FAR 25.407—Agreement on Trade in Civil Aircraft.
Plain-English Summary
FAR 25.407 explains the special trade policy treatment for civil aircraft and related articles under the Agreement on Trade in Civil Aircraft. It states that, under Section 303 of the Trade Agreements Act, the U.S. Trade Representative has waived the Buy American statute for qualifying civil aircraft and related articles that meet the Trade Agreements Act substantial transformation test when they come from countries that are parties to the Agreement. The section also identifies the covered countries, which is essential because country of origin determines whether the waiver applies. In practice, this means contracting officers and contractors must look beyond the normal Buy American analysis and determine whether the item is a civil aircraft or related article, whether it qualifies under the substantial transformation test, and whether it originates in a listed participating country. The rule matters because it can open federal procurement to foreign civil aircraft products that would otherwise be restricted, while still preserving origin-based limits and compliance checks. It is especially important in aviation procurements, where supply chains are international and origin determinations can be complex.
Key Rules
Buy American waiver applies
The U.S. Trade Representative has waived the Buy American statute for qualifying civil aircraft and related articles under this agreement. This means the normal domestic preference does not apply when the item and source country meet the rule’s conditions.
Civil aircraft only
The waiver is limited to civil aircraft and related articles. It does not create a blanket exception for all goods or services, so the procurement must involve items within the scope of the agreement.
Substantial transformation required
The item must meet the Trade Agreements Act substantial transformation test. In practice, this requires determining whether the article was transformed into a new and different article of commerce in the covered country.
Country must be a party
The waiver applies only to products from countries that are parties to the Agreement on Trade in Civil Aircraft. Origin from a non-party country does not qualify, even if the item is otherwise aircraft-related.
Covered countries are specific
The section lists the participating countries, including the United States’ major aviation trading partners such as Canada, France, Germany, Japan, the United Kingdom, and others named in the text. The list is controlling for determining eligibility under this waiver.
Responsibilities
Contracting Officer
Determine whether the procurement involves civil aircraft or related articles, verify whether the item qualifies under the substantial transformation test, and confirm that the country of origin is one of the listed parties to the agreement before applying the waiver.
Contractor
Identify the country of origin for civil aircraft and related articles, ensure the product meets the applicable substantial transformation standard, and provide accurate origin and compliance information to support the procurement decision.
Agency
Apply the trade agreement waiver consistently in aviation procurements, ensure solicitation and award decisions reflect the correct origin and eligibility rules, and maintain compliance with trade policy requirements.
U.S. Trade Representative
Maintain the waiver authority under Section 303 of the Trade Agreements Act and determine the countries and scope covered by the Agreement on Trade in Civil Aircraft.
Practical Implications
This section can make foreign civil aircraft products eligible for federal purchase even when Buy American would otherwise restrict them, so origin analysis is critical early in the acquisition process.
A common pitfall is assuming that any aircraft-related item qualifies; the item must be within the civil aircraft scope and must satisfy the substantial transformation test.
Another frequent mistake is focusing only on the manufacturer’s location instead of the actual country of origin under trade rules, which may differ from where the company is headquartered.
Contracting officers should document the basis for applying the waiver, especially when the supply chain includes multiple countries or complex assembly steps.
Contractors should be prepared to substantiate origin claims with supply-chain and manufacturing information, because unsupported assertions can lead to noncompliance or award delays.
Official Regulatory Text
Under the authority of Section 303 of the Trade Agreements Act, the U.S. Trade Representative has waived the Buy American statute for civil aircraft and related articles that meet the substantial transformation test of the Trade Agreements Act, from countries that are parties to the Agreement on Trade in Civil Aircraft. Those countries are Albania, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Macao China, Malta, Montenegro, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan (Chinese Taipei), and the United Kingdom.