Proposal for a COUNCIL DECISION on the position to be taken by the European Union within the Bilateral Oversight Board under the Agreement between the United States of America and the European Community on cooperation in the regulation of civil aviation safety, concerning the Decision N° 0004 amending Annex 1 to the Agreement
Date: 2013-05-02
Institutions: European Commission
Subjects: Community tax, European Aviation Safety Agency, United States, air safety, cooperation agreement (EU)

EUROPEAN 
COMMISSION 

Brussels, 2.5.2013  
COM(2013) 252 final 

2013/0132 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Bilateral Oversight Board 
under the Agreement between the United States of America and the European 
Community on cooperation in the regulation of civil aviation safety, concerning the 
Decision N° 0004 amending Annex 1 to the Agreement 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1 

  Background 

In 2007, the U.S. aviation industry raised concerns that the EU rules on the fees and charges 
levied  by  the  European  Aviation  Safety  Agency  (EASA)  do  not  differentiate  between 
European  certification  projects  and  EASA  validation  of  Federal  Aviation  Administration 
(FAA) approvals of U.S. products. 

Following several exchanges on this issue, the European Commission (EC) eventually agreed 
that  EASA  fees  for  validation  would  be  discussed  pursuant  to  the  Agreement  between  the 
United States of America and  the  European Community on cooperation  in the regulation of 
civil aviation safety (the “Agreement”).  

The  Bilateral  Oversight  Board  (BOB)  agreed  at  its  June  2011  meeting  to  address  the  fees 
charged  by  EASA  to  U.S.  applicants  for  validation  of  FAA  approvals  under  the  terms  of 
Annex 1 of the Agreement.  Consequently the Terms of Reference establishing the formation 
of a Validation Fees Team (VFT) was approved at the BOB meeting on December 11, 2011. 

The VFT, composed of representation from the FAA, the EC and EASA, was tasked by the 
BOB to review the current EASA process and methods for setting fees and charges as applied 
to validation of U.S. products and to develop recommendations regarding amendments to the 
Agreement  which  will  address  the  issues  associated  with  EASA  fees  for  validation  of  U.S. 
products.   

1.2 

  Understanding the EASA Fees and Charges system 

All fees charged by EASA are mandated by Commission Regulation (EC) No. 593/2007 (as 
amended)  that  establishes  the  fees  and  charges  which  are  to  be  levied  by  EASA  for  all 
certification tasks.  

This Regulation identifies the exact fees that are to be charged for each certificate (annually 
for  multi-year  projects)  and  approval,  as  well  as  an  hourly  rate  for  certain  tasks  that  are 
charged  by  the  hour.    All  tasks  related  to  certification  of  products,  parts  and  appliances 
(including  approval  of  data  for  repairs,  etc.)  as  well  as  activities  related  to  the  approval  of 
organizations  (including  design  organizations,  production  organizations,  maintenance 
these 
organizations,  etc.)  must  be  fully  covered  from 
certificates/approvals.  Additionally, EASA’s costs related to the continued airworthiness of 
these products, parts and appliances as well as the costs related to the oversight of approved 
organizations must also be fully covered and are addressed in this same Regulation. 

the  applicants  requesting 

The  fees  in  Regulation  (EC)  No.  593/2007  are  adjusted  by  a  factor  on  an  annual  basis  to 
account for inflation.  Further, to ensure that fees continue to offset EASA’s costs, those fees 
are  subject  to  periodic  reviews  and  may  be  revised  as  necessary  by  the  Commission  in 
accordance  with  the  regulatory  procedure  with  scrutiny.    Fees  are  developed  and  updated 
using  a  combination  of  real  certification  activity  data  and  costs  incurred  in  the  past  and 
business plan data for future developments.  Based on these data, hourly rates and applicable 
flat fees are calculated.  This method allows for both increases or reductions of fees if justified 
by the supporting data. 

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1.3 

  Application of a reduction factor in the Agreement 

During the VFT discussions, it became apparent that both EASA and the FAA have not fully 
internalized the Agreement.  Even though both Technical Agents are working to a common 
set  of  validation  principles,  which  are  meant  to  represent  the  intent  and  spirit  of  the 
Agreement,  it  is  evident  that,  in  reality,  the  full  benefits  of  the  Agreement  are  not  being 
realized. 

The EASA fee schedules do give special consideration to non-EU certificate activity in some 
areas.  For example, Supplemental Type Certificates (STCs) that are classified as “basic” are 
charged as simple STCs regardless of the complexity of the design change.  Also the fees for 
activities associated with the continued airworthiness of a non-EU certificate are charged at a 
reduced  rate.    In  the  area  of  organization  approvals  accepted,  Part  145  approvals  are  also 
subject to reduced fees. 

