The efforts of the Government of the British Virgin Islands to ensure continued and sustainable development of the Territory’s financial services and related offerings continue with the coming into force on 15 October 2012 of the Mortgaging of Aircraft and Aircraft Engines Act, 2011, and the Mortgaging of Aircraft and Aircraft Engines Regulations, 2012.
The new law complements the jurisdiction’s status as a US Federal Aviation Authority Category One aircraft register under the International Aviation Safety Assessment programme by creating a framework for registration in the British Virgin Islands of security over aircraft, and separately, aircraft engines. The regime contemplates the appointment of a Registrar who is mandated to establish and maintain a register of aircraft mortgages, and a register of aircraft engine mortgages, that will be available for inspection by the public, and over which the Registrar will have administrative and operational control.
Aircraft registered in the Virgin Islands Aircraft Register or capable of being so registered, and aircraft engines, in either case owned or otherwise in the lawful possession of a British Virgin Islands company, may be made the subject of a mortgage for the purposes of registration under the new law. Practically, the application for registration of an aircraft or aircraft engine mortgage must be in the prescribed form, and must be made to the Registrar by or on behalf of the mortgagee in question. It must be accompanied by a certified true copy of the mortgage and the prescribed fees.
Lenders in particular will be comforted by provision in the legislation for the filing of priority notices (which reserve and protect a particular priority position for a prospective mortgagee, for fourteen days), and clear provisions on enforcement, transfer, transmission and, inter alia, discharge of mortgages. This development paves the way for new business opportunities which complement and support the British Virgin Islands’ position as the premier offshore corporate domicile with over 850,000 companies incorporated to date.