Memorandum regarding The Cape Town Convention

by Erin M. Van Laanen

On March 1, 2006, the United States became a party to 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, both signed in Cape Town, South Africa on November 16, 2001 (collectively, the “Convention“).  The Convention creates an international registry (the “International Registry“) which is a web-based, electronic computer system for registering interests created by documents used in an aircraft equipment transaction and recognized by the Convention as “international interests.”  Interests which are covered by the Convention include sale/ownership interests created by a buyer and seller, security agreement interests created by a debtor in favor of a lender, and lease interests created by a lessor and lessee.

In order to lodge an international interest with the International Registry, both the seller and buyer, lender and debtor, or lessor and lessee, have to electronically sign up and be recognized as company users of the International Registry system.  The reason for this is because the electronic system is set up so that one party sends an electronic request to the second party to lodge the interest and the second party then has to electronically consent to the creation of the interest.  No ownership, security interest or lease interest can be created without both parties’ participation as users of the International Registry system.

In order to sign up as a company user of the system (and be approved by the International Registry), the following steps must be taken:

  1. The user must have a computer containing the correct type of hardware/software because the International Registry website is a secured website with special security features.  Below is a list of computer requirements:
    • You must have a personal computer with internet connection
    • The International Registry website is designed to work with the following internet browsers:
      • Microsoft Internet Explorer v.5 and above
      • Netscape v.6 and above
      • Opera v.6 and above
    • Your PC must have JAVA 2 Platform Standard Edition v. 1.4.2 (www.java.com)
      – The International Registry website is https://www.internationalregistry.aero.
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    Please note that many companies have policies in place that may prohibit you from applying as a company user and/or firewall issues to resolve before your computer system will permit you to log onto the International Registry website.
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  2. The fee for registering with the International Registry as a company user is $200 for a one-year license (or you can pay $500 for a five-year license if you think you will be using the system over several years).  The fee must be paid by credit card when you sign up electronically as a company user.
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  3. The information required to sign up as a company user is as follows:  (i) the full, legal name of the company, (ii) the company address, and (iii) the name of the company’s Administrator and the Administrator’s email address, title and date of birth.  The Administrator must be a natural person.  The Administrator cannot be any type of entity.  The Administrator can be, but does not have to be, an employee of the company.
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  4. After submitting the electronic application to be approved as a company user to the International Registry, the International Registry will email the Administrator and request verification of the Administrator’s email address.  The International Registry will then telephone the Administrator to verify the information in the application.  Thereafter, the Administrator will receive an email from the International Registry with information to download a digital certificate onto the Administrator’s computer.  The digital certificate can only be downloaded on the same computer that submitted the application to the International Registry.  The digital certificate is the final step in the approval process and is the means by which the company communicates electronically with the International Registry.  It is very important that the Administrator be easily reachable and the Administrator’s computer be accessible to the company when the Administrator is on vacation or out of the office, etc.  The digital certificate should not be downloaded to a laptop computer.

The foregoing process can also be done for you by our office, or by others who work in this area, upon your agreement to and execution of a services agreement, permitting an agent to set up your company as a user of the system and act as Administrator for your Company with regard to International Registry issues.  Attached is a services agreement for your review, if you would like more information about this option.  Under this option, you would not have to access the International Registry website or deal with your company’s internal computer department or firewall issues.

Finally, if you do sign up as a company user, the other party to your transaction may request that you electronically authorize a Professional User to work on a specific aircraft asset on your behalf.  This authorization for a specific asset helps in coordinating closing calls and ensuring that the proper registrations are made in a timely manner on the International Registry at the closing of a transaction.