Common Position (EC) No 8/2004 of 5 December 2003 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a regulation of the European Parliament and of the Council on insurance requirements for air carriers and aircraft operators
Date: 2003-12-05
Institutions: Council of the European Union
Subjects: air transport, common transport policy, transport company, transport insurance

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COMMON POSITION (EC) No 8/2004

adopted by the Council on 5 December 2003

with a view to adopting Regulation (EC) No . . ./2004 of the European Parliament and of the
Council of . . . on insurance requirements for air carriers and aircraft operators

(2004/C 54 E/04)

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 Commission (1),

Having regard to the Opinion of the European Economic and
Social Committee (2),

After consulting the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

Whereas:

(1)

(2)

In the framework of the common transport policy, and in
it is important to
order to foster consumer protection,
ensure a proper minimum level of
insurance to cover
liability of air carriers in respect of passengers, baggage,
cargo and third parties.

In the Community aviation market,
the distinction
between national and international air transport has been
therefore, appropriate to establish
eliminated and it is,
minimum insurance requirements
for Community air
carriers.

(3) Common action is necessary to ensure
carriers

that
these
requirements
from third
countries in order to ensure a level playing field with
Community air carriers.

also apply to air

(4)

In its Communication of 10 October 2001 regarding the
repercussions of the terrorist attacks in the United States
on the air transport industry, the Commission stated its
intention to examine the amounts and conditions of
insurance required for the grant of operating licences by
Member States in order to ensure a harmonised approach.
Moreover, 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, the

(1) OJ C 20 Ε, 28.1.2003, p. 193.
(2) OJ C 95, 23.4.2003, p. 16.
(3) Opinion of the European Parliament of 13 May 2003 (not yet
published in the Official Journal), Council Common Position of 5
December 2003 and Position of the European Parliament of . . .
(not yet published in the Official Journal).

Commission stated that it would continue to monitor the
developments on the aviation insurance market with
regard to the revision of the amounts and conditions of
insurance required for the grant of operating licences by
Member States.

(5) By Council Decision 2001/539/EC of 5 April 2001 (4) the
Community concluded the Convention for the Unification
of Certain Rules Relating to International Carriage by Air,
at Montreal on 28 May 1999 (‘Montreal
agreed
Convention’), which lays down new rules on liability in
respect of the international carriage by air of persons,
baggage and cargo. These rules are expected to replace
those of
the Warsaw Convention of 1929 and its
subsequent amendments.

(6) Article 50 of the Montreal Convention requires parties to
ensure that air carriers are adequately insured to cover
liability under that Convention. The Warsaw Convention
of 1929 and its subsequent amendments will continue to
exist alongside the Montreal Convention for an indefinite
period. Both Conventions provide for the possibility of
unlimited liability.

(7) Article 7 of Council Regulation (EEC) No 2407/92 of 23
July 1992 on licensing of air carriers (5), 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.

(8)

(9)

It is appropriate to take into account the fact that the
European Civil Aviation Conference adopted on 13
December 2000 Resolution ECAC/25-1 on minimum
levels of insurance cover for passenger and third party
liability, which was modified on 27 November 2002.

It is necessary to define minimum insurance requirements
to cover passengers, baggage, cargo and third parties for
air carriers and aircraft operators flying within, into, out
of, or over the territory of a Member State, including its
territorial waters.

(10) Insurance obligations should remain with air carriers with
a valid operating licence, and, in the case of Community
air carriers, with a valid operating licence granted in
accordance with Regulation (EEC) No 2407/92. The
absence or expiry of such licence does not relieve the
undertaking from such obligation.

(4) OJ L 194, 18.7.2001, p. 38.
(5) OJ L 240, 24.8.1992, p. 1.

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is, according to Article 2 of

(11) While the Montreal Convention specifically regulates
liability in respect of passengers, baggage and cargo, the
liability for mail
that
Convention, to be subject to ‘the rules applicable to the
relationship between the carriers and the postal adminis-
trations’. In the Community, insurance for such liability is
sufficiently regulated by Article 7 of Regulation (EEC) No
2407/92.

