[Federal Register Volume 88, Number 233 (Wednesday, December 6, 2023)]
[Notices]
[Pages 84837-84839]
[FR Doc No: 2023-26773]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99060; File No. PCAOB-2023-02]

Public Company Accounting Oversight Board; Order Granting
Approval of Auditing Standard Governing the Auditor's Use of
Confirmation

I. Introduction

    On October 4, 2023, the Public Company Accounting Oversight Board
(the ``Board'' or the ``PCAOB'') filed with the Securities and Exchange
Commission (the ``Commission''), pursuant to section 107(b) \1\ of the
Sarbanes-Oxley Act of 2002 (``SOX'') and section 19(b) \2\ of the
Securities Exchange Act of 1934 (the ``Exchange Act''), a proposal to
adopt Auditing Standard (``AS'') 2310, The Auditor's Use of
Confirmation (AS 2310); rescind AS 2310, The Confirmation Process (AS
2310); and amend several other existing auditing standards
(collectively, the ``Amendments''). The Amendments were published for
comment in the Federal Register on October 17, 2023.\3\ We received
three (3) comment letters in response to the notice.\4\ This order
approves the Amendments, which we find to be consistent with the
requirements of SOX and the securities laws and necessary or
appropriate in the public interest or for the protection of investors.
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    \1\ 15 U.S.C. 7217(b).
    \2\ 15 U.S.C. 78s(b).
    \3\ See Public Company Accounting Oversight Board; Notice of
Filing of Proposed Rules on The Auditor's Use of Confirmation, and
Other Amendments to PCAOB Standards, Release No. 34-98689 (Oct. 5,
2023) [88 FR 71684 (Oct. 17, 2023)], available at https://www.sec.gov/rules/pcaob/2023/34-98689.pdf.
    \4\ We received comment letters from Deloitte & Touche LLP (Nov.
2, 2023), PricewaterhouseCoopers LLP (Nov. 6, 2023), and Gopal
Krushna Panda (Nov. 6, 2023). Copies of the comment letters received
on the Commission notice of the Amendments are available on the
Commission's website at https://www.sec.gov/comments/pcaob-2023-02/pcaob202302.htm.
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II. Description of the Amendments

    On September 28, 2023, the Board unanimously adopted the
Amendments.\5\ The Amendments are intended to strengthen and modernize
the requirements for the confirmation process by describing principles-
based requirements for all methods of confirmation, including paper-
based and electronic means of communications. In addition, the new
standard is more directly integrated with the PCAOB's risk assessment
standards by incorporating certain risk-based considerations and
emphasizing the auditor's responsibilities for obtaining relevant and
reliable audit evidence through the confirmation process. This should
promote investor protection by enhancing the quality of audits. The
requirements contained within the Amendments are discussed further
below.
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    \5\ See The Auditor's Use of Confirmation, and Other Amendments
to PCAOB Standards, PCAOB Release No. 2023-008 (Sept. 28, 2023),
available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/rulemaking/docket_028/2023-008_confirmation-adopting-release.pdf?sfvrsn=e18cef74_4.
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A. Changes to PCAOB Standards

