Supervisory Authority of the future international registration system for Space Assets under the Space Protocol
Space Protocol - The Space Protocol is part of a family of international treaties beginning with the Convention on International Interests in Mobile Equipment and the Protocol on Matters specific to Aircraft Equipment, both opened to signature in Cape Town on 16 November 2001. The Space Protocol is an instrument designed to facilitate asset-based financing for the acquisition and use of space assets, such as satellites and transponders that move beyond frontiers.
Asset-Based Financing - Under an international legal framework of asset-based financing, a creditor could enforce its rights against the equipment in the event of default by the debtor. Such financing lends itself to borrowing involving high-value space assets. Under the current legal regime, it is the law governing the location of the equipment that will normally decide questions regarding the validity, priority ranking and enforcement of security and leasing rights in such equipment. However, there is currently no applicable law governing the location of equipment in space. From the viewpoint of a lender, this situation makes the risks of asset-based financing less acceptable.
The International Registry - There is currently no suitable global registration mechanism for titles or security interests in space property. The Space Protocol is establishing the legal foundation for the creation, priority ranking and enforcement of security and leasing rights in space-based equipment. One of the key features of the Space Protocol is the creation of an international registry for space assets in which those rights may be registered. The Registry would determine priority among rights on the basis of the first-come, first-served principle to give lenders a degree of legal certainty relating to asset-based financing. The Registry would be operated and administered by the Registrar on a twenty-four hour /seven days a week basis.
Role and Functions of the Supervisory Authority - The Supervisory Authority would oversee the operation of the Registry by the Registrar. In particular, it would nominate and dismiss the Registrar, monitor its activities, establish regulations in relation to the functioning of the Registry after approval by Contracting States and would be assisted by a commission of experts nominated by Signatory and Contracting States. It would determine and periodically review the structure of fees for the Registry’s services.
Procedures for Selecting the Supervisory Authority - The States represented at the diplomatic Conference (Berlin, February/March 2012) adopted Resolution 1 relating to the setting up of the Preparatory Commission for the Establishment of the International Registry for Space Assets and Resolution 2 relating to the Establishment of the Supervisory Authority, taking account of the interest expressed at the Conference by ITU observers for the ITU to possibly become the Supervisory Authority, subject to consideration of the matter by the governing bodies of ITU. Pending the entry into force of the Space Protocol, the Preparatory Commission will act as the Provisional Supervisory Authority, and in the event that the governing bodies of ITU deciding that ITU should not become the Supervisory Authority, the Commission will appoint another international organization or entity for such a role.
Financing - The Supervisory Authority will be financed out of the fees to be paid to the international registry. The Supervisory Authority, in setting the fees to be charged, will be entitled to charge for reasonable setting-up costs and the reasonable costs of establishing, operating and regulating the future International Registry and of supervising the Registrar and performing the other functions of the Supervisory Authorithy.
The International Institute for the Unification of Private Law (UNIDROIT) is an independent intergovernmental Organisation which was set up in 1926 in Rome. Its statutory purposes are to study needs and methods for modernising, harmonising and co-ordinating private law as between States and groups of States as well as to formulate uniform law instruments, principles and rules to achieve those objectives.
ITU’s role as Supervisory Authority of the future international registration system for Space Assets under the draft Space Protocol was discussed at Council 2011. The Secretary-General stated that the adoption of this protocol could be expected to be a landmark for the industry and would have no financial impact on the Supervisory Authority since the latter would be financed out of fees from international registration. He encouraged councillors not to let this opportunity pass ITU by.
The major issues discussed at Council 2011 concerned the scope and obligations of the Supervisory Authority and the extent and definition of enforcement, litigation, liability, dispute resolution, financial implications, accountability and responsibility. The questions raised by Member States were addressed during the Council – and the conference in Berlin next February was expected to clarify certain issues.
The Council agreed to authorize the Secretary-General to attend the Berlin conference as an observer and that the matter of whether or not ITU could become the Supervisory Authority should not be prejudged, but ITU secretary-General could continue to express interest (see Document C11/100 (Rev.1)). The Secretary-General would report back to Council 2012 which would consider the matter further in the light of the output of the diplomatic conference taking into account the financial, juridical and technical implications.
Diplomatic conference (Berlin, 27 February - 9 March 2012)
The diplomatic Conference to adopt a Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets was held, under the auspices of UNIDROIT, at the invitation of the Government of the Federal Republic of Germany, in Berlin, from 27 February to 9 March 2012. Forty States and ten international Organizations, including the ITU, participated in the diplomatic Conference.
The Conference adopted the text of the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets (Space Protocol) and also by consensus the 5 Resolutions that are set out in annexes to the Final Act of the diplomatic Conference.
As instructed by Council 2011, the observer representing the ITU Secretary-General expressed the interest for ITU to become the Supervisory Authority of the International Registry for space assets, subject to consideration of the matter by the governing bodies of the ITU and without prejudice to the decision to be taken by them in this regard, in the light of the outcome of the Conference, taking into account the financial, juridical and technical implications of such a decision.
The Conference adopted Resolution 1 relating to the setting up of the Preparatory Commission for the Establishment of the International Registry for Space Assets, which resolves “to establish, pending the entry into force of the Protocol, a Preparatory Commission to act with full authority as Provisional Supervisory Authority for the establishment of the International Registry for space assets, under the guidance of the General Assembly of UNIDROIT”. Such Preparatory Commission shall be composed of persons, having the necessary qualifications and experience, nominated by one-third of the negotiating States, with the International Telecommunication Union (ITU), the International Civil Aviation Organization (ICAO), the Intergovernmental organization for Carriage by Rail (OTIF) and representatives of the commercial space, financial and insurance communities and other interested parties being invited to participate in the work of the Preparatory Commission as observers. A meeting under the auspice of UNIDROIT is foreseen at the end of 2012 or early 2013 to establish the Preparatory Commission.
In its Resolution 2, relating to the establishment of the Supervisory Authority for the international registry for Space Assets, and taking account of ITU interest, the Conference invites the governing bodies of the ITU:
(1) to consider the matter of the ITU becoming Supervisory Authority upon or after the entry into force of the Protocol and take the necessary action, as appropriate; and
(2) to inform the Secretary-General of UNIDROIT accordingly.
Following up the Council’s discussions in 2011 on the possible role of ITU as Supervisory Authority of the future international registration system for space assets under the draft Space Protocol, a status report on the diplomatic Conference was presented at Council 2012 (see Document C12/36) with the suggested follow-up actions. Council-2012 agreed to authorize the Secretary General to continue to express interest in the ITU becoming the Supervisory Authority, noting that the matter of whether or not ITU could become the Supervisory Authority should not be prejudged at this stage and also authorized the Secretary-General or his representative, to participate in the work of the Preparatory Commission as observer, once this commission established. The Secretary-General will report back to Council 2013 which will consider the matter further in light of the development on the establishment of the Preparatory Commission and progress if any, taking into account the financial, juridical and technical implications for ITU.
Unidroit web page
on the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Space Assets (Berlin, 2012).