Plane owners that attempt to mask their ownership through trustees could soon be forced to disclose their identities under the AIrcraft Ownership Transparency Act of 2017, which was recently introduced to the House by Rep. Stephen F. Lynch (D-MA).
Under existing law, the Federal Aviation Administration (FAA) requires ownership history and lien information on civil aircraft be provided to them. A sort of legal loophole allows some owners to get around that requirement by licensing the aircraft under trustees’ names, which can in turn mask information on the actual trustors, beneficiaries or those using the aircraft.
Lynch claims such masks can pose risks to national security and public safety.
“Without beneficial ownership information for aircraft registration, the FAA may be registering aircraft that do not meet its own requirements,” Lynch said. “There are serious national security risks when the FAA approves an aircraft registration, but does not have all the information, particularly if an aircraft is owned by a shell corporation or a foreign entity. We need increased transparency in aircraft registration, as well as improved accountability from the FAA, to prevent fraud, corruption, or illicit activity by bad actors. The Aircraft Ownership Transparency Act of 2017 will help mitigate fraud and reveal who actually owns and funds the trusts tied to aircraft registered here in the United States.”
The legislation was introduced by Lynch, the Ranking Member of the National Security Subcommittee and a member of the Financial Services Committee’s Terrorism and Illicit Financing Subcommittee. He was cosponsored in the effort by Reps. Carolyn Maloney (D-NY) and Peter King (R-NY).
The Transparency Act would require beneficial ownership of an aircraft be identified before it can be registered. If owned by owned by more than one entity, the relationships between them would have to be established, while trusts or associations would be required to provide their owner, trustee and beneficiary.
It follows a Department of Transportation’s Office of Inspector General report that noted such issues as a terrorist organization financially backing a trustor and a foreign oil corporation acting as a trustor in turn selling large shares of its company to the government of China.