Click here to download the Aviation finance and leasing 2019 report, published by Getting the Deal Through.

Jurisdictions covered

The following 35 jurisdictions are covered in this report:

Argentina; Austria; Belgium; Bermuda; Brazil; British Virgin Islands; Cayman Islands; Dominican Republic; England & Wales; France; Germany; Greece; Hong Kong; India; Israel; Italy; Japan; Kenya; Latvia; Lithuania; Malta; Mexico; Netherlands; Nigeria; Panama; Portugal; Qatar; Russia; Slovenia; South Africa; Spain; Sweden; Ukraine; United Arab Emirates; United States

Questions

The set of questions relating to the topic of aviation finance and leasing and answered by the guide for each jurisdiction covered include:

Overview

• • To which major air law treaties is your state a party?
• • What is the principal domestic legislation applicable to aviation finance and leasing?
• • Are there any restrictions on choice-of-law clauses in contracts to the transfer of interests in or creation of security over aircraft? If parties are not free to specify the applicable law, is the law of the place where the aircraft is located or where it is registered the relevant applicable law?

Title transfer

• • How is title in an aircraft transferred?
• • What are the formalities for creating an enforceable transfer document for an aircraft?

Registration of aircraft ownership and lease interests

• • Identify and describe the aircraft registry.
• • Can an ownership or lease interest in, or lease agreement over, aircraft be registered with the aircraft registry? Are there limitations on who can be recorded as owner? Can an ownership interest be registered with any other registry? Can owners’, operators’ and lessees’ interests in aircraft engines be registered?
• • Summarise the process to register an ownership interest.
• • What is the effect of registration of an ownership interest as to proof of title and third parties?
• • Summarise the process to register a lease interest.
• • What is the regime for certification of registered aviation interests in your jurisdiction?
• • Is an owner or mortgagee required to consent to any deregistration or export of the aircraft? Must the aviation authority give notice? Can the operator block any proposed deregistration or export by an owner or mortgagee?
• • What are the principal characteristics of deregistration and export powers of attorney?
• • If the Cape Town Convention is in effect in the jurisdiction, describe any notable features of the irrevocable deregistration and export request authorisation (IDERA) process.

Security

• • What is the typical form of a security document over the aircraft and what must it contain?
• • What are the documentary formalities for creation of an enforceable security over an aircraft? What are the documentary costs?
• • Must the security document be filed with the aviation authority or any other registry as a condition to its effective creation or perfection against the debtor and third parties? Summarise the process to register a mortgagee interest.
• • How is registration of a security interest certified?
• • What is the effect of registration as to third parties?
• • How is security over aircraft and leases typically structured? What are the consequences of changes to the security or its beneficiaries?
• • What form does security over spare engines typically take and how does it operate?

Enforcement measures

• • Outline the basic repossession procedures following lease termination. How may the lessee lawfully impede the owner’s rights to exercise default remedies?
• • Outline the basic measures to enforce a security interest. How may the owner lawfully impede the mortgagee’s right to enforce?
• • Which liens and rights will have priority over aircraft ownership or an aircraft security interest? If an aircraft can be taken, seized or detained, is any form of compensation available to an owner or mortgagee?
• • How are judgments of foreign courts enforced?

Taxes and payment restrictions

• • What taxes may apply to aviation-related lease payments, loan repayments and transfers of aircraft? How may tax liability be lawfully minimised?
• • Are there any restrictions on international payments and exchange controls in effect in your jurisdiction?
• • Are there any limitations on the amount of default interest that can be charged on lease or loan payments?
• • Are there any costs to bring the aircraft into the jurisdiction or take it out of the jurisdiction? Does the liability attach to the owner or mortgagee?

Insurance and reinsurance

• • Summarise any captive insurance regime in your jurisdiction as applicable to aviation.
• • Are cut-through clauses under the insurance and reinsurance documentation legally effective?
• • Are assignments of reinsurance (by domestic or captive insurers) legally effective? Are assignments of reinsurance typically provided on aviation leasing and finance transactions?
• • Can an owner, lessor or financier be liable for the operation of the aircraft or the activities of the operator?
• • Does the jurisdiction adopt a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft?
• • Are there minimum requirements for the amount of third-party liability cover that must be in place?