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International Registry and General Aviation Aircraft Purchases
Thursday, June 21, 2012
With larger aircraft transactions, there is a higher level of complexity with respect to title preparation and recording a lienholder’s security interest on an additional aircraft registration called the International Registry. The International Registry (IR) is a global registration that the United States has adopted, and it is important that you understand if, how, and why you need to register your aircraft before closing.
In 2006, the Cape Town Treaty went into effect, attempting to standardize transactions involving movable property (aircraft, railway and space equipment); in doing so, the Treaty created laws governing the global registration of Aircraft. The Treaty, in effect, created a new global registry for larger aircraft (similar to the FAA registry). In the US, we recognize the IR as an additional place for filing interests on particular airframes and engines. Interests filed with the IR take priority over any unregistered interests and also takes precedence over any other governing registration (including the FAA). Please note, in the United States, documents must still be filed with the FAA.
What type of aircraft equipment must be registered? If an aircraft buyer is located in one of the contracting countries (Over 50 worldwide including the US), and the aircraft fits certain parameters designated by the Treaty, it must register on the IR under Cape Town Treaty. Aircraft falling within the requirements of the IR are defined below:
1.Airplanes certified to transport 8+ people, or goods in excess of 6050 pounds
2.Helicopters certified to transport 5+ people, or goods in excess of 990 pounds
3.Jet aircraft engines with at least 1750 pounds of thrust
4.Turbine or Piston aircraft engines with at least 550 take-off horsepower.
How do I Register? If your aircraft or engine fits one of the requirements above, you should contract with a firm that specializes in aircraft registration. After you file your documents with the FAA, this firm will contact the registry and act on behalf of all parties involved (buyer, seller, lender, etc) to file everyone’s interests appropriately. Once this is complete, a search will be performed to confirm accurate registration.
How does this pertain to Aircraft Financing? If an aircraft is financed, the lender has an interest in the equipment (just like a lien with the FAA). The lender’s interest must be registered with the IR so that in case of default or other unforeseen issue, they are protected not just in the eyes of the FAA, but also in the global governance community.
Additional information on the International Registry, including “Eligible Aircraft” and engines, as well as the countries who have “contracted” the Capetown Treaty may be found through following websites:http://www.aerospacereports.com/services/registry https://www.internationalregistry.aero/irWeb/
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