(12) Mandatory insurance should not be required for State

aircraft and for certain other types of aircraft.

(13) Minimum insurance cover should be provided in situations
where an air carrier or aircraft operator is liable in respect
of passengers, baggage,
in
international Conventions,
accordance with rules of
interfering with
Community or national
such rules.

cargo and third parties

law, without

(14) The insurance should cover aviation-specific liability in
respect of passengers, baggage, cargo and third parties.
insurance
Regarding passengers, baggage
should include cover
injury
caused by accidents and for loss or destruction of or
damage to baggage and cargo. Regarding third parties,
insurance should include cover for death, personal injury
and damage to property caused by accidents.

for death and personal

and cargo,

(15) This Regulation should not be interpreted as requiring
double insurance. As far as the contracting carrier and
the actual carrier within the meaning of Article 39 of
the Montreal Convention can be held liable for the same
damage, Member States may establish specific measures to
avoid double insurance.

(16) While the market practice of offering insurance on an
in
aggregate basis may be conducive to insurability,
particular for risks of war and terrorism, by allowing
insurers better control over their liabilities, this practice
does not release an air carrier or aircraft operator from
the obligation to respect minimum insurance requirements
is
when the aggregate fixed by its insurance contract
reached.

they respect at all

(17) It is necessary to require air carriers to provide evidence
that
times the minimum insurance
requirements to cover liability, as provided for in this
Regulation. With regard to Community air carriers and
with regard to aircraft operators using aircraft registered
in the Community, depositing evidence of insurance in
one Member State should be sufficient for all Member
States, such insurance being effected by an undertaking
authorised to do so under the applicable law.

(18) With respect to overflights of the territory of a Member
State by non-Community air carriers or aircraft registered
outside the Community which do not involve a landing on
from any Member State, any overflown
or

take-off

Member State may, in accordance with international law,
request
insurance
requirements of this Regulation, for example by carrying
out random checks.

compliance with the

evidence of

(19) The minimum insurance requirements should be reviewed

after a period of time.

(20) Procedures

for monitoring

the
minimum insurance requirements should be transparent
and non-discriminatory and should not impede the free
movement of goods, persons, services and capital.

application of

the

(21) The measures necessary for the implementation of this
Regulation should be
adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (1).

(22) Where further rules are required to establish adequate
insurance covering aviation-specific liability on points
which are not covered by this Regulation, the Member
States should have the possibility to introduce such rules.

(23) Arrangements for greater cooperation over the use of
Gibraltar airport were agreed in London on 2 December
1987 by the Kingdom of Spain and the United Kingdom
in a joint declaration by the Ministers of Foreign Affairs of
the two countries. Such arrangements have yet to enter
into operation.

(24) Since the objective of this Regulation, namely the intro-
duction of minimum insurance requirements which can
contribute to the objectives of
the internal aviation
market by reducing distortions of competitition, cannot
be sufficiently achieved by the Member States and can
therefore be better achieved at Community level,
the
Community may adopt measures, in accordance with the
principle of subsidiarity as set out in Article 5 of the
Treaty. In accordance with the principle of proportionality,
as set out in that Article, this Regulation does not go
beyond what
to achieve that
objective,

is necessary in order

HAVE ADOPTED THIS REGULATION:

Article 1

Objective

The objective of this Regulation is to establish minimum
1.
insurance requirements for air carriers and aircraft operators in
respect of passengers, baggage, cargo and third parties.

In respect of

2.
requirements are those set out
2407/92 and in the national laws of the Member States.

insurance
the
in Regulation (EEC) No

carriage of mail,

the

(1) OJ L 184, 17.7.1999, p. 23.

