Thoughts on Considerations in Making Article 39
Declarations to Maximize Convention Benefits
As noted above, Article 39 gives a Contracting State the option to declare ‘at any time’ which NCRIs will enjoy up to the same priority with respect to registered international interests as such NCRIs have with equivalent interests under its internal law.
A declaration may not create a new NCRI or accord it a greater priority than that under applicable internal law, but a declaration may restrict the priority of an NCRI vis-à-vis a registered international interest as compared with such NCRI’s priority with respect to an equivalent domestic interest
. In all cases, a declaration under Article 39 may be general or specific in terms of identifying categories of NCRIs to be covered. By creating more uncertainty
and risk for financing parties, a larger and/or less specific universe of NCRIs covered by a declaration reduces (or potentially eliminates) the willingness of potential financing parties to offer financing to the operators in the applicable Contracting State and tends to raise costs of such financing.