Marpa Sounds Alarm on New U.S. Content Rules

 - December 17, 2008, 10:28 AM

The Modification and Replacement Parts Association is raising the red flag over proposed changes to U.S. export policy. Currently, a foreign-made component with 25 percent or less U.S. content is not subject to U.S. export laws when it is re-exported (sent from one foreign country to a second non-U.S. country). The minimum U.S. content drops to 10 percent for re-exports to Cuba, Iran, North Korea, Sudan or Syria. Under the new rules–aimed at limiting the leakage of U.S. missile technology–these minimums would be eliminated, with all foreign parts containing any degree of U.S. content subject to the Commerce Department’s Export Administration Regulations. This means that all such re-exports would come under U.S. government scrutiny, a time-consuming process that will delay deliveries, raise prices and make U.S. components less attractive to foreign manufacturers and their clients, says Marpa. The only exemptions would be for Group 7A items that are “incorporated as standard equipment in FAA  (or national equivalent)-certified civilian transport aircraft,” says the relevant Commerce Department document. For the U.S. maintenance industry, the removal of limits could hamper its ability to serve non-U.S. clients. The industry has until Jan. 20, 2009, to file comments.