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In May 1970 the design of this type was started by a team led by Dipl Eng Radu Manicatide at the IMFCA (Institutul de Mecanica Fluidelor si Cercetari Aerospatiale, Institute of Fluid Mechanics and Aerospace Research). In the Autumn of 1971 construction of the first prototype was started at ICA (Intreprinderea de Constructii Aeronautice, Aeronautical Construction Enterprise) at Brasov. Design and construction was under the control of the state organization CIAR (Centrala Industriala Aeronautica Romana, Industrial Center for Romanian Aviation). The prototype of the ICA Brasov IAR 823 flew for the first time in July 1973. The Fortele Aeriene ale Romaniei (Romanian Air Force) ordered 36 and a considerable number were ordered by the Aeroclubului Romaniei (Romanian Aeroclub) This particular aircraft was first flown in 1976. In 1991 the organization of the Romanian aviation industry was changed and the company became known as S.C. IAR S.A. Brasov. At the moment 43 IAR 823s are registered in the USA, as the Type Certificate passed from ICA to IAR, these 43 aircraft are registered by the new company name, although production ended already in 1984 after 80 aircraft had been built.