Gibbons: UK needs to ratify treaty

A treaty which could boost the lucrative aircraft registry in Bermuda has still to be ratified by the UK and extended to its overseas territories, a Minister told MPs today.

Minister for Economic Development Dr Grant Gibbons said the Cape Town Convention, signed by the UK in 2001, established international rules covering property rights to things like aircraft and their engines.

It has the effect of assisting in the acquisition and financing of aircraft and “provides mechanisms that clarify priority and security interests over international assets.”

He said: “Without ratification, the UK cannot extend the benefit of the treaty to Bermuda and the other Overseas Territories.

“Other countries, including the Netherlands, have ratified the treaty and extended it to their territories.

“Consequently, we are at a strategic disadvantage to the Netherlands Antilles, such as Aruba, which openly markets ascension to the Cape Town Convention as a sales pitch for their registry.”

Dr Gibbons added that the Convention also gives creditors with a range of remedies for enforcement of their rights or interests, including means for swift interim relief, without the necessity of judicial intervention.

“The Convention seeks to provide financiers, lessors and creditors in the aviation market greater confidence when granting credit.

“In practice it has also had the benefit of lowering cost of financing due to decreased credit risk.”

Dr Gibbons said the issue had been raised at a recent aviation consultative conference in the UK.

He added: “As mentioned in the Throne Speech, the development of our aircraft registry is an important component in our economic mix.

“We will continue to advocate for favourable treatment and work to get our registry back on a strong footing.”