    Among other things, the Amendments enhance the existing
confirmation requirements by:
     Including principles-based requirements that are designed
to apply to all methods of confirmation. These methods include
longstanding practices, such as the use of paper-based confirmation
requests and responses sent via regular mail; methods that involve
electronic means of communications, such as the use of email or an
intermediary to facilitate direct electronic transmission of
confirmation requests and responses; and methods that have yet to
develop.
     Expressly aligning the requirements for the auditor's use
of confirmation with the requirements of the Board's risk assessment
standards, including AS 1105. The Amendments specify certain risk-based
considerations and emphasize the auditor's responsibility to obtain
relevant and reliable audit evidence when performing confirmation
procedures.\6\
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    \6\ See AS 2310.03, as amended.
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     Strengthening the requirements for the use of confirmation
procedures in certain situations. The Amendments add a requirement that
the auditor should perform confirmation procedures for cash held by
third parties, carry forward the existing requirement that the auditor
normally should perform confirmation procedures for accounts
receivable, and include a new provision that the auditor may otherwise
obtain audit evidence by directly accessing information maintained by a
knowledgeable external source for cash and accounts receivable.\7\ In
addition, the Amendments carry forward the existing requirement that
the auditor consider confirming the terms of certain other
transactions.\8\
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    \7\ See AS 2310.24 through .27, as amended.
    \8\ See AS 2310.30, as amended.
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     Addressing situations in which it would not be feasible
for the auditor to obtain information directly from a knowledgeable
external source. The Amendments provide that if it would not be
feasible for the auditor to obtain audit evidence directly from a
knowledgeable external source for accounts receivable, the auditor
should perform other substantive procedures, including tests of
details, that involve obtaining audit evidence from external sources
indirectly.\9\
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    \9\ See AS 2310.25, as amended.
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     Mandatory communications with the audit committee
regarding certain audit responses to significant risks. Under the
Amendments, for significant risks associated with cash or accounts
receivable, the auditor is required to communicate with the audit
committee when the auditor either did not perform confirmation
procedures or otherwise obtained audit evidence by directly accessing
information maintained by a knowledgeable external source.\10\
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    \10\ See AS 2310.28, as amended.
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     Reflecting the relatively insignificant amount of audit
evidence obtained when using negative confirmation requests. Under the
Amendments, the use of negative confirmation requests may provide
sufficient appropriate audit evidence only when combined with other
substantive procedures. The Amendments include examples of situations
in which the use of negative confirmation requests in combination with
other substantive procedures may provide sufficient appropriate audit
evidence.\11\
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    \11\ See AS 2310.12 and .13, as amended.
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     Emphasizing the auditor's responsibility to maintain
control over the confirmation process. The Amendments state that the
auditor should select the items to be confirmed,

send confirmation requests, and receive confirmation responses.\12\
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    \12\ See AS 2310.14 through .17, as amended.
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     Providing more specific direction for circumstances where
the auditor is unable to obtain relevant and reliable audit evidence
through confirmations. The Amendments identify situations where other
procedures should be performed by the auditor as an alternative to
confirmations. The Amendments also include examples of such alternative
procedures that may provide relevant and reliable audit evidence.\13\
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    \13\ See AS 2310.11, .19, .23, and Appendix C, as amended.
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B. Applicability and Effective Date

    The Amendments will be effective for all audits of financial
statements for fiscal years ending on or after June 15, 2025. The PCAOB
has proposed application of the Amendments to include audits of
emerging growth companies (``EGCs''),\14\ as discussed in Section IV
below.
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    \14\ The term ``emerging growth company'' is defined in section
3(a)(80) of the Exchange Act (15 U.S.C. 78c(a)(80)). See also
Inflation Adjustments and Other Technical Amendments Under Titles I
and III of the JOBS Act, Release No. 33-10332 (Mar. 31, 2017) [82 FR
17545 (Apr. 12, 2017)], available at https://www.sec.gov/rules/final/2017/33-10332.pdf.
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III. Comment Letters

    The comment period on the Amendments ended on November 7, 2023. We
received three (3) comment letters.\15\ The commenters generally
supported the Amendments and encouraged us to support the PCAOB's plans
to monitor implementation, conduct post-implementation review, and
monitor advancements in technology that may affect application of the
Amendments. We acknowledge the importance of monitoring the
implementation of the Amendments and the Commission staff works closely
with the PCAOB as part of our general oversight mandate.\16\ As part of
that oversight, Commission staff will keep itself apprised of the
PCAOB's activities for monitoring the implementation of the Amendments
and update the Commission, as necessary. Additionally, one commenter
made suggestions for expanded explanations and examples. The adopting
release addresses the points raised by the commenter.
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    \15\ See Supra note 4.
    \16\ See section 107 of SOX.
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    SOX requires us to determine whether the Amendments are consistent
with the requirements of SOX and the securities laws or are necessary
or appropriate in the public interest or for the protection of
investors.\17\ In making this determination, we have considered the
comments we received, as well as the feedback received and
modifications made by the PCAOB throughout its rulemaking process.
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    \17\ See section 107(b)(3) of SOX. SOX also specifies that the
provisions of section 19(b) of the Exchange Act shall govern the
proposed rules of the Board. See section 107(b)(4) of SOX. section
19 of the Exchange Act covers the registration, responsibilities,
and oversight of self-regulatory organizations. Under the procedures
prescribed by SOX and section 19(b)(2) of the Exchange Act, the
Commission must either approve or disapprove, or institute
proceedings to determine whether the proposed rules of the Board
should be disapproved; and these procedures do not expressly permit
the Commission to amend or supplement the proposed rules of the
Board.
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IV. Effect on Emerging Growth Companies

