The Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment are multilateral agreements that establish a commercially oriented international legal framework to protect security and leasing interests in aircraft equipment (i.e., airframes, engines and helicopters), thereby facilitating cross-border, asset‑based financing and leasing of this equipment.
The Convention and Protocol allow the value of aircraft equipment to be used as security for payment, and also establish an international registry for security interests in aircraft equipment. This registry records the existence of rights and determines their order of priority for use in the purchase and financing of aircraft in order to facilitate the resolution of questions of title in the event of insolvency or bankruptcy.
The Convention and Protocol provide creditors with greater assurance that aircraft assets could be recovered in a timely manner in cases where those operating the assets, including airlines, become financially insolvent. This allows lending institutions the possibility of reducing risk premiums. In turn, it will offer more favourable lending with significant cost savings for the Canadian aviation industry.
The Convention and Protocol will initially apply in Alberta, British Columbia, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Ontario, Quebec and Saskatchewan. The Government will extend the application of the Convention and Protocol to the other provinces and territories at their request should they adopt the Convention and Protocol framework as part of their laws.
December 2012
December 27, 2012
News Release - Canada ratifies the Cape Town Convention and Aircraft Protocol
