. Owners’ Regulatory Compliance 

Obligations 

In reviewing the issues surrounding 

the use of trusts to register aircraft, the 

FAA has focused attention on the role 

of the owner trustee of a U.S.-registered 

aircraft in ensuring compliance with the 

laws and regulations that relate to the 

operation of the aircraft. In particular, 

the FAA has considered whether the 

status of the trustee as the owner of the 

aircraft under a trust agreement affects 

its responsibilities for compliance issues 

related to the operation of the aircraft as 

compared to other owners of a U.S.- 

registered aircraft. After considering the 

comments submitted by the public, FAA 

has determined that there is nothing 

inherent in the status of a trustee owner 

of a U.S.-registered aircraft that would 

affect or limit its responsibilities for 

ensuring compliance with the laws and 

regulations that relate to the operation 

of the aircraft. The FAA is not aware of 

any basis for treating one type of 

owner—such as a trustee under a noncitizen trust—differently from any other 

owner of a civil aircraft on the U.S. 

registry when considering issues of 

regulatory compliance. 

Several commenters indicated that a 

trustee could relieve itself of its 

regulatory compliance obligations if, in 

transferring the aircraft to another party 

for purposes of operating it, the trustee 

includes a contractual requirement that 

the operator fully comply with all 

applicable laws and regulations. The 

FAA disagrees. No commenter cited any 

legal authority in support of the 

proposition that a private party could 

somehow avoid a regulatory obligation 

imposed on it by the FAA simply by 

entering into a private contract with 

another party. The FAA in its 

regulations and policies does not 

recognize such a right. 

The FAA also disagrees with the 

suggestion that 49 U.S.C. 44112 

provides a basis for relieving owners of 

aircraft of their regulatory obligations. In 

its current form, section 44112, entitled 

‘‘Limitations on Liability,’’ provides in 

part: 

A lessor, owner, or secured party is liable 

for personal injury, death, or property loss or 

damage on land or water only when a civil 

aircraft, aircraft engine, or propeller is in the 

actual possession or control of the lessor, 

owner, or secured party, and the personal 

injury, death, or property loss or damage 

occurs because of 

(1) The aircraft, engine, or propeller; or 

(2) The flight of, or an object falling from, 

the aircraft, engine, or propeller. 

The plain language of the statute makes 

clear that the intent is to protect lessors, 

owners, or secured parties from tort 

liability when they are not in actual 

possession or control of the aircraft. The 

legislative history indicates that the 

liability protection provided under 

section 44112 was necessary to 

encourage participation in the financing 

of aircraft purchases. H.R. Rpt. 802091, 

at 1–2 (Jun. 1, 1948). There is no 

indication, however, in either the 

language of the statute or the legislative 

history that the drafters of the provision 

meant to provide broader protection to 

lessors, owners, or secured parties by 

exempting them from regulatory 

compliance. 

4. Due Diligence Reviews of Non-U.S. 

Citizen Trustors and Beneficiaries 

Some of the commenters stated that, 

presently, most U.S. citizen owner 

trustees exercise due diligence when 

investigating the background of foreign 

trustors and beneficiaries before those 

U.S. citizen trustees enter into trust 

relationships or any other type of 

relationship with such non-U.S. 

citizens. As those commenters 

explained, those U.S. citizen trustees are 

endeavoring ‘‘* * * to protect the 

interests of the United States * * *’’, 

and do so by, among other things, 

exercising due diligence pursuant to the 

USA Patriot Act, the Department of 

Commerce export control regulations, 

and the Office of Foreign Asset Control 

economic sanction regulations. 

The FAA acknowledges that the duediligence reviews described by the 

commenters are important for purposes 

of protecting the interests of the U.S. as 

to issues of national security, export 

control, and economic sanctions. Those 

reviews do not, however, necessarily 

meet the needs of the FAA with regard 

to protecting U.S. interests concerning 

aviation safety inasmuch as they do not 

consider the technical aviation issues 

that drive a safety oversight system. The 

FAA is concerned with technical 

qualification and the ability to comply 

on an ongoing basis with technical, 

operating, and maintenance standards. 

Such issues are outside the scope of the 

due-diligence reviews for national 

security, export control, and economic 

sanction compliance purposes. 

As indicated in the foregoing 

discussion, the FAA by regulation and 

practice imposes important safety 

obligations on all owners of aircraft. 

These obligations require that the 

information about the identity and 

whereabouts of the actual operators of 

aircraft and location and nature of 

operation be updated on an ongoing 

basis, thereby allowing owners to 

provide operators with safety critical 

information in a timely manner, and to 

obtain information responsive to FAA 

inquiries, including investigations of 

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2The FAA also notes that it had previously 

unfavorably opined on whether a trustee could 

enter into operating agreements that permitted 

custody and use of the aircraft by the non-US 

citizen trustor. FAA now recognizes that such 

transactions are not uncommon. 

3Pursuant to 14 CFR 47.7(c), in addition to the 

aircraft registration application and evidence of 

ownership, other required documents include a 

trust agreement and trustee affidavit of citizenship. 

alleged violations of FAA regulations. 

The FAA expects this level of due 

diligence from owners with regard to 

issues concerning aviation safety 

oversight. Moreover, the FAA believes 

such obligations are not unduly 

burdensome or beyond the capabilities 

of any owner of a U.S.-registered aircraft 

to meet. 

Some commenters have suggested 

however that the FAA should not expect 

that U.S. owner trustee be able to 

identify the operator or be able to insure 

quick contact with the operator of the 

aircraft. We reject these suggestions. To 

accept such suggestions would result in 

the removal of existing obligations on 

U.S. citizen owner trustees that would 

otherwise continue to exist for all other 

owners. 

5. FAA Policy Clarification: Information 

Requirements 

For the majority of the aircraft on the 

FAA Aircraft Registry, including some 

aircraft registered to non-U.S. citizens 

under trusts, the FAA has adequate 

sources of information about the aircraft 

and their operations to effectively and 

efficiently carry out its State of Registry 

responsibilities under international law. 

However, for aircraft registered to nonU.S. citizens under trusts that are 

primarily or exclusively used in general 

aviation or aerial works operations 

outside the United States, the FAA has 

been less successful in accessing 

information necessary to the execution 

of its State of Registry responsibilities. 

In all cases, the FAA will look to the 

trustee, as the registered owner of the 

aircraft, for information about the 

aircraft and its operations when needed 

to comply with the United States’ State 

of Registry obligations under the 

Chicago Convention. In particular, the 

FAA expects that within 2 business 

days a trustee will be able to provide to 

the FAA the following information 

about the aircraft and its operation: 

• The identity of the person normally 

operating, or managing the operations 

of, the aircraft; 

• Where that person currently resides 

or has its principal place of business; 

• The location of maintenance and 

other aircraft records; and 

• Where the aircraft is normally based 

and operated. 

The FAA further expects that within 

5 business days the trustee, as the 

registered owner of the aircraft, will be 

able to respond to FAA requests for 

more detailed information about the 

aircraft and its operations, including: 

• Information about the operator, 

crew, and aircraft operations on specific 

dates; 

• Maintenance and other aircraft 

records; and 

• The current airworthiness status of 

the aircraft. 

In the event of an emergency, the FAA 

may request a trustee to provide 

information more quickly than the 

timelines specified above. 