    In the notice of filing of the Amendments, the Board recommended
that the Commission determine that the Amendments apply to audits of
EGCs.\18\ section 103(a)(3)(C) of SOX, as amended by section 104 of the
Jumpstart Our Business Startups Act of 2012, requires that any rules of
the Board requiring mandatory audit firm rotation or a supplement to
the auditor's report in which the auditor would be required to provide
additional information about the audit and the financial statements of
the issuer (auditor discussion and analysis) shall not apply to an
audit of an EGC. The provisions of the Amendments do not fall into
these categories.\19\
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    \18\ See the Notice of Filing of Proposed Rules, supra note 3.
    \19\ While the precise scope of this category of rules under
section 103(a)(3)(C) is not entirely clear, we do not interpret this
statutory language as precluding the application of Board rules
requiring inclusion of additional factual information about
referred-to auditors and the scope of their work in connection with
the audits of EGCs. In our view, this approach reflects an
appropriate interpretation of the statutory language and is
consistent with our understanding of the Congressional purpose
underlying this provision.
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    Section 103(a)(3)(C) further provides that ``[a]ny additional
rules'' adopted by the PCAOB after April 5, 2012, do not apply to
audits of EGCs ``unless the Commission determines that the application
of such additional requirements is necessary or appropriate in the
public interest, after considering the protection of investors and
whether the action will promote efficiency, competition, and capital
formation.'' The Amendments fall within this category. Having
considered those statutory factors, we find that applying the
Amendments to the audits of EGCs is necessary or appropriate in the
public interest.
    With respect to the Commission's determination of whether the
Amendments will apply to audits of EGCs, the PCAOB provided
information, including data and analysis of EGCs identified by the
Board's staff, from public sources that sets forth its views as to why
it believes the Amendments should apply to audits of EGCs. In addition,
the Board sought public input on the application of the Amendments to
the audits of EGCs. Commenters generally supported the application of
the Amendments to the audits of EGCs. The Board noted that while the
associated costs may be higher for EGC audits than for non-EGC audits,
due to the scalability of the risk-based requirements, the costs of
performing the procedures are unlikely to be disproportionate to the
benefits of the procedures. Overall, the Amendments are expected to
enhance audit quality and contribute to an increase in the credibility
of financial reporting by EGCs.
    We agree with the Board's analysis and further emphasize the price
efficiency benefits discussed by the PCAOB noting that improvements in
the quality of the audit may be more pronounced on the audits of EGCs,
thereby potentially creating a larger increase to the price efficiency
of EGCs by providing investors with more accurate information. Price
efficiency helps investors make more informed investment decisions--
facilitating issuers', including EGCs', access to capital--thus
enhancing capital formation. Additionally, while the Amendments could
impact competition in the EGC market if the indirect costs to audited
companies disproportionately impact EGCs relative to their competitors,
as the costs associated with the Amendments are expected to be
relatively modest, any impact on competition is likely to be relatively
small. As such, after considering the protection of investors and
whether the action will promote efficiency, competition, and capital
formation, we believe there is a sufficient basis to determine that
applying the Amendments to the audits of EGCs is necessary or
appropriate in the public interest.

