36412 Federal Register / Vol. 78, No. 117 / Tuesday, June 18, 2013 / Rules and Regulations 

The Rule 

This amendment to Title 14, Code of 

Federal Regulations (14 CFR) part 71 

amends Class E airspace extending 

upward from 700 feet above the surface 

within a 6.7-mile radius of Moton Field 

Municipal Airport, Tuskegee, AL, 

formerly called Tuskegee Municipal 

Airport. Airspace reconfiguration is 

necessary due to the decommissioning 

of the Tuskegee VOR/DME and 

cancellation of the VOR approach, and 

for the continued safety and 

management of IFR operations at the 

airport. Accordingly, the extension of 

Class E airspace to the northeast of the 

airport is eliminated. 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current, is non-controversial and 

unlikely to result in adverse or negative 

comments. It, therefore, (1) is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866; (2) is not a 

‘‘significant rule’’ under DOT 

Regulatory Policies and Procedures (44 

FR 11034; February 26, 1979); and (3) 

does not warrant preparation of a 

Regulatory Evaluation as the anticipated 

impact is so minimal. Since this is a 

routine matter that only affects air traffic 

procedures and air navigation, it is 

certified that this rule, when 

promulgated, does not have a significant 

economic impact on a substantial 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, Section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. This rulemaking is 

promulgated under the authority 

described in Subtitle VII, Part A, 

Subpart I, Section 40103. Under that 

section, the FAA is charged with 

prescribing regulations to assign the use 

of airspace necessary to ensure the 

safety of aircraft and the efficient use of 

airspace. This regulation is within the 

scope of that authority as it amends 

controlled airspace at Moton Field 

Municipal Airport, Tuskegee, AL. 

Environmental Review 

The FAA has determined that this 

action qualifies for categorical exclusion 

under the National Environmental 

Policy Act in accordance with FAA 

Order 1050.1E, ‘‘Environmental 

Impacts: Policies and Procedures,’’ 

paragraph 311a. This airspace action is 

not expected to cause any potentially 

significant environmental impacts, and 

no extraordinary circumstances exist 

that warrant preparation of an 

environmental assessment 

Lists of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (Air). 

Adoption of the Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for Part 71 

continues to read as follows: 

Authority: 49 U.S.C. 106(g); 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 

1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of Federal Aviation 

Administration Order 7400.9W, 

Airspace Designations and Reporting 

Points, dated August 8, 2012, effective 

September 15, 2012, is amended as 

follows: 

Paragraph 6005 Class E Airspace Areas 

Extending Upward from 700 feet or More 

Above the Surface of the Earth. 

* * * * * 

ASO TN E5 Tuskegee, AL [Amended] 

Moton Field Municipal Airport, AL 

(Lat. 32°27′38′′ N., long. 85°40′48′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 6.7-mile 

radius of Moton Field Municipal Airport. 

Issued in College Park, Georgia, on June 7, 

2013. 

Barry A. Knight, 

Manager, Operations Support Group, Eastern 

Service Center, Air Traffic Organization. 

[FR Doc. 2013–14150 Filed 6–17–13; 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 Policy Clarification for the 

Registration of Aircraft to U.S. Citizen 

Trustees in Situations Involving NonU.S. Citizen Trustors and Beneficiaries 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of FAA policy 

clarification. 

SUMMARY: Notice is hereby given of the 

FAA’s clarification of its policy 

regarding the registration of aircraft to 

U.S. Citizen Trustees in situations 

involving non-U.S. citizen trustors and 

beneficiaries. 

DATES: Effective Date: The policy 

described herein is effective September 

16, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Joseph Standell at 405–954–3296, Office 

of Aeronautical Center Counsel, Federal 

Aviation Administration, 6500 S. 

MacArthur Blvd., Oklahoma City, 

Oklahoma 73169. 

SUPPLEMENTARY INFORMATION:

Background 

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 to assure compliance 

with the FAA regulatory requirements 

for non-citizen trusts contained in 14 

CFR 47.7. 

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 (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 ‘‘owner’’ registry; it is not an 

‘‘operator’’ registry. 

The FAA met with interested 

members of the public on June 1, 2011, 

in Oklahoma City, Oklahoma. 


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Representatives of trade associations, 

law firms, aircraft manufacturers, 

lenders, lessors, aircraft operators, 

trustees and others were present. The 

proceedings of that meeting were 

transcribed, and the transcript was 

made available for purchase from the 

court reporter to members of the public. 

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, or AWG) 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. The AWG also 

participated at the public meeting on 

June 1, 2011, and submitted additional 

written comments on June 30, 2011. 

After considering the written 

comments submitted by the public and 

the information received at the June 1 

public meeting, the FAA published a 

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 in the Federal Register on 

February 9, 2012. (77 FR 6694). That 

notice contained a detailed discussion 

of the FAA safety oversight obligations 

under U.S. and international law, and 

how those obligations related to the 

FAA’s rules and practices on the use of 

non-citizen trusts to register aircraft in 

the name of owner trustees. The FAA’s 

proposed policy clarification in the 

notice was designed to help the public 

better understand the FAA’s rules and 

practices on non-citizen trusts. The FAA 

suggested changes to provisions in trust 

agreements to ensure consistency of 

those agreements with FAA rules, 

policies, and practices, and to enable 

the FAA to facilitate the registration of 

aircraft in the future that are owned in 

trust. An example of a standard trust 

agreement with FAA-suggested changes 

incorporated was attached at the end of 

the February 9 notice. The FAA invited 

the public to submit written comments 

on the proposed policy clarification by 

March 31, 2012. 