Policy Clarifications Related to NonCitizen Trusts and the Registration 

Process 

1. Operating Agreements Between the 

Trustee Owner and the Trustor or 

Beneficiary 

During the course of its review of noncitizen trusts, the FAA has had an 

opportunity to review a number of 

aircraft operating agreements between 

the trustee owners of aircraft and the 

trustors or beneficiaries of the trust.2

The operating agreements reviewed had 

not been submitted to the FAA along 

with aircraft registration application and 

other required documents of the aircraft 

concerned.3

In its review, the FAA found that 

many operating agreements contained 

clauses that addressed issues not 

covered in the non-citizen trust 

agreement or that modified or 

contradicted provisions in the trust 

agreement, particularly as to enlarging 

the degree of control exercised by a nonU.S. citizen over the trustee. The 

ultimate impact of many operating 

agreements was to affect the 

relationship and balance established 

under the non-citizen trust between the 

trustor and/or beneficiary on one hand 

and the trustee on the other. 

The FAA requires that a person 

holding legal title to an aircraft in trust 

must, when applying to register that 

aircraft in the United States, submit a 

‘‘copy of each document legally 

affecting a relationship under the trust. 

* * *’’ 14 CFR 47.7(c)(2)(i). The fact 

that the operating agreements referenced 

above have not been routinely 

submitted to the FAA in conjunction 

with an application to register an 

aircraft held in trust troubles the FAA 

because of the effect of the operating 

agreements on the relationship 

established under the trust. The FAA 

concludes, contrary to the views of 

some commenters, that a relationship 

established under a trust agreement is 

necessarily affected by an operating 

agreement or similar side agreement or 

arrangement involving trustee and 

trustor which allows possession and use 

of the aircraft at all times to remain with 

the trustor. The operating agreement 

and the trust agreement are so 

intertwined that the operating 

agreement will always affect the 

relationship established under the trust. 

A fundamental part of the registration 

process for aircraft held in trust is 

determining whether the underlying 

agreements meet the applicable 

requirements and therefore are 

sufficient to establish the trustee’s 

eligibility to register the aircraft. The 

failure to submit required documents 

such as an operating agreement 

frustrates this objective. To avoid this 

result in the future, the FAA will 

require that all operating agreements or 

similar side agreements involving the 

trustee transferring custody and use of 

the aircraft held in trust to the trustor be 

submitted to the FAA along with other 

documents that affect a relationship 

under the trust pursuant to 14 CFR 

47.7(c)(2)(i). 

In cases where a non-citizen trust is 

used to establish eligibility for 

registration and no operating agreement 

or other similar side agreement or 

arrangement is submitted along with a 

registration application, the FAA will 

expect the applicant to provide 

sufficient assurances that no such 

operating agreement or other side 

agreement or arrangement exists 

between the trustee and the trustor. An 

adequate assurance might take the form 

of an additional declaration by the 

trustee in an affidavit submitted in 

support of a non-citizen trust 

registration that no such operating 

agreement or other side agreement or 

arrangement has been entered into by 

the trustee and the trustor and/or 

beneficiary. There may be other means 

by which the trustee could adequately 

assure the FAA that no operating 

agreement or other side agreement or 

arrangement exists between the trustee 

and the trustor and/or beneficiary; the 

FAA will consider alternate approaches. 

In the end, however, the FAA must be 

certain that it has the opportunity to 

review all documents that affect the 

relationship established under a noncitizen trust in order to insure the 

integrity of the registration process. 

Silence by the trustee with regard to this 

important issue will not be sufficient. 

2. Trustee Removal or Resignation 

In promulgating regulations to permit 

the use of a non-citizen trust to establish 

eligibility to register an aircraft in the 

U.S., the FAA imposed restrictions on 

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4 In a related vein, the FAA notes that some trust 

agreements contain a provision designating a 

foreign court to adjudicate disputes between the 

trustor and trustee. Such designations are not 

acceptable to the FAA. 

5Attached as Exhibit 1 is an example of a 

standard trust agreement with FAA-suggested 

changes incorporated. The revised standard trust 

agreement showing the FAA’s additions and 

deletions also is available on the FAA’s Web site. 

6Some have suggested that the FAA impose a 

new requirement on the various and potentially 

vast number of operators of these trust aircraft. The 

suggestion has been made that FAA require those 

that actually operate the aircraft under a lease or 

other arrangement whereby they get possession, 

control and use of the aircraft, submit reports to 

Flight Standards District Offices (FSDO) identifying 

themselves as the operators of the aircraft. The 

suggestion is that the FAA apply the operatorreporting provisions found in a long-standing 

exemption issued to the NBAA in 1972. See 

Exemption 1637. Adoption of a similar exemption 

would have the effect of not requiring an owner 

trustee to be the conduit for important 

communications to the operator/users of the aircraft 

or the conduit or provider of important information 

and documents about the past or current condition 

and use of the aircraft to the FAA. In terms of 

conveying important safety information or in terms 

of gathering important safety information and 

evidence, FAA believes trustee owners should be 

treated just like any other registered aircraft owners. 

the ability of non-U.S. citizens or 

resident aliens to remove the trustee. 

Such restrictions, in the FAA’s view, 

lend more meaningful status and 

permanence to the trustee as the owner 

of the aircraft held in trust.’’ Section 

47.7(c)(3) of the regulations provides: 

If persons who are neither U.S. citizens nor 

resident aliens have the power to direct or 

remove a trustee, either directly or indirectly 

through the control of another person, the 

trust instrument must provide that those 

persons together may not have more than 25 

percent of the aggregate power to direct or 

remove a trustee. Nothing in this paragraph 

prevents those persons from having more 

than 25 percent of the beneficial interest in 

the trust. 

The limitation on the ability of non-U.S. 

citizens or resident aliens to remove a 

trustee is in addition to what 

limitations, if any, exist under the laws 

of the state in which the trust is 

established. 

a. Removal for Cause—Specificity 

The FAA is concerned that noncitizen trusts being used to establish 

eligibility to register an aircraft do not 

adequately limit the ability of non-U.S. 

citizens to remove a trustee. In general, 

the agreements allow trustees to be 

removed for cause without specifying 

what constitutes a sufficient cause. The 

FAA’s view is that such lack of 

specificity appears to provide a nonU.S. citizen beneficiary with virtually 

unconditional power to remove a 

trustee, since practically any cause for 

removal might be interpreted as 

sufficient. 

Therefore, the FAA believes that a 

non-citizen trust agreement must 

describe with specificity what would be 

a sufficient cause for removal of a 

trustee by a non-U.S. citizen beneficiary. 

Some trust agreements on file with the 

FAA have loosely attempted to define 

what constitutes cause to remove 

consistent with the general law of trusts. 

The grounds for removal listed in the 

Third Restatement of Trusts at Section 

37 are illustrative of possible (but not 

always relevant) grounds for removing a 

trustee that might be included in a noncitizen trust agreement. 

b. Removal for Cause—Aggregate Power 

Section 47.7(c)(3) of the Federal 

Aviation Regulations provides that nonU.S. citizens or non-resident aliens may 

not have more than 25% of the aggregate 

power to direct or remove a trustee. In 

those cases where a non-citizen trustor 

appears to have 100% of such power 

(not just 25%), the FAA needs to be 

assured in writing (in the trust 

agreement, trust affidavit of citizenship, 

or elsewhere) how and why it is that 

such non-citizens will not be able to 

exercise such aggregate power in excess 

of 25%.4

In summary, the FAA believes that 

without a description of the causes that 

might justify removal, and without the 

power to remove by non-U.S. citizen or 

non-resident aliens being clearly limited 

to 25% of the aggregate power, that a 

clause that simply vests a non-U.S. 

citizen trustor with the power to remove 

a trustee for cause is insufficient. 

c. Termination of the Trust and Trustee 

Resignation 

Finally, the FAA would note that 

none of the restrictions on the power of 

non-U.S. citizen to control or remove a 

trustee affect the ability of a non-U.S. 

citizen beneficiary or trustor otherwise 

to terminate a trust in accordance with 

its terms. With regard to the registration 

of the aircraft, the FAA expects that the 

likely effect of a termination, not 

involving removal of the trustee, would 

be to end registration or render the 

registration ineffective under 14 CFR 

47.41(a). The aircraft could be reregistered in the United States if 

ownership were transferred to a person 

eligible to register it, whether under a 

non-citizen trust or some other 

mechanism recognized under the FAA’s 

regulations. 

