The Draft MAC Protocol to the UNIDROIT Cape Town Convention on International Interests in Mobile Equipment: A New International Regime for Security Interests in Mining, Agricultural and Construction (MAC) Equipment

Abstract

The recent announcement by the International Institute for the Unification of Private Law (UNIDROIT) that the draft of an international instrument for the asset-based financing and leasing of mining, agricultural and construction equipment (MAC Protocol) will be conferred to a Diplomatic Conference for its adoption towards the end of the year 2019 provides a timely opportunity to describe the economic background, history, and key elements of this instrument, which will be the fourth industry-specific Protocol under the umbrella of the Cape Town Convention on International Interests in Mobile Equipment. The United States and Germany, both nations that are major exporting states of MAC equipment, have from the very beginning significantly contributed to the preparation of the Cape Town Convention and its existing Protocols as well as to that of the draft MAC Protocol. For this reason, the article sheds light on the upcoming international legal framework for security interests in MAC equipment particularly through the lens of these two jurisdictions, which at the same time exemplify the traditional divide between common law and civil law systems. Although the draft MAC Protocol in many respects follows its elder siblings, it also features several innovative elements that represent an unprecedented step for the Cape Town Convention system as a whole, primarily those dealing with inventory financing and the effects of the association of MAC equipment with immovable property. Overall, the draft MAC Protocol can be expected to greatly contribute to the modernization and harmonization of the secured transactions framework both at international and domestic level. The article concludes that its adoption will offer substantial benefits both for importing countries of MAC equipment as well as for states that export such equipment, and for common law and civil law jurisdictions alike.

Keywords: Cape Town Convention, MAC Protocol, secured transactions, UNIDROIT, comparative law

JEL Classification: K11, K12, K33, K39