THE Government is poised to decide whether Bermuda's commercial aircraft register will be closed indefinitely – resulting in a loss of lucrative revenue, and implications for the island's major law firms.

The Director of Civil Aviation this week confirmed to the Mid-Ocean News that Bermuda's off-shore register for international aircraft is under review by the Government.

Thomas Dunstan (pictured) explained that the Ministry of Transport views the register – currently "oversubscribed" – as a risk, both in terms of safety and exposure.

Bermuda's biggest client for commercial aircraft registration is Russia, although the Department of Civil Aviation also counts ex-Soviet Eastern European countries such as Uzbekistan and Azerbaijan as repeat customers.

"There is a review currently under way because of growth in the register," Mr. Dunstan said.

"We don't have enough internal resources. We may temporarily stop new commercial aircraft applicants. We're looking at how far we want to go with this business. We're oversubscribed, in terms of commercial aircraft registered in Bermuda that fly all over the world.

"Russian aircrafts prefer to register here because finance and leasing agreements in Russia make it more difficult. We are an offshore registry, and over the years we have become Russia's preferred country of register. We also have agreements with Uzbekistan and Azerbaijan."

Registering in Bermuda means companies from these countries benefit in terms of "considerable tax advantages", according to the Department of Civil Aviation's web site.

The same site also notes that Bermuda may seem a preferable jurisdiction for registration compared to areas of "legal or financial uncertainty or political unrest".

Bermuda has also been deemed a Category 1 jurisdiction by the Federal Aviation Authority under their assessment programme, making the island a top choice for international operators looking for high safety standards.

Mr. Dunstan admitted that there could be financial implications to stopping new aircraft registration applicants, but added that the risks could outweigh the benefits for Bermuda.

"How many aircraft can you control and oversee on a safety basis?" he asked.

"How far does Bermuda want to go in this business? It is a big risk. Do we want that exposure? Shall we limit our risk? Where do we want to be?"

Mr. Dunstan and his team have briefed local law firms with civil aviation departments ahead of the Government's decision.

"Appleby Spurling Hunter, Conyers Dill & Pearman, Mello Jones Martin and a few others all deal with civil aviation," he said.

"It depends on a decision further down the line, but there could be implications for their growth.

"We gave them a heads-up so they are prepared."