GREECE Law and Practice Contributed by: Betty Smyrniou, Bahas, Gramatidis & Partners
2.10 Cape Town Convention and Others 2.10.1 Conventions in Force The Convention on International Interests in Mobile Equipment (the “Convention”) and the related Pro - tocol on Matters specific to Aircraft Equipment (the ”Protocol”) are not in force in Greece. 2.10.2 Declarations Made Concerning Conventions There is no applicable information in this jurisdiction. 2.10.3 Application of Article XIII of the Protocol on Matters Specific to Aircraft Equipment There is no applicable information in this jurisdiction. 2.10.4 Enforcement of Conventions There is no applicable information in this jurisdiction. 2.10.5 Other Conventions Greece is party to the 1948 Geneva Convention on the International Recognition of Rights in Aircraft, and has not ratified the 1933 Rome Convention for the Unifi - cation of Certain Rules relating to the Precautionary Arrest of Aircraft. 3. Aircraft Debt Finance 3.1 Structuring 3.1.1 Restrictions on Lending and Borrowing There are no restrictions on foreign lenders financing local aircraft or on borrowers’ utilisation of loan funds. However, the act of providing loans within Greece is a regulated activity. Only credit institutions that have been duly licensed or those that have obtained an EU passport can engage in this activity. While foreign lenders do need a licence to offer lend - ing services in Greece, as provided by the Bank of Greece or an EU passport, they do not need to obtain a licence to obtain security over an aircraft located in Greece for loans that have been provided by them in their jurisdiction. 3.1.2 Effect of Exchange Controls or Government Consents There are no exchange controls or government con - sents that would be material to any financing or repa -
triation of realisation proceeds under a loan, guaran - tee or security document. 3.1.3 Granting of Security to Foreign Lenders Borrowers are permitted to grant security to foreign lenders, although there are certain limitations when it comes to securing real estate in Greek border areas. 3.1.4 Downstream, Upstream and Cross-Stream Guarantees Depending on the legal form of the corporate bor - rower, certain statutory restrictions exist if the lender is a direct or indirect affiliate or if security is granted for the liabilities of an affiliated person (upstream, down - stream or sidestream collateral). In the case of société anonyme , said guarantees are considered “related-party transactions” and a certain approval and publication process is required. The guarantee may be granted either: • after a ten-day period from the publication in the company registry, during which shareholders hold - ing one twentieth of the company’s shares may challenge the approval; or • following the written consent of all shareholders of the company, waiving their right to dispute the process. 3.1.5 Lenders’ Share in Security Over Domestic SPVs It is advisable for a lender to take share security over a domestic special purpose vehicle that owns the financed aircraft. A pledge of shares is recognised. 3.1.6 Negative Pledges Negative pledges are recognised. 3.1.7 Intercreditor Arrangements No material restrictions or requirements are imposed on intercreditor arrangements.
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