Proposal for a Decision of the Council and the Representatives of the Governments of the Member States of the European Union, meeting within the Council On the conclusion of the Air Transport Agreement between the European Community and its Member States, on the one hand, and the United States of America, on the other hand
Date: 2006-04-21
Institutions: European Commission
Subjects: United States, aeronautical industry, agreement (EU), air transport, bilateral agreement, ratification of an agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.4.2006 
COM(2006) 169 final 

2006/0058 (CNS) 

Proposal for a 

DECISION OF THE COUNCIL AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES OF THE EUROPEAN UNION, 
MEETING WITHIN THE COUNCIL 

On the signature and provisional application of the Air Transport Agreement between 
the European Community and its Member States, on the one hand, and the United 
States of America, on the other hand 

Proposal for a 

DECISION OF THE COUNCIL AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES OF THE EUROPEAN UNION, 
MEETING WITHIN THE COUNCIL 

On the conclusion of the Air Transport Agreement between the European Community 
and its Member States, on the one hand, and the United States of America, on the other 
hand 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  Grounds for and objectives of the proposal 

The  Air  Transport  Agreement  between  the  European  Community  and  its  Member 
States, on the one hand, and the United States of America, on the other hand has been 
negotiated  under  a  mandate  received  from  the  Council  in  June  2003.  Air  services 
between the EU and US presently operate on the basis of bilateral agreements between 
individual  Member  States  and  the  US.  These  bilateral  agreements  contain  provisions 
that  the  European  Court  of  Justice  ruled  in  November  2002  to  be  incompatible  with 
Community  law  and  it  is  therefore  essential  that  a  new  Community-level  framework 
for EU/US air services is established. The Agreement represents a comprehensive first-
stage agreement and contains a commitment by both sides to begin negotiations on a 
second  stage  within  a  defined  timescale.  It  would  meet  the  legal  requirements  of  the 
Community  and  deliver  substantial  immediate  economic  benefits  for  transatlantic  air 
travellers and shippers. 

120 

•  General context 

The  negotiating  mandate  set  the  objective  of  establishing  an  Open  Aviation  Area 
(OAA)  between  the  EU  and  US.  This  would  create  a  single  market  for  air  transport 
between the EU and US in which investment could flow freely and in which European 
and US airlines would be able to provide air services without any restriction, including 
in  the  domestic  markets  of  both  parties.  Achievement  of  the  mandate  in  full  would 
require significant legislative changes in the United States, in particular to remove the 
existing  legal  restrictions  on  foreign  ownership  and  control  of  US  airlines  and  on 
cabotage.  These  issues  remain  extremely  politically  sensitive  in  the  US.  For  this 
reason, the mandate explicitly recognises the possibility of implementing an agreement 
in a staged approach, although it requires there to be mechanisms to ensure progression 
to subsequent stages. 

The EU accepted during the negotiations that cabotage could not be included in a first 
stage  agreement,  but  made  clear  to  the  US  that  a  first-stage  agreement  would  be 
acceptable  to  the  EU  only  if  meaningful  progress  was  made  towards  the  removal  of 
restrictions  on  ownership  and  control  of  US  airlines.  On  2  November  2005,  the  US 
Department  of  Transportation  (DOT)  issued  a  "Notice  of  Proposed  Rulemaking" 
(NPRM) that would re-interpret the statutory requirement for US airlines to be under 
the "actual control" of US citizens so as to expand opportunities for foreign citizens to 
invest in and participate in the management of US airlines. 

Based on the negotiating directives of the mandate, the text of the Agreement with the 
United  States  of  America  was  finalised  by  the  Commission  at  the  final  negotiating 
round on 18 November 2005. In finalising the text of the Agreement, the EU stated that 
in  reaching  a  decision  on  whether  to  proceed  with  the  Agreement,  the  European 
Community  and  its  Member  States  will  consider  the  results  of  the  NPRM  process  as 
expressed in a final rule. The adoption of the decision by the Council will therefore be 
subject  to  the  prior  adoption  by  the  US  DOT  of  a  final  rule  that  is  assessed  by  the 
Council to constitute clear, meaningful and robust changes to US policy in this area. If 

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130 

140 

the DOT's final rule is published in sufficient time and if the Council's assessment is 
positive, it is foreseen that signature of the Agreement will take place in the first half of 
2006. 

•  Existing provisions in the area of the proposal 

The  provisions  of  the  Agreement  supersede  the  20  existing  bilateral  air  services 
agreements between Member States and the United States. 

•  Consistency with the other policies and objectives of the Union 

The conclusion of an Air Transport Agreement with the United States has been a long-
standing  priority  for  the  EU  and  is  a  key  element  in  the  development  of  the  EU's 
external aviation policy, as identified in Commission Communication COM(2005) 79 
final  "Developing  the  agenda  for  the  Community's  external  aviation  policy".  The 
Agreement will also serve a fundamental objective of the Community external aviation 
policy  by  bringing  existing  bilateral  air  services  agreements  in  line  with  Community 
law. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

211 

Consultation methods, main sectors targeted and general profile of respondents 

Throughout  the  negotiating  process,  the  Commission  has  consulted  extensively  with 
stakeholders, in particular via regular meetings of the Consultative Forum comprising 
representatives of air carriers, airports, and labour organisations. 

212 

Summary of responses and how they have been taken into account 

More than 10 meetings have been held with the Consultative Forum, during which all 
elements of the negotiations were discussed in detail. All comments from stakeholders 
were duly taken into consideration in the preparation of the Community's negotiating 
position. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

229 

230 

The  Agreement  represents  a  significant  first  step  towards  the  EU's  ultimate  goal  of 
establishing an EU/US Open Aviation Area. A report prepared for the Commission in 
2002  by  US  consultants,  the  Brattle  Group,  estimated  that  an  EU/US  Open  Aviation 
Area would generate upwards of 17 million extra passengers a year, consumer benefits 
of at least €5billion a year, and would boost employment on both sides of the Atlantic. 

The Agreement establishes a Joint Committee which will be responsible for reviewing 
the implementation of the Agreement and its effects.  

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3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

The Agreement represents a comprehensive first-stage agreement that will replace the 
existing bilateral agreements concluded by Member States with the United States. The 
Agreement  removes  all  existing  restrictions  on  the  rights  of  both  Community  air 
carriers  and  United  States  air  carriers  to  operate  between  points  in  the  European 
Community and points in the United States. In this respect, the Agreement removes the 
obstacles  to  the  ability  of  Community  air  carriers  to  benefit  from  the  right  of 
establishment within the Community, including the right to non-discriminatory market 
access,  in  relation  to  the  provision  of  air  services  to  and  from  the  United  States  that 
were identified in the judgements of the Court of Justice of the European Communities 
in the cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 
and C-476/98. 

310 

•  Legal basis 

Article 80(2), in conjunction with the first sentence of the first subparagraph of Article 
300(2) and the first subparagraph of Article 300(3) thereof. 

320 

•  Subsidiarity principle 

321 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the 
exclusive competence of the Community. 

The  objectives  of  the  proposal  cannot  be sufficiently  achieved  by  the  Member  States 
for the following reason(s). 

The  Agreement  establishes  new  arrangements  at  Community  level  governing  the 
provision of transatlantic air services that will replace the existing arrangements made 
by  individual  Member  States.  The  Agreement  creates  simultaneously  for  all 
Community  air  carriers  uniform  conditions  for  market  access,  and  establishes  new 
arrangements  for  regulatory  co-operation  between  the  European  Community  and  the 
United  States  in  fields  essential  for  the  safe,  secure,  and  efficient  operation  of 
transatlantic  air  services.  In  particular,  there  will  be  strengthened  co-operation  in 
matters  concerning  aviation  security  and  aviation  safety.  There  will  also  be  new 
arrangements  for  co-operation  between  the  competition  authorities  of  each  side 
concerning  the  application  of  their  respective  competition  regimes  to  international 
aviation affecting the transatlantic market. These arrangements can only be achieved at 
Community  level  because  they  involve  a  number  of  areas  of  exclusive  Community 
competence. 

Community action will better achieve the objectives of the proposal for the following 
reason(s). 

324 

The  Agreement  allows  for  the  simultaneous  extension  of  its  terms  to  the  25  Member 
States,  applying  the  same  rules  without  discrimination  and  benefiting  all  Community 
air carriers regardless of their nationality. These carriers can now operate freely from 
any point in the European Union to any point in the United States. 

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325 

327 

331 

332 

341 

342 

Removal  of  all  market  access  restrictions  between  the  EU  and  the  United  States  will 
not  only  attract  new  entrants  to  the  market  and  create  opportunities  to  operate  to 
underserved  airports,  but  will  also  facilitate  consolidation  between  Community  air 
carriers. 

The  Agreement  secures  for  all  Community  air  carriers  access  to  commercial 
opportunities,  such  as  provision  of  aircraft  with  crew  to  US  air  carriers,  which  no 
Member  State  has  been  able  to  secure  by  negotiating  individually.  One  of  the  main 
objectives of the mandate is to create a level playing field between all EU and US air 
carriers, and this requires strong regulatory co-operation which can only be delivered at 
Community level. 

The proposal therefore complies with the subsidiarity principle. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

A Joint Committee will be established to discuss matters related to the implementation 
of  the  Agreement.  The  Joint  Committee  will  foster  expert-level  exchanges  on  new 
legislative  or  regulatory  initiatives  or  developments  and  consider  potential  areas  for 
further  development  of  the  Agreement.  The  Joint  Committee  will  be  composed  of 
representatives of the Commission and the Member States. 

Furthermore,  Member  States  will  continue  to  carry  out  the  traditional  administrative 
tasks they execute in the context of international air transport, but under common rules 
applied uniformly.  

•  Choice of instruments 

Proposed instruments: other. 

Other means would not be adequate for the following reason(s). 

External aviation relations can only be given effect through international agreements. 

