Air Transport Agreement - Annexes - Declarations - Protocol
Date: 2007-04-30
Institutions: Austria, Belgium, Bulgaria, Cyprus, Czechia, Denmark, Estonia, European Community, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom, United States
Subjects: EU Member State, United States, agreement (EU), air safety, air space, air traffic control, air transport

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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 BULGARIA,

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,

MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE SLOVAK REPUBLIC,

THE REPUBLIC OF SLOVENIA,

THE KINGDOM OF SPAIN,

THE KINGDOM OF SWEDEN,

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,

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being parties to the Treaty establishing the European Community and being Member States of the European Union (here-
inafter 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 travelling 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 liberalised 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 7 December 1944;

RECOGNISING that government subsidies may adversely affect airline competition and may jeopardize the basic objec-
tives 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 Unifica-
tion of Certain Rules for International Carriage by Air, done at Montreal 28 May 1999;

INTENDING to build upon the framework of existing agreements with the goal of opening access to markets and maxi-
mising benefits for consumers, airlines, labour, and communities on both sides of the Atlantic;

RECOGNISING the importance of enhancing the access of their airlines to global capital markets in order to strengthen
competition and promote the objectives of this Agreement;

INTENDING to establish a precedent of global significance to promote the benefits of liberalisation in this crucial eco-
nomic sector;

HAVE AGREED AS FOLLOWS:

3.

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

Article 1

Definitions

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

(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 Mem-
ber States as is relevant to the issue in question,

1.

‘Agreement’ means this Agreement, its Annexes and Appen-
dix, and any amendments thereto;

and

2.

‘air transportation’ means the carriage by aircraft of passen-
gers, baggage, cargo, and mail, separately or in combina-
tion, held out to the public for remuneration or hire;

(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;

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4.

‘full cost’ means the cost of providing service plus a reason-
able charge for administrative overhead;

Article 3

Grant of rights

5.

‘international air transportation’ means air transportation
that passes through the airspace over the territory of more
than one State;

Each Party grants to the other Party the following rights
1.
for the conduct of international air transportation by the airlines
of the other Party:

6.

‘Party’ means either the United States or the European Com-
munity and its Member States;

(a)

the right to fly across its territory without landing;

7.

8.

9.

‘price’ means any fare, rate or charge for the carriage of pas-
sengers, baggage and/or cargo (excluding mail) in air trans-
portation, including surface transportation in connection
with international air transportation, if applicable, charged
by airlines, including their agents, and the conditions gov-
erning the availability of such fare, rate or charge;

‘stop for non-traffic purposes’ means a landing for any pur-
pose other than taking on or discharging passengers, bag-
gage, cargo and/or mail in air transportation;

‘territory’ means, for the United States, the land areas (main-
land and islands), internal waters and territorial sea under
its sovereignty or jurisdiction, and, for the European Com-
munity 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 suc-
cessor instrument; application of this Agreement to Gibral-
tar 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, and to the
continuing suspension of Gibraltar Airport from European
Community aviation measures existing as at 18 September
2006 as between Member States, in accordance with the
Ministerial statement on Gibraltar Airport agreed in Córdoba
on September 2006;

and

10.

‘user charge’ means a charge imposed on airlines for the pro-
vision of airport, airport environmental, air navigation, or
aviation security facilities or services including related ser-
vices and facilities.

Article 2

Fair and equal opportunity

(b)

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

(c)

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

for airlines of the United States (hereinafter US 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);

for airlines of the European Community and its Mem-
ber 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; for all-cargo service, between
the United States and any point or points; and, for com-
bination services, between any point or points in the
United States and any point or points in any member
of the European Common Aviation Area (hereinafter
the ECAA) as of the date of signature of this Agreement;

(i)

(ii)

and

(d)

the rights otherwise specified in this Agreement.

2.

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

(a) operate flights in either or both directions;

(b) combine different

flight numbers within one aircraft

operation;

(c)

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

(d) omit stops at any point or points;

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

(e)

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

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(f)

serve points behind any point in its territory with or with-
out 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

3.
subject to the requirements that:

for US airlines, with the exception of all-cargo services, the
transportation is part of a service
the
United States,

serves

that

and

(a)

(b)

6.

Nothing in this Agreement shall be deemed to confer on:

(a) US 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 ter-
ritory of that Member State;

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

Community airlines’ access to US Government procured

7.
transportation shall be governed by Annex 3.

Article 4

Authorisation

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

and (ii)

for Community airlines, with the exception of (i) all-cargo
services
combination services between the
United States and any member of the ECAA as of the date
of signature of this Agreement, the transportation is part of
a service that serves a Member State.

(a)

for a US airline, substantial ownership and effective control
of that airline are vested in the United States, US nationals,
or both, and the airline is licensed as a US airline and has its
principal place of business in US territory;

4.
Each Party shall allow each airline to determine the fre-
quency and capacity of the international air transportation it
offers based upon commercial considerations in the market-
place. 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 15) reasons under uni-
form conditions consistent with Article 15 of the Convention.

5.
Any airline may perform international air transportation
without any limitation as to change, at any point, in type or num-
ber of aircraft operated; provided that, (a) for US airlines, with
the exception of all-cargo services, the transportation is part of a
service that serves the United States, and (b) for Community air-
lines, with the exception of (i) all-cargo services and (ii) combi-
nation services between the United States and a member of the
ECAA as of the date of signature of this Agreement, the trans-
portation is part of a service that serves a Member State.

