Aviation Finance & Leasing 2023 Comparisons

The execution of an aircraft or engine sale agreement, including the sale of an ownership interest in an entity owning an aircraft or engine, does not in itself create an obligation to pay taxes in Greece.

The transfer of ownership upon completion of the sale agreement may be relevant for income tax and VAT purposes.

This is especially pertinent if the lessee does not have VAT exemption and the asset is physically situated in Greece, in which case VAT may be due.

For engine transactions, it is advisable to ensure the engine is not located in Greece at the time of transfer.

The sale agreement does not need to be translated, certified, notarised or legalised to be enforceable against a domestic party. However, if legal proceedings are instigated before a Greek court, foreign language documents must be translated into Greek to be admissible as evidence in such proceedings.

Transfer of ownership of greek-registered aircraft must be made in writing and registered with the aircraft register.

There is separate register for aircraft engines.

The “transfer of title” to an aircraft or engine, or the bill of sale, extends to include all installed parts, such as an APU.

If an entity that owns an aircraft or engine sells its ownership interest while remaining the owner, this constitutes not a sale of the aircraft or engine, but a transfer of shares.

The transfer of title to an aircraft or engine physically delivered in Greece will be recognised if the bill of sale is governed by either English or New York law.

For such bill of sale to be recognised in Greece, it must fully describe the aircraft, including type and serial number, and clearly indicate complete transfer of ownership. No other minimum substantive requirements are needed.

The bill of sale needs to be notarised and apostilled if it has been executed abroad or have the signature of the signatory authenticated by a competent Greek authority to be enforceable against a domestic party. 

The Bill of Sale of a greek-registered aircraft/engine should be filed with the relevant registry of the Hellenic Civil Aviation Authority (HCAA), together with all the documents required to register the new aircraft/engine owner.

Typically, the lessee applies for the registration of ownership change.

The bill of sale needs to be notarised and apostilled if it has been executed abroad or have the signature of the signatory authenticated by a competent Greek authority.

The documents required for the registration of the bill of sale, include the bill of sale, the documents pertaining to the powers of attorney granted (notarised and apostilled) for the execution of the bill of sale, the certificate of location related to the aircraft/engine at the time of transfer, a VAT exemption document of the lessee if applicable or payment of VAT or taxes if applicable, along with the documents related to the novation and transfer of the lease agreement.

Completion of the ownership transfer and registrations can usually occur within the same day, depending on the aircraft/engine’s location.

Usually, VAT obligations are not applicable if the aircraft is located abroad or in Greece and the lessee has VAT exemption.

If the aircraft is located in Greece at the time of the transfer of title (ie, at the time of execution of the relevant bill of sale), and the lessee is entitled to VAT exemption, the HCAA shall enter the transfer of title in the register provided a copy of the exemption certificate obtained by the lessee from the competent tax office is attached to the bill of sale.

However, if the lessee is not entitled to VAT exemption, the seller shall have to secure a taxpayer registration/VAT number in Greece and the sale shall have to be made subject to the corresponding VAT rate. The HCAA shall enter the transfer of title in the register, provided the bill of sale includes, the seller’s Greek taxpayer registration/VAT number, the relevant tax office, the tax representative (if any), and the corresponding VAT. The HCAA shall immediately give notice of the transfer of title to the tax office that issued the foreign seller’s Greek taxpayer registration/VAT number.

If the aircraft is located outside Greece at the time of the transfer of title, such transfer of title shall not be subject to tax in Greece, and the contracting parties shall need to examine any VAT-related obligations in the country where the aircraft is located. In order for the transfer of the title to the aircraft to be entered in the Greek Registry, a document (eg, issued by the airport where the aircraft is parked or any other authority) certifying the location of the aircraft at the time of transfer of title will need to be produced. The Hellenic Civil Aviation Authority shall give notice of the transfer of title to the lessee’s tax office, providing information about the identities of the seller and the buyer and the place where the aircraft was located at the time of title transfer. Under the framework of Council Regulation 904/2010, the relevant tax office shall relay this information to the tax authorities of the member state where the aircraft was located at the time of title transfer, clarifying whether the lessee qualifies for exemption.