4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

409 

E-7353 

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Proposal for a 

DECISION OF THE COUNCIL AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES OF THE EUROPEAN UNION, 
MEETING WITHIN THE COUNCIL 

On the signature and provisional application of the Air Transport Agreement between 
the European Community and its Member States, on the one hand, and the United 
States of America, on the other hand 

THE COUNCIL OF THE EUROPEAN UNION AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES MEETING WITHIN THE COUNCIL 

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular  Article 
80(2), in conjunction with the first sentence of the first subparagraph of Article 300(2) thereof 

Whereas 

(1) 

the Commission has negotiated on behalf of the Community and of the Member States 
an  Agreement  on  Air  Transport  with  the  United  States  of  America  (hereinafter,  the 
“Agreement”); 

(2) 

the Agreement was initialled on ……..; 

(3) 

(4) 

(5) 

the Agreement should be signed and applied provisionally by the Community and the 
Member States, subject to its possible conclusion at a later date; 

currently the statutory law of the United States requires, among other things, that, for 
an airline to be licensed as a U.S. carrier, it must be under “the actual control” of U.S. 
citizens.  This  requirement  has  been  interpreted  by  the  U.S.  Department  of 
Transportation in a statement of general policy contained in Part 399.88 of Title 14 of 
its Code of Federal Regulations (hereafter “CFR 14 Part 399.88”); 

the  Agreement  is  based  on  the  understanding  that  the  United  States  shall  apply  the 
interpretation of the statutory “actual control” requirement that has been enounced by 
the Department of Transportation in CFR 14 Part 399.88 in a manner which affords to 
the nationals of the Member States who have invested in an airline of the United States 
the  possibility  to  exercise  a  commensurate  degree  of  influence  over  the  commercial 
operations  of  such  airline.  Therefore,  if  the  aviation  authorities  or  the  courts  of  the 
United  States  fail  to  interpret  or  apply  CF  14  399.88  in  such  a  manner,  or  if  that 
provision is amended, revoked, withdrawn or annulled, unless it is replaced by another 
provision which affords no less favourable treatment to the Community investors, the 
Community and the Member States should discontinue the provisional application of 
the Agreement; 

(6) 

it is necessary to lay down procedural arrangements for deciding, if appropriate, how 
to discontinue the provisional application of the Agreement. It is also necessary to lay 

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down appropriate procedural arrangements for the participation of the Community and 
the Member States in the Joint Committee set up under Article 17 of the Agreement 
and in the arbitration procedures provided in Article 18 of the Agreement, as well as 
for  implementing  certain  provisions  of  the  Agreement  concerning  security,  safety, 
traffic rights and government support. 

HAVE DECIDED AS FOLLOWS:  

Article 1 (Signature) 

Subject  to  a  possible  conclusion  at  a  later  date,  the  President  of  the  Council  is  hereby 
authorised  to  designate  the  person  empowered  to  sign,  on  behalf  of  the  Community,  the 
Agreement on Air Transport between the European Community and its Member States, of the 
one  part,  and  the  United  States  of  America,  of  the  other  part.  The  text  of  the  Agreement  is 
attached to this decision. 

Article 2 (Provisional application) 

1. 

2. 

3. 

Pending its entry into force, the Agreement shall be applied on a provisional basis by 
the Community and by the Member States from […]. 

A  decision  to  discontinue  the  provisional  application  of  the  Agreement  and  give 
notice  thereof  to  the  United  States  in  accordance  with  Article  24(2)  of  the 
Agreement, and a decision to withdraw such notice, shall be taken by the Council, on 
behalf of the Community and of the Member States, acting unanimously on the basis 
of a Commission proposal. 

If the Council determines, in accordance with the procedure established in paragraph 
2, that 

a) 

CFR 14 Part 399.88, or any successor provision, is being interpreted or applied 
by  the  aeronautical  authorities  or  the  courts  of  the  United  States  in  a  manner 
which does not afford to the nationals of the Member States who have invested 
in  an  airline  of  the  United  States  the  possibility  to  exercise  a  commensurate 
degree  of  influence  over  the  commercial  operations  of  such  airline,  with  the 
exception of matters relating to security, safety and the Civil Reserve Air Fleet 
commitments; or 

b)  CFR 14 Part 399.88, or any successor provision, is amended in a manner which 
provides less favourable treatment to the nationals of the Member States who 
have invested in an airline of the United States than CFR 14 Part 399.88; or 

c) 

CFR  14  Part  399.88,  or  any  successor  provision,  is  withdrawn,  revoked  or 
annulled, unless it is replaced by another provision which affords treatment no 
less favourable to the nationals of the Member States who have invested in an 
airline of the United States than CFR 14 Part 399.88. 

it shall give the notice provided in Article 24(2) of the Agreement. 

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1. 

2. 

1. 

2. 

3. 

1. 

2. 

Article 3 (Joint Committee) 

The Community and the Member States shall be represented in the Joint Committee 
established  under  Article  17  of  the  Agreement  by  the  Commission  assisted  by 
representatives of the Member States. 

The position to be taken by the Community and its Member States within the Joint 
Committee  as  regards  matters  falling  within  Articles  17  or  19  of  the  Agreement  or 
matters  that  do  not  require  the  adoption  of  a  decision  having  legal  effects  shall  be 
established by the Commission. In all other instances the position of the Community 
and its Member States shall be adopted by the Council, acting by qualified majority 
on a proposal from the Commission.  

Article 4 (Arbitration) 

The  Commission  shall  represent  the  Community  and  the  Member  States  in 
arbitration proceedings under Article 18 of the Agreement.  

The decision to suspend the application of benefits pursuant to Article 18(7) of the 
Agreement shall be taken by the Council on the basis of a Commission proposal. The 
Council shall decide by qualified majority. 

Any other appropriate action to be taken under Article 18 of the Agreement shall be 
decided  by  the  Commission,  with  the  assistance  of  a  Special  Committee  of 
representatives of the Member States appointed by the Council.  

Article 5 (Traffic rights) 

Member  States  shall  inform  in  advance  the  Commission  of  any  decision  that  they 
intend to adopt under Articles 4 or 5 of the Agreement. 

If the Commission determines at any time that a decision which a Member State has 
adopted, or intends to adopt, under Articles 4 or 5 of the Agreement is incompatible 
with  the  Agreement  it  shall  address  a  decision  to  that  Member  State  requiring  it  to 
take  appropriate  action  in  order  to  comply  with  the  Agreement.  The  Commission 
shall inform the Council and the other Member States of such decision. Any Member 
State  may  refer  the  decision  of  the  Commission  to  the  Council  within  10  working 
days  from  its  notification.  The  Council  may  take  a  different  decision  within  one 
month of the referral. The Council shall decide by qualified majority. 

Article 6 (Safety) 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or  notifications 
made or received by them under Article 7 of the Agreement. 

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Article 7 (Security) 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or  notifications 
made or received by them under Article 8 of the Agreement. 

Article 8 (Government subsidies and support) 

1. 

If a Member State believes that a subsidy or support being considered or provided by 
a  governmental  entity  in  the  territory  of  the  United  States  will  have  the  adverse 
competitive  effects  referred  to  in  Article  13(2)  of  the  Agreement,  it  may  bring  the 
matter  to  the  attention  of  the  Commission,  which  may  approach  such  entity  or 
request  a  meeting  of  the  Joint  Committee  established  under  Article  17  of  the 
Agreement.  

2. 

Member  States  shall  inform  immediately  the  Commission  when  they  are  contacted 
by the United States under Article 13(3) of the Agreement. 

Done at Brussels,  

For the Council 
The President 

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2006/0058 (CNS) 

Proposal for a 

DECISION OF THE COUNCIL AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES OF THE EUROPEAN UNION, 
MEETING WITHIN THE COUNCIL 

On the conclusion of the Air Transport Agreement between the European Community 
and its Member States, on the one hand, and the United States of America, on the other 
hand 

THE COUNCIL OF THE EUROPEAN UNION AND THE REPRESENTATIVES OF THE 
GOVERNMENTS OF THE MEMBER STATES MEETING WITHIN THE COUNCIL 

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular  Article 
80(2), in conjunction with the first sentence of the first subparagraph of Article 300(2) and the 
first subparagraph of Article 300(3) thereof 

Having regard to the opinion of the European Parliament1 

Whereas: 

(1) 

the Commission has negotiated on behalf of the Community and of the Member States 
an  Agreement  on  Air  Transport  with  the  United  States  of  America  (hereinafter,  the 
“Agreement”); 

(2) 

the Agreement was signed on ….; 

(3) 

the Agreement should be approved by the Community and the Member States; 

(4) 

(5) 

currently the statutory law of the United States requires, among other things, that, for 
an airline to be licensed as a U.S. carrier, it must be under “the actual control” of U.S. 
citizens.  This  requirement  has  been  interpreted  by  the  U.S.  Department  of 
Transportation in a statement of general policy contained in Part 399.88 of Title 14 of 
its Code of Federal Regulations (hereafter “CFR 14 Part 399.88”); 

the  Agreement  is  based  on  the  understanding  that  the  United  States  shall  apply  the 
interpretation of the statutory “actual control” requirement that has been enounced by 
the Department of Transportation in CFR 14 Part 399.88 in a manner which affords to 
the nationals of the Member States who have invested in an airline of the United States 
the  possibility  to  exercise  a  commensurate  degree  of  influence  over  the  commercial 
operations  of  such  airline.  Therefore,  if  the  aviation  authorities  or  the  courts  of  the 
United  States  fail  to  interpret  or  apply  CF  14  399.88  in  such  a  manner,  or  if  that 
provision is amended, revoked, withdrawn or annulled, unless it is replaced by another 

1 

OJ C … 

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provision which affords no less favourable treatment to the Community investors, the 
Community and the Member States should discontinue the provisional application of 
the Agreement; 

(6) 

it is necessary to lay down procedural arrangements for deciding, if appropriate, how 
to  terminate  the  Agreement.  It  is  also  necessary  to  lay  down  appropriate  procedural 
arrangements  for  the  participation  of  the  Community  and  the  Member  States  in  the 
Joint  Committee  set  up  under  Article  17  of  the  Agreement  and  in  the  arbitration 
procedures  provided  in  Article  18  of  the  Agreement,  as  well  as  for  implementing 
certain  provisions  of  the  Agreement  concerning  security,  safety,  traffic  rights  and 
government support. 

HAVE DECIDED AS FOLLOWS:  

1. 

2. 

3. 

1. 

2. 

Article 1 (Approval) 

The Agreement on Air Transport between the European Community and its Member 
States, on the one part, and the United States of America, of the other part, is hereby 
approved on behalf of the Community. The text of the Agreement is attached to this 
decision.  

Upon  completion  of  its  internal  procedures  for  entry  into  force  of  the  Agreement, 
each  Member  State  shall  transmit  to  the  Secretariat  of  the  Council  the  diplomatic 
note provided for in Article 25 of the Agreement.  

The President of the Council is hereby authorised to designate the person empowered 
to  deliver  to  the  United  States  the  diplomatic  notes  provided  in  Article  25  of  the 
Agreement on behalf of the Community and of the Member States. 

Article 2 (Termination) 

A decision to terminate the Agreement and give notice thereof to the United States in 
accordance  with  Article  22  of  the  Agreement,  and  a  decision  to  withdraw  such 
notice,  shall  be  taken  by  the  Council,  on  behalf  of  the  Community  and  of  the 
Member States, acting unanimously on the basis of a Commission proposal. 

If the Council determines, in accordance with the procedure established in paragraph 
2, that 

a) 

CFR 14 Part 399.88, or any successor provision, is being interpreted or applied 
by  the  aeronautical  authorities  or  the  courts  of  the  United  States  in  a  manner 
which does not afford to the nationals of the Member States who have invested 
in  an  airline  of  the  United  States  the  possibility  to  exercise  a  commensurate 
degree  of  influence  over  the  commercial  operations  of  such  airline,  with  the 
exception of matters relating to security, safety and the Civil Reserve Air Fleet 
commitments; or 

b)  CFR 14 Part 399.88, or any successor provision, is amended in a manner which 
provides less favourable treatment to the nationals of the Member States who 
have invested in an airline of the United States than CFR 14 Part 399.88; or 

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c) 

CFR  14  Part  399.88,  or  any  successor  provision,  is  withdrawn,  revoked  or 
annulled, unless it is replaced by another provision which affords treatment no 
less favourable to the nationals of the Member States who have invested in an 
airline of the United States than CFR 14 Part 399.88. 

it shall give the notice provided in Article 22 of the Agreement. 

