Proposal for a Council Decision on the signing by the European Community of the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock, adopted in Luxembourg on 23 February 2007
Date: 2009-03-02
Institutions: European Commission
Subjects: EU visa policy, Schengen Agreement, collective agreement, rail network, rail transport, traffic regulations, vehicle

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.3.2009 
COM(2009) 94 final 

Proposal for a 

COUNCIL DECISION 

on the signing by the European Community of the Protocol to the Convention on 
International Interests in Mobile Equipment on Matters Specific to Railway Rolling 
Stock, adopted in Luxembourg on 23 February 2007 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

Purpose of the present proposal 

The  Commission  is  proposing  that  the  Community  sign  the  Protocol  to  the  Convention  on 
International  Interests  in  Mobile  Equipment  on  Matters  Specific  to  Railway  Rolling  Stock 
(hereinafter  "the  Rail  Protocol"  or  "the  Luxembourg  Protocol")  adopted  at  a  Diplomatic 
Conference held under the joint auspices of the International  Institute for the Unification of 
Private  Law  (UNIDROIT)  and  the  International  Organisation  for  International  Carriage  by 
Rail  (OTIF)  in  Luxembourg  from  12  to  23  February  2007.  42  States  and  11  International 
Organisations  participated  in  the  Diplomatic  Conference.  The  European  Commission 
participated  in  the  negotiations  for  the  European  Community  on  the  basis  of  Council 
directives adopted on 28 February 2003. Two Member States, Luxembourg and Italy, signed 
the Protocol at the end of the Conference. 

2. 

The Cape Town Convention and the Rail Protocol 

2.1. 

Scope 

The Convention on International Interests in Mobile Equipment (hereinafter "the Cape Town 
Convention" or "the Convention") and the Protocol on Matters Specific to Aircraft Equipment 
(hereinafter "the Aircraft Protocol") were adopted, at a Diplomatic Conference held in Cape 
Town from 29 October to 16 November 2001. 

The Convention lays down uniform rules for the constitution and effects of an international 
interest  (security  agreement,  title  reservation  agreement  or  leasing  agreement)  in  certain 
categories  of  mobile  equipment  designated  in  the  Protocols  relating  to  the  following 
categories: aircraft, railway rolling stock and space assets.  

The  instrument  consists  of  the  basic  Convention  laying  down  legal  rules  applicable  to  all 
categories of mobile equipment mobiles and a number of specific Protocols containing special 
rules relating to particular types of equipment. 

These Protocols may amend the Convention where the specific features of the relevant sector 
so require. It is accordingly the Protocol and not the Convention that prevails as regards each 
category  of  mobile  equipment.  The  Member States’  obligations  under  the  Convention  vary 
with  the  Protocol  to  which  they  accede.  The  Convention  can  apply  to  a  category  of  mobile 
equipment only when the relevant Protocol comes into force, and only as between the Parties 
to that Protocol. But the Convention and the Protocol must then be read together as a single 
instrument. 

The Convention applies when the debtor is situated in a contracting State (Article 3) since the 
various  protocols  provide  for  specific  connecting  factors  (i.e.  the  State  of  registration).  The 
interest  established  by  the  Convention  (Articles 1  and  2)  concerns  the  asset  registered,  but 
also associated rights and proceeds, and the relevant protocol may provide for the Convention 
to apply to the sale of an asset (Article 41 of the Convention). The Convention strengthens the 
rights  of  the  beneficiaries  of  this  unified  interest  in  rem  in  mobile  equipment  assets  if  the 
debtor should default on his obligations (Articles 8 to 15). The Convention finally establishes 
an  international  system  for  creditors  to  register  interests  in  the  various  categories  of  mobile 
equipment  assets  (Articles 16  to  26),  giving  priority  to  the  creditor's  registered  interest 
(Article 29). 

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The Rail Protocol fixes certain rules concerning the priority and enforceability of registered 
international interests for certain types of creditors financing rolling stock – i.e. the chargor, 
conditional  seller  or  lessor.  Furthermore  the  Protocol  provides  to  creditors  specific  default 
remedies (Article VII) and three alternatives for remedies on insolvency of the debtor (Article 
IX). Under Chapter III an international registry will be accessible through the internet and a 
Supervisory  Authority  is  created.  Finally  Article  XXV  authorises  under  certain  conditions 
Contracting States to make declarations on public service exemptions. 

2.2. 

