Amended proposal for a Regulation of the European Parliament and of the Council On insurance requirements for air carriers and aircraft operators (presented by the Commission pursuant to Article 250 (2) of the EC Treaty)
Date: 2003-07-23
Institutions: European Commission
Subjects: air transport, insurance, insured risk, intra-EU transport, liability, transport company, transport regulations

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 23.7.2003
COM(2003) 454 final

2002/0234 (COD)

Amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

On insurance requirements for air carriers and aircraft operators

(presented by the Commission pursuant to Article 250 (2) of the EC Treaty)

EXPLANATORY MEMORANDUM

During  its  13  May  2003  Plenary  Session,  the  European  Parliament  approved  subject  to  a
number  of  amendments  the  Commission's  proposal  for  a  European  Parliament  and  Council
Regulation  on  insurance  requirements  for  air  carriers  and  aircraft  operators.  The  European
Economic and Social Committee and the Committee of the Regions supported the legislative
initiative as well.

The  European  Parliament  agrees  with  the  main  elements  of  the  Commission's  proposal.
However, it has formulated a number of amendments, on the basis of which the Commission
proposes to introduce some new elements to its original text.

The Commission appreciates the pragmatic and balanced approach followed by the European
Parliament  in  the  matter  and  recognises  in  particular  the  added  value  of  the  amendments
proposing to strengthen certain elements of the Regulation and in that way the functioning of
the proposed rules.

In  the  light  of  these  considerations,  the  Commission  is  prepared  to  incorporate  those
suggestions  and  amendments  aiming  at  improving  and  clarifying  the  current  text  of  its
proposal.

In particular:

A  large  part  (13)  of  the  proposed  amendments  are  acceptable  as  adopted  by  the  European
Parliament. These amendments are the following: 1, 2, 3, 5, 6, 7, 8, 10, 11, 16, 17, 19 and 20.
These amendments are accepted as they stand, since they would provide a useful addition to
the text, clarify the text or constitute editorial improvements.

These amendments concern the following elements of the proposal:

Recital 10

This recital is amended in the same way as article 5 paragraph 3 is amended to state clearly
that depositing evidence of insurance with one national authority shall suffice for all Member
States.  This  will  further  reinforce  the  absence  of  any  discriminatory  treatment  against  air
carriers and aircraft operators across the Community. EP amendments concerned: 1 and 10.

Article 1 - Objective

The article has been amended so as to render the text clearer with regard to passengers. The
amendment  of  this  article  is  closely  linked  to  the  new  definition  of  passenger,  which  is
provided in article 3 (l). EP amendment concerned: 2.

Article 2 - Scope

The  article  concerning  the  scope  of  the  proposed  Regulation  has  been  amended  in  various
ways:  the  wording  of  the  article  has  been  streamlined  so  as  to  reflect  the  objective  of  the
proposed  Regulation  as  stated  in  Article  1;  the  scope  of  the  proposed  regulation  has  been
broadened,  so  as  to  apply  also  to  local  flights;  at  the  same  time  state  aircraft  have  been
excluded from the scope of application. These changes constitute partly textual clarifications
and  to  the  extent  they  concern  the  scope,  they  do  not  unduly  affect  the  scope  of  proposed
rules. EP amendments concerned: 3, 5 and 6.

2

Article 3 (k) - Definitions

The definition concerning the basis for classifying aircraft to categories (Maximum Take-Off
Weight - MTOW or Maximum Take-Off Mass - MTOM as it is also called in the industry)
has  been  textually  clarified  without  changing  the  meaning  of  the  provision.  EP  amendment
concerned: 7.

Article 4 - Principles of Insurance

The text of  the provision has been clarified  without changing the meaning  of  the  provision.
EP amendment concerned: 8.

Article 5 § 3 - Compliance

The text is modified so as to state clearly that when air carriers and aircraft operators deposit
evidence of insurance with the competent authority of one Member State that shall suffice for
all  Member  States.  This  will  introduce  clarity  and  will  further  foster  the  functioning  of  the
internal market. EP amendment concerned: 10.