1. 

2. 

1. 

2. 

3. 

1. 

2. 

Article 3 (Joint Committee) 

The Community and the Member States shall be represented in the Joint Committee 
established  under  Article  17  of  the  Agreement  by  the  Commission  assisted  by 
representatives of the Member States. 

The position to be taken by the Community and its Member States within the Joint 
Committee  as  regards  matters  falling  within  Articles  17  or  19  of  the  Agreement  or 
matters  that  do  not  require  the  adoption  of  a  decision  having  legal  effects  shall  be 
established by the Commission. In all other instances the position of the Community 
and its Member States shall be adopted by the Council, acting by qualified majority 
on a proposal from the Commission. 

Article 4 (Arbitration) 

The  Commission  shall  represent  the  Community  and  the  Member  States  in 
arbitration proceedings under Article 18 of the Agreement.  

The decision to suspend the application of benefits pursuant to Article 18(7) of the 
Agreement shall be taken by the Council on the basis of a Commission proposal. The 
Council shall decide by qualified majority. 

Any other appropriate action to be taken under Article 18 of the Agreement shall be 
decided  by  the  Commission,  with  the  assistance  of  a  Special  Committee  of 
representatives of the Member States appointed by the Council.  

Article 5 (Traffic rights) 

Member  States  shall  inform  in  advance  the  Commission  of  any  decision  that  they 
intend to adopt under Articles 4 or 5 of the Agreement. 

If the Commission determines at any time that a decision which a Member State has 
adopted, or intends to adopt, under Articles 4 or 5 of the Agreement is incompatible 
with  the  Agreement  it  shall  address  a  decision  to  that  Member  State  requiring  it  to 
take  appropriate  action  in  order  to  comply  with  the  Agreement.  The  Commission 
shall inform the Council and the other Member States of such decision. Any Member 
State  may  refer  the  decision  of  the  Commission  to  the  Council  within  10  working 
days  from  its  notification.  The  Council  may  take  a  different  decision  within  one 
month of the referral. The Council shall decide by qualified majority. 

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Article 6 (Safety) 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or  notifications 
made or received by them under Article 7 of the Agreement. 

Article 7 (Security) 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or  notifications 
made or received by them under Article 8 of the Agreement. 

Article 8 (Government subsidies and support) 

1. 

If a Member State believes that a subsidy or support being considered or provided by 
a  governmental  entity  in  the  territory  of  the  United  States  will  have  the  adverse 
competitive  effects  referred  to  in  Article  13(2)  of  the  Agreement,  it  may  bring  the 
matter  to  the  attention  of  the  Commission,  which  may  approach  such  entity  or 
request  a  meeting  of  the  Joint  Committee  established  under  Article  17  of  the 
Agreement.  

2. 

Member  States  shall  inform  immediately  the  Commission  when  they  are  contacted 
by the United States under Article 13(3) of the Agreement. 

Done at Brussels,  

For the Council 
The President 

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ANNEX 

AIR TRANSPORT AGREEMENT 

THE UNITED STATES OF AMERICA (hereinafter the “United States”), of the one part; and 

THE REPUBLIC OF AUSTRIA, 

THE KINGDOM OF BELGIUM, 

THE REPUBLIC OF CYPRUS, 

THE CZECH REPUBLIC, 

THE KINGDOM OF DENMARK, 

THE REPUBLIC OF ESTONIA, 

THE REPUBLIC OF FINLAND, 

THE FRENCH REPUBLIC, 

THE FEDERAL REPUBLIC OF GERMANY, 

THE HELLENIC REPUBLIC, 

THE REPUBLIC OF HUNGARY, 

IRELAND, 

THE ITALIAN REPUBLIC, 

THE REPUBLIC OF LATVIA, 

THE REPUBLIC OF LITHUANIA, 

THE GRAND DUCHY OF LUXEMBOURG,  

THE REPUBLIC OF MALTA, 

THE KINGDOM OF THE NETHERLANDS, 

THE REPUBLIC OF POLAND, 

THE PORTUGUESE REPUBLIC, 

THE SLOVAK REPUBLIC, 

THE REPUBLIC OF SLOVENIA, 

THE KINGDOM OF SPAIN, 

THE KINGDOM OF SWEDEN, 

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THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, 

being parties to the Treaty establishing the EUROPEAN COMMUNITY and being Member 
States of the European Union (hereinafter the “Member States”),  

and the EUROPEAN COMMUNITY, of the other part; 

Desiring to promote an international aviation system based on competition among airlines in 
the marketplace with minimum government interference and regulation;  

Desiring  to  facilitate  the  expansion  of  international  air  transport  opportunities,  including 
through the development of air transportation networks to meet the needs of passengers and 
shippers for convenient air transportation services;  

Desiring to make it possible for airlines to offer the traveling and shipping public competitive 
prices and services in open markets;  

Desiring to have all sectors of the air transport industry, including airline workers, benefit in a 
liberalized agreement; 

Desiring to ensure the highest degree of safety and security in international air transport and 
reaffirming  their  grave  concern  about  acts  or  threats  against  the  security  of  aircraft,  which 
jeopardize  the  safety  of  persons  or  property,  adversely  affect  the  operation  of  air 
transportation, and undermine public confidence in the safety of civil aviation;  

Noting  the  Convention  on  International  Civil  Aviation,  opened  for  signature  at  Chicago  on 
December 7, 1944; 

Recognizing  that  government  subsidies  may  adversely  affect  airline  competition  and  may 
jeopardize the basic objectives of this Agreement; 

Affirming  the  importance  of  protecting  the  environment  in  developing  and  implementing 
international aviation policy; 

Noting  the  importance  of  protecting  consumers,  including  the  protections  afforded  by  the 
Convention  for  the  Unification  of  Certain  Rules  for  International  Carriage  by  Air,  done  at 
Montreal May 28, 1999; 

Intending to build upon the framework of existing agreements with the goal of opening access 
to markets and maximizing benefits for consumers, airlines, labor, and communities on both 
sides of the Atlantic;  

Intending  to  establish  a  precedent  of  global  significance  to  promote  the  benefits  of 
liberalization in this crucial economic sector; 

Have agreed as follows: 

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Article 1 

Definitions 

For the purposes of this Agreement, unless otherwise stated, the term: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

“Agreement” means this Agreement, its Annexes, and any amendments thereto; 

“Air  transportation”  means  the  carriage  by  aircraft  of  passengers,  baggage,  cargo, 
and  mail,  separately  or  in  combination,  held  out  to  the  public  for  remuneration  or 
hire; 

“Convention”  means  the  Convention  on  International  Civil  Aviation,  opened  for 
signature at Chicago on December 7, 1944, and includes: 

a.  any  amendment  that  has  entered  into  force  under  Article 94(a)  of  the 
Convention  and  has  been  ratified  by  both  the  United  States  and  the  Member 
State or Member States as is relevant to the issue in question, and 

b.  any  Annex  or  any  amendment  thereto  adopted  under  Article 90  of  the 
Convention, insofar as such Annex or amendment is at any given time effective 
for  both  the  United  States  and  the  Member  State  or  Member  States  as  is 
relevant to the issue in question; 

“Full  cost”  means  the  cost  of  providing  service  plus  a  reasonable  charge  for 
administrative overhead; 

“International  air  transportation”  means  air  transportation  that  passes  through  the 
airspace over the territory of more than one State; 

"Party" means either the United States or the European Community and its Member 
States; 

“Price” means any fare, rate or charge for the carriage of passengers, baggage and/or 
cargo  (excluding  mail)  in  air  transportation,  including  surface  transportation  in 
connection  with  international  air  transportation,  if  applicable,  charged  by  airlines, 
including their agents, and the conditions governing the availability of such fare, rate 
or charge;  

“Stop for non-traffic purposes” means a landing for any purpose other than taking on 
or discharging passengers, baggage, cargo and/or mail in air transportation; 

“Territory”  means,  for  the  United  States,  the  land  areas  (mainland  and  islands), 
internal  waters  and  territorial  sea  under  its  sovereignty  or  jurisdiction,  and,  for  the 
European Community and its Member States, the land areas (mainland and islands), 
internal  waters  and  territorial  sea  in  which  the  Treaty  establishing  the  European 
Community  is  applied  and  under  the  conditions  laid  down  in  that  Treaty  and  any 
successor instrument; application of this Agreement to Gibraltar airport 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 Agreement to Gibraltar airport shall 

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be  suspended  until  the  arrangements  in  the  Joint  Declaration  made  by  the  Foreign 
Ministers of the Kingdom of Spain and the United Kingdom on December 2, 1987, 
enter into operation; and 

10. 

"User charge” means a charge imposed on airlines for the provision of airport, airport 
environmental,  air  navigation,  or  aviation  security  facilities  or  services  including 
related services and facilities. 

Article 2 

Fair and Equal Opportunity 

Each Party shall allow a fair and equal opportunity for the airlines of both Parties to compete 
in providing the international air transportation governed by this Agreement. 

Article 3 

Grant of Rights 

1. 

Each  Party  grants  to  the  other  Party  the  following  rights  for  the  conduct  of 
international air transportation by the airlines of the other Party: 

a. 

b. 

c. 

the right to fly across its territory without landing; 

the right to make stops in its territory for non-traffic purposes; 

the  right  to  perform  international  air  transportation  between  points  on  the 
following routes: 

i.  for  airlines  of  the  United  States  (hereinafter  "U.S.  airlines"),  from  points 
behind the United States via the United States and intermediate points to 
any  point  or  points  in  any  Member  State  or  States  and  beyond;  and  for 
all-cargo  service,  between  any  Member  State  and  any  point  or  points 
(including in any other Member States); 

ii. for airlines of the European Community and its Member States (hereinafter 
"Community  airlines"),  from  points  behind  the  Member  States  via  the 
Member  States  and  intermediate  points  to  any  point  or  points  in  the 
United States and beyond; and for all-cargo service, between the United 
States and any point or points; and 

d. 

the rights otherwise specified in this Agreement. 

2. 

Each airline may on any or all flights and at its option: 

a. 

b. 

c. 

operate flights in either or both directions;  

combine different flight numbers within one aircraft operation; 

serve  behind,  intermediate,  and  beyond  points  and  points  in  the  territories  of 
the Parties in any combination and in any order; 

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17 

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d. 

e. 

f. 

omit stops at any point or points; 

transfer traffic from any of its aircraft to any of its other aircraft at any point; 

serve points behind any point in its territory with or without change of aircraft 
or  flight  number  and  hold  out  and  advertise  such  services  to  the  public  as 
through services; 

g.  make stopovers at any points whether within or outside the territory of either 

Party; 

h. 

carry transit traffic through the other Party’s territory; and 

i. 

combine traffic on the same aircraft regardless of where such traffic originates; 

without  directional  or  geographic  limitation  and  without  loss  of  any  right  to  carry 
traffic otherwise permissible under this Agreement. 

