25.407
Agreement on Trade in Civil Aircraft
Civil aircraft and related articles from designated countries are exempt from Buy American requirements if they meet the substantial transformation test under the Trade Agreements Act.
Overview
FAR 25.407 implements the U.S. commitment under the Agreement on Trade in Civil Aircraft by waiving the Buy American statute for civil aircraft and related articles from designated countries. This waiver applies when the products meet the "substantial transformation" test as defined by the Trade Agreements Act. The section lists all countries that are parties to the Agreement, ensuring that civil aircraft and related items from these countries are treated as domestic products for procurement purposes. This provision facilitates international trade in civil aircraft and ensures compliance with U.S. trade obligations.
Key Rules
- Buy American Waiver for Civil Aircraft
- The Buy American statute does not apply to civil aircraft and related articles from listed countries if they meet the substantial transformation test.
- Eligible Countries
- Only civil aircraft and related articles from countries party to the Agreement on Trade in Civil Aircraft are eligible for the waiver.
- Substantial Transformation Requirement
- Products must meet the substantial transformation criteria under the Trade Agreements Act to qualify.
Responsibilities
- Contracting Officers: Must recognize and apply the waiver for eligible products and verify country of origin and substantial transformation.
- Contractors: Must ensure products meet the substantial transformation test and originate from listed countries.
- Agencies: Oversee compliance with trade agreement obligations and proper application of waivers.
Practical Implications
- This section allows for broader competition and sourcing of civil aircraft and related articles from a wide range of countries, reducing restrictions imposed by the Buy American statute. Contractors must be diligent in verifying origin and transformation requirements to avoid compliance issues. Common pitfalls include misidentifying eligible countries or failing to meet the substantial transformation test.