Aviation Finance & Leasing 2025 Comparisons

As a general rule, the sale of an aircraft or engine is subject to VAT at a rate of 22% if the transaction is considered to take place in Italy for VAT purposes. Sales of aircraft located in Italy attract VAT at the same rate. VAT does not apply if an aircraft is purchased by an airline that qualifies as an international carrier, meaning that most of its flights are chiefly operated for reward on international routes. VAT also does not apply if the aircraft is sold in Italy and thereafter exported by the foreign purchaser within 90 days of the purchase.

In addition, there is also a registration tax due at rates varying from a flat rate of EUR200 to 3% on the relevant taxed amount, depending on whether the obligations under the agreement are subject to the VAT regime. The registration will also attract stamp duty at a rate of EUR16 for every four standard pages.

Regarding the sale of an ownership interest in an entity, the sale of shares or quotas in a company is generally subject to a fixed registration tax of EUR200.

An aircraft sale and purchase agreement must be in writing, in Italian, signed by both the seller and purchaser, notarised (meaning that an Italian notary public must certify the identity and powers of the relevant signatories), filed with the Italian Public Registry of Private Deeds and thereafter with the Italian Aircraft Registry (the “RAN”), if relating to an aircraft.

An aircraft sale and purchase agreement can be executed abroad by the parties and notarised by a foreign notary public. If so, such foreign notarised (and apostilled, if required) agreement must be submitted to an Italian notary public along with a sworn translation into Italian, then filed with the Italian Public Registry of Private Deeds as well as with the RAN, if relating to an aircraft.

The transfer of title to an aircraft registered with the RAN is effected by a bilateral agreement between the seller and the buyer. Pursuant to Article 2684 of the Italian Civil Code and Article 865 of the Italian Navigation Code (INC), a bilateral aircraft sale and purchase agreement must be in writing, notarised and filed with the Italian Public Registry of Private Deeds and then transcribed in the RAN to be fully perfected and opposable to third parties. An aircraft sale and purchase agreement can also be executed abroad by the parties and notarised by a foreign notary public (see 1.1.2 Enforceability Against Domestic Parties). Installed parts are considered appurtenances to an aircraft and their title is generally transferred with the aircraft, provided that parts having significant value are typically specified and identified in the agreement. A standalone engine is transferred by written purchase agreement between the seller and purchaser. There is no public registry for engines in Italy where any such purchase agreement needs to be registered.

The sale of the ownership interest in an entity that owns an aircraft or engine results in the sale of such aircraft or engine to the purchaser of the ownership interest in such entity.

The transfer of title to an aircraft or an engine physically delivered in Italy is recognised when the bill of sale is governed by English or New York law, provided that the aircraft is not registered in Italy. See 1.1.2 Enforceability Against Domestic Parties for information on the formalities of registering an aircraft in Italy.

For a standalone engine, while there is no public registry, the bill of sale must meet the “indisputable date” requirements pursuant to Article 2704 of the Italian Civil Code to be opposable to third parties. Note that a document meets the indisputable date requirement, among other things, if it has undergone or fulfilled any of the actions recognised or admitted by the law or the case law for such purposes, including but not limited to registration with the Italian Public Registry of Private Deeds, notarisation, application of stamps at an Italian post office or exchange of the document by the Italian certified email system with time marks.

See 1.1.2 Enforceability Against Domestic Parties and 1.2.2 Sales Governed by English or New York Law.

See 1.1.2 Enforceability Against Domestic Parties and 1.2.2 Sales Governed by English or New York Law.

No specific licences, permits or government consents are required.

See 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement.

Operating, wet and finance leases are recognised under the laws of Italy.

A lease involving either a domestic party or an asset situated in Italy can be governed by a foreign law chosen by the lessor and lessee. The choice must be expressed or evidenced with reasonable certainty by the terms of the lease or the circumstances of the case. The Italian courts must uphold the choice of the parties to have a foreign law as the governing law of the lease, unless its application in respect of a specific matter would:

• prejudice the application of the rules of law which cannot be derogated by contract (so-called mandatory rules) of a country with which all other elements of the lease (save for the choice of law) were connected;
• be contrary to mandatory provisions of Italian law; or
• be contrary to Italian public policies.

No material restrictions are imposed on domestic lessees making rental payments to foreign lessors in US dollars.

No restrictions on international payments or exchange controls exist in Italy. Therefore, proceeds or other payments arising from contracts or liability, in turn, can be freely remitted abroad.

Certain taxes and duties are payable for the physical execution of a lease in Italy.

Registration in the Italian Public Registry of Private Deeds is required to the extent an agreement is executed in Italy, and has to be made either within 30 days of its execution by all signatories, or in the so-called case of use, which is the case of enforcement in Italy at the time of such an enforcement.

Registration will attract:

• stamp duty at a rate of EUR16 for every four standard pages; 
• a tax due at rates varying from a flat rate of Euro 200 to 3% on the relevant taxed amount, depending on whether the obligations under the agreement are subject to the VAT regime and on the relevant contents thereunder.

The translation into Italian of an agreement is requested as a condition for (i) enforceability before an Italian Court; (ii) admissibility in evidence in Italy; and/or (iii) registration with the Italian Public Registry of Private Deeds.

A lessor does not have to be licensed or otherwise qualified in Italy to do business with a domestic lessee – to the extent that a foreign lessor is not required to set up a permanent establishment in Italy (eg, a subsidiary, branch office, etc) for the purpose of offering leasing and financial services on a regular basis in the Italian market.

There are no mandatory terms that a lease must contain under the laws of Italy, provided that its essential terms (ie, rent, term, subject aircraft and contractual parties) are determined. A lease agreement having a term in excess of six months must be in written form according to Article 939-bis of the INC.

Tax and other withholding gross-up provisions are valid and enforceable in Italy.

