Cablegate: Implementation of Capetown Convention

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A
SUBJECT: Implementation of Capetown Convention

1. Summary: ICAO Preparatory Commission selects Ireland as
host country for new International Registry for financing
interests in aircraft.

2. The Capetown Diplomatic Conference established a
Preparatory Commission of 20 states, including the U.S., to
set up the new international registry, in conjunction with
ICAO. Once established, the ICAO Council will act as
supervisory authority over the registry. Timing for
establishment of the registry is critical to keeping the
convention system on track, which is expected to come into
force by late 2004 or early 2005.

3. The outlines of the new system were developed by a task
force co-chaired by the U.S. and France as the largest
aircraft manufacturing states. As co-chairs, both countries
agreed not to bid to be the host country.

4. The ICAO Secretariat administered a sealed-bid
procurement, drawing on air transportation and procurement
expertise from states; which included FAA experts.

5. The Preparatory Commission was chaired by Switzerland
(Laurent Noel) and attended by ICAO Secretary General Taieb
Cherif and Council President Assad Kotaite.

6. Four countries supported bids from registry companies
based in their territories; Canada, Ireland, Singapore and
Spain. Bids were first available to the Preparatory
Commission this week. Selection of Ireland followed the
rankings by the ICAO Secretariat's procurement team.

7. A critical factor was cost, which will drive the fee
schedules to be established later. Ireland, Singapore and
Canada had technically acceptable proposals. A considerable
gap existed between the lowest bidder, Ireland which
estimated start-up costs and first year operations at $ 2.7
million, compared to Singapore at $6.7 million and Canada at
$7.7 million. Negotiations with the lowest bidder are
expected to reach a fee structure acceptable to the air
transport industry.

8. All U.S. Agency reps participating (DOT, FAA, State,
EXIM Bank), as well as U.S./Industry reps, including Boeing,
Pratt & Whitney, and the Aircraft Working Group (AWG)
supported the selection process and the result.

9. The Preparatory Commission agreed to initiate final
contract negotiations without delay assisted by the U.S.,
Finance, AWG and IATA. FAA staff expert Moffat is expected
to continue to assist ICAO. The Regulations Working Group
(chaired by the U.S. - FAA Klang) will also proceed to
complete its work by December.

10. ICAO will initiate a draft Headquarters Agreement with
the GOI.

11. U.S. Delegation included: US Rep: HBurman (State),
Alternate Rep: JKlang (FAA), PBloch (DOT), JStandell (FAA),
and LEmery (EXIM Bank). CMoffat (FAA) assisted the ICAO.
U.S. Mission Ambassador Stimpson coordinated the U.S. effort
and the interface with U.S. industry representatives.

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