Back to BlogFlying high, staying compliant: How aerospace contractors navigate complex global regulations
Introduction
Aerospace is one of the most complex and heavily regulated industries in the world. From civilian aviation to defence and space systems, aerospace companies face some of the highest compliance standards not only in relation to safety and performance, but also for exports, data, and labour laws.
In EMEA, where governments are often involved in multinational programs (like Airbus, Eurofighter, and Galileo), the regulatory burden is significant. And, as global supply chains become more complicated and security conscious, the smallest compliance error can result in project shutdowns, financial penalties, and damaged reputations. For aerospace companies, compliance is key to operational success.
Why compliance is critical in aerospace
In the aerospace industry, companies work with complex products, long project timeframes, and globally dispersed teams. It’s an industry prone to gaps in compliance, particularly if contractors, suppliers, and third-party experts are onboarded in different jurisdictions with different legal mandates. Without standardised onboarding processes for each jurisdiction, compliance risks can arise.
The key regulatory bodies shaping aerospace compliance
Aerospace companies need to abide by the rules of various regulatory bodies, depending on where they’re located and the type of work being performed. These global bodies include:
- FAA (Federal Aviation Administration, U.S.): The FAA oversees aircraft certification, airworthiness standards, and approvals of parts manufacturing
- EASA (European Union Aviation Safety Agency): EASA regulates civil aviation safety across EU member states, including certification and airworthiness
- ICAO (International Civil Aviation Organization): ICAO is a UN agency setting international standards for civil aviation in 193 countries
- National defence bodies: these include the UK’s Ministry of Defence (MOD), France’s DGA, Germany’s BAAINBw, and the U.S. Department of Defense, which enforce local defence security clearance regulations
Core regulations and standards contractors must follow
In addition to aviation regulators, aerospace contractors must also comply with a number of technical and quality assurance frameworks. These include:
- FAR/DFARS: U.S. Federal Acquisition Regulations and Defence FAR Supplement
- AS9100: Global aerospace quality management standard based on ISO 9001
- EASA CS-25: Certification standards for large aircraft in Europe
- NADCAP: The National Aerospace and Defense Contractors Accreditation Program, essential for special manufacturing processes (e.g., heat treating, welding)
Failing to meet the standards of these bodies, puts contracts at risk, can disqualify vendors from government programs, and can stop work altogether. Companies operating in EMEA must be compliant to remain competitive and secure.
Navigating compliance across borders
Aerospace projects often involve international partnerships and distributed workforces. This makes contractor compliance particularly difficult to manage, given the different systems, companies, and countries that can be involved in a single project. For example, if a project involves engineers in Toulouse, suppliers in Abu Dhabi, and testing teams in Ankara, there are massive compliance hurdles (and potential time delays) to factor in.
Without standardised processes for gaining security clearance, contractor vetting and compliance with local laws, delays are inevitable when onboarding new workers to any stage of a project.
Coordinating with multiple regulators
To be compliant, aerospace contractors need to abide by local employment laws and safety rules, as well as foreign military and technology standards, depending on the nature and location of the project. For example:
- A satellite component built in France might need export approval from the US if it contains tech that is of US origin. This rule applies even if the final product never enters the US (a concept known as re-export control under ITAR).
- A system integrator in the UK may need to meet both UK MOD clearance and EASA CS-25 if the product is intended for dual-use (e.g., civil and military).
This multi-layered, regulatory complexity is why multinational contractors partner with Employer of Record (EOR) or Agent of Record (AOR) providers to handle the local sourcing, onboarding, vetting and classification of contract workers.
Consequences of non-compliance
Compliance failures can cause aerospace programs to shut down, defence contracts to be canceled, production to cease, and/or result in fines in the millions. Examples include:
- Airbus: In 2020, Airbus paid a record €3.6 billion settlement over export control and bribery violations involving US, UK, and French authorities.
- Honeywell: In 2021, Honeywell paid a $13 million civil penalty after exporting ITAR‑controlled technical drawings for the F‑22, F‑35, and B‑1B to foreign countries without approval. The U.S. Department of State reached the settlement under a voluntary disclosure agreement
Non-compliance doesn’t just hurt aerospace projects, companies and contractors financially, it can preclude contractors from getting hired for future programs and can also damage national security partnerships.