Subsequent additions to an aircraft can be included in the lease. It should be normal under the terms of a lease agreement for the lessee to carry out and bear all costs of ordinary (and extraordinary) maintenance work and repairs. Furthermore, the lessee may deem it necessary to carry out improvements, fittings or alterations. Usually, the prior written consent of the lessor is required for this and in the event of termination of the lease, the lessee may be required to reverse any alterations, improvements or additions, unless otherwise required or agreed by the lessor.

Under Italian law, if an engine is installed on an aircraft which is owned by a different entity/person, the engine does not cease to be the property of the relevant engine owner – who also retains the right to require the separation of the same from the host aircraft. The ownership rights to the engine can be enforced against third parties who acquire rights over the aircraft only when rights to the engine result from a formal legal document (eg, a purchase agreement or lease agreement) bearing the indisputable date (see 1.2.2 Sales Governed by English or New York Law).

Italian laws generally recognise the concept of a trustee and the role of an owner trustee. 

The interest of the owner of an aircraft may be registered with the RAN. Pursuant to Article 750 of INC, aircraft may be registered with the RAN provided that certain nationality requirements are met. In particular – to satisfy the nationality requirements for the registration with the Aircraft Registry – the aircraft must be wholly or mainly the property of:

• a state, region, province, municipality or any other Italian or EU member states’ public or private body;
• an Italian citizen or citizens of other EU member states; or
• a company established or with registered offices in Italy, or other property of Italian or other EU member state’s citizens, or an Italian or other EU member state’s body corporate with the same characteristics of shareholding and whose president and most of the directors (including the managing director) are Italian or citizens of other EU member states.

If the nationality requirements are met, the relevant aircraft is registered with the RAN in the name of the aircraft owner.

In addition, a lease interest can be registered with the RAN by submitting a copy of the relevant lease agreement, previously filed with the Italian Public Registry of Private Deeds, to the Italian Civil Aviation Authority (Ente Nazionale per l'Aviazione Civile or ENAC).

Ownership and other rights resulting from registration in the RAN become validly enforceable against any third party.

According to the 2.3.1 Notation of Owner’s/Lessor’s Interests on Aircraft Register, an aircraft may be registered in the name of an owner meeting the EU-nationality requirements, who is not a licensed operator. In addition, INC Article 756 paragraph 2 (governing registration in the RAN in the name of the operator of the aircraft) states as follows:

“The ENAC may […] permit registration in the Aircraft Registry of aircraft which are effectively operated by, but not property of, companies holding an air carrier’s license. In such a case, the different basis (ie ground) on which registration is made, will be reflected in the Aircraft Registry and the Certificate of Registration.”

Aircraft leases can be registered in the RAN. Engine leases cannot be registered separately from the aircraft to which they pertain. There is no specific public register for engines in Italy.

An aircraft lease agreement having a term of more than six months has to be filed with the RAN, subject to its prior registration with the Italian Public Registry of Private Deeds. The translation into Italian of a lease agreement is requested as a condition for:

• enforceability before an Italian court;
• admissibility as evidence in Italy; and/or
• registration with the Italian Public Registry of Private Deeds.

No specific licences and/or other government consents are necessary to the transaction parties in conjunction with the execution and performance of the transaction documents, provided that any dry-lease agreement entered into by an Italian operator is subject to the prior check and approval of the ENAC with regard to its compliance with air safety provisions, as provided under EU Regulation No 1008/2008.

The registration procedure generally takes 24/48 hours after filing.

See 1.1.2 Enforceability Against Domestic Parties.

See 2.1.5 Taxes/Duties Payable for Physical Execution of a Lease.

The two most popular alternative countries for the registration of aircraft habitually based in Italy are Ireland and Malta. This is generally based on the ICAO 83-bis agreements in place between the ENAC and the Irish Civil Aviation Authority, and the ENAC and Transport Malta, which allow the state of registration to delegate regulatory oversight to the state of the operator.

See 1.1.2 Enforceability Against Domestic Parties and 1.2.4 Registration, Filing and/or Consent From Government Entities.

In general, the rent paid by an Italian lessee to a foreign lessor will be subject to Italian withholding taxes. Where a double-taxation treaty is in force between Italy and the foreign country concerned, such treaty will generally fix a cap.

A foreign lessor would not be deemed as resident, domiciled or carrying on business in Italy solely by reason of being the registered owner/lessor of the aircraft in the RAN or as a result of being the owner/lessor of an aircraft.

Generally speaking, Italian laws impose liabilities relating to flight operations on the operator of an aircraft, who must file a so-called dichiarazione di esercenza (statement of the operator) with the ENAC according to INC Article 874. Lessors and owners are not responsible for the consequences of flight operations in respect of aircraft operated by an Italian lessee, provided that the dichiarazione di esercenza is properly filed with the RAN. Once the statement is recorded with the RAN, the operator is exclusively liable for the operation, maintenance and insurance of the aircraft.

Save where such liability is caused by, or otherwise arises from the gross negligence, wilful default or fraud of the lessor, or where any of these have contributed to such liability, the lessor cannot be liable in tort, strict liability or otherwise under Italian law in respect of the operation of an aircraft by a lessee qualified as an operator for the purposes of Article 874 et seq, of the INC.

Creditors of a domestic lessee generally cannot attach an aircraft leased to it but owned by a different entity. Creditors can only attach the assets belonging to their debtor.

The following preferred claims, secured by statutory liens pursuant to Article 1023 of the INC, have priority over an aircraft and its appurtenances and separable parts, including engines:

• judicial expenses due to the state, or incurred in the common interest of the creditors for the precautionary arrest of the aircraft, or for costs and expenses of enforcement proceedings brought against the aircraft;
• airport duties or similar duties and taxes;
• expenses incurred in respect of the custody and maintenance of the aircraft after its arrival on its last flight;
• costs and expenses arising from the unpaid salaries of the crew;
• costs and expenses arising from amounts advanced by the aeronautic administration or consular authorities for the support and repatriation of the crew;
• costs and expenses arising from mandatory contributions due for social welfare and assistance for the crew;
• indemnities and rewards for assistance and rescue;
• indemnities for damages to third parties not covered by mandatory insurance caused on the surface by the aircraft, indemnities for the collision of the aircraft and for death or personal injuries incurred by the passengers and crew, as well as for loss or damage to the cargo; and
• costs and expenses arising from contracts executed, and transactions carried out, by the captain of the aircraft for the preservation of the aircraft or continuation of the trip.

