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The MAC Protocol

The Future of the mining, agriculture and construction sectors


The Cape Town Convention

The MAC Protocol is an extension of a successful international treaty already in operation, the Convention on International Interests in Mobile Equipment (more commonly known as the “Cape Town Convention”).

The Cape Town Convention establishes an international legal regime for the creation, enforcement, registration and priority of international interests in categories of high-value, uniquely identifiable mobile equipment. 

The Cape Town Convention has had great success in increasing the availability of  finance in the aviation sector through the 2001 Aircraft Protocol, and has been further expanded by the 2007 Luxembourg Rail Protocol and the 2012 Space Protocol

The MAC Protocol is expected to have an annual global economic impact of 32 – 48 billion dollars in developing countries and 36 – 50 billion dollars in developed countries

The treaty will provide an international legal framework for the financing of MAC equipment. Cheaper financingand access to modern MAC equipment will allow parties involved in the mining, agriculture and construction sectors to optimise their productivity and profitability. 

The MAC Protocol will have significant economic benefits for countries’ mining, agriculture and construction industries, as well as additional benefits for countries that produce and export MAC equipment. It will assist countries to modernise their economies, improve infrastructure and increase food security.

How does it work?

In many countries, financial institutions are unwilling to provide credit to companies in the mining, agricultural and construction sectors to purchase or lease equipment, due to uncertainty created by domestic laws or the possible movement of assets across borders.  Companies also face challenges in securing credit using MAC equipment they already own as collateral. 

The MAC Protocol will create an international electronic registry that will allow creditors to protect their legal interests over high value MAC equipment, regardless of its location. The MAC Protocol provides uniform rules governing the creation, registration and priority of legal interests in MAC equipment, as well as facilitating expeditious and efficient enforcement of remedies in the event of a default or insolvency of the debtor.

The MAC Protocol will allow financiers to provide credit in countries where they are currently unable to do so. In other countries, the MAC Protocol will allow financiers to provide credit at a lower cost. 

Who benefits?

  • Entities involvedin the MAC sectors will have increased access to modern MAC equipment at a lower cost

  • Manufacturers will be able to increase output

  • Dealers will be able to export to new markets

  • Financiers will have more confidence in issuing credit

Become involved

It is anticipated that the MAC Protocol will be concluded at a Diplomatic Conference in 2019. Countries can fast-track entry into force of the Protocol by preparing to sign the Protocol at the Diplomatic Conference. 

To be well prepared for the Diplomatic Conference, it is vitally important that countries engage with the process immediately by taking the following steps:

1. Examine the legal rules in the Protocol to understand their impact.

2. Review the types of MAC equipment covered by the scope of the Protocol.

3.  Consult domestic stakeholders and encourage private sector entities to join their representative body, the MAC Working Group.

The Unidroit Secretariat (info@unidroit.org) is available to assist countries in their consideration of the Protocol and preparation for the Diplomatic Conference.