V. Conclusion

    The Commission has reviewed and considered the Amendments, the
information submitted therewith by the PCAOB, and the comment letters
received. In connection with the PCAOB's filing and the Commission's
review,
    A. The Commission finds that the Amendments are consistent with the
requirements of SOX and the securities laws and are necessary or
appropriate in

the public interest or for the protection of investors; and
    B. Separately, the Commission finds that the application of the
Amendments to the audits of EGCs is necessary or appropriate in the
public interest, after considering the protection of investors and
whether the action will promote efficiency, competition, and capital
formation.
    It is therefore ordered, pursuant to section 107 of SOX and section
19(b)(2) of the Exchange Act, that the Amendments (File No. PCAOB-2023-
02) be and hereby are approved.

    By the Commission.
    Dated: December 1, 2023.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-26773 Filed 12-5-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: January 18, 2007 (Volume 72, Number 11)]
[Notices]
[Page 2319-2320]
[DOCID:fr18ja07-117]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55082; File No. SR-NSCC-2006-18]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change To Create Service
To Facilitate the Exchange of Account Related Information on an
Automated Basis Between Members

January 10, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 21, 2006, the National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') and on January 5, 2007, amended \3\ the proposed rule
change described in Items I, II, and III below, which items have been
prepared primarily by NSCC. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The amendment added the number of the new rule inadvertently
omitted in the original filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The proposed rule change seeks to modify NSCC's Rules to provide
for a service to facilitate the exchange of account related information
on an automated basis during the movement of correspondent broker
accounts between members or during other material events that result in
the bulk movement of accounts between members.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NSCC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NSCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\4\
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    \4\ The Commission has modified the text of the summaries
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    Currently, when a correspondent firm chooses to move its book of
business from one NSCC member to another, there is no standard method
for transmitting the detailed customer data between the members. This
information is currently exchanged through tapes, CDs, and other means
and is dependent on the proprietary data format and values defined by
the clearing firm from which the correspondent is moving. The process
is time-consuming and prone to incorrect interpretation of data values.
It is made more inefficient because clearing firms maintain separate
code for each other clearing firm for which they convert data.
    NSCC proposes to modify its rules to create the Account Information
Transmission Service (``AIT'') to facilitate the exchange of account
related information during the movement of correspondent broker
accounts between members or during other material events that result in
the bulk movement of accounts between members. AIT will provide members
with a standard mechanism to transmit customer data that will reduce
the potential for lost and incorrectly interpreted data and will
provide members with a secure facility for the exchange of data. The
standard data model also will allow for the adoption of a single code
base that is applicable for all conversion events. NSCC believes the
single standard format could reduce costs, increase accuracy, and
accelerate delivery time.
    NSCC proposes to develop and introduce AIT in two phases. The first
phase will be to create the mechanism by which members may transmit
data between themselves. Subject to final approval, NSCC intends to
implement the first phase on Monday, February 12, 2007. The second
phase will involve the development of standardized data formats. NSCC
will notify the Commission of phase two enhancements prior to their
implementation.
    Since AIT is only an information transmission service, NSCC is also
proposing to amend its rules to clarify that NSCC will neither be
responsible for the accuracy or completeness of any information
transmitted through AIT nor for any omissions or delays that may occur
in the transmission of AIT data. Finally, NSCC is proposing a $200
monthly subscription fee for participation in AIT during phase one.
NSCC will reevaluate AIT service fees as subsequent enhancements are
completed.
    NSCC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \5\ and the rules and
regulations thereunder because by reducing costs, increasing accuracy,
and accelerating delivery time of bulk movement of accounts between
members, it will enable NSCC to facilitate the prompt and accurate
clearance and settlement of securities transactions.
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    \5\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change will have any
impact or impose any burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others

    The SIA Data Conversion Privacy Working Group initially requested
NSCC provide this service. No written comments relating to the proposed
rule change have been solicited or received. On November 3, 2006, NSCC
notified members of the terms of AIT by Important Notice
A6334, P&S5904. NSCC will notify the Commission of
any written comments it receives.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period: (i) As the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which the self-regulatory organization consents,
the Commission will:
    (A) By order approve such proposed rule change or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
) or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NSCC-2006-18 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSCC-2006-18. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filings also will be
available for inspection and copying at the principal office of NSCC
and on NSCC's Web site at http://www.nscc.com/legal/2006/2006-18-amendment.pdf.
 All comments received will be posted without change; the

Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NSCC-2006-18 and should be submitted on or before February 2, 2007.