(b)

for a Community airline, substantial ownership and effec-
tive control of that airline are vested in a Member State or
States, nationals of such a State or States, or both, and the
airline is licensed as a Community airline and has its princi-
pal place of business in the territory of the European
Community;

(c)

the airline is qualified to meet the conditions prescribed
under the laws and regulations normally applied to the
operation of international air transportation by the Party
considering the application or applications;

and

(d)

the provisions set forth in Article 8 (Safety) and Article 9
(Security) are being maintained and administered.

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Article 5

Revocation of authorisation

such aircraft while within its territory, shall be applied to the air-
craft utilised by the airlines of the other Party, and shall be com-
plied with by such aircraft upon entering or departing from or
while within the territory of the first Party.

Either Party may revoke, suspend or limit the operating
1.
authorisations or technical permissions or otherwise suspend or
limit the operations of an airline of the other Party where:

(a)

(b)

for a US airline, substantial ownership and effective control
of that airline are not vested in the United States, US nation-
als, or both, or the airline is not licensed as a US airline or
does not have its principal place of business in US territory;

for a Community airline, substantial ownership and effec-
tive control of that airline are not vested in a Member State
or States, nationals of such a State or States, or both, or the
airline is not licensed as a Community airline or does not
have its principal place of business in the territory of the
European Community;

or

(c)

that airline has failed to comply with the laws and regula-
tions referred to in Article 7 (Application of Laws) of this
Agreement.

Unless immediate action is essential to prevent further non-
2.
compliance with subparagraph 1(c) of this Article, the rights
established by this Article shall be exercised only after consulta-
tion with the other Party.

3.
This Article does not limit the rights of either Party to with-
hold, revoke, limit or impose conditions on the operating autho-
risation or technical permission of an airline or airlines of the
other Party in accordance with the provisions of Article 8 (Safety)
or Article 9 (Security).

Article 6

Additional matters related to ownership, investment, and
control

Notwithstanding any other provision in this Agreement, the Par-
ties shall implement the provisions of Annex 4 in their decisions
under their respective laws and regulations concerning owner-
ship, investment and control.

Article 7

Application of laws

1.
The laws and regulations of a Party relating to the admis-
sion to or departure from its territory of aircraft engaged in inter-
national air navigation, or to the operation and navigation of

2. 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 Par-
ty’s airlines.

Article 8

Safety

The responsible authorities of the Parties shall recognise as
1.
valid, for the purposes of operating the air transportation pro-
vided for in this Agreement, certificates of airworthiness, certifi-
cates of competency, and licences issued or validated by each
other and still in force, provided that the requirements for such
certificates or licences at least equal the minimum standards that
may be established pursuant to the Convention. The responsible
authorities may, however, refuse to recognise as valid for pur-
poses of flight above their own territory, certificates of compe-
tency and licences granted to or validated for their own nationals
by such other authorities.

2.
The responsible authorities of a Party may request consul-
tations with other responsible authorities concerning the safety
standards maintained by those authorities relating to aeronauti-
cal facilities, aircrews, aircraft, and operation of the airlines over-
seen by those authorities. Such consultations shall take place
within 45 days of the request unless otherwise agreed. If follow-
ing 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 nec-
essary to conform with these minimum standards, and those
authorities shall take appropriate corrective action. The request-
ing responsible authorities reserve the right to withhold, revoke
or limit the operating authorisation or technical permission of
an airline or airlines for which those authorities provide safety
oversight in the event those authorities do not take such appro-
priate corrective action within a reasonable time and to take
immediate action as to such airline or airlines if essential to pre-
vent further non-compliance with the duty to maintain and
administer the aforementioned standards and requirements
resulting in an immediate threat to flight safety.

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The European Commission shall simultaneously receive all

3.
requests and notifications under this Article.

Nothing in this Article shall prevent

the responsible
4.
authorities of the Parties from conducting safety discussions,
including those relating to the routine application of safety stan-
dards and requirements or to emergency situations that may arise
from time to time.

5. With full regard and mutual respect for each other’s sover-
eignty, a Party may adopt security measures for entry into its ter-
ritory. Where possible, that Party shall take into account the
security measures already applied by the other Party and any
views that the other Party may offer. Each Party recognises, how-
ever, 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.

Article 9

Security

In accordance with their rights and obligations under inter-
1.
national 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 Agree-
ment. Without limiting the generality of their rights and obliga-
tions under international law, the Parties shall in particular act
in conformity with the following agreements: the Convention on
Offences and Certain Other Acts Committed on Board Aircraft,
done at Tokyo, 14 September 1963, the Convention for the Sup-
pression of Unlawful Seizure of Aircraft, done at The Hague,
16 December 1970, the Convention for the Suppression of
Unlawful Acts against the Safety of Civil Aviation, done at Mon-
treal, 23 September 1971, and the Protocol for the Suppression
of Unlawful Acts of Violence at Airports Serving International
Civil Aviation, done at Montreal, 24 February 1988.

2.
The Parties shall provide upon request all necessary assis-
tance 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 navi-
gation facilities.

3.
The Parties shall, in their mutual relations, act in confor-
mity with the aviation security standards and appropriate recom-
mended practices established by the International Civil Aviation
Organisation and designated as Annexes to the Convention; they
shall require that operators of aircraft of their registries, opera-
tors of aircraft who have their principal place of business or per-
manent 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
4.
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 secu-
rity of civil aviation. Each Party agrees that the security provi-
sions 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.

A Party may take emergency measures including amend-
6.
ments to meet a specific security threat. Such measures shall be
notified immediately to the responsible authorities of the other
Party.

