Space Protocol - The draft 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 draft 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 planned Space Protocol would establish 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 draft 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 could 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, to be hosted by the Government of the Federal Republic of Germany in Berlin from 27 February to 9 March 2012, for the adoption of the draft Space Protocol are expected to decide whom to invite to exercise the functions of Supervisory Authority, at least in principle.

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.

Council 2011

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 is 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 will report back to Council 2012 which will consider the matter further in the light of the output of the diplomatic conference taking into account the financial, juridical and technical implications.