With effect from the 21st of March, 2016, Malta has been included in the list of countries which qualify for the so-called Cape Town Convention discount. This discount applies to aircraft finance transactions which are supported by export credit agencies (the “ECAs”) and which satisfy the following conditions:
- The ECA-supported financing relates to an “aircraft object” within the meaning of the Cape Town Convention;
- The operator of the aircraft is situated in a country that appears on the list of states maintained by the OECD Secretariat for Cape Town Discounts; and
- Such financing relates to an aircraft object that has been registered on the International Registry established pursuant to the Cape Town Convention.
The ECAs are required to charge a minimum premium rate (the “MPR”) to the buyers/borrowers as a fee for its guarantee of the repayment of the facility and if the conditions mentioned above are met, then a reduction of up to 10% of the MPR can be granted.
This is the last step in the process for Malta in relation to the ratification of the Cape Town Convention which was introduced into Maltese law in 2010 through the enactment of the Aircraft Registration Act, 2010, which sought to rationalise and modernise Maltese law on aircraft registration, aircraft mortgage and other matters relating to aviation. This was the first major overhaul of the legislation relating to aircraft registration and security interests in aircraft since Malta became independent in 1964, at which time it had aviation statutes based on English law. The laws now reflect developments in aircraft registration and security rules in parallel with what has taken place in the field of security over ships in Malta, the Cape Town Convention and Aircraft Protocol and the EU rules on nationality of aircraft, for both commercial and private aircraft, as well as aircraft operator certificates.
The Maltese register has seen marked growth in the last three years and on the 22nd of March, 2016, Vistajet has announced the relocation of its headquarters to Malta. Click here to view announcement.