HomeCurrent Air Transport Agreements...Nineteenth Meeting of the U.S.-EU Joint Committee Record of Meeting November 16, 2016

# 									Nineteenth Meeting of the U.S.-EU Joint Committee Record of Meeting November 16, 2016							

Air Transport Agreement

November 16, 2016

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        - The nineteenth meeting of the U.S.-EU Joint Committee (J.C.) took place on 16 November 2016 in Berlin. This J.C. initially planned as a 1.5 day event, was able to conclude at the end of the first day. The list of participants is at Attachment 1. The approved agenda is at Attachment 2.

**Adoption of the Records of the Previous J.C. Meetings**
        - The records of the last five J.C. meetings (that have been finalised and signed by correspondence) were adopted.

**Implementation of Agreement**
        - The J.C. noted the joint work that has been carried out by their legal experts on the draft exchange of letters regarding the status of Mayotte and the Croatia Protocols. The delegations hoped to finalize both matters by the next J.C. meeting in spring 2017.
        - The EU delegation stated that the necessary internal process for the adoption of a “conclusion” decision, necessary for bringing into force the Air Transport Agreement between the United States of America and the European Community and its Member States, signed on April 25 and 30, 2007, was on-going. The relevant discussions at the Council of the European Union (the Council) were progressing towards a conclusion. The consent of the European Parliament would subsequently be sought. Final adoption was expected to take place early 2017, at which point the Agreement could be brought into force through an exchange of diplomatic notes.

**Article 21 – Annual Review**
        - The EU delegation recalled the “Information Note” that it had communicated to the U.S. delegation in advance of the January 2015 J.C. meeting in which it indicated that the EU Regulation 598/2014 satisfied Article 21’s conditions. The EU delegation maintained this position. The U.S. delegation reiterated its disagreement with this assessment. The EU delegation would now consider the next steps.

**Legislation & Rule Making Updates**

EU Regulation 261/2004 – Interpretative Guidelines
        - The EU delegation provided clarifications on the interpretative guidelines that were adopted on June 10, 2016 in response to a request from stakeholders to provide more clarity and legal certainty to ensure uniform application of the rules across the EU. On the revision of the legislation, EU Member States have not agreed on a common approach yet. Therefore, it was unlikely that a new Regulation will enter into force before 3 years from now.
        - The U.S. delegation expressed appreciation for the explanations while noting its concern that the EU Member States could still take different positions on the no show policy. The EU delegation emphasised that guidelines clarified how no-show should be applied under EU Regulation 261/2004 and that national courts also were looking at this matter under unfair contract clauses legislation. The U.S. delegation asked to be kept informed of developments concerning such cases.

**Update on European Accessibility Act**
        - The EU delegation provided answers to specific questions previously raised by the U.S. on the status and scope of the proposal for a Directive for the European Accessibility Act. The U.S. delegation had a few more follow-up questions of a technical nature and expressed willingness to share their experience/lessons-learned in this field. The U.S. delegation stated that it would appreciate facilitation of dialogue with the Commission’s lead Directorate General on this file, DG EMPL. The EU delegation underlined that the proposal for the Directive was currently under discussion in the Council and offered to facilitate U.S. Government contacts with DG (EMPL).

**Wet Leasing**
        - The delegations addressed developments related to arrangements between airlines for the provision of aircraft and crew ( i.e. , wet leasing). The EU delegation reported on the progress made regarding the grant of the authorisation for the negotiation of the envisaged wet lease agreement and on the associated amendment to its internal regulation. The adoption of the corresponding Commission initiatives was expected to take place by the end of the year. This would be followed by a submission of those initiatives to the Council in early 2017. The U.S. delegation welcomed this progress, stressing that it is imperative to resolve this matter quickly, as it has been pending for more than four years. It referred to the licenses of two EU carriers coming to the end of their term in the next three weeks and two more carriers that would follow in early January and noted that it could not commit to maintain the status quo with respect to wet lease operations by EU carriers while U.S. carriers are foreclosed from participating in the market. The U.S. delegation noted that a formal communication from DG MOVE at the time of adoption of the relevant Commission decision would be appreciated and would facilitate the Department of Transportation’s (DOT) assessment of these cases.