This process also applies when one or both of the contract parties are tax-liable entities based in Greece.

The sale of an ownership interest between foreign persons in a foreign entity that owns an aircraft or engine, including where title to such aircraft or engine is transferred while it is located in Greece, or in transit, does not in itself create any Greek tax obligation regarding the aircraft or the engine owned by the entity.

All types of operating/wet/finance leases or leases concerning only engines or parts are generally permissible and recognised.

Foreign law may apply to a lease involving either a domestic party or an asset situated in Greece.

There are no material restrictions imposed on domestic lessees making rent payments to foreign lessors in US dollars.

There are no exchange controls that could prevent rent payments.

Greece’s foreign exchange market conforms to EU rules on the free movement of capital. Controls only exist to facilitate the enforcement of money laundering and terrorist financing laws. Since 1 January 2001, Greece has been part of the Eurozone, and all transactions have been conducted in euros since 1 March 2002.

There are no restrictions or difficulties in converting, repatriating, or transferring funds associated with proceeds.

Although capital controls were imposed in late June 2015, these have since been lifted.

There are no taxes/duties payable for physically executing a lease in Greece with regard to a domestic party, or as a consequence of an original or copy of a lease being brought to Greece either physically or electronically.

However, income resulting from a lease is subject to taxation in the case of a Greek tax resident lessor and matters of deductions of taxes are subject to double taxation treaties.

Leasing of an aircraft designated to be used by airlines predominantly for international commercial air transport, and or that is subject to VAT exemptions, is usually exempt from VAT.

A lessor does not need to be licensed or otherwise qualified in Greece to do business with a domestic lessee.

No mandatory terms are required in a lease (or ancillary documents thereto), governed by either English or New York law, that would not typically already be included.

Tax and other withholding gross-up provisions are permissible and enforceable.

A lease can cover parts that are installed or replaced on an aircraft or engine after its execution, especially if this is provided in the lease agreement.

There are legal and practical risks associated with aircraft engines becoming attached to other aircraft. These risks are reduced in the case of registered spare engines.

The lease should be carefully drafted in order to minimise the risk of title annexation in respect of aircraft engines installed on an airframe.

Accordingly, the lease may provide for a separate recognition of rights agreement to be entered into in favour of the lessor/owner/security trustee.

The concept of a trust and the role of an owner trustee is governed by the law applicable to the trust or the lease.

The concepts of a common law trust and an owner trustee of a common law trust is not recognised under Greek in rem law.

Greece has not ratified the Hague Convention on the Law Applicable to Trusts and on their Recognition.

However, a statutory trust with its own legal personality and an owner trustee of such trust are recognised in such capacities (owner trustee as owner), but leases with owner trustees are avoided as they cause complexity.

The Certificate of Registration mentions both owner and operator.

The aircraft registry records the legal owner as well as the lessor and lessee. 

The registration of the ownership and recording of the lease in the aircraft registry is necessary for the completion of the registration of the aircraft.

If the operator does not own the aircraft, the aircraft cannot be registered in Greece in the operator’s name. However, it can be registered in the owner’s name, even if the owner is not the operator.

The are no separate registers for leases concerning aircraft and engines.

There are separate registers for aircraft and engines.

A lease (and a lessor’s interest therein) must be filed in the domestic aircraft registry, otherwise registration of the aircraft is not completed.

For the registration of an aircraft, the lease must be submitted by the operator for filing with the HCAA along with certain other documents, including: deregistration from the previous registry; proof of paid nominal duties; an original or certified copy of the executed lease with signature authentication, or notarised and apostilled if executed abroad; proof of signatories’ authority, such as notarised and apostilled powers of attorney; corporate documents; a resolution of lease approval by the lessee; Certificate of Airworthiness (CoA); and an insurance certificate.