Objectives of the Rail Protocol 

This instrument is intended to facilitate the financing of high-value railway rolling stock by 
creating  a  particularly  strong  international  guarantee  for  creditors  (sellers  on  credit  and 
institutions  supplying  credit  for  such  sales)  which  gives  them  "absolute"  priority  over  these 
assets in an international register. 

Such instrument, to which many of the Community's main trading partners are party, is likely 
to be of great benefit to the European rail industry, banks and Governments by encouraging 
capital  investment  in  the  rail  sector  and  boosting  the  creation  of  a  genuine  lease  market. 
Before the Community can benefit from it, however, it must sign and ratify the Rail Protocol. 

3. 

Community Powers 

The  Cape  Town  Convention  and  its  Protocols  are  mixed  agreements  falling  partly  under 
exclusive Community competence. In 2002, the Commission presented two proposals for the 
signing and the conclusion by the Community of the Cape Town Convention and the Aircraft 
Protocol. In July 2008 the Commission presented a revised proposal for the conclusion only 
of these international instruments as they are no longer open to signature following their entry 
into force. 

The  Community  has  jurisdiction  over  certain  matters  governed  by  the  Rail  Protocol  and 
affecting  Regulation  (EC)  No  44/2001  of  22 December 2000  on  Jurisdiction  and  the 
Recognition  and  Enforcement  of  Judgments  in  Civil  and  Commercial  Matters1,  Regulation 
(EC)  No  1346/2000  of  29  May  2000  on  insolvency  proceedings2  and  Regulation  (EC)  No 
593/2008  of  17  June  2008  on  the  law  applicable  to  contractual  obligations  (Rome  I)3. 
Furthermore,  there  is  Community  legislation  in  matters  governed  by  the  Rail  Protocol  and 
affecting  Directive  2008/57/EC  of  the  European  Parliament  and  of  the  Council  of  17  June 
2008 on interoperability of the Rail system within the Community (Recast)4 and Regulation 
(EC)  No  881/2004  of  29  April  2004  establishing  a  European  railway  agency5.  For  these 
reasons, the Member States cannot sign the Rail Protocol independently. 

On 28 February 2003, the Council authorised the Commission  to negotiate on behalf of the 
Community,  at  the  Diplomatic  Conference  in  Luxembourg,  provisions  of  the  Rail  Protocol 
which fall within the exclusive powers of the Community and affected Community law. 

Under Article XXII of the Rail Protocol, "Regional Economic Integration Organisations" may 
sign, accept, approve or accede to this instrument. For the purposes of the Rail Protocol, a 

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OJ L 12, 16.1.2001, p. 1. 
OJ L 160, 30.6.2000, p. 1. 
OJ L 177, 4.7.2008, p. 6. 
OJ L 191, 18.07.2008, p. 1. 
OJ L 220, 21.6.2004, p. 3. 

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"Regional Economic Integration Organisation" is taken to mean an organisation which has 
competence over certain matters governed by the Protocol and may sign it. This definition 
will allow the Community to sign this instrument on condition that it obtains the necessary 
approval of the Community institutions. Pursuant to Article XXII(3) any reference in the 
Protocol to "Contracting State(s)" or "States Parties" also applies to the Community when so 
required by the context. 

Article  XXII(2)  of  the  Rail  Protocol  requires  that  at  the  time  of  signature,,  acceptance, 
approval  or  accession,  the  Community  make  a  general  declaration  indicating  the  matters 
covered  by  the  Rail  Protocol  which  fall  within  the  Community's  jurisdiction.  To  this  end  a 
draft  declaration  is  attached  in  Annex.  The  text  has  been  drawn  up  on  the  basis  of  the 
Community's  present  powers  conferred  by  Regulations  (EC)  No  44/2001  of  22  December 
2000,  No  1346/2000  of  29  May  2000  and  No  593/2008  of  17  June  2008,Directive 
2008/57/EC  of  the  European  Parliament  and  of  the  Council  of  17  June  2008  on 
interoperability  of  the  Rail  system  within the  Community  (Recast)  and  Regulation  (EC)  No 
881/2004 of 29 April 2004.  

In view of the foregoing, the Commission proposes that the Council adopt the decision set out 
below,  authorising  signature  of  the  Protocol  to  the  Convention  on  International  Interests  in 
Mobile  Equipment  on  Matters  Specific  to  Railway  Rolling  Stock,  by  making  the 
abovementioned declaration, the text of which is attached in Annex. 