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Article 2

Scope

(d)

‘flight’ means:

This Regulation shall apply to all air carriers and to all
into, out of, or over the

1.
aircraft operators flying within,
territory of a Member State to which the Treaty applies.

2.

This Regulation shall not apply to:

(a) State aircraft as

referred to in Article 3(b) of

Convention on International Civil Aviation,
Chicago on 7 December 1944;

the
signed at

(b) Model aircraft with an MTOM of less than 20 kg;

(c) Foot-launched flying machines (including powered para-

gliders and hang gliders);

(d) Captive balloons;

(e) Kites;

(f) Parachutes (including parascending parachutes).

The application of

this Regulation to the airport of
3.
Gibraltar
is understood to be without prejudice to the
respective legal positions of the Kingdom of Spain and the
United Kingdom with regard to the dispute over sovereignty
over the territory in which the airport is situated.

Application of this Regulation to Gibraltar airport shall
4.
be suspended until
the arrangements included in the Joint
Declaration made by the Foreign Ministers of the Kingdom
of Spain and the United Kingdom on 2 December 1987
enter into operation. The Governments of Spain and the
inform the Council of such date of
United Kingdom will
entry into operation.

Article 3

Definitions

For the purposes of this Regulation:

— with regard to passengers and unchecked baggage, the
the passengers by aircraft

period of
including their boarding and disembarkation,

transport of

— with regard to cargo and checked baggage, the period
of transport of baggage and cargo from the moment
the baggage or cargo is handed to the air carrier until
the moment of delivery to the entitled recipient,

— with regard to third parties, the use of an aircraft from
the moment when power is applied to its engines for
the purpose of
the
taxiing or actual
is on the surface and its engines
moment when it
have come to a complete stop; additionally,
it shall
mean the moving of an aircraft by towing and
push-back vehicles or by powers which are typical for
the drive and the lift of aircraft, particularly air streams;

take-off until

(e)

‘SDR’ means a Special Drawing Right as defined by the
International Monetary Fund;

(f)

the Maximum Take Off Mass, which
‘MTOM’ means
corresponds to a certified amount specific to all aircraft
types, as stated in the certificate of airworthiness of the
aircraft;

(g)

‘passenger’ means any person who is on a flight with the
consent of the air carrier or the aircraft operator, excluding
on-duty members of both the flight crew and the cabin
crew;

(h) ‘third party’ means any legal or natural person, excluding
passengers and on-duty members of both the flight crew
and the cabin crew;

(i)

‘commercial operation’ means an operation for remun-
eration and/or hire.

Article 4

Principles of insurance

(a)

‘air carrier’ means an air transport undertaking with a valid
operating licence;

(b) ‘Community air carrier’ means an air carrier with a valid
operating licence granted by a Member State in accordance
with Regulation (EEC) No 2407/92;

1.
Air carriers and aircraft operators referred to in Article 2
shall be insured in accordance with this Regulation as regards
their aviation-specific liability in respect of passengers, baggage,
cargo and third parties. The insured risks shall include acts of
war, terrorism, hijacking, acts of sabotage, unlawful seizure of
aircraft and civil commotion.

(c)

‘aircraft operator’ means the person or entity, not being an
air carrier, who has continual effective disposal of the use
or operation of the aircraft; the natural or legal person in
whose name the aircraft is registered shall be presumed to
be the operator, unless that person can prove that another
person is the operator;

Air carriers and aircraft operators

shall ensure that
2.
insurance cover exists for each and every flight, regardless of
whether the aircraft operated is at
through
ownership or any form of lease agreement, or through joint
or franchise operations, code-sharing or any other agreement
of the same nature.

their disposal

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This Regulation is without prejudice to the rules on

3.
liability as arising from:

— international Conventions to which the Member States

and/or the Community are parties,

— Community law; and

— national law of the Member States.

Article 5

Compliance

Air carriers and, when so required, aircraft operators, as
1.
referred to in Article 2, shall demonstrate compliance with the
insurance requirements set out in this Regulation by providing
the competent authorities of the Member State concerned with
a deposit of an insurance certificate or other evidence of valid
insurance.