7.
The Parties underline the importance of working towards
compatible practices and standards as a means of enhancing air
transport security and minimising regulatory divergence. To this
end, the Parties shall fully utilise and develop existing channels
for the discussion of current and proposed security mea-
sures. The Parties expect that the discussions will address, among
other issues, new security measures proposed or under consider-
ation by the other Party, including the revision of security mea-
sures 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 com-
patibility 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 initia-
tives and requirements.

8. 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 pos-
sible 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 appropri-
ate to address those security concerns.

9. When an incident or threat of an incident of unlawful sei-
zure of aircraft or other unlawful acts against the safety of pas-
sengers, 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.

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10. 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
authorisation 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.

11.
Separate from airport assessments undertaken to deter-
mine conformity with the aviation security standards and prac-
tices referred to in paragraph 3 of this Article, a Party may request
the cooperation of the other Party in assessing whether particu-
lar 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 bag-
gage, 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 10

Commercial opportunities

1.
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
2.
with the laws and regulations of the other Party relating to entry,
residence, and employment, to bring in and maintain in the ter-
ritory of the other Party managerial, sales, technical, operational,
and other specialist staff who are required to support the provi-
sion of air transportation.

(b) The rights under (i) and (ii) in subparagraph (a) above
shall be subject only to specific constraints of avail-
able space or capacity arising from the need to main-
tain safe operation of
the airport. Where such
constraints preclude self-handling and where there is
no effective competition between suppliers that pro-
vide ground-handling 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 trans-
4.
portation in the territory of the other Party directly and/or, at
the airline’s discretion, through its sales agents or other interme-
diaries appointed by the airline. Each airline shall have the right
to sell such transportation, and any person shall be free to pur-
chase such transportation, in the currency of that territory or in
freely convertible currencies.

5.
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 trans-
actions and remittance on the date the carrier makes the initial
application for remittance.

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 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 cooperative marketing
arrangements, such as blocked-space or code-sharing arrange-
ments, with:

3.

(a) Without prejudice to subparagraph (b) below, each air-
line shall have in relation to ground handling in the
territory of the other Party:

(a) any airline or airlines of the Parties;

(i)

the right to perform its own ground-handling
(self-handling) or, at its option

(b) any airline or airlines of a third country;

(ii)

the right to select among competing suppliers that
provide ground-handling 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.

and

(c) a surface (land or maritime) transportation provider of any

country;

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

Article 11

Customs duties and charges

8.
The airlines of each Party shall be entitled to enter into
franchising or branding arrangements with companies, includ-
ing airlines, of either Party or third countries, provided that the
airlines hold the appropriate authority and meet the conditions
prescribed under the laws and regulations normally applied by
the Parties to such arrangements. Annex 5 shall apply to such
arrangements.

9.
The airlines of each Party may enter into arrangements for
the provision of aircraft with crew for international air transpor-
tation with:

(a) any airlines or airlines of the Parties;

and

(b) any airlines or airlines of a third country;

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 equipment, fuel, lubri-
cants, 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 des-
tined 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 interna-
tional air transportation shall be exempt, on the basis of reci-
procity, 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 para-
graph 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;

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.

(b) ground equipment and spare parts (including engines) intro-
duced into the territory of a Party for the servicing, mainte-
nance, or repair of aircraft of an airline of the other Party
used in international air transportation;

air

transportation any

10.
Notwithstanding any other provision of this Agreement,
airlines and indirect providers of cargo transportation of the Par-
ties shall be permitted, without restriction, to employ in connec-
tion with international
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 facili-
ties. Airlines may elect to perform their own surface transporta-
tion or to provide it through arrangements with other surface
carriers, including surface transportation operated by other air-
lines and indirect providers of cargo air transportation. Such
inter-modal 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.

(c)

fuel, lubricants and consumable technical supplies intro-
duced into or supplied in the territory of a Party for use in
an aircraft of an airline of the other Party engaged in inter-
national air transportation, even when these supplies are to
be used on a part of the journey performed over the terri-
tory 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.

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Equipment and supplies referred to in paragraphs 1 and 2
3.
of this Article may be required to be kept under the supervision
or control of the appropriate authorities.

charges may include a reasonable return on assets, after depre-
ciation. Facilities and services for which charges are made shall
be provided on an efficient and economic basis.

4.
The exemptions provided by this Article shall also be avail-
able 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
5.
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.

6.
In the event that two or more Member States envisage
applying to the fuel supplied to aircraft of US airlines in the ter-
ritories 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 para-
graph 4(e) of Article 18.

7.
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 gov-
ernments 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 govern-
mental unit or authority and urge that those views be given
appropriate consideration.

Article 12

User charges

User charges that may be imposed by the competent charg-
1.
ing 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 favourable than the most favour-
able terms available to any other airline at the time the charges
are assessed.

3.
Each Party shall encourage consultations between the com-
petent charging authorities or bodies in its territory and the air-
lines 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 accor-
dance 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 pro-
posal 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
4.
pursuant to Article 19, 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.

Article 13

Pricing

1.
Prices for air transportation services operated pursuant to
this Agreement shall be established freely and shall not be sub-
ject 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 US airline for international air trans-
portation 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 pro-
vide immediate access, on request, to information on histori-
cal, existing, and proposed prices to the responsible
authorities of the Parties in a manner and format acceptable
to those authorities.

Article 14

Government subsidies and support

2.
User charges imposed on the airlines of the other Party may
reflect, but shall not exceed, the full cost to the competent charg-
ing authorities or bodies of providing the appropriate airport,
airport environmental, air navigation, and aviation security facili-
ties and services at the airport or within the airport system. Such

1.
The Parties recognise that government subsidies and sup-
port may adversely affect the fair and equal opportunity of air-
lines to compete in providing the international air transportation
governed by this Agreement.

