# EUR-Lex - 52012PC0038 - EN

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# 52012PC0038

**Proposal for a COUNCIL DECISION on the signature, on behalf of the European Union, and provisional application of the Agreement on certain aspects of air services between the European Union and the Democratic Socialist Republic of Sri Lanka /* COM/2012/038 final - 2012/0017 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           Context of the proposal

110 || · Grounds for and objectives of the proposal Following the judgements of the Court of Justice in the so-called “Open Skies” cases, on 5 June 2003 the Council granted the Commission a mandate to open negotiations with third countries on the replacement of certain provisions in existing agreements with an agreement at Union level[1] (the “horizontal mandate”). The objectives of such agreements are to give all European Union air carriers non-discriminatory access to routes between the European Union and third countries, and to bring bilateral air service agreements between Member States and third countries in line with the law of the Union.

120 || · General context International aviation relations between Member States and third countries have traditionally been governed by bilateral air services agreements between Member States and third countries, the Annexes to such agreements and other related bilateral or multilateral arrangements. Traditional designation clauses in Member States’ bilateral air services agreements infringe the law of the Union. They allow a third country to reject, withdraw or suspend the permissions or authorisations of an air carrier that has been designated by a Member State but that is not substantially owned and effectively controlled by that Member State or its nationals. This has been found to constitute discrimination against Community carriers established in the territory of a Member State but owned and controlled by nationals of other Member States. This is contrary to Article 49 of the Treaty on the Functioning of the European Union which guarantees nationals of Member States who have exercised their freedom of establishment the same treatment in the host Member State as that accorded to nationals of that Member State.

130 || · Existing provisions in the area of the proposal The provisions of the Agreement supersede or complement the existing provisions in the 15 bilateral air services agreements between Member States and the Democratic Socialist Republic of Sri Lanka.

140 || · Consistency with the other policies and objectives of the Union The Agreement will serve a fundamental objective of the external aviation policy of the Union by bringing existing bilateral air services agreements in line with the law of the Union.

2.           Consultation of interested parties and impact assessment

|| · Consultation of interested parties

211 || Consultation methods, main sectors targeted and general profile of respondents Member States as well as the industry were consulted throughout the negotiations.

212 || Summary of responses and how they have been taken into account Comments made by Member States and the industry have been taken into account.

3.           Legal elements of the proposal

305 || · Summary of the proposed action In accordance with the mechanisms and directives in the Annex to the ”horizontal mandate”, the Commission has negotiated an agreement with the Democratic Socialist Republic of Sri Lanka that replaces certain provisions in the existing bilateral air services agreements between Member States and the Democratic Socialist Republic of Sri Lanka. Article 2 of the Agreement replaces the traditional designation clauses with an EU designation clause, permitting all EU carriers to benefit from the right of establishment. Article 4 resolves potential conflicts with the competition rules of the Union.

310 || · Legal basis Art. 100(2) in conjunction with 218(5) and (8) TFEU

329 || · Subsidiarity principle The proposal is entirely based on the “horizontal mandate” granted by the Council taking into account the issues covered by the law of the Union and bilateral air services agreements.

|| · Proportionality principle The Agreement will amend or complement provisions in bilateral air services agreements only to the extent necessary to ensure compliance with the law of the Union.

|| · Choice of instruments

342 || The Agreement between the Union and the Democratic Socialist Republic of Sri Lanka is the most efficient instrument to bring all existing bilateral air services agreements between Member States and the Democratic Socialist Republic of Sri Lanka into conformity with the law of the Union.

4.           Budgetary implication

409 || The proposal has no implication for the budget of the Union.

5.           Additional information

510 || · Simplification

511 || The proposal provides for simplification of legislation.

512 || The relevant provisions of bilateral air services agreements between Member States and the Democratic Socialist Republic of Sri Lanka will be superseded or complemented by provisions in one single agreement of the Union.

570 || · Detailed explanation of the proposal In accordance with the standard procedure for the signature and conclusion of international agreements, the Council is asked to approve the decisions on the signature and on the conclusion of the Agreement on certain aspects of air services between the European Union and the Democratic Socialist Republic of Sri Lanka and to designate the persons authorised to sign the Agreement on behalf of the Union.

