Using Digital Signatures in Aircraft Title & Registration see more
NAFA member, Debbie Mercer-Erwin, President of Wright Brothers Aircraft Title, discusses the use of digital signatures in the aircraft title and registration process.
It is an exciting topic and a fundamental priority for Wright Brothers Aircraft Title (WBAT) to stay current with technology, especially when it has the potential to increase efficiency and security in our services, as well as help reduce time and cost in transactions for our clients. We are always looking forward to how our company could put certain applications to use, even Blockchain in Aviation Escrow Transactions. For this month’s topic, we don’t have to guess though.
One huge hindrance to efficiency in aircraft title registration is the paperwork involved – handling and distributing numerous paper documents between multiple parties, whether in the United States or internationally. Printing, signing, mailing – more than once if corrections are needed, let alone if the documents are lost in the mail altogether – is enormously time-consuming.
WBAT wanted to find a way to streamline certain processes and reduce our amount of paperwork, while maintaining a high level of security – to save time and money within our business and for our clients. We were immediately interested in the use of Digital Signatures, which is a specific implementation of an electronic signature (eSignature).
The US Federal ESIGN Act defines an eSignature as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record”. A Digital Signature takes this a bit further with the addition of encryption/decryption technology – securing the data associated with an electronically signed document and creating a robust audit trail.
Digital Signatures have been used for electronically signing an array of documents – sales contracts, offer letters, lease agreements, liability waivers, financial documents, etc. – and are legally enforceable in most business transactions throughout most of the world.
We needed to make sure this solution would work with multiple signers on complex documents though and be compliant with the Federal Aviation Authority guidelines, including their Notice of Policy Clarification for Acceptance of Documents With Digital Signatures (81 FR 23384), which requires Digital Signatures – traceable and digitally encrypted – not just eSignatures.
DocuSign was the clear answer for our business – meeting some of the most stringent US, EU, and global security standards, and using the strongest data encryption technologies available. It also happens to be the leading eSignature brand, with the ability to:
- Easily upload and send documents for signing
- Sign at any time, on a wide variety of devices, from nearly anywhere
- Check signing status and send reminders to keep things moving forward
This software has enabled us to get agreements done faster with fewer errors, which directly translates to lower cost, for our business and our clients. We’ve accomplished this with using Digital Signatures mainly for Bill of Sale and Application for Registration documents, which directly benefits our buyers and sellers.
There are more benefits on the horizon though with more widespread use of this technology. With more lenders in the industry using Digital Signatures, it might not even be necessary to presign a release of the lien. Instead, the involved parties would digitally sign at closing when money is distributed, reducing the risk for all.
We’re excited to see where this technology takes us and the aviation finance industry. In the meantime, we’re thrilled with the results we’ve already seen and the time and cost savings we’re able to pass down to our clients.
This article was originally published by Wright Brothers Aircraft Title on September 16, 2019.
TUE and PUE: Closing the Gap Between the FAA and IR see more
NAFA member, Debbie Mercer-Erwin, President of Wright Brothers Aircraft Title, writes about closing the gap between filing at the FAA and registering at the International Registry.
In previous blogs we have discussed the paperwork gaps that can occur around aviation escrow transactions and how Wright Brothers helps to Close the Gaps, whether between the time you pay for an aircraft and the time the necessary documents are filed with the Federal Aviation Authority (FAA), or between documentation Filing and Recording at the FAA.
There is also a gap between filing at the FAA and registering at the International Registry (IR). In each of these scenarios, an escrow agent, as a “PUE”, can help close the gap with a more seamless transaction for a “TUE”, ensuring representation for each party. In the gap between the FAA and IR specifically, “The Closing Room”, a virtual safekeep for all notices between parties, can be a key factor and a huge help.
TUE? PUE? – The Differences
The terms TUE and PUE are often used in the world of aviation escrow, but what do they mean? A TUE is a Transacting User Entity, such as a buyer or seller, lender or debtor, whereas a PUE is a Professional User Entity, like Wright Brothers for example. Why is this important in terms of filing at the FAA or registering an interest with the IR?
While a TUE is the party named in the filing or registration, a PUE is not. A Professional User Entity can however file or register on behalf of a Transacting User Entity. Representation by a PUE, like WBAT, can ensure that the correct steps for both filing at the FAA and registering at the IR are followed, securing the interests of all parties involved and only upon the approval of each.