2.
For the purpose of this Article ‘Member State concerned’
shall mean the Member State which has granted the operating
licence to the Community air carrier or the Member State
where the aircraft of the aircraft operator is registered. For
non-Community air carriers and aircraft operators using
aircraft
‘Member State
concerned’ shall mean the Member State to or from which
the flights are operated.

registered outside the Community,

3.
By way of exception from paragraph 1, Member States
overflown may require that air carriers and aircraft operators
referred to in Article 2 produce evidence of valid insurance in
accordance with this Regulation.

4. With regard to Community air carriers and aircraft
registered in the Community,
operators using aircraft
the
deposit of evidence of
in the Member State
insurance
referred to in paragraph 2 is sufficient for all Member States,
without prejudice to the application of Article 8(6).

In exceptional cases of
determine,
referred to in Article 9(2),

5.
Commission may
procedure
measures for the application of paragraph 1.

in

failure,
accordance with
the

the
the
appropriate

insurance-market

Article 6

Insurance in respect of liability for passengers, baggage
and cargo

liability in respect of passengers,
cover

the minimum
For
1.
insurance
shall be 250 000 SDRs per passenger.
However, in respect of non-commercial operations by aircraft
with a MTOM of 2 700 kg or less, Member States may set a
lower level of minimum insurance cover, provided that such
cover is at least 100 000 SDRs per passenger.

For
2.
insurance
commercial operations.

liability in respect of baggage,
cover

shall be 1 000 SDRs per passenger

the minimum
in

For liability in respect of cargo, the minimum insurance
shall be 17 SDRs per kilogramme in commercial

3.
cover
operations.

4.
Paragraphs 1, 2 and 3 shall not apply with respect to
flights over the territory of the Member States carried out by
non-Community air carriers and by aircraft operators using
aircraft
registered outside the Community which do not
involve a landing on, or take-off from, such territory.

5.
The values referred to in this Article may be amended, as
appropriate, where amendments in the relevant international
treaties indicate the necessity thereof, in accordance with the
procedure referred to in Article 9(2).

Article 7

Insurance in respect of liability for third parties

In respect of

1.
insurance cover per accident,
shall be:

liability for third parties,

the minimum
for each and every aircraft,

Category

1

2

3

4

5

6

7

8

9

10

ΜΤΟΜ
(kg)

< 500

< 1 000

< 2 700

< 6 000

< 12 000

< 25 000

< 50 000

< 200 000

< 500 000

‡ 500 000

Minimum insurance
(million SDRs)

0,75

1,5

3

7

18

80

150

300

500

700

If at any time insurance cover for damage to third parties due
to risks of war or terrorism is not available to any air carrier or
aircraft operator on a per-accident basis, such air carrier or
aircraft operator may satisfy its obligation to insure such
risks by insuring on an aggregate basis. The Commission
shall closely monitor the application of
this provision in
order to ensure that such aggregate is at least equivalent to
the relevant amount set out in the table.

2.
The values referred to in this Article may be amended, as
appropriate, where amendments in the relevant international
treaties indicate the necessity thereof, in accordance with the
procedure referred to in Article 9(2).

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Article 8

Enforcement and sanctions

Article 9

Committee procedure

1. Member States shall ensure that air carriers and aircraft
operators referred to in Article 2 comply with this Regulation.

2.
For the purposes of paragraph 1 and without prejudice to
paragraph 7, with respect to overflights by non-Community air
carriers or aircraft registered outside the Community which do
not involve a landing on or take-off from any Member State, as
well as with respect to stops in Member States by such aircraft
the Member State concerned may
for non-traffic purposes,
request
insurance
compliance with
of
requirements laid down in this Regulation.

evidence

the

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

Sanctions for infringement of this Regulation shall be

4.
effective, proportional and dissuasive.