    For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-585 Filed 1-17-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 74, Number 111 (Thursday, June 11, 2009)]
[Rules and Regulations]
[Pages 27702-27704]
[FR Doc No: E9-13138]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-0005; Directorate Identifier 2008-NM-164-AD;
Amendment 39-15927; AD 2009-12-04]
RIN 2120-AA64

Airworthiness Directives; Construcciones Aeronauticas, S.A.
(CASA), Model C-212-CB, C-212-CC, C-212-CD, C-212-CE, C-212-CF, and C-
212-DE Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: We are adopting a new airworthiness directive (AD) for the
products listed above. This AD results from mandatory continuing
airworthiness information (MCAI) originated by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as:

    Incidents have been reported on Britten-Norman BN-2 aircraft,
where cracks were found in the inner shell of the pitot/static
pressure heads. The investigation concluded that these pitot tubes,
supplied by Thales Optronics, could be operated outside their
voltage specification. On December 15th, 2005, CAA [Civil Aviation
Authority] United Kingdom issued AD G-2005-0034 (EASA approval
number 2005-6447), later superseded by EASA AD 2006-0143, to require
inspections and leak tests on Britten-Norman aircraft. Subsequently,
it has been discovered that the same tubes are supplied to EADS-CASA
for installation on C-212 aircraft, one for the pilot side and one
for the co-pilot side. So far, EADS-CASA has not received any report
of cracked pitot tubes from C-212 operators.
    This condition, if not corrected, could result in incorrect
readings on the pressure instrumentation, e.g., altimeters, vertical
speed indicators (rate of climb) and airspeed indicators,
potentially leading to navigational errors.
* * * * *

The unsafe condition could reduce the ability of the flightcrew to
maintain the safe flight and landing of the airplane. We are issuing
this AD to require actions to correct the unsafe condition on these
products.

DATES: This AD becomes effective July 16, 2009.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of July 16,
2009.

ADDRESSES: You may examine the AD docket on the Internet at http://www.regulations.gov or in person at the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Shahram Daneshmandi, Aerospace
Engineer, International Branch, ANM-116, Transport Airplane
Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356;
telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on February 23, 2009
(74 FR 8043). That NPRM proposed to correct an unsafe condition for the
specified products. The MCAI states:

    Incidents have been reported on Britten-Norman BN-2 aircraft,
where cracks were found in the inner shell of the pitot/static
pressure heads. The investigation concluded that these pitot tubes,
supplied by Thales Optronics, could be operated outside their
voltage specification. On December 15th, 2005, CAA [Civil Aviation
Authority] United Kingdom issued AD G-2005-0034 (EASA approval
number 2005-6447), later superseded by EASA AD 2006-0143, to require
inspections and leak tests on Britten-Norman aircraft. Subsequently,
it has been discovered that the same tubes are supplied to EADS-CASA
for installation on C-212 aircraft, one for the pilot side and one
for the co-pilot side. So far, EADS-CASA has not received any report
of cracked pitot tubes from C-212 operators.
    This condition, if not corrected, could result in incorrect
readings on the pressure instrumentation, e.g., altimeters, vertical
speed indicators (rate of climb) and airspeed indicators,
potentially leading to navigational errors.
    For the reasons described above, this EASA AD requires the
inspection of the affected pitot tubes, and, if cracks are found,
replacement of those tubes with the new P/N [part number] 212-A0150-
0001 and 212-A0150-0002 pitot tubes.

The unsafe condition could reduce the ability of the flightcrew to
maintain the safe flight and landing of the airplane. You may obtain
further information by examining the MCAI in the AD docket.

Comments

    We gave the public the opportunity to participate in developing
this AD. We received no comments on the NPRM or on the determination of
the cost to the public.