Registration can be completed fairly quickly, depending on the airworthiness of the aircraft.

Generally, there are no government applications or consents required prior to the execution and delivery of an aircraft and/or engine lease for an aircraft registered in Greece.

For a lease to be registered in the Greek aircraft register, it does not require translation but it must be executed with the signatures authenticated by a competent Greek authority, or notarised and apostilled if executed abroad.

The fees payable to the aircraft registration for registering a lease are nominal.

There are instances where aircraft habitually based in Greece are registered in other jurisdictions like Malta, in line with the application of Article 83bis of the Convention on International Aviation (the Chicago Convention).

For an aircraft registration to be accepted and processed, the Greek aircraft register necessitates the filing of original executed documents or certified copies from a lawyer. Translations from English are not required by the Greek register.

Upon leasing an aircraft or engine to a Greek lessee, a foreign lessor is not obligated to pay any income tax or capital gains.

Withholding tax may be due, subject to the provisions of double taxation treaties. The withholding tax should be paid (retained) by the lessee.

The lease agreement may provide that the lessee is under obligation to pay lease rental net of any Greek taxes, including any withholding tax. Gross-up provisions are recognised.

A foreign lessor cannot be deemed to be resident or domiciled in Greece simply as a result of its being a party to, or its enforcement of, the lease.

Liabilities in respect of aircraft or engine maintenance and operations may not generally be imposed on a foreign lessor under a lease as a result of its being a party to such lease.

If the lessor is also the owner of the aircraft, the lessor as the owner would be fully liable for damage to third parties caused by the aircraft’s use while in flight. Here, “damages” refer to those affecting the property and personal safety of any third party, such as crew members and passengers of other aircraft, and individuals on land or at sea. The owner’s liability extends up to the value of the aircraft. The limits of liability do not apply if the damages are due to intentional or gross negligence. 

The lessor would have no other liability under Greek law.

Creditors of a domestic lessee could not attach an aircraft leased to it but owned by a different entity, except in the case of liens.

Whether or not a lease/lessor is registered in the aircraft register, Greek aviation law gives priority to certain preferential rights such as expenses and fees for salvage, any necessary maintenance charges and handling fees, rights and other aviation and airport taxes, relating to air navigation/landing, air navigation facilities, use of airports, EUROCONTROL, etc, which are chargeable on the aircraft.

The obligations of the lessee, in terms of priority and security, rank at least equally and pari passu with all other unsecured and unsubordinated obligations of the lessee, save and except in a winding-up (where there are preferential creditors; ie, creditors secured by a lien over real estate or by a pledge, and employees’ claims relating to their salaries).

It is not a mandatory requirement that either all or part of the insurance be placed in Greece.

There are mandatory insurance coverage requirements (third-party liability to cover damage to aircraft, passengers, cargo, as well as third parties on the ground).

Commercial air carriers must be insured for damage caused to passengers, luggage, freight and third parties, with mandatory minimum coverage. The mandatory insurance coverage requirements are imposed by European regulations.

Greek law does not restrict the portion of reinsurance coverage that can be taken out abroad.

“Cut-through” clauses in the insurance/reinsurance documents are enforceable.

Assignments of insurances/reinsurances are permitted.

There are no restrictions on a lessor’s ability to (i) terminate an aircraft lease; (ii) re-export the aircraft; and/or (iii) sell the aircraft following such termination.

In certain cases (third country origin), the aircraft may need to be physically located in Greece before export.

In situations where the lessee opposes the lessor’s possession, the lessor is prohibited from obtaining physical possession of the aircraft without a court order. A court order is therefore necessary in this case.

In certain cases, a deregistration power of attorney (DerPoA) may be of practical use in cases of repossession.

Greece does not have specialised courts dedicated to aviation disputes. However, commercial courts or other competent courts, such as those for lease disputes, hold the jurisdiction to settle disagreements between commercial entities, whether they are Greek or foreign.

