Approaching the end of 2018, the Ministry of Transportation of the Republic of Indonesia issued a guideline for the implementation of the Minister of Transportation of Republic of Indonesia Regulation No. 52 of 2018 on Civil Aviation Safety Regulations Part 47 Regarding Aircraft Registration issued earlier this year (“Implementation Guideline Part 47”). The Implementation Guideline Part 47 provides details explanation on the implementation of the MOTR 52/2018 which in principle the Ministry of Transportation has addressed concerns from international parties especially creditors in aircraft financing transactions or aircraft owners who serve as indirect lessors in two tiers lease agreements where in the previous legislation regime those parties’ interest were not well protected. The Implementation Guideline Part 47 provides clarity on the procedures to establish legal protection through an Irrevocable Deregistration and Export Request Authorization (“IDERA”) to not only for aircraft operator and aircraft owner, but also other related parties of the aircraft owner. The aircraft owner may transfer its rights of an aircraft to other related party, such as head lessor, financial institution, or insurer, etc. (“Other Related Party”) through a Certified Designee.
According to the Implementation Guideline Part 47, a chargor/conditional buyer/lessee (“Authorized Party”) under one of the following agreements i.e. security agreements, title reservation agreements, or lease agreements, may perform recording of IDERA over Indonesian registered aircraft which have obtained an Indonesian Aircraft Certificate of Registration that can be recorded IDERA to the Directorate General of Civil Aviation, Ministry of Transportation of the Republic of Indonesia (“DGCA”). The IDERA recording procedures also applies to the recording of Certified Designee to the DGCA in the event of an aircraft owner will transfer its rights of an aircraft to Other Related Party. Prior to record the Certificate Designee, aircraft owners must have obtained an original IDERA certificate from the Authorized Party. In the process to record the IDERA or Certified Designee by the Authorized Party to the DGCA Indonesia, the Authorized Party shall provide: (i) completed DGCA forms; (ii) summary agreement in connection with the aircraft transaction that must be signed by all parties of the agreement(s); and (iii) a statement letter signed by the Authorized Party or Other Related Party (as applicable) containing a promise not to involve or sue the DGCA in any dispute arising from or in connection with the aircraft transaction. The IDERA Certificate or Certified Designee Letter shall be issued by the DGCA Indonesia within five (5) working days since all the requirements are received completely and correctly by the DGCA.
The Implementation Guideline Part 47 provides that IDERA may be revoked based on a request from the Authorized Party in written proposal to the DGCA. In this regard, the record of IDERA over the Indonesian aircraft registration mark will be revoked accordingly. So is the case with Certified Designee Letter. The Certified Designee Letter may also be revoked based on a written proposal from the Certified Designee to the DGCA. The revocation process of the IDERA or Certified Designee Letter by the DGCA Indonesia shall be completed within five (5) working days since all the requirements are received completely and correctly by the DGCA. Once the Certified Designee Letter has been revoked by the DGCA Indonesia, the right of IDERA shall return to the Authorized Party under the IDERA Certificate.
The Authorized Party or the Certified Designee may request de-registration of Indonesian aircraft registration mark under the Certificate of Aircraft Registration to the DGCA in case of default occurs under a security agreement between a chargee and a chargor, a title reservation agreement between a conditional seller and a conditional buyer, or a lease agreement between a lessor and a lessee. In the process of de-registration of an aircraft, the Authorized Party or Certified Designee shall submit: (i) completed DGCA forms and (ii) a statement letter containing a promise not to involve or sue the DGCA Indonesia in any dispute arising from or in connection with the aircraft de-registration signed by the Authorized Party or Certified Designee (as applicable). The DGCA shall issue the de-registration statement letter to the Authorized Party or Certified Designee within five (5) working days since the Authorized Party or Certified Designee submits the administrative requirements completely and correctly to the DGCA. Upon the issuance of the de-registration statement letter by the DGCA, the status of an aircraft becomes “state-less aircraft”. Since such de-registered aircraft is no longer under Indonesia aircraft registration mark, thus, the DGCA no longer has authority to the de-registered aircraft.