Thursday, March 29, 2018

Bahamian Attorney: 'I Want To Say Aircraft Registry Is Finally Happening'

The Government has been urged to fund a Bahamian international aircraft registry in the upcoming 2018-2019 Budget, an attorney saying: "I want to finally say this is happening."

Llewellyn Boyer-Cartwright, a Bahamian aviation law specialist, told Tribune Business his international contacts were suggesting the "window of opportunity" remains open for the Bahamas to attract significant business to a facility that could be established within nine-12 months.

Describing an aircraft registry as 'low hanging fruit' for the Bahamian aviation sector, the Callenders & Co attorney and partner said such a rapid set-up was "doable" provided this nation dedicated the necessary funding, training, legislative and regulatory reforms.

In particular, Mr. Boyer-Cartwright warned that the Bahamas "will not be taken seriously" unless it removes the 10 percent Stamp duty on imported planes - something he said has never actually been levied but remains on the books, causing significant market uncertainty.

And he added that efforts to establish an aircraft registry would receive a further credibility boost if the Bahamas became a signatory to the Cape Town Treaty (Aircraft Convention), which gives financiers and leasing companies confidence that their liens and charges over planes - and plane parts - will be recognised and secure whatever jurisdiction the craft is in.

Mr. Boyer-Cartwright, who at times has seemingly led a 'one-man crusade' to establish such a registry, said these essential reforms would build on the platform provided by the Civil Aviation Act 2016 and its accompanying regulations.

"It's not onerous, it's not tedious and will not cost us as much as we think," told Tribune Business of an aircraft registry's creation. "The main thing initially would be the appropriate number of administrative staff, which could be five people, the proper software and marketing and branding.

"The registry is doable. We could probably get it up and running anywhere from nine to 12 months, once we have everything in place. It's very doable, compact and contained, if you will."

Mr. Boyer-Cartwright said signing the Cape Town Convention and eliminating the 10 percent duty on imported planes/maintenance parts were essential for the Bahamas to demonstrate it intended to be a serious competitor to rival international financial centres (IFCs) in the aircraft registry business.

"If the Bahamas becomes a Cape Town member state it really does say something; that they're to be taken seriously," he explained. "The feedback I received on Stamp Duty recently was that no one will take us seriously if we have that on the books. You're going to have to offer some incentive."

Mr. Boyer-Cartwright revealed that Bahamas-based companies and residents typically have to pay more when leasing aircraft from US companies because this nation is not a Cape Town Convention signatory, and the owner wants extra compensation for the extra risk.

Apart from increasing cost, and reducing affordability for Bahamas-based interests, the Callenders & Co attorney said the reluctance of banks to finance purchases of "mobile assets" such as aircraft meant buying options were limited.

As a result, Bahamian parties frequently ended up leasing planes long-term, while being reluctant to entertain lease-to-purchase deals for fear of being hit with the 10 per cent Stamp Duty when the aircraft was brought to the Bahamas.

Mr. Boyer-Cartwright, meanwhile, said the Bahamas might also have to 'bite the bullet' initially by acquiring foreign expertise to help train Bahamians in the management and administration of an international aircraft registry.

"It's a given that the legislation is already in place. I know one of the concerns would be the staffing and the resources, and I'm hoping this is part of the next Budget, I really do. I will go out on a limb, Neil, and say that like other jurisdictions we might very well need outside help initially and have to outsource it [administration and related training].

"That's not a bad thing. You get the right people in to train the Bahamians. Whether you do it in-house or outsource it, both have advantages and disadvantages, but at the same time I don't think we should be afraid to ask for outside help."

Mr. Boyer-Cartwright, seemingly single-handed, has been pushing the creation of a Bahamian international aircraft registry for at least five years, viewing it as a significant 'value added' product that would enable this nation to offer a 'one-stop shop' when it came to services targeted at high net worth clients.

"It's reached a point for me personally, in terms of my involvement, where I can no longer do this alone," he told Tribune Business. "I don't want to talk any more; I want to be able to say this is happening. This is it. I've given it a good run, and still have some energy left in me."

Dionisio D'Aguilar, minister of tourism and aviation, confirmed to Tribune Business he had told Mr Boyer-Cartwright to go out and develop the strategy for an international aircraft registry, then come back and discuss it with him when he was ready.

"The window of opportunity I feel is still there," the aviation law specialist confirmed. "People are still interested in doing business in the Bahamas. We can take advantage by taking the most positive aspects of other jurisdictions and making ours even better.

"I'm truly hoping we are going to see legislation in the near future, and that includes the ratification of the Cape Town Convention."

Mr. Boyer-Cartwright suggested the Bahamas use its high-end resident base to build a registry with private corporate aircraft first, before targeting the "transitory" cargo market featuring planes "between sale and lease" where the owners did not want to bring them back home.

He said these niches would act as 'building blocks' so the Bahamas could "find its feet" before going after the private cargo transportation market and fleet business, "where the serious money is".

Other potential opportunities were identified as Brexit, the UK's exit from the European Union (EU), and the impact this could have on IFC dependencies such as Jersey, Guernsey and the Isle of Man, the latter of which now has 1,000 planes on its 10-year-old registry and is adding more at the rate of six per month.

Mr. Boyer-Cartwright added that an aircraft registry would also create increased spin-off business for the likes of Nassau Airport Development Company (NAD), in terms of parking, landing and maintenance fees, not to mention fuel supply.

"It's not going to happen overnight, but we have to start somewhere," he told Tribune Business. "It's 2018. Now we have to look at being dynamic and more innovative."

Original article can be found here ➤

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