Nevertheless, Regulation (EC) No 593/2007 mandates that EASA collect fees that reflect its 
total  certification  costs.    For  certificates  and  approvals,  fees  are  computed  primarily  using 
historical data of resource engagement in similar projects in combination with business plan 
data.  Based on this method, it is not possible for EASA to give any special consideration to 
its bilateral partners, including the United States, in the fees and charges regulation itself.  If 
there  is  to  be  special  consideration  which  transcends  this  regulation,  it  must  be  granted 
through  a  superseding  regulation  or  through  an  international  treaty  which  takes  precedence 
over the regulation.   

On this basis, and in order to align more fully with the intent of Article 14 of the Agreement, 
which states that fees should be just, reasonable and commensurate with the services, the VFT 
has  agreed  and  recommended  a  decision  from  the  BOB  to  apply  a  reduction  factor  to  the 
relevant  fee  tables  in  Regulation  (EC)  No  593/2007  to  account  for  the  efficiencies  of  the 
validation  process  in  the  Agreement.    This  reduction  factor  would  be  incorporated  into  the 
provisions of Annex 1 to provide the needed derogation from Regulation (EC) No 593/2007 
via the Agreement. 

1.4 

  Procedural aspects 

The  relevant  Council  Decision  and  the  Agreement  entered  into  force  on  1  May  2011 
following the notification by the Parties that their respective internal procedures necessary for 
its entry into force had been completed. 

Article  218(9)  of  the  Treaty  on  the  Functioning  of  the  European  Union  establishes  that  the 
Council, on a proposal from the Commission, shall adopt a decision establishing the positions 
to  be  adopted  on  the  Union’s  behalf  in  a  body  set  up  by  an  agreement,  when  that  body  is 
called upon to adopt acts having legal effects. 

Article  4.4  of  Council  Decision  2011/719/EU1  concerning  the  conclusion  of  the  Agreement  
between  the  United  States  of  America  and  the  European  Community  on  cooperation  in  the 
regulation of civil aviation safety establishes that the Council shall decide on amendments to 
Annexes to the Agreement when they entail any modification to relevant Union legal acts. 

1 

OJ L 291, 9.11.2011, p. 1. 

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As  such,  a  Council  Decision  on  the  position  to  be  taken  by  the  EU  within  the  Bilateral 
Oversight  Board  on  the  Decision  to  amend  Annex  1  to  the  Agreement  as  per  the  draft 
Decision 0004 annexed to the proposed Council Decision.  

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Member States were regularly informed throughout progress of the work. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

1.1. 

Summary of the proposed action 

The  proposed  amendment  of  Annex  1  to  the  Agreement  will  introduce  a  reduction  factor 
applicable to EASA levied Fees and Charges in the context of the validation of U.S. (aviation) 
products, thus reflecting the spirit and benefits to be attained from the Agreement.  

1.2. 

Legal basis 

Article  100(2)  in  conjunction  with  Article  218(9)  of  the  Treaty  on  the  Functioning  of  the 
European Union. 

1.3. 

Subsidiarity principle 

The agreement covers issues where the EU has competence and where relations with United 
States of America need to be maintained at the EU level. 

1.4. 

Impact on existing EU legislation 

Under the current provisions of Regulation (EC) No 593/2007 no distinction is made between 
EASA  Fees  and  Charges  levied  for  (European)  certification  projects  as  opposed  to  the 
validation of products emanating from 3rd countries with whom the EU has a bilateral aviation 
safety  agreement.  A  critical  element  of  these  agreements,  being  the  product  of  mutual  trust 
and  recognition  of  the  equivalent  level  of  safety  of  the  respective  parties'  systems,  are  the 
efficiency gains to result from relying on the work processes and outcomes of the other party, 
the  result  of  which  is  a  decrease  in  workload  and  associated  costs  when  carrying  out  a 
validation. 

The legal impact of introducing the envisaged reduction factor in Annex 1 to the Agreement 
will,  by  virtue  of  the  status  of  the  Agreement  as  an  International  Treaty,  be  that  such 
provisions  will  have  precedence  over  current  provisions  in  Regulation  (EC)  593/2007.  In 
order for this provision to become applicable not solely as a result of the (EU/US) Agreement, 
a dedicated provision will need to be included in Regulation (EC) 593/2007, a process that is 
ongoing at the time of writing. 

As for likely budgetary implications, please refer to point 4 below. 

4. 

BUDGETARY IMPLICATION 

An estimated deficit in EASA Fees and Charges revenue resulting from the entry into force of 
this amendment to Annex 1 to the Agreement would amount to approximately €450.000 that 
will  fully  be  covered  by  redeployment  within  the  Fees  and  Charges  budget  of  the  Agency.