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If one Party believes that a government subsidy or support
2.
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. Fur-
thermore, it may request a meeting of the Joint Committee as
provided in Article 18, to consider the issue and develop appro-
priate responses to concerns found to be legitimate.

3.
Each Party may approach responsible governmental enti-
ties in the territory of the other Party, including entities at the
State, provincial or local level, if it believes that a subsidy or sup-
port 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.

4.
Issues raised under this Article could include, for example,
capital injections, cross-subsidisation, grants, guarantees, owner-
ship, relief or tax exemption, by any governmental entities.

Article 15

Environment

1.
The Parties recognise the importance of protecting the envi-
ronment when developing and implementing international avia-
tion policy. The Parties recognise that the costs and benefits of
measures to protect the environment must be carefully weighed
in developing international aviation policy.

Article 16

Consumer protection

The Parties affirm the importance of protecting consumers, and
either Party may request a meeting of the Joint Committee to dis-
cuss consumer protection issues that the requesting Party identi-
fies as significant.

Article 17

Computer reservation systems

1.
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.

2.
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.

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 terri-
tory of the other Party as do owners/operators of that Party.

Article 18

The Joint Committee

2. When a Party is considering proposed environmental mea-
sures, 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.

3. When environmental measures are established, the avia-
tion environmental standards adopted by the International Civil
Aviation Organisation in Annexes to the Convention shall be fol-
lowed 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 envi-
4.
ronmental protection raises concerns for the application or
implementation of this Agreement, it may request a meeting of
the Joint Committee, as provided in Article 18, to consider the
issue and develop appropriate responses to concerns found to
be legitimate.

1.
A Joint Committee consisting of representatives of the Par-
ties shall meet at least once a year to conduct consultations relat-
ing to this Agreement and to review its implementation.

2.
A Party may also request a meeting of the Joint Committee
to seek to resolve questions relating to the interpretation or appli-
cation of this Agreement. However, with respect to Article 20 or
Annex 2, the Joint Committee may consider questions only relat-
ing to the refusal by either Participant to implement the commit-
ments 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.

3.
The Joint Committee shall review, no later than at its first
annual meeting and thereafter as appropriate, the overall imple-
mentation 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 9,
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.

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4.

The Joint Committee shall also develop cooperation by:

(a)

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

(b) considering the social effects of the Agreement as it is imple-
mented and developing appropriate responses to concerns
found to be legitimate;

Article 19

Arbitration

1.
Any dispute relating to the application or interpretation of
this Agreement, other than issues arising under Article 20 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 dis-
pute shall, at the request of either Party, be submitted to arbitra-
tion in accordance with the procedures set forth below.

(c)

considering potential areas for the further development of
the Agreement, including the recommendation of amend-
ments to the Agreement;

Unless the Parties otherwise agree, arbitration shall be by a

2.
tribunal of three arbitrators to be constituted as follows:

(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 11;

(f) developing, within one year of provisional application,
approaches to regulatory determinations with regard to air-
line fitness and citizenship, with the goal of achieving recip-
rocal recognition of such determinations;

(g) developing a common understanding of the criteria used by
the Parties in making their respective decisions in cases con-
cerning airline control, to the extent consistent with confi-
dentiality requirements;

(h)

fostering consultation, where appropriate, on air transport
issues dealt with in international organisations and in rela-
tions with third countries,
including consideration of
whether to adopt a joint approach;

(i)

taking, on the basis of consensus, the decisions to which
paragraph 3 of Article 1 of Annex 4 and paragraph 3 of
Article 2 of Annex 4 refer.

The Parties share the goal of maximising the benefits for
5.
consumers, airlines, labour, and communities on both sides of
the Atlantic by extending this Agreement to include third coun-
tries. To this end, the Joint Committee shall work to develop a
proposal regarding the conditions and procedures, including any
necessary amendments to this Agreement, that would be required
for third countries to accede to this Agreement.

The Joint Committee shall operate on the basis of

6.
consensus.

(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 agree-
ment 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 arbi-
trator 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 Organisation
to appoint the necessary arbitrator or arbitrators within 30
days of receipt of that request. If the President of the Coun-
cil of the International Civil Aviation Organisation is a
national of either the United States or a Member State, the
most senior Vice President of that Council who is not dis-
qualified on that ground shall make the appointment.

3.
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 determina-
tion. 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 pre-
cise 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 defence shall be submitted 40 days thereafter. Any reply
by the claimant shall be submitted within 15 days of the
submission of the statement of defence. Any reply by the
respondent shall be submitted within 15 days thereafter.

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(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.

The Joint Committee shall be briefed annually on the results

4.
of the cooperation under Annex 2.

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 deci-
sion of the majority of the tribunal shall prevail.

6.
The Parties may submit requests for clarification of the deci-
sion within 10 days after it is rendered and any clarification given
shall be issued within 15 days of such request.

7.
If the tribunal determines that there has been a violation of
this Agreement and the responsible Party does not cure the vio-
lation, 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 appli-
cation 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

8.
including the fees and
the tribunal,
expenses of the arbitrators, shall be shared equally by the Par-
ties. Any expenses incurred by the President of the Council of
the International Civil Aviation Organisation, or by any Vice
President of that Council, in connection with the procedures of
paragraph 2(b) of this Article shall be considered to be part of
the expenses of the tribunal.