2012/0017 (NLE)

Proposal for a

COUNCIL DECISION

on the signature, on behalf of the
European Union, and provisional application of the Agreement on certain aspects
of air services between the European Union and the Democratic Socialist
Republic of Sri Lanka

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
functioning of the European Union, and in particular Article 100(2), in
conjunction with Article 218(5) and (8), first paragraph thereof,

Having regard to the proposal from the
European Commission[2],

Whereas:

(1)
By its Decision of 5 June 2003, the Council
authorised the Commission to open negotiations with third countries on the
replacement of certain provisions in existing bilateral agreements with an
agreement at Union level,

(2)
On behalf of the Union, the Commission has
negotiated an Agreement on certain aspects of air services with the Democratic
Socialist Republic of Sri Lanka (hereinafter "the Agreement") in
accordance with the mechanisms and directives in the Annex to the Council
Decision of 5 June 2003,

(3)
Subject to its conclusion at a later date, the
Agreement should be signed and provisionally applied by the Union.

HAS
ADOPTED THIS DECISION:

Article 1

(1)
The signing of the Agreement between the
European Union and the Democratic Socialist Republic of Sri Lanka on certain
aspects of air services is hereby approved on behalf of the Union, subject to
the conclusion of the Agreement.

The text of the Agreement is attached to this
Decision.

(2)
The Council Secretariat General shall establish
the instrument of full powers to sign the Agreement, subject to its conclusion,
for the person(s) indicated by the negotiator of the Agreement.

Article 2

Pending its entry into force, the Agreement
shall be applied provisionally, in accordance with Article 7 (2) of the
Agreement, as from the day of its signature.

Article 3

This Decision shall enter into force on the
date of its adoption.

Article 4

This Decision shall be published in the
Official Journal of the European Union.

Done at Brussels,

For
the Council

The
President

ANNEX

AGREEMENT

between
the European Union and Government of the Democratic Socialist Republic of Sri
Lanka

on
certain aspects of air services

THE EUROPEAN UNION,

(hereinafter referred to as "the
Union")

of the one part, and

THE GOVERNMENT OF THE DEMOCRATIC SOCIALIST
REPUBLIC OF SRI LANKA, (hereinafter referred to as "Sri Lanka"),

of the other part,

(hereinafter referred to as ‘the Parties’)

NOTING that bilateral air service
agreements have been concluded between several Member States of the Union and
Sri Lanka.

RECOGNISING that certain provisions of the
bilateral air service agreements between Member States of the Union and Sri
Lanka, which are contrary to the law of the Union, must be brought into
conformity with the law of the Union in order to establish a sound legal basis
for air services between the Union and Sri Lanka and to preserve the continuity
of such air services,

NOTING that the Union has exclusive
competence with respect to several aspects that may be included in bilateral
air service agreements between Member States of the Union and third countries,

NOTING that under the law of the Union
Community air carriers established in a Member State have the right to
non-discriminatory access to air routes between the Member States of the Union
and third countries,

HAVING REGARD to the agreements between the
Union and certain third countries providing for the possibility for the
nationals of such third countries (countries listed under Annex 3) to acquire
ownership in air carriers licensed in accordance with the law of the Union,

NOTING that under the law of the Union air
carriers may not, in principle, conclude agreements which may affect trade
between Member States of the Union and which have as their object or effect the
prevention, restriction or distortion of competition,

RECOGNISING that provisions in bilateral
air service agreements concluded between Member States of the Union and Sri
Lanka which i) require or favour the adoption of agreements between
undertakings, decisions by associations of undertakings or concerted practices
that prevent, distort or restrict competition between air carriers on the
relevant routes; or ii) reinforce the effects of any such agreement, decision
or concerted practice; or iii) delegate to air carriers or other private
economic operators the responsibility for taking measures that prevent, distort
or restrict competition between air carriers on the relevant routes may render
ineffective the application of the competition rules applicable to
undertakings.

RECOGNISING that where a Member State has designated
an air carrier whose regulatory control with regard to safety oversight is
exercised and maintained by another Member State, the rights of Sri Lanka under
the safety provisions of the agreement between the Member State that has
designated the carrier and Sri Lanka should apply equally in relation to that
other Member State.

NOTING that the bilateral air services
agreements listed in Annex 1 are based on the general principle that the
designated airlines of the parties shall have fair and equal opportunities in
operating the agreed services on the specified routes.