In response to the initial reaction to 

the February 9 notice, the FAA decided 

to hold a second public meeting to 

allow the public to provide views on the 

proposed policy clarification. The FAA 

published a notice of public meeting 

inviting members of the public to 

discuss the proposed policy clarification 

on the use of non-citizen trusts to 

register aircraft (77 FR 15180, March 14, 

2012). The FAA also extended the 

deadline for written comments on the 

proposed policy clarifications until July 

6, 2012. 

The public meeting was held on June 

6, 2012, in Oklahoma City, Oklahoma. 

As with the first public meeting, 

representatives of trade associations, 

law firms, aircraft manufacturers, 

lenders, lessors, aircraft operators, 

trustees and others were in attendance. 

The proceedings of the meeting were 

transcribed and the transcript was made 

available for purchase from the court 

reporter to members of the public. 

During the meeting, several 

participants requested an additional 

extension of time to submit written 

comments on the proposed policy 

clarification given the complexity of the 

issues involved. The FAA agreed to the 

request, and published a notice 

extending the deadline for comments 

until August 17, 2012 (77 FR 40310, July 

9, 2012). The FAA received a number of 

written comments, including those from 

the AWG. 

The FAA considered the information 

provided at the two public meetings and 

the written comments received in 

response to the April 26, 2011 and 

February 9, 2012 notices as critical in 

helping it better understand the 

practices and concerns of the aviation 

industry regarding the use of noncitizen trusts to register aircraft in the 

United States. The FAA also now has a 

more complete understanding of how 

some view the regulatory obligations on 

an owner trustee when registering an 

aircraft in the United States using a noncitizen trust. Importantly, the FAA also 

believes that the public meetings helped 

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 U.S. and international law. 

Policy Clarification 

This policy clarification is consistent 

with the FAA’s regulations. It is also in 

accord with the FAA’s duties under 

applicable statutory and treaty 

obligations with regard to safety 

oversight functions, safety 

investigations, and safety rulemaking 

activities (including the expeditious 

communication of critical safety 

rulemaking, e.g. airworthiness 

directives). 

The FAA has carefully considered the 

information provided during the public 

meetings and in written comments in 

developing the following policy 

clarification on the use of non-citizen 

trusts to register aircraft in the United 

States. The FAA believes this policy 

clarification will ensure that the use of 

non-citizen trusts to register aircraft is 

fully consistent with the applicable 

regulations and supports the FAA’s 

safety oversight interests with regard to 

aircraft on the U.S. registry. The policy 

clarification will facilitate the FAA’s 

ability to determine eligibility for 

registering aircraft to non-U.S. citizen 

trusts. The FAA does not expect that 

this policy clarification will discourage 

the use of non-citizen trusts to register 

aircraft in the appropriate 

circumstances. 

In presenting this policy clarification, 

the FAA for the most part will not 

repeat the detailed legal analysis that it 

provided in outlining its proposed 

policy clarification in the February 9 

notice. Except as discussed in this 

Notice, the underlying legal reasons for 

the policy clarification outlined in this 

Notice are substantially the same as the 

legal analysis presented in the February 

9 notice. Accompanying this policy 

clarification is a discussion of the 

comments received concerning the 

policy. 

A. Policy Concerning Trustees as 

Aircraft Owners 

As discussed extensively in the 

February 9 notice, a primary area of 

concern for the FAA is whether the 

trustees of non-citizen trusts fully 

understand and are prepared to comply 

with their regulatory obligations as 

owners of aircraft on the U.S. registry. 

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. The owner’s 

role includes the ability to communicate 

critical safety information to the actual 

operator of an aircraft, assuming (as is 

the case in most, if not all, instances) 

that the trustee in a non-citizen trust is 

not the operator of the aircraft. When 

requested, the owner also must be able 

to provide the FAA with information on 

the aircraft and its operation. 

In the laws and regulations that 

establish and govern the FAA Aircraft 

Registry, no distinction is made between 

types 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 


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1 In its current form, section 44112, entitled 

‘‘Limitations on Liability,’’ provides in part that 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 the aircraft, engine, or propeller; 

or the flight of, or an object falling from, the aircraft, 

engine, or propeller. 

associations, any of which may act in 

the capacity of owner trustees, have the 

same obligations to comply with 

applicable FAA regulations. Once the 

FAA completes the registration process, 

the registered owner is the owner for all 

purposes under the regulations. 

The FAA does not consider the status 

of the trustee as the owner of the aircraft 

under a trust agreement as having any 

differing effect on its responsibilities for 

regulatory compliance issues compared 

to other owners of a U.S.-registered 

aircraft. The 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 applicable laws and regulations. 

The FAA is not aware of any basis for 

treating one type of owner—such as a 

trustee under a non-citizen trust— 

differently from any other owner of a 

civil aircraft on the U.S. registry when 

considering issues of regulatory 

compliance. 

Contrary to the suggestion made by 

some commenters, treating an owner 

trustee of an aircraft the same as all 

other owners of aircraft on the U.S. 

registry does not represent a change 

either in the status of the owner trustee 

or in the relationship or responsibilities 

of trustee as to an aircraft registered 

under a non-citizen trust under FAA 

regulations. The regulatory obligations 

of an owner trustee with regard to an 

aircraft registered in the U.S. using a 

non-citizen trust are, and always have 

been, the same as the regulatory 

obligations of all owners of U.S. 

registered aircraft. 

Some commenters have suggested that 

a trustee owner can 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 owner of an aircraft 

on the U.S. registry can 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. 

Two commenters—the AWG and 

Airlines for America (A4A)—expressed 

concern about whether treating an 

owner trustee the same as all other 

owners under the FAA’s regulations 

could increase the trustee’s tort liability 

exposure. The FAA takes no position on 

this issue other than to note that in our 

view, the regulatory obligations of an 

owner trustee are not changed or 

expanded by virtue of this policy 

clarification. Analyzing the potential 

tort liability of any owner of an aircraft 

on the U.S. registry is beyond the 

purview of the FAA and is not relevant 

to the discussion of the owner’s 

responsibilities. 

