As global external counsel for the Aviation Working Group (AWG), we have spent the past year working with AWG on several large projects that are scheduled to go live in early 2020, including the Cape Town Convention Compliance Index (Compliance Index) and Global Aircraft Trading System (GATS).
Compliance Index
The Compliance Index is a large-scale AWG project to assess and monitor going forward the compliance record of contracting states with the Cape Town Convention. It will assign a score and category of likelihood of compliance to each contracting state for which AWG has sufficient data (expected to be most, if not all, contracting states) that will be available publicly.
The scoring will take into account, among other factors, implementation of the Cape Town Convention by way of legislation, rules and regulations and practical application of the Cape Town Convention in a particular contracting state (including court decisions, administrative actions and general experience reported by practitioners).
More detailed scorecards with further explanations and scoring breakdown by the variables that AWG uses in its methodology will be available to AWG members, certain other select stakeholders (such as rating agencies and the OECD secretariat) and paid subscribers.
The inaugural Compliance Index is scheduled for publication in February 2020 and will be hosted on an electronic platform (E-Platform) within the larger AWG website.
In providing assistance to AWG in coordinating the development, preparation and analysis of the Compliance Index, Blakes has been working over the past 15 months with more than 200 laws firms in 70-plus contracting states around the world to gather information regarding countries' laws, regulations and applied practice as it relates to compliance with the requirements of the Cape Town Convention and associated Aircraft Protocol.
GATS
At its announcement, GATS was greeted with enthusiasm by the aircraft leasing and financing communities as a timely innovation to streamline aircraft trading through a uniform and cost-effective process. Aircraft equipment will be placed into GATS-eligible trusts, with trades occurring at the beneficial-interest-holder level so that most third-party-facing documents (i.e., leases) can be left largely in place without the need for time-consuming and costly, but largely non-substantive, revisions. GATS will help to streamline this process while preserving and protecting third-party rights by way of agreed conditions to transfer that must be confirmed to be satisfied prior to consummating a transaction.
AWG has released for use standard form documents on its website as leasing companies contemplate a transition to the GATS e-ledger system once it goes live (scheduled for end of Q1 2020) by pre-positioning aircraft equipment into GATS-eligible trusts using GATS standard form documents. Once operational, the GATS e-ledger will record and execute transactions with electronic standard form instruments executed by way of digital signatures.
Together with leading aviation leasing and financing law firms around the world, Blakes helped to create many of the form documents that will be used for GATS, and we encourage any leasing companies interested in this innovative approach to aircraft trading to reach out with any questions, either on the transition process or the e-ledger itself.
In addition to the Compliance Index and GATS, AWG is planning to launch a revamp of its website soon, with updated information on all of its various projects and initiatives. It is continuing to work on an updated Annotation to the Fourth Edition of the Official Commentary, published in May 2019, as well as an update to its Practitioners' Guide.
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