NOTING that it is not a purpose of this
agreement to increase the total volume of air traffic between the Union and Sri
Lanka, to affect the balance between Community air carriers and air carriers of
Sri Lanka, or to negotiate amendments to the provisions of existing bilateral
air service agreements concerning traffic rights.

HAVE AGREED AS FOLLOWS:

ARTICLE
1

General
provisions

(1)
For the purposes of this Agreement, ‘Member
States’ shall mean Member States of the European Union, and 'EU Treaties' shall
mean the Treaty on European Union and the Treaty on the functioning of the
European Union.

(2)
References in each of the agreements listed in
Annex 1 to nationals of the Member State that is a party to that agreement
shall be understood as referring to nationals of the Member States.

(3)
References in each of the agreements listed in
Annex 1 to air carriers or airlines of the Member State that is a party to that
agreement shall be understood as referring to air carriers or airlines
designated by that Member State.

(4)
The granting of traffic rights will continue to
be carried out through bilateral arrangements.

ARTICLE
2

Designation
by a Member State

(1)
The provisions in paragraphs 2 and 3 of this
Article shall supersede the corresponding provisions in the articles listed in
Annex 2 (a) and (b) respectively, in relation to the designation of an air
carrier by the Member State concerned, its authorisations and permissions
granted by Sri Lanka, and the refusal, revocation, suspension or limitation of
the authorisations or permissions of the air carrier, respectively.

(2)
On receipt of a designation by a Member State, Sri
Lanka shall grant the appropriate authorisations and permissions with minimum
procedural delay, provided that:

(a)
the air carrier is established, under the EU
Treaties, in the territory of the designating Member State and has a valid
Operating Licence in accordance with the law of the Union; and

(b)
effective regulatory control of the air carrier
is exercised and maintained by the Member State responsible for issuing its Air
Operator Certificate and the relevant aeronautical authority is clearly
identified in the designation; and

(c)
the air carrier is owned, directly or through
majority ownership, and it is effectively controlled by Member States and/or
nationals of Member States, and/or by other states listed in Annex 3 and/or
nationals of such other states and shall at all times be effectively controlled
by such state and/or such nationals.

(3)
Sri Lanka may refuse, revoke, suspend or limit
the authorisations or permissions of an air carrier designated by a Member
State where:

(a)
the air carrier is not established, under the EU
Treaties, in the territory of the designating Member State or does not have a
valid Operating Licence in accordance with the law of the Union; or

(b)
effective regulatory control of the air carrier
is not exercised or not maintained by the Member State responsible for issuing
its Air Operator Certificate, or the relevant aeronautical authority is not
clearly identified in the designation; or

(c)
the air carrier is not owned, directly or
through majority ownership, or it is not effectively controlled by Member
States and/or nationals of Member States, and/or by other states listed in
Annex 3 and/or nationals of such other states; or

(d)
the air carrier is already authorised to operate
under bilateral agreement between Sri Lanka and another Member State and by
exercising traffic rights under this Agreement on a route that includes a point
in that other Member State, it would be circumventing restrictions on the
traffic rights imposed by that other agreement; or

(e)
the air carrier designated holds an Air
Operator’s Certificate issued by a Member State with which Sri Lanka does not
have a bilateral air services agreement and that Member State has denied
traffic rights to Sri Lanka.

In exercising its right under this
paragraph, Sri Lanka shall not discriminate between Community air carriers on
the grounds of nationality.

ARTICLE
3

Safety

(1)
The provisions in paragraph 2 of this Article
shall complement the corresponding provisions in the articles listed in Annex 2
(c).

(2)
Where a Member State has designated an air
carrier whose regulatory control is exercised and maintained by another Member
State, the rights of Sri Lanka under the safety provisions of the agreement
between the Member State that has designated the air carrier and Sri Lanka
shall apply equally in respect of the adoption, exercise or maintenance of
safety standards by that other Member State and in respect of the operating
authorisation of that air carrier.

ARTICLE
4

Compatibility
with competition rules

(1)
Notwithstanding any other provision to the
contrary, nothing in each of the agreements listed in Annex 1 shall (i) require
or favour the adoption of agreements between undertakings, decisions by
associations of undertakings or concerted practices that prevent or distort
competition; (ii) reinforce the effects of any such agreement, decision or
concerted practice; or (iii) delegate to private economic operators the
responsibility for taking measures that prevent, distort or restrict
competition.