The aforementioned statutory liens over an aircraft and its appurtenances are extinguished with the expiry of a 90-day period.

In Italy, it is not mandatory that all or part of the insurance on an aircraft or engine be placed with domestic insurance companies.

The insurance regime applicable in Italy is that set out by the European legal framework for all EU member states (mainly Regulation (EC) No 785/2004, as amended by Regulation (EU) No 285/2010). Accordingly, the Italian laws and regulations on aviation insurance are meant to reflect and implement the EU legislation. The insurance for civil aircraft should be compliant with the requirements set out by the aforementioned EU legal framework in respect of passengers, baggage, cargo and third parties.

Generally speaking, up to 100% of reinsurance coverage can be placed outside Italian jurisdiction.

Cut-through clauses under insurance and re-insurance documentation are legally effective in Italy.

The assignment of insurance and reinsurance contracts is legally valid and effective under Italian law pursuant to Articles 1406 to 1410 of the Italian Civil Code, subject to the consent of the other party. Assignment of insurances is not registered in the RAN.

There are no restrictions on a lessor’s ability to terminate an aircraft lease, except for:

• according to Article 1057 of the INC, aircraft cannot be seized, confiscated, attached or be the object of precautionary measures to the extent that (i) they are operated for the transport of passengers and/or goods for profit and they are either ready to take off or fly, or (ii) they are operated for scheduled services in Italy, unless the prior authorisation of the Italian Ministry of Transportation is obtained (these provisions are meant to prevent such seizure, confiscation or attachment from interfering with the correct and timely performance of scheduled flight services for passengers/goods; and
• in any event under Italian law, certain self-help remedies cannot be enforced to the extent that they would entitle the enforcing party to take measures directly without seeking remedies through the judicial system (on termination of the lease agreement, should the lessee fail to return or re-deliver the aircraft or be in default thereunder, then the lessor may seek to repossess the aircraft by filing an application for an injunction of return (decreto ingiuntivo) with the competent Italian court).

There are no restrictions on the export of the aircraft.

The lessor may sell the aircraft after termination. It is not strictly necessary for the aircraft to be physically located in Italy for termination, export, or sale to occur.

There are no self-help remedies available in Italy for a lessor to repossess an aircraft to the extent that such remedies would entitle the lessor to take enforcement measures with respect to the aircraft directly, without a court-supervised procedure. Any such self-help remedies would only be possible if taken with the express consent of the lessee, given at the time when the relevant measures have to be taken. In the case of a lessee’s non-cooperation, a judicial order of the competent court would be necessary to take possession of the aircraft.

Therefore, a lessor may either enforce a foreign judgment in Italy (as long as such judgment is recognised by the Italian system) or act before the Italian competent court claiming:

• an injunction of return of the aircraft pursuant to Article 633 of the Italian Civil Procedure Code, which can be granted without notice to the lessee and is either immediately enforceable or subject to a waiting period of 40 days for possible objection by the lessee; or
• precautionary measures (including seizure or attachment of the aircraft).

If the lessee objects to the injunction of return, a proceeding on the merit of the case would be opened before the court, provided that – at the first hearing – if the opposition is not grounded on solid written evidence or clear straightforward proof of a ready solution in favour of the debtor, then the opposed injunction would be declared temporarily enforceable. Should the injunction not be opposed within the term above, it will be declared enforceable.

The above measures – if and when granted or recognised by the Italian competent court – are materially enforced on Italian territory by taking physical repossession of the aircraft with the assistance of the competent court bailiff.

There are no specific courts for aviation disputes in Italy. The disputes are assigned based on their civil, administrative or criminal nature.

A lessor can obtain various forms of expedited or provisional relief in Italy to enforce an aircraft lease pending final resolution. Key tools include the:

• decreto ingiuntivo (an injunctive order for payment or delivery of the aircraft, obtainable with strong written proof);
• a temporary injunction issued by an Italian court prohibiting the lessee from operating the aircraft, where the prerequisites of any such temporary injunction consist in providing the Italian court with satisfactory evidence of:
1. fumus boni juris (ie, the rights under the existing agreements); and
2. periculum in mora (ie, the irreparable prejudice that any such rights would suffer in the absence of the temporary injunction).

A security (in the form of a deposit, bank guarantee, etc) for possible damages may be required by the Italian court, upon request of the lessee, as a condition for the issuance of the temporary injunction. 

The timing may vary. A return injunction is generally issued by the court in a period between two and four weeks. It could be immediately enforceable or subject to challenge within 40 days of notification. Should the injunction (issued as not immediately enforceable) be challenged, then an ordinary case on the merit starts. At the first hearing, the request for temporary enforceability can be repeated.

The choice of a foreign law as the governing law of an aircraft lease will be recognised and upheld as a valid choice in any action in the courts of Italy. Also, consent to the jurisdiction contained in a lease constitutes a legal, valid and binding undertaking on the lessee which does not contravene any provision of the laws of Italy and which is not subject to revocation. Any express waiver of immunity would be upheld by the courts of Italy.

Foreign Court Judgments

A final, valid and conclusive judgment rendered by a foreign court would be recognised and enforced by the courts of Italy, without review on the merits, if the following requirements provided by Article 64 of Law 31 May 1995, No 218 are met:

• the foreign judgment is given by a foreign judge who was competent to settle the dispute according to the Italian rules on competence;
• the defendant was duly summoned in the proceeding and given the opportunity to dispute the claim according to the laws of the place where the proceeding was held;
• both the claimant and the defendant filed their respective defence with the foreign court or the default (in absentia) of one of them was declared according to the law of the place where the proceeding was held;
• the foreign judgment is final and conclusive according to the law of the place where the proceeding was held;
• the foreign judgment is not contrary to any other Italian judgment issued in relation to the same subject matter that became final and conclusive according to Italian law;
• no other proceedings have previously been filed, and are pending, before the Italian courts between the same parties and having the same subject matter; and
• the foreign judgment is not contrary to Italian public order rules.