A lessor could obtain a summary judgment, equitable or other injunctive relief pending a final resolution of judicial proceedings to enforce an aircraft lease, particularly when there is an imminent risk concerning the aircraft, like the necessity for maintenance or reduction of value. The process, from the filing to the issuance of the decision, could last up to six months.

Greek courts will generally uphold:

• a foreign law as the governing law of an aircraft lease between a French and a foreign party;
• the submission to a foreign jurisdiction;
• a contractual waiver of jurisdiction immunity by the parties of such lease; and
• a contractual waiver of immunity of execution that expressly describes the assets subject to the waiver of such immunity.

Domestic courts could recognise and enforce a final judgment of a foreign court or an arbitral award without re-examination of the matter unless it is shown that:

• the judgment contradicts any decision previously issued in Greece concerning the same case between the same parties or if the judgment is incompatible with an earlier judgment given in another member state or in a third state involving the same cause of action and the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the member state addressed;
• the lawsuit has not been served on the defendant in a timely manner; and
• the judgment is contrary to good morals or public order, in each case, as dictated by Greek law.

Greek judgments are in euros (however, they can be converted from a foreign currency).

Greek courts may in certain cases deem additional rent as a penalty clause following termination of a lease for default, including where the lessee fails to return the aircraft, depending on the facts and the wording of the contractual undertakings.

Greek courts may reduce penalty clauses as excessive, depending on the facts of the case and the contractual undertakings.

Under Greek legal precedent there may be restrictions with respect to punitive damages, while statutory provisions regulate default/compound interest.

A lessor under an aircraft lease is not required to pay substantial taxes or fees (ie, non-nominal, except in cases of request for judicial payment where the duties paid are a specific percentage of the amount) in connection with the recognition and enforcement of such lease in Greece.

Governing law will be applicable for notice periods if the aircraft is operated domestically or leased by a domestic operator.

Whether the lessee is entitled to claim any immunity from suit, execution, attachment or other legal process will depend on its actual identity. If the lessee is a sovereign body or other government organ, it may be able to claim sovereign immunity.

Greece has adopted the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). 

Greece’s domestic courts recognise and enforce arbitral decisions.

There are no other relevant issues.

Greece recognises the concepts of contractual assignment and novation.

Assignment and assumption agreement or novation agreements (or deeds) are executed as three-party agreements and are filed with the HCAA.

Usually the lease provides that the lessee consents to these transfer agreements or the terms for such transfer.

There are no mandatory terms that need to be included in such agreement/deed, as they are governed by applicable law.

If an aircraft and/or engine lease assignment and assumption/novation is executed abroad it will need to be notarised and apostilled. If executed in Greece, the authenticity of the signature needs to be certified by a competent Greek public authority. 

Lease assignments/novations need to be filed with the HCAA, along with the transfer of ownership documentation, if applicable, and are not subject to any consent from any government entity.

The completion process is typically swift, and no government consents are necessary prior to executing and delivering an aircraft and/or engine lease assignment and assumption/novation concerning an aircraft registered domestically, as long as all relevant documents have been properly filed.

Taxes/duties are not payable in respect of the execution of an aircraft lease assignment and assumption/novation agreement, or as a consequence of an original or copy thereof being brought into Greece, either physically or electronically, except that there may be issues related to duties that have to be reviewed ad hoc.

When the ownership interest of an entity, or the beneficial interest in a trust, that owns an aircraft is transferred (with the legal title to the asset remaining with that entity), no filing with the Greek aircraft register is required. This is because the entity in question remains the registered legal owner of the aircraft.

The lessee, lessor, or owner can deregister an aircraft, although the existence of a DerPoA may be required for the lessor to apply for deregistration. This applies even when lease expiration obliges the Civil Aviation Authority (CAA) to deregister the aircraft.