Article 20

Competition

1.
The Parties recognise 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 recognise that differences may arise concerning
2.
the application of their respective competition regimes to inter-
national aviation affecting the transatlantic market, and that com-
petition among airlines in that market might be fostered by
minimising those differences.

Article 21

Second stage negotiations

1.
The Parties share the goal of continuing to open access to
markets and to maximise benefits for consumers, airlines, labour,
and communities on both sides of the Atlantic, including the
facilitation of investment so as to better reflect the realities of a
global aviation industry, the strengthening of the transatlantic air
transportation system, and the establishment of a framework that
will encourage other countries to open their own air services
markets. The Parties shall begin negotiations not later than 60
days after the date of provisional application of this Agreement,
with the goal of developing the next stage expeditiously.

2.
To that end, the agenda for the second stage negotiations
shall include the following items of priority interest to one or
both Parties:

(a)

further liberalisation of traffic rights;

(b) additional foreign investment opportunities;

(c)

effect of environmental measures and infrastructure con-
straints on the exercise of traffic rights;

(d)

further access to Government-financed air transportation;

and

(e) provision of aircraft with crew.

3.
The Parties shall review their progress towards a second
stage agreement no later than 18 months after the date when
the negotiations are due to start in accordance with para-
graph 1. If no second stage agreement has been reached by the
Parties within 12 months of the start of the review, each Party
reserves the right thereafter to suspend rights specified in this
Agreement. Such suspension shall take effect no sooner than the
start of the International Air Transport Association (IATA) traf-
fic season that commences no less than 12 months after the date
on which notice of suspension is given.

Article 22

Relationship to other agreements

3.
The Parties recognise that cooperation between their
respective competition authorities serves to promote competi-
tion in markets and has the potential to promote compatible
regulatory results and to minimise differences in approach with
respect to their respective competition reviews of inter-carrier
agreements. Consequently, the Parties shall further this coopera-
tion to the extent feasible, taking into account the different
responsibilities, competencies and procedures of the authorities,
in accordance with Annex 2.

1.
During the period of provisional application pursuant to
Article 25 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.

2.
Upon entry into force pursuant to Article 26 of this Agree-
ment, 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.

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If the Parties become parties to a multilateral agreement,
3.
or endorse a decision adopted by the International Civil Avia-
tion Organisation or another international organisation, 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 23

Termination

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

Article 24

Registration with ICAO

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

Article 25

Provisional application

Pending entry into force pursuant to Article 26:

1. The Parties agree to apply this Agreement from 30 March

2008.

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 26

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 authorised, have signed this Agreement.

DONE at Brussels on the twenty-fifth day of April 2007 and at Washington on the thirtieth day of April
2007, in duplicate.

За Репyблика Бългaрия

Pour le Royaume de Belgique
Voor het Koninkrijk België
Für das Königreich Belgien

Cette signature engage également la Communauté française, la Communauté flamande, la Communauté germanophone,
la Région wallonne, la Région flamande et la Région de Bruxelles-Capitale.

Deze handtekening verbindt eveneens de Vlaamse Gemeenschap, de Franse Gemeenschap, de Duitstalige Gemeenschap,
het Vlaamse Gewest, het Waalse Gewest en het Brussels Hoofdstedelijk Gewest.

Diese Unterschrift bindet zugleich die Deutschsprachige Gemeinschaft, die Flämische Gemeinschaft, die Französische
Gemeinschaft, die Wallonische Region, die Flämische Region und die Region Brüssel-Hauptstadt.

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Za Českou republiku

På Kongeriget Danmarks vegne

Für die Bundesrepublik Deutschland

Eesti Vabariigi nimel

Για την Ελληνική Δημοκρατία

Por el Reino de España

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Pour la République française

Thar cheann Na hÉireann
For Ireland

Per la Repubblica italiana

Για την Κυπριακή Δημοκρατία

Latvijas Republikas vārdā

Lietuvos Respublikos vardu

Pour le Grand-Duché de Luxembourg

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A Magyar Köztársaság részéről

Għal Malta

Voor het Koninkrijk der Nederlanden

Für die Republik Österreich

W imieniu Rzeczypospolitej Polskiej

Pela Repύblica Portuguesa

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Pentru România

Za Republiko Slovenijo

Za Slovenskύ republiku

Suomen tasavallan puolesta

För Konungariket Sverige

For the United Kingdom of Great Britain and Northerm Ireland

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За Европейсkatа общнoст
For the European Community
Por la Comunidad Europea
Za Evropské společenstvί
For Det Europæiske Fællesskab
Für die Europäische Gemeinschaft
Euroopa Ühenduse nimel
Για την Ευρωπαϊκή Κοινότητα
Pour la Communauté européenne
Per la Comunità europea
Eiropas Kopienas vārdā
Europos bendrijos vardu
az Európai Közösség részéről
Għall-Komunità Ewropea
Voor de Europese Gemeenschap
W imieniu Wspόlnoty Europejskiej
Pela Comunidade Europeia
Pentru Comunitatea Europeană
Za Eurόpske spoločenstvo
za Evropsko skupnost
Euroopan yhteisön puolesta
På Europeiska gemenskapens vägnar

For the United States of America

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ANNEX 1

Section 1

As provided in Article 22 of this Agreement, the following bilateral agreements between the United States and Member
States shall be suspended or superseded by this Agreement:

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

(b) The Kingdom of Belgium: Air transport agreement, effected by exchange of notes at Washington, 23 October 1980;

amended 22 September and 12 November 1986; amended 5 November 1993 and 12 January 1994.

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

(c) The Republic of Bulgaria: Civil aviation security Agreement, signed at Sofia 24 April 1991.

