How will the MAC Protocol help your country?

By ratifying the MAC Protocol, your country will become part of an international legal framework for the financing of mining, agriculture and construction equipment. Companies in your country that want to borrow money to buy or lease MAC equipment will have better, cheaper access to finance. This will allow farmers, construction companies and mining entities in your country to access modern equipment, increasing productivity, efficiency and profit. As such, the largest beneficiaries of the MAC Protocol will be countries with significant mining, agriculture or construction expansion needs.

However, the MAC Protocol’s economic benefits are not limited to the MAC sectors. If your country has a strong manufacturing industry, domestic manufacturers of MAC equipment will benefit from higher demand for their equipment around the world, allowing them to increase production and export sales. If your country has a strong international trade sector, your country’s shippers, freight forwarders and equipment dealers will be able to export and import increased volumes of equipment and begin operations in new markets. If your country has a strong finance and banking sector, your country’s financiers benefit from greater legal protection in issuing credit, which will allow them to provide cheaper financing in existing markets and expand operations to new markets. 

All of these benefits for different sectors will drive higher productivity, efficiency and profit across your country’s economy, ultimately increasing global domestic product and human prosperity.

In addition to the economic benefits, the MAC Protocol will contribute to your country achieving Sustainable Development Goals 2 (zero hunger), 8 (decent work and economic growth), 9 (industry, innovation and infrastructure), 11 (sustainable cities and communities) and 13 (climate action). 

Countries that import and export significant amounts of MAC equipment are likely to be the most significant beneficiaries of the MAC Protocol, if they ratify the treaty. 

However, countries with large mining, agriculture and construction sectors that do not currently import large amounts of MAC equipment could significantly benefit from ratifying the MAC Protocol, as the MAC Protocol may help overcome existing legal barriers that are preventing the import of MAC equipment.

How will the MAC Protocol interact with existing legal frameworks?

The MAC Protocol is a non-invasive treaty. If your country ratifies the MAC Protocol, it will supplement rather than replace existing domestic law in relation to security interests in MAC equipment. Your country will not be required to repeal existing domestic law to implement the MAC Protocol, as those domestic laws will continue to exist and function. Similarly, parties involved in the financing of MAC equipment under domestic law can continue their existing practices.

The essential rule that countries must respect when they ratify the MAC Protocol is that an international interest in MAC equipment created under the treaty and registered in the International Registry for MAC equipment has priority over a domestic law interest. Similarly, to fully protect themselves, parties involved in the financing of MAC equipment in your country will need to register international interests in the International Registry. 

The MAC Protocol is a treaty that complements existing domestic law frameworks, rather than replacing them. As such, countries working on reforming their domestic secured transactions laws can easily ratify and implement the MAC Protocol alongside such reforms. 

How does my country implement the MAC Protocol? 

To implement the MAC Protocol, your country must do three things:

1. Ratify or accede to the Cape Town Convention. If your country is one of the more than 85 countries that has already ratified the Cape Town Convention, this step is already satisfied. Check here: https://www.unidroit.org/instruments/security-interests/cape-town-convention/states-parties/ 

2. Ratify or accede to the MAC Protocol: Your country will need to complete its domestic process to approve and implement an international treaty. Once the process is completed, your country will need to complete an instrument of ratification/accession for the MAC Protocol, that is:
   1. Signed by hand by either the Head of State, Head of Government or Minister of Foreign Affairs, 
   2. dated, and 
   3. have the seal of your country affixed to it

The original signed instruments of accession must then be received by the UNIDROIT Secretariat in Rome, which is the Treaty Depositary for the Cape Town Convention and the MAC Protocol.

3. Submit declarations under the MAC Protocol: The MAC Protocol contains nine declarations that countries ratifying the treaty can make, which affect its legal operation and economic benefits. One declaration under Articile VII (association with immovable property) is a mandatory declaration that your country must make when it ratifies the MAC Protocol. Your country must submit its declarations under the MAC Protocol alongside the instrument of ratification/accession to Unidroit (see step two above). 

Further information on implementing the MAC Protocol is available on the Depositary page of the Unidroit website: https://www.unidroit.org/instruments/security-interests/mac-protocol/depositary/.

UNIDROIT is pleased to assist countries with their MAC Protocol implementation processes. UNIDROIT can be contacted at info@unidroit.org.