Αn application for the deregistration of the Aircraft will have to be submitted to the HCAA. Customs clearance may also need to be submitted.

In cases other than the expiry of the lease term or unilateral termination, a letter or agreement of termination of the aircraft (duly executed) must be submitted along with the DerPoA and legal documents proving the authority of the signatories. The documents must be either notarised and apostilled or, if they are intended to be used in Greece, have the signatures of the signatories authenticated.

An aircraft owner, mortgagee or lessor may apply for the deregistration of the aircraft without the consent of the lessee or operator, especially where deregistration power of authority has been granted, and once the mortgage has been released.

To deregister the aircraft, the owner, mortgagee or lessor will have to submit, along with an application, the customs docs, relevant payment of nominal duties, copy of the DerPoA, and termination documentation (unilateral termination or agreement properly executed, and legal documents proving the authority of the signatories (PoAs, etc)).

The deregistration process typically takes a couple of days where there are no disputes. In case of dispute, the timeframe varies depending on whether the lessee resorts to legal action.

The Greek aircraft register will not provide advance written assurances to an aircraft owner, mortgagee or lessor as to the prompt deregistration of the aircraft until all the required documentation is filed with the executed request.

The fees charged by the aircraft register in respect of the deregistration of an aircraft are nominal.

The DerPoA must be written in Greek, be irrevocable, and bear specific wording. It also requires notarisation.

To enforce a DerPoA, besides paying the nominal fees, a copy of the DerPoA must be submitted to the HCAA along with customs documentation (if applicable) and termination documentation.

Greek law is applicable to the DerPoA.

The grantor of the DerPoA cannot revoke it without consent of the beneficiaries.

An aircraft owner, mortgagee or lessor can export the aircraft without the lessee’s consent, on the basis of the DerPoA.

A mortgagee can export the aircraft without the owner or lessor’s consent on the basis of the DerPoA.

To enhance the probability of exporting the aircraft without the lessee's consent, the owner, mortgagee, or lessor should request a DerPoA during lease or mortgage negotiations.

While the asset does not necessarily need to be in Greece at the time of deregistration, its location may become significant in certain customs export cases.

Typically, Greece does not issue aircraft export permits or licenses, except in instances of customs export permits.

These permits cannot be issued in advance.

The costs/fees/taxes that are charged in respect of the customs export of an aircraft are not significant.

There are no other significant practical issues that an aircraft owner or mortgagee or lessor should be aware of in respect of the deregistration of aircraft in Greece.

The main law on bankruptcy and insolvency is Law 4738/2020. This newly enacted Greek law titled “Debt Settlement and Facilitation of a Second Chance” came into effect on 1 January 2021.

It transposes the provisions of Directive 1023/2019 on preventive restructuring into the Law, and replaces the majority of the previous debt settlement mechanisms and restructuring schemes and introduces a new regime dealing with various forms of personal and corporate insolvencies.

Liquidation and administration are also governed by the laws on the relevant corporate entities and the Civil Procedure Code.

Within the framework of pre-bankruptcy proceedings, rehabilitation/reorganisation proceedings aim at reaching a settlement/rehabilitation agreement between the debtor and its creditors rather than liquidating the assets.

The reorganisation agreement is validated by the court.

The Out-of-Court Workout is a new procedure carried out electronically via a public electronic platform. It commences once the debtor or certain types of creditors (financial institutions, the state, social security funds) file an online application via the platform to the competent authority.

A restructuring agreement is entered into, and the creditors that are legally bound by the agreement may not proceed with any enforcement proceedings against the debtor.

Bankruptcy is a process that aims to repay the debtor’s debts to creditors using the debtor’s assets. This can be done by liquidating the assets at a public auction or through the sale of the debtor’s business.

When a debtor consistently and generally fails to pay their debts, a bankruptcy application can be filed. This application may be submitted by the debtor themselves, a creditor, or the district attorney. They will submit this application to the appropriate court to declare the debtor bankrupt.