Between the FAA and the IR – Possible Repercussions
Documents are filed at the FAA for recording, and notices of interest are registered at the IR. In general, a U.S. document is filed with the FAA first, where a code is then issued to register the notice of that same interest with the IR.
What happens if you file at the FAA and not the IR? The IR was granted super priority over the FAA, and the IR gives “first in time, first in right” status to all notices registered there. This basically means that if you file at the FAA but do not register the notice at the IR, and someone else files a notice of a competing interest at the IR before you get there – they win.
The same is true if you file at the FAA and intend to register at the IR, but someone registers a competing interest before you do. They got there first, so they win. This makes the gap between filing at the FAA and registering at the IR extremely important.
The Closing Room – How it Helps Save Time
The Closing Room is an IR function that allows a coordinator, a PUE like Wright Brothers, to set up a virtual space for the interested parties (sometimes PUEs and TUEs) to hold all registrations until they are approved and ready to process. This space allows the PUE to “preposition” registration information in conjunction with any other claimed interests before submitting them. It allows for all PUEs and TUEs to view each registration and requires the approval of each in order to “close” the room, which then releases all registrations. Closing the room and filing at the FAA can thus happen almost simultaneously.
In this way, “The Closing Room” helps close the time gap between the registering of an interest at the IR and the filing of documents at the FAA, especially if there is a competing claim. Of significant note here is that in order to lessen the number of “hands in the pot” and really streamline the process and close the gap, the PUE should be handling all FAA filings and IR registrations on a regular basis so that all documents among all parties are handled correctly. Having interests preapproved and consented to before closing is always a good thing.
This article was originally published by Wright Brothers Aircraft Title on May 21, 2019.
Private aviation usage growth may be due to increased demand for long-range international travel. see more
NAFA members, Scott McCreary at McAfee & Taft and Jeffrey Towers at TVPX, weigh in on deciding where to register an aircraft that is operated in multiple jurisdictions. Originally published in Corporate Jet Investor's Official Guide to Aircraft Registration - April 2018.
As many aircraft are regularly operated in multiple jurisdictions, corporate aircraft owners are faced with multiple choices as to where they will register their aircraft for nationality purposes. Once the pros and cons of each registry are fully considered, owners often choose to register their aircraft on a registry that does not correspond with the nationality of the corporate jet owner. One of the most frequently chosen aircraft registries is the United States Federal Aviation Administration (FAA) Aircraft Registry, commonly referred to as the N Registry.
The FAA is the primary US regulatory agency that governs and oversees registration, maintenance and operation of aircraft. In addition, the United States Department of Transportation further provides economic authority for certain aircraft operations and protects consumers from unfair and deceptive trade practices involving the sale of air transportation. The FAA Aircraft Registry located in Oklahoma City, Oklahoma, issues Certificates of Aircraft Registration for both commercial and general aviation aircraft. To register an aircraft with the FAA, the applicant for registration must file documents evidencing ownership of the aircraft in the name of the applicant, as well as an AC Form 8050-1 aircraft registration application. To perfect liens or encumbrances against aircraft registered with the FAA, parties must (i) file the security documents with the FAA and (ii) comply with the registration requirements under the Cape Town Treaty, when applicable.
Why is the US a preferred jurisdiction for aircraft registration?
There are several advantages to registering an aircraft in the US. The FAA is widely respected for its easy, secure and inexpensive processes for filing aircraft title transfer, registration and security documents. There is also a long history of court decisions and other legal precedents regarding the processes for registering and canceling aircraft from the FAA, as well as the validity, priority and enforceability of security interests in aircraft. The US was also one of the first countries to adopt the Cape Town Treaty, thus providing the additional comfort and assurance that interests properly created and registered under the Cape Town Treaty will be recognized in other Contracting States. The clarity of applicable law and long history of legal precedents for enforcing rights of owners and lenders for US-registered aircraft appeals to aircraft lenders, lessors and borrowers.
The FAA provides an efficient system for owners and lenders to file documents and now accepts documents bearing appropriate digital signatures, which simplifies and expedites the closing process. There is a large pool of internationally-recognized aviation attorneys and other professionals in the US available to assist aircraft owners and lenders. Many parties also take comfort in the fact that the FAA, as part of the US government, has the resources and wherewithal to properly oversee and enforce its rules and obligations as an aircraft registry. Finally, there is ample evidence that registration with the FAA helps to preserve the value of a business aircraft, both because the FAA’s standards for aircraft operations and maintenance are among the highest in the world and because the US is the most active market for