GERMANY Law and Practice Contributed by: Konrad Schott, Jan Brinkmann and Johannes Vogel, Freshfields
3.2.16 Form and Perfection of Security Over Bank Accounts Typically, an account pledge would be used to take security over a bank account (such as a lease receiva - bles account), and it requires, among other things, a notification to the account bank. 3.3 Liens 3.3.1 Third-Party Liens In the case of: • undischarged European Union Emission Trading Scheme payments; • unpaid VAT and/or customs in case of an import of an aircraft; • due and outstanding Eurocontrol charges; and • non-payment of certain official charges as well as fines as a result of a breach of obligations under the German Air Traffic Act ( Luftverkehrsgesetz ). the relevant authority can – with the help of a bailiff ( Gerichtsvollzieher ) – register a non-consensual lien over an aircraft registered in Germany if the debtor is the aircraft owner (and in case of air traffic control charges if the operator is unknown). Repairer’s charges, otherwise generally permitted under German civil law, cannot be created in respect of German-registered aircraft. However, in the case of salvage, the Act on the Rights in Aircraft ( Gesetz über Rechte an Luftfahrzeugen ) provides for a first-priority lien if certain conditions are met. A German aircraft mortgage can be granted over more than one German-registered aircraft. 3.3.2 Timeframe to Discharge a Lien or Mortgage One has to distinguish between the discharge of the mortgage itself and the deregistration of the mortgage from the register. In general, the mortgage as a legal right ends automatically if the claim secured by the mortgage ceases to exist. To record the release of the mortgage its deregistration from the German aircraft mortgage register should be sought. Vis-à-vis third parties acting in good faith, the register is generally deemed correct.
istration with the German aircraft mortgage register ( Register für Pfandrechte an Luftfahrzeugen ). 3.2.11 Effect of Changes in the Identity of Secured Parties The effects of any change in the identity of a secured party under a German law security assignment depend on the specific arrangements made with respect to such security interest – eg, whether a security trus - tee concept has been introduced or not. The transfer of a mortgagee’s position under a German aircraft mortgage is possible if transferred together with the secured obligation, and it requires registration with the The concept of “parallel debt” on the basis of abstract acknowledgements of debt is generally an established concept in Germany. 3.2.13 Effect of Security Assignments on Residence of Secured Parties German aircraft mortgage register. 3.2.12 “Parallel Debt” Structures A secured party under a security assignment is gen - erally not deemed to be resident, domiciled, carrying on business or subject to any taxes in Germany solely because it is a party to, or the enforcement of, such security assignment. 3.2.14 Perfection of Domestic Law Mortgages A German aircraft mortgage takes effect upon its registration in the German aircraft mortgage register. Such mortgage encompasses engines that are on- wing and owned by the same legal entity or natural person owning the airframe at the time of the creation of the aircraft mortgage. 3.2.15 Differences Between Security Over Aircraft and Spare Engines An engine installed on an airframe owned by the same person can become subject to an aircraft mortgage pertaining to such airframe. For a spare engine that is off-wing or owned by a person other than the owner of that airframe, other security interests – such as a pledge or security transfer of title – may be available.
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