Also, in the same context, with regard to overflight, Member States have instead of the option
the obligation to require that air carriers and aircraft operators produce evidence of insurance,
which has been effected in  accordance with the Regulation. This will ensure  consistency  of
the measures regarding compliance. EP amendment concerned: 11.

Article 7 § 3 Third Party Liability

The  change  introduced  in  this  part  of  the  proposal  is  considerable;  with  the  new  text  it  is
clearly stated that in as much as third party cover for risks of war and terrorism is concerned,
the insurance amounts will be applicable in the aggregate. This change echoes reactions from
both the aviation industry and the insurers, which are still unable to provide insurance cover
for such risks according to contractual practice prevailing before the events of 11 September
2001. Nevertheless, the change is integrated in such a way into the text of the proposal that
allows air carriers to observe the minimum insurance  requirements for  both general  risks as
well as specifically for risks of war and terrorism. EP amendment concerned: 16.

Article 8 §§ 1, 3 and 4 Sanctions/Enforcement

The text of the proposal has been changed in an effort to render the sanctions more effective,
by  allowing  Member  States  to  proceed  to  additional  inspections  to  verify  the  existence  of
appropriate insurance. EP amendment concerned: 17.

In  the  same  context,  where  air  carriers  and  aircraft  operators  from  third  countries  do  not
observe the insurance requirements of the Regulation, Member States have the obligation to
refuse them access to the Community. At the same time, it should be borne in mind, that when
EU  air  carriers  are  not  adequately  insured  Member  States  cannot  maintain  their  operating
licence  as  foreseen  in  article  3  of  Council  Regulation  (EEC),  N°  2407/92  on  air  carrier
licensing. EP amendment concerned: 19.

Finally, the proposed sanctions are further strengthened, as Member States have the obligation
not to allow the aircraft which has been found without appropriate insurance to take-off from
airport before it has produced evidence of valid insurance. This measure should ensure that no
air carrier or aircraft operator subject to the Regulation is allowed to start uninsured  a flight
from a Community airport. EP amendment concerned: 20.

3

One amendment (21) is acceptable only in principle: it concerns the definition of "passenger".
Accordingly a new definition under Article 3 (l) has been introduced.

Some amendments (4) are acceptable only in part and with redrafting: these are: amendments
4, 14, 23 and 31:

Amendment  4  (concerning  Article  2  -  scope  of  the  Regulation  with  regard  to  aircraft
operators)  can  be  accepted  only  in  part  because  the  second  part  thereof  is  confusing,  as
aircraft operators are never required to hold an operating licence.

Amendment 14 (concerning Article 7 § 2 - regarding the categories and amounts of insurance
to  cover  third  party  liability),  can  be  accepted  only  in  part.  The  addition  of  3  categories  of
small aircraft below 25 tons and the relevant insurance amounts are acceptable as they clarify
the situation of such aircraft. The remaining categories and insurance amounts however, are
not  acceptable,  because  they  are  based  on  a  resolution  by  the  European  Civil  Aviation
Conference  (ECAC)  of  December  2000,  which  does  not  reflect  any  more  the  reality  of  the
market after the events of 11/9/2001 as they are too low.

Amendment  23  (concerning  the  definition  of  a  flight)  can  be  accepted  only  in  part  because
even though it follows largely the Montreal Convention it is unnecessary detailed and needs
therefore to be shortened.

Amendment  31  (concerning  Article  8  -  Sanctions/Enforcement)  is  acceptable  only  as  far  as
third  country  carriers  are  concerned,  but  not  Community  ones.  As  explained  earlier,  where
insurance  requirements  are  not  observed  the  air  carriers  bear  sanctions  in  application  of
existing rules, that is Regulation 2407/92 on air carrier licensing.

The  Commission  has  to  reject  a  number  (6)  of  proposed  changes  to  the  Regulation,  which
affect the core issues of its proposal. These amendments are: 9, 12, 13, 15, 18 and 25.

Amendment 9 concerning state guarantees (Article 5 § 2 of the proposal) would not be in line
with  the  Commission's  state  aid  philosophy  and  would  distort  competition.  Therefore,  it
cannot be accepted by the Commission.