The AWG and A4A also raised the 

issue of whether 49 U.S.C. 44112 1

affects the regulatory responsibilities of 

owner trustees. As the FAA noted in the 

February 9 notice, the plain terms of 

§ 44112 only addresses the tort liability 

of lessors, owners and secured parties 

under certain circumstances. Section 

44112 does not distinguish between 

types of owners of aircraft with respect 

to regulatory obligations, nor does it 

provide a basis for relieving trustees of 

the obligation to comply with the 

applicable regulations. 

Flexjet, a fractional ownership 

program manager, stated in its 

comments that ‘‘the registration of 

fractional ownership program aircraft to 

U.S. citizen trustees in situations 

involving non-U.S. citizens and 

beneficiaries should be exempted from 

the proposed FAA policy’’ because of 

the role of the fractional program 

manager in receiving notices and the 

joint liability of the fractional 

ownership program manager and owner 

for regulatory compliance. According to 

Flexjet, these considerations either 

substantially mitigate or eliminate the 

FAA’s oversight concerns as outlined in 

the February 9 notice. 

The FAA disagrees with the Flexjet 

position. Without addressing in this 

Notice the issue of whether an owner 

trustee can participate as an ‘‘owner’’ in 

a fractional ownership program under 

14 CFR part 91, subpart K, the FAA’s 

oversight of fractional ownership 

operations does include consideration 

of the role and actions of the owner in 

such operations. There is no basis in 

subpart K for the proposition that the 

actions of a fractional ownership 

program manager could somehow 

reduce or eliminate the FAA’s oversight 

concerns as to owners. 

B. Information About the Aircraft and 

Its Operations 

As noted above, the FAA by law 

imposes important safety obligations on 

all owners of aircraft. To meet these 

obligations, an owner must maintain 

current information about the identity 

and whereabouts of the actual operators 

of an aircraft and location and nature of 

the operation on an ongoing basis, 

thereby allowing that owner to provide 

the operator with safety critical 

information in a timely manner, and to 

obtain information responsive to FAA 

inquiries, including investigations of 

alleged violations of FAA regulations. 

Such information is an essential 

element in the FAA’s ability to carry out 

its oversight obligations under U.S. and 

international law. 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. 

The FAA expects that an owner 

trustee of aircraft on the U.S. registry, in 

carrying out the above-described 

obligations, normally should be able to 

respond to a request by the FAA for the 

following information about the aircraft 

and its operation within two (2) 

business days: 

• 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 that an 

owner trustee of aircraft on the U.S. 

registry normally should be able to 

respond within five (5) business days to 

a request by the FAA 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 noted above. 

The timeline guidance of two and five 

days referenced above is intended by 

the FAA to be just that—guidelines. 

They are not mandatory timelines by 

which an owner trustee must, in all 

cases, respond to an FAA request for 

information or face sanctions. The 

timelines of two and five days merely 

represent what the FAA believes are 

reasonable and attainable goals for 

providing specific information to the 

FAA under most circumstances. The 

FAA understands that there may be 

occasions where requested information 

is not readily available, such that the 

owner trustee cannot provide it to the 

FAA within the timelines described. In 


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Federal Register / Vol. 78, No. 117 / Tuesday, June 18, 2013 / Rules and Regulations 36415 

2With regard to the inspection of the aircraft and 

its regulations, the FAA notes that U.S. laws and 

regulations provide the FAA with a right of access 

to U.S. registered aircraft. A foreign civil aviation 

authority has a right under international law to 

inspect a U.S.-registered aircraft and its documents 

when the aircraft is located in the territory of the 

country for which the authority oversees aviation 

safety. Convention on International Civil Aviation, 

Article 16. 

3For example, the FAA would view favorably a 

provision that requires the owner trustee to 

approve, or be provided with information on, all 

downstream transfers of the aircraft, such that the 

trustee has current information on the location and 

operator of the aircraft. 

4The FAA 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-U.S. 

citizen trustor. FAA now recognizes that such 

transactions are not uncommon. 

those cases, however, the FAA would 

expect that an owner trustee would be 

in communication with the FAA about 

the nature of the delays or difficulties in 

obtaining requested information, 

including information on actions by the 

trustee owner to overcome the delays or 

difficulties. In a case where an owner 

trustee is unable to provide much or all 

of the information requested by the 

FAA, or does not diligently attempt to 

provide information in a timely manner 

when requested by FAA, the facts and 

circumstances may dictate further 

action by the FAA. 

Several commenters, including AWG, 

A4A, and Flexjet, argued that in many 

instances timely information about an 

aircraft registered to an owner trustee 

would more readily be available from 

other sources, including an air carrier or 

other holder of an air operator certificate 

in actual possession of an aircraft or 

from a fractional ownership program 

manager whose program operation 

includes an aircraft registered in whole 

or in part, in the name of an owner 

trustee. In those cases, the commenters 

stated that the FAA would obtain 

needed information more efficiently if it 

went directly to those other sources. 

The FAA agrees that for many aircraft 

on the FAA Aircraft Registry, including 

aircraft registered under non-citizen 

trusts, the FAA may be able to obtain 

information about the aircraft and its 

operations by directly contacting the 

operator of the aircraft when that 

operator is readily identifiable. Such 

operators include air carriers and other 

holders of air operator certificates. They 

also may include fractional ownership 

program managers. The FAA, which 

shares the commenters’ interest in 

efficiency, will in most cases, go 

directly to the air carrier or similar 

operator through FAA personnel (e.g., 

principal operations or maintenance 

inspectors) to obtain information about 

the aircraft and its operation. The FAA 

will, however, always reserve the right 

to seek information from the registered 

owner of an aircraft on the U.S. registry. 

