The contract creates new laws on the primacy of privileges or claims over an aircraft item. Currently, priority rules in the United States are subject to applicable state laws, with one exception to the Transportation Code. The current U.S. priority rule states that the first to file a security right with the FAA registry takes precedence over all other privileges over the aircraft or engine, unless the filing party has “effective notice” of another claim or right in the aircraft or engine.  The concept of actual notification has given rise to various disputes, one of which was settled in the only Supreme Court case dealing with aviation privileges and laws, Philko v. Shacket.  The current U.S. rule is modified and simplified because the treaty establishes a priority rule: whoever first registers a valid interest with the CTIR takes precedence over all other competing interests. The existence of a factual communication is simply not relevant to determining the primacy of competing privileges or interests.  (c) “aircraft equipment” means airframes, aircraft engines and helicopters; 2. They shall protect creditors` security rights in aircraft objects by providing for the registration of international interests in such objects through a single online international registry accessible 24 hours a day, seven days a week. And (3) they subject international interests to a simple priority regime, the main principles of which are that registered interests take precedence over unregistered interests and that earlier registrations prevail over subsequent registrations, and give parties the opportunity to vary priority between them by registering subordination agreements in the International Register. We had the luxury of observing the evolution of the Treaty from a distance and knowing over time that ratification and implementation were still years away.
Now that the contract will come into effect on March 1, 2006, industry must begin an active and thorough analysis of the contract and prepare for a new and different way of documenting and concluding aircraft transactions.  2. Nothing in the Convention or in this Protocol shall affect the liability of a creditor for a breach of the Agreement under applicable law to the extent that this Agreement relates to an aircraft object. If the ratifying State decides to maintain its own insolvency laws, the insolvency rights of creditors depend on the credit compliance of the insolvency laws of that State. Many common law jurisdictions, for example, are very creditor-friendly jurisdictions. Many civil law countries are more debtor-friendly and sometimes require that, for example, aircraft safety can only be enforced through lengthy public auction procedures and prohibit repossession of self-handling. 4. Article 29(7) of the Convention shall apply to an object other than an object incorporated in an airframe, an aircraft engine or a helicopter. (b) obtain the physical export and transfer of the aircraft from the territory in which it is located. In this context, aircraft financiers and lessors of aircraft objects should consider subjecting their interests in aircraft to the regime established under the Convention and the Aircraft Protocol. Cape Town`s regulations, while somewhat convoluted, provide a roadmap for navigating the CTIR system, and practitioners should familiarize themselves with this document.
2. In the event of an insolvency-related event, the insolvency administrator or subject to paragraph 7, the debtor shall give the creditor possession of the object of the aircraft no later than the earlier of the following dates: the contract will have a direct impact on aeronautical transactions carried out from the date of entry into force because a person may enter into a contract or sale and an international interest in an agency or the sale of a aircraft object; to a trust or other representative property. In this case, that person has the right to assert rights and interests under the Convention. 6. Point (a) of the preceding paragraph shall not preclude the use of the object of the aircraft within the framework of the provisions intended to preserve the object of the aircraft and preserve its value. If the creditor wishes to obtain the cancellation of the registration of the aircraft and the physical export and transfer of the object of the aircraft, the registration authority and the administrative authorities of a Contracting State shall, within five working days from the date on which the creditor notifies those authorities that it is entitled to exercise such remedies in accordance with the Convention. 2. The Convention and this Protocol shall be referred to as the Convention on International Rights in Mobile Equipment as it applies to aircraft objects. The Convention replaces this Convention for a State Party which is a Party to the Convention on the International Recognition of aircraft rights, signed at Geneva on 19 June 1948, in so far as it concerns aircraft within the meaning of this Protocol and aircraft. However, with respect to rights or interests which are not covered by or affected by this Convention, the Geneva Convention shall not be superseded.
1. They shall accelerate, secure and reduce the costs of the process of repossession, write-off and export of aircraft objects in the event of default or insolvency of the debtor, in particular where the aircraft component is located in a country whose legal system might otherwise not be favourable to creditors. The European Union has acceded to the Convention and the Aircraft Protocol as an organization for regional economic integration. .