Amendment 12 concerning the validity of insurance (article 5 § 5 of the proposal) is legally
not  practicable  as  insurance  may  be  withdrawn  during  a  flight  as  after  the  11/09/2001  and
compliance  would  be  impossible  to  ensure.  Therefore,  it  cannot  be  accepted  by  the
Commission.

Amendments 13 and 15 concerning the definition of short-term leases (article 6 § 2 and article
7  §  4  of  the  proposal)  fall  under  the  scope  of  other  rules  (article  8  of  Council  Regulation
(EEC) N° 2407/92). Also, as far as the responsibility to meet minimum insurance requirement
in case of short-term lease is concerned, amendment 15 is legally confusing as the entity that
purchases  insurance  does  not  always  have  to  be  the  holder  of  an  Aircraft  Operator's
Certificate (AOC). Therefore, these amendments cannot be accepted by the Commission.

Amendment 18 containing a detailed description of doubts about effective insurance (article 8
§ 2 of the proposal); is over-prescriptive and cannot be accepted by the Commission.

Amendment 25 which broadens the definition of insurer (article 5 § 2 of the proposal) cannot
be accepted as it would introduce undue discrimination against insurers from third countries
and  contravene  international  obligations  of  the  Community  in  financial  services  (GATS).
Therefore, it cannot be accepted by the Commission.

4

In the light of all the above and in compliance with Article 250, paragraph 2, the Commission
modifies its proposal.

5

2002/0234 (COD)

Amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

On insurance requirements for air carriers and aircraft operators

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
80 (2) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the Economic and Social Committee2,

Having regard to the opinion of the Committee of the Regions3,

Acting in accordance with the procedure laid down in Article 251 of the Treaty4,

Whereas:

(1)

(2)

(3)

(4)

In the  framework  of  the  common  transport  policy,  it  is  important  to  ensure  a  proper
minimum level of insurance to cover liability of air carriers concerned by accidents in
particular in respect of passengers, baggage, cargo, mail and third parties;

In the Community aviation market, the distinction between national and international
air  transport  has  been  eliminated  and  it  is,  therefore,  appropriate  to  have  the  same
minimum level and nature of insurance requirements for Community air carriers;

Common action is necessary to ensure that minimum levels of insurance also apply to
air carriers from third countries so that to ensure a level playing field with Community
air carriers and foster consumer protection;

The Commission  has  stated  in  its  Communication  of  10  October  2001  regarding  the
repercussions of the terrorist attacks in the United States on the air transport industry,
its intention to examine the amounts and conditions of insurance required for the issue
of operating licences in order to ensure a harmonised approach; also, the Commission
stated in its Communication of 2 July 2002 regarding insurance  in  the  Air  Transport
sector following the terrorist attacks of 11 September 2001 in the United States, that it
would  continue  monitoring  the  developments  on  the  aviation  insurance  market  with
regard  to  the  revision  of  the  amounts  and  conditions  of  insurance  required  for  the
issuance of operating licences;

1

2

3

4

OJ C , , p. .
OJ C , , p. .
OJ C , , p. .
OJ C , , p. .

6

                                                
(5)

(6)

(7)

(8)

(9)

The Community has concluded the Montreal Convention for the Unification of Certain
Rules Relating to International Carriage by Air agreed on 28 May 19995 setting new
global  rules  on  liability  in  the  event  of  accidents  for  international  air  transport  of
persons, baggage and cargo replacing those in the Warsaw Convention of 1929 and its
subsequent amendments;

Article  50  of the Montreal  Convention  requires  parties  to  ensure  that  air  carriers  are
adequately  insured  to  cover  liability  under  that  Convention;whereas  the  Warsaw
Convention  of  1929  and  its  subsequent  amendments  will  continue  to  exist  alongside
the  Montreal  convention  for  an  indefinite  period;  whereas  both  Conventions  foresee
the possibility of unlimited liability;

Article  7  of  Council  Regulation  (EEC)  2407/92  of  23  July  1992  on  licensing  of  air
carriers,  requires  air  carriers  to  be  insured  to  cover  liability  in  case  of  accidents,  in
particular  in  respect  of  passengers,  baggage,  cargo,  mail  and  third  parties,  albeit
without specifying minimum amounts and conditions of insurance;