The provisions of paragraph 1 of this Article shall apply subject to the requirement 
that,  with  the  exception  of  all-cargo  services,  the  transportation  is  part  of  a  service 
that serves the United States for U.S. airlines or a service that serves a Member State 
for Community airlines. 

Each  Party  shall  allow  each  airline  to  determine  the  frequency  and  capacity  of  the 
international air transportation it offers based upon commercial considerations in the 
marketplace.  Consistent  with  this  right,  neither  Party  shall  unilaterally  limit  the 
volume  of  traffic,  frequency  or  regularity  of  service,  or  the  aircraft  type  or  types 
operated by the airlines of the other Party, nor shall it require the filing of schedules, 
programs for charter flights, or operational plans by airlines of the other Party, except 
as may be required for customs, technical, operational, or environmental (consistent 
with Article 14) reasons under uniform conditions consistent with Article 15 of the 
Convention. 

Any airline may perform international air transportation without any limitation as to 
change, at any point, in type or number of aircraft operated; provided that, with the 
exception of all-cargo services, the transportation is part of a service that serves the 
United  States  for  U.S.  airlines  or  a  service  that  serves  a  Member  State  for 
Community airlines. 

3. 

4. 

5. 

6. 

Nothing in this Agreement shall be deemed to confer on: 

a.  U.S. airlines the right to  take on board, in the territory of  any  Member  State, 
passengers, baggage, cargo, or mail carried for compensation and destined for 
another point in the territory of that Member State; 

b. 

Community  airlines  the  right  to  take  on  board,  in  the  territory  of  the  United 
States,  passengers,  baggage,  cargo,  or  mail  carried  for  compensation  and 
destined for another point in the territory of the United States. 

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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, provided: 

a. 

b. 

c. 

d. 

for a U.S. airline , substantial ownership and effective control of that airline are 
vested in the United States, U.S. nationals, or both;  

for  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; 

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 

the provisions set forth in Article 7 (Safety) and Article 8 (Security) are being 
maintained and administered. 

Article 5 

Revocation of Authorization 

1. 

Either  Party  may  revoke,  suspend  or  limit  the  operating  authorizations  or  technical 
permissions  or  otherwise  suspend  or  limit  the  operations  of  an  airline  of  the  other 
Party where: 

a. 

b. 

c. 

for a U.S. airline, substantial ownership and effective control of that airline are 
not vested in the United States, U.S. nationals, or both; 

for  a  Community  airline,  substantial  ownership  and  effective  control  of  that 
airline are not vested in a Member State or States, nationals of such a state or 
states, or both; or 

that  airline  has  failed  to  comply  with  the  laws  and  regulations  referred  to  in 
Article 6 (Application of Laws) of this Agreement. 

2. 

3. 

Unless  immediate  action  is  essential  to  prevent  further  noncompliance  with 
subparagraph  1c  of  this  Article,  the  rights  established  by  this  Article  shall  be 
exercised only after consultation with the other Party. 

This  Article  does  not  limit  the  rights  of  either  Party  to  withhold,  revoke,  limit  or 
impose conditions on the operating authorization or technical permission of an airline 
or airlines of the other Party in accordance with the provisions of Article 7 (Safety) 
or Article 8 (Security). 

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1. 

2. 

1. 

2. 

Article 6 

Application of Laws 

The laws and regulations of a Party relating to the admission to or departure from its 
territory  of  aircraft  engaged  in  international  air  navigation,  or  to  the  operation  and 
navigation  of  such aircraft while  within its territory, shall be applied to the  aircraft 
utilized by the airlines of the other Party, and shall be complied with by such aircraft 
upon entering or departing from or while within the territory of the first Party. 

While entering, within, or leaving the territory of one Party, the laws and regulations 
applicable  within  that  territory  relating  to  the  admission  to  or  departure  from  its 
territory  of  passengers,  crew  or  cargo  on  aircraft  (including  regulations  relating  to 
entry,  clearance,  immigration,  passports,  customs  and  quarantine  or,  in  the  case  of 
mail, postal regulations) shall be complied with by, or on behalf of, such passengers, 
crew or cargo of the other Party’s airlines. 

Article 7 

Safety 

The responsible authorities of the Parties shall recognize as valid, for the purposes of 
operating  the  air  transportation  provided  for  in  this  Agreement,  certificates  of 
airworthiness,  certificates  of  competency,  and  licenses  issued  or  validated  by  each 
other and still in force, provided that the requirements for such certificates or licenses 
at  least  equal  the  minimum  standards  that  may  be  established  pursuant  to  the 
Convention. The responsible authorities may, however, refuse to recognize as valid 
for  purposes  of  flight  above  their  own  territory,  certificates  of  competency  and 
licenses granted to or validated for their own nationals by such other authorities. 

The  responsible  authorities  of  a  Party  may  request  consultations  with  other 
responsible  authorities  concerning  the  safety  standards  maintained  by  those 
authorities  relating  to  aeronautical  facilities,  aircrews,  aircraft,  and  operation  of  the 
airlines overseen by those authorities. Such consultations shall take place within 45 
days  of  the  request  unless  otherwise  agreed.  If  following  such  consultations,  the 
requesting  responsible  authorities  find  that  those  authorities  do  not  effectively 
maintain and administer safety standards and requirements in these areas that at least 
equal the minimum standards that may be established pursuant to the Convention, the 
requesting responsible authorities shall notify those authorities of such findings and 
the steps considered necessary to conform with these minimum standards, and those 
authorities  shall  take  appropriate  corrective  action.  The  requesting  responsible 
authorities reserve the right to withhold, revoke or limit the operating authorization 
or  technical  permission  of  an  airline  or  airlines  for  which  those  authorities  provide 
safety oversight in the event those authorities do not take such appropriate corrective 
action  within  a  reasonable  time  and  to  take  immediate  action  as  to  such  airline  or 
airlines if essential to prevent further noncompliance with the duty to maintain and 
administer the aforementioned standards and requirements resulting in an immediate 
threat to flight safety. 

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3. 

4. 

1. 

2. 

3. 

4. 

5. 

The European Commission shall simultaneously receive all requests and notifications 
under this Article. 

Nothing  in  this  Article  shall  prevent  the  responsible  authorities  of  the  Parties  from 
conducting  safety  discussions,  including  those  relating  to  the  routine  application  of 
safety  standards  and  requirements  or  to  emergency  situations  that  may  arise  from 
time to time. 

Article 8 

Security 

In  accordance  with  their  rights  and  obligations  under  international  law,  the  Parties 
reaffirm  that  their  obligation  to  each  other  to  protect  the  security  of  civil  aviation 
against  acts  of  unlawful  interference  forms  an  integral  part  of  this  Agreement. 
Without  limiting  the  generality  of  their  rights  and  obligations  under  international 
law,  the  Parties  shall  in  particular  act  in  conformity  with  the  following  agreement: 
the  Convention  on  Offenses  and  Certain  Other  Acts  Committed  on  Board  Aircraft, 
done at Tokyo September 14, 1963, the Convention for the Suppression of Unlawful 
Seizure of Aircraft, done at The Hague December 16, 1970, the Convention for the 
Suppression of Unlawful Acts against the Safety of Civil Aviation, done at Montreal 
September  23,  1971,  and  the  Protocol  for  the  Suppression  of  Unlawful  Acts  of 
Violence at Airports Serving International Civil Aviation, done at Montreal February 
24, 1988. 

The  Parties  shall  provide  upon  request  all  necessary  assistance  to  each  other  to 
address any threat to the security of civil aviation, including the prevention of acts of 
unlawful  seizure  of  civil  aircraft  and  other  unlawful  acts  against  the  safety  of  such 
aircraft, of their passengers and crew, and of airports and air navigation facilities. 

The  Parties  shall,  in  their  mutual  relations,  act  in  conformity  with  the  aviation 
security  standards  and  appropriate  recommended  practices  established  by  the 
International  Civil  Aviation  Organization  and  designated  as  Annexes  to  the 
Convention; they shall require that operators of aircraft of their registries; operators 
of aircraft who have their principal place of business or permanent residence in their 
territory; and the operators of airports in their territory act in conformity with such 
aviation security provisions. 

Each  Party  shall  ensure  that  effective  measures  are  taken  within  its  territory  to 
protect  aircraft  and  to  inspect  passengers,  crew,  and  their  baggage  and  carry-on 
items, as well as  cargo and aircraft stores, prior to and during boarding or loading; 
and that those measures are adjusted to meet increased threats to the security of civil 
aviation.  Each  Party  agrees  that  the  security  provisions  required  by  the  other  Party 
for  departure  from  and  while  within  the  territory  of  that  other  Party  must  be 
observed. Each Party shall give positive consideration to any request from the other 
Party for special security measures to meet a particular threat.  

With full regard and mutual respect for each other’s sovereignty, a Party may adopt 
security  measures  for  entry  into  its  territory.  Where  possible,  that  Party  shall  take 
into account the security measures already applied by the other Party and any views 

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6. 

7. 

8. 

9. 

10. 

11. 

that the other Party may offer. Each Party recognizes, however, that nothing in this 
Article  limits  the  ability  of  a  Party  to  refuse  entry  into  its  territory  of  any  flight  or 
flights that it deems to present a threat to its security. 

A  Party  may  take  emergency  measures  including  amendments  to  meet  a  specific 
security  threat.  Such  measures  shall  be  notified  immediately  to  the  responsible 
authorities of the other Party. 

The  Parties  underline  the  importance  of  working  towards  compatible  practices  and 
standards as a means of enhancing air transport security and minimizing regulatory 
divergence. To this end, the Parties shall fully utilize and develop existing channels 
for the discussion of current and proposed security measures. The Parties expect that 
the discussions will address, among other issues, new security measures proposed or 
under  consideration  by  the  other  Party,  including  the  revision  of  security  measures 
occasioned by a change in circumstances; measures proposed by one Party to meet 
the  security  requirements  of  the  other  Party;  possibilities  for  the  more  expeditious 
adjustment of standards with respect to aviation security measures; and compatibility 
of  the  requirements  of  one  Party  with  the  legislative obligations of the  other Party. 
Such  discussions  should  serve  to  foster  early  notice  and  prior  discussion  of  new 
security initiatives and requirements. 

Without  prejudice  to  the  need  to  take  immediate  action  in  order  to  protect 
transportation security, the Parties affirm that when considering security measures, a 
Party  shall  evaluate  possible  adverse  effects  on  international  air  transportation  and, 
unless  constrained  by  law,  shall  take  such  factors  into  account  when  it  determines 
what measures are necessary and appropriate to address those security concerns. 

When  an  incident  or  threat  of  an  incident  of  unlawful  seizure  of  aircraft  or  other 
unlawful  acts  against  the  safety  of  passengers,  crew,  aircraft,  airports  or  air 
navigation  facilities  occurs,  the  Parties  shall  assist  each  other  by  facilitating 
communications  and  other  appropriate  measures  intended  to  terminate  rapidly  and 
safely such incident or threat. 

