Legal Analysis: FAA Guidelines on IDERA Conflict with International Aviation Convention, Attorneys Argue

Attorneys at Vedder Price have published a legal analysis contending that the FAA's guidelines on the Irrevocable De-Registration and Export Request Authorization (IDERA) are narrower than required under the Convention on International Interests in Mobile Equipment and its related Protocol on Matters Specific to Aircraft Equipment, two instruments that have governed international aircraft leasing and financing for more than 20 years. The IDERA lets a creditor, including a security interest holder or lessor, deregister and export an aircraft from the country where it is situated if a debtor defaults, and under the Protocol a "debtor" expressly includes a lessee.

The FAA's current guidelines limit IDERA recordation to security conveyances against aircraft and explicitly exclude straight leases, which the analysis says contradicts the Protocol's requirement that contracting-state registries record an IDERA when submitted, including those issued by lessees. The attorneys attribute this gap to the United States being an "owner registry," where registration is based on the owner rather than the operator or lessee, and note that in practice the FAA has reliably facilitated deregistration and export in repossession cases over the past two decades despite the absence of lease-based IDERAs.

The attorneys call for two specific amendments: permitting IDERA filings for aircraft leasing transactions, and establishing that such a filing obligates the registry to both deregister the aircraft and procure its export. They argue these changes would align U.S. practice with the Convention and the Protocol and strengthen enforcement in outlier deregistration and export cases.