Gerrit Straub LL.M.

Klein Rechtsanwälte AG (Klein Attorneys) is mainly active in the private and business aviation sector; over the last five years the firm has handled purchases and sales of business jets and VIP helicopters with a transaction value in excess of US$3.5 billion. Klein Attorneys specialises in representing owners of business jets and VIP helicopters, advising and representing them in the selection, purchase, outfitting, financing, registration, operation and resale of their jets and helicopters. The firm also handles the tax and VAT structuring for the ownership of business jets. The firm maintains a close cooperation with technical experts in Europe and North America and with auditors specialising in the audit of business jets operations. Klein Attorneys’ clients typically purchase larger jets (average transaction value approximately US$35 million) or larger VIP helicopters. The firm has also handled the acquisition of five presidential aircraft with the related security concerns. Gerrit Straub, senior partner, explained that the firm only represents operators, bankers or brokers in exceptional cases. “We, therefore, avoid the typical conflicts of interest of law firms who regularly work on different sides of transactions and have been able to develop a set of documents and clauses specifically tailored to the needs of the owner,” he commented. “As we purchase large numbers of new aircraft on behalf of our clients we were able to negotiate standardised clauses with most of the manufacturers of business jets. These clauses include provisions not typically found in contracts negotiated by other law firms and regularly result in a measurable financial and/or reliability advantage for our clients.” A separate and older (20 years of experience) field of specialisation in the firm is aviation related litigation and arbitration. In this field the firm not only handles matters related to business jets, but also has substantial experience in litigation concerning commercial aircraft. The firm’s aviation litigation practice focuses on warranty claims and technical deficiencies of aircraft. Prominent cases included failure to meet guaranteed range for commercial jets, excess VIP cabin weight, excess noise in the ACJ cabin, various engine failures, foreign object damage, maintenance failures and the like. The firm also has experience in bankruptcy procedures concerning several air lines. According to Mr Straub, one of the most important issues faced by the firm’s clients is the abolition of the 0% import VAT rate in England. “As a result avoiding EU VAT on business jets requires substantially more structuring advice and more elaborate ownership structures,” he explained. “Nevertheless, this year we were able to avoid EU VAT on all aircraft that entered into operation for our clients.” A further challenge highlighted by Mr Straub will be the new weight dependent tax on business jets presently under discussion in Italy which will also apply to business jets not registered in Italy, but merely visiting Italy for more than 48 hours. He noted that the key problem for the business aviation industry in Switzerland is certainly Swiss VAT. “The Swiss VAT and particularly the broad interpretation of the Swiss VAT law by the Swiss VAT authorities has resulted in a very large number of customers abandoning Switzerland as a country of registration and operation of their aircraft,” commented Mr Straub. He concluded: “Several operators have substantially moved their operations outside of Switzerland. The trend is continuing and results in an important loss of employment in Switzerland.”