If the court accepts the application, a Supervising Judge and a Bankruptcy Trustee are subsequently appointed

Greek Law 3858/2010 enacted the UNCITRAL Model Law and introduces the prospect of cross-border co-operation where there are overseas proceedings.

The UNCITRAL Model Law is regarded as necessary for promoting international co-operation in cases of cross-border insolvency.

The law also provides for the recognition of a foreign judicial decision of an insolvency process, following a Greek judicial decision recognising the foreign decision.

The EU Regulation 2015/848 on insolvency proceedings provides for the immediate recognition of judicial decisions related to restructuring or insolvency proceedings issued by foreign EU courts. In particular, any judicial decision related to restructuring or insolvency proceedings issued by the competent courts of an EU member state has direct effect in any other EU member state.

The lessee’s insolvency does not affect a DerPoA if it is irrevocable.

When the lessee of an aircraft, who is in possession of that aircraft, is put into liquidation or administration or a similar process, the following generally applies:

• the bankruptcy trustee may elect not to continue the performance of the lease;
• the lessor may encounter delays in repossessing the aircraft on termination of the lease if the lease was not terminated before the date of the bankruptcy judgment;
• the aircraft will not be deemed to be part of the lessee’s property; and
• the liquidator/administrator may not prioritise the rights of any other ordinary creditors over those of the lessor.

The main risk for a lender if a borrower or guarantor or entity providing security becomes insolvent is that the lender’s claims will not be satisfied, except if security has been granted on the aircraft. If there are insufficient assets to cover the lender’s payment, or in the absence of security, the lender will be treated like other unsecured creditors.

Once bankruptcy is declared, all individual measures of the bankruptcy creditors against the debtor for the satisfaction or discharge of their bankruptcy claims shall be automatically suspended. This includes the commencement or continuation of enforcement, the exercise of counterclaims, the continuation of proceedings, the bringing or adjudication of legal remedies, the issuing of administrative acts, or their enforcement on elements of the bankrupt’s assets, including administrative enforcement measures by the state and social security institutions, as well as measures to secure the debt pursuant to the legislation.

Enforcement may also be suspended if an application is made before filing an agreement for the debtor’s reorganisation.

The initial suspension period can last up to four months, with a potential extension of up to six months.

The filing of a recovery agreement triggers an automatic stay that lasts for four months, which may be extended.

The total duration of the moratorium under the new law cannot exceed 12 months.

Enforcement may also be suspended in the event of an application for bankruptcy if the application provides for a going-concern sale. Otherwise, the application for, or declaration of, bankruptcy will not suspend enforcement by secured creditors.

Compulsory administration is a legal process that allows creditors to manage a debtor’s property to satisfy their debts. The process does not involve freezing or auctioning the property, and the conditions for compulsory administration are as follows:

• the creditor must have a monetary claim against the debtor;
• the creditor must have an enforceable title to the claim;
• the creditor must have served the debtor with an order for execution;
• a decision of a single-member court of first instance of the district where the debtor’s property or place of business is located must be issued; and
• the decision that imposes the receivership must be served on the debtor.

During a lessee’s insolvency proceedings, ipso facto defaults are acknowledged, permitting repossession of the aircraft.

In the case of an insolvency situation that would usually constitute an event of default under the lease agreement and/or the domestic lessee is wound up by a court or administration proceeding, the lessor would be entitled to request the return of the aircraft.

In a liquidation of the lessee or insolvency proceedings, the aircraft may not be attached by unsecured creditors of the lessee. The lessee only has a right to possession of the aircraft pursuant to the lease agreement, and its rights are subject to the proprietary and security interests of the lessor and its secured creditors.

Any outstanding lease rental payments which were due to the lessor when the lessee was being wound up, would be treated as unsecured along with the other ordinary creditors of an insolvent lessee.

If the lease agreement continues, claims for lease rentals incurred following the formal opening of insolvency proceedings constitute preferred claims against the insolvency estate.