Conclusion

    We reviewed the available data and determined that air safety and
the public interest require adopting the AD as proposed.

Differences Between This AD and the MCAI or Service Information

    We have reviewed the MCAI and related service information and, in
general, agree with their substance. But we might have found it
necessary to use different words from those in the MCAI to ensure the
AD is clear for U.S. operators and is enforceable. In making these
changes, we do not intend to differ substantively from the information
provided in the MCAI and related service information.
    We might also have required different actions in this AD from those
in the MCAI in order to follow our FAA policies. Any such differences
are highlighted in a NOTE within the AD.

Costs of Compliance

    We estimate that this AD will affect 32 products of U.S. registry.
We also estimate that it will take about 1 work-hour per product to
comply with the basic requirements of this AD. The average labor rate
is $80 per work-hour. Based on these figures, we estimate the cost of
this AD to the U.S. operators to be $2,560, or $80 per product.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
Requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify this AD:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979); and
    3. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD docket.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains the NPRM, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Operations office (telephone<PHONE_NUMBER>) is in the
ADDRESSES section. Comments will be available in the AD docket shortly
after receipt.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

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2. The FAA amends Sec.  39.13 by adding the following new AD:

2009-12-04 Construcciones Aeronauticas, S.A. (CASA): Amendment 39-
15927. Docket No. FAA-2009-0005; Directorate Identifier 2008-NM-164-
AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective July 16,
2009.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to CASA Model C-212-CB, C-212-CC, C-212-CD,
C-212-CE, C-212-CF, and C-212-DE airplanes, all serial numbers;
certificated in any category; on which pitot tubes having part
number 212-61105.1 or 212-61105.2 are installed.

Subject

    (d) Air Transport Association (ATA) of America Code 34:
Navigation.

Reason

    (e) The mandatory continuing airworthiness information (MCAI)
states:

    ``Incidents have been reported on Britten-Norman BN-2 aircraft,
where cracks were found in the inner shell of the pitot/static
pressure heads. The investigation concluded that these pitot tubes,
supplied by Thales Optronics, could be operated outside their
voltage specification. On December 15th, 2005, CAA [Civil Aviation
Authority] United Kingdom issued AD G-2005-0034 (EASA approval
number 2005-6447), later superseded by EASA AD 2006-0143, to require
inspections and leak tests on Britten-Norman aircraft. Subsequently,
it has been discovered that the same tubes are supplied to EADS-CASA
for installation on C-212 aircraft, one for the pilot side and one
for the co-pilot side. So far, EADS-CASA has not received any report
of cracked pitot tubes from C-212 operators.
    ``This condition, if not corrected, could result in incorrect
readings on the pressure instrumentation, e.g., altimeters, vertical
speed indicators (rate of climb) and airspeed indicators,
potentially leading to navigational errors.
    ``For the reasons described above, this EASA AD requires the
inspection of the affected pitot tubes, and, if cracks are found,
replacement of those tubes with the new P/N [part number] 212-A0150-
0001 and 212-A0150-0002 pitot tubes.

The unsafe condition could reduce the ability of the flightcrew to
maintain the safe flight and landing of the airplane.

Actions and Compliance

    (f) Unless already done, do the following actions.
    (1) Within 1 month or 300 flight hours after the effective date
of this AD, whichever occurs first: Perform a detailed inspection of
the affected pitot tubes and static inlets for radial cracking
around the top lip of the dynamic port, in accordance with the
instructions of Chapter 5 of the CASA C-212 Series 100/200
Maintenance Manual, Revision 2, dated June 11, 2002. Repeat the
inspection thereafter at intervals not to exceed 300 flight hours.
    (2) If any crack is found during any inspection required by
paragraph (f)(1) of this AD, before further flight, replace the
pitot tube with a new pitot tube having P/N 212-A0150-0001 or 212-
A0150-0002 in accordance with the instructions of CASA Service
Bulletin SB-212-34-11, Revision 1, dated February 27, 2008.
Replacement of both pitot tubes having part number 212-61105.1 and
212-61105.2 with new tubes terminates the repetitive inspections
required by paragraph (f)(1) of this AD.