**Passenger Name Record (PNR)**
        - The EU delegation provided an update on the PNR directive that was issued earlier in the year, as well as the opinion from the Advocate General of the European Court of Justice (ECJ) on the forthcoming decision on compatibility of the EU-Canada PNR agreement with specified provisions of the EU law concerning the protection of personal data. The update also included the EU delegation’s views on the effect of the opinion, if adopted by the ECJ, on negotiations on PNR agreements with third countries like Mexico. The U.S. delegation requested clarification on the timeline and implementation plan regarding the PNR Directive. The EU delegation committed to providing additional information on this point after coordination with the lead DG (HOME). On the negotiations on PNR agreements with third countries, the U.S. delegation reiterated its concerns as regards to the potential exposure of the U.S. carriers under EU law. The EU delegation took note of this point while underlining that the EU was not in a position to progress with these negotiations before the issue of the ECJ’s ruling.

**Drug and Alcohol Testing – Update on U.S. and EU developments**
        - The EU delegation inquired about the implications of the Federal Aviation Administration (FAA) reauthorisation legislation enacted on February 14, 2012 for drug and alcohol testing of certain maintenance provider employees working in foreign repair stations. The U.S. delegation confirmed that the 2012 legislation required that the FAA promulgate a rule and referred to the relevant Advanced Notice of Proposed Rule Making of 2014 on Drug and Alcohol Testing which received a broad array of substantive comments including from the EU. The U.S. delegation stated the FAA was considering the possibility of waivers for foreign repair stations in certain countries. Although no exact date could be provided for the publication of the Notice of Proposed Rule Making , the FAA representative emphasized that the FAA is working to develop a rule that takes into consideration the views of all stakeholders, including the EU.
        - On the proposed EU approach to random alcohol testing during ramp inspections of EU and third country air carriers, the U.S. delegation repeated concerns that FAA Administrator Huerta had expressed in an earlier letter to DG MOVE highlighting that the U.S. preference continued to be exemption and the reciprocal acceptance of oversight responsibility under the applicable International Civil Aviation Organization (ICAO) framework. The EU delegation underlined that the proposal was not about testing the oversight of host country regarding operation or safety; rather, the tests would be envisaged as part of the ramp inspections. The EU delegation highlighted that the relevant European Aviation Safety Agency (EASA) draft opinion has not reached DG MOVE yet and referred to an upcoming senior level meeting between FAA and EASA where the matter would be discussed. The delegations stated that they would remain in touch after the issuance of the EASA opinion.

**Federal Aviation Administration Reauthorisation Extension**
        - EU delegation asked the U.S. delegation about expectations for FAA reauthorization legislation. The U.S. delegation recalled that the last FAA reauthorisation had expired in September 2015. Since then three short term extensions were enacted; with the most recent one covering the period July 2016-September 2017. In response to a question from the EU delegation, the U.S. delegation said that they would be going through a transition process but underlined that reauthorisation remains a priority for the senior management at FAA and DOT. Among the issues that Congress could discuss is privatisation of the air traffic control (ATC) services. Administrator Huerta is serving a five-year term that ends in January 2018. The EU delegation indicated that it would look at the most opportune moment for high level contacts with the new Administration on this topic and many others where it is important for the EU to understand where the U.S. would be headed and assess its implications.

**Bilateral Visa Program Changes – Visa Waiver Programme (VWP)**
        - The EU delegation recalled the mutual benefits of the VWP and stressed its desire to maintain the system. The EU would continue its efforts with the new Administration to claim derogation from the 3% visa refusal rate threshold to ensure that all EU nationals benefit from the VWP. The U.S. delegation emphasized that certain requirements for joining the VWP are imposed by statute and that the U.S. has continued to dialogue with the five EU member states that do not meet the program’s requirements but which aspire to join the VWP. The U.S. delegation further expressed the Obama Administration’s commitment to maintaining the VWP.

**European Travel Information and Authorisation System (ETIAS)**
        - The EU delegation provided a brief introduction to its envisaged ETIAS pointing out that it was too early to provide further details because the proposal was being shaped (it was on the agenda of the College of Commissioners on the day of the J.C.). In principle, ETIAS would be similar to U.S.’ ESTA, strengthening the security of travel. The U.S. delegation welcomed the EU delegation’s statements and encouraged the EU to implement the system in a way that would not be burdensome for the carriers. The U.S. delegation also noted that colleagues from U.S. Customs and Border Protection have been in contact with European counterparts to share their experience.