Any such final, valid and conclusive judgment will then be enforceable in Italy by submitting an application before the competent Court of Appeal according to the Italian Civil Procedure Code (exequatur).

EU court judgments

Judgments rendered by EU courts are recognised and enforced by the Italian courts in accordance with the provisions of Regulation (EU) No 1215/2012 of the European Parliament and of the European Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, as subsequently amended and supplemented.

Foreign Arbitral Awards

In addition, Italy is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958). According to Article 839 of the Italian Civil Procedure Code, the enforcement in Italy of a foreign arbitration award is subject to an appeal to the president of the Italian Court of Appeal in whose district the party is resident (if such party does not reside in Italy, the Court of Appeal in Rome is competent).

The appellant must file the original or a certified copy of the award, together with the arbitration clause/agreement, or an equivalent document, in original or certified copy, along with a certified translation into Italian if issued in a foreign language.

The president of the Court of Appeal, having ascertained the formal regularity of the foreign award, will by decree declare the foreign award immediately enforceable in Italy, unless (i) the dispute could not be remitted to arbitration according to Italian law; or (ii) the foreign award contains provisions contrary to public policies.

A lessor under an aircraft lease can obtain a judgment in a foreign currency.

There are limitations under Italian law on a lessor’s ability to recover default interest and to charge additional rent after a lease termination. The ability to recover default interest is generally valid, but Italian law provides the prohibition on compounding interest: according to Article 1283 of the Italian Civil Code, the interest on accrued interests is not generally permitted unless specific conditions are met (so-called Anatocismo). This limitation is particularly relevant for the calculation of default interest.

In addition, the Italian Criminal Code (Article 644, so-called Usura) prohibits charging interest rates above a statutory threshold, which is updated quarterly by the Ministry of Economy and Finance. If the interest rate exceeds the legal threshold, the interest provision is null and unenforceable, and the lender may face both criminal and civil penalties.

Moreover, if the lessee fails to return the aircraft after the termination of the lease, the lessor is entitled to compensation for the period of non-return.

A lessor is required to pay fees and taxes to enforce a lease agreement in Italy. The court fees are based on the value of the claim and the principal charge is the “unified court fee” (so-called Contributo Unificato). The amount of this fee is not fixed but is calculated based on the value of the dispute, and the maximum amount is currently set at EUR1,686. Furthermore, the lessor may have to bear other expenses related to the enforcement procedures, such as registration and stamp taxes and other administrative charges.

A lessor is not required to comply with mandatory notice periods imposed by Italian law when terminating an aircraft lease agreement.

Italy does not have a specific law on sovereign immunity. The topic is instead governed by Article 10 of the Italian Constitution, according to which, the Italian legal system must conform to international principles, including customary international principles.

Any express waiver of immunity would be upheld by the courts of Italy.

Italy is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (see 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards).

There are presently no other relevant issues to discuss.

The specific discipline of contractual assignment and novation is set forth in Articles 1406 to 1410 of the Italian Civil Code. This is the agreement whereby either party may substitute themselves with a third party in the relations arising from a contract providing mutual obligations, if the latter have not yet been performed, provided that the other party consents thereto. The novation discipline is also set forth in Article 1230 of the Italian Civil Code.

The choice of English law or New York law as the governing law of documents will be recognised and upheld as a valid choice in any action in the courts of Italy. Under Italian law, the lessee’s consent is required for the novation or assignment of the entire lease contract.

It is highly advisable for an aircraft and/or engine lease assignment and assumption/novation to be translated, certified, notarised or legalised for it to be enforceable against an Italian party.

In Italy, aircraft lease assignments and novations relating to Italian registered aircraft must be transcribed in the RAN if the original lease was registered, to ensure their opposability and effectiveness against third parties. This requires the agreement to be in notarised written form (or legalised/apostilled with a sworn translation, if foreign), and registered with the Italian Public Registry of Private Deeds. For standalone engine lease assignments or novations, as there is no specific public registry, their effectiveness against third parties depends on obtaining an indisputable date for the agreement (see 1.2.2 Sales Governed by English or New York Law).

No specific licences, permits or government consents are required, and provided that all documents to be filed are in good order, the registration procedure generally takes 24/48 hours after filing.

Generally speaking, a novation (which implies a change in the identity of the lessor and/or the lessee) will not attract registration taxes and ENAC fees.

The transfer of an ownership interest in an entity is recognised under Italian corporate and trust law. It should be noted, however, that a transfer of the ownership interest in an entity owning an aircraft, or of the beneficial interest in a trust holding an aircraft, does not constitute a direct transfer of the aircraft itself, since legal title remains with the entity or trustee.

The deregistration of an aircraft from the RAN is governed by INC Article 760 which states as follows:

“The aircraft will be deregistered from the Aircraft Registry:

(a) on the occurrence, or assumption, of an event of loss;

(b) after being dismantled;

(c) on the loss of the nationality requirements provided in Article 756;

(d) when the aircraft is registered in the aircraft register of another State;

(e) when the aircraft has been re-delivered to the owner in the cases set forth in Article 756, second para;

(f) if the owner files an application to register the aircraft in the aircraft register of another EU State.”

In the cases of (c) and (d) above, the ENAC – after being provided with the deregistration application – will publish in its subsidiary office which has jurisdiction in the district where the aircraft is normally located when on the ground, as well as in the RAN – a notice of the deregistration which invites any interested persons to claim any outstanding credit (or right) in respect of the relevant aircraft within a period of 60 days from the date of issue of the notice.

