JAPAN Law and Practice Contributed by: Taro Omoto, Yusuke Nakajima and Makoto Sakai, Mori Hamada & Matsumoto
2.1.5 Taxes/Duties Payable for Physical Execution of a Lease Stamp duty does not apply to a lease of an aircraft or an engine. 2.1.6 Licensing/Qualification of Lessors It is not necessary for a lessor to be licensed or other - wise qualified in Japan to lease an aircraft to a Japa - nese lessee. However, if the lessor is a foreign company, attention should be paid to the requirements for registration with the JCAB. In general, the aircraft operated by a Japanese lessee must be registered with the JCAB. Under the Civil Aeronautics Act (Act No 231 of 15 July 1952), any aircraft owned by any person who falls under any of the following descriptions may not be eligible for registration: • any person who does not have Japanese national - ity; • any foreign state or public entity or its equivalent in any foreign state; • any juridical person or body established in accord - ance with the laws and regulations of any foreign state; and • any juridical person of which the representative is any one of those listed in the preceding three items or of which one-third or more of the officers are those persons or one-third or more of voting rights are held by those persons. It is usually impossible for a foreign lessor to meet the above requirements itself. As a practical solution, a foreign lessor often uses a special purpose company that meets the requirements as nominee title holder. 2.2 Lease Terms 2.2.1 Mandatory Terms for Leases Governed by English or New York Law There are no mandatory terms that are required to be in a lease (or ancillary documents thereto) governed by English or New York law that would not typically already be included.
2.2.2 Tax and Withholding Gross-Up Provisions Tax and other withholding gross-up provisions are generally considered to be permissible and enforce - able. 2.2.3 Parts Installed or Replaced After a Lease’s Execution A lease can cover parts that are installed or replaced on an aircraft or engine after its execution if parties so agree under the lease agreement. 2.2.4 Risk of Title Annexation The Civil Code (Act No 89 of 27 April 1896) has a concept of “accession” ( fugo ), whereby if two or more movable properties with different owners can no long - er be separated without damage due to accession, the ownership of the composite thing belongs to the owner of the principal movable property. The same applies if excessive expense is required to separate the movables. In most cases, aircraft engines installed on an aircraft can be easily separated without damage or excessive expense. Therefore, practitioners usually consider the risk of title annexation of the aircraft engines to be relatively low. In practice, an engine owner installs a nameplate on the engine to indicate its interest. 2.2.5 Recognition of the Concepts of Trust/Trustee In Japan, the Trust Act (Act No 108 of 15 December 2006) provides for the concepts of a trust and a trus - tee. 2.3 Lease Registration 2.3.1 Notation of Owner’s/Lessor’s Interests on Aircraft Register Legal ownership of an aircraft by an owner (lessor) may be registered in the aircraft register in Japan. Upon registration of ownership in the aircraft register, the aircraft acquires Japanese nationality. In principle, the JCAB may not grant airworthiness certification to an aircraft that does not have Japanese nationality. Registration of ownership of an aircraft serves as per - fection against a third party as well (see 1.2.1 Trans- ferring Title ).
333 CHAMBERS.COM
Powered by FlippingBook