The Cape Town Convention will take effect in Lithuania on 1 December 2025. This will allow the country’s aviation transactions to be integrated into the global system for registering international interests in aircraft and will increase the reliability of such transactions.
As aviation law expert and AVERUS Managing Partner Laura Čereškaitė-Kinčiuvienė emphasises, a long-awaited connecting element is finally emerging for aviation businesses operating in Lithuania.
“From now on, creditors’ interests can be registered in the International Registry (IR), and unified international priority rules between contracting states will apply. This means that Lithuanian aviation entities will become clearly visible within the Cape Town system, and transactions will gain significantly more legal certainty,” the expert says.
Until now, Lithuanian airlines or leasing companies were not part of the international system where rights in aircraft are registered. As a result, it was difficult to track aircraft transactions, encumbrances or the sequence of creditor priorities involving Lithuania-registered aircraft.
In addition, since aircraft are treated as immovable property under Lithuanian law, notaries will now also be required to check the International Registry and obtain creditor consent when transferring aircraft.
“This will mean greater security for financiers and a lower risk of unpleasant surprises when acquiring an aircraft that may have hidden obligations,” notes Čereškaitė-Kinčiuvienė.
With the Cape Town Convention coming into force, Lithuania also made minor amendments to its national aircraft registration rules. The updated rules now require the Transport Competence Agency, when deregistering an aircraft from the Lithuanian Aircraft Register, to verify the International Registry and obtain creditor consent before removing the aircraft from the register.
These changes are relevant to financiers, airlines, and owners of aircraft and aircraft engines.
However, according to the aviation law expert, the full benefits of the Cape Town Convention will not yet be felt by Lithuanian businesses, as Lithuania has not made the specific declarations under the Aircraft Protocol.
“The major value of the Cape Town Convention lies in the optional declarations—particularly those relating to expedited aircraft repossession measures, the 60-day waiting period in insolvency proceedings, and others. Many states that have adopted these mechanisms see clear advantages. Lower aircraft financing costs, increased lessor confidence, quicker aircraft recovery when a lessee defaults, and reduced export credit premium rates are just a few of these benefits,” the attorney explains.
Nevertheless, the entry into force of the Cape Town Convention is an important first step. Lithuania’s aviation market becomes part of the global system for registering international interests—a change that the sector will undoubtedly feel.
Lithuania ratified the Convention in June 2024.
FAQ about Cape Town Convention
For more information:
Laura Čereškaitė-Kinčiuvienė
Managing Partner, AVERUS
Head of Aviation Practice
+370 684 06452
laura.cereskaite@averus.lt