On the expiration of the 60-day period, the aircraft can be deregistered – provided that no creditor of the owner has made objection against the deregistration (or, if made, this has been according to INC Article 759 paragraphs 4 and 5). In the case of urgency, the aircraft can be deregistered prior to the expiration of the 60-day period, provided that a bank guarantee is deposited with the Aircraft Registry as a security for the value of the aircraft – such value being as determined by the competent technicians of the ENAC.

The consent of a lessee is not required to the extent that the aircraft is registered in the name of the owner/lessor. However, in order to finalise the deregistration process, the ENAC will require evidence that the lease is terminated and that the original certificate of registration and the original certificate of airworthiness, which are kept on board the aircraft, have been returned.

If the aircraft is registered in the name of an Italian lessee:

• deregistration can be achieved upon redelivery or repossession of the aircraft; or 
• if the lessee does not co-operate in the deregistration process and the lessor is willing to deregister the aircraft based on the lessee’s default under the lease, then the ENAC may require satisfactory evidence, at its exclusive discretion, that:
1. the lessee is in breach of its obligations under the lease; and
2. as a consequence thereof the lease has been lawfully terminated.

Such evidence, satisfactory to the ENAC, may also consist of a judicial decision/order from an Italian or foreign competent court.

An application has to be filed with the RAN, detailing the reasons for the deregistration (see 2.8.1 Deregistering Aircraft in This Jurisdiction). The documents to be filed with the RAN for the deregistration of an aircraft depend on the reasons for deregistration. Details of the documents required are available on the ENAC website.

Subject to the provisions in 2.8.1 Deregistering Aircraft in This Jurisdiction and 2.8.3 Required Documentation:

• if there is co-operation from the lessee, the deregistration for the return of the aircraft is usually completed by the ENAC within two or three business days from the filing of all the required documents; and
• in the case of non-cooperation, the timing very much depends on the development and outcome of the judicial proceeding actioned by the lessor in order to repossess and deregister the aircraft.

The ENAC does not typically provide advance assurances regarding the deregistration of an aircraft. Deregistration from the RAN may be refused if the requirements set out under Article 760 of the INC are not satisfied.

The ENAC duty for deregistering an aircraft is EUR279.

A deregistration power of attorney is recognised in Italy.

Notarisation is crucial for establishing legal certainty and an indisputable date for the document (see 1.2.2 Sales Governed by English or New York Law and1.1.2 Enforceability Against Domestic Parties).

No additional documents are required to enforce a deregistration power of attorney meeting the requirements under 2.8.7 Deregistration Power of Attorney.

A deregistration power of attorney does not have to be governed by the laws of this jurisdiction.

A power of attorney expressed to be irrevocable may nevertheless be revoked under certain circumstances (including the bankruptcy of the grantor) for “cause” in accordance with Article 1723 of the Italian Civil Code. This Article provides in general that a grantor can also revoke an irrevocable power of attorney if just cause occurs, being on the other hand liable for any damages caused by the revocation should such revocation not be grounded on just cause.  Moreover, a power of attorney may be limited in circumstances of conflict of interest.

Generally, the owner or lessor cannot export the aircraft without the lessee’s consent during the term of the lease, unless an applicable termination procedure has been properly followed. Similarly, a mortgagee may not export the aircraft without the consent of the owner or lessor, except in cases where the mortgagee exercises its enforcement rights in accordance with the terms of the mortgage and Italian law.

There is nothing that an owner, mortgagee, or lessor can do at the time of negotiating the lease or mortgage to increase the likelihood of being able to export the aircraft without the lessee’s consent, as self-help remedies are not permitted in Italy. The aircraft does not need to be physically located in Italy at the time of deregistration or export.

In Italy, no separate export permit or licence is specifically required for the export of civil aircraft. The timing may vary, but generally this process takes approximately one month, and does not involve material costs. No export permit is issued in advance.

Generally, no duties are payable upon exportation, although such export may attract Italian VAT and customs duties.

In order to finalise the deregistration process, the ENAC will require evidence that the lease has been terminated and the original certificate of registration and the original certificate of airworthiness, which are mandatorily kept by the lessee on board the aircraft, have been returned. Any mortgage or encumbrances must be discharged prior to deregistration.

The primary framework is the Italian Insolvency Code (Legislative Decree 14/2019, the “Crisis Code”). It encompasses both voluntary (debtor-initiated) and involuntary (creditor or prosecutor-initiated) procedures.

There is also an Italian insolvency procedure called Amministrazione Straordinaria (ie, Negotiated Extraordinary Administration of the Crisis, or “Extraordinary Administration”), which is available only to large enterprises, pursuant to the rules set forth in Legislative Decree No 270 of 8 July 1999 (as amended from time to time, the “Prodi-bis Law”), in certain cases, in conjunction with Law No 39 of 18 February 2004 (as amended from time to time, the “Marzano Law”).

An Italian commercial enterprise that is continuously unable to fulfil its payment obligations (and is therefore in a “condition of insolvency”), can apply for, or otherwise be subject to, an insolvency procedure before the competent court according to the provisions of the “Crisis Code”.

Voluntary options often aim for business continuity and include:

• an arrangement with creditors (concordato preventivo);
• a debt restructuring agreement (accordi di ristrutturazione dei debiti); and
• a negotiated resolution of the crisis (composizione negoziata della crisi).

Involuntary proceedings typically lead to judicial liquidation (liquidazione giudiziale), formerly known as bankruptcy. Additionally, Extraordinary Administration is a special regime that focuses on reorganisation and recovery for large, strategically important enterprises.

Cross-border co-operation in insolvency proceedings is governed by a dual framework: Regulation (EU) 2015/848 of the European Parliament and of the Council on insolvency proceedings, which is directly applicable in the national legal system, and Law No 218 of 31 May 1995 on the reform of the Italian system of private international law, which applies to relations with non-EU countries.

Regulation (EU) 2015/848 provides specific mechanisms for direct communication between the courts, the sharing of information, and co-ordination in relation to EU proceedings. The regulation also establishes mutual information obligations and simplified procedures for the recognition of decisions, removing the need for exequatur proceedings with respect to decisions on the opening, conduct and closure of insolvency proceedings.