When  a  Party  has  reasonable  grounds  to  believe  that  the  other  Party  has  departed 
from  the  aviation  security  provisions  of  this  Article,  the  responsible  authorities  of 
that  Party  may  request  immediate  consultations  with  the  responsible  authorities  of 
the  other  Party.  Failure  to  reach  a  satisfactory  agreement  within  15  days  from  the 
date  of  such  request  shall  constitute  grounds  to  withhold,  revoke,  limit,  or  impose 
conditions on the operating authorization and technical permissions of an airline or 
airlines  of  that  Party.  When  required  by  an  emergency,  a  Party  may  take  interim 
action prior to the expiry of 15 days. 

Separate  from  airport  assessments  undertaken  to  determine  conformity  with  the 
aviation security standards and practices referred to in paragraph 3 of this Article, a 
Party may request the cooperation of the other Party in assessing whether particular 
security measures of that other Party meet the requirements of the requesting Party. 
The responsible authorities of the Parties shall coordinate in advance the airports to 
be  assessed  and  the  dates  of  assessment  and  establish  a  procedure  to  address  the 
results of such assessments. Taking into account the results of the assessments, the 
requesting  Party  may  decide  that  security  measures  of  an  equivalent  standard  are 
applied  in  the  territory  of  the  other  Party  in  order  that  transfer  passengers,  transfer 

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baggage, and/or transfer cargo may be exempted from re-screening in the territory of 
the requesting Party. Such a decision shall be communicated to the other Party. 

Article 9 

Commercial Opportunities 

The airlines of each Party shall have the right to establish offices in the territory of 
the other Party for the promotion and sale of air transportation and related activities. 

The  airlines  of  each  Party  shall  be  entitled,  in  accordance  with  the  laws  and 
regulations of the other Party relating to entry, residence, and employment, to bring 
in  and  maintain  in  the  territory  of  the  other  Party  managerial,  sales,  technical, 
operational, and other specialist staff who are required to support the provision of air 
transportation. 

a.  Without  prejudice  to  sub-paragraph  (b)  below,  each  airline  shall  have  in 
relation to groundhandling in the territory of the other Party: 

(i) 

(ii) 

the  right  to  perform  its  own  groundhandling  (“self-handling”)  or,  at  its 
option 

to 

right 

select  among  competing 

that  provide 
the 
groundhandling  services  in  whole  or  in  part  where  such  suppliers  are 
allowed  market  access  on  the  basis  of  the  laws  and  regulations  of  each 
Party, and where such suppliers are present in the market. 

suppliers 

b. 

The rights under (i) and (ii) in sub-paragraph (a) above shall be subject only to 
specific  constraints  of  available  space  or  capacity  arising  from  the  need  to 
maintain  safe  operation  of  the  airport.  Where  such  constraints  preclude  self-
handling  and  where  there  is  no  effective  competition  between  suppliers  that 
provide groundhandling services, all such services shall be available on both an 
equal  and  an  adequate  basis  to  all  airlines;  prices  of  such  services  shall  not 
exceed their full cost including a reasonable return on assets, after depreciation. 

Any airline of each Party may engage in the sale of air transportation in the territory 
of the other Party directly and/or, at the airline’s discretion, through its sales agents 
or other intermediaries appointed by the airline. Each airline shall have the right to 
sell such transportation, and any person shall be free to purchase such transportation, 
in the currency of that territory or in freely convertible currencies. 

Each airline shall have the right to convert and remit from the territory of the other 
Party to its home territory and, except where inconsistent with generally applicable 
law or regulation, the country or countries of its choice, on demand, local revenues in 
excess  of  sums  locally  disbursed.  Conversion  and  remittance  shall  be  permitted 
promptly  without  restrictions  or  taxation  in  respect  thereof  at  the  rate  of  exchange 
applicable  to  current  transactions  and  remittance  on  the  date  the  carrier  makes  the 
initial application for remittance. 

1. 

2. 

3. 

4. 

5. 

6. 

The  airlines  of  each  Party  shall  be  permitted  to  pay  for  local  expenses,  including 
purchases  of  fuel,  in  the  territory  of  the  other  Party  in  local  currency.  At  their 

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discretion, the airlines of each Party may pay for such expenses in the territory of the 
other Party in freely convertible currencies according to local currency regulation. 

7. 

In operating or holding out services under the Agreement, any airline of a Party may 
enter  into  co-operative  marketing  arrangements,  such  as  blocked-space  or  code-
sharing arrangements, with: 

a. 

b. 

c. 

any airline or airlines of the Parties;  

any airline or airlines of a third country; and 

a surface (land or maritime) transportation provider of any country; 

provided that (i) all participants in such arrangements hold the appropriate authority 
and  (ii)  the  arrangements  meet  the  conditions  prescribed  under  the  laws  and 
regulations  normally  applied  by  the  Parties  to  the  operation  or  holding  out  of 
international air transportation. 

8. 

The airlines of each Party may enter into arrangements for the provision of aircraft 
with crew for international air transportation with: 

a. 

b. 

any airlines or airlines of the Parties; and 

any airlines or airlines of a third country; 

provided that all participants in such arrangements hold the appropriate authority and 
meet  the  conditions  prescribed  under  the  laws  and  regulations  normally  applied  by 
the Parties to such arrangements. Neither Party shall require an airline of either Party 
providing  the  aircraft  to  hold  traffic  rights  under  this  Agreement  for  the  routes  on 
which the aircraft will be operated. 

9. 

international  air 

in  connection  with 

Notwithstanding  any  other  provision  of  this  Agreement,  airlines  and  indirect 
providers of cargo transportation of the Parties shall be permitted, without restriction, 
to  employ 
transportation  any  surface 
transportation  for  cargo  to  or  from  any  points  in  the  territories  of  the  Parties,  or  in 
third  countries,  including  transport  to  and  from  all  airports  with  customs  facilities, 
and including, where applicable, the right to transport cargo in bond under applicable 
laws  and  regulations.  Such  cargo,  whether  moving  by  surface  or  by  air,  shall  have 
access  to  airport  customs  processing  and  facilities.  Airlines  may  elect  to  perform 
their  own  surface  transportation  or  to  provide  it  through  arrangements  with  other 
surface  carriers,  including  surface  transportation  operated  by  other  airlines  and 
indirect providers of cargo air transportation. Such intermodal cargo services may be 
offered  at  a  single,  through  price  for  the  air  and  surface  transportation  combined, 
provided that shippers are not misled as to the facts concerning such transportation. 

Article 10 

Customs Duties and Charges 

1. 

On  arriving  in  the  territory  of  one  Party,  aircraft  operated  in  international  air 
transportation  by  the  airlines  of  the  other  Party,  their  regular  equipment,  ground 

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equipment,  fuel,  lubricants,  consumable  technical  supplies,  spare  parts  (including 
engines), aircraft stores (including but not limited  to such  items  of  food,  beverages 
and  liquor,  tobacco  and  other  products  destined  for  sale  to  or  use  by  passengers  in 
limited  quantities  during  flight),  and  other  items  intended  for  or  used  solely  in 
connection  with  the  operation  or  servicing  of  aircraft  engaged  in  international  air 
transportation  shall  be  exempt,  on  the  basis  of  reciprocity,  from  all  import 
restrictions,  property  taxes  and  capital  levies,  customs  duties,  excise  taxes,  and 
similar  fees  and  charges  that  are  (a)  imposed  by  the  national  authorities  or  the 
European Community, and (b) not based on the cost of services provided, provided 
that such equipment and supplies remain on board the aircraft. 

2. 

There shall also be exempt, on the basis of reciprocity, from the taxes, levies, duties, 
fees  and  charges  referred  to  in  paragraph  1  of  this  Article,  with  the  exception  of 
charges based on the cost of the service provided: 

a. aircraft stores introduced into or supplied in the territory of a Party and taken 
on board, within reasonable limits, for use on outbound aircraft of an airline of 
the  other  Party  engaged  in  international  air  transportation,  even  when  these 
stores are to be used on a part of the journey performed over the territory of the 
Party in which they are taken on board; 

b.  ground  equipment  and  spare  parts  (including  engines)  introduced  into  the 
territory  of  a  Party  for  the  servicing,  maintenance,  or  repair  of  aircraft  of  an 
airline of the other Party used in international air transportation; 

c.  fuel,  lubricants  and  consumable  technical  supplies  introduced  into  or 
supplied in the territory of a Party for use in an aircraft of an airline of the other 
Party engaged in international air transportation, even when these supplies are 
to be used on a part of the journey performed over the territory of the Party in 
which they are taken on board; and 

d.  printed  matter,  as  provided  for  by  the  customs  legislation  of  each  Party, 
introduced into or supplied in the territory of one Party and taken on board for 
use  on  outbound  aircraft  of  an  airline  of  the  other  Party  engaged  in 
international air transportation, even when these stores are to be used on a part 
of the journey performed over the territory of the Party in which they are taken 
on board. 

3. 

4. 

5. 

Equipment  and  supplies  referred  to  in  paragraphs  1  and  2  of  this  Article  may  be 
required to be kept under the supervision or control of the appropriate authorities. 

The exemptions provided by this Article shall also be available where the airlines of 
one  Party  have  contracted  with  another  airline,  which  similarly  enjoys  such 
exemptions from the other Party, for the loan or transfer in the territory of the other 
Party of the items specified in paragraphs 1 and 2 of this Article. 

Nothing  in  this  Agreement  shall  prevent  either  Party  from  imposing  taxes,  levies, 
duties,  fees  or  charges  on  goods  sold  other  than  for  consumption  on  board  to 
passengers during a sector of an air service between two points within its territory at 
which embarkation or disembarkation is permitted. 

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6. 

7. 

1. 

2. 

3. 

4. 

In the event that two or more Member States envisage applying to the fuel supplied 
to aircraft of U.S. airlines in the territories of such Member States for flights between 
such  Member  States  any  waiver  of  the  exemption  contained  in  Article  14  (b)  of 
Council  Directive  2003/96/EC  of  27  October  2003,  the  Joint  Committee  shall 
consider that issue, in accordance with paragraph 4(e) of Article 17. 

A  Party  may  request  the  assistance  of  the  other  Party,  on  behalf  of  its  airline  or 
airlines,  in  securing  an  exemption  from  taxes,  duties,  charges  and  fees  imposed  by 
state and local governments or authorities on the goods specified in paragraphs 1 and 
2  of  this  Article,  as  well  as  from  fuel  through-put  charges,  in  the  circumstances 
described in this Article, except to the extent that the charges are based on the cost of 
providing  the  service.  In  response  to  such a  request,  the  other Party  shall  bring  the 
views  of  the  requesting  Party  to  the  attention  of  the  relevant  governmental  unit  or 
authority and urge that those views be given appropriate consideration. 

Article 11 

User Charges 

User charges that may be imposed by the competent charging authorities or bodies of 
each  Party  on  the  airlines  of  the  other  Party  shall  be  just,  reasonable,  not  unjustly 
discriminatory,  and  equitably  apportioned  among  categories  of  users.  In  any  event, 
any such user charges shall be assessed on the airlines of the other Party on terms not 
less favorable than the most favorable terms available to any other airline at the time 
the charges are assessed. 

