China Aviation Law

Pacific Northwest Aviation and Insurance Law Conference

Dinner at Conference

I just returned from one of my favorite conferences of the year - the Pacific Northwest Aviation and Insurance Law Conference.  During my second year of law school, I joined the King County Bar Association Aviation Section. It is populated by nice small group of lawyers across the northwest and every year we have a conference.

This year the conference was in Vancouver, BC, and I was one of the presenters.

Despite the constant rain, the conference was great. I met a number of interesting attorneys and heard from some great presenters.

One who stood out was a consultant who talked about the legal and logistical challenges in large scale and remote construction projects. His presentation tracked the development of a mountain road to a mining project in the wilderness of British Columbia. Some of the challenges included importing a MI-26 helicopter from Russia  and coordinating the thousands of flight hours require to shuttle men and equipment.

I presented on the recent developments in Aviation Case Law over the last year. I will be posting the whole of my presentation on a later post.

I tried to appeal to the broad range of attendees to the conference and had cases from transactions, accidents, certification, and regulation practice areas.

After the conference, we had an afternoon to see the sites in Vancouver. We enjoyed a run through Stanley park and headed down to Gastown to check out the Steam Clock and other local tourist attractions.



Asian Business Aviation Conference and Exhibition


Always nice to see aviation conferences in China. Last week brought us the Asian Business Aviation Conference and Exhibition in all its splendor.

I find it ironic how the news coverage and "industry insiders" fawn over themselves about how quickly the business aviation market is growing in China.  Yet, with the same breath, make a statement like this:

"The number of registered business jets last year on the mainland was 132, less than 1 percent of that in the United States."


Sorry, but that is no market. There was an addition of 20 planes in the last year to the Chinese registry. Despite the predictions, there is no growth. Why?

It is no doubt a complicated answer, but one of the biggest hurdles to the development of private aviation in China is that fact this is Communist China. The airspace is run by the military, the airports have limited facilities for private jets, and most importantly there is no general aviation airspace (aside from a few test areas.)

In this environment, there is little incentive to fire up your private jet, especially when airspace closures and pre-authorization of flight plans limit your ability to travel.

As the Wall Street Journal put it last week:

But for all the dizzying projections, there are also more practical problems. China's military retains significant control over the country's airspace, and it's commercial, not private, aviation that is the development priority. Approval times for private flights are still often measured in days rather than hours—so much for the convenience of having your own jet—and in the few places where a program to open up low altitudes to general aviation has been implemented, pilots can do little more than circle the airports from which they take off.



Chinese Aviation Execs Violate US Arms Embargo

For want of a pROM chip, aerospace execs went to jail.

Last September, two Chinese nationals were arrested in Hungary and transferred to US custody in April. They were charged with conspiring to violate the Arms Export Control Act and to smuggle goods from the U.S., and the attempted export of munitions in violation of the act.

Hong Wei Xian, 32, and Li Li, 33, both from the PRC, were charged in a two-count indictment accusing them of conspiring to violate the Arms Export Control Act and to smuggle goods from the United States and the attempted export of U.S. Munitions List items in violation of the Arms Export Control Act.

According to the indictment, Xian is the president of Beijing Starcreates Space Science and Technology Development Company Limited, and Li is the company’s vice president. Among other things, Beijing Starcreates engages in the business of importing and selling programmable read-only memory microchips to China Aerospace Science and Technology Corporation, which is controlled by the PRC government and plays a substantial role in the research, design, development and production of strategic and tactical missile systems and launch vehicles for the PRC.


Since 1990, the U.S. government has maintained an arms embargo against the PRC that prohibits the export, re-export, or re-transfer of any defense article to the PRC. Prohibited defense articles are placed on the U.S. Munitions List, which includes spacecraft systems and associated equipment. A programmable read-only memory microchip (PROM) serves to store the initial start-up program for a computer system and is built to withstand the conditions present in outer space.

According to the indictment, neither Xian nor Li applied for nor received a license from the United States to export defense articles of any description; however, from April 2009 to Sept. 1, 2010, the two are charged with contacting a company in the Eastern District of Virginia and seeking to export thousands of radiation-hardened PROMs from that company.

The indictment states that Xian and Li knew a license was required, but did not seek to obtain one because it was difficult, time-consuming, and would require them to identify the end user and describe the end use. They are accused of conspiring to break up orders into multiple shipments and designate countries outside of the PRC for delivery to avoid drawing attention to the orders.