With regard to non-EU countries, Law No 218/1995 on private international law applies. This law regulates the criteria for determining the applicable law and the recognition and enforcement of foreign judgments and acts. Under this framework, insolvency, restructuring and receivership proceedings from non-EU jurisdictions may be recognised and enforced in Italy on the basis of reciprocity and compatibility with Italian public policy.

Parties are not restricted from adopting co-ordination principles, including those developed by the American Law Institute and the International Insolvency Institute in the Guidelines Applicable to Court-to-Court Communications in Cross-Border Cases, as well as the Global Principles for Multi-Creditor Workouts issued by INSOL International.

Finally, note that Italy has not directly implemented the UNCITRAL Model Law on Cross-Border Insolvency through specific domestic legislation.

The Italian Crisis Code incorporates principles of international co-operation in insolvency matters. For example, Articles 11 and 26 establish jurisdiction where the debtor has its centre of main interest (COMI) or an establishment in Italy, even in the presence of parallel foreign proceedings. In addition, Italy ensures a high degree of international co-operation and recognition of foreign proceedings through the application of Regulation (EU) 2015/848 in intra-EU relations and through Law No 218/1995 in respect of non-EU countries.

Generally speaking, a power of attorney expressed to be irrevocable may be revoked under certain circumstances (including the bankruptcy of the principal) for “cause” in accordance with the Italian Civil Code Article 1723. This provides that a grantor can revoke an irrevocable power of attorney if there is just cause, although the grantor will be liable for any damages caused by the revocation, should such revocation not be grounded on a just cause. Moreover, powers of attorney may be limited in circumstances where there is a conflict of interest – the deregistration power of attorney would not cease to be valid solely as a consequence of the lessee’s insolvency, but its enforceability would be affected.

Irrevocable de-registration and export request authorisations (IDERAs) are not enforceable in Italy, as Italy has not ratified the Cape Town Convention.

Pursuant to Article 172 of the Crisis Code, the following will apply in the event that the holder of an aircraft lease becomes insolvent:

• if an agreement is still unperformed or has not yet been fully performed/completed by both parties at the time the bankruptcy proceeding is opened, performance of the agreement will, subject to the different provisions of the law, remain suspended until the receiver, with the authorisation of the creditors’ committee, declares it will take over the agreement in place of the debtor and assume, as from the date of the takeover, all the obligations arising therefrom or dissolve the agreement unless, in the case of an agreement in rem, the transfer of the right has already taken place;
• the contracting party may urge the receiver by having the delegated judge assign a time limit not exceeding 60 days, after which, the agreement will be deemed to be dissolved;
• in the event of the continuation of the agreement, only claims accrued in the course of the bankruptcy proceedings will be pre-deductible;

• in the event of termination of the agreement, the lessor is entitled to assert the claim resulting from non-performance in the liabilities of the bankruptcy proceeding, without being entitled to damages;

• actions for termination of an agreement brought before the opening of bankruptcy proceedings against the defaulting party will be effective as against the receiver, without prejudice, in the cases provided for, to the effectiveness of the registration of the request;
• if the lessor intends to obtain the restitution of a sum or an asset or compensation for damage by a judgment of termination, it will bring the request in accordance with the provisions of the law; and
• a contractual termination clause that makes the termination of the agreement dependent on the opening of bankruptcy proceedings will be ineffective.

The procedure may vary and differ should the insolvency of the lessee be subject to specific rules (eg, Extraordinary Administration governed by Legislative Decree 8 July 1999, No 270 or Law 18 February 2004, No 39, as from time to time amended and supplemented).

Under the Extraordinary Administration rules:

• a lease agreement would continue in full force and effect according to the relevant terms and conditions (as events of default that occurred before the commencement of the Extraordinary Administration and not previously enforced would not be upheld), unless terminated early by the Extraordinary Commissioners pursuant to the right and authority granted to the them by Article 50 of Prodi-bis Law, which states: “Except for the provisions of paragraph 4, the extraordinary commissioner is entitled to terminate the agreements, including those having a continuing or periodical performance, which have not yet been performed, totally or partially, by the parties as at the date on which the extraordinary administration procedure starts. Until the termination right is exercised, the agreement continues to be implemented”;
• after authorisation to implement the plan, the contractual party is entitled to assign the Extraordinary Commissioners a term not exceeding 30 days to resolve whether to continue or terminate the relevant agreement. If the Extraordinary Commissioners fail to respond, then the agreement must be considered as terminated. If the Extraordinary Commissioners formally agree to continue the agreement, then the so-called “step-in” effects will occur, as a consequence of which, the outstanding indebtedness that arises under such agreement before the commencement of the Extraordinary Administration, if any, will also become payable with priority (pre-deduction);
• in the case of termination, the other party can file a claim for the admission of its credits under the relevant agreement within the overall indebtedness of the Extraordinary Administration (if an aircraft lease agreement is terminated, the owner/lessor can apply to the competent court to claim an authorisation decree to repossess the aircraft pursuant to Articles 210 and 196 of the Crisis Code);
• credits, if any, accrued against the Extraordinary Administration prior to the declaration of insolvency are repaid on a par condicio creditorum (equal conditions for creditors) basis, taking into account lawful priority reasons (ie, pre-deduction, privileges, secured obligations and unsecured obligations), according to the plan prepared and carried out by the Extraordinary Commissioners for the satisfaction of creditors; and
• regarding the agreement(s) still in force and effect, the Extraordinary Administration is bound to perform in full its current obligations thereunder (including payment of lease rents) accrued after the declaration of insolvency.

Failing the proper performance of such obligations, the provisions concerning the termination and applicable remedies would apply, always provided that no enforcement or precautionary measures can be taken against the Extraordinary Administration.

The most important effects of the declaration of insolvency are that:

• creditors cannot act or enforce their rights with individual actions against the company, and any action already commenced before the declaration of insolvency is interrupted (ie, “automatic stay”); and
• no enforcement or precautionary measures can be commenced or continued against the assets, properties, financial means and receivables of the company.