Likewise, the FAA does not have any 

restrictions on the ability of a trustee to 

resign without first being replaced by a 

successor trustee. Contrary to the 

suggestion of at least one commenter, 

the FAA does not have any regulation 

or policy that requires the inclusion of 

a requirement in the non-citizen trust 

agreement that a resignation may take 

effect only upon the appointment of a 

successor trustee. The FAA allows the 

parties to the non-citizen trust to 

address that issue as they see fit. The 

FAA believes the consequences of a 

resignation by a trustee without the 

prior appointment of an eligible 

successor trustee would be the same as 

a termination of the trust as described 

above. 

3. Proposed Changes to a Standard 

Trust Agreement 

A standard non-citizen trust 

agreement has developed over the years. 

The FAA believes it is useful to offer 

suggestions to that document.5 In some 

instances we recommend striking 

language that we believe is ambiguous 

or perhaps contrary to law. We also 

suggest some new language that we 

believe might be included in trust 

agreements (e.g., in paragraph 3.02, 

illustrative language has been added 

regarding for cause removal). That 

language reflects what the FAA might 

deem acceptable for aircraft registration 

purposes and that the owner trustee 

applicant is making a bona fide effort to 

comply with existing legal requirements 

imposed on all aircraft owners. Below is 

a discussion of significant suggested 

revisions to a standard trust agreement. 

a. Specification of Owner Trustee’s 

Duties in the Non-Citizen Trust 

Agreement Should Reflect Aspects of 

Duties Imposed by the FAA on Owners 

and Should Reflect That the Owner 

Trustee May Need To Rely on the 

Assistance of the Trustor and/or 

Beneficiary To Meet Those Duties 

We propose new paragraphs (e) and 

(f) to Section 4.01 of the standard trust 

agreement. As discussed earlier in this 

document, foreign civil aviation 

authorities and others come to the FAA 

with information that a U.S.-registered 

aircraft may have conducted an unsafe 

operation or that it is presently in an 

unairworthy condition. Trustee aircraft 

owners, just like non-trustee aircraft 

owners, must be able to provide the 

FAA with information about who 

normally operates and maintains the 

aircraft.6 We feel that 2 business days is 

enough time for the trustee, with the 

cooperation of the trustor, to provide the 

FAA with information about those who 

normally operate the aircraft and about 

the usual location of aircraft 

maintenance records and other records. 

We also believe that it is reasonable to 

expect that within 5 business days of an 

FAA request, that a trustee, with the 

cooperation of the trustor should be able 

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7Choose the appropriate phrase depending on 

whether Trustor is an LLC or a corporation. 

to provide the FAA with: (i) Information 

about the actual operator, crew, and 

aircraft operations for specified dates; 

(ii) information about where the aircraft 

will be on specified dates in order for 

the FAA to conduct direct oversight 

inspections and investigations regarding 

the condition of the aircraft or the 

manner in which the aircraft is being 

operated; and (iii) maintenance and 

other records in order to identify the 

current airworthiness status of the 

aircraft, who performed maintenance on 

the aircraft, and the manner and 

methods used to perform that 

maintenance. 

We note that proposed new 

paragraphs (e) and (f) includes language 

to address emergency situations 

identified by the FAA. If an emergency 

arises, the FAA may issue an emergency 

order to the owner trustee requiring the 

production of information and 

documents in a shorter time frame. In an 

emergency situation, the nonemergency 

time frames specified in draft 

paragraphs (e) and (f) would not apply. 

We are proposing a new paragraph (g) 

to Section 4.01 of the trust agreement in 

order for the parties to recognize that it 

is the owner trustee’s duty to 

expeditiously communicate emergency 

airworthiness directives concerning the 

aircraft to the Trustor and/or Lessee of 

the aircraft. Again, the FAA through the 

appropriate Aircraft Certification Office 

uses the information about aircraft 

owners, which is listed in the FAA 

Aircraft Registry, to communicate timecritical safety requirements and 

restrictions to aircraft owners, who 

under the regulations are primarily 

responsible for the airworthiness of the 

aircraft. See § 91.403. Similarly, a 

situation could develop where the FAA 

may already have sufficient evidence 

about an aircraft’s condition or misuse 

to warrant the issuance of a Cease and 

Desist Order or some other type of order 

immediately grounding the aircraft. 

In regard to draft paragraph (h), the 

United States has an interest in being 

informed by the most expeditious 

means possible of the resignation of a 

trustee or the ‘‘for cause’’ removal of a 

trustee. Among other things, the agency 

needs that information in order to 

determine whether to de-register the 

aircraft. 

b. Proposed Revisions to Article 9 of the 

Trust Agreement 

Much of the language in the existing 

Article 9 is ambiguous or problematic. 

For example, subsection 9.01(a) 

beginning at line 2 states: 

‘‘* * * the Trustor will have no rights or 

powers to direct, influence or control the 

Owner Trustee in the performance of the 

Owner Trustee’s duties under this Agreement 

in connection with matters involving the 

ownership and operation of the Aircraft by 

the Owner Trustee.’’ (italicized emphasis 

added). 

In that regard FAA is concerned that 

most non-citizen trusts involve 

situations where the U.S. Citizen 

Trustee never possesses or operates the 

aircraft which is rarely operated in U.S. 

airspace. Therefore the italicized 

language might be interpreted as only 

limiting a Trustor’s rights and powers 

do direct, limit, or influence an Owner 

Trustee’s duties on those rare occasions 

when the Owner Trustee is the actual 

operator. 

In the proposed rewrite of subsection 

9.01(a) FAA has tried to make it clear 

that the Trustor may not control the 

Owner Trustee’s duties under the 

Agreement including, but not limited to, 

matters involving ownership or the 

operation of the aircraft. 

Request for Comments 

FAA is seeking comment on the 

proposed policy clarifications and trust 

agreement revisions, and invites 

interested parties to visit its Web site for 

background information. The FAA will 

consider the comments and other 

information received in formulating a 

final notice of policy clarification, or in 

determining whether a new policy or 

rule should be developed to address 

FAA safety and oversight concerns with 

non-citizen trust registrations. The FAA 

also will consider whether an additional 

public meeting is required to ensure an 

adequate airing of the public’s views on 

the use of non-citizen trusts to register 

aircraft in the United States. 

Issued in Washington, DC, on February 3, 

2012. 

Kathryn B. Thomson, 

Chief Counsel, Federal Aviation 

Administration. 

