Text 3. The Historical Growth of the Leasing Industry.

For the purpose of this paper two forms of leasing are described:

Hire purchase type finance (HP) - a traditional method of funding where the lessee eventually shall or may own the equipment on completion of the agreement. The lessor retains title until all installment payments have been made.

The asset is capitalized and shown on the balance sheet. This is very similar to the "Financial Lease" defined in the Ukraine legislation. Hire type finance (Lease)- in the UK there are three forms of Lease- the Finance Lease which is similar to HP except that the lessor retains title after payments are complete (not to be confused with the "Financial Lease" in Ukraine); the Operating Lease where the risks and rewards of ownership are substantially with the lessor and the lessee has only possession and utilization of the equipment for a fixed term; and the Contract Hire that is similar to the Operating Lease except maintenance services are often included during the fixed term. Lease rentals are charged to the profit and loss of the lessee without necessarily appearing on the balance sheet. These are all similar to the "Operating Lease" defined in the Ukraine legislation.

The practical application of HP and Lease agreements are to a large extent dictated by the tax and accounting environment. In the 1970's and 1980's finance companies with large amounts of taxable profit were able to take advantage of the 100 percent tax and allowance for investments in capital equipment. Smaller, less profitable companies were unable to utilize these incentives but could acquire the equipment through the banks and their finance houses who then passed on the benefits of the tax incentives. Thus the UK asset finance industry grew considerably at this time. Even when the incentives were gradually reduced, leasing still had the advantage that rentals were a tax deductible expenditure and considerable saving could be made by accelerating this expenditure.

Industrial companies have tended to be particularly concerned with the levels of profits that directly affect the shareholders. Therefore they tended to choose Lease rather than HP agreements, as their means of asset finance as such arrangements do not have to appear on the balance sheet and thus improve the performance ratios.

Vocabulary Notes:

basis of delivery - базис постачання

leasing -_лізинг

lessee – орендар

lessor - орендодавець

Hire type finance (Lease) - угода типу прокату (оренди)

Operating Lease - операційний лізинг

Contract Hire - прокат за контрактом

Lease rentals - суми орендної платні

hire purchase - купівля на виплат

retain title - зберігати право

tax and accounting environment - умови оподаткування та звітування

benefits of the tax incentives - вигоди податкових стимулів

performance ratios - показники ефективності

asset finance - фінансування операцій з активами.

Text 4. The basic principle of international air law.

A basic principle of international air law is that every state has complete and exclusive sovereignty over the airspace above its territory, including its territorial sea. At the turn of the 20th century the view that airspace, like the high seas, should be free was sometimes advanced. But the principle of airspace sovereignty was unequivocally affirmed in the Paris Convention on the Regulation of Aerial Navigation (1919) and subsequently by various other multilateral treaties.

The principle is restated in the Chicago Convention on International Civil Aviation (1944). Airspace is now generally accepted as an appurtenance of the subjacent territory and shares the latter's legal status.Thus, under the Geneva Convention on the High Seas (1958) as well as under international customary law, the freedom of the high seas applies to aerial navigation as well as to maritime navigation. Vertically, airspace ends where outer space begins. It follows from the principle of airspace sovereignty that every state is entitled to regulate the entry of foreign aircraft into its territory and that persons within its territory are subject to its laws.

States normally permit foreign private (i.e., nongovernmental and noncommercial) aircraft to visit or fly through their territory without too much difficulty. Such aircraft registered in states that are parties to the 1944 Chicago Convention are, under the convention, allowed into the territories of all other contracting states without prior diplomatic permission if not engaged in the carriage of passengers, mail, or cargo for reward.

Task 1. Translate text 4 in writing.

Task 2. Answer the following questions:

I . What is the basic principle of international air law?

Where was the basic principle restated?

What does the freedom of the high seas apply to?

What follows from the principle of airspace sovereignty?

Task 3. Find in the text English equivalents of the following:

Mіжнародне авіаційне право; суверенітет; багатосторонні угоди; приналежність; юридичний статус; звичайне право; аеронавігація; морська навігація; країни, що підписали угоду; дипломатичний дозвіл.

Task 4. Summarize the text in 3-4 sentences.