User  charges  imposed  on  the  airlines  of  the  other  Party  may  reflect,  but  shall  not 
exceed, the full cost to the competent charging authorities or bodies of providing the 
appropriate  airport,  airport  environmental,  air  navigation,  and  aviation  security 
facilities and services at the airport or within the airport system. Such charges may 
include  a  reasonable  return  on  assets,  after  depreciation.  Facilities  and  services  for 
which charges are made shall be provided on an efficient and economic basis. 

Each Party shall encourage consultations between the competent charging authorities 
or  bodies  in  its  territory  and  the  airlines  using  the  services  and  facilities,  and  shall 
encourage the competent charging authorities or bodies and the airlines to exchange 
such  information  as  may  be  necessary  to  permit  an  accurate  review  of  the 
reasonableness of the charges in accordance with the principles of paragraphs 1 and 2 
of  this  Article.  Each  Party  shall  encourage  the  competent  charging  authorities  to 
provide users with reasonable notice of any proposal for changes in user charges to 
enable users to express their views before changes are made. 

Neither Party shall be held, in dispute resolution procedures pursuant to Article 18, to 
be in breach of a provision of this Article, unless (a) it fails to undertake a review of 
the  charge  or  practice  that  is  the  subject  of  complaint  by  the  other  Party  within  a 
reasonable  amount  of  time;  or  (b)  following  such  a  review  it  fails  to  take  all  steps 
within  its  power  to  remedy  any  charge  or  practice  that  is  inconsistent  with  this 
Article. 

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Article 12 

Pricing 

1. 

Prices  for  air  transportation  services  operated  pursuant  to  this  Agreement  shall  be 
established freely and shall not be subject to approval, nor may they be required to be 
filed. 

2. 

Notwithstanding paragraph 1: 

a. 

The introduction or continuation of a price proposed to be charged or charged 
by  a  U.S.  airline  for  international  air  transportation  between  a  point  in  one 
Member  State  and  a  point  in  another  Member  State  shall  be  consistent  with 
Article  1(3)  of  Council  Regulation  (EEC)  2409/92  of  23  July  1992,  or  a  not 
more restrictive successor regulation. 

b.  Under this paragraph, the airlines of the Parties shall provide immediate access, 
on  request,  to  information  on  historical,  existing,  and  proposed  prices  to  the 
responsible  authorities  of  the  Parties  in  a  manner  and  format  acceptable  to 
those authorities. 

Article 13 

Government Subsidies and Support 

1. 

2. 

3. 

4. 

The  Parties  recognize  that  government  subsidies  and  support  may  adversely  affect 
the fair and equal opportunity of airlines to compete in providing the international air 
transportation governed by this Agreement. 

If  one  Party  believes  that  a  government  subsidy  or  support  being  considered  or 
provided by the other Party for or to the airlines of that other Party would adversely 
affect or is adversely affecting that fair and equal opportunity of the airlines of the 
first Party to compete, it may submit observations to that Party. Furthermore, it may 
request a meeting of the Joint Committee as provided in Article 17, to consider the 
issue and develop appropriate responses to concerns found to be legitimate. 

Each  Party  may  approach  responsible  governmental  entities  in  the  territory  of  the 
other Party, including entities at the state, provincial or local level, if it believes that 
a  subsidy  or  support  being  considered  or  provided  by  such  entities  will  have  the 
adverse  competitive  effects  referred  to  in  paragraph  2.  If  a  Party  decides  to  make 
such  direct  contact  it  shall  inform  promptly  the  other  Party  through  diplomatic 
channels. It may also request a meeting of the Joint Committee. 

Issues raised under this Article could include, for example, capital injections, cross-
subsidization,  grants,  guarantees,  ownership,  relief  or  tax  exemption,  by  any 
governmental entities. 

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Article 14 

Environment 

1. 

2. 

3. 

4. 

The Parties recognize the importance of protecting the environment when developing 
and implementing international aviation policy. The Parties recognize that the costs 
and  benefits  of  measures  to  protect  the  environment  must  be  carefully  weighed  in 
developing international aviation policy. 

When  a  Party  is  considering  proposed  environmental  measures,  it  should  evaluate 
possible adverse effects on the exercise of rights contained in this Agreement, and, if 
such  measures  are  adopted,  it  should  take  appropriate  steps  to  mitigate  any  such 
adverse effects. 

When environmental measures are established, the aviation environmental standards 
adopted by International Civil Aviation Organization in Annexes to the Convention 
shall be followed except where differences have been filed. The Parties shall apply 
any  environmental  measures  affecting  air  services  under  this  Agreement  in 
accordance with Article 2 and 3(4) of this Agreement. 

If one Party believes that a matter involving aviation environmental protection raises 
concerns for the application or implementation of this Agreement, it may request a 
meeting of the Joint Committee, as provided in Article 17, to consider the issue and 
develop appropriate responses to concerns found to be legitimate. 

Article 15 

Consumer Protection 

The  Parties  affirm  the  importance  of  protecting  consumers,  and  either  Party  may  request  a 
meeting  of  the  Joint  Committee  to  discuss  consumer  protection  issues  that  the  requesting 
Party identifies as significant. 

Article 16 

Computer Reservation Systems 

1. 

2. 

Computer Reservation Systems (CRS) vendors operating in the territory of one Party 
shall be entitled to bring in, maintain, and make freely available their CRSs to travel 
agencies  or  travel  companies  whose  principal  business  is  the  distribution  of  travel-
related products in the territory of the other Party provided the CRS complies with 
any relevant regulatory requirements of the other Party. 

Neither  Party  shall,  in  its  territory,  impose  or  permit  to  be  imposed  on  the  CRS 
vendors of the other Party more stringent requirements with respect to CRS displays 
(including  edit  and  display  parameters),  operations,  practices,  sales,  or  ownership 
than those imposed on its own CRS vendors. 

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   EN 

 
3. 

1. 

2. 

3. 

Owners/Operators  of  CRSs  of  one  Party  that  comply  with  the  relevant  regulatory 
requirements of the other Party, if any, shall have the same opportunity to own CRSs 
within the territory of the other Party as do owners/operators of that Party. 

Article 17 

The Joint Committee 

A  Joint  Committee  consisting  of  representatives  of  the  Parties  shall  meet  at  least 
once  a  year  to  conduct  consultations  relating  to  this  Agreement  and  to  review  its 
implementation. 

A  Party  may  also  request  a  meeting  of  the  Joint  Committee  to  seek  to  resolve 
questions  relating  to  the  interpretation  or  application  of  this  Agreement.  However, 
with respect to Article 19 or Annex 2, the Joint Committee may consider questions 
only  relating  to  the  refusal  by  either  Participant  to  implement  the  commitments 
undertaken  and  the  impact  of  competition  decisions  on  the  application  of  this 
Agreement. Such a meeting shall begin at the earliest possible date, but not later than 
60 days from the date of receipt of the request, unless otherwise agreed. 

The  Joint  Committee  shall  review,  no  later  than  at  its  first  annual  meeting  and 
thereafter as appropriate, the overall implementation of the Agreement, including any 
effects of aviation infrastructure constraints on the exercise of rights provided for in 
Article  3,  the  effects  of  security  measures  taken  under  Article  8,  the  effects  on  the 
conditions of competition, including in the field of Computer Reservation Systems, 
and any social effects of the implementation of the Agreement.  

4. 

The Joint Committee shall also develop cooperation by:  

a. 

b. 

c. 

fostering expert-level exchanges on new legislative or regulatory initiatives and 
developments,  including  in  the  fields  of  security,  safety,  the  environment, 
aviation infrastructure (including slots), and consumer protection; 

considering  the  social  effects  of  the  Agreement  as  it  is  implemented  and 
developing appropriate responses to concerns found to be legitimate; 

considering  potential  areas  for  the  further  development  of  the  Agreement, 
including the recommendation of amendments to the Agreement; 

d.  maintaining an inventory of issues regarding government subsidies or support 

raised by either Party in the Joint Committee; 

e.  making  decisions,  on  the  basis  of  consensus,  concerning  any  matters  with 

respect to application of paragraph 6 of Article 10. 

5. 

The Joint Committee shall operate on the basis of consensus. 

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Article 18 

Arbitration 

1. 

2. 

3. 

Any dispute relating to the application or interpretation of this Agreement, other than 
issues arising under Article 19 or under Annex 2, that is not resolved by a meeting of 
the Joint Committee may be referred to a person or body for decision by agreement 
of the Parties. If the Parties do not so agree, the dispute shall, at the request of either 
Party, be submitted to arbitration in accordance with the procedures set forth below. 

Unless  the  Parties  otherwise  agree,  arbitration  shall  be  by  a  tribunal  of  three 
arbitrators to be constituted as follows: 

a.  Within  20  days  after  the  receipt  of  a  request  for  arbitration,  each  Party  shall 
name  one  arbitrator.  Within  45  days  after  these  two  arbitrators  have  been 
named,  they  shall  by  agreement  appoint  a  third  arbitrator,  who  shall  act  as 
President of the tribunal. 

b. 

If  either  Party  fails  to  name  an  arbitrator,  or  if  the  third  arbitrator  is  not 
appointed  in  accordance  with  subparagraph  a  of  this  paragraph,  either  Party 
may  request  the  President  of  the  Council  of  the  International  Civil  Aviation 
Organization to appoint the necessary arbitrator or arbitrators within 30 days of 
receipt of that request. If the President of the Council of the International Civil 
Aviation  Organization  is  a  national  of  either  the  United  States  or  a  Member 
State, the most senior Vice President of that Council who is not disqualified on 
that ground shall make the appointment. 

Except as otherwise agreed, the tribunal shall determine the limits of its jurisdiction 
in  accordance  with  this  Agreement  and  shall  establish  its  own  procedural  rules.  At 
the  request  of  a  Party,  the  tribunal,  once  formed,  may  ask  the  other  Party  to 
implement interim relief measures pending the tribunal's final determination. At the 
direction of the tribunal or at the request of either Party, a conference shall be held 
not  later  than  15  days  after  the  tribunal  is  fully  constituted  for  the  tribunal  to 
determine  the  precise  issues  to  be  arbitrated  and  the  specific  procedures  to  be 
followed. 

4. 

Except as otherwise agreed or as directed by the tribunal: 

a. 

The  statement  of  claim  shall  be  submitted  within  30  days  of  the  time  the 
tribunal is fully constituted, and the statement of defense shall be submitted 40 
days thereafter. Any reply by the claimant shall be submitted within 15 days of 
the submission of the statement of defense. Any reply by the respondent shall 
be submitted within 15 days thereafter. 

b. 

The tribunal shall hold a hearing at the request of either Party, or may hold a 
hearing on its own initiative, within 15 days after the last reply is filed. 

5. 

The  tribunal  shall  attempt  to  render  a  written  decision  within  30  days  after 
completion of the hearing or, if no hearing is held, within 30 days after the last reply 
is submitted. The decision of the majority of the tribunal shall prevail. 

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6. 

7. 

8. 

1. 

2. 

3. 

The Parties may submit requests for clarification of the decision within 10 days after 
it  is  rendered  and  any  clarification  given  shall  be  issued  within  15  days  of  such 
request. 