For aircraft registered on behalf of 

non-U.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 obtaining 

information about the aircraft and their 

operations. In those cases, the operator 

is frequently not identifiable by the 

FAA, and in any case, the FAA records 

would not necessarily contain contact 

information for those operators that can 

be identified. In those cases, the FAA 

will look to the owner trustee, as the 

registered owner of the aircraft, for 

information about the aircraft and its 

operations when needed to meet the 

FAA’s safety oversight obligations under 

U.S. and international law. 

Comments by the AWG suggest that 

an owner trustee could meet its 

obligations to provide information to the 

FAA by including clauses in operating 

agreements, leases, bailments and other 

arrangements requiring operators of a 

trust-registered aircraft to maintain 

current contact information with owner 

trustee and requiring them to provide 

that information to the FAA upon 

request. AWG further explained that 

under this approach, such clauses also 

would be required elements in any 

downstream operating agreement, lease, 

or other arrangement pertaining to the 

aircraft but not involving the owner 

trustee as a party. The clauses would 

address other issues related to the 

provision of information requested by 

the FAA, including: the obligation to 

expeditiously provide the information; 

liability for a failure to reply; giving the 

FAA access to inspect the aircraft and 

its records; 2 and required notices to the 

owner trustee of transfers of control of 

the aircraft under an operating 

agreement, lease, bailment, or other 

arrangement. 

To the extent that these and other 

contractual mechanisms would be 

intended to somehow relieve the owner 

trustee of an obligation to provide the 

FAA with requested information, the 

FAA does not agree that this approach 

represents an acceptable means of 

complying with the obligations of an 

owner to provide information. As noted 

above, an owner of an aircraft on the 

U.S. registry cannot avoid a regulatory 

obligation imposed on it by the FAA 

simply by entering into a private 

contract with another party. Moreover, 

the approach suggested by the AWG 

would make the FAA’s ability to obtain 

information subject to the 

implementation of contracts to which 

the FAA is not a party and over which 

the FAA would have no standing to 

enforce. Subordinating the oversight 

interests of the FAA to the interests of 

private parties in executing a private 

contract is not acceptable. The FAA 

needs a more reliable system of 

obtaining information in order to meet 

its safety oversight interests. 

On the other hand, the FAA agrees 

that the contractual system described by 

the AWG may represent a reasonable 

means by which an owner trustee can 

ensure that it is able to satisfy FAA 

requests for information about an 

aircraft that is in the possession of the 

trustor, beneficiary, or other 

downstream operator. There may be 

other mechanisms that an owner trustee 

could utilize to achieve that same result. 

Although the FAA will not require an 

owner trustee to adopt such specific 

contractual mechanisms or otherwise 

specify how the owner trustee should 

structure arrangements concerning the 

possession and use of the aircraft in 

order to ensure its ongoing ability to 

comply with its regulatory obligations, 

such contractual mechanisms may be 

considered favorably by the FAA.3

C. Submission of Operating Agreements 

With a Registration Application 

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 purpose 

of this requirement is to ensure the FAA 

has access to all documents relevant to 

the trust relationship when determining 

whether a particular non-citizen trust 

provides an adequate basis for 

registering an aircraft in accordance 

with FAA regulations. A fundamental 

part of the registration process for 

aircraft held in trust is determining 

whether the underlying agreements 

meet and are not in conflict with 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. 

During the course of its review of noncitizen trusts, the FAA reviewed a 

number of aircraft operating agreements 

between the trustee owners of aircraft 

and the trustors or beneficiaries of the 

trust.4 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 


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36416 Federal Register / Vol. 78, No. 117 / Tuesday, June 18, 2013 / Rules and Regulations 

5Upon entry of Aircraft Operating Agreements or 

side agreements in FAA ancillary files, they will not 

be removed. 

6The FAA considers that any trust agreement or 

related document that contains a provision 

designating a foreign court or body to adjudicate 

disputes between the trustor and trustee as violating 

the § 47.7(c)(3) limits on non-U.S. citizens power to 

direct or remove a trustee. Such designations are 

not acceptable to the FAA. 

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. 

Based on the information considered 

in the course of its review of non-citizen 

trusts, the FAA concludes 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 or beneficiary which 

allows possession and use of the aircraft 

at all times to remain with the trustor 

and/or beneficiary. The operating 

agreement and the trust agreement are 

so intertwined that the operating 

agreement could affect the relationship 

established under the trust. 

To avoid the result where the FAA 

does not have access to all relevant 

information for use in determining 

whether a particular non-citizen trust 

provides an adequate basis for 

registering an aircraft in accordance 

with FAA regulations, 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 or 

beneficiary 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 or 

beneficiary. An adequate assurance 

might take the form of a 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 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. 

The comments received by the FAA 

on the required submission of aircraft 

operating agreements expressed concern 

over whether the agreements would be 

accorded confidential treatment because 

of the sensitivity of the information 

contained therein, and whether the 

retention of the agreements in the 

Registry’s files would create a cloud on 

the title of the aircraft that would 

impede its subsequent sale. The FAA 

agrees that those concerns are valid. 

After further consideration of the issue, 

the FAA concludes aircraft operating 

agreements do not have to be retained 

as part of a trust registration application 

in the files of the FAA Registry. 