5. With regard to Community air carriers, these sanctions
may include the withdrawal of the operating licence, subject to
and in accordance with the relevant provisions of Community
law.

6. With regard to non-Community air carriers and to
aircraft
the
aircraft
Community, the sanctions may include refusal of the right to
land on the territory of a Member State.

operators using

registered

outside

7. Where Member States are not satisfied that the conditions
of this Regulation are met, they shall not allow an aircraft to
take off, before the air carrier or aircraft operator concerned
has produced evidence of adequate
in
accordance with this Regulation.

insurance

cover

1.
The Commission shall be assisted by the Committee set
up by Article 11 of Council Regulation (EEC) No 2408/92 of
23 July 1992 on access for Community air carriers to intra-
Community air routes (1).

2. Where reference is made to this paragraph, Articles 5 and
7 of Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be set at three months.

3.

The Committee shall adopt its rules of procedure.

4.
The Committee may furthermore be consulted by the
Commission on any other matter concerning the application
of this Regulation.

Article 10

Report and cooperation

1.
The Commission shall submit a report to the European
Parliament and the Council on the operation of this Regulation
by . . . (*).

Upon request, Member States shall submit information on

2.
the application of this Regulation to the Commission.

Article 11

Entry into force

This Regulation shall enter into force twelve months following
the date of its publication in the Official Journal of the European
Union.

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

Done at . . .

For the European Parliament

The President

For the Council

The President

(1) OJ L 240, 24.8.1992, p. 8. Regulation as last amended by Regu-
lation (EC) No 1882/2003 of the European Parliament and of the
Council (OJ L 284, 31.10.2003, p. 1).

(*) 3 years after the date of entry into force of this Regulation.

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STATEMENT OF THE COUNCIL'S REASONS

I.

INTRODUCTION

In the framework of the codecision procedure (Article 251 EC-Treaty), the Council reached on 9
October 2003 a political agreement on the draft Regulation of the European Parliament and of the
Council on insurance requirements for air carriers and aircraft operators.

The Regulation aims at introducing minimum insurance requirements for air carriers and aircraft
operators flying within,
into, out of, or over the territory of a Member State in respect of their
liability for passengers, baggage, cargo and third parties.

In taking its position, the Council took account of the opinion of the European Parliament in first
reading, as well as of the opinion of the Economic and Social Committee.

II. ANALYSIS OF THE COMMON POSITION

1. General

The Council was able to agree on the major lines of the Commission proposal. On some points,
however, the Council decided to modify the text, generally in order to make it clearer, simpler and
easier to understand. The modifications often resulted from amendments presented by the European
Parliament.

The main modifications operated by the Council are the following (unless otherwise indicated, the
Articles and recitals referred to are those of the common position):

1. In Article 1(2), the Council agreed to exclude ‘mail’ from the scope of the Regulation, since the
insurance requirements in respect of the carriage of mail are sufficiently dealt with by Regu-
lation (EEC) No 2407/92 on licensing of air carriers (1) and by the national laws of the Member
States.

2. In Article 2(2), the Council felt that it was appropriate to exclude certain types of aircraft and

‘flying machines’ from the scope of the Regulation.

3. In Articles 2(3) and 2(4), the Gibraltar clauses have been inserted.

4. In Article 3, the Council deleted some definitions (‘insurer’, ‘insurance’, ‘insurer's principal place
of business’, ‘incident’, ‘air service’, ‘scheduling period’), either because the term concerned was
sufficiently self-explicatory — in view notably of established Community law — or because the
definition had become superfluous because of redrafting exercises in the rest of the text. The
Council revised the definitions of ‘aircraft operator’ and ‘flight’, and added new definitions
regarding ‘passenger’, ‘third party’ and ‘commercial operation’.

5. In Articles 4(1) and 4(2), the Council redrafted the ‘general principles of insurance’ in order to
clarify the insurance requirements that air carriers and aircraft operators have to observe.