It is appropriate to take into account that the European Civil Aviation Conference has
adopted  on  13  December  2000  a  Resolution  (ECAC/25-1)  on  minimum  levels  of
insurance cover for passenger and third party liability;

It is necessary to define non-discriminatory minimum insurance requirements to cover
passenger, baggage, cargo, mail and third parties for both Community air carriers and
other air carriers flying to and from  an  airport  situated  in  the  Community  as  well  as
flying over the territory of a Member State;

(10)

It is necessary to require air carriers to provide evidence on request that they respect at
all times the minimum insurance requirements to cover liability as provided for in the
present  Regulation;  depositing  evidence  of  insurance  in  one  Member  State  is
sufficient for all Member States;

(11)

The minimum insurance requirements should be reviewed after a period of time;

(12)

(13)

Procedures  for  monitoring  the  application  of  the  minimum  insurance  requirements
should be transparent  and  non-discriminatory  and  should  not  impede  in  any  way  the
free movement of goods, persons, services and capital;

Since any measures necessary for the implementation of this Regulation with regard to
the adjustment of the minimum insurance requirements are of a general scope and they
concern the adaptation of certain non-essential provisions of the Regulation within the
meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down
the procedures for the exercise of implementing powers conferred to the Commission6,
they should be adopted by use of the regulatory procedure provided for in Article 5 of
that Decision;

(14)

The Regulation is in accordance with the principles of subsidiarity and proportionality
as  set  out  in  Article  5  of  the  Treaty.  The  introduction  of  minimum  insurance
requirements  can  contribute  to  the  objectives  of  the  internal  aviation  market  by
eliminating  distortions  of  competition.  The  objectives  can,  therefore,  be  more

5

6

OJ L 194, 18.07.2001, p. 38
OJ L 184, 17.7.1999, p. 23

7

                                                
effectively achieved by the Community by means of harmonised rules. The Regulation
confines itself to the minimum required in order to achieve these objectives and does
not go beyond what is necessary for that purpose.

HAVE ADOPTED THIS REGULATION:

Article 1

Objective

The objective of  this Regulation is  to define minimum insurance  requirements  in  respect  of
insurance regarding passengers, others on board, baggage, mail, cargo and third parties, that
air carriers and aircraft operators have to respect to be allowed to operate services within, into
or  out  of  the  Community  or  to  fly  over  the  territory  of  Member  States  to  which  the  Treaty
applies.

Article 2

Scope

This Regulation shall apply

a)

b)

c)

to all air carriers flying to or from an airport situated in the  Community as  well as
and/or  flying  over  the  territory  of  a  Member  State  operating  a  scheduled  or  non-
scheduled flight;

to all aircraft operators flying to or from an airport situated in the Community as well
as  or  flying  over  the  territory  of  a  Member  State  carrying  passengers  and  their
baggage, mail and/or cargo with or without remuneration or hire;

to carriage by air of passengers and their baggage, mail or cargo performed by
a state aircraft of a Member State or any other country.

This Regulation shall not apply to carriage by air of passengers, mail and/or cargo, performed
by non-power driven aircraft and/or ultra-light power driven aircraft, nor to local flights not
involving carriage between different airports. In respect of these operations, national  law
concerning insurance requirements in the event of accidents shall apply.

Article 3

Definitions

For the purposes of this Regulation:

(a)

(b)

“air carrier” shall mean an air transport undertaking with a valid operating licence;

“Community  air  carrier”  shall  mean  an  air  carrier  with  a  valid  operating  licence
granted by a Member State in accordance with the provisions of Council Regulation
(EEC) 2407/92 of 23 July 1992 of licensing of air carriers;

8

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

7

8

“aircraft operator” shall mean a natural person residing in a Member State or a legal
person established in a Member State using one or more aircraft in accordance with
the  regulations  applicable  in  that  Member  State,  as  provided  for  in  Council
Regulation (EEC) No 3922/917, or a natural person residing outside the Community
or  a  legal  person  established  outside  the  Community  using  one  or  more  aircraft  in
accordance with the regulations of the country of residence or establishment;