If the tribunal determines that there has been a violation of this Agreement and the 
responsible Party does not cure the violation, or does not reach agreement with the 
other Party on a mutually satisfactory resolution within 40 days after notification of 
the  tribunal’s  decision,  the  other  Party  may  suspend  the  application  of  comparable 
benefits  arising  under  this  Agreement  until  such  time  as  the  Parties  have  reached 
agreement  on  a  resolution  of  the  dispute.  Nothing  in  this  paragraph  shall  be 
construed  as  limiting  the  right  of  either  Party  to  take  proportional  measures  in 
accordance with international law. 

The expenses of the tribunal, including the fees and expenses of the arbitrators, shall 
be  shared  equally  by  the  Parties.  Any  expenses  incurred  by  the  President  of  the 
Council of the International Civil Aviation Organization, or by any Vice President of 
that Council, in connection with the procedures of paragraph 2b of this Article shall 
be considered to be part of the expenses of the tribunal. 

Article 19 

Competition 

The Parties recognize that competition among airlines in the transatlantic market is 
important to promote the objectives of this Agreement, and confirm that they apply 
their respective competition regimes to protect and enhance overall competition and 
not individual competitors. 

The Parties recognize that differences may arise concerning the application of their 
respective  competition  regimes  to  international  aviation  affecting  the  transatlantic 
market,  and  that  competition  among  airlines  in  that  market  might  be  fostered  by 
minimizing those differences. 

The  Parties  recognize  that  cooperation  between  their  respective  competition 
authorities serves to promote competition in markets and has the potential to promote 
compatible regulatory results and to minimize differences in approach with respect to 
their  respective  competition  reviews  of  inter-carrier  agreements.  Consequently,  the 
Parties  shall  further  this  cooperation  to  the  extent  feasible,  taking  into  account  the 
different  responsibilities,  competencies  and  procedures  of  the  authorities,  in 
accordance with Annex 2. 

4. 

The Joint Committee shall be briefed annually on the results of the cooperation under 
Annex 2. 

Article 20 

Second Stage Negotiations 

The Parties share the goal of continuing to open access to markets and to maximize benefits 
for consumers, airlines, labor, and communities on both sides of the Atlantic. To continue this 

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process, the Parties shall develop an agenda including items of priority interest to each Party. 
The  Parties  shall  begin  negotiations  by  not  later  than  60  days  after  the  date  of  provisional 
application of this Agreement, with the goal of developing the next stage expeditiously. 

Article 21 

Relationship to Other Agreements 

1. 

2. 

3. 

During  the  period  of  provisional  application  pursuant  to  Article  24  of  this 
Agreement,  the  bilateral  agreements  listed  in  section  1  of  Annex  1,  shall  be 
suspended, except to the extent provided in section 2 of Annex 1. 

Upon entry into force pursuant to Article 25 of this Agreement, this Agreement shall 
supersede the bilateral agreements listed in section 1 of Annex 1, except to the extent 
provided in section 2 of Annex 1. 

If  the  Parties  become  parties  to  a  multilateral  agreement,  or  endorse  a  decision 
adopted  by  the  International  Civil  Aviation  Organization  or  another  international 
organization, that addresses matters covered by this Agreement, they shall consult in 
the Joint Committee to determine whether this Agreement should be revised to take 
into account such developments. 

Article 22 

Termination 

Either Party may, at any time, give notice in writing through diplomatic channels to the other 
Party of its decision to terminate this Agreement. Such notice shall be sent simultaneously to 
the  International  Civil  Aviation  Organization.  This  Agreement  shall  terminate  at  midnight 
GMT at the end of the International Air Transport Association (IATA) traffic season in effect 
one  year  following  the  date  of  written  notification  of  termination,  unless  the  notice  is 
withdrawn by agreement of the Parties before the end of this period. 

Article 23 

Registration with ICAO 

This  Agreement  and  all  amendments  thereto  shall  be  registered  with  the  International  Civil 
Aviation Organization. 

Article 24 

Provisional Application 

Pending entry into force pursuant to Article 25: 

1. 

The Parties agree to apply this Agreement from [A]. 

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2. 

Either  Party  may  at  any  time  give  notice in writing through diplomatic channels to 
the  other  Party  of  a  decision  to  no  longer  apply  this  Agreement.  In  that  event, 
application shall cease at midnight GMT at the end of the International Air Transport 
Association  (IATA)  traffic  season  in  effect  one  year  following  the  date  of  written 
notification,  unless  the  notice  is  withdrawn  by  agreement  of  the  Parties  before  the 
end of this period. 

Article 25 

Entry into Force 

This Agreement shall enter into force one month after the date of the later note in an exchange 
of diplomatic notes between the Parties confirming that all necessary procedures for entry into 
force  of  this  Agreement  have  been  completed.  For  purposes  of  this  exchange,  the  United 
States  shall  deliver  to  the  European  Community  the  diplomatic  note  to  the  European 
Community and its Member States, and the European Community shall deliver to the United 
States the diplomatic note or notes from the European Community and its Member States. The 
diplomatic note or notes from the European Community and its Member States shall contain 
communications from each Member State confirming that its necessary procedures for entry 
into force of this Agreement have been completed. 

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

DONE at [_____________]  on  this  [_______]  day of ________, 200__,  in  duplicate, in the 
Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, 
Latvian,  Lithuanian,  Maltese,  Polish,  Portuguese,  Slovak,  Slovene,  Spanish  and  Swedish 
languages. In case of divergence, the English text shall prevail over the other language texts. 

FOR THE UNITED STATES OF AMERICA 

FOR THE REPUBLIC OF AUSTRIA 

FOR THE KINGDOM OF BELGIUM 

FOR THE REPUBLIC OF CYPRUS 

FOR THE CZECH REPUBLIC 

FOR THE KINGDOM OF DENMARK 

FOR THE REPUBLIC OF ESTONIA 

FOR THE REPUBLIC OF FINLAND 

FOR THE FRENCH REPUBLIC 

FOR THE FEDERAL REPUBLIC OF GERMANY 

FOR THE HELLENIC REPUBLIC 

FOR THE REPUBLIC OF HUNGARY 

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FOR IRELAND 

FOR THE ITALIAN REPUBLIC 

FOR THE REPUBLIC OF LATVIA 

FOR THE REPUBLIC OF LITHUANIA 

FOR THE GRAND DUCHY OF LUXEMBOURG 

FOR THE REPUBLIC OF MALTA 

FOR THE KINGDOM OF THE NETHERLANDS 

FOR THE REPUBLIC OF POLAND 

FOR THE PORTUGUESE REPUBLIC 

FOR THE SLOVAK REPUBLIC 

FOR THE REPUBLIC OF SLOVENIA 

FOR THE KINGDOM OF SPAIN 

FOR THE KINGDOM OF SWEDEN 

FOR THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND 

FOR THE EUROPEAN COMMUNITY 

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Section 1 

ANNEX 1 

As provided in Article 21 of this Agreement, the following bilateral air transport agreements 
between  the  United  States  and  Member  States  shall  be  suspended  or  superseded  by  this 
Agreement: 

a. 

b. 

The Republic of Austria: Air services agreement, signed at Vienna March 16, 
1989; amended June 14, 1995. 

The  Kingdom  of  Belgium:  Air  transport  agreement,  effected  by  exchange  of 
notes at Washington October 23, 1980; amended September 22 and November 
12, 1986; amended November 5, 1993 and January 12, 1994. 

(amendment concluded on September 5, 1995 (provisionally applied).) 

c. 

d. 

e. 

f. 

g. 

The Czech Republic: Air transport agreement, signed at Prague September 10, 
1996; amended June 4, 2001 and February 14, 2002. 

The  Kingdom  of  Denmark:  Agreement  relating  to  air  transport  services, 
effected  by  exchange  of  notes  at  Washington  December  16,  1944;  amended 
August 6, 1954; amended June 16, 1995. 

The  Republic  of  Finland:  Air  transport  agreement,  signed  at  Helsinki  March 
29,  1949;  related  protocol  signed  May  12,  1980;  agreement  amending  1949 
agreement and 1980 protocol concluded June 9, 1995. 

The French Republic: Air transport agreement, signed at Washington June 18, 
1998; amended October 10, 2000; amended January 22, 2002. 

The Federal Republic of Germany: Air transport agreement and exchanges of 
notes, signed at Washington July 7, 1955; amended April 25, 1989. 

(related  protocol  concluded  November  1,  1978;  related  agreement  concluded  May 
24,  1994;  protocol  amending  the  1955  agreement  concluded  on  May  23,  1996; 
agreement  amending  the  1996  protocol  concluded  on  October  10,  2000  (all 
provisionally applied).) 

h. 

i. 

j. 

The  Hellenic  Republic:  Air  transport  agreement,  signed  at  Athens  July  31, 
1991;  extended  until  July  31,  2006  by  exchange  of  notes  of  July  19  and  25, 
2005. 

The  Republic  of  Hungary:  Air  transport  agreement  and  memorandum  of 
understanding, signed at Budapest July 12, 1989; extended until July 12, 2006 
by exchange of notes of July 12 and November 7, 2005. 

Ireland:  Agreement  relating  to  air  transport  services,  effected  by  exchange  of 
notes  at  Washington  February  3,  1945;  amended  January  25,  1988  and 
September 29, 1989; amended July 25 and September 6, 1990. 

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(Memorandum  of  consultations,  signed  at  Washington  October  28,  1993 
(provisionally applied).) 

k. 

The  Italian  Republic:  Air  transport  agreement,  with  memorandum  and 
exchange of notes, signed at Rome June 22, 1970; amended October 25, 1988; 
related memorandum of understanding signed September 27, 1990; amendment 
of 1970 agreement and 1990 MOU concluded November 22 and December 23, 
1991; amendment of 1970 agreement and 1990 MOU concluded May 30 and 
October  21,  1997;  agreement  supplementing  the  1970  agreement  concluded 
December 30, 1998 and February 2, 1999. 

(Protocol amending the 1970 agreement concluded December 6, 1999 (provisionally 
applied).) 

l. 

The  Grand  Duchy  of  Luxembourg:  Air  transport  agreement,  signed  at 
Luxembourg August 19, 1986; amended June 6, 1995; amended July 13 and 21 
1998. 

m.  The Republic of Malta: Air transport agreement, signed at Washington October 

12, 2000. 

n. 

o. 

p. 

q. 

r. 

s. 

t. 

The  Kingdom  of  the  Netherlands:  Air  transport  agreement,  signed  at 
Washington April 3, 1957;  protocol amending  the 1957 agreement concluded 
on  March  31,  1978;  amendment  of  1978  protocol  concluded  June  11,  1986; 
amendment of 1957 agreement concluded October 13 and December 22, 1987; 
amendment  of  1957  agreement  concluded  January  29  and  March  13,  1992; 
amendment of 1957 agreement and 1978 protocol concluded October 14, 1992. 

The  Republic of Poland: Air transport agreement, signed at Warsaw June 16, 
2001. 

The  Portuguese  Republic: Air  transport agreement, signed at Lisbon May 30, 
2000. 

The Slovak Republic: Air transport agreement, signed at Bratislava January 22, 
2001. 