Accordingly, if an applicant requests 

the return of an aircraft operating 

agreement submitted as part of a trust 

registration application at the time the 

application is submitted, the FAA will 

return the agreement to the applicant 

once its review of the application 

package is complete. That review will 

focus on whether the aircraft operating 

agreement affects the relationship 

established under the trust in a way that 

is contrary to the regulations. If the 

review establishes that the aircraft 

operating agreement does not adversely 

affect the trust relationship, FAA 

registry counsel will create a brief 

summary of the review that will be 

retained in the FAA Registry’s ancillary 

aircraft file and the aircraft operating 

agreement will be returned. If the 

review establishes that the aircraft 

operating agreement does adversely 

affect the trust relationship, the 

application may be rejected or the 

application process suspended until the 

problem is corrected by the applicant. 

The only exception to the policy of 

returning operating agreements will 

arise in the event that the review of the 

operating agreement establishes that the 

aircraft operating agreement adversely 

affects the trust relationship, resulting 

in the rejection of the registration 

application. In those cases, the FAA will 

retain the operating agreement for 

inclusion in the administrative record 

that the FAA will need to assemble in 

the event of any litigation that arises out 

of the rejection. 

In the event an applicant does not 

request return of an aircraft operating 

agreement at the time a registration 

application is submitted, the agreement 

will be retained in the FAA Registry 

files.5

The FAA notes that there may be 

circumstances where after return of an 

aircraft operating agreement, 

information contained in the aircraft 

operating agreement is needed by the 

agency. The FAA will expect the full 

cooperation of the registered owner in 

providing such information. 

D. Trustee Removal 

In order to insure owner trustee 

independence, in promulgating 

regulations to permit the use of a noncitizen trust to establish eligibility to 

register an aircraft in the U.S., the FAA 

has imposed restrictions on the ability 

of non-U.S. citizens 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, thereby 

ensuring better protection for U.S. 

interests. Section 47.7(c)(3) of the 

regulations provides that 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 § 47.7 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 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. 

In its review of non-citizen trusts, the 

FAA noted language in trust agreements 

and related documents suggesting that 

non-U.S. citizens held more than 25 

percent of the power to remove or direct 

a trustee. To avoid issues of noncompliance with this requirement in the 

future, the FAA will review all 

registration applications that rely on 

non-citizen trusts for evidence of clear 

compliance with the § 47.7(c)(3) limits 

on non-U.S. citizens power to direct or 

remove a trustee. In those cases where 

a non-U.S. citizen appears to have 

greater than 25 percent of the power to 

direct or remove a trustee under a trust 

agreement or related document,6 the 

FAA may request further information on 

how and why such non-citizens will not 

be able to exercise aggregate power to 

direct or remove a trustee in excess of 

the 25 percent limit. Alternatively, the 


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7The 25% limitation is based on the language in 

the applicable statutes. See 49 U.S.C. 40102(A)(15) 

and 44102(a)(1)(A). Such a requirement cannot be 

altered by regulation. Moreover, at this time the 

FAA is not proposing to undertake any rulemaking 

to address this issue or any of the other issues 

associated with the use of non-citizen trusts to 

place aircraft on the U.S. registry. 

8The 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. 

FAA may simply reject an application 

that is based on a trust agreement or 

other documents that provide a nonU.S. citizen with such power. 

In its comments to the February 9 

notice and during the June 6 public 

hearing, the AWG indicated that strict 

compliance with the § 47.7(c)(3) 

limitation on the power of a non-U.S. 

citizen to direct or remove the trustee 

was not possible as a practical matter. 

It stated that including U.S. citizens in 

the process to ensure compliance with 

the 25 percent limitation does not 

address FAA issues with non-citizen 

trusts and ‘‘adds a layer of expense and 

bureaucracy that will be difficult to bear 

by transaction parties.’’ The AWG also 

suggested that an Aeronautical Center 

Counsel opinion of 2002 was 

inconsistent with the 25 percent 

limitation contained in § 47.7(c)(3) of 

the FAA’s regulations. The AWG 

concluded its comments on this issue by 

suggesting that the FAA use this policy 

clarification as a vehicle to indicate that 

it would not strictly enforce the plain 

language of the regulation moving 

forward. 

The FAA rejects the AWG position on 

this issue. The language of § 47.7(c)(3) is 

plain and unambiguous, and has been a 

part of the regulation on non-citizen 

trusts since it was adopted in 1979. See 

(44 FR 61937, October 29, 1979). The 

FAA believes that there are adequate 

mechanisms to comply with the 

§ 47.7(c)(3) limitations on non-U.S. 

citizen power over trustees, to integrate 

the costs of those mechanisms in the 

overall cost structure of non-citizen 

trusts, and to otherwise adjust their 

business practices to the requirement. 

For example, the FAA identified 

instances of non-citizen trusts filed with 

the FAA in the years immediately after 

the adoption of § 47.7(c)(3) where nonU.S. citizens had no power to remove a 

trustee and appropriately limited power 

to direct the trustee. Those same 

arrangements, however, did give the 

interested non-U.S. citizens full power 

to terminate the non-citizen trust. The 

FAA sees no reason why a similar 

mechanism could not be adopted today, 

or why other innovative approaches to 

the issue could not be developed by the 

industry. 

With regard to the Aeronautical 

Center Counsel opinion of 2002, the 

FAA disagrees that it contains any 

indication that the FAA would not 

enforce the 25 percent limitation on 

non-U.S. citizen power under 

§ 47.7(c)(3). It is stated in the opinion 

that ‘‘14 CFR 47.7(c) must restrict 

removal rights to situations involving 

‘‘cause’’.’’ Use of removal for cause 

provisions in non-citizen trust 

agreements does not substitute for 

compliance with the 25 percent 

limitation imposed by regulation. No 

change to that requirement could be 

effected through the 2002 opinion or in 

this policy clarification.7

With regard to removals for cause, the 

FAA believes that a non-citizen trust 

agreement must describe with some 

specificity what would be a sufficient 

cause for removal of a trustee by a nonU.S. citizen beneficiary. Non-citizen 

trust agreements reviewed by the FAA 

frequently allow trustees to be removed 

for cause without specifying what 

constitutes a sufficient cause. 