TRUST AGREEMENT 

THIS TRUST AGREEMENT (XXX), 

dated as of XXX, (the ‘‘Agreement’’) by 

and between XXX, a [corporation 

organized and existing] [limited liability 

company formed] 7 under the laws of 

XXX (‘‘Trustor’’), and XXX, a XXX 

organized and existing under the laws of 

the XXX (‘‘Owner Trustee’’); 

WITNESSETH: 

WHEREAS, Trustor desires to cause 

title to the Aircraft (as hereinafter 

defined) to be conveyed to Owner 

Trustee; 

WHEREAS, Trustor desires to create a 

trust (the ‘‘Trust’’) and contribute the 

Aircraft thereto in order to ensure the 

eligibility of the Aircraft for United 

States registration with the Federal 

Aviation Administration (the ‘‘FAA’’); 

WHEREAS, this Agreement is 

designed to create a Trust in order that 

the Owner Trustee may hold title to the 

Aircraft until such time as Trustor 

directs the Owner Trustee to distribute 

the Aircraft in accordance with 

Trustor’s written instructions; and 

WHEREAS, Owner Trustee is willing 

to accept the trusts as herein provided; 

NOW, THEREFORE, in consideration 

of the mutual covenants and agreements 

contained herein, Trustor and Owner 

Trustee agree as follows: 

ARTICLE 1 

DEFINITIONS 

Capitalized terms used in this 

Agreement shall have the respective 

meanings assigned thereto below, unless 

such terms are otherwise defined herein 

or the context hereof shall otherwise 

require. The terms ‘‘hereof’’, ‘‘herein’’, 

‘‘hereunder’’ and comparable terms refer 

to this Agreement, as amended, 

modified or supplemented from time to 

time, and not to any particular portion 

hereof. References in this Agreement to 

sections, paragraphs and clauses are to 

sections, paragraphs and clauses in this 

Agreement unless otherwise indicated. 

‘‘Affidavit’’ means the Affidavit of 

Owner Trustee pursuant to Section 

47.7(c)(2)(iii) of Part 47 of the Federal 

Aviation Regulations. 

‘‘Aircraft’’ means the XXX Aircraft, 

serial number XXX, FAA Registration 

Number N XXX together with the XXX 

engines, bearing manufacturer’s serial 

numbers XXX and XXX, which are 

transferred to the Owner Trustee in trust 

under this Trust Agreement. 

‘‘Aircraft Registration Application’’ 

means AC Form 8050–1 Aircraft 

Registration Application by Owner 

Trustee covering the Aircraft. 

‘‘Citizen of the United States’’ means 

‘‘citizen of the United States’’ as that 

term is defined in Section 40102(a)(15) 

of Title 49 of the United States Code. 

‘‘FAA’’ means the Federal Aviation 

Administration of the United States or 

any Government Entity succeeding to 

the functions of such Federal Aviation 

Administration. 

‘‘FAA Bill of Sale’’ means an AC Form 

8050–2 Bill of Sale for the Aircraft from 

Trustor to Owner Trustee. 

‘‘Lessee’’ means any lessee under any 

Lease, or any operator under any 

Operating Agreement. 

‘‘Lease’’ means any agreement from 

time to time entered into with respect to 

the Aircraft by the Owner Trustee, as 

Lessor, and a third party Lessee, 

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whether or not at the direction of the 

Trustor. 

‘‘Operating Agreement’’ means any 

agreement entered into between the 

Owner Trustee and the Trustor, or 

between a third party Lessee and the 

Trustor, transferring to the Trustor the 

right to possess, use, operate or manage 

the Aircraft. 

‘‘Trust Estate’’ means all estate, right, 

title and interest of Owner Trustee in 

and to the Aircraft, the Lease, the 

Warranty Bill of Sale and the FAA Bill 

of Sale, including, without limitation, 

all amounts of the rentals under any 

Lease, insurance proceeds (other than 

insurance proceeds payable to or for the 

benefit of Owner Trustee, for its own 

account or in its individual capacity, or 

Trustor), and requisition, indemnity or 

other payments of any kind for or with 

respect to the Aircraft, (other than 

amounts owing to Owner Trustee, for its 

own account or in its individual 

capacity, Trustor or any Lessee of the 

Aircraft). 

‘‘Warranty Bill of Sale’’ means a full 

warranty bill of sale for the Aircraft, 

executed by Trustor in favor of Owner 

Trustee and specifically referring to 

each engine installed on the Aircraft. 

ARTICLE 2 

CREATION OF TRUST 

Section 2.01 Transfer of Control. 

Trustor shall cause title to the Aircraft 

to be conveyed to Owner Trustee. 

Section 2.02 Acceptance and 

Declaration of Trust. Owner Trustee 

accepts the Trust created hereby, and 

declares that it will hold the Trust 

Estate upon the trusts hereinafter set 

forth for the use and benefit of Trustor, 

in accordance with and subject to all of 

the terms and conditions contained in 

this Agreement, and agrees to perform 

the same, including without limitation 

the actions specified in Section 4.01 

hereof, and agrees to receive and 

disburse all moneys constituting part of 

the Trust Estate, all in accordance with 

the terms hereof. 

ARTICLE 3 

THE OWNER TRUSTEE 

Section 3.01 Status. Owner Trustee 

hereby represents and warrants that it is 

a Citizen of the United States. 

Section 3.02 Removal. Owner 

Trustee may be removed at any time, 

but for cause only, by a written 

instrument or instruments signed by 

Trustor, subject to the regulatory 

limitation that a non-U.S. citizen not 

hold more than 25 percent of the 

aggregate power to remove a trustee. 

[For purposes of this Section, ‘‘for 

cause’’ shall mean willful misconduct or 

gross neglect so as to endanger the 

[Trust estate]. Mere disagreements 

between Owner Trustee and Trustor 

shall not constitute a cause warranting 

removal.] Such removal shall take effect 

immediately upon the appointment of a 

successor Owner Trustee pursuant to 

Section 3.04, whereupon all powers, 

rights and obligations of the removed 

Owner Trustee under this Agreement 

(except the rights set forth in Section 

3.08) shall cease and terminate. Without 

any affirmative action by Trustor, any 

Owner Trustee shall cease immediately 

to be an Owner Trustee at such time as 

it ceases to be a Citizen of the United 

States or at such time as it for any 

reason is not free from control by 

Trustor as described in Article 9, and 

shall give immediate notice thereof to 

Trustor. Any Owner Trustee shall also 

give Trustor notice of a possible change 

of citizenship at the later of (i) 90 days 

prior to a change in citizenship and (ii) 

actual knowledge by Owner Trustee that 

such a change in citizenship is probable. 

Section 3.03 Resignation. Owner 

Trustee may resign at any time upon 

giving 30 days prior written notice of 

such resignation to Trustor. Such 

resignation shall take effect only upon 

the appointment of a successor Owner 

Trustee pursuant to Section 3.04, 

whereupon all powers, rights and 

obligations of the resigning Owner 

Trustee under this Agreement (except 

the rights set forth in Section 3.08) shall 

cease and terminate. 

Section 3.04 Successor Owner 

Trustee. Promptly upon receipt of a 

notice of resignation from the Owner 

Trustee in accordance with Section 

3.03, a successor trustee shall be 

appointed by a written instrument 

signed by a duly authorized officer of 

Trustor and the successor trustee shall 

execute and deliver to the predecessor 

Owner Trustee an instrument accepting 

such appointment. Such successor 

trustee shall be a Citizen of the United 

States and shall assume all powers, 

rights and obligations of such Owner 

Trustee hereunder immediately upon 

the resignation of such Owner Trustee 

becoming effective. Such successor, 

concurrently with such appointment, 

shall file an Affidavit with the FAA and 

all other documents then required by 

law to be filed in connection therewith. 

If the Trustor shall not have so 

appointed a successor Owner Trustee 

within 30 days after such resignation or 

removal, the Owner Trustee may apply 

to any court of competent jurisdiction to 

appoint a successor Owner Trustee to 

act until such time, if any, as a 

successor or successors shall have been 

appointed by the Trustor as above 

provided. Any successor Owner Trustee 

so appointed shall immediately and 

without further act be superseded by 

any successor Owner Trustee appointed 

by the Trustor as above provided. 

