BRAZIL Law and Practice Contributed by: Renata Iezzi, Nicole René Gomes e Cunha and Marcela Correa, Basch & Rameh
• notarisation costs, which are nominal and rise according to the number of signatures (not applica - ble for digitally signed documents); • costs related to apostille/consular legalisation if any party signed the instrument abroad; • costs related to sworn translations into Portuguese (see 2.3.8 Requirements for Documents Concern- ing Registration ); and • RAB and RTD fees (see 2.3.1 Notation of Owner’s/ Lessor’s Interests on Aircraft Register and 2.3.6 Taxes/Duties Payable for Registering a Lease ). A security assignment governed by English or New York law may be registered with the RAB; see 3.2.6 Choice of Foreign Law and 3.2.7 Formalities/Manda- tory Terms to Create and Perfect Security Assign- ments . 3.2.10 Transfer of Security Interests Over Aircraft/ Engines The transfer of contractual rights is recognised if the provisions detailed in 2.3.8 Requirements for Docu- ments Concerning Registration are met. As men - tioned in 3.2.6 Choice of Foreign Law , Brazilian law mortgages are required to establish a lien under Bra - zilian laws. A transfer of security interest of a Brazilian law mortgage would require a written instrument filed with the RAB. 3.2.11 Effect of Changes in the Identity of Secured Parties If the identity of a security trustee under a security assignment changes, the new security trustee and the lessor should serve a new notice to the Brazilian lessee, and obtain an acknowledgement from them. To be enforceable, each of these documents must be registered at the RAB; see 2.3.8 Requirements for Documents Concerning Registration . 3.2.12 “Parallel Debt” Structures As noted in 2.2.5 Recognition of the Concepts of Trust/Trustee , trusts are not recognised in Brazil per se. A parallel debt structure established in a com - mon law jurisdiction would be effective in Brazil since the trustee/agent would hold the security under the 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws
secured debt. Parties would not be able to create a trust under Brazilian law. 3.2.13 Effect of Security Assignments on Residence of Secured Parties A security trustee will not be deemed resident or domiciled in Brazil as a result of being a party to or enforcement of a security assignment over Brazilian- registered aircraft; see 2.1.4 Exchange Controls and 2.4.2 Effects of Leasing on the Residence of a For - eign Lessor . 3.2.14 Perfection of Domestic Law Mortgages A domestic law mortgage is perfected through its reg - istration with the RAB; see 2.3.8 Requirements for Documents Concerning Registration . 3.2.15 Differences Between Security Over Aircraft and Spare Engines Aircraft mortgages registered with the RAB estab - lish and perfect security interests over the aircraft (including its engines). The effect of registering a spare engine mortgage is less certain since engines them - selves are not registered objects (see 2.3.3 Aircraft/ Engine-Specific Registers ). International interests arising from security agree - ments over aircraft engines should be registered with the International Registry, according to the Cape Town Convention (see 2.10 Cape Town Convention and Others ). 3.2.16 Form and Perfection of Security Over Bank Accounts Receivables can be deposited in escrow accounts in Brazil. Parties can enter into receivables pledge agreements where a party would pledge its rights over receivables in favour of a creditor. In addition, parties can execute account management agreements, pur - suant to which a bank receives instructions on how to release the account funds. Since revenue coming into a Brazilian bank account will be in Brazilian currency, and most leases require payments in US dollars, account management agree - ments tend to be complex and include provisions for the bank to convert and remit funds to the foreign
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