(2)
The provisions contained in the agreements
listed in Annex 1 that are incompatible with paragraph 1 of this Article shall
not be applied.

ARTICLE
5

Annexes
to the Agreement

The Annexes to this Agreement shall form an
integral part thereof.

ARTICLE
6

Review,
Revision or amendment

The Parties may, at any time, review, revise or amend this Agreement by mutual
consent.

ARTICLE
7

Entry
into force and provisional application

(1)
This Agreement shall enter into force when the
Parties have notified each other in writing that their respective internal
procedures necessary for its entry into force have been completed.

(2)
Notwithstanding paragraph 1, the Parties agree
to provisionally apply this Agreement from the date of signature until it
enters into force.

(3)
This Agreement shall apply to all agreements and
arrangements listed in Annex 1 including those that, at the date of
signature of this Agreement, have not yet entered into force and are not being
applied provisionally.

ARTICLE 8

Termination

(1)
In the event that an agreement listed in Annex 1
is terminated, all provisions of this Agreement that relate to the agreement
listed in Annex 1 concerned shall terminate at the same time.

(2)
In the event that all agreements listed in Annex
1 are terminated, this Agreement shall terminate at the same time.

IN WITNESS WHEREOF, the undersigned, being
duly authorised, have signed this Agreement.

Done at [....] in duplicate, on this [...] day
of [..., ...] in the Sinhala, Bulgarian, Czech, Danish, Dutch, English, Estonian,
Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian,
Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish, Swedish and
languages, all texts being equally authentic.

FOR THE EUROPEAN UNION:        FOR THE
GOVERNMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA:

Annex 1

List of agreements referred to in Article 1 of this Agreement

Air service agreements and other
arrangements between Sri Lanka and Member States as modified or amended which,
at the date of signature of this Agreement, have been concluded, signed or
initialled;

–
Air Transport Agreement between the Austrian
Federal Government and the Government of the Democratic Socialist Republic of
Sri Lanka done in Colombo on 15 February 1978, hereinafter referred to as “Sri
Lanka – Austria Agreement” in Annex 2;

–
Agreement between the Government of the
Kingdom of Belgium and the Government of the Democratic Socialist Republic of
Sri Lanka on Air Transport done in Brussels on 15 December 1998,
hereinafter referred to as “Sri Lanka – Belgium Agreement” in Annex 2;

–
Air Transport Agreement between the
Government of the Republic of Cyprus and the Government of the Democratic
Socialist Republic of Sri Lanka initialled in Colombo on 15 November 2002,
hereinafter referred to as “Sri Lanka – Cyprus Agreement” in Annex 2;

–
Agreement between the Government of the Czech
Republic and the Government of the Democratic Socialist Republic of Sri Lanka
on Air Services done at Prague on 20 April 2004, hereinafter referred to as “Sri
Lanka – Czech Republic Agreement” in Annex 2;

–
Agreement between the Government of Denmark
and the Government of Ceylon relating to Air Services done in Colombo on 29
May 1959, hereinafter referred to as “Sri Lanka – Denmark Agreement” in Annex
2;

–
Agreement between the Republic of France and
Ceylon relating to Air Transport done in Colombo on 18 April 1966,
hereinafter referred to as “Sri Lanka – France Agreement” in Annex 2;

–
Air Transport Agreement between the Federal
Republic of Germany and the Republic of Sri Lanka done at Colombo on 24
July 1973, hereinafter referred to as “Sri Lanka – Germany Agreement” in Annex
2;

–
Air Transport Agreement between the Government
of the Hellenic Republic and the Government of the Democratic Socialist
Republic of Sri Lanka initialled in Athens on 5 November 2002, hereinafter
referred to as “Sri Lanka – Greece Agreement” in Annex 2;

–
Agreement between the Government of the Italian
Republic and the Government of Ceylon relating to Air Services done in Colombo
on 1 June 1959, hereinafter referred to as “Sri Lanka – Italy Agreement” in
Annex 2;

–
Agreement between the Government of the
Kingdom of the Netherlands and the Government of Ceylon for Air Services between
and beyond their respective territories done in Colombo on 14 September 1953,
hereinafter referred to as “Sri Lanka – Netherlands Agreement” in Annex 2;