Section 3.05 Merger. Any 

corporation into which Owner Trustee 

may be merged or converted or with 

which it may be consolidated, or any 

corporation resulting from any merger, 

conversion or consolidation to which 

Owner Trustee shall be a party, or any 

corporation to which substantially all 

the corporate trust business of Owner 

Trustee may be transferred, shall, 

subject to the terms of Section 3.04, be 

Owner Trustee without further act. 

Section 3.06 Tax Returns. The 

Owner Trustee shall keep all 

appropriate books and records relating 

to the receipt and disbursement by it of 

all monies under this Agreement or any 

agreement contemplated hereby. The 

Trustor will prepare all tax returns 

required to be filed with respect to the 

trust hereby and the Owner Trustee, 

upon request, will furnish the Trustor 

with all such information as may be 

reasonably required from the Owner 

Trustee in connection with the 

preparation of such tax returns. The 

Owner Trustee will execute and file the 

tax returns as prepared by the Trustor. 

Section 3.07 Vacancies. If any 

vacancy shall occur in the position of 

Owner Trustee for any reason, 

including, without limitation, removal, 

resignation, loss of United States 

citizenship or the inability or refusal of 

such Owner Trustee to act as Owner 

Trustee, the vacancy shall be filled in 

accordance with Section 3.04. 

Section 3.08 Fees; Compensation. 

The Owner Trustee shall receive from 

the Trustor as compensation for the 

Owner Trustee’s services hereunder 

such fees as may heretofore and from 

time to time hereafter be agreed upon by 

the Owner Trustee and the Trustor and 

shall be reimbursed by the Trustor for 

all reasonable costs and expenses 

incurred or made by it in accordance 

with any of the provisions of this 

Agreement. If an event of default under 

any Lease shall occur, the Owner 

Trustee shall be entitled to receive 

reasonable compensation for its 

additional responsibilities, and payment 

or reimbursement for its expenses. 

Owner Trustee shall have a lien on the 

Trust Estate, prior to any interest therein 

of the Trustor, to secure payment of 

such fees and expenses. 

Section 3.09 No Duties. Owner 

Trustee shall not have any duty (i) to see 

to any insurance on the Aircraft or 

maintain any such insurance, (ii) to see 

to the payment or discharge of any tax, 

assessment or other governmental 

charge or any lien or encumbrance of 

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any kind owing with respect to, 

assessed or levied against, the Aircraft 

(provided, however, that Owner Trustee 

shall not create, permit or suffer to exist 

any lien or encumbrance on any part of 

the Aircraft which results from claims 

against Owner Trustee unrelated to its 

capacity as Owner Trustee hereunder), 

(iii) to confirm or verify any notices or 

reports, (iv) to inspect the Aircraft at 

any time or ascertain the performance or 

observance by either of any Lessee or 

Trustor of its covenants under any 

Lease, or (v) except as set forth herein, 

to see to any recording or see to the 

maintenance of any such recording or 

filing with the FAA or other government 

agency. 

Section 3.10 Status of Moneys 

Received. All moneys received by 

Owner Trustee under or pursuant to any 

provisions of this Agreement shall 

constitute trust funds for the purpose for 

which they are paid or held, and shall 

be segregated from any other moneys 

and deposited by Owner Trustee under 

such conditions as may be prescribed or 

permitted by law for trust funds. 

Section 3.11 Owner Trustee May 

Rely. Owner Trustee shall not incur any 

liability to anyone in acting or refraining 

from acting upon any signature, 

instrument, notice, resolution, request, 

consent, order, certificate, report, 

opinion, bond or other document or 

paper reasonably believed by it to be 

genuine and reasonably believed by it to 

be signed by the proper party or parties. 

As to any fact or matter, the manner or 

ascertainment of which is not 

specifically described herein, Owner 

Trustee may for all purposes hereof rely 

on a certificate, signed by or on behalf 

of the party executing such certificate, 

as to such fact or matter, and such 

certificate shall constitute full 

protection of Owner Trustee for any 

action taken or omitted to be taken by 

it in good faith in reliance thereon. In 

the administration of the Trust, Owner 

Trustee may, at the reasonable cost and 

expense of Trustor, seek advice of 

counsel, accountants and other skilled 

persons to be selected and employed by 

them, and Owner Trustee shall not be 

liable for anything done, suffered or 

omitted in good faith by it in accordance 

with the actions, advice or opinion of 

any such counsel, accountants or other 

skilled persons. 

Section 3.12 Owner Trustee Acts as 

Trustee. In accepting the Trust, Owner 

Trustee acts solely as trustee hereunder 

and not in any individual capacity 

(except as otherwise expressly provided 

in this Agreement or any Lease), and all 

persons other than Trustor having any 

claim against the Owner Trustee by 

reason of the transactions contemplated 

hereby shall not have any recourse to 

Owner Trustee in its individual 

capacity. 

Section 3.13 No Expenses for Owner 

Trustee. Owner Trustee shall not have 

any obligation by virtue of this 

Agreement to expend or risk any of its 

own funds, or to take any action which 

could, in the reasonable opinion of 

Owner Trustee, result in any cost or 

expense being incurred by Owner 

Trustee. Owner Trustee shall not be 

required to take any action or refrain 

from taking any action under this 

Agreement unless it shall have been 

indemnified by Trustor in a manner and 

form satisfactory to Owner Trustee 

against any liability, cost or expense 

(including reasonable attorneys’ fees) 

which may be incurred in connection 

therewith. No provisions of this 

Agreement shall be deemed to impose 

any duty on Owner Trustee to take any 

action if Owner Trustee shall have been 

advised by counsel that such action 

would expose it to personal liability, is 

contrary to the terms hereof or is 

contrary to law. 

Section 3.14 Notice of Event of 

Default. In the event that a responsible 

officer in the Corporate Trust 

Department of the Owner Trustee shall 

have actual knowledge of a default or an 

event of default under any Lease, the 

Owner Trustee shall give or cause to be 

given prompt notice of such default or 

event of default to the Trustor. The 

Owner Trustee shall take such action 

with respect to such default or event of 

default as shall be specified in written 

instructions from the Trustor. For all 

purposes of this Agreement and any 

Lease, in the absence of actual 

knowledge of a responsible officer in the 

Corporate Trust Department of the 

Owner Trustee, the Owner Trustee shall 

not be deemed to have knowledge of a 

default or event of default unless 

notified in writing by the Trustor. 

Section 3.15 Certain Duties and 

Responsibilities of Owner Trustee. 

(a) Owner Trustee undertakes to 

perform such duties and only such 

duties as are specifically set forth in this 

Agreement and in any Lease or 

Operating Agreement or as required by 

law and no implied duties, covenants or 

obligations shall be read into this 

Agreement or any Lease or Operating 

Agreement against Owner Trustee. 

Owner Trustee agrees that it will deal 

with the Aircraft or any other part of the 

Trust Estate in accordance with the 

terms of this Agreement and any Lease 

or Operating Agreement or as required 

by law. 

(b) Whether or not herein expressly so 

provided, every provision of this Trust 

Agreement [relating to the conduct or] 

affecting the liability of or affording 

protection to Owner Trustee shall be 

subject to the provisions of this Section 

3.15. 

