Isle of Man: Business Aviation Law In Europe

Last Updated: 25 April 2019
Article by Andrew Webb

The European Business Aviation Association (EBAA) is the leading organisation for operators of business aircraft in Europe. Appleby is on its Associate Members Advisory Council (AMAC) Lawyers Subcommittee.

In 2016 the AMAC Subcommittee Legal and European Affairs decided to create a guide offering an overview of the key areas of legislations applicable to business aviation throughout the main jurisdictions within Europe. Counsel Andrew Webb has provided the Isle of Man contribution and again to this second edition of the Business Aviation Law in Europe guide.

Isle of Man

INTERNATIONAL CONVENTIONS

1. Is your country a signatory to any of the following treaties?

Source: www.ebaa.org

2. Is there any specific information about how these conventions apply in your domestic law that you would like to share?

The Cape Town Convention 2001 was implemented in the Isle of Man with effect from 1 January 2018. The Isle of Man Applied the UK International Interests in Aircraft Equipment (Cape Town Convention) Regulations (SI 2015/92) with modifications to reflect its more creditor friendly insolvency laws. The Isle of Man has no international status as a country and conventions are only extended by the United Kingdom as contracting state after discussion between the governments of the United Kingdom and the Isle of Man.

3. Does your country apply EASA regulations?

Applied in part. The Isle of Man is not a member state of the EU.

4. In case your country is not a member state of the EU, are there any specific relationships or agreements with the EU in relation to aviation? If so, please specify them.

Yes. The Isle of Man Civil Aviation Administration (the Administration) chooses to apply certain norms and protocols of EASA. The Administration also has in place, or is negotiating, letters of understanding with European member states' national aviation authorities in respect of operating approvals issued by the authority to assist with Part-NCC compliance.

NATIONAL LAWS AND INTERPRETATIONS

5. What are the main national laws that apply to non-commercial air transport in your country?

  • Civil Aviation Act 1982 (as extended to the Isle of Man by Order in Council)
  • Airports and Civil Aviation Act 1987
  • Air Navigation (Isle of Man) Order 2015 (an order in Council) (the ANO)

6. What are the main national laws applicable to commercial air transport in your country?

Not applicable.

7. Are there any guidelines from your national authority on non-commercial flights? If so, please specify them and explain.

Yes. The Administration has adopted the content of a UK CAA Civil Aviation Publication (UK CAA CAPs) where regulations and the instructions for continued airworthiness do not address a topic in sufficient detail for aircraft owners and their contracted organisations. The UK CAA CAPs that are currently adopted are listed on the Administration's website.

NATIONAL AUTHORITIES

8. Which national body is in charge of supervising and regulating business aviation?

Name of CAA: Isle of Man Civil Aviation Administration

Phone: +44 1624 632358

Website: www.gov.im/ded/Aircraft

9. If this information may be disclosed, please give the contact details of the relevant civil servants.

Name: Simon Williams, Director of Civil Aviation

Phone: +44 1624 682358

Email: caa@gov.im

10. If available, please give the CAA website page link where relevant forms may be found.

www.gov.im/ded/Aircraft/forms.xml

NATIONAL REGISTRY

11. Which entity is in charge of the civil aviation registry?

Name: Isle of Man Aircraft Registry (IOMAR)

Phone: +44 1624 682358

Website: www.gov.im/ded/Aircraft

Link where forms can be found: www.gov.im/ded/Aircraft

12. Is the registry an operator one (commercial), an owner one (non-commercial), or both?

An owner one (non-commercial).

13. Which contractual documents need to be submitted to the registry (e.g. dry lease)?

The ANO permits a registered owner to be registered as a charterer by demise and IOMAR may require production of the dry lease to evidence the same.

14. Who has the right to register aircraft on your national registry?

  • The Crown in right of the Isle of Man, the United Kingdom or any part of the United Kingdom.
  • Commonwealth citizens.
  • Nationals of any EEA state or Switzerland.
  • British protected persons.
  • Bodies incorporated in some part of the Commonwealth or having their registered office, central administration or principal place of business in a part of the Commonwealth.
  • Undertakings formed in accordance with the law of the Isle of Man, an EEA state or Switzerland and having their registered office, central administration or principal place of business within the Isle of Man, an EEA state or Switzerland.

15. Is registration equivalent to legal title?

No.

16. Who is entitled to be mentioned on the registration certificate?

The registered owner. If an aircraft is registered by way of charterer by demise, then a statement that the aircraft is registered under article 5(3) of the ANO in the name of the charterer will appear on the registration certificate. However, only the name of the registered owner will appear on the registration certificate and the publicly available record.