“insurer”  shall  mean  an  undertaking,  which  has  received  official  authorisation  in
accordance  with  Article  6  of  Council  Directive  73/239/EEC8,  or  a  non-member-
country undertaking, which would require authorisation in accordance with Article 6
of Directive 73/239/EEC or Article 6 of Directive 79/267/EEC if it had its registered
office in the Community;

“insurance”'shall mean the policy contract setting the conditions whereby the insurer
agrees to indemnify the insured for all insured loss up to the limit of liability for all
insured perils, in respect of incidents which occur during the policy period; insurance
shall also mean the policy contract where the insured perils are acts of war, terrorism,
hijacking,  act  of  sabotage,  unlawful  seizure  of  aircraft,  civil  commotion  or  labour
disturbances;

“insurer's  principal  place  of  business”  shall  mean  the  location  of  the  insurer's
headquarters or, alternatively, the place from which the majority of the undertaking's
operations are managed on a day to day basis;

“incident” shall mean the occurrence or series of occurrences having the same origin,
in which an aircraft causes damage to passengers, baggage, cargo, mail and/or third
parties  on  the  surface  and/or  in  the  air.  Where  an  incident  consists  of  a  series  of
occurrences,  it  shall  be  treated  as  having  occurred  on  the  date  of  the  first  such
occurrence.  Incidents  shall  be  understood  to  cause  accidentally  damage  to
passengers, baggage, cargo, mail and/or third parties on the surface and/or in the air,
or because of acts of war, terrorism, hijacking, act of sabotage, unlawful  seizure of
aircraft, civil commotion or labour disturbances;

“flight”  shall  mean  the  beginning  of  the  operations  of  departure  including  the
boarding or loading onto the aircraft of the passenger and/or baggage until the
end  of  the  operations  of  arrival  including  the  disembarkation  or  unloading  of
baggage from the aircraft and where the aircraft has come to a complete stop;

“air  service”  shall  mean  a  flight  or  a  series  of  flights  carrying  passengers,  cargo,
and/or mail irrespective of remuneration and/or hire;

“scheduling period” shall mean either the summer or the winter season as used in the
schedules of air carriers;

“SDR” shall mean a Special Drawing Right as defined by the International Monetary
Fund  in  1969,  as  an  international  reserve  asset,  to  supplement  members'  existing

Council  Regulation  (EEC)  No  3922/91  of  16  December  1991  on  the  harmonisation  of  technical
requirements and administrative procedures in the field of civil aviation, OJ L 373 , 31/12/199, p.4 - 8
OJ L 228, 16.08.1973,p. 3

9

                                                
(l)

(m)

1.

reserve assets (official  holdings of  gold, foreign  exchange, and  reserve  positions  in
the International Monetary Fund) 9;

“MTOW”  shall  mean  the  Maximum  Take  Off  Weight,  which  corresponds  to  a
certified  amount  specific  to  all  each  aircraft  types  as  stated  in  the  certificate  of
airworthiness of the aircraft;

“passenger”  shall  mean  any  person,  excluding  on-duty  members  of  the  flight
and cabin crew, who makes a journey by air.

Article 4

Principles of insurance

Community  air  carriers  registered  in  the  Community  and  aircraft  operators
operating  aircraft  registered  in  the  Community,  as  well  as  other  air  carriers  and
aircraft  operators  operating  air  services  into  the  Community  and/or  flying  over
Community  territory,  shall  be  insured  in  respect  to  their  liability  for  damage
sustained on the territory of a Member State and for which a right to compensation
exists.

Article 5

Compliance

1.

The  insurance  shall  be  effected  by  an  insurer  authorised  to  effect  such  insurance
under Community law or the laws of:

–  the country which has delivered an operating licence to the air carrier concerned,

or

–  the country where the aircraft is registered, or

–  the country where the insurer has its residence or principal place of business.

This paragraph shall not affect the rights of Member States to define the prudential
conditions under which an insurer non-authorised according to Article 6 of Council
Directive 73/239/EEC may conduct business in its territory.