Section 3.16 No Representations or 

Warranties as to the Aircraft or 

Documents. OWNER TRUSTEE MAKES 

(i) NO REPRESENTATION OR 

WARRANTY, EXPRESS OR IMPLIED, 

AS TO THE VALUE, CONDITION, 

DESIGN, OPERATION, 

MERCHANTABILITY OR FITNESS FOR 

USE OF THE AIRCRAFT OR AS TO 

THE TITLE THERETO, OR ANY OTHER 

REPRESENTATION OR WARRANTY 

WITH RESPECT TO THE AIRCRAFT 

WHATSOEVER, except that XXX, in its 

individual capacity warrants that on the 

date on which the Aircraft is transferred 

to the Trust contemplated by this 

TRUST AGREEMENT, Owner Trustee 

shall have received whatever title was 

conveyed to it, and (ii) no other 

representations or warranties are made 

by the Owner Trustee other than to the 

extent expressly made herein by Owner 

Trustee, except that Owner Trustee 

represents and warrants that it has full 

right, power and authority to enter into, 

execute, deliver and perform this 

Agreement and that this Agreement 

constitutes the legal, valid and binding 

obligation of the Owner Trustee. 

ARTICLE 4 

THE TRUST ESTATE 

Section 4.01 Authorization and 

Direction to Owner Trustee. Trustor 

hereby authorizes and directs Owner 

Trustee, not individually but solely as 

Owner Trustee hereunder, and Owner 

Trustee covenants and agrees: 

(a) to execute and deliver each 

agreement, instrument or document to 

which Owner Trustee is a party in the 

respective forms thereof in which 

delivered from time to time by Trustor 

for execution and delivery and, subject 

to the terms hereof, to exercise its rights 

and perform its duties under any Lease 

in accordance with the terms thereof, 

including without limitation, accepting 

title to, and delivery of, the Aircraft and 

leasing the Aircraft to any Lessee or, 

subject to the provisions of Section 7 

hereof, distributing the Aircraft to 

Trustor pursuant to the specific written 

instructions of Trustor; 

(b) to effect the registration of the 

Aircraft with the FAA by duly executing 

and filing or causing to be filed with the 

FAA (i) the Aircraft Registration 

Application, (ii) the Affidavit, (iii) the 

FAA Bill of Sale, (iv) an executed 

counterpart of this Agreement, and (v) 

any other document or instrument 

required therefore including any 

Operating Agreement; 

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(c) to execute and deliver each other 

document referred to in any Lease or 

which Owner Trustee is required to 

deliver pursuant to any Lease or this 

Agreement; and 

(d) subject to the terms of this 

Agreement, to perform the obligations 

and duties and exercise the rights of 

Owner Trustee under any Lease. 

(e) upon request by FAA, and with the 

cooperation of Trustor, to provide the 

FAA with the following information 

within 2 business days of the request (or 

immediately in an emergency identified 

by the FAA): (i) the identity and contact 

information (address, phone number, 

email) of person or entity normally 

operating, or maintaining the operations 

of the aircraft; (ii) where that person or 

entity resides or is incorporated and has 

its principal place of business; (iii) the 

location of the aircraft maintenance and 

other records; and; (iv) where the 

aircraft is normally based and operated. 

(f) upon request by FAA, and with the 

cooperation of Trustor, to provide the 

FAA with the following information 

within 5 business days of the request (or 

immediately in an emergency identified 

by the FAA): (i) information about the 

operator, crew (names and pilot 

certificate numbers) and aircraft 

operations on specific dates; (ii) 

information about where the aircraft 

will be on a specific date in the future 

and (iii) maintenance and other aircraft 

records. 

(g) upon receipt of an emergency 

airworthiness directive from the FAA, to 

immediately forward the emergency 

airworthiness directive to the Trustor 

and or Lessee by the most expeditious 

means available. 

(h) to notify the FAA Aircraft Registry 

by the most expeditious means available 

of the trustee’s resignation under Article 

3.03 or removal under 3.02, or of the 

termination of the trust under 7.01. 

(i) to authorize U.S. and foreign 

government officials to inspect the 

aircraft. 

Section 4.02 Supplier Warranties. 

Trustor hereby assigns to Owner Trustee 

any and all warranties and indemnities 

of, and other claims against, any 

supplier relating to the Aircraft. 

Section 4.03 Advances by Trustor. 

Trustor shall make advances to Owner 

Trustee in such amounts and at such 

times as may be necessary to permit 

Owner Trustee to satisfy its obligations 

under any Lease and this Trust 

Agreement. 

ARTICLE 5 

DISTRIBUTIONS 

Section 5.01 Receipts. Except as 

otherwise provided in this Agreement, 

any payment received by Owner Trustee 

for which provision as to the 

application thereof is made in any Lease 

shall be applied promptly to the 

purpose for which such payment shall 

have been made in accordance with the 

terms of such Lease; and any payment 

received by Owner Trustee for which no 

provision as to the application thereof is 

made in any Lease or in this Article 5 

shall, unless Trustor shall have 

otherwise instructed Owner Trustee in 

writing, be distributed promptly to 

Trustor. 

Section 5.02 Manner of Making 

Distributions. Owner Trustee shall make 

all distributions to Trustor under this 

Agreement and any Lease promptly 

upon the receipt of proceeds available 

for distribution, but shall not be 

obligated to make any distributions 

until the funds therefor have been 

received by Owner Trustee. All 

distributions to Trustor hereunder shall 

be made to such account and in such 

manner as Trustor shall from time to 

time direct in writing. 

ARTICLE 6 

INDEMNIFICATION OF OWNER 

TRUSTEE BY TRUSTOR 

Section 6.01 Indemnification. 

Trustor hereby agrees, whether or not 

any of the transactions contemplated 

hereby shall be consummated, to 

assume liability for, and does hereby 

indemnify, protect, save and keep 

harmless XXX, in its individual capacity 

and its successors, assigns, legal 

representatives, agents and servants, 

from and against any and all liabilities, 

obligations, losses, damages, penalties, 

taxes (excluding any taxes payable by 

XXX in its individual capacity on or 

measured by any compensation received 

by XXX in its individual capacity for its 

services hereunder), claims, actions, 

suits, costs, expenses or disbursements 

(including, without limitation, 

reasonable ongoing fees of Owner 

Trustee and reasonable attorneys’ fees 

and expenses) of any kind and nature 

whatsoever which may be imposed on, 

incurred by or asserted against XXX in 

its individual capacity (whether or not 

also indemnified against by a Lessee 

under any Lease or also indemnified 

against by any other person) in any way 

relating to or arising out of this 

Agreement or any Lease or the 

enforcement of any of the terms hereof 

or thereof, or in any way relating to or 

arising out of the manufacture, 

purchase, acceptance, nonacceptance, 

rejection, ownership, delivery, lease, 

possession, use, operation, condition, 

sale, return or other disposition of the 

Aircraft (including, without limitation, 

latent and other defects, whether or not 

discoverable, and any claim for patent, 

trademark or copyright infringement), or 

in any way relating to or arising out of 

the administration of the Trust Estate or 

the action or inaction of Owner Trustee 

or XXX in its individual capacity 

hereunder, except (a) in the case of 

willful misconduct or gross negligence 

on the part of Owner Trustee or XXX in 

its individual capacity in the 

performance or nonperformance of its 

duties hereunder, or (b) those resulting 

from the inaccuracy of any express 

representation or warranty of XXX in its 

individual capacity (or from the failure 

of XXX in its individual capacity to 

perform any of its covenants) contained 

in this Agreement or any Lease, or (c) 

in the case of the failure to use ordinary 

care on the part of Owner Trustee or 

XXX in its individual capacity in the 

disbursement of funds. The indemnities 

contained in this Article 6 extend to 

XXX only in its individual capacity and 

shall not be construed as indemnities of 

the Trust Estate. The Indemnities 

contained in this Article 6 shall survive 

the termination of this Agreement. In 

addition, and to secure the foregoing 

indemnities, Owner Trustee shall have 

a lien on the Trust Estate, which shall 

be prior to any interest therein of 

Trustor. 

