US embassy cable - 04MONTREAL766

UNCLAS MONTREAL 000766 
 
SIPDIS 
 
DEPT FOR EB/TPP, EB/TRA, L/PIL, L/T 
DEPT PLEASE PASS EXIM BANK WASHDC 
ROME PLEASE PASS TO FODAG - BERTON 
 
E.O. 12958:  N/A 
TAGS: EAIR, ETRD, CA, EI, SN, ICAO, UNIDROIT 
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. 
ALLEN