Implementation of the Cape Town Treaty

Overview

In 2014 BIS held a consultation on how the UK should ratify the Convention on international interests in mobile equipment and the Protocol thereto on matters specific to aircraft equipment, commonly called the Cape Town Convention. 

The treaty aims to reduce the cost of raising finance for aircraft, helicopters and aircraft engines above a certain size and engine capacity.  It only applies to the aircraft objects meeting the following criteria:

• aircraft which can carry at least eight people or 2,750 kilograms of cargo or
• aircraft engines with thrust exceeding 1,750 pounds-force (7,800 N) or 550 horsepower (410 kW) or
• helicopters carrying 5 or more passengers

Light aircraft, such as those used by the general aviation community, are not covered by this treaty.  It does not include military, customs or police equipment.

The treaty has two main provisions:

(i)         Providing for the creation, registration and prioritisation of an “international interest” (such as a mortgage or a lease)

(ii)        Remedies available to creditors in the event of a default where an international interest exists

Following consideration of the consultation responses, the government has published a response to the consultation, final impact assessment, draft regulations to implement the Cape Town Convention and draft guidance for those affected by ratifcation of the treaty.

Why your views matter

The consultation response sets out which declarations the government will make.  We are seeking views on the practical effect of the draft regulations.  In particular we are asking for views on whether the draft regulations implement the treaty and declarations effectively.

We are also asking for comments on the draft guidance.  In particular we are asking for comments on whether the guidance is clear and whether any additional information should be included.

What happens next

The draft regualtions will be finalised in mid March ready to be made.

Once the regualtions have been made, the UK will send the necessary instruments of ratification to Unidroit, the depository for the treaty.