SPAIN Law and Practice Contributed by: Alfonso López-Ibor and Olivia López-Ibor, Lopez-Ibor Abogados
2.10.5 Other Conventions The Kingdom of Spain is a party to the 1933 Rome Convention but not the 1948 Geneva Convention. 3. Aircraft Debt Finance 3.1 Structuring 3.1.1 Restrictions on Lending and Borrowing There are no restrictions on foreign lenders financ - ing an aircraft locally or on borrowers using the loan proceeds. 3.1.2 Effect of Exchange Controls or Government Consents See 2.1.3 Restrictions Concerning Payments in US Dollars . 3.1.3 Granting of Security to Foreign Lenders Borrowers in Spain may grant security to foreign lend - ers. As a general rule, under Spanish law it is nec - essary that the person (borrower) who creates any security (mortgage or pledge) be the owner of the asset. The security must be created to guarantee a pre-existing valid and enforceable obligation. Any security/mortgage created under US law or the laws of a third country cannot be enforced over a Spanish-registered aircraft, unless the security or mortgage has been recorded in the Register of Goods and Chattels. Security registration in the Register of Goods and Chattels requires the prior recording of the ownership title (and fulfilling reciprocity requirements) and will attract around 1% stamp duty on the amounts secured by the mortgage. The Register of Goods and Chattels will also require that the security/mortgage conform to Spanish law, which will involve a redrafting of the document. 3.1.4 Downstream, Upstream and Cross-Stream Guarantees Intragroup guarantees (downstream, upstream and/or cross-stream guarantees) are permitted under Span - ish law.
five business days at a price of EUR47.25 per code (AEP codes are required for International Register filing purposes; the Spanish Register of Goods and Chattels must subsequently be informed of their effec - tive use within five business days of their issuance, otherwise they will charge an additional EUR47.25). 2.10.2 Declarations Made Concerning Conventions The declarations that Spain has made under the Con - vention or the Protocol are the following: • Article 39 (1)(a) of the Convention: priority of non-consensual rights or interests over registered international interests; • Article 39 (1)(b) of the Convention: priority of amounts owed to public bodies relating to the pro - vision of public services; • Article 40 of the Convention: court orders permit - ting attachment of aircraft objects and tax liens shall be registrable under the Convention; • Article 53 of the Convention: competence of Span - ish courts; • Article 54.2 of the Convention: prohibition of self- help remedies, except for IDERA; • Article XIX of the Protocol: The Registry of Goods and Chattels is designated as an “authorising entry point”; • Article XXX (I) of the Protocol: applicability of IDERA instrument in Spain; and • Article XXIX of the Protocol: applicability of the Convention and Protocol to Gibraltar, which is limited to the latter government’s internal compe - tencies. 2.10.3 Application of Article XIII of the Protocol on Matters Specific to Aircraft Equipment Article XIII of the Protocol does apply domestically. The IDERA must be submitted in the Aircraft Reg - ister and subsequently the Registry will proceed to record it. If it is submitted on its own, the IDERA must be notarised, but if submitted along with other trans - action documents, the Spanish Aircraft Register will accept a signed IDERA without notarisation. 2.10.4 Enforcement of Conventions So far, there has not been any intervention of Spanish courts enforcing the Convention or the Protocol.
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