International Registry

The new Cape Town Convention regime applies to "international interests" created on and after March 1, 2006 in certain aircraft assets.  From that time, “international interests” in aircraft and aircraft engines are supposed to be registered with Aviareto, the operator of the new International Registry, in Ireland.  The "international interest" in aircraft assets is a newly defined concept.  Such an interest is deemed to be created when either (1) a "debtor" based or organized in a jurisdiction which has adopted the Convention (such as the U.S.) creates any charge or security interest in, enters into a title-reservation agreement covering, agrees to sell or purchase or agrees to lease either an aircraft or an aircraft engine of a certain size, or a party holding such an interest assigns it to another party, or (2) an airframe registered in a signatory country has such an interest created with respect to it.
The new system does not displace national filing systems such as the FAA Registry, compliance with which will continue to be required as before.  Pre-existing interests duly filed in national systems up through February 28, 2006 are not affected by Cape Town.
The new system affects the relative priority of interests and is structured as a "pure race" system – i.e., the first to register has priority over others.  Even "prospective" interests may be registered to establish a priority date, before the interests actually become effective.  The nature of the interest is not disclosed by the registration -- inquiry must be made of the parties named in the registration.  Local law continues to define the rights of the parties to the interests.

The Convention regime applies to airframes type-certificated to carry eight or more persons or cargo over 6,050 pounds, and helicopters type-certificated to carry five or more persons or cargo over 990 pounds.   Also, piston and turboprop aircraft engines rated at 550 or more takeoff shaft horsepower are covered (down from 750 hp under previous FAA rules), and jet engines having 1,750 or more pounds of thrust are covered.  Therefore, a Cessna 172 is not covered by this regime and an Embraer 135 regional jet is covered, but there may be possibilities for some gray areas in between.  Also, more engines are now covered than were covered previously by FAA filings.

The parties to the transactions are themselves required to become authorized users of the Web-based International Registry.  Such a user is called a "transactional user entity."  Transactional users also may be individuals, since individuals often own or lease aircraft.  The signup system for users authorized to do the on-line registrations of interests went live on February 21, 2006.
There is another category of user -- the "professional user entity" -- into which law firms and title firms fall.  They may interact with the IR system as authorized representatives of transactional users.

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