Malta ranked the highest in Europe, and second highest globally in the latest update of the Cape Town Convention Compliance Index.
According to the International Civil Aviation Organization, a United Nations agency, the primary aim of the Convention and its Aircraft Protocol is “to resolve the problem of obtaining certain and opposable rights to high-value aviation assets, namely airframes, aircraft engines and helicopters which, by their nature, have no fixed location.”
It said that this problem arises primarily because legal systems have different approaches to securities, title retention agreements and lease agreements, which creates uncertainty for lending institutions regarding the efficacy of their rights.
The Aviation Working Group (a not-for-profit legal entity comprised of major aviation manufacturers, leasing companies and financial institutions), said that the convention is designed to facilitate asset-based financing and leasing of aviation equipment, expand financing opportunities, and reduce costs, and does so “by reducing a creditor's risk and by enhancing legal predictability in these transactions.”
The Aviation Working Group (AWG) handles the Index, which monitors and assesses compliance by states with their undertakings under the Cape Town Convention and its Aircraft Protocol.
AWG said that it developed the Index as a way of tracking and providing information on the level of compliance with CTC in individual jurisdictions to stakeholders.”
The index, which was updated in March, shows that Malta scored a 95, placing it in the very high compliance category, with only Canada receiving a higher score.
Senior Associate at Mamo TCV advocates Joshua Chircop, in an article on the law firm’s website, writes that this ranking represents a significant improvement from the score of 82.5 achieved in 2020, “highlighting Malta’s consistent efforts to improve its aviation framework and ensure continued compliance with the CTC.”
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