17. Are mortgages or other security on aircraft registered on the same registry?

Yes.

18. What security interests may be taken on an aircraft in your country? Please explain the procedures and costs to take and register such a security.

The only security interest that may be registered in the Isle of Man Register of Aircraft Mortgages is an aircraft mortgage. The aircraft mortgage may extend to any store of spare parts for that aircraft but does not otherwise include a mortgage created as a floating charge. Form 26 and a certified true copy of the mortgage must be submitted, both of which can be submitted by email. The fee for registering a mortgage is £425.

The mortgagee can also enter a priority notice by filing Form 25 to ensure that a contemplated mortgage has priority. A priority notice is valid for 14 working days and the fee for filing is £150. Mortgage services are carried out on request and are ordinarily completed on the day of submission.

19. Does your civil aviation authority authorise the operation of foreign-registered aircraft?

No.

20. What are the conditions requested from a foreign operator (holding an AOC in another country) to operate an aircraft registered in your national registry?

Not applicable.

21. How does the aircraft deregistration process work? Please describe the classical deregistration process.

First, it should be established whether the new state of registry requires an export certificate of airworthiness. If required, Form 10 must be filed. IOMAR advises that to process the application and survey the aircraft can take between a minimum of 10 working days and a maximum of 15 working days. There is a fee of £500 for issuing the certificate, plus the surveyor's costs for preparation, conducting the survey and their travel to and from the aircraft will be charged by IOMAR.

To deregister the aircraft, the registered owner must file Form 11 and where the registered owner is a company, an up to date list of directors. IOMAR advise that processing a deregistration application an take a maximum of two working days. There is a fee of £250 for deregistering an aircraft.

If there is a mortgage registered, Form 28 and the document of discharge must be filed. There is a fee of £300 to discharge a registered mortgage.

Once the deregistration process has been completed, the registry will send a notification to the new state of registry. More detailed guidance can be found in registry publication number 12:

www.gov.im/lib/docs/ded/Aircraft/Registration/rp12deregistrationofaircraftfrm.pdf

22. Can an aircraft be automatically deregistered? If yes, under what circumstances?

Yes. It is standard to include in a security package a deregistration power of attorney, which grants the mortgagee the power to deregister the aircraft if an event of default occurs. However, Form 11 and if applicable, Form 10 and Form 28, would still have to be submitted.

23. If available, please give the contact details of the relevant civil servant.

Name: All applications should be submitted to the general mailbox, which is continuously monitored during office hours.

Phone: +44 1624 682358

Email: aircraft@gov.im

Link where forms can be found: www.gov.im/ded/Aircraft.forms.xml

AIRCRAFT FINANCING

24. Whare are the financing structures mainly used in your country for the financing of private jets?

Loan and mortgage.

25. What are the main security interests reqiuired by financiers to finance private aircraft?

  • Mortgage of aircraft
  • Security assignment of lease
  • Tripartite agreement (operator, registered owner as borrower, lender)

26. Are there any retention rights for unpaid debts? If so, please specify.

Yes.

  • Common law liens in respect of improvements to the aircraft
  • Isle of Man airport charges
  • Contractual liens in respect of work done to the aircraft not within common law rights of lien.

27. What is the most common type of legal entity used in corporate aircraft transactions?

Limited liability company.

28. What are the requirements for incorporation for the most common type of legal entity?

  • Minimum capital requirement: None
  • Number of directors: One
  • Nationality of directors: Any
  • Location of the registered offices: Isle of Man
  • Average timing required for incorporation: Five days
  • Average costs for incorporation: £1500

MISCELLANEOUS

29. Please highlight any legal developments, trends or peculiarity affecting the business aviation sector in your jurisdiction and not covered under the preceding points.

There is uncertainty regarding the impact Brexit will have upon the Island's aviation offering; the Isle of Man is not a member state of the EU, but has a relationship which is governed by Protocol 3 to the Act of Accession forming part of the UK's Treaty of Accession. Under Protocol 3, the Isle of Man is part of the customs territory of the Union. There is free movement of industrial and agricultural goods in trade between the Island and the Union.

In addition, a VAT regime is operated that is essentially identical to, and interlinked with, that of the UK by virtue of the Customs and Excise Agreement with the UK, so that the Isle of Man is treated as part of the European Single Market for customs and excise purposes. The extent to which the regime will change after Brexit is, as yet, unknown.

The full 2019 guide, which includes the Isle of Man chapter, can be downloaded via the link below. 

PDF Version

Originally published in the Business Aviation Law in Europe - A Practical Guide 2019  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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