The Kingdom of Spain: Air transport agreement signed at Madrid February 20, 
1973;  related  agreement  of  February  20,  March  31  and  April  7,  1987; 
amendment of 1973 agreement concluded May 31, 1989; amendment of 1973 
agreement concluded November 27, 1991.  

The Kingdom of Sweden: Agreement relating to air transport services, effected 
by exchange of notes at Washington December 16, 1944; amended August 6, 
1954; amended June 16, 1995. 

The  United  Kingdom  of  Great  Britain  and  Northern  Ireland:  Agreement 
concerning  air  services,  and  exchange  of  letters,  signed  at  Bermuda  July  23, 
1977;  agreement  relating  to  North  Atlantic  air  fares,  concluded  March  17, 
1978;  agreement  amending  the  1977  agreement,  concluded  April  25,  1978; 
agreement  modifying  and  extending  the  1978  agreement  relating  to  North 
Atlantic air fares, concluded November 2 and 9, 1978; agreement amending the 

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1977 agreement, concluded December 4, 1980; agreement amending the 1977 
agreement,  concluded  February  20,  1985;  agreement  amending  Article  7, 
Annex  2,  and  Annex  5  of  the  1977  agreement,  concluded  May  25,  1989; 
agreement concerning amendments of the 1977 agreement, termination of the 
US/UK  Arbitration  Concerning  Heathrow  Airport  User  Charges  and  the 
request for arbitration made by the United Kingdom in its embassy’s note no. 
87 of 13 October 1993 and settlement of the matters which gave rise to those 
proceedings,  concluded  March  11,  1994;  agreement  amending  the  1977 
agreement, concluded March 27, 1997. 

(Arrangements,  being  provisionally  applied,  contained  in  the  memorandum  of 
consultations dated September 11, 1986; arrangements contained in the exchange of 
letters  dated  July  27,  1990;  arrangements  contained  in  the  memorandum  of 
consultations of March 11, 1991; arrangements contained in the exchange of letters 
dated October 6, 1994; arrangements contained in the memorandum of consultations 
of June 5, 1995; arrangements contained in the exchange of letters dated March 31 
and April 3, 2000 (all provisionally applied).) 

Section 2 

Notwithstanding  section  1  of  this  Annex,  for  areas  that  are  not  encompassed  within  the 
definition  of  “territory”  in  Article  1  of  this  Agreement,  the  agreements  in  paragraphs  (d) 
(Denmark-United States), (f) (France-United States), and (t) (United Kingdom-United States) 
of that section shall continue to apply, according to their terms. 

Section 3 

Notwithstanding Article 3 of this Agreement, U.S. airlines shall not have the right to provide 
all-cargo services, that are not part of a service that serves the United States, to or from points 
in the Member States, except to or from points in the Czech Republic, the French Republic, 
the Federal Republic of Germany, the Grand Duchy of Luxembourg, the Republic of Malta, 
the Republic of Poland, the Portuguese Republic, and the Slovak Republic. 

Section 4 

Notwithstanding any other provisions of this Agreement, this section shall apply to scheduled 
and charter combination air transportation between Ireland and the United States with effect 
from  the  beginning  of  IATA  Winter  season  2006/2007  until  the  end  of  the  IATA  Winter 
season 2007/2008. 

a. 

(i)  Each  U.S.  and  Community  airline  may  operate  3  non-stop  flights 
between  the  United  States  and  Dublin  for  each  non-stop  flight  that  the 
airline operates between the United States and Shannon. This entitlement 
for  non-stop  Dublin  flights  shall  be  based  on  an  average  of  operations 
over the entire three-season transitional period. A flight shall be deemed 
to be a non-stop Dublin, or a non-stop Shannon, flight, according to the 
first point of entry into, or the last point of departure from, Ireland. 

(ii)  The requirement to serve Shannon in subparagraph (a)(i) of this Section 
inaugurates  scheduled  or  charter 
shall 
combination  service  between  Dublin  and  the  United  States,  in  either 

if  any  airline 

terminate 

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direction,  without  operating  at  least  one  non-stop  flight  to  Shannon  for 
every  three  non-stop  flights  to  Dublin,  averaged  over  the  transition 
period. 

b. 

c. 

For  services  between  the  United  States  and  Ireland,  Community  airlines  may 
serve only Boston, New York, Chicago, Los Angeles, and 3 additional points 
in  the  United  States,  to  be  notified  to  the  United  States  upon  selection  or 
change.  These  services  may  operate  via  intermediate  points  in  other  Member 
States or in third countries. 

Code  sharing  shall  be  authorized  between  Ireland  and  the  United  States  only 
via  other  points  in  the  European  Community.  Other  code-share  arrangements 
will be considered on the basis of comity and reciprocity. 

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ANNEX 2  

Concerning 

Cooperation With Respect to Competition Issues in the Air Transportation Industry 

Article 1 

The  cooperation  as  set  forth  in  this  Annex  shall  be  implemented  by  the  Department  of 
Transportation  of  the  United  States  of  America  and  the  Commission  of  the  European 
Communities  (hereinafter  referred  to  as  "the  Participants"),  consistent  with  their  respective 
functions  in  addressing  competition  issues  in  the  air  transportation  industry  involving  the 
United States and the European Community. 

Article 2 

Purpose 

The purpose of this cooperation is: 

1. 

2. 

3. 

4. 

To enhance mutual understanding of the application by the Participants of the laws, 
procedures  and  practices  under  their  respective  competition  regimes  to  encourage 
competition in the air transportation industry; 

To  facilitate  understanding  between  the  Participants  of  the  impact  of  air 
transportation  industry  developments  on  competition  in  the  international  aviation 
market; and 

To  reduce  the  potential  for  conflicts  in  the  Participants’  application  of  their 
respective  competition  regimes  to  agreements  and  other  cooperative  arrangements 
which have an impact on the transatlantic market 

To  promote  compatible  regulatory  approaches  to  agreements  and  other  cooperative 
arrangements  through  a  better  understanding  of  the  methodologies,  analytical 
techniques  including  the  definition  of  the  relevant  market(s)  and  analysis  of 
competitive  effects,  and  remedies  that  the  Participants  use  in  their  respective 
independent competition reviews. 

Article 3 

Definitions 

For the purpose of this Annex, the term “competition regime” means the laws, procedures and 
practices  that  govern  the  Participants’  exercise  of  their  respective  functions  in  reviewing 
agreements  and  other  cooperative  arrangements  among  airlines  in  the  international  market. 
For the European Community, this includes, but is not limited to, Articles 81, 82, and 85 of 
the  Treaty  Establishing  the  European  Community  and  their  implementing  Regulations 
pursuant  to  the  said  Treaty,  as  well  as  any  amendments  thereto.  For  the  Department  of 
Transportation, this includes, but is not limited to, sections 41308, 41309, and 41720 of Title 

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49 of the United States Code, and its implementing Regulations and legal precedents pursuant 
thereto. 

Article 4 

Areas of Cooperation 

Subject  to  the  qualifications  in  sub-paragraphs  1(a)  and  1(b)  of  Article  5,  the  types  of 
cooperation between the Participants shall include the following: 

(1) 

(2) 

(3) 

(4) 

Meetings between representatives of the Participants, to include competition experts, 
in  principle  on  a  semi-annual  basis,  for  the  purpose  of  discussing  developments  in 
the  air  transportation  industry,  competition  policy  matters  of  mutual  interest,  and 
analytical approaches to the application of competition law to international aviation, 
particularly  in  the  transatlantic  market.  The  above  discussions  may  lead  to  the 
development of a better understanding of the Participants’ respective approaches to 
competition  issues,  including  existing  commonalities  and  to  more  compatibility  in 
those approaches, in particular with respect to inter-carrier agreements.  

Consultations  at  any  time  between  the  Participants,  by  mutual  agreement  or  at  the 
request  of  either  Participant,  to  discuss  any  matter  related  to  this  Annex,  including 
specific cases. 

Each Participant may, at its discretion, invite representatives of other governmental 
authorities  to  participate  as  appropriate  in  any  meetings  or  consultations  held 
pursuant to paragraphs 1 or 2 above. 

Timely notifications of the following proceedings or matters, which in the judgment 
of  the  notifying  Participant  may  have  significant  implications  for  the  competition 
interests of the other Participant: 

a.  With respect to the Department of Transportation, (i) proceedings for review of 
applications  for  approval  of  agreements  and  other  cooperative  arrangements 
among  airlines  involving  international  air  transportation,  in  particular  for 
antitrust  immunity  involving  airlines  organized  under  the  laws  of  the  United 
States  and  the  European  Community,  and  (ii)  receipt  by  the  Department  of 
Transportation of a joint venture agreement pursuant to section 41720 of Title 
49 of the United States Code; and 

b.  With respect to the Commission of the European Communities, (i) proceedings 
for  review  of  agreements  and  other  cooperative  arrangements  among  airlines 
involving  international  air  transportation,  in  particular  for  alliance  and  other 
cooperative  agreements  involving  airlines  organized  under  the  laws  of  the 
United  States  and  the  European  Community,  and  (ii)  consideration  of 
individual or block exemptions from European Union competition law; 

(5) 

Notifications  of  the  availability,  and  any  conditions  governing  that  availability,  of 
information and data filed with a Participant, in electronic form or otherwise, that, in 
the  judgment  of  that  Participant,  may  have  significant  implications  for  the 
competition interests of the other Participant; and 

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(6) 

Notifications of such other activities relating to air transportation competition policy 
as may seem appropriate to the notifying Participant. 

Article 5 

Use and Disclosure of Information 

(1) 

Notwithstanding any other provision of this Annex, neither Participant is expected to 
provide  information  to  the  other  Participant  if  disclosure  of  the  information  to  the 
requesting Participant: 

a. 

is prohibited by the laws, regulations or practices of the Participant possessing 
the information; or 

b.  would  be  incompatible  with  important  interests  of  the  Participant  possessing 

the information. 

(2) 

Each  Participant  shall  to  the  extent  possible  maintain  the  confidentiality  of  any 
information  provided  to  it  in  confidence  by  the  other  Participant  under  this  Annex 
and to oppose any application for disclosure of such information to a third party that 
is  not  authorized  by  the  supplying  Participant  to  receive  the  information.  Each 
Participant intends to notify the other Participant whenever any information proposed 
to  be  exchanged  in  discussions  or  in  any  other  manner  may  be  required  to  be 
disclosed in a public proceeding. 

(3) 

Where  pursuant  to  this  Annex  a  Participant  provides  information  on  a  confidential 
basis to the other Participant for the purposes specified in Article 2, that information 
should be used by the receiving Participant only for that purpose. 

Article 6 

Implementation 

(1) 

Each Participant is designating a representative to be responsible for coordination of 
activities established under this Annex. 

(2) 

This Annex, and all activities undertaken by a Participant pursuant to it, are -- 

a. 

b. 

intended  to  be  implemented  only  to  the  extent  consistent  with  all  laws, 
regulations, and practices applicable to that Participant; and 

intended  to  be  implemented  without  prejudice  to  the  Agreement  between  the 
European  Communities  and  the  Government  of  the  United  States  of  America 
Regarding the Application of their Competition Laws. 

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