ARTICLE 7 

TERMINATION 

Section 7.01 Termination Date. The 

Trust shall terminate without any notice 

or other action of Owner Trustee upon 

the earlier of (a) such date as may be 

directed by Trustor and the sale or other 

final disposition by the Owner Trustee 

of all property constituting the Trust 

Estate or (b) twenty one years less one 

day after the earliest execution of this 

Trust Agreement by any party hereto. 

Section 7.02 Distribution of Trust 

Estate Upon Termination. Upon any 

termination of the Trust pursuant to the 

provisions of Section 7.01 hereof, 

Owner Trustee shall convey the Trust 

Estate to Trustor or its nominee. 

ARTICLE 8 

MISCELLANEOUS 

Section 8.01 Nature of Title of 

Trustor. Trustor shall not have legal title 

to any part of the Trust Estate. No 

transfer, by operation of law or 

otherwise, of the right, title and interest 

of Trustor in and to the Trust Estate or 

the trusts hereunder, in accordance with 

the terms hereof, shall operate to 

terminate this Agreement or the trusts 

hereunder or entitle any successor or 

transferee of Trustor to an accounting or 

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Federal Register / Vol. 77, No. 27 / Thursday, February 9, 2012 / Proposed Rules 6703 

to the transfer of it of legal title to any 

part of the Trust Estate. 

Section 8.02 Power of Owner Trustee 

to Convey. Any assignment, sale, 

transfer or other conveyance by Owner 

Trustee of the interest of Owner Trustee 

in the Aircraft or any part thereof made 

pursuant to the terms of this Agreement 

or any Lease shall bind Trustor and 

shall be effective to transfer or convey 

all right, title and interest of Owner 

Trustee and Trustor in and to the 

Aircraft or such part thereof. No 

permitted purchaser or other permitted 

grantee shall be required to inquire as to 

the authorization, necessity, expediency 

or regularity of such assignment, sale, 

transfer or conveyance or as to the 

application of any sale or other proceeds 

with respect thereto by Owner Trustee. 

Section 8.03 Trust Agreement for 

Benefit of Certain Parties Only. Nothing 

herein, whether expressed or implied, 

shall be construed to give any person 

other than Owner Trustee and Trustor 

any legal or equitable right, remedy or 

claim under or in respect of this 

Agreement; but this Agreement shall be 

held to be for the sole and exclusive 

benefit of Owner Trustee and Trustor. 

Section 8.04 Notices. Unless 

otherwise expressly provided herein, all 

notices, instructions, demands and 

other communications hereunder shall 

be in writing and shall be delivered 

personally or sent by registered or 

certified mail, postage prepaid and 

return receipt requested, or sent by 

facsimile transmission, with a 

confirming copy sent by air mail, 

postage prepaid, and the date of 

personal delivery or facsimile 

transmission or 7 business days after the 

date of mailing (other than in the case 

of the mailing of a confirming copy of 

a facsimile transmission), as the case 

may be, shall be the date of such notice, 

in each case addressed (i) if to the 

Owner Trustee, to XXX at its office at 

XXX, Attention: XXX and (ii) if to the 

Trustor, to XXX, Attention: XXX. 

Section 8.05 Co-Trustee and 

Separate Trustees. If at any time it shall 

be necessary or prudent in order to 

conform to any law of any jurisdiction 

in which all or any part of the Trust 

Estate is located, or Owner Trustee 

being advised by counsel shall 

determine that it is so necessary or 

prudent in the interest of Trustor or 

Owner Trustee, or Owner Trustee shall 

have been directed to do so by Trustor, 

Owner Trustee and Trustor shall 

execute and deliver an agreement 

supplemental hereto and all other 

instruments and agreements necessary 

or proper to constitute another bank or 

trust company or one or more persons 

(any and all of which shall be a Citizen 

of the United States) approved by 

Owner Trustee and Trustor, either to act 

as co-trustee jointly with Owner 

Trustee, or to act as separate trustee 

hereunder (any such co-trustee or 

separate trustee being herein sometimes 

referred to as ‘‘additional trustee’’). In 

the event Trustor shall not have joined 

in the execution of such agreements 

supplemental hereto within 10 days 

after the receipt of a written request 

from Owner Trustee so to do, or in case 

an event of default, as defined in any 

Lease, shall have occurred and be 

continuing, Owner Trustee may act 

under the foregoing provisions of this 

Section 8.05 without the concurrence of 

Trustor; and Trustor hereby appoints 

Owner Trustee its agent and attorney-infact to act for it under the foregoing 

provisions of this Section 8.05 in either 

of such contingencies. 

Every additional trustee hereunder 

shall, to the extent permitted by law, be 

appointed and act, and Owner Trustee 

and its successors shall act, subject to 

the following provisions and conditions: 

(a) all powers, duties, obligations and 

rights conferred upon Owner Trustee in 

respect of the custody, control and 

management of moneys, the Aircraft or 

documents authorized to be delivered 

hereunder or under any Lease shall be 

exercised solely by Owner Trustee; 

(b) all other rights, powers, duties and 

obligations conferred or imposed upon 

Owner Trustee shall be conferred or 

imposed upon and exercised or 

performed by Owner Trustee and such 

additional trustee jointly, except to the 

extent that under any law of any 

jurisdiction in which any particular act 

or acts are to be performed (including 

the holding of title to the Trust Estate) 

Owner Trustee shall be incompetent or 

unqualified to perform such act or acts, 

in which event such rights, powers, 

duties and obligations shall be exercised 

and performed by such additional 

trustee; 

(c) no power given to, or which it is 

provided hereby may be exercised by, 

any such additional trustee shall be 

exercised hereunder by such additional 

trustee, except jointly with, or with the 

consent in writing of, Owner Trustee; 

(d) no trustee hereunder shall be 

personally liable by reason of any act or 

omission of any other trustee hereunder; 

(e) Trustor, at any time, by an 

instrument in writing may remove any 

such additional trustee. In the event that 

Trustor shall not have executed any 

such instrument within 10 days after the 

receipt of a written request from Owner 

Trustee so to do, Owner Trustee shall 

have the power to remove any such 

additional trustee without the 

concurrence of Trustor; and Trustor 

hereby appoints Owner Trustee its agent 

and attorney-in-fact for it in such 

connection in such contingency; and 

(f) no appointment of, or action by, 

any additional trustee will relieve the 

Owner Trustee of any of its obligations 

under, or otherwise affect any of the 

terms of, this Agreement or any Lease. 

Section 8.06 Situs of Trust; 

Applicable Law. The Trust has been 

accepted by Owner Trustee and will be 

administered in the State of Utah. The 

validity, construction and enforcement 

of this Agreement shall be governed by 

the laws of the State of Utah without 

giving effect to principles of conflict of 

law. If any provision of this Agreement 

shall be invalid or unenforceable, the 

remaining provisions hereof shall 

continue to be fully effective, provided 

that such remaining provisions do not 

increase the obligations or liabilities of 

Owner Trustee. 

Section 8.07 Amendment. This 

Agreement may not be amended, 

modified, supplemented, or otherwise 

altered except by an instrument in 

writing signed by the parties thereto. 

Section 8.08 Successors and 

Assigns. In accordance with the terms 

hereof, this Agreement shall be binding 

upon and shall inure to the benefit of, 

and shall be enforceable by, the parties 

hereto and their respective successors 

and permitted assigns, including any 

successive holder of all or any part of 

Trustor’s interest in the Trust Estate. 

Section 8.09 Headings. The 

headings of the Articles and Sections of 

this Agreement are inserted for 

convenience only and shall not affect 

the meaning or construction of any of 

the provisions hereof. 

