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Financing Rolling Stock: Luxembourg Rail Protocol Steams Ahead

BY Barbara M. Goodstein
June 02, 2017

Cross-border trade and international law regimes are all affected by the Luxembourg Rail Protocol to the Cape Town Convention (the Cape Town Convention on International Interests in Mobile Equipment (the Convention)), which is well known to those experienced in aircraft financing. Like the Hague Securities Convention, the Cape Town Convention was sponsored by UNIDROIT (the International Institute for the Unification of Private Law), an intergovernmental organization whose mission is to harmonize international laws.

Background

The Convention was completed in Cape Town, South Africa in 2001. It applies to specific assets through a “protocol” and its first such protocol, adopted contemporaneously with the Convention, covers aircraft assets (specifically airframes, aircraft engines and helicopters). The “Protocol on Matters Specific to Aircraft” (Aircraft Protocol) came into force in March 2006 when ratified by the minimum eight countries (including the United States). The Aircraft Protocol has been a clear success. It's effective in close to 70 countries and the international asset registry created under that protocol, located in Dublin, Ireland, has handled over 600,000 registrations.

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