Cape Town Convention Compliance Index Q1 2025: Malta Among Top Ranked

In its first quarter 2025 report, Malta has once again achieved a high ranking, being placed first in Europe and second globally on the Cape Town Convention Compliance Index. With a score of 95 out of 100, Malta was rated in the “Very High” category, confirming its strong position within the global aviation sector.

Background to the Cape Town Convention

The Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment (collectively known as the CTC), signed in 2001 and ratified by Malta in 2010, was created to facilitate aircraft financing and leasing by introducing a harmonised set of rules that enhance certainty and predictability in cross-border transactions. It recognises the benefits of asset-based financing and ensures that rights and interests in aircraft and aircraft equipment are protected universally. At the centre of the Convention is the International Registry for aircraft objects, which allows parties to register certain interests such as security interest in an aircraft to ensure recognition and enforceability across the board. In addition, the Convention strengthens the position of creditors by providing protection in situations of default or insolvency.

In this way, the Convention reshapes the legal framework governing aircraft sales, leases and financing by replacing fragmented national rules with a consistent international system. This harmonisation has not only enhanced the protection offered to stakeholders involved in aviation transactions but has also encouraged investment in the industry worldwide.

The Cape Town Convention Compliance Index

The Cape Town Convention Compliance Index, developed by the Aviation Working Group (AWG), is a central monitoring tool that evaluates how contracting states implement and adhere to the CTC. The Index provides an objective, data-driven assessment of legal risk and has become an important point of reference in aviation financing and leasing transactions. It is updated twice yearly, in March and September, to ensure stakeholders have access to current compliance evaluations.

The Index assigns each contracting state a score based on its legal implementation of the Convention, the extent to which the Convention prevails over conflicting national laws, and whether the framework has been comprehensively applied without any gaps or inconsistencies. It also takes into account judicial precedent, administrative actions, and expert assessments of practical application, while factoring in wider rule of law and political risk indicators that may affect regulatory enforcement and the protection of property rights.

Through this methodology, the Index provides an accurate reflection of how effectively each jurisdiction has aligned itself with the requirements of the CTC.

Malta’s Compliance with the Cape Town Convention

The top ranking represents a significant improvement from the score of 82.5 achieved in 2020, highlighting Malta’s consistent efforts to improve its aviation framework and ensure continued compliance with the CTC.

In its explanatory comments, the AWG observed that the “CTC prevails over national law and is comprehensively implemented through legislation, rules and regulations. There is judicial precedent with both mixed outcomes relating to compliance with the terms and intent of CTC (Wind Jet S.p.A.) and outcomes that are substantially compliant with the terms and intent of CTC (Air X Charter vs. Avmax; Hi Fly). Such precedent has medium predictive value for the outcome of future cases with similar facts. There has been positive practical experience on CTC issues. Malta is and should remain eligible for the OECD discount. The government has established a communications channel with AWG, and work on CTC issues has been effective and efficient.”

Malta’s consistently high performance on the Cape Town Convention Compliance Index highlights its reputation as a leading jurisdiction for aviation finance and leasing. Its ongoing improvements and strong legal implementation demonstrate Malta’s commitment to maintaining a robust and reliable framework that supports the global aviation industry.

Mamo TCV & Aviation

Mamo TCV Advocates is one of the foremost law firms in Malta in the aviation sector and it is a market leader in this area. The firm covers the full spectrum of aviation-related legal work and is noted for its experience in complex corporate structures relating to the ownership and operation of aircraft. The group specialises in all aspects of aviation law including asset finance, sale and purchase of aircraft, liability claims, passenger claim handling, tax and corporate set ups, asset repossession and arrest, European aviation law and drafting of legislation.

Feel free to get in touch with us to discuss our aviation practice and the services we can provide to your business, including assisting you with navigating your legal and regulatory obligations, on aviation@mamotcv.com