History of AWG
In 1994, the International Institute for the Unification of Private Law (UNIDROIT), requested the formation, by Airbus and Boeing, of an ad hoc international industry group to provide detailed, coordinated input to assist UNIDROIT in the development of an international treaty on the financing and leasing of mobile equipment that would come to be known as the Cape Town Convention. In response to that request, Airbus and Boeing agreed to form AWG. They jointly invited others into this grouping. The initial and subsequent invitees were a number of major manufacturers, financial institutions, and leasing companies. Since that time, AWG's scope of activity and membership has expanded significantly. It now addresses a wide range of topics affecting international aviation financing and leasing.

UNIDROIT REQUEST AND REPLY

In 1994, UNIDROIT, an intergovernmental organisation, requested the formation, by Airbus and Boeing, of an ad hoc international industry group to provide detailed, coordinated input to assist UNIDROIT in the development of an international treaty on the financing and leasing of mobile equipment (as subsequently renamed, 'Cape Town Convention').

In response to that request, Airbus and Boeing agreed to form AWG. They jointly invited others into this grouping. The initial and subsequent invitees were a number of major manufacturers, financial institutions, and leasing companies.

ACTIVITIES FROM 1994 - 2002

Prior to 2000, AWG limited its activities to contributing to and advancing the Cape Town Convention. In that effort, which it undertook in close cooperation with the IATA, AWG was guided by the basic principle that the text of the Cape Town Convention must reflect asset-based financing and leasing principles and facilitate extensions of aviation credit.

The Convention on International Interests in Mobile Equipment (The Cape Town Convention) and Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment (Aircraft Protocol) were adopted on 16 November 2001. The final texts of the Cape Town Convention and of its Aircraft Protocol reflect the principles and have had the effects noted above.

Work on national ratification and effective implementation of the Cape Town Convention remained (and remains) a high priority of AWG.

In 2000, the group began considering whether it should pursue other matters of mutual interest on financing and leasing-related topics, employing the methods that were proving successful in developing and advancing the Cape Town Convention.

AWG agreed in principle to work on the development of policies, regulations and rules designed to facilitate advanced international aviation financing and leasing. That objective was specific, but the subject matter was general. The approach was and remains functional: potential topics are those that impose inefficiencies or limit options in the financing or leasing contexts.

The broadened general purpose of AWG was driven by the creation of subgroups addressing proposed changes to international capital adequacy rules (Bank for International Settlement (BIS) II), export credit rules, and documentary practices.

In the immediate aftermath of the events of September 11, AWG found itself spontaneously engaged in a range of activities relating to war risk insurance and liability. These actions, including AWG's role in helping to advance war risk programs and protective cover thereunder for lessors and financiers, was instrumental in the decision to formalise AWG.

FORMALISATION OF AWG

In late 2002, AWG formalized as a not-for-profit entity, organised under the laws of Bermuda (a company limited by guarantees).

The jurisdiction was selected for its well developed corporate and non-profit entity laws and their suitability for international groupings.

The formalisation was coupled with the adoption of a best practices compliance program. The compliance program is reviewed and updated on a regular basis.

EXPANSION OF TOPICS ADDRESSED

AWG policy is determined by its members. Since its formation, the group has agreed to work on the following projects: Cape Town Convention, export credit rules, cross-border transfer of aircraft, insurance and liability, capital adequacy rules, accounting rules and other select legal, regulatory, and policy issues.

AWG is also a forum for considering new issues as they emerge and develop, as well as continuing to monitor issues of importance to the international aviation financing and leasing community.

GROWTH IN MEMBERSHIP

Membership in AWG has grown steadily over the years. It now has broad international membership that comprises the major manufacturers, lessors and financiers of commercial aviation equipment.