Served: August 4 , 201 4

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of

NORWEGIAN AIR INTERN ATIONAL LIMITED

for an exemption under 49 U.S.C. § 40109 and a foreign air carrier permit pursu ant to 49 U.S.C. § 41301

Docket DOT

- OST

- 201 3

- 0 204

NOTICE

Pursuant to a request made by the U.S. Government (U.S.) to the European Commission’s Directorate General for Mobility and Transport (DG MOVE) to meet to ask for its views on the legal meaning and applicability of Article 17 bis of the Air Transport Agreement (the Agreement), representatives from the Departments of State and Transportation (DOT) met with European Commission (E C) officials in Brussels, Belgium, on July 14, 2014. The meeting was not held under the auspices of the Joint Committee but served as an opportunity for EC officials to respond to the U.S. request. The discussion

was amicable.

It was noted that the me eting had been requested by U.S. Secretary of Transportation Anthony Foxx. The Secretary also requested the presence of the Department’s Assistant Secretary for Aviation and International Affairs, General Counsel

, and Deputy Assistant Secretary for Aviati on and International

Affairs. The Director of Aviation (the Director) for DG MOVE spoke on behalf of the EC delegation. It was also noted on both sides that the high

- level participation in the U.S. delegation was an indication of

the attention and intere st that this issue generally, and the Norwegian Air International (NAI) case in particular, ha ve in the United States.

At the beginning of the meeting, the U.S. delegation stated that

, because the NAI application currently is pending before the DOT , it was not able to engage in a dialogue regarding Article 17 bis . The U.S. delegation did state, however, that obtaining DG MOVE’s views on the meaning and applic ability of

Article 17 bis could inform DOT’s consideration of the NAI application. In that connection, the U.S. sought to hear DG MOVE’s views on the meaning and applicability of Article 17 bis of the A greement as it pertains to consideration of a foreign air carrier’s application for operating authority. In particular, the U.S. delegation inq uired as to the EC’s views on the mechanisms available for discussing Article 17 bis; the role of the Joint Committee in discussing Article 17 bis; and the circumstances relevant to a unilateral or joint decision to grant or deny an application under Artic le 17 bis

.

Article 17 bis of the Agreement reads:

Article 17 bis: Social Dimension 1. The Parties recognise the importance of the social dimension of the Agreement and the benefits that arise when open markets are accompanied by high labour standards. The opportunities2

created by the Agreement are not intended to undermine labour standards or the labour

- related rights and principles contained in the Par ties' respective laws. 2. The principles in paragraph 1 shall guide the Parties as they implement the Agreement, including regular consideration by the Joint Committee, pursuant to Article 18, of the social effects of the Agreement and the development of appropriate responses to concerns found to be legitimate.

The Director noted that the vi ews expressed during the meetings were the views of EC officials, and that

DG MOVE was in the process of discussing the issue s with representatives of European Union (EU)

Member States , Iceland, and Norway, which are all parties to the Agreement

.

The Di rector provided more detail on the EC’s view that Article 17 bis does not provide a legal basis for unilaterally denying an application under Article 4 because (1) Article 4 makes no reference to Article 17

bis and (2) Article 17 bis itself does not formul ate a legal rule that can be applied unilaterally by one

party.

The Director asserted that paragraph 1 of Article17 bis sets out the parties' views on the "importance of

the social dimension" of the A greement and the "intentions" underlying the opportuni ties it creates. It

does not provide for legal consequences to be drawn from these views. According to the Director, its paragraph 2 refers to paragraph 1 as containing certain principles. These principles shall "guide" the parties as they implement the A greement. Such implementation is referred to as a matter to be dealt with by "the parties

, " not any one single party. By the same logic, paragraph 2 refers to "regular consideration by the Join t Committee

. " DG MOVE assert ed that s uch consideration is clearly directed at two aspects, namely the " social effects of the Agreement" and the "development of appropriate responses to concerns found to be legitimate

. " The context implies that a "finding " that concerns are "legitimate" can be made only through agreement between the parties and that "responses" cannot be developed unilaterally by one party against the interests of the other party [to the same effect, cf. also Article 18(4)(b)].