Air  carriers  and  aircraft  operators  registered  in  a  third  country,  shall  provide
alternatively  to  the  insurance  requirements  referred  to  in  paragraph  1,  any  of  the
following securities:

A  cash  deposit  in  a  depository  maintained  in  the  country  having  granted  a  valid
operating licence to the air  carrier concerned, or having  delivered the air operator's
certificate to the aircraft operator concerned;

SDRs  are  determined  daily  by  the  International  Monetary  Fund.  The  SDR  rate  on  5  September  2002
was set at: SDR/Euro 0.747385 -- Euro/SDR 1.338000

10

2.

9

                                                
3.

4.

5.

1.

2.

3.

A guarantee issued by a bank authorised to do so by the country of registration of the
aircraft and whose financial responsibility has been verified by that country;

A guarantee issued by a bank authorised to do so by the country of registration of the
aircraft, if that country undertakes that it will not claim immunity from suit in respect
of that guarantee.

Air  carriers  and  aircraft  operators  shall  deposit  an  insurance  certificate  issued  in
accordance with paragraph 1 or any of the securities provided for in paragraph 2 with
the competent authorities of Member State(s)  concerned at before the beginning of
each  scheduling  period.  Depositing  evidence  of  insurance  in  one  Member  State
shall suffice for all Member States.

For  the  purpose  of  application  of  the  present  paragraph,  Member  State  concerned
shall  mean  the  Member  State(s)  which  has  issued  an  operating  licence  to  an  air
carrier  or  the  Member  State  where  an  aircraft  has  been  registered  and  the  Member
State responsible for the airport to and from an air service is operated.

Member  States  overflown  may  shall  also  require  that  air  carriers  and  aircraft
operators produce evidence that insurance has been effected in accordance with the
present regulation.

Where an air service consists of series of flights, all air carriers or aircraft operators
concerned shall meet the requirements stipulated in the present Regulation.

Where  the  insurance  or  the  guarantee  or  the  security  expires  during  a  flight,  air
carriers shall ensure that it shall continue to be in force until the next safe landing of
the aircraft specified in the flight plan.

Article 6

Passenger, baggage, mail and cargo liability

Where  passengers  are  carried  by  air,  all  air  carriers  shall  be  insured  to  cover  their
liability for death, wounding or any other bodily injury sustained by a passenger for
the  minimum  amount  of  250  000  SDRs  per  passenger.  Such  insurance  shall  be
understood  to  also  cover  damage  sustained  in  the  case  of  destruction  or  loss  of,  or
damage  to  checked  baggage  of  a  passenger,  upon  condition  only  that  the  event
causing the damage took place in the period during which the checked baggage was
in the charge of the carrier, or its servants or agents.

This provision shall apply mutatis mutandis to aircraft operators.

In case of aircraft operated under short term lease agreements with or without crew
minimum  insurance  requirements  have  to  be  met  by  the  air  carrier  actually
performing the flight.

Where cargo is carried by  air,  air carriers  and  aircraft  operators  shall  be  insured  to
cover their liability for damage sustained in the event of the destruction or loss of, or
damage  to  cargo  carried  for  the  minimum  amount  of  17  SDRs  per  kilogram  upon
condition that the event, which caused the damage so sustained, took place during the
flight.

11

4.

5.

1.

Where  mail  is  carried  by  air  Member  States  shall  set  the  minimum  insurance
requirements in value for the carriage of mail by air carriers and/or aircraft operators
without discrimination on grounds of nationality or identity of the air carrier or  the
aircraft operator.

The values referred to in this Article may be amended as appropriate including where
changes  in  international  law  indicate  the  necessity  of  such  decision,  in  accordance
with the procedure laid down in Article 9 (2).

Article 7

Third Party Liability

Insurance  to  cover  liability  vis-à-vis  third  parties  shall  be  understood  to  cover  any
damage  caused  by  an  aircraft  in  flight  or  on  the  ground  or  by  any  person  or  thing
falling therefrom to third parties, for each aircraft and incident, only if the damage is
a direct consequence of the incident giving rise thereto, and

a)

b)

for which the air carrier or aircraft operator concerned is held liable according
to national laws of the Member State where the incident has occurred, or

was  due  to  an  act  of  war,  or  hijacking,  or  sabotage,  or  terrorism,  or  civil
commotion or social disturbance intended to affect the operation of the aircraft
and  was  due  to  the  negligence  or  other  wrongful  act  or  omission  of  the  air
carrier or its servants or agents or the aircraft operator.