**U.S. Developments on Competition and Consumer Protection**
        - The EU delegation requested clarifications from the U.S. delegation regarding the recent (October 18, 2016) White House announcement on measures to spur competition among the airlines and to allow consumers to make better choices. It inquired about the scope and implications for EU carriers. The U.S. delegation indicated that the package contained a series of actions most of which would not affect foreign carriers. On the issues that may affect EU carriers (including code-share and lost luggage), the U.S. delegation provided a brief summary and the relevant DOT docket numbers and specified the comment periods.

**Iran Sanctions**
        - The U.S. delegation highlighted the Obama Administration’s commitment to the Joint Comprehensive Plan of Action (JCPOA) underlining the issue of licenses for the sale of commercial passenger aircraft and related parts. Businesses were anxious to get their licenses and U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) was working diligently to process them as quickly as possible. Waiting times, however, were not always due to U.S. Government delay. Some cases necessitated going back to the applicant and timing depended on how quickly they responded. The EU delegation referred to ongoing difficulties of European airlines with banks regarding transactions for the payment of overflight charges to Iran. While the EU delegation appreciated the guidance already provided by the U.S., it highlighted how difficult it was, in practice, to execute financial transactions that did not involve U.S. parties. Accordingly, banks continued to stick to a risk-averse position. The U.S. delegation noted that the U.S. Government had conducted substantial outreach to financial institutions in Europe and expressed the view that ultimately such firms must decide whether to engage in transactions involving Iran based on their own risk analysis. The U.S. delegation highlighted that OFAC had a feedback email and phone number that could be used for specific questions on what is sanctionable. Typically OFAC would endeavour to respond within 24-48 hours.

**Updates on Bilateral Discussions and Negotiations with Third Countries (government-to-government session)**
        - The delegations exchanged information about their on-going negotiations with third countries. The EU delegation gave a brief update on recent negotiations with Qatar (first round in September 2016, next one planned for early 2017), UAE (no progress for now) ASEAN (first round in October 2016, next one planned for early 2017) and Turkey (first round in November 2016, next one planned for Q1 of 2017) and envisaged next steps. The objective of these negotiations were agreement providing for the closest possible cooperation across the broad range of aviation policy, including market access but also regulatory convergence in other areas such as safety, security, air traffic management and environmental protection while taking into account fair competition.
        - The U.S. delegation referred to its informal technical discussions with Qatar and the UAE that have started in July 2016 with additional rounds in October/November. The U.S. delegation noted that these are “informal discussions” and not “consultations” requested pursuant to the relevant provisions of the Open Skies Agreements. During these discussions, the U.S. shared its concerns about state support to the aviation industry with the aim of adopting voluntary commitments on best practices in the areas of transparency and moving towards financing in commercial terms. U.S. delegation noted the hope was to conclude this as expeditiously as possible.

**Aviation Security Update**
        - The U.S. delegation recalled the  24th Meeting of the EU-U.S. Transport Security Cooperation Group, held in Brussels on 12 and 13 October 2016 , which, once again witnessed the commitment of both sides in addressing important issues in transportation security. The discussions highlighted the common understanding of current threats and challenges, and offered the opportunity to enhance the already high level of cooperation the Parties have entertained for years. The rich agenda of the meeting covered, inter alia:

(a) **The recently adopted UN Security Council Resolution 2309 on aviation security**, regarding which both sides showed great appreciation for and endorsement of all the principles contained therein. Both the EU and the U.S. are individually and jointly committed to defining initiatives at the international level in order to meet the mandate this Resolution provides;(b) **Security of public areas in the transport sector**, where recent events in Brussels, Paris, and Istanbul have demonstrated the vulnerabilities in public areas and have highlighted the need to identify mitigation measures to address the threat, avoiding disproportionate and unnecessary reactions that could negatively impact operations and the passenger’s experience. The involvement of all stakeholders having institutional competence, jurisdiction and expertise in security should be sought in order to assist the appropriate authority in adopting a balanced and holistic approach. The discussions showed a common view and consistent approach on the matter, with parallel initiatives being taken to improve the ‘culture of security’ in the transportation sector. Both sides committed to maintaining an active dialogue and explore joint initiatives;(c) **Inbound security and Last Point of Departure assessments**, where both sides also expressed their intention to exchange information on threats, vulnerabilities and risks, to the extent possible, as well as exchanging best practices and mechanisms to react to emerging threats. Both sides also expressed their intent to share information on capacity building initiatives delivered in third countries;(d) **Air Cargo Security**, where both sides provided updates on initiatives taken on both sides of the Atlantic. In particular, the regulatory change currently under consideration by the EU to strengthen the inbound cargo regime from third countries was welcomed by the U.S. Both sides also reiterated their commitment to working together on the Pre-Loading Advance Cargo Information for cargo shipments, where the role of aviation security authorities needs to be strengthened to assist ICAO in its evaluation of the concept;(e) The **U.S. Pre-Clearance Programme**, where the U.S. is considering a possible expansion of the programme in Europe to 3 or 4 additional locations. While appreciating the initiative, the EU has reiterated its preference for an effort aimed at mutual recognition of security measures in order to avoid duplication of requirements, rather than creating parallel or additional regimes.(f) **Cooperation on Technology**, where both sides again committed to an open exchange of information on new initiatives and the development of commensurate standards.

The meeting included a stakeholders’ session that gave the opportunity to industry representatives to raise issues. The discussions were open and fruitful and highlighted the high level of cooperation between the two regulators.
        - The delegations noted that the next meeting of the Transportation Security Cooperation Group was provisionally scheduled to take place in April/May 2017. On air cargo security, the EU delegation underlined the importance of maintaining mutual recognition on a long-term basis, noting the significant benefits accrued for air transport and trade.

**EU Aviation Strategy**
        - The EU delegation provided an update on the implementation of the EU Aviation Strategy. In March 2016, the Council gave its green light to the opening of bilateral aviation safety agreement (BASA) negotiations with China and Japan and in June 2016 authorisations for EU air transport agreements with ASEAN, Qatar, the UAE and Turkey followed. First negotiating rounds have taken place with Qatar, ASEAN and Turkey since the summer. On EU Regulation 868/2004, the European Commission intends to present a legislative proposal as soon as possible. Work on the new safety Regulation is progressing and is expected to be concluded in 2017. New issues like unmanned aircraft and challenges such as cyber security are also expected to be addressed.

**ICAO Assembly Follow-Up**
        - In addressing the ICAO Assembly outcome on non-environmental matters, the U.S. delegation raised two issues: aviation security and disinsection. On aviation security, the U.S. delegation emphasised the importance of the UN Security Resolution 2309 (also touched upon under the agenda item on Aviation Security), noting the U.S. had raised the possibility of establishing an Aviation Security Bureau within the ICAO Secretariat and encouraged ICAO to welcome a collaborative process. Regarding audits, the U.S. delegation stated that the Transportation Security Administration (TSA) is willing to share best practices with ICAO on scope and methods and encouraged the EU to do the same. The EU delegation stated that the EU and the U.S. were on the same side when talking about aviation security at a global level. Both delegations expressed satisfaction on the outcome of the Assembly and their collaboration before and during the event.
        - The U.S. delegation also expressed its satisfaction with the ICAO resolution on disinsection wherein the Assembly directed the Council to engage with the World Health Organization (WHO). It expressed an interest to work with the EU to move forward on this resolution. The U.S. delegation raised concerns regarding chemical disinsection requirements put in place, including in certain Member States, in response to the Zika virus, noting the U.S. Centers for Disease Control and its European counterpart consider disinsction to have low efficacy in preventing importation of Zika-infested mosquitoes. The EU delegation indicated that even though some form of cooperation exists in the area, notably through workshops involving the European Centre for Disease Prevention and Control (ECDC) and the Commission, the EU has not harmonized rules on disinsection. The EU delegation therefore encouraged the U.S. to reach out to EU Member States bilaterally The U.S. delegation noted that the U.S. has engaged in bilateral outreach, but also wanted to continue to discuss the issue with the Commission, underscoring that this was the third Assembly resolution on disinsection and that the U.S. considers exposure to hazardous chemicals is a health/consumer/labour issue that continues to be of significant importance.

