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The Convention on International Interests in Mobile Equipment (Convention) is a precedentsetting multilateral, private international law treaty intended to bring predictability and standardization to financing transactions involving high-value mobile equipment, including aviation, rail, and space assets. This unique endeavor has been of particular value to the aviation finance community in parts of the global economy where domestic legal and commercial systems lacked adequate protections for potential providers of credit or credit support.
The Convention's genesis, from early conception through its initial evaluation and commitment by the International Institute for the Unification of Private Law (UNIDROIT), the subsequent involvement of the International Civil Aviation Organization (ICAO) as a cosponsor of the project, and the convening of a Diplomatic Conference to finalize the text, took nearly 15 years. On November 16, 2001, a total of 53 states, including the United States, out of the 68 countries and 14 international organizations that attended, signed the Final Act at the Diplomatic Conference held in Cape Town, South Africa. The U.S. Senate ratified the Convention and related Protocol on Matters Specific to Aircraft Equipment (Protocol) (together the Cape Town Convention or CTC) on October 28, 2004. The Convention came into force on April 1, 2004, following its ratification by three states; and the Protocol took effect on March 1, 2006, following its ratification by eight countries: Ethiopia, Ireland, Malaysia, Nigeria, Oman, Pakistan, Panama, and the United States.
One of the CTC's most important elements was the establishment of an electronic registry for recordation of rights and interests arising under the Convention. A fundamental premise of the International Registry was that it would be available 24/7, 365 days a year for the searching and filing of interests in aircraft, aircraft engines, and helicopters. Consequently, any financier or other interested party would be able to determine that an asset it was about to finance was free and clear of any previously registered interests that could affect rights in the asset or its value.
EXIM's Role in Developing the CTC
The Export-Import Bank of the United States (EXIM) was created by an act of the U.S. Congress in 1935. Its principal function is to support the creation and preservation of U.S. jobs by assisting U.S. producers of goods and services to more effectively...