This provision shall apply mutatis mutandis to aircraft operators, where the aircraft is
registered in a third country.

2.

All air carriers shall be insured for damages sustained by third parties in the event of
accidents  as  well  as  acts  of  war  and  acts  of  terrorism.  The  minimum  insurance
requirements shall be understood to cover the following categories of aircraft:

Category 1: aircraft with a MTOW < 2 000 kg 1,5 million SDRs

Category 2: aircraft with a MTOW < 6 000 kg4,5 million SDRs

Category 3: aircraft with a MTOW < 14 000 kg 9million SDRs

Category 4: aircraft with a MTOW < 25 000 kg

80 million SDRs

Category 5: aircraft with a MTOW < 50 000 kg 270 million SDRs

Category 6: aircraft with a MTOW < 200 000 kg 400 million SDRs

Category 7: aircraft with a MTOW > 200 000 kg 600 million SDRs

This provision shall apply mutatis mutandis to aircraft operators, where the aircraft is
registered in the Community.

3.

Air  carriers  operating  flights  to  and  from  any  airport  situated  on  the  territory  of  a
Member State or flying over the territory of a Member State shall produce evidence

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that  they  observe  at  all  times  the  minimum  insurance  requirements  referred  to  in
paragraph 2.

This provision shall apply mutatis mutandis to all aircraft operators.

The values referred to in paragraph (2) as applied to paragraph (1) (b), shall be
limited  in  the  aggregate  to  amounts  available  in  the  commercial  insurance
market from time to time.

In case of aircraft operated under short term lease agreement with or without crew,
minimum  insurance  requirements  have  to  be  met  by  the  air  carrier  bearing  the
operating risk of the flight.

The values referred to in this Article may be amended as appropriate including where
changes  in  international  law  indicate  the  necessity  of  such  decision,  in  accordance
with the procedure laid down in Article 9 (2).

Article 8

Enforcement

Member  States  shall  perform  regular  and,  where  appropriate,  additional
unannounced inspections to verify that air carriers using airports in their territory, or
Community air carriers to which they have delivered an operating licence, or aircraft
operators  to  which  they  have  issued  an  aircraft  operator's  certificate  according  to
Council  Regulation  (EEC)  N°  2407/92  comply  with  the  provisions  of  the  present
Regulation.

This provision shall apply mutatis mutandis to aircraft operators whichever the place
of registration of the aircraft.

Where appropriate Member States concerned may request additional evidence from
the air carrier, the aircraft operator or the insurer concerned.

Where Member States concerned are not satisfied that the conditions of the present
Regulation are met, they shall refuse the air carrier or aircraft operator from a third
country access to routes into or within the Community or the right to overfly  their
territory.

Where Member States concerned are not satisfied that the conditions of the present
Regulation  are  met  before  or  after  an  aircraft  has  landed  at  an  airport  in  their
territory, they shall not allow the aircraft to take-off, before the air carrier or aircraft
operator  concerned  has  produced  a  valid  insurance  certificate  according  to  the
present Regulation.

4.

5.

1.

2.

3.

4.

Article 9

Committee

1.

The  Commission  shall  be  assisted  by  the  committee  instituted  by  Article  11  of
Regulation (EEC) N° 2408/92.

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2.

3.

4.

1.

2.

Where reference is made to decisions taken pursuant to paragraph 1, the regulatory
procedure laid down in Article 5 of Decision 1999/468/EC shall apply, in compliance
with Article 7 and Article 8 thereof.

The  period  provided  for  in  Article  5(6)  of  Decision  1999/468/EC  shall  be  three
months.

The  committee  referred  to  in  this  Article  may  furthermore  be  consulted  by  the
Commission on any other matter concerning the application of this Regulation.

Article 10

Report and cooperation

The Commission shall  submit  a  report  to  the European  Parliament and the Council
on the operation of this Regulation at least three years after its entry into force. The
report shall address in particular the functioning of articles 5, 6, 7 and 8.

Member  States  shall  upon  request  submit  information  on  the  application  of  this
Regulation to the Commission.

Article 11

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in
the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament
The President

For the Council
The President

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