Notwithstanding any other limitation on 

a non-U.S. citizen’s power to remove a 

trustee, the FAA’s view is that such lack 

of specificity in the removal for cause 

provisions gives non-U.S. citizen 

trustors or beneficiaries virtually 

unconditional power to remove a 

trustee, since practically any cause for 

removal might be interpreted as 

sufficient. Greater specificity in defining 

what constitutes sufficient cause will 

address the FAA’s concerns in this 

regard. Some trust agreements on file 

with the FAA have defined what 

constitutes cause to remove consistent 

with the general law of trusts such as 

gross negligence and willful 

misconduct. As a minimum, FAA will 

expect such examples of specific causes 

for removal. See, e.g., para 3.02, 

Removal, in the attached proposed Trust 

Agreement.8

E. Termination of the Trust and Trustee 

Resignation 

None of the restrictions on the power 

of a non-U.S. citizen to direct 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, there are no regulatory 

restrictions on the ability of a trustee to 

resign without first being replaced by a 

successor trustee. 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 noncitizen 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. 

No comments were received on these 

elements of the FAA policy on noncitizen trusts. 

Changes to a Standard Trust Agreement 

The FAA does not require the use of 

a particular template in establishing a 

non-citizen trust. However, the FAA 

recognizes that the aviation industry has 

developed a standard non-citizen trust 

agreement over the years. The FAA 

continues to believe, as it did when 

issuing the February 9 notice, that it was 

useful to offer suggestions to that 

document. The FAA attached as an 

exhibit to the February 9 notice an 

example of a standard trust agreement 

with FAA-suggested changes 

incorporated. The FAA also made the 

revised standard trust agreement 

showing the FAA’s additions and 

deletions available on the FAA’s Web 

site. For the reasons stated in the 

February 9 notice, the FAA believes that 

the revisions made to the standard trust 

agreement are consistent with the policy 

clarification set forth in this Notice. 

In comments in response to the 

February 9 notice, the AWG suggest a 

number of additional changes to the 

revised standard trust agreement that 

was attached to the notice. To the extent 

that the changes suggested by the AWG 

are consistent with the policy 

clarification described in this Notice, 

the FAA has incorporated them into the 

revised standard trust agreement. 

Several changes suggested by the AWG 

were not consistent with the policy 

clarification described in this Notice, 

and therefore not adopted by the FAA. 

The revised standard trust agreement 

with the incorporated AWG changes is 

attached to this Notice as an exhibit. A 

version of the revised standard trust 

agreement that shows in detail which of 

the AWG changes were accepted by the 

FAA and which were rejected is entitled 

‘‘Sample NCT Agreement 021012 

redline’’ and located on the FAA Office 


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9Choose the appropriate phrase depending on 

whether Trustor is an LLC or a corporation. 

of Chief Counsel’s Web site at the 

‘‘Aircraft Registration—Proposed Policy 

Clarification’’ link at http:// 

www.faa.gov/about/office_org/ 

headquarters_offices/agc. 

Non-citizen trusts that follow the 

attached standard trust agreement 

(which includes recommendations from 

the public) generally will be acceptable 

to the FAA as a basis for registering the 

aircraft in the U.S. However, applicants 

who wish to register an aircraft in the 

U.S. using a non-citizen trust are not 

required to use any particular version of 

a trust agreement. The FAA will review 

any non-citizen trust agreement, any 

aircraft operating arrangement and other 

documents affecting a relationship 

under the trust, and all other documents 

required to be filed along with an 

application for registration that is based 

on a non-citizen trust, to ensure that 

they are consistent with U.S. law, the 

applicable regulations, and the clarified 

policies set forth in this Notice. 

Issued in Washington DC on June 13, 2013. 

Marc L. Warren, 

Acting Chief Counsel, Federal Aviation 

Administration. 

EXHIBIT 

TRUST AGREEMENT 

THIS TRUST AGREEMENT 

( ), dated as of , (the 

‘‘Agreement’’) by and between , 

a [corporation organized and existing] 

[limited liability company formed] 9

under the laws of (‘‘Trustor’’), 

and , a organized and 

existing under the laws of the

(‘‘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

Aircraft, serial number , FAA 

Registration Number N together 

with the engines, bearing 

manufacturer’s serial numbers

and , 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 counterparty to 

the Owner Trustee under any Lease. 

‘‘Lease’’ means any agreement 

(including an Operating Agreement) 

from time to time entered into by Owner 

Trustee and Lessee that transfers the 

right to possess, use and operate the 

Aircraft to such Lessee. 

‘‘Operating Agreement’’ means any 

agreement (including a lease) that 

transfers the right to possess, use and 

operate the Aircraft from Owner Trustee 

to Trustor. ‘‘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 an 

authorized person or persons, subject to 

the regulatory limitation that non-U.S. 

citizens not hold more than 25 percent 

of the aggregate power to remove a 

trustee. For purposes of this Section, 

‘‘for cause’’, may include willful 

misconduct or gross negligence, but ‘‘for 

cause’’ will not include the refusal of 

Owner Trustee to act or refrain from 

acting in a manner that (1) would 

violate the laws, regulations, court 

orders, or lawful directions of a 

government agency; (2) is outside the 

scope of Owner Trustee’s authority; (3) 

is contrary to its obligations under the 

Trust Agreement; or (4) is the subject of 

a mere disagreement between Owner 

Trustee and Trustor. 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 


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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, 

Successor Owner Trustee whereupon all 

powers, rights and obligations of the 

resigning Owner Trustee under this 

Agreement (except the rights set forth in 

Section 3.08, Fees, Compensation) 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 

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 


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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 , 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, except that the 

Owner Trustee may request that an 

Operating Agreement not be filed with 

the FAA, but only reviewed and 

returned. 