(d) The Czech Republic: Air transport agreement, signed at Prague, 10 September 1996; amended 4 June 2001 and

14 February 2002.

(e) The Kingdom of Denmark: Agreement relating to air transport services, effected by exchange of notes at Washing-

ton, 16 December 1944; amended 6 August 1954; amended 16 June 1995.

(f)

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

(g) The French Republic: Air transport agreement, signed at Washington, 18 June 1998; amended 10 October 2000;

amended 22 January 2002.

(h) The Federal Republic of Germany: Air transport agreement and exchanges of notes, signed at Washington, 7 July

1955; amended 25 April 1989.

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

(i)

(j)

The Hellenic Republic: Air transport agreement, signed at Athens, 31 July 1991; extended until 31 July 2007 by
exchange of notes of 22 and 28 June 2006.

The Republic of Hungary: Air transport agreement and memorandum of understanding, signed at Budapest, 12 July
1989; extended until 12 July 2007 by exchange of notes of 11 and 20 July 2006.

(k)

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

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

(l)

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

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

(m) The Grand Duchy of Luxembourg: Air transport agreement, signed at Luxembourg, 19 August 1986; amended 6 June

1995; amended 13 and 21 July 1998.

(n) Malta: Air transport agreement, signed at Washington, 12 October 2000.

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

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

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

(r) Romania: Air transport agreement, signed at Washington, 15 July 1998.

(s)

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

(t)

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

(u) The Kingdom of Sweden: Agreement relating to air transport services, effected by exchange of notes at Washington,

16 December 1944; amended 6 August 1954; amended 16 June 1995.

(v) The United Kingdom of Great Britain and Northern Ireland: Agreement concerning air services, and exchange of
letters, signed at Bermuda, 23 July 1977; agreement relating to North Atlantic air fares, concluded 17 March 1978;
agreement amending the 1977 agreement, concluded 25 April 1978; agreement modifying and extending the 1978
agreement relating to North Atlantic air fares, concluded 2 and 9 November 1978; agreement amending the 1977
agreement, concluded 4 December 1980; agreement amending the 1977 agreement, concluded 20 February 1985;
agreement amending Article 7, Annex 2, and Annex 5 of the 1977 agreement, concluded 25 May 1989; agreement
concerning amendments of the 1977 agreement, termination of the US/UK Arbitration Concerning Heathrow Air-
port 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 11 March 1994;
agreement amending the 1977 agreement, concluded 27 March 1997.

(Arrangements, being provisionally applied, contained in the memorandum of consultations dated 11 September
1986; arrangements contained in the exchange of letters dated 27 July 1990; arrangements contained in the memo-
randum of consultations of 11 March 1991; arrangements contained in the exchange of letters dated 6 October 1994;
arrangements contained in the memorandum of consultations of 5 June 1995; arrangements contained in the exchange
of letters dated 31 March and 3 April 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 (e) (Denmark–United States), (g) (France–United States), and (v) (United
Kingdom–United States) of that section shall continue to apply, according to their terms.

Section 3

Notwithstanding Article 3 of this Agreement, US 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, Malta, the Repub-
lic 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 US and Community airline may operate three 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.

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

For services between the United States and Ireland, Community airlines may serve only Boston, New York, Chicago,
Los Angeles, and three 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.

(c) Code sharing shall be authorised between Ireland and the United States only via other points in the European Com-

munity. 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;

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

and

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 analy-
sis 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 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 subparagraphs 1(a) and 1(b) of Article 5, the types of cooperation between the Participants
shall include the following:

1. 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, particu-
larly 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 compatibil-
ity in those approaches, in particular with respect to inter-carrier agreements.

2.

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.

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3.

4.

Each Participant may, at its discretion, invite representatives of other governmental authorities to participate as appro-
priate 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 organised under the laws of the United States and the Euro-
pean 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 alli-
ance and other cooperative agreements involving airlines organised under the laws of the United States and the
European Community, and (ii) consideration of individual or block exemptions from European Union competi-
tion 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 implica-
tions for the competition interests of the other Participant;

and

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

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

1.
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 confi-
dence by the other Participant under this Annex and to oppose any application for disclosure of such information to a
third party that is not authorised 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

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

1.
Annex.

2.

(a)

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

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

and

(b)

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

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ANNEX 3

Concerning US Government procured transportation

Community airlines shall have the right to transport passengers and cargo on scheduled and charter flights for which a US
Government civilian department, agency, or instrumentality (1) obtains the transportation for itself or in carrying out an
arrangement under which payment is made by the Government or payment is made from amounts provided for the use
of the Government, or (2) provides the transportation to or for a foreign country or international or other organisation
without reimbursement, and that transportation is (a) between any point in the United States and any point in a Member
State, except — with respect to passengers only — between points for which there is a city-pair contract fare in effect,
or (b) between any two points outside the United States. This paragraph shall not apply to transportation obtained or
funded by the Secretary of Defence or the Secretary of a military department.

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ANNEX 4

Concerning additional matters related to ownership, investment and control

Article 1

Ownership of airlines of a Party

Ownership by nationals of a Member State or States of the equity of a US airline shall be permitted, subject to two
1.
limitations. First, ownership by all
foreign nationals of more than 25 % of a corporation’s voting equity is
prohibited. Second, actual control of a US airline by foreign nationals is also prohibited. Subject to the overall 25 % limi-
tation on foreign ownership of voting equity:

(a)

ownership by nationals of a Member State or States of:

(i)

as much as 25 % of the voting equity;

and/or

(ii)

as much as 49,9 % of the total equity

of a US airline shall not be deemed, of itself, to constitute control of that airline;

and

(b) ownership by nationals of a Member State or States of 50 % or more of the total equity of a US airline shall not be

presumed to constitute control of that airline. Such ownership shall be considered on a case-by-case basis.

