The Aviation Law Review: Cayman Islands

The year in review

i Cayman Maritime & Aviation City

The Cayman Islands has distinguished itself from other special economic zones and favourable tax jurisdictions with the addition of the Cayman Maritime & Aviation City to the special economic zone, provided by Cayman Enterprise City, which is designed to make it easier for aviation services providers, including commercial air transport operators, aerospace developers and manufacturers to set up a physical presence in the Cayman Islands.

ii Registration of Aircraft Operating Commercially and Transition Register

The ability to take advantage of the opportunities to set up a business in the Cayman Maritime & Aviation City to, among other things, obtain an AOC and the innovative offering for the temporary register of aircraft during a transition process are very attractive features of the Aircraft Register, which continue to draw financiers and owners alike to registering aircraft in the Cayman Islands.

Footnotes

1 Wanda Ebanks is a partner and Shari Howell is of counsel at Maples Group.

2 CAACI revenues are generated from regulatory activities and the registration of aircraft (private and corporate) on the Cayman Islands Aircraft Registry. The CAACI's latest annual report indicates that 2016–2017 was another successful year for the CAACI.

3 Civil Aviation Authority Law (2015 Revision), Section 5(1)(a).

4 ibid. Section 5(1)(a).

5 Civil Aviation Authority Law (2015 Revision), Section 7(1).

6 Only six approved AOC holders are reported in the 2017 CAACI Annual Report.

7 As at 22 May 2020, the CAACI records indicated a total of 268 aircraft were registered on the Cayman Islands Aircraft Registry (Active Aircraft Register on CAACI website at www.caacayman.com).

8 Air Navigation (Overseas Territories) Order 2013, Article 16(1).

9 More detailed information is available from the CAACI directly.

10 Air Navigation (Overseas Territories) Order 2013, Article 188(1).

11 References to 'registered owner' mean either the owner or the charterer by demise (as relevant).

12 Ad valorem duty at the rate of 1.5 per cent of the sum secured is payable if the original mortgage is executed in or brought to the Cayman Islands following execution.

13 See Sections 3 and 4 of the International Interests in Mobile Equipment (Cape Town Convention) Law, 2015.

14 In any application to exercise enforcement options under Cayman Islands law, the judgment creditor will need to establish the factors outlined above, to the satisfaction of the Cayman Islands court.

15 Enforcement by a Cayman Islands court requires originals of the relevant documents (with Cayman Islands stamp duty paid thereon), and applicable court fees to be paid.

16 It is not possible to be definitive since no legislation and, to the best of our knowledge, no Cayman Islands case law has analysed aircraft liens in detail.

17 The absence of relevant cases makes it uncertain whether an aircraft salvage lien can be asserted in the Cayman Islands.

18 The 1948 Geneva Convention on the International Recognition of Rights in Aircraft or the 1933 Rome Convention on Precautionary Arrest of Aircraft.

19 Airports Authority Law (2005 Revision) Section 34.

20 Customs Law (2017 Revision) Section 61.

21 Misuse of Drugs Law (2017 Revision) Section 25(2). Note also that the court has broad powers under the Proceeds of Crime Law (2020 Revision) to order the confiscation of property derived from the proceeds of criminal conduct. (Applications for compensation in these situations are dealt with thereunder.)

22 Emergency Powers Law (2006 Revision) Section 5(2)(b).

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