**Environment**

ICAO Assembly Outcome: Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), Noise & EU Emissions Trading System (ETS) Next Steps
        - Both delegations expressed satisfaction on the outcome of the Assembly with respect to CORSIA, and their collaboration before and at the Assembly. They emphasised the need to continue this cooperation during the implementation stage. The EU delegation explained the next steps regarding the EU ETS; an amended proposal was planned to be adopted by 2017 to avoid the EU ETS from snapping back to apply to rights to and from non-European Economic Area countries). The U.S. delegation welcomed these explanations, while stating that it continued to have questions about the EU ETS moving forward and expressed its interest to remain in touch on this matter. On noise, the U.S. delegation expressed concern about certain remarks made at the Assembly on operating restrictions and stated that these restrictions should be taken as a last (and not first) resort. The EU delegation underlined that the balanced approach was firmly embedded in its recent Noise Regulation.

**Environmental Tax Issues**
        - The U.S. delegation noted that it had raised concerns about environmental taxes imposed by EU Member States at prior JC meetings and indicated that since the April 2016 J.C. The U.S. has reached out bilaterally to EU member States concerned to address any adverse effects on international aviation and to ensure compliance with Article 15 of the Air Transport Agreement between the United States of America and the European Community and its Member States, signed on April 25 and 30, 2007, as amended. The EU delegation stated that the European Commission was closely following all cases both from this bilateral perspective and also regarding compliance with European Union’s internal rules. For Spain, the EU delegation was happy to report that the Catalan authorities have put through legislation that modifies the NoX emissions tax from 1 January 2017 onwards. The modification removes the 20,000 flight ceiling, the distinction based on transit and long-haul passengers, and brings cargo flights under the tax. For Sweden, the inquiry (on how a new tax on air travel could be designed) continued and there were no results to report at this moment. Regarding Italy’s IRESA (Imposta Regionale per le Emissioni Sonore degli aeromobili civili), the representative of Italy indicated that she had no additional information to share: capping payments and providing reimbursements for some payments made concluded the situation from the Italian government’s viewpoint. The U.S. delegation took note of these updates. On IRESA, the U.S. delegation reiterated its concerns about the application of the balanced approach and expressed concern about the expenses incurred by the air carriers to try to recuperate the amounts that they should not have been asked to pay in the first place.

**Any Other Business (AOB)**
        - The U.S. delegation indicated that it wished to raise three AOB points. In the absence of timely prior notification of these items, it accepted that the EU delegation could choose to respond or remain in a listening mode.
        - Operating restrictions at Brussels airport:  The U.S. delegation raised concerns that operations at Brussels airport have been restricted between 10 p.m. and 7 a.m. due to noise concerns and questioned whether these restrictions were imposed in a manner consistent with the balanced approach. The EU delegation underlined the obligation of Member States to comply with the Noise Regulation that has been in force since April 2015. Any operational restrictions had to follow the strict process and conditions written in that regulation which was aligned with the balanced approach. In case of non-compliance with the Regulation, the European Commission would be entitled to take action.
        - Segregation of U.S. airlines at Rome’s Fiumicino airport:  The U.S. delegation stated that although U.S. carriers were now moving back to the terminal area, the carriers were concerned about being isolated from their EU partners. The representative of Italy indicated her understanding that the matter was about to be resolved, but would try to confirm.
        - ATC disruptions over Europe:  The U.S. delegation stated that this constituted an issue of concern for U.S. carriers, and noted its view that international operations should be prioritized in the event of disruptions. The EU delegation indicated that EU carriers/passengers were the ones most concerned by this matter. Whatever the source of the disruption might be (volcano, technical, labour), the EU is looking at the impact of disruptions and the resiliency of system to react. A dedicated study was commissioned on this and the European Network Manager was asked to reflect on possible courses of action.

**Next Meeting**
        - The delegations intend to coordinate further before fixing the date of the next J.C. meeting that would take place in Spring 2017 in Washington D.C.

 

Signed: