Supervisory Authority of the future international registration system for Space Assets

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 C11/10​0 (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.

 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

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.

 As a follow-up to the discussions that took place at the 2012 session of the Council and the first session of the Preparatory Commission held in Rome, Italy on 6 and 7 May 2013 (see Document C13/55), Council 2013 discussed in depth the issue relating to the possible role of ITU as Supervisory Authority of the international registration system for space assets under the Space Protocol. The major questions and comments raised by the Member States were related to the financial impacts and logistical considerations in the event of ITU assuming the function of Supervisory Authority; the linkage between the purposes of the Union, as laid down in the ITU Constitution, and the Space Protocol; the rights and obligations of the Supervisory Authority; the document that would associate ITU with the Protocol; and the possibility for the Union to set freely the amount of the registration fees.
In line with its previous decisions, Council 2013 authorized the Secretary-General to continue to express interest in the ITU becoming the Supervisory Authority, upon and after the entry into force of the Protocol, considering that the matter of whether or not the ITU could become the Supervisory Authority would be considered by an ITU Plenipotentiary Conference. Council 2013 also authorized the Secretary-General or his representatives to continue to participate in the work of the Preparatory Commission and its working groups as an observer.
Council 2013 also instructed the Secretary-General to submit to Council 2014 and the next Plenipotentiary Conference a report on the outcomes of the Preparatory Commission and the financial, juridical and technical implications of the ITU taking on the role of the Supervisory Authority, taking into account developments of the Preparatory Commission up to that time and addressing the clarifications sought by Council at its 2011, 2012 and 2013 sessions. (see Document C13/107).

The second session of the Preparatory Commission for the establishment of the International Registry for Space Assets pursuant to the Space Protocol took place at the headquarters of UNIDROIT in Rome on 27 and 28 January 2014. There were no meetings of the Working Group I in charge of developing draft regulations for the International Registry for space assets and Working Group II to draft a request for proposals for the selection of a Registrar for the space.
The meeting focused on the consideration of the Explanatory Note to the revised draft Space Regulations prepared by Prof. Roy Goode and consideration of other points concerning the revised text of the draft Space Regulations with most of the time taken to discuss the issue of the identification criteria for registration of space assets, in particular satellites and physically linked assets. The question of the determination of the fees for use of the Registry facilities was deferred for a later stage of the discussions, possibly through inclusion in the Procedural Rules following the Regulations.
Regarding the pending issues for the selection of a Registrar, as well as the finalization of the draft Regulations, the Preparatory Commission agreed to meet at the headquarters of UNIDROIT on 11-12 September 2014. The Inter-sessional period would be used to finalize the Regulations and prepare a draft Request for Proposals for the selection of the Registrar.
The Preparatory Commission indicated that it was working on the assumption that ITU would eventually accept the role of Supervisory Authority, and that it would be premature to speculate on possible alternatives.

 Keeping in mind the upcoming Plenipotentiary Conference, Council 2014 was given detailed information relating to the possible role of ITU as Supervisory Authority of the International Registration System for Space Assets under the Space Protocol, and on the progress of the Preparatory Commission regarding the establishment of the International Registry for space assets (see Documents C14/13 and C14/INF/12).
The main concerns expressed during the Council session remained focused on the financial, juridical as well as the technical implications on ITU assuming the role of Supervisory Authority; the correlation between the functions of the Supervisory Authority and ITU’s mandate, the immunity of ITU, the role of ITU towards the Registrar, the participation of ITU within the Space Protocol, the evaluation of the impact that the acceptance or the refusal of ITU to play the role of Supervisory Authority could cause.
In line with its previous decisions, Council 2014 noted Document C14/13 and authorized the Secretary-General to continue to express ITU’s interest in becoming the Supervisory Authority, noting that the matter of whether or not ITU could become the Supervisory Authority should not be prejudged at the current stage. In addition, it authorized the Secretary-General or his representative to continue to participate in the work of the Preparatory Commission and its working groups as an observer.
The Council also authorized the Secretary-General to submit a report on the matter to PP-14 and to report on progress to Council-15.

Council 2015 continued to show a strong interest for ITU to take on the role of Supervisory Authority of the International Registration System for Space Assets under the Space Protocol and indicated that it was time to decide on the substance of the matter. Some elements that would allow the Council to take a fully informed decision were not yet finalized and therefore Council 2015 postponed its decision on the matter to its next session, bearing in mind that the final decision would be taken by PP-18. Regarding the invitation made to ITU to take on the role of Supervisory Authority, councilors were referred to Resolution 2 of the Final Act of the Berlin Diplomatic Conference. It was also recalled that, as the Supervisory Authority, ITU would play no role in the interpretation or implementation of the protocol, and that the number of ITU Member States having ratified the protocol was unrelated to the role that ITU might be called upon to play as the Supervisory Authority for the register.
In line with its previous decisions, Council 2015 noted Document C15/26 and authorized the Secretary-General to continue to express ITU's interest in becoming the supervisory authority, noting that the matter of whether or not ITU could become the supervisory authority should not be prejudged at that stage. The Council also authorized the Secretary-General or his representative to continue to participate in the work of the preparatory commission and its working groups as an observer, in accordance with the relevant decision taken by PP-14.

The fourth session of the Preparatory Commission for the establishment of the International Registry for Space Assets to the Space Protocol took place at the headquarters of UNIDROIT in Rome on 10 and 11 December 2015. After consideration of the explanatory note to the revised draft space regulations and the note on linked asset prepared by Prof. Sir Roy Goode, and further last changes proposed by the German delegation, the draft baseline Space Registry Regulations was unanimously approved.
Regarding the issue of a request for proposal for the selection of a Registrar, the Preparatory Commission agreed with the options presented, with some preference in term of efficiency for the simplified approach where discussions with the two current Registrars (Aircraft and Rail) would be initiated. 
For the criteria to select and set up the Commission of experts assisting the Supervisory Authority, a short document would be circulated early 2016 tailoring the procedure that applied to the Aircraft Registry to the needs of the Space Protocol.
The decision and date for the next meeting would be taken in early 2016 based on the progress of the documentation to be produced.
​

Council 2016

Council 2016 noted that there were no objections of principle to the ITU becoming the Supervisory Authority, but that the Council decision should not appear to pre-empt the plenipotentiary conference decision in 2018. In line with its previous decisions, Council 2016 noted Document C1​6/36​ and decided to continue addressing the matter of ITU becoming Supervisory Authority, noting that the final decision on the matter of whether or not ITU could become the Supervisory Authority should be taken at the next Plenipotentiary Conference. Council 2016 also authorized the Secretary-General or his representative to continue to participate in the work of the Preparatory Commission and its Working Groups as an observer and to continue to express interest in ITU becoming Supervisory Authority and instructed the Secretary General to address the issues raised during Council 2016, in particular the conditions and limitations that may be necessary should the ITU assume the role of supervisory authority and any other matter that may need to be addressed in order for Council 2017 to make a decision on a recommended course of action to PP-18.​