A major risk also includes revocation actions, whereby the insolvency officer may claw back payments made by the debtor.

Furthermore, while security created by the first priority mortgage over the aircraft would be recognised in the case of the insolvency of the lessee and will grant priority on the distribution of the proceeds resulting from the sale of the asset, this priority is always subject to the statutory liens set forth by Article 1023 of the INC (see 2.4.6 Priority of Third Parties’ Rights).

In Italy, a moratorium (often referred to as an “automatic stay”) is imposed in connection with the opening of insolvency proceedings. Its duration varies depending on the specific procedure – see 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent.

See 2.9.1 Overview of Relevant Laws and Statutory Regimes Governing Restructurings, Reorganisations, Insolvencies and Liquidations and 2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reoganisations, Insolvencies and Receivership.

A contractual termination clause that makes the termination of the agreement dependent on the opening of a bankruptcy proceeding will be ineffective. The parties can, however, introduce a termination clause whereby it is provided that in the case of a lessee’s breach of the payment of rent provisions, the contract will be terminated, with the lessee being obliged to return the aircraft.

See 2.9.5 Other Effects of a Lessee’s Insolvency.

Italy is a signatory to, but has not yet ratified, the 2001 Cape Town Convention.

See 2.10.1 Conventions in Force. 

See 2.10.1 Conventions in Force.

See 2.10.1 Conventions in Force.

No other conventions are applicable in Italy.

There are no restrictions on lending and borrowing in Italy.

No general restrictions apply for the remittance abroad of the proceeds resulting from the sale of an aircraft, subject to the application of specific restrictions that may be applied from time to time according to international sanctions imposed for other reasons (eg, anti-money laundering, anti-bribery, embargo, etc).

Borrowers are permitted to grant security to foreign lenders.

Downstream, upstream and cross-stream guarantees are generally permitted in Italy. While downstream guarantees are straightforward and widely accepted, upstream and cross-stream guarantees are more complex.

The main legal issue is ensuring a genuine corporate benefit for the guaranteeing company. Under Italian corporate law, Articles 2497 et seq of the Italian Civil Code regulate transactions with subsidiaries, affiliates and controlling companies, requiring that the act provides a benefit to the companies belonging to the group. This benefit must be clearly documented to justify the risk and avoid potential legal challenges, especially under the rules governing corporate control.

It is generally advisable for a lender to take security over the shares of a domestic special-purpose vehicle (SPV) that owns the financed aircraft. A share pledge is a fully recognised and effective form of security under Italian law.

A negative pledge clause is recognised in Italy.

In Italy, there are no material restrictions on intercreditor arrangements. Such agreements are generally valid and enforceable, provided that they do not contravene mandatory rules (eg, the principle of par condicio creditorum in insolvency proceedings or the protection of unsecured creditors).

The concept of agency and the role of an agent under a syndicated loan are recognised under Italian law. This recognition is based on the general principles of Italian private law, supplemented by the specific regulatory framework governing banking and financial activities.

Both contractual and legal methods of debt subordination are permissible and recognised. Based on the principle of contractual freedom, creditors can agree to subordinate their claims to those of other creditors. Such an agreement is valid and effective between the parties that have signed it, but it is not enforceable against creditors who have not joined the agreement.

Moreover, some debts are subordinated by law. The most relevant example in Italian corporate law is shareholder loans. According to Article 2467 of the Italian Civil Code, loans granted by shareholders to a company are automatically subordinated to other creditors.

The transfer or assignment of all or part of an outstanding debt under a loan governed by English or New York law is fully permissible and recognised in Italy.

Under Italian law, there are usury and interest limitation rules that apply to both secured and unsecured loans, including financial leases. See 2.6.8 Limitations on Lessors’ Actions Following Termination.

A mortgage is the sole security interest that can be voluntarily created over an aircraft. Pursuant to Article 1030 of the INC, a mortgage must be recorded with the RAN and reflected on the aircraft certificate at its registration. A mortgage must be in Italian and contain, among other things:

• the name and legal seat of the mortgagor and mortgagee;
• the type, model, marks and manufacturer’s serial number of the aircraft over which the security is recorded; and
• the secured amount.

No mortgage can be registered over spare parts, separate from the aircraft, since they are not individually recorded in the Aircraft Registry.

Italian law recognises the concept of security trustee. The identity of the mortgagee is relevant for the assessment of the registration tax payable at the time of registration of the mortgage deed in the Italian Public Registry of Private Deeds, as the flat tax of EUR200 is subject to – among other things – the mortgagee(s) being the person(s) giving the secured amounts.

A borrower can assign its rights to the aircraft or under an aircraft lease (including those related to insurances) to a security trustee pursuant to a security assignment or a mortgage.

As a general rule under Italian law, it is not possible to assign only the rights and benefits under an aircraft lease without also transferring the related obligations of the lessor. A “partial” assignment limited to benefits would conflict with the principle of reciprocity.

In practice, under a lease, the parties often execute amendments or novation agreements so that the original party transfers its obligations to another party.

A security assignment or a guarantee can be governed by English or New York law and will be fully enforceable in Italy. Note that while the validity of the assignment agreement is determined by the foreign law, its effectiveness against the Italian debtor and other third parties is subject to Italian law.

In order to create a security assignment, the agreement must be in writing. Also, to perfect it and make it fully enforceable against the domestic party, the assignment must be notified or accepted by the lessee in a manner that establishes an indisputable date (see 1.2.2 Sales Governed by English or New York Law and 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation. It is advisable for a security assignment to be translated, certified or notarised. Notarisation or certification is the most common way to obtain an indisputable date, while a sworn translation ensures that the document can be used in Italian court proceedings.

No security instrument other than a mortgage can be registered against Italian registered aircraft.

Generally speaking, a security assignment governed by a foreign law cannot be registered in the RAN, while an aircraft mortgage must be registered in the RAN to be validly created and to be enforceable against third parties.