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2013/0132 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the Bilateral Oversight Board 
under the Agreement between the United States of America and the European 
Community on cooperation in the regulation of civil aviation safety, concerning the 
Decision N° 0004 amending Annex 1 to the Agreement 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 100(2) in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

Council  Decision  2011/719/EU  of  7  March  2011  concerning  the  conclusion  of  the 
Agreement  between  the  United  States  of  America  and  the  European  Community  on 
cooperation  in  the  regulation  of  civil  aviation  safety2  (hereinafter  referred  to  as  'the 
Agreement'), entered into force on 1 May 2011. 

Pursuant to Article 3.C.2 of the Agreement, the Bilateral Oversight Board established 
by  Article  3.A  of  the  Agreement  may  amend  the  annexes  to  the  Agreement  in 
accordance with Article 19.B of the Agreement. 

It is appropriate to establish the position to be taken by the European Union within the 
Bilateral  Oversight  Board  in  accordance  with  Article  4.4  of  the  Council  Decision 
2011/719/EU as regards this specific Decision to amend Annex 1 of the Agreement, 

HAS ADOPTED THIS DECISION:  

Article 1 

The position to be taken by the European Union within the Bilateral Oversight Board (BOB), 
as referred to in Article 3.A of the Agreement between the United States of America and the 
European Community on cooperation in the regulation of civil aviation safety, with regard to 
the adoption of a BOB Decision amending Annex 1 of the Agreement, shall be based on the 
draft Decision 0004 of the Bilateral Oversight Board, attached to this Decision. 

This Decision shall enter into force on the day of its adoption. 

Article 2 

2 

OJ L 291, 9.11.2011, p. 1. 

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This Decision is addressed to the Member States. 

Article 3 

. 

Done at Brussels,  

For the Council 
The President 

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ANNEX  

BILATERAL OVERSIGHT BOARD 

FOR THE AGREEMENT 

BETWEEN 

THE UNITED STATES OF AMERICA 

AND THE EUROPEAN UNION 

ON COOPERATION IN THE REGULATION OF CIVIL AVIATION 
SAFETY 

RECORD OF DECISION 

DECISION N˚ 0004 

In accordance with Article 19.B of the Agreement between the United States of America 
and the European Community on Cooperation in the Regulation of Civil Aviation Safety (the 
“Agreement”),  which  provides  for  the  amendments  to  the  annexes  to  the  Agreement  to  be 
effected by decision of the Bilateral Oversight Board (“BOB”) established pursuant to Article 
3 of the Agreement, the BOB hereby decides as follows: 

To  amend  Annex  1  to  the  Agreement  by  adding  a  new  paragraph  3.2.11  with  the 

1. 
following text: 

"3.2.11(a)  As  of  January  1,  2013,  fees  imposed  during  any  calendar  year  by  a  Technical 
Agent  on  an  applicant  or  regulated  entity  for  a  validation  performed  by  that 
Technical Agent under 3.2.4 to approve 

(i) 

the design of an aircraft, aircraft engine, propeller, or appliance; 

(ii)  a supplemental type certificate; 

(iii)  certain  major  changes  to  a  type  design,  as  defined  in  the  technical 

implementation procedures; or 

(iv)  acoustical and emissions changes 

shall not exceed 95% of the fees that the Technical Agent would have imposed 
on  the  applicant  or  regulated  entity  during  that  same  calendar  year  in  the 
issuance  of  an  equivalent  approval  of  a  design,  supplemental  type  certificate, 
major change, or acoustical or emissions change using a certification process. 

(b)  Fees  imposed  during  any  calendar  year  by  a  Technical  Agent  on  an  applicant  or 
regulated  entity  for  a  validation  performed  by  that  Technical  Agent  under  3.2.4 
shall  reflect  the  efficiencies  gained  by  using  a  validation  process  instead  of  a 
certification  process.    Such  efficiencies  and  associated  fee  reductions  shall  be 

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substantiated by relevant data.  Therefore, the BOB shall periodically review, and 
appropriately adjust by decision, the percentage in (a) above." 

2. 

The  periodic  review  indicated  in  the  new  paragraph  3.2.11  (b)  shall  be  undertaken  no 
more frequently than every two years.  As provided for in paragraph 2.2.1 of Annex 1 to 
the Agreement, the BOB shall be assisted by the COB in conducting such reviews and 
developing  any  necessary  decisions.    The  review  and  decision  shall  be  based  on  data 
provided by the Technical Agents. 

The amendment shall take effect on the date of the last signature below. 

For the Bilateral Oversight Board: 

FEDERAL AVIATION ADMINISTRATION 

  EUROPEAN COMMISSION 

DEPARTMENT OF TRANSPORTATION 

EUROPEAN UNION 

UNITED STATES OF AMERICA 

BY: 

BY: 

TITLE: 

Associate 
Aviation Safety 

Administrator 

for 

TITLE: 

Aviation 

Director, 
and 
International  Transport  Affairs, 
Directorate-General  for  Mobility 
and Transport 

DATE: 

DATE: 

PLACE: 

Washington, DC 

PLACE: 

Brussels, Belgium 

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