2.
Ownership by US nationals of a Community airline shall be permitted subject to two limitations. First, the airline
must be majority owned by Member States and/or by nationals of Member States. Second, the airline must be effectively
controlled by such States and/or such nationals.

3.
For the purposes of paragraph (b) of Article 4 and subparagraph 1(b) of Article 5 of this Agreement, a member of
the ECAA as of the date of signature of this Agreement and citizens of such a member shall be treated as a Member State
and its nationals, respectively. The Joint Committee may decide that this provision shall apply to new members of the
ECAA and their citizens.

4.
Notwithstanding paragraph 2, the European Community and its Member States reserves the right to limit invest-
ments by US nationals in the voting equity of a Community airline made after the signature of this Agreement to a level
equivalent to that allowed by the United States for foreign nationals in US airlines, provided that the exercise of that right
is consistent with international law.

Article 2

Ownership and control of third-country airlines

1.
Neither Party shall exercise any available rights under air services arrangements with a third country to refuse, revoke,
suspend or limit authorisations or permissions for any airlines of that third country on the grounds that substantial own-
ership of that airline is vested in the other Party, its nationals, or both.

2.
The United States shall not exercise any available rights under air services arrangements to refuse, revoke, suspend or
limit authorisations or permissions for any airline of the Principality of Liechtenstein, the Swiss Confederation, a member
of the ECAA as of the date of signature of this Agreement, or any country in Africa that is implementing an Open-Skies
air services agreement with the United States as of the date of signature of this Agreement, on the grounds that effective
control of that airline is vested in a Member State or States, nationals of such a State or States, or both.

The Joint Committee may decide that neither Party shall exercise the rights referred to in paragraph 2 of this Article

3.
with respect to airlines of a specific country or countries.

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Article 3

Control of airlines

1.
The rules applicable in the European Community on ownership and control of Community air carriers are currently
laid down in Article 4 of Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers. Under this
Regulation, responsibility for granting an Operating Licence to a Community air carrier lies with the Member States. Mem-
ber States apply Regulation 2407/92 in accordance with their national regulations and procedures.

2.
The rules applicable in the United States are currently laid down in Sections 40102(a)(2), 41102 and 41103 of
Title 49 of the United States Code (USC), which require that licences for a US ‘air carrier’ issued by the Department of
Transportation, whether a certificate, an exemption, or commuter licence, to engage in ‘air transportation’ as a common
carrier, be held only by citizens of the United States as defined in 49 USC §40102(a)(15). That section requires that the
president and two-thirds of the board of directors and other managing officers of a corporation be US citizens, that at least
75 % of the voting stock be owned by US citizens, and that the corporation be under the actual control of US citi-
zens. The requirement must be met initially by an applicant, and continue to be met by a US airline holding a licence.

3.

The practice followed by each Party in applying its laws and regulations is set out in the Appendix to this Annex.

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Appendix to Annex 4

1.

2.

3.

4.

In the United States, citizenship determinations are necessary for all US air carrier applicants for a certificate, exemp-
tion, or commuter licence. An initial application for a licence is filed in a formal public docket, and processed ‘on the
record’ with filings by the applicant and any other interested parties. The Department of Transportation renders a
final decision by an Order based on the formal public record of the case, including documents for which confidential
treatment has been granted. A ‘continuing fitness’ case may be handled informally by the DOT, or may be set for
docketed procedures similar to those used for initial applications.

The DOT’s determinations evolve through a variety of precedents, which reflect, among other things, the changing
nature of financial markets and investment structures and the DOT’s willingness to consider new approaches to for-
eign investment that are consistent with US law. The DOT works with applicants to consider proposed forms of
investment and to assist them in fashioning transactions that fully comply with US citizenship law, and applicants
regularly consult with DOT staff before finalising their applications. At any time before a formal proceeding has
begun, DOT staff may discuss questions concerning citizenship issues or other aspects of the proposed transaction
and offer suggestions, where appropriate, as to alternatives that would allow a proposed transaction to meet US citi-
zenship requirements.

In making both its initial and continuing citizenship and fitness determinations, the DOT considers the totality of
circumstances affecting the US airline, and Department precedents have permitted consideration of the nature of the
aviation relationship between the United States and the homeland(s) of any foreign investors. In the context of this
Agreement, the DOT would treat investments from EU nationals at least as favourably as it would treat investments
from nationals of bilateral or multilateral Open-Skies partners.

In the European Union, paragraph 5 of Article 4 of Regulation 2407/92 provides that the European Commission,
acting at the request of a Member State, shall examine compliance with the requirements of Article 4 and take a
decision if necessary. In taking such decisions the Commission must ensure compliance with the procedural rights
recognised as general principles of Community law by the European Court of Justice, including the right of interested
parties to be heard in a timely manner.

5. When applying its laws and regulations, each Party shall ensure that any transaction involving investment in one of

its airlines by nationals of the other Party is afforded fair and expeditious consideration.

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ANNEX 5

Concerning franchising and branding

1.