Staying ahead of export control and technology transfer risks
Aerospace contractors regularly work with controlled technologies: these are the systems and technology used to manage and manipulate the flight and operation of aircraft and spacecraft. They can range from stealth coatings, propulsion controls, and autopilots, to satellite telemetry systems and much more. Most of these high-powered systems are subject to export laws. These include:
Complying with ITAR and EAR
- ITAR (International Traffic in Arms Regulations): the U.S. law regulating military articles and services
- EAR (Export Administration Regulations): the U.S. law controlling dual-use technology (that is, for civilian and military use)
Both apply extraterritorially, and so are exempt from the jurisdiction of any local law, but have power across all regions and jurisdictions where they are used. So for example, if a UK-based engineer accesses a US-origin drawing for a missile component, ITAR may apply to its usage, even if the project is based solely in Europe.
Best practices for for licenses, documentation, and monitoring of export control include:
- Classifying controlled items early using ECCNs (Export Control Classification Numbers)
- Obtaining export licenses before transferring data or hardware involved in the program
- Using tight access controls so only security-cleared individuals see restricted content
Non-compliance with ITAR and EAR regulations can be devastating. In 2023, a case involving 3D Systems Corporation led to The US Directorate of Defense Trade Controls imposing a $20 million fine on the company for unauthorised exports of technical data.
Securing sensitive data in a global workforce
Many aerospace contractors work remotely or in hybrid working conditions. When these teams include subcontractors, overseas personnel, or unsecured data endpoints for the transfer of sensitive and classified information, the cybersecurity and compliance risks multiply.
Meeting cybersecurity requirements
Governments across the globe now require contractors to meet strict cybersecurity compliance standards, as a condition of doing business in their country. These include:
- NIST SP 800-171: This is the U.S. standard for protecting controlled unclassified information (CUI)
- CMMC (Cybersecurity Maturity Model Certification): This is a mandatory certification for US Department of Defense contracts from 2025
- RTCA DO-326A: This is the aviation-specific cybersecurity framework addressing vulnerabilities in airborne systems
For contractors and third-party consultants working in aerospace in EMEA, new technologies like remote development, AI-assisted design, and digital twins by their very nature, increase the likelihood for sensitive data to be exposed. If that data is breached, it can break both GDPR and export control laws, creating potential legal issues in several countries at once.
Keeping pace with an evolving regulatory landscape
As the industry is acutely aware, the main constant in aerospace compliance is change. From AI-based design systems to new geopolitical controls, regulatory standards change frequently and fast. Therefore, it’s easy for companies to lose visibility and control of worker compliance, especially if they have multiple contractors working across multiple jurisdictions.
Monitoring and updating compliance programs
In order to keep contractors up-to-date with these changes in regulations, aerospace organisations need to:
- Track updates from all applicable regulatory bodies (e.g., EASA, FAA, DoD, MOD) and ensure contractors are across all changes
- Conduct regular internal audits, especially for contractors and subcontractors
- Train staff on updated classifications rules, license requirements, and rules around access controls
- Ensure contract clauses reflect the latest cybersecurity mandates, export obligations and cybersecurity protections
As EMEA governments are increasingly aligning civil and military procurement standards in the aerospace industry (for example, via initiatives with the EU DEFIS), commercial contractors may now be subject to defence-grade compliance and security rules.
Managing compliance in the aerospace supply chain
Aerospace supply chains are typically complex and far-reaching, often spanning hundreds of suppliers across dozens of countries, each with different jurisdictions and nuanced workplace laws. This presents a challenging compliance environment for aerospace companies and their contractors.
Oversight and traceability in global supply chains
Some of the more common threats in the supply chain for aerospace companies to guard against, include:
- Counterfeit parts
- The use of restricted or embargoed materials
- The misclassification of contractors and subcontractors, particularly in countries with high enforcement mandates (such as Germany, UAE, Saudi Arabia)
According to the European Union Aviation Safety Agency (EASA), over 7,700 parts have been flagged in recent years. highlighting a persistent challenge with counterfeit components in the region’s aerospace supply chain.