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Proposal for a 

COUNCIL DECISION 

on the signing by the European Community of the Protocol to the Convention on 
International Interests in Mobile Equipment on Matters Specific to Railway Rolling 
Stock, adopted in Luxembourg on 23 February 2007 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 61(c) in conjunction with the first subparagraph of Article 300(2) thereof, 

Having regard to the proposal from the Commission6, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  Community  is  working  towards  the  establishment  of  a  common  judicial  area 
based on the principle of mutual recognition of judicial decisions. 

The  Protocol  to  the  Convention  on  International  Interests  in  Mobile  Equipment 
(hereinafter referred to as the "Cape Town Convention") on matters specific to railway 
rolling  stock (hereinafter referred to  as the "Rail Protocol"), adopted in Luxembourg 
on  23  February  2007,  makes  a  useful  contribution  to  the  regulation  at  international 
level.  It  is  therefore  desirable  that  the  provisions  of  this  instrument  which  concern 
matters falling within the exclusive competence of the Community should be applied 
as soon as possible. 

The  Commission  negotiated  the  Rail  Protocol  on  behalf  of  the  Community,  for  the 
parts falling within the exclusive competence of the Community. 

Article  XXII(1)  of  the  Rail  Protocol  provides  that  Regional  Economic  Integration 
Organisations,  which  have  competence  over  certain  matters  governed  by  the  Rail 
Protocol, may sign the said Protocol; 

(5) 

The Protocol remains open for signature until its entry into force. 

(6) 

Some of the matters governed by Regulation (EC) No 44/2001 of 22 December 2000 
on  jurisdiction  and  the  recognition  and  enforcement  of  judgments  in  civil  and 
commercial matters 7, Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency 
proceedings 8, Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to 
contractual  obligations  (Rome  I)9,  Directive  2008/57/EC  of  the  European  Parliament 

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OJ C , , p. . 
OJ L 12, 16.1.2001, p. 1. Regulation as last amended …. 
OJ L 160, 30.6.2000, p. 1. Regulation as last amended … 
OJ L 177, 4.7.2008, p. 6. 

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and of the Council of 17 June 2008 on interoperability of the Rail system within the 
Community  (Recast)10  and  Regulation  (EC)  No  881/2004  of  29  April  2004 
establishing a European railway agency11 are also dealt with in the Rail Protocol. 

The Community has exclusive competence over some of the matters governed by the 
Rail Protocol, while the Member States have competence over other matters governed 
by this instrument. 

The  Community  should  therefore  sign  the  Rail  Protocol.  Article XXII(2)  of  the  Rail 
Protocol  provides  that,  at  the  time  of  signature,  acceptance,  approval  or  accession  a 
Regional  Economic  Integration  Organisation  shall  make  a  declaration  specifying  the 
matters  governed  by  the  said  Protocol  in  respect  of  which  competence  has  been 
transferred to that organisation by its Member States. 

The  United  Kingdom  and  Ireland  take  part  in  the  adoption  and  application  of  this 
Decision. 

In  accordance  with  Articles  1  and  2  of  the  Protocol  on  the  position  of  Denmark, 
annexed to the Treaty on European Union and to the Treaty establishing the European 
Community,  Denmark  does  not  take  part  in  the  adoption  of  this  Decision  and  is  not 
bound by it or subject to its application, 

(7) 

(8) 

(9) 

(10) 

HAS DECIDED AS FOLLOWS:  

Article 1 

1.  Subject  to  a  possible  conclusion  at  a  later  date,  the  signing  of  the  Protocol  to  the 
Convention  on  International  Interests  in  Mobile  Equipment  on  matters  specific  to  railway 
rolling stock, adopted in Luxembourg on 23 February 2007, is hereby approved on behalf of 
the Community. 

In this Decision, "Member State" shall mean all the Member States with the exception 

2. 
of Denmark. 

Article 2 

The  President  of  the  Council  is  hereby  authorised  to  designate  the  person(s)  empowered  to 
sign, on behalf of the European Community, the Protocol to the Convention on International 
Interests  in  Mobile  Equipment  on  matters  specific  to  railway  rolling  stock,  subject  to  the 
condition set out in Article 3. 

When signing the Rail Protocol, the Community shall make the declaration set out in Annex, 
in accordance with Article XXII (2) of the Protocol. 

Article 3 

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OJ L 191, 18.07.2008, p. 1. 
OJ L 220, 21.6.2004, p. 3. 

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The text of the Protocol is attached to this Decision. 