On Sept. 1, 2010, the defendants were arrested in Hungary pursuant to a U.S. provisional arrest warrant and were transferred into the custody of U.S. Marshals on April 1, 2011, after they waived extradition. They arrived in the Eastern District of Virginia late April 1, 2011.


Analysis and Source Documents after the Break.


Taiwan Takes Baby Steps Toward General Aviation


When I first went to Taiwan, I thought it would be like Hong Kong, with private helicopters ferrying from sky scraper to Songshan and around the island. At the very least, I expected to occasionally see some private jet traffic and small aircraft. However, but my expectations were not to be met.

Indeed, it took 4 months before I saw my first helicopter, a military helicopter doing exercises of the coast of Taidong (台东). I often traveled past Songshan airport and I don't think I ever saw a private jet come into that location.

The reason is that Taiwan does not allow private aviation. Between being under martial law for 50 years and the constant conflict with the Mainland, Taiwan has never opened up for private aviation.

The closest they come to GA is microlight aircraft, hang gliders, and para gliders. There is one English language website which covers this scene. .

Unfortunately, today, Taiwan is rather short of airfields. Outside of the major population centers like Gaoxiong, Hualian, Taidong, and the islands, there are very few places that are free to be developed. It is a shame that the government didn't convert the number of airfields that were left over from WWII. Indeed, the central park in Linkou 林口 , was once a US air base.

However, I was heartened by the news this week that Taiwan was starting a charter airline company.

The government-owned Aerospace Industrial Development Corp. (AIDC) flew its maiden flight last Saturday from Taichung City in the interior of the island state to Kinmen Island, off its coast. The company is using Astra SP aircraft it imported in 2000. The company hopes to run both domestic and international charters and has set its sights Hong Kong, Macau, Seoul, Singapore, Tokyo, Bangkok, Ho Chi Minh City and Manila. The big plum in the Taiwanese charter business is behind a geopolitical roadblock.


The prospect of a direct flight from Gaoxiong to Shanghai on a private aircraft is very attractive to Taiwan's growing class Mainland-based businessmen.

This is yet another example in a long list (chartered mainland flights, airmail service, non-Hong Kong diverted flight to Shanghai) of  Taiwanese government actions to normalization of air travel in the next few years.

The Astra SP is the aircraft of choice for the Taiwanese Charter Service. (A bit of an odd choice as there were only 37 ever built)


Chinese Airlines to Pay for Delays (in theory) – 航班延误赔偿”标准”


In 2004, the CAAC promulgated rules that mandate that airlines compensate passengers who are delayed for more than 4 hours. However, those rules, in 《航班延误经济补偿指导意见》, did not provide any details on the amount, means, or enforceability of that compensation. Recently, the China Air Transport Association has promulgated a provisional regulation that outlines those areas. The document "Provisional Air Transport Service Rules for Service and Compensation on not-as-scheduled flights" 航空运输服务质量不正常航班承运人服务和补偿规范(试行), outline compensation and service standards in the case of  not-as-schedule flight. (Anyone have a better way to translate 不正常It literally means "not normal.")

The rules propose compensation for delays which are attributable to the airlines, e.g. flight plan, maintenance, flight deployment, transportation services and crew troubles. If the delay lasts four to eight hours, airline companies are required to provide ticket discounts, equivalent mileage accumulation or other compensation worth 300 yuan or 200 yuan in cash. If the delay is longer than eight hours, airline companies are required to provide ticket discount, equivalent mileage accumulation or other compensation worth 450 yuan or 300 yuan in cash. (Stealing a joke from Shanghaiist: I hope that the "other compensation" is not free tickets to the expo.)

However, delays attributable to the following non-carrier problems will not be compensated - weather, emergencies, air traffic control, passengers' security inspection,  and public safety. As the vast majority of delays in China are attributed to its schizophrenic division of air traffic services by the military, or the weather, I doubt this policy will see much effect.

Finally, as it is an industry promulgated policy, which is not binding in a legal sense, airlines are free to ignore it. Indeed, Shanghai's Spring Airlines (a ultra-low cost carrier) has decided not to participate in the policy. Indeed, it may even be ignored by the industry association that promulgated the policy. The CATA is no longer advertising its existence and has removed the press release from its website.

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