In response to U.S. questions, the Director noted that DG MOVE believes that if a party has a concern

about Article 17 bis as a general matter the only mechanism available under the A greement is to raise the issue for consideration by the Joint Committee esta blished under Article 18(4)

. Article 18(4)(b) allows the Joint Committee to “consider the social effects of the Agreement as it is implemented and develop appropriate responses to concerns found to be legitimate.” He further noted that, if a party wanted to
discuss Article 17 bis in the context of a particular foreign air carrier application , it could avail itself of

Article 6 bis (1)(a) , which also leads to consultations. Article 6 bis (1)(a) reads :

Article 6 bis: Reciprocal Recognition of Regulatory D eterminations with Regard to Airline Fitness and Citizenship 1. Upon receipt of an application for operating authorisation, pursuant to Article 4, from an air carrier of one Party, the aeronautical authorities of the other Party shall recognise any fitness and/or citizenship determination made by the aeronautical authorities of the first Party with respect to that air carrier as if such a determination had been made by its own aeronautical authorities and not enquire further into such matters, e xcept as provided for at sub

- paragraph (a) below: (a) If, after receipt of an application for operating authorisation from an air carrier, or after the grant of such authorisation, the aeronautical authorities of the receiving Party have a specific

reason for concern that, despite the determination made by the aeronautical authorities of the other Party, the conditions prescribed in Article 4 of this Agreement for the grant of appropriate authorisations or permissions have not been met, then they shall prom ptly advise those authorities, giving substantive reasons for their concern. In that event, either Party may seek consultations, which should include representatives of the relevant aeronautical authorities,3

and/or additional information relevant to this c oncern, and such requests shall be met as soon as practicable. If the matter remains unresolved, either Party may bring the matter to the Joint
Committee;

The Director noted that DG MOVE believes that, under certain circumstances, perhaps t wo parties cou ld decide together to deny an application using Article 17 bis based on paragraph 1 of Article 17 bis ( i.e

., that an application undermines labor

- related rights and laws). However, he emphasized that t he key

message from DG MOVE’s perspective was that Art icle 17 bis of the Agreement cannot be referred to unilaterally by a Party to refuse an authorization under Article 4 of the Agreement to an airline of the other Party.

Article 4 reads:

Article 4: Authorization On receipt of applications from an airline of one Party, in the form and manner prescribed for operating authorizations and technical permissions, the other Party shall grant appropriate authorizations and permissions with minimum procedural delay

, provide d: (a) for a U.S. airline, substantial ownership and effective control of that airline are vested in the
United States, U.S. nationals, or both, and the airline is licensed as a U.S. airline and has its principal place of business in U.S. territory; (b) fo r a Community airline, substantial ownership and effective control of that airline are vested in a Member State or States, nationals of such a state or states, or both, and the airline is licensed as a Community airline and has its principal place of busin ess in the territory of the European Community; (c) the airline is qualified to meet the conditions prescribed under the laws and regulations normally applied to the operation of international air transportation by the Party considering the application or applications; and (d) the provisions set forth in Article 8 (Safety) and Article 9 (Security) are being maintained and

administered.

In closing, the Director reiterated DG MOVE’s position that any unilateral decision to deny an application using Article 1 7 bis runs against the letter and spirit of the Agreement.

Delegations

United States

Susan L. Kurland, Assistant Secretary for Aviation and International Affairs, DOT Kathryn Thomson, General Counsel, DOT Brandon Belford, Deputy Assistant Secretary for Aviation and International Affairs, DOT Paul Gretch, Director, Office of International Aviation, DOT Jennifer Thibodeau, Attorney Advisor, Office of the General Counsel, DOT Stephen Cristina, Director, Office of Aviation Negotiations, State Department Kristin Westphal, Office of Aviation Negotiations, State Department Karin Kizer, Office of the Legal Adviser, State Department Hylko Oosterloo, U.S. Mission to the European Union, State Department

European Commission Matthew Baldwin, Director Aviation and International Transport Affairs, DG MOVE Deniz Bayraktutar, International Transport Affairs, DG MOVE Emmanuelle Maire, Head of Unit, Internal Market & Airports, DG MOVE4

Frédéric Lagneaux, Internal Market & Airports, DG MOVE Eddy Liégeois, Legal matters & infringements, DG MOVE Walter Moells, European Commission Legal Service

In light of Norwegian Air International Limited’s ongoing application in this Docket, we establish the following procedural schedule for public comments on the above s ummary : 1

Answe rs

– must be filed no later than August 1 8 , 2014 ;

Replies

– must be filed no later than August 25 , 2014

.

We will serve this N otice on all persons on the service list for this docket.

By:

PAUL L. GRETCH
Director, Office of International Aviation

Date: August 4 , 201 4

(SEAL)

An electronic version of this document is available at http://www.regulations.gov

1 Given the extensive comments that have already been submitted regarding this application, we ask interested parties to

limit any further comments to responding to the information contained in the s ummary.