Section 8.10 Counterparts. This 

Agreement may be executed in any 

number of counterparts, each of which 

when so executed shall be deemed to be 

an original, and such counterparts 

together shall constitute and be one and 

the same instrument. 

ARTICLE 9 

CERTAIN LIMITATIONS 

Section 9.01 Limitations on Control, 

Exceptions. 

(a) Limitation on Control. 

Notwithstanding any other provision of 

this Agreement, but subject to paragraph 

(b) of this Section 9.01, the Trustor will 

have no rights or powers to direct, 

influence or control the Owner Trustee 

in the performance of the Owner 

Trustee’s duties under this Agreement, 

including matters involving the 

ownership and operation of the Aircraft. 

In all matters arising under the 

Agreement, including the ownership 

and operation of the Aircraft the Owner 

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Trustee shall have absolute and 

complete discretion in connection 

therewith and shall be free of any kind 

of influence or control whatsoever by 

the Trustor. The Owner Trustee shall 

exercise its duties under this Agreement 

in connection with matters involving 

the ownership and operation of the 

Aircraft, as the Owner Trustee, in its 

discretion, shall deem necessary to 

protect the interests of the United 

States, notwithstanding any 

countervailing interest of any foreign 

power which, or whose citizens, may 

have a direct or indirect interest in the 

Trustor and any such action by the 

Owner Trustee shall not be considered 

malfeasance or in breach of any 

obligation which the Owner Trustee 

might otherwise have to the Trustor; 

provided, however, that subject to the 

foregoing limitations, the Owner Trustee 

shall exercise this discretion in all 

matters arising under the Agreement, 

including the ownership and operation 

of the Aircraft with due regard for the 

interests of the Trustor. In exercising 

any of its rights and duties under this 

Agreement in connection with matters 

which may arise not relating to the 

ownership and operation of the Aircraft, 

the Owner Trustee shall be permitted to 

seek the advice of the Trustor before 

taking, or refraining from taking, any 

action with respect thereto. The Owner 

Trustee shall notify the Trustor of its 

exercise of rights and duties under this 

Agreement in connection with matters 

involving the ownership and operation 

of the Aircraft. 

(b) Certain Exceptions. Subject to the 

requirements of the preceding paragraph 

(a), the Owner Trustee agrees that it will 

not, without the prior written consent of 

the Trustor, sell, mortgage, pledge or 

otherwise dispose of the Aircraft or 

other assets held in the Trust Estate 

relating thereto except as otherwise 

expressly provided for herein. 

(c) Purpose. The purpose of this 

Section 9.01 is to assure that (i) the 

Aircraft shall be controlled with respect 

to such matters by a Citizen of the 

United States and (ii) the Trustor shall 

have no power to influence or control 

the exercise of the Owner Trustee’s 

authority with respect to such matters 

and (iii) Owner Trustee shall be able to 

give the affidavit required by Section 

47.7(c)(2)(iii) of the Federal Aviation 

Regulations, 14 CFR 47.7 (c)(2)(iii). 

Section 9.01 shall be construed in 

furtherance of the foregoing purpose. 

Section 9.02 General. 

Notwithstanding anything to the 

contrary in this Agreement, the Owner 

Trustee and the Trustor hereby agree as 

follows: 

If persons who are neither U.S. 

citizens or resident aliens have the 

power to direct or remove the Owner 

Trustee, either directly or indirectly 

through the control of another person, 

those persons together shall not have 

more than twenty five (25%) percent of 

the aggregate power to direct or remove 

the Owner Trustee. 

Section 9.03 Priority. In creating and 

accepting the Trust, Trustor, and Owner 

Trustee each acknowledges that in case 

of conflict, the limitations in Article 9 

of this Agreement are paramount and 

superior to any other terms and 

conditions in this Agreement; or in any 

other document or documents to which 

trustor/beneficiary and trustee are a 

party.] 

ARTICLE 10 

COMPLIANCE WITH LAWS 

Section 10.1 Covenant to Comply 

with Export Restrictions and U.S. Laws. 

Trustor acknowledges that the Aircraft 

may be subject to restrictions involving 

the export and re-export of the same 

pursuant to the laws and regulations of 

the United States, that the laws and 

regulations of the United States restrict 

the transfer of any interest in the 

Aircraft to certain persons (collectively, 

the ‘‘Export Restrictions’’) and that such 

Export Restrictions may apply to the 

Aircraft even after the Aircraft has been 

physically removed or transferred from 

the United States. Trustor also 

acknowledges that the Owner Trustee, 

as a U.S. regulated financial institution, 

is subject to the laws and regulations of 

the United States, including, without 

limitation, those promulgated by the 

U.S. Department of the Treasury’s Office 

of Foreign Assets Control (OFAC) and 

the Financial Crimes Enforcement 

Network (FinCEN) (collectively, the 

‘‘U.S. Laws’’). Trustor agrees that it will 

comply with, and will not knowingly 

permit the Aircraft to be used in a 

manner that is contrary to, Export 

Restrictions and U.S. Laws applicable to 

(1) the Trustor; (2) the Owner Trustee; 

or (3) the Aircraft, including the 

acquisition, possession, operation, use, 

maintenance, leasing, subleasing, or 

other transfer or disposition thereof. 

Section 10.2 Approval of Transfer. 

Trustor agrees that it will not permit the 

assignment of this Agreement, any 

transfer of the beneficial interest of the 

Trustor created by this Agreement, or a 

lease or sublease of the Aircraft 

(collectively, a ‘‘Transfer’’) without 

Owner Trustee’s prior written approval 

of such Transfer. Owner Trustee shall 

not unreasonably delay its decision on 

a request for approval from Trustor nor 

shall it unreasonably withhold its 

approval to such request. To facilitate 

Owner Trustee’s evaluation of the 

Transfer, Trustor agrees that it will use 

reasonable efforts to provide Owner 

Trustee with any information 

reasonably requested by the Owner 

Trustee regarding the Transfer, the 

proposed transferee and/or the 

ownership of the proposed transferee. 

Owner Trustee’s decision to approve or 

disapprove the proposed Transfer shall 

not be deemed to have been 

unreasonably delayed if Owner Trustee 

has not obtained the information it 

needs to make the decision, and Owner 

Trustee’s approval of the proposed 

Transfer shall not be deemed to have 

been unreasonably withheld if Owner 

Trustee has determined that the 

Transfer will or may reasonably be 

expected to put Owner Trustee at risk of 

violating any laws or regulations 

applicable to Owner Trustee including, 

without limitation, the Export 

Restrictions and/or U.S. Laws. If Owner 

Trustee withholds approval of a 

Transfer as set forth herein, then: (i) 

subject to the terms of this Agreement, 

Owner Trustee may resign; and (ii) 

Owner Trustee shall have no obligation 

to consent to or facilitate a Transfer 

while Owner Trustee’s resignation is 

pending. 

IN WITNESS WHEREOF, Owner 

Trustee and Trustor have caused this 

Agreement to be duly executed all as of 

the date first above written. 

TRUSTOR: 

By: llllllllllllllll

Title: lllllllllllllll

OWNER TRUSTEE: 

By: llllllllllllllll

Title: lllllllllllllll

[FR Doc. 2012–2930 Filed 2–7–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HOMELAND 

SECURITY 

U.S. Customs and Border Protection 

19 CFR Parts 4 and 122 

[Docket No. USCBP–2012–0003] 

RIN 1651–AA89 

Exemptions From Entry Requirements 

and Report of Arrival Requirements for 

Certain Department of Defense Vessels 

and Aircraft 

AGENCY: U.S. Customs and Border 

Protection, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: Certain vessels and aircraft 

owned or chartered by the Department 

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