A new system for registering security over aircraft and aircraft engines recently came into force in the BVI.
The BVI has a US Federal Aviation Authority Category One Aircraft Register under the International Aviation Safety Assessment programme which permits aircraft to be registered in the British Virgin Islands bearing the prefix VP-L.
Following the Mortgaging of Aircraft and Aircraft Engines Act 2011, and the Mortgaging of Aircraft and Aircraft Engines Regulations 2012 coming into force on October 15 2012, a new system for registering security over aircraft and aircraft engines was introduced.
Aircraft registered in the BVI Aircraft Register, and aircraft engines, which are either owned or in the lawful possession of a BVI company, may be made the subject of a mortgage for registration under the new law.
An application for registration of a mortgage over an aircraft or aircraft engine must be in the prescribed form, accompanied by a certified true copy of the mortgage and the prescribed fee, and must be made to the Registrar by or on behalf of the mortgagee.
The new law permits the filing of priority notices to protect a prospective mortgagee’s position, for fourteen days, and also contains clear provisions on enforcement, transfer and discharge of mortgages.
The register itself will be available for public inspection and the new system is overseen by the Registrar.
The BVI has a thriving international business industry and is recognised as one the world’s leading offshore financial centres. It has a stable political environment, respected judicial system, (the UK Privy Council being the highest court of appeal), a favourable legislative framework and tax regime making it an ideal jurisdiction for ownership and financing structures. Of late it has become an increasingly popular jurisdiction for the formation of asset holding entities, and in particular, special purpose vehicles (SPVs) for use in aircraft financing transactions.
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