–
Agreement between the Government of the
Polish People’s Republic and the Government of the Democratic Socialist
Republic of Sri Lanka for air services between and beyond their respective
territories done at Colombo on 26 January 1982 hereinafter referred to as “Sri
Lanka – Poland Agreement” in Annex 2;

–
Agreement between the Socialist Republic of
Romania and the Government of the Democratic Socialist Republic of Sri Lanka
relating to Air Services done in Colombo on 29th August 1980 hereinafter
referred to as “Sri Lanka – Romania Agreement” in Annex 2;

–
Agreement between the Government of Sweden
and the Government of Ceylon relating to Air Services done in Colombo on 29
May 1959, hereinafter referred to as “Sri Lanka – Sweden Agreement” in Annex 2;

–
Agreement between the Government of the
United Kingdom of Great Britain and Northern Ireland and the Government of the
Democratic Socialist Republic of Sri Lanka concerning Air Services done at
Colombo on 22 April 1998, as amended, hereinafter referred to as “Sri Lanka – United
Kingdom Agreement” in Annex 2.

Annex 2

List of articles in the agreements listed in Annex 1 and referred to
in Articles 2 to 4 of this Agreement

(a)
Designation by a Member State:

–
Article 3, of the Sri Lanka - Austria Agreement;

–
Article 3, of the Sri Lanka - Belgium Agreement;

–
Article 4, of the Sri Lanka - Cyprus Agreement;

–
Article 3, of the Sri Lanka - Czech Republic
Agreement;

–
Article 2, of the Sri Lanka - Denmark Agreement;

–
Article 3, of the Sri Lanka - France Agreement;

–
Article 3, paragraph 4 of the Sri Lanka - Germany
Agreement;

–
Article 3, of the Sri Lanka - Greece Agreement;

–
Article 4, Paragraphs 1 to 3 of the Sri Lanka -
Italy Agreement;

–
Article 2, of the Sri Lanka - Netherlands
Agreement;

–
Article 3, of the Sri Lanka - Poland Agreement;

–
Article 3, of the Sri Lanka - Romania Agreement;

–
Article 2, of the Sri Lanka - Sweden Agreement;

–
Article 4, of the Sri Lanka – United Kingdom
Agreement;

(b)
Refusal, revocation, suspension or limitation of
authorisations or permissions:

–
Article 4, of the Sri Lanka - Austria Agreement;

–
Article 5, of the Sri Lanka - Belgium Agreement;

–
Article 5, of the Sri Lanka - Cyprus Agreement;

–
Article 4, of the Sri Lanka - Czech Republic
Agreement;

–
Article 6, of the Sri Lanka - Denmark Agreement;

–
Article 3, paragraph 4 and Article 4, of the Sri
Lanka - France Agreement;

–
Article 4, paragraph 1, of the Sri Lanka - Germany
Agreement;

–
Article 4, of the Sri Lanka - Greece Agreement;

–
Article 4, Paragraphs 4 to 6 of the Sri Lanka -
Italy Agreement;

–
Article 3, of the Sri Lanka - Netherlands
Agreement;

–
Article 3, of the Sri Lanka - Romania Agreement;

–
Article 6, of the Sri Lanka - Sweden Agreement;

–
Article 5, of the Sri Lanka – United Kingdom
Agreement;

(c)
Safety:

–
Article 7, of the Sri Lanka - Austria Agreement;

–
Article 7, of the Sri Lanka - Belgium Agreement;

–
Article 10, of the Sri Lanka - Cyprus Agreement;

–
Article 7, of the Sri Lanka - Czech Republic
Agreement;

–
Article 4, of the Sri Lanka - Denmark Agreement;

–
Article 7, of the Sri Lanka - Greece Agreement;

–
Article 7, of the Sri Lanka - Poland Agreement;

–
Article 7, of the Sri Lanka - Romania Agreement;

–
Article 4, of the Sri Lanka - Sweden Agreement;

Annex 3

List of other states referred to in Article 2 of this Agreement

(a)
The Republic of Iceland (under the Agreement on the European Economic Area);

(b)
The Principality of Liechtenstein (under the Agreement on the European Economic Area);

(c)
The Kingdom of Norway (under the Agreement on the European Economic Area);

(d)
The Swiss Confederation (under the Agreement between the European Community and the Swiss
Confederation on Air Transport).

[1]               Council Decision 11323/03 of 5 June 2003 (restricted
document)

[2]               OJ C , , p. .