All unmanned aircraft systems (UAS) are “aircraft” as defined under federal aviation law, and the FAA requires that all aircraft be registered to conduct operations in the U.S. The FAA’s proposed small UAS (sUAS) rules will codify the UAS registration requirement. Following the same registration requirements as manned aircraft, the UAS must be U.S.-owned and cannot be foreign registered. The U.S.-registration requirement has implications for multi-national businesses and entities that intend to operate UAS around the globe, including potential operational limitations or additional approval requirements.

To be registered in the U.S., the UAS must be owned by: (i) a citizen of the United States; (ii) a permanent resident of the United states; (iii) a foreign corporation that is organized and doing business under U.S. Federal or state law, and the aircraft is based and primarily used in the U.S.; or (iv) the U.S. Government or state or local government entity. Citizens of the United States are further defined as (i) an individual who is a citizen of the U.S.; (ii) a partnership each of whose partners is an individual who is a citizen of the U.S.; or (iii) a corporation or association organized under the laws of the U.S. or a State (or the District of Columbia or a territory or possession of the U.S.), of which the president and at least two-thirds of the board of directors and other managing officers are U.S. citizens, which is under actual control of U.S. citizens, and in which at least 75 percent of the voting interest is owned or controlled by persons that are U.S. citizens.

A foreign business or person may also use a non-citizen trust to establish U.S.-ownership of the aircraft, requiring additional legal planning. Pillsbury’s UAS Focus Team can assist with navigating the U.S. ownership and citizenship requirements and establishing a non-citizen trust for foreign entities and persons.

To date, the FAA has not addressed the operation of U.S.-registered UAS in foreign countries and the FAA’s proposed sUAS regulations only apply to operations “within the United States.” Under the FAA’s existing rules for manned aircraft, foreign operations of U.S.-registered aircraft are required to comply with: (1) the regulations of the nation where the operation is conducted; (2) Part 91 of the FAA’s rules, with limited exceptions, so long as they are not inconsistent with the applicable regulations of the foreign country where the aircraft is operated or Annex 2 of the Convention on International Civil Aviation; and (3) separation, noise, and emissions requirements. The FAA has not made clear whether these rules will be applied to U.S.-registered UAS operating in foreign countries.

Global UAS operators, especially multi-national businesses, must consider the impact of the U.S.-registration requirement that may require additional business structuring and legal planning or limit the foreign operations of U.S.-registered UAS. As aircraft can only be registered in one country at a time, operators must carefully consider registration and citizenship requirements for its global operations, especially given the ease with which sUAS can be shipped.