2 Moveable assets
| (24357)
15904/2/02
SEC(02) 1308
| Draft Council Decision on signing by the European Community of the Convention on International Interests in Mobile Equipment and its Protocol on matters specific to aircraft equipment.
Draft Council Decision on conclusion by the European Community of the Convention on International Interests in Mobile Equipment and its Protocol on matters specific to aircraft equipment.
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| Legal base | Articles 61(c) and 300(2) EC; consultation; unanimity
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| Document originated | 3 March 2003
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| Deposited in Parliament | 18 March 2003
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| Department | Trade and Industry
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| Basis of consideration | EM of 7 April 2003
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| Previous Committee Report | None
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| To be discussed in Council | Not known
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared
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Background
2.1 At present, those providing asset-based finance for high-value
internationally mobile equipment are reliant on national laws
of the territories through which such mobile equipment passes.
Such national laws differ in the extent to which a security interest
is recognised, thus creating risks for the financier. The 2001
Cape Town Convention on International Interests in Mobile Equipment
and its Protocol on matters specific to aircraft equipment (the
Aircraft Protocol), adopted under the combined auspices of the
International Institute for the Unification of Private Law and
the International Civil Aviation Organisation, provides a new
uniform international legal order for the creation, registration
and enforcement of security and similar interests in such mobile
equipment. The intention is to support asset-based financing by
giving greater certainty, clarity and confidence, resulting in
increased flows of capital at lower cost to the borrower and business
opportunities for equipment suppliers.
2.2 The general regime of the Convention is to
be applied by equipment-specific protocols to different high-value
mobile equipment. The Aircraft Protocol applies the regime to
aircraft equipment (airframes, engines and helicopters above a
certain size) other than equipment used for military, customs
or police purposes.
The document
2.3 For some aspects the Convention and the Aircraft
Protocol are within the competence of Member States. (As of 12
March 2003 four Member States — France, the UK, Italy and
Germany — had signed the Convention and Protocol.) In so
far as the Community has competence the draft Decisions in the
document are to allow the Community to sign and conclude the Convention
and the Aircraft Protocol.
The Government's view
2.4 The Minister for International Trade and
Investment, Department of Trade and Industry (Baroness Symons
of Vernham Dean) does not give us an explicit endorsement of signature
and conclusion of the Convention and Aircraft Protocol by the
Community. But it is implicit in her acknowledgement of Community
competence in relation to provisions affecting Regulation EC No
44/2001 on jurisdiction and the recognition and enforcement of
judgements in civil and commercial matters.
2.5 However, the Minister does tell us that the
UK and a number of Member States are arguing with the Commission
that there is Member State rather than Community competence in
relation to insolvency aspects of the Convention and Protocol.
Lawyers are considering this matter further and until it is resolved
the Presidency will not be carrying the draft Decisions forward.
Conclusion
2.6 Getting the division of
competences right is important. We do not propose to clear this
document until the Minister is able to inform us further in this
regard. We should be grateful also if at the same time she would
confirm that our understanding that the Government supports Community
signature and conclusion of the Convention and Aircraft Protocol
is correct.
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