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Cape Town Convention Update: Ireland signs Order to adopt “Alternative A”
The Irish Minister for Transport, Tourism and Sport, Shane Ross TD ("the Minister"), announced on 10 May 2017 that the Government has signed an Order pursuant to the State Airports (Shannon Group) Act 2014 implementing the provisions of “Alternative A” of the Aircraft Protocol to the Cape Town Convention on International Interests in Mobile Equipment into Irish law.
The primary benefit of adopting "Alternative A" is that it provides a lender, lessor, owner or an insolvency administrator with a clear deadline by which an aircraft object must be returned to a lender / lessor or retained by a debtor or insolvency administrator.
The implementation of "Alternative A" by the Irish Government:
- confirms Ireland’s position as a centre of excellence in aviation;
- makes Ireland an even more attractive location for investors to lend into; and
- further facilitates the offering of bonds and asset backed securities backed by aircraft assets. Such bonds and debt securities should obtain higher ratings from credit rating agencies which, in turn, should bring interest cost savings for airlines and lessors.
The Minister added that “Ireland is already the global leader for aircraft leasing, with the top lessors in the world located here and making a significant contribution in terms of high-value job creation. This new legislation will send a clear signal to the world that we continue to strengthen our competitiveness in this highly mobile sector”. He emphasised that “Ireland is considered to be the birthplace of aircraft leasing and our strong reputation is underpinned by a supportive regulatory and corporation tax regime as well as an excellent tax treaty network.”
We will issue a further update with the particulars of the Order as soon as it has been made publically available.