Latvia has qualified for OECD Cape Town discount on financing rates for acquisition of essential aviation assets
Sorainen, together with other Latvian law firms, assisted the Ministry of Transport of the Republic of Latvia to prepare an application to the European Commission. The aim of the application was for the Latvian aviation industry to qualify for the OECD Cape Town discount on financing rates for the acquisition of essential aviation assets. On 7 June 2022, Latvia was included in the OECD updated list of countries that have accepted declarations of compliance with the Cape Town Convention and, therefore, qualified for the Cape Town discount.
Benefits of the convention
The Cape Town Convention was implemented in Latvia in 2011. In 2021, significant amendments were made to several Latvian laws and regulations, and new laws and regulations were also developed in order to adopt declarations of conformity to the Cape Town Convention established by the OECD. By accepting the abovementioned declarations, it becomes possible for aircraft operators to obtain a funding discount for the purchase of aircraft that will be registered in Latvia. The Cape Town Convention aims to eliminate differences between national regulations on investor and owner provision of leased valuable movable equipment, such as aircraft. Accession to the Cape Town Convention provides an opportunity to invest safely in the aviation sector.
Role of our team
In order for the Ministry of Transport to submit the necessary application for discounted rates, Sorainen, together with other Latvian law firms, prepared a legal assessment questionnaire on how creditors can exercise the rights provided for in the convention and how compliant the process is.
In addition, Sorainen is among the law firms that have been assisting the AWG since 2019, providing information every six months on the implementation and application of the Cape Town Convention in Latvia. This information is used by the AWG to prepare and update the Cape Town Convention’s compliance index. The index is an assessment of fulfilment of the Cape Town Convention’s obligations.
Our team for this project consists of partners Rūdolfs Eņģelis and Valts Nerets, senior associate Inese Heinacka, and assistant lawyer Lūcija Strauta.