Done at Brussels,  

For the Council 
The President 

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ANNEX 

Declaration  pursuant  to  Article  XXII(2)  concerning  the  competence  of  the  European 
Community over matters governed by the Protocol to the Convention on International 
Interests  in  Mobile  Equipment  on  matters  specific  to  railway  rolling  stock  ("Rail 
Protocol"),  adopted  in  Luxembourg  on  23  February  2007,  in  respect  of  which  the 
Member States have transferred their competence to the Community 

Article XXII  of  the  Rail  Protocol  provides  that  Regional  Economic  Integration 
1. 
Organisations  which  are  constituted  by  sovereign  States  and  which  have  competence  over 
certain  matters  governed  by  the  Protocol  may  sign  it  on  condition  that  they  make  the 
declaration  referred  to  in  Article XXII(2).  The  Community  has  decided  to  sign  the  Rail 
Protocol and is accordingly making that declaration. 

2. 
The current Members of the European Community are the Kingdom of Belgium, the 
Republic of Bulgaria, the Czech Republic, the Kingdom of Denmark, the Federal Republic of 
Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the 
French  Republic,  the  Italian  Republic,  the  Republic  of  Cyprus,  the  Republic  of  Latvia,  the 
Republic  of  Lithuania,  the  Grand-Duchy  of  Luxembourg,  the  Republic  of  Hungary,  the 
Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of 
Poland,  the  Portuguese  Republic,  Romania,  the  Republic  of  Slovenia,  the  Slovak  Republic, 
the  Republic  of  Finland,  the  Kingdom  of  Sweden  and  the  United Kingdom  of  Great Britain 
and Northern Ireland. 

However, this declaration does not apply to the Kingdom of Denmark, in accordance 

3. 
with Articles 1 and 2 of the Protocol on the position of Denmark, annexed to the Treaties. 

4. 
This declaration is not applicable in the case of the territories of the Member States in 
which  the  Treaty  establishing  the  European  Community  does  not  apply  and  is  without 
prejudice to such acts or positions as may be adopted under the Rail Protocol by the Member 
States concerned on behalf of and in the interests of those territories. 

5. 
The  Member  States of the European Community have transferred competence to the 
Community  as  regards  matters  which  affect  Regulation  (EC)  No  44/2001  of  22 December 
2000  on  jurisdiction  and  the  recognition  and  enforcement  of  judgments  in  civil  and 
commercial  matters 12,  Regulation (EC)  No  1346/2000  of  29 May  2000  on  insolvency 
proceedings 13,  Regulation  (EC)  No  593/2008  of  17  June  2008  on  the  law  applicable  to 
contractual obligations (Rome I)14, Directive 2008/57/EC of the European Parliament and of 
the  Council  of  17  June  2008  on  interoperability  of  the  Rail  system  within  the  Community 
(Recast)15  and  Regulation  (EC)  No  881/2004  of  29  April  2004  establishing  a  European 
railway agency16. 

6. 
As far as the numbering system of vehicles is concerned, the Community has adopted 
through its decision 2006/920/EC (Commission Decision of 11 August 2006 concerning the 
technical  specification  of  interoperability  relating  to  the  subsystem  Traffic  Operation  and 

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OJ L 12, 16.1.2001, p. 1. Regulation as last amended … 
OJ L 160, 30.6.2000, p. 1. Regulation as last amended …. 
OJ L 177, 4.7.2008, p. 6. 
OJ L 191, 18.07.2008, p. 1. 
OJ L 220, 21.6.2004, p. 3. 

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Management  of  the  trans-European  conventional  rail  system)  a  numbering  system  which  is 
appropriate for the purpose of identification of rolling stock as referred to in article V (2) of 
the Protocol. 

Furthermore,  as  far  as  data  exchange  between  Member  States  of  the  Community  and  the 
International Registry is concerned, the Community has made considerable progress through 
its  decision  2007/756/EC  (Commission  Decision  of  9  November  2007  adopting  a  common 
specification  of  the  national  vehicle  register  provided  for  under  Articles  14(4)  and  (5)  of 
Directives  96/48/EC  and  2001/16/EC).  In  accordance  with  that  decision  EC  Member  States 
are  implementing  National  vehicle  registers  and  duplication  of  data  with  the  international 
registry should be avoided. 

The  exercise  of  competence  which  the  Member  States  have  transferred  to  the 
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Community  pursuant  to  the  Treaty  establishing  the  European  Community  is,  by  its  nature, 
liable to continuous development. In the framework of that Treaty, the competent institutions 
may  take  decisions  which  determine  the  extent  of  the  competence  of  the  Community.  The 
latter  therefore  reserves  the  right  to  amend  the  present  declaration  accordingly,  without  this 
constituting a prerequisite for the exercise of its competence with regard to matters governed 
by the Rail Protocol. 

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