A Category 1 rating means the country’s civil aviation authority complies with standards set by the International Civil Aviation Organization, a United Nations’ technical agency for aviation. A Category 2 rating means a country either lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards, or that its aviation agency lacks technical expertise, trained personnel, record keeping, or inspection procedures.
Countries with air carriers that fly to the United States are required to meet international standards and recommended practices for aircraft operations and maintenance
The Category 2 rating is usually the province of Third World countries, but the U.S. has previously downgraded other important allies, including Israel in December 2008. When the FAA takes such an action, it usually is the result of deficiencies in government regulation of aviation safety, rather than a judgment about an individual airline.