The transfer of security interests over an aircraft and/or engines is fully recognised under Italian law.

The credits secured by a mortgage registered in the RAN can be assigned by the mortgagee according to Article 2843 of the Italian Civil Code. The assignment agreement, which must be in the same form as the mortgage deed, must be noted (annotazione) alongside the mortgage in the RAN.

Under Italian law, “parallel debt” structures are not used in domestic financing transactions in the typical form found in international markets. This is primarily due to the specificities of the Italian legal system and the lack of a national legal framework for the concept of a trust.

A foreign secured party would not generally be deemed to be resident, domiciled, carrying on business, or subject to Italian taxes solely as a result of being a party to or enforcing a security assignment.

A mortgage is created with registration in the RAN and in the aircraft certificate of registration of a public mortgage deed, either unilaterally (ie, signed by the mortgagor only) or bilaterally (ie, signed by both mortgagor and mortgagee), executed before an Italian notary public and registered with the Italian Public Registry of Private Deeds, along with two enrolment notes (note di trascrizione). Failing registration in the RAN, the mortgage is null and void.

A security interest over a civil aircraft is created by an aircraft mortgage, which extends also to appurtenances and separable parts of the aircraft, unless different ownership of such appurtenances results from a deed bearing an indisputable date (see 1.2.2 Sales Governed by English or New York Law).

The form of security typically used to take security over a bank account is a pledge of credits. To perfect the pledge and make it effective against third parties, the security agreement must be notified to the bank in a manner that establishes an indisputable date (see 1.2.2 Sales Governed by English or New York Law).

A third party can take or register a lien over an aircraft or engine in Italy, which is imposed on a “per aircraft” basis, not fleet-wide.

Privileges relating to aircraft are provided by both the Italian Civil Code and the INC.

Italian Civil Code privileges on aircraft secure ordinary costs of participation in the enforcement proceedings as well as conservation and upgrading costs (conservazione e miglioramento).

INC privileges secure:

• a salvage lien, possessory lien (for custody and conservation of the aircraft), judicial expenses and costs;
• airport duties or similar duties and taxes (see Article 1023 of the INC), the wages of the captain and crew, credits of the aviation administration or the Italian Consular Authorities, credits for social security contributions, damages caused by the aircraft to third parties or goods; and
• expenses incurred by the aircraft’s captain.

These privileges have two common characteristics: i) the privilege secures only the credits arising from a specific flight; ii) the privilege is cancelled upon full payment of the debt, or the elapse of a 90-day period after, respectively, the date:

• of the salvage operation ending;
• of the accident;
• of the arrival of the crew in the airport of final destination following expiration of the employment contracts; or
• when payment was due.

The statutory liens set out in Article 1023 of the INC have priority in respect of any security.

As a remedy, pursuant to Article 802 of the INC, the ENAC is entitled, at the request of airport authorities and/or the authority for air traffic control (Ente Nazionale Assistenza al Volo or ENAV), to deny authorisation to aircraft taking off from Italian airports as long as taxes, duties or fees, including charges for landing, take-off and parking of aircraft, taxes for loading or unloading, fees for the supply of handling services as well as overflight or terminal charges, are outstanding.

An aircraft can also be detained and/or seized pursuant to court proceedings in the case above and also in the following circumstances:

• for outstanding amounts under –
1. Article 6 of Law 5 May 1976, No 324, which provides for the joint liability of the owner of the aircraft with the lessee for the payment of duties, taxes, charges and interests to the airports; and
2. Article 1023 of the INC, which provides certain liens on the aircraft by cause of its operation; or
• if certain provisions of the Italian Criminal Code have been breached; or
• in the case of unlawful operation of the aircraft. 

The timing may vary. At the latest, the lien or mortgage will be discharged within one week.

The registration of aircraft mortgages is recorded in the RAN. An aircraft mortgage is the only lien (security) which can be registered in the RAN pursuant to the INC, Article 1030, and it takes effect on the relevant registration. Failing registration, the aircraft mortgage will be treated as null and void.

Statutory rights of detention or non-consensual preferential liens attach to a specific aircraft and are not extended on a fleet-wide basis.

A potential purchaser can verify that an aircraft is free of encumbrances in the RAN, in which the following information is recorded:

• the manufacturer, type, model, manufacturer’s serial number and marks of the aircraft;
• the name and registered office of the owner;
• the name and registered office of the operator (if other than the owner);
• the voluntary mortgage details (if any); and
• the judicial enforcements or precautionary measures (if any).

There are no substantial differences in enforcing a security assignment compared to a loan or guarantee.

Under Italian law, a notice and acknowledgement executed by the lessor and lessee are sufficient to make the security assignment effective and enforceable against the lessee, provided that self-help remedies are not permitted. Any enforcement action must be carried out through the judicial system in accordance with the Italian Civil Procedure Code, for instance by seeking a court order to seize and sell the aircraft or to compel the lessee’s performance of the assignment.

The domestic courts in Italy will uphold a foreign law as the governing law of a finance or security document and submission to a foreign jurisdiction (see 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards).

See 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards.

See 2.6.1 Restrictions on Lessors’ Abilities and 2.6.2 Lessor Taking Possession of the Aircraft.

The court of first instance (tribunale) is the domestic court competent to decide enforcement actions under a security agreement or aircraft mortgage. Within the tribunale, a specific judge of the enforcement oversees the execution proceedings.

See 3.4.5 Secured Parties’ Right to Take Possession of Aircraft.

The sale price on the judicial sale of the aircraft is usually expressed in euro.

Payments in any other currency are (generally) not restricted.

Some minor court expenses will be incurred in relation to proceedings for the attachment of the aircraft by the mortgagee. The tariffs published in the Italian Official Attorney’s Rates (which may vary from time to time) are based on the type of judicial activity performed. Costs may increase considerably if the mortgagor opposes the attachment of the aircraft.

No other relevant issues apply.