(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 in 

an expeditious manner (generally 

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 in 

an expeditious manner (generally 

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) to immediately forward all 

applicable FAA airworthiness directives 

to the Trustor, Lessee, and Operator, as 

applicable, 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 

Section 3.03, Resignation, or removal 

under Section 3.02, Removal, or of the 

termination of the trust under Section 

7.01, Termination Date. 

(i) to permit the inspection of the 

aircraft and/or records by the FAA or 

any other duly authorized 

representatives of the U.S. or of the 

government of the country where it is 

based or operated, when an appropriate 

request is made by the FAA or other 

governmental entity entitled to inspect 

the aircraft and/or records. 

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. 

Section 4.04 Trustor’s Duties. 

Trustor hereby convenants and agrees: 

(a) upon a request by the FAA for 

information related to the Aircraft and 


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the operation of the Aircraft that the 

FAA is legally entitled to receive from 

an owner or operator of an aircraft, 

which is issued to Owner Trustee (and 

forwarded by Owner Trustee to Trustor), 

as the case may be, to provide as 

expeditiously as reasonably practicable 

to Owner Trustee or the FAA, as the 

case may be, with all such requested 

information to the extent that Trustor 

has such information or actually 

receives such information from the 

operator or from any other source, 

including, if applicable, (i) information 

in relation to the operation, 

maintenance, location or base of 

operation of the Aircraft, and (ii) contact 

information of (x) the operator of the 

Aircraft and (y) any other person to 

whom the FAA may look to gather 

information related to crew members for 

the Aircraft, the Aircraft’s operations on 

specific dates, the location of the 

Aircraft, and maintenance and other 

aircraft records for the Aircraft; Trustor 

(so long as it is not also the operator of 

the Aircraft) shall not be liable or 

responsible under this Agreement for 

any failure by Owner Trustee, the 

operator or any other source to provide 

accurate information requested under 

this Agreement whether in a timely 

manner or at all; 

(b) in connection with any transfer of 

Trustor’s beneficial interest in the Trust 

(other than a collateral assignment 

thereof), to provide Owner Trustee the 

identity and contact information with 

respect to the new Trustor and to update 

the operator information provided 

pursuant to Section 4.04(c) and 4.04(d) 

to the extent Trustor has such 

information or actually receives such 

information from the operator or from 

any other source; 

(c) to provide as expeditiously as 

possible to Owner Trustee, in response 

to a request by the Owner Trustee, the 

identity and contact information for the 

operator of the Aircraft under any Lease 

or Operating Agreement or bailment 

agreement entered into from time to 

time by Trustor, or any lease, bailment, 

or other arrangement entered into from 

time to time by a third party, whether 

or not at Trustor’s direction. 

(d) to require that any Lease, 

Operating Agreement, bailment, or 

similar arrangement transferring 

possession and operational control of 

the Aircraft provide the following or 

similar provisions to the same effect: 

(i) that all further transfers of the 

rights to possession and operational 

control of the Aircraft to a transferee 

must be in writing; provide the identity 

and contact information about the 

transferee; and the transferee’s 

assurance that if and when the 

transferee is notified that the Owner 

Trustee has made a request, to promptly 

provide information related to 

crewmembers of the Aircraft and the 

Aircraft’s operations on specific dates, 

the location of the Aircraft, and the 

maintenance and other aircraft records 

for the Aircraft; 

(ii) that each such further transferee or 

operator (x) shall provide its reasonable 

cooperation to Owner Trustee, Trustor 

and the FAA in an expeditious manner 

with respect to any request from the 

FAA or other applicable governmental 

entity for information and access to 

records of the Aircraft which it is legally 

entitled to receive, and (y) shall 

authorize the FAA or any other duly 

authorized air authority representatives 

of the U.S. or the government where it 

is habitually based or operated, upon 

any request which the FAA or such 

other governmental entity is legally 

entitled to make under law applicable to 

such transferee or operator of the 

Aircraft, to inspect the Aircraft; and 

(iii) that each such further transferee 

or operator agrees that the abovereferenced information and inspection 

requirements would be made and agreed 

in all subsequent or downstream leases, 

operating agreements and bailment 

agreements thereby requiring each such 

subsequent transferee or operator to 

provide such contact information in the 

event that there has been a transfer of 

possession and operation to another 

party, to update such information when 

any changes occur, and to promptly 

confirm such information at any time 

upon request by Owner Trustee or 

Trustor, to provide its reasonable 

cooperation to Owner Trustee, Trustor 

and the FAA in an expeditious manner 

with respect to any request from the 

FAA or other applicable governmental 

entity for information and access to 

records of the Aircraft which it is legally 

entitled to receive made pursuant to 

existing regulations and policies, and (z) 

to authorize the FAA or such other 

governmental entity to inspect the 

Aircraft to the extent that it is legally 

entitled to make such request under law 

applicable to Owner Trustee, Trustor, 

the relevant counterparty to any such 

subsequent or downstream agreement or 

the Aircraft. 

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 , 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 in its individual 

capacity on or measured by any 

compensation received by 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 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 


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the administration of the Trust Estate or 

the action or inaction of Owner Trustee 

or in its individual capacity 

hereunder, except (a) in the case of 

willful misconduct or gross negligence 

on the part of Owner Trustee or

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 in 

its individual capacity (or from the 

failure of 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 in its individual 

capacity in the disbursement of funds. 