6. In Article 4(3), the Council underlined that the minimum insurance requirements of this
Regulation are without prejudice to the rules on liability as defined by rules of international
conventions, Community law and national law of the Member States.

7. The Council deleted the former Article 5(2), relating to alternative security requirements for air
carriers and aircraft operators registered in a third country, since this could lead to a situation
in which Community air carriers and aircraft operators using aircraft registered in the
Community would be discriminated against.

(1) OJ L 240, 24.8.1992, p. 1.

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8. In Article 5(3), the Council, acknowledging that the enforcement of the insurance requirements
could pose practical problems in respect of ‘overflying aircraft’, stated that ‘Member States
overflown may require that air carriers and aircraft operators referred to in Article 2
produce evidence of valid insurance in accordance with this Regulation.’ This provision
should be read in conjunction with Article 8(2) and recital 18.

9. In Article 6, the Council confirmed that in respect of passengers, the minimum insurance cover
should be 250 000 SDRs per passenger. However, in order to take account of the particular
situation of operators using small aircraft
the Council provided an
exception to this rule, according to which in respect of non-commercial operations by
aircraft of 2 700 kg or less, Member States have the possibility of setting a lower minimum
insurance cover, provided that such cover is at least 100 000 SDRs per passenger. Since these
are minimum levels, Member States have the freedom of setting higher levels of insurance
cover.

for private purposes,

10. The Council considerably simplified Article 7, concerning insurance in respect of liability for
third parties. It lowered the minimum insurance cover in respect of third parties, and agreed
upon a more detailed classification of aircraft, which allows a more accurate determination of
the minimum insurance cover in each case.

11. Article 8 on enforcement and sanctions was clarified by the Council in view notably of existing

Community law.

12. In Article 11, the entry into force of the Regulation has been put at twelve months following its

publication in the Official Journal.

2. Amendments of Parliament

As regards the amendments of Parliament, the Council endeavoured to incorporate them to the
greatest extent possible. However,
in some cases it was impossible to integrate an amendment,
because the relevant text had been substantially modified or had even been deleted.

This being said, the Council was able to accept, literally or in substance, in part or in full, the
following amendments:

Amendment 1 has been accepted almost literally by modifying recital 17;

Amendment 2 has been accepted by applying a broad definition of ‘passenger’ in Article 3(g);

Amendment 3 has been accepted by modifying Article 2(1), which now refers to air carriers and
aircraft operators ‘flying within, into, out of, or over the territory of a Member State’;

Amendment 4 has been accepted partly by modifying Article 2(1), and partly by modifying the
definition of ‘aircraft operator’ in Article 3(c);

Amendment 5 has been accepted by inserting a new Article 2(2)(a), which explicitly excludes State
aircraft form the scope of the Regulation;

Amendment 6 has been fully accepted by deleting any reference to the exclusion of local flights from
the scope of the Regulation;

Amendment 21 has been accepted by inserting a definition of ‘passenger’ in Article 3(g);

Amendment 23 has been accepted by modifying the definition of ‘flight’ in Article 3(d);

Amendment 10 has been accepted by inserting a new Article 5(4);

Amendment 14 has been accepted by inserting a table in Article 7(1), which contains, like in the EP
amendment, a more detailed classification of aircraft, as well as by providing lower levels of
minimum insurance cover in respect of liability for third parties;

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Amendment 16 has been accepted by the insertion of the two sentences under the table in Article 7(1);

Amendments 19 and 31 have been accepted by the new Articles 8(5) and 8(6);

Amendment 20 has been accepted in the modified Article 8(7).

III. CONCLUSION

The Council submits that the text of its common position is appropriate and balanced. With respect to
the amendments proposed by the European Parliament in first reading, the Council observes that a
large majority of these amendments have been integrated – to the letter or in spirit, partially or in full –
in the common position. The Council holds therefore that the text of its common position ensures by
and large that the aim sought by the amendments of Parliament is achieved.