On January 13, 2026, the Federal Aviation Administration (FAA) formally notified Southern Aircraft Consultancy Inc. (SACI) that all aircraft registration certificates issued through the company are invalid, citing violations of U.S. citizenship requirements for trustees involved in aircraft registrations. SACI, a U.K.-based trust services provider, acts as owner trustee to facilitate US aircraft registration, for U.S. entities and non-U.S. entities alike, through trust arrangements.
The FAA has ordered SACI to surrender all registration certificates within 21 days. Until the owners re-register through a compliant U.S. citizen entity or owner trustee (or move their aircraft to a different country’s registry), the FAA has confirmed all impacted aircraft are effectively grounded.
Why citizenship matters in aircraft registration
For decades, the FAA has supported the use of trusts — specifically including Non‑Citizen Trusts (NCTs) – that allow non‑U.S. owners to register aircraft with the FAA. A 2013 FAA Policy Clarification reaffirmed the legitimacy of NCTs and established detailed requirements for both the owner trustee and the underlying trust structure.
Under 49 U.S.C. § 40102(a)(15), an entity registering an aircraft must satisfy a complex citizenship test involving: where the entity is formed; the citizenship of its president/board of directors/other managing officials; the citizenship of the entities holding voting interests; and confirmation the applicant for registration is under the “actual control” of U.S. citizens.
The owner trustee must independently meet U.S. citizenship requirements, and the trust agreement itself must restrict the non‑citizen trustor’s control over the owner trustee. The Policy Clarification also requires that trustees are capable of providing operational and ownership information within very specific timeframes upon request, and any aircraft operating lease agreements transferring possession of the aircraft to the trustor must be filed with the FAA. Trust structures where the owner trustee is administered outside the United States tend to receive heightened regulatory scrutiny.
What we don’t know
The FAA’s public notice simply states that SACI was “in violation of U.S. citizenship requirements when it submitted the registration applications.” It does not specify in detail what citizenship issues might exist. Possible issues that might arise for any non‑citizen trust structure include:
- The citizenship of the entity acting as owner trustee;
- Independence (or lack thereof) between owner trustee and trustor; or
- Non‑compliance with the 2013 Policy Clarification requirements.
Operational Impact on Owners
Each time an entity registers an aircraft, it certifies when executing the FAA Aircraft registration application that it meets FAA citizenship requirements. If the applicant is not a citizen, or later falls out of compliance, the registration is immediately invalid or no longer effective. There is no grace period under 14 C.F.R. §§ 47.41 and 47.43. Aircraft that are not properly registered cannot be operated until the registration issue is resolved.
The FAA has indicated some owners may need to convey title of the aircraft from SACI as owner trustee to a new entity that qualifies to register the aircraft. This would require parties to submit a new application for registration with proof of ownership and the standard FAA fee. For aircraft located in the Unites States, it might be possible to operate the aircraft with a copy of the aircraft registration onboard the aircraft after filing all appropriate documents and pending the FAA processing the documents. But for aircraft located outside the United States, it would require filing a Declaration of International Operations (DIO) and receipt of a Fly-Wire (Temporary Certificate of Aircraft Registration) before the aircraft can be operated.
The appropriate solution will vary for each owner, and it is imperative owners engage legal counsel to review the structure on a case-by-case basis. Owners need to comply with FAA registration and operational requirements, consider any tax issues that may arise when transferring title, update insurance providers, address any loan/lease requirements, transfer radio station licenses, etc.
A path forward
The good news: the U.S. market has multiple well‑established, reputable aircraft trustees that have been vetted repeatedly by the FAA and industry over the years. Selecting the right trustee has always been critical and essential to ensuring full compliance with the FAA’s trust and citizenship requirements.