FAA AD Differences

    Note:  This AD differs from the MCAI and/or service information
as follows: No differences.

Other FAA AD Provisions

    (g) The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International

Branch, ANM-116, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. Send
information to Attn: Shahram Daneshmandi, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425) 227-1112; fax<PHONE_NUMBER>. Before using any approved AMOC
on any airplane to which the AMOC applies, notify your appropriate
principal inspector (PI) in the FAA Flight Standards District Office
(FSDO), or lacking a PI, your local FSDO.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.
    (3) Reporting Requirements: For any reporting requirement in
this AD, under the provisions of the Paperwork Reduction Act, the
Office of Management and Budget (OMB) has approved the information
collection requirements and has assigned OMB Control Number 2120-
0056.

Related Information

    (h) Refer to MCAI European Aviation Safety Agency Airworthiness
Directive 2008-0155, dated August 11, 2008; Chapter 5 of the CASA C-
212 Series 100/200 Maintenance Manual, Revision 2, dated June 11,
2002; and CASA Service Bulletin SB-212-34-11, Revision 1, dated
February 27, 2008; for related information.

Material Incorporated by Reference

    (i) You must use Chapter 5 of the CASA C-212 Series 100/200
Maintenance Manual, Revision 2, dated June 11, 2002; and CASA
Service Bulletin SB-212-34-11, Revision 1, dated February 27, 2008;
as applicable; to do the actions required by this AD, unless the AD
specifies otherwise. The CASA C-212 Series 100/200 Maintenance
Manual, Revision 2, dated June 11, 2002, contains the following
effective pages:

                                             List of Effective Pages
----------------------------------------------------------------------------------------------------------------
       Page title/description             Page number(s)          Revision number        Date shown on page(s)
----------------------------------------------------------------------------------------------------------------
Title Page..........................  None shown............  2.....................  June 11, 2002.
Record of Revisions.................  None shown............  2.....................  June 11, 2002.
Chapter 5: List of Effectivity Pages  1.....................  None shown*...........  June 11, 2002.
Chapter 5: Table of Contents........  1-4...................  None shown*...........  May 25, 1988.
Section 5-00-00.....................  1-6...................  None shown*...........  May 25, 1988.
Section 5-10-00.....................  1-4...................  None shown*...........  May 25, 1988.
                                      5-7, 9, 10............  None shown*...........  June 11, 2002.
                                      8, 11-15..............  None shown*...........  July 22, 1993.
Section 5-20-00.....................  1-4...................  None shown*...........  May 25, 1988.
                                      5-13, 16, 19-31, 34-    None shown*...........  July 22, 1993.
                                       45, 47-62, 64, 66-90.
                                      14, 15, 17, 18, 32,     None shown*...........  June 11, 2002.
                                       33, 46, 63, 65.
Section 5-50-10.....................  1-10..................  None shown*...........  May 25, 1988.
Section 5-50-20.....................  1, 2..................  None shown*...........  May 25, 1988.
----------------------------------------------------------------------------------------------------------------
(*Only the title page and Record of Revisions for the CASA C-212-100/200 Maintenance Manual specify the revision
  level of the document.)

    (1) The Director of the Federal Register approved the
incorporation by reference of this service information under 5
U.S.C. 552(a) and 1 CFR part 51.
    (2) For service information identified in this AD, contact EADS-
CASA, Military Transport Aircraft Division (MTAD), Integrated
Customer Services (ICS), Technical Services, Avenida de
Arag[oacute]n 404, 28022 Madrid, Spain; telephone +34 91 585 55 84;
fax +34 91 585 55 05; e-mail<EMAIL_ADDRESS>
Internet http://www.eads.net.
    (3) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington. For information on the availability of this material at
the FAA, call<PHONE_NUMBER> or<PHONE_NUMBER>.
    (4) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

    Issued in Renton, Washington, on June 1, 2009.
Stephen P. Boyd,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. E9-13138 Filed 6-10-09; 8:45 am]
BILLING CODE 4910-13-P