The indemnities contained in this 

Article 6 extend to 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 

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 at its office 

at , Attention: and (ii) if 

to the Trustor, to , Attention: . 

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 (U.S. citizen) 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 


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(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

(State of United States). The validity, 

construction and enforcement of this 

Agreement shall be governed by the 

laws of the State of (State 

of United States) 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. 

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, or amend any Lease or 

other document (other than a document 

over which the Owner Trustee has the 

absolute and complete discretion 

established under Section 9.01(a) 

Limitation on Control of this 

Agreement) or give any consents 

thereunder 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 as are described in 

Section 9.01(a) of this Agreement 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, 

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 including 

without limitation, under a Lease or an 

Operating Agreement to which Trustor 

and Owner Trustee are a party in 

respect of the Trust. 

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 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 


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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: lllllllll

By: llllllllllllllll

Title: lllllllllllllll

[FR Doc. 2013–14434 Filed 6–17–13; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 100 

[Docket No. USCG–2013–0327] 

RIN 1625–AA08 

Special Local Regulations for Summer 

Events; Captain of the Port Lake 

Michigan Zone 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing temporary special local 

regulations for three summer events 

within the Captain of the Port Lake 

Michigan Zone. This rule is intended to 

provide for the safety of life and 

property on navigable waters 

immediately prior to, during, and 

immediately after a triathlon and two 

dragon-boat races. This rule will 

establish restrictions upon, and control 

the movement of, vessels in a portion of 

the Captain of the Port Lake Michigan 

Zone. 

DATES: This rule is effective on June 22, 

2013 until July 21, 2013. This rule will 

be enforced at various times on June 22 

and 23; July 12 and 13; and July 20 and 

21 of 2013. 

ADDRESSES: Documents mentioned in 

this preamble are part of docket USCG– 

2013-0327. To view comments, as well 

as documents mentioned in this 

preamble as being available in the 

docket, go to http:// 

www.regulations.gov, type the docket 

number (USCG–2013–0327) in the 

‘‘SEARCH’’ box and click ‘‘SEARCH.’’ 

Click on Open Docket Folder on the line 

associated with this rulemaking. You 

may also visit the Docket Management 

Facility in Room W12–140 on the 

ground floor of the Department of 

Transportation West Building, 1200 

New Jersey Avenue SE., Washington, 

DC 20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this temporary 

rule, contact or email MST1 Joseph 

McCollum, U.S. Coast Guard Sector 

Lake Michigan, at 414–747–7148 or 

Joseph.P.McCollum@uscg.mil. If you 

have questions on viewing the docket, 

call Barbara Hairston, Program Manager, 

Docket Operations, telephone (202) 

366–9826. 

SUPPLEMENTARY INFORMATION: 

Table of Acronyms 

DHS Department of Homeland Security 

FR Federal Register 

NPRM Notice of Proposed Rulemaking 

TFR Temporary Final Rule 

A. Regulatory History and Information 

The Coast Guard is issuing this 

temporary final rule without prior 

notice and opportunity to comment 

pursuant to authority under section 4(a) 

of the Administrative Procedure Act 

(APA)(5 U.S.C. 553(b)). This provision 

authorizes an agency to issue a rule 

without prior notice and opportunity to 

comment when the agency for good 

cause finds that those procedures are 

‘‘impracticable, unnecessary, or contrary 

to the public interest.’’ Under 5 U.S.C. 

553(b)(B), the Coast Guard finds that 

good cause exists for not publishing a 

notice of proposed rulemaking with 

respect to this temporary rule because 

doing so would be impracticable and 

contrary to the public interest. The final 

details for the three events listed within 

this temporary rule were not known to 

the Coast Guard until there was 

insufficient time remaining before the 

event to publish an NPRM. 

Because each of the events listed 

within this temporary rule are codified 

within 33 CFR Part 100, the Coast Guard 

has taken steps to complete an update 

of that part. The Coast Guard has 

written and submitted an NPRM under 

the same docket number as this TFR; the 

NPRM addresses changes to six events 

within 33 CFR part 100 so that the 

public has opportunity to comment 

before a Final Rule is published. This 

temporary rule has been written to 

address minor changes in three of the 

events listed within 33 CFR part 100 

that will take place in June and July, 

2013. Delaying the effective date of this 

temporary rule to wait for a comment 

period to run would be both 

impracticable and contrary to the public 

interest because it would inhibit the 

Coast Guard’s ability to protect 

spectators and vessels from the hazards 

associated with the swim portion of a 

triathlon and two Dragon-boat races, 

which are discussed further below. 

Under 5 U.S.C. 553(d)(3), The Coast 

Guard finds that good cause exists for 

making this temporary rule effective less 

than 30 days after publication in the 

Federal Register. For the same reasons 

discussed in the preceding paragraph, 

waiting for a 30 day notice period to run 

would be impracticable and contrary to 

the public interest. 

B. Basis and Purpose 

The legal basis for the rule is the 

Coast Guard’s authority to establish 

Special Local Regulations: 33 U.S.C. 

1233. 

This temporary rule will establish 

restrictions upon, and control the 

movement of, vessels in a specified area 

immediately prior to, during, and 

immediately after three marine events. 

The specifics of these three events are 

as follows: 

(1) Harborfest Dragon Boat Race; 

South Haven, MI. The Harborfest 

Dragon Boat Race is an annual event 

involving an estimated 250 participants 

maneuvering self-propelled vessels 

within a portion of the Black River in 

South Haven, MI. The organizer for this 

event submitted an application showing 

a date that is different from what is 

currently codified in 33 CFR 100.903. 

Therefore, this temporary rule will 

establish a special local regulation for 

this event on the waters of the Black 

River in South Haven, MI on June 22 

and 23 from 6 a.m. until 7 p.m. 


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