To mitigate these risks, aerospace companies and their contractors need to implement the following processes, without fail:
- Regular supplier audits including traceability protocols, with established processes and quality checks
- Ensure the pre-vetting of subcontractors is taking place at all times, and that the standards for selection criteria reflect industry best practices
- Establish workforce classification and onboarding protocols, that are aligned with local laws, based on every location the contractors are based
Building a resilient compliance framework
Best practices for aerospace compliance
The key elements of a robust, future-proof compliance program includes the following:
- Clear company policies aligned with all international standards, as well as local workplace laws
- Ongoing training for all staff handling controlled technologies, sensitive, or classified information
- Risk assessments executed at every stage of every project
- The use of automation tools to track license expiry, vetting status of contractors, and transparent document trails with user identification at every stage
Compliance frameworks following these guidelines will become resilient. And a resilient company can more easily, and quickly scale.
As aerospace companies expand across countries or regions, or as they enter into new programs, their compliance systems must be robust and foolproof, to be able to grow with them.
Integrating Ethics and Sustainability Into Compliance
Today, the aerospace industry is expected to meet ever-increasing Environmental, Social, and Governance (ESG) standards, as part of their operational compliance. This includes demonstrating transparency across every stage of their programs, including worker classifications, supply chain partners, data and technology security, as well as the environmental impact of their operations.
With regulations in place across EMEA such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and the UK’s Modern Slavery Act aerospace companies must now closely monitor and be able to report on every step, process and worker involved in their programs.
How CXC helps aerospace contractors stay compliant, secure, and agile
CXC partners with global aerospace companies by minimising the complexity around workforce engagement, onboarding, and compliance, which is especially helpful for aerospace companies operating in multiple countries and jurisdictions. Our solutions are designed so contractors can be deployed fast, with full accuracy and legal certainty, meeting the local and global standards of our client’s operations.
We standardise compliance for our clients so that contractor vetting, security clearances and classifications are watertight, avoiding onboarding bottlenecks. And, we allow our aerospace clients to have full visibility of their contractors, no matter where they’re based, or what program they’re working on.
EOR and AOR solutions tailored for aerospace
CXC provides Employer of Record (EOR) and Agent of Record (AOR) services that help aerospace companies:
- Onboard engineers, technicians, and contractors across EMEA, with full compliance based on their role, expertise, local jurisdiction and relevant requirements of global industry standards
- Ensure their contractors are able to meet export control and local security clearance rules
- Classify their contract workers correctly under local labour laws, no matter how many jurisdictions their contract workforce covers
- Ensure all worker contracts include data protection, IP ownership, and compliance clauses leaving protections and IP in the hands of the company
By handling onboarding, tax registration, worker compliance and classification, we help to reduce delays in mobilising project-critical talent, with timely, accurate and proven processes.
Giving aerospace leaders peace of mind
For aerospace leaders hiring complex roles and specialist skills, CXC is positioned to help you act quickly, access the right talent successfully, and manage them with full transparency and compliance. It might be an avionics engineer in Spain, or the onboarding of a systems integrator in Dubai, or setting up a design team in Germany. Whatever the brief, we have the expertise, local market knowledge and global track record in the aerospace industry, so companies can move quickly without exposing your program to compliance failures.
You stay in control of your work, while we manage the compliance and regulatory framework behind it.
Conclusion
In the aerospace industry, the risks of operational and workforce non-compliance are higher than in almost every other industry. And the impact of non-compliance has the potential to reach far beyond the industry itself. A misclassified worker, a lapsed license, a compromised design file or a cybersecurity breach can derail years of company investment, or worse, place national security at risk.
By building resilient compliance frameworks through a partnership with CXC, aerospace companies can confidently navigate local and global regulations and protect the integrity of all their programs.
About CXC
At CXC, we want to help you grow your business with flexible, contingent talent. But we also understand that managing a contingent workforce can be complicated, costly and time-consuming. Through our MSP solution, we can help you to fulfil all of your contingent hiring needs, including temp employees, independent contractors and SOW workers. And if your needs change? No problem. Our flexible solution is designed to scale up and down to match our clients’ requirements.