The lease security deposit would be available to the lessor to cover outstanding claims.

Maintenance reserves would usually remain with the lessor.

Convention on International Interests in Mobile Equipment (the “Convention”) and the related Protocol on Matters specific to Aircraft Equipment (the “Protocol”) are not in force in Greece.

There is no applicable information in this jurisdiction.

There is no applicable information in this jurisdiction.

There is no applicable information in this jurisdiction.

Greece is party to the 1948 Geneva Convention on the International Recognition of Rights in Aircraft and the 1933 Rome Convention on the Unification of Certain Rules relating to the Precautionary Arrest of Aircraft.

There are no restrictions on foreign lenders financing local aircraft or on borrowers’ utilisation of loan funds. However, the act of providing loans within Greece is a regulated activity. Only credit institutions that have been duly licensed or those that have obtained an EU passport can engage in this activity.

While foreign lenders do need a license to offer lending services in Greece, as provided by the Bank of Greece or an EU passport, they do not need to obtain a license to obtain security over an aircraft located in Greece for loans that have been provided by them in their jurisdiction.

There are no exchange controls or government consents that would be material to any financing or repatriation of realisation proceeds under a loan, guarantee or security document.

Borrowers are permitted to grant security to foreign lenders, although there are certain limitations when it comes to securing real estate in Greek border areas.

Depending on the legal form of the corporate borrower, certain statutory restrictions exist if the lender is a direct or indirect affiliate or if security is granted for the liabilities of an affiliated person (upstream or downstream or side stream collateral).

In the case of a société anonyme, said guarantees are considered “related-party transactions” and a certain approval and publication process is required.

The guarantee may be granted either (i) after a 10-day period from the publication in the company registry, during which shareholders holding 1/20 of the company’s shares may challenge the approval, or (ii) following the written consent of all shareholders of the company, waiving their right to dispute the process.

It is advisable for a lender to take share security over a domestic special-purpose vehicle that owns the financed aircraft.

A pledge of shares is recognised.

Negative pledges are recognised.

There are no material restriction or requirements imposed on intercreditor arrangements.

The concept of agency and the role of an agent (such as the facility agent) under a syndicated loan is recognised only by the bond loan legislation.

Τhe Société Anonyme Company Law provides that if a bond loan is governed by foreign law, collateral security and guarantees are granted in the name of the person who, under the law governing the bond loan, may hold securities and guarantees on his/her account on behalf of the bondholders.

All forms of subordination are known in Greece.

The subordination usually takes the form of an agreement between secured and unsecured creditors of a borrower entity.

The transfer or assignment of all or part of an outstanding debt under an English or New York law-governed loan is permissible and recognised on the basis of the applicable law.

Interest rates are not subject to a legal maximum, however they should be determined according to the Bank of Greece in the context of the open market and competition rules. Limitations apply to default interest and compounding of interest.

Greek law allows for the creation of a first-priority aircraft mortgage that is locally provided. Once the mortgage has been registered in the aircraft register, the creditor has the right to seize and sell the aircraft in the event of default.

There are no types of security that cannot be taken over an aircraft or related collateral such as engines, warranties or insurance.

With the exception of the Greek bond loan structures, the concept of a trust and the role of a security trustee are not recognised; instead, parallel debt structures should be used.

The parallel debt structure allows the debtor to undertake to pay the agent/trustee, as the creditor, an amount equal to the total amount owed to the creditors.

A borrower may assign its rights to an aircraft or under an aircraft lease (including in relation to insurances) to a foreign security trustee, pursuant to a security assignment or mortgage.

It is possible to assign the rights and benefits only, without also assigning the attendant obligations of the lessor, under an aircraft lease.

A security assignment or a guarantee can be governed by English or New York law.

In connection with any Greek law security assignment, a notification of the third-party debtor is necessary to prevent the third-party debtor from discharging its obligations by making payments to the assignor instead of the assignee.

It is not necessary for a security assignment to be translated, certified, notarised or apostilled/legalised to be enforceable against a domestic party. However, if legal proceedings are imitated before a Greek court, foreign language documents have to be translated into Greek to be admissible as evidence in such proceedings.

In the case of an English or New York law-governed security assignment in respect of an aircraft registered domestically, there is no need for a financier to take any additional domestic law security instrument (except for the registration of the Greek mortgage). Such an assignment does not need to be registered.

Cape Town filings are not provided.

A Greek law mortgage is a domestic law security instrument and is filed with the HCAA, at a nominal cost of EUR2,000.

An English or New York law-governed security assignment or a domestic law security instrument are not registered domestically.

The transfer of security interests over an aircraft and/or engines is recognised. If it concerns a mortgage, it has to be registered in the Greek aircraft mortgage register.

If the identity of the secured parties under a security assignment changes after its execution, the security interests are not jeopardised as long as the relevant filings are made in relation to the mortgage.

The effects of any change in the identity of a secured party under a security assignment governed by foreign law depend on the specific arrangements made with respect to such security interest; eg, whether a security trustee concept has been introduced or not.

The transfer of a mortgagee’s position under a Greek aircraft mortgage requires registration in the Greek aircraft mortgage register.

Parallel debt structures are used domestically.

A secured party under a security assignment would not be deemed to be resident, domiciled, carrying on business or subject to any taxes as a result of its being a party to, or its enforcement of, such security assignment.

A domestic law mortgage over an aircraft or engine can be perfected. It would take effect upon its registration in the Greek aircraft mortgage register.

The mortgage over an aircraft is different from the mortgage over spare engines. Spare engines are separately registered and a mortgage can be registered on them.

An account pledge is the granting of security over a bank account (such as a lease receivables account), and it requires, among other things, a notification to the account bank.

A lien can be taken over an aircraft.

The aforementioned liens are extinguished (i) on the aircraft’s sale in a public auction; or (ii) three months after the claim arose, unless they are registered in the mortgage book following agreement or exercise of a lawsuit.

Fleet liens could be applicable for specific liens provided by Greek law such as handler’s fees, HCAA charges etc, and the aircraft could be grounded.

The third party could detain the aircraft and enforce the lien.

A mortgage can be swiftly deregistered, typically within a week, provided there are notarised and apostilled powers of attorney from both the mortgagor and mortgagee.

The lien’s discharge and the associated timeline depend on whether the lien is contested. If it is unchallenged and the relevant obligation is paid to the third party, such as the handling agent, the lien can be discharged promptly, usually within a week.

The mortgage is registered in the book of mortgages. The mortgage has to be registered in order to be perfected and to give priority to the mortgagee.

Rights of detention can be applied for liens, such as obligations to handlers, HCAA, airport authorities and EUROCONTROL.

The aircraft registry of the HCAA is the relevant book where any aircraft search should take place.

Enforcement will depend on the terms of each such instrument. Governing law shall be applicable.

Security trustees’ enforcement of their rights will be governed by applicable law.

Domestic courts will uphold (i) a foreign law as the governing law of a finance or security document; and (ii) the submission to a foreign jurisdiction.

Greek courts will recognise and enforce the final judgment of a foreign court or an arbitral award without re-examining the merits of the case.

A secured party cannot take physical possession of an aircraft to enforce a security agreement/aircraft mortgage without the consent of the lessee or operator.

There are no special courts competent to decide enforcement actions under a security assignment or mortgage.

A secured party can obtain a summary judgment, equitable or other injunctive relief pending final resolution of judicial proceedings to enforce a security agreement/aircraft mortgage. A bond would probably need to be granted.

Greek judgments are in euros (however, they can be converted from a foreign currency).

The secured party needs to pay judicial expenses for the enforcement of a decision.

There are no other relevant issues that a lender should be aware of in relation to the enforcement of its rights.