The airlines of each Party shall not be precluded from entering into franchise or branding arrangements, including
conditions relating to brand protection and operational matters, provided that: they comply, in particular, with the
applicable laws and regulations concerning control; the ability of the airline to exist outside of the franchise is not
jeopardised; the arrangement does not result in a foreign airline engaging in cabotage operations; and applicable regu-
lations, such as consumer protection provisions, including those regarding the disclosure of the identity of the airline
operating the service, are complied with. So long as those requirements are met, close business relationships and
cooperative arrangements between the airlines of each Party and foreign businesses are permissible, and each of the
following individual aspects, among others, of a franchise or branding arrangement would not, other than in excep-
tional circumstances, of itself raise control issues:

(a)

using and displaying a specific brand or trademark of a franchisor, including stipulations on the geographic area
in which the brand or trademark may be used;

(b) displaying on the franchisee’s aircraft the colours and logo of the franchisor’s brand, including the display of
such a brand, trademark, logo or similar identification prominently on its aircraft and the uniforms of its
personnel;

(c)

using and displaying the brand, trademark or logo on, or in conjunction with, the franchisee’s airport facilities
and equipment;

(d) maintaining customer service standards designed for marketing purposes;

(e) maintaining customer service standards designed to protect the integrity of the franchise brand;

(f)

providing for licence fees on standard commercial terms;

(g) providing for participation in frequent flyer programs, including the accrual of benefits;

and

(h) providing in the franchise or branding agreement for the right of the franchisor or franchisee to terminate the
arrangement and withdraw the brand, provided that nationals of the United States or the Member States remain
in control of the US or Community airline, respectively.

2.

Franchising and branding arrangements are independent of, but may coexist with, a code-sharing arrangement that
requires that both airlines have the appropriate authority from the Parties, as provided for in paragraph 7 of Article 10
of this Agreement.

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Joint Declaration

Representatives of the United States and of the European Community and its Member States confirmed that
the Air Transport Agreement initialled in Brussels on 2 March 2007 and envisioned for signature on
30 April 2007 is to be authenticated in other languages, as provided for either by exchange of letters, before
signature of the Agreement, or by decision of the Joint Committee, after signature of the Agreement.

This Joint Declaration is an integral part of the Air Transport Agreement.

For the United States:

For the European Community
and its Member States; ad referendum

Date: 18 April 2007

Date: 18 April 2007

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MEMORANDUM OF CONSULTATIONS

1. Delegations representing the European Community and its Member States and the United States of
America met in Brussels 27 February – 2 March 2007, to complete negotiations of a comprehensive air
transport agreement. Delegation lists appear as Attachment A.

2. The delegations reached ad referendum agreement on, and initialled the text of, an Agreement (the Agree-
ment, appended as Attachment B). The delegations intend to submit the draft Agreement to their respec-
tive authorities for approval, with the goal of its entry into force in the near future.

3. With respect to paragraph 2 of Article 1, the delegations affirmed that the definition of ‘air transporta-
tion’ included all forms of charter air service. Furthermore, they noted that the reference to carriage
‘held out to the public’ did not prejudge the outcome of ongoing discussions on the issue of fractional
ownership.

4. With respect to paragraph 5 of Article 1, the EU delegation noted that flights between Member States

are considered as intra-Community flights under Community law.

5. With respect to paragraph 6 of Article 1, the EU delegation noted that nothing in this Agreement affects
the distribution of competencies between the European Community and its Member States resulting from
the Treaty establishing the European Community.

6. The EU delegation confirmed that the overseas territories to which the Treaty establishing the European
Community applies are: the French overseas departments (Guadeloupe, Martinique, Réunion, Guiana),
the Azores, Madeira, and the Canary Islands.

7.

In response to a question from the US delegation, the EU delegation affirmed that, under European Com-
munity legislation, a Community airline must receive both its AOC and its operating licence from the
country in which it has its principal place of business. Further, no airline may have an AOC or operat-
ing licence from more than one country.

8. With respect to paragraphs 1, 3 and 5 of Article 3, paragraph 3 of Article 1 of Annex 4 and para-
graph 2 of Article 2 of Annex 4, and in response to a question from the US delegation, the EU delega-
tion explained that as of the date of signature of the Agreement the members of the European Common
Aviation Area comprise, in addition to the Member States of the European Community, the Republic of
Albania, Bosnia and Herzegovina, the Republic of Croatia, the Republic of Iceland, the former Yugoslav
Republic of Macedonia, the Republic of Montenegro, the Kingdom of Norway, the Republic of Serbia
and the United Nations Interim Administration Mission in Kosovo.

9.

In response to a question from the EU delegation, the US delegation explained that the following coun-
tries are implementing Open-Skies air services agreements with the United States as of the date of sig-
nature of the Agreement: Burkina Faso, the Republic of Cape Verde, the Republic of Cameroon, the
Republic of Chad, the Gabonese Republic, the Republic of The Gambia, the Republic of Ghana, the Fed-
eral Democratic Republic of Ethiopia, the Republic of Liberia, the Republic of Madagascar, the Republic
of Mali, the Kingdom of Morocco, the Republic of Namibia, the Federal Republic of Nigeria, the Repub-
lic of Senegal, the United Republic of Tanzania and the Republic of Uganda. The US delegation also
indicated that it intended to treat airlines of the Republic of Kenya in the same way as airlines of States
implementing an Open-Skies air services agreement for the purposes of paragraph 2 of Article 2 of
Annex 4.

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10. With respect to Article 4, the US delegation noted that the Department of Transportation (DOT) would
require any foreign air carrier seeking authority to operate services pursuant to the Agreement to indi-
cate the responsible authority that had issued its AOC and operating licence, thus making clear which
authority is responsible for safety, security and other regulatory oversight of the carrier.

11. For the purposes of Article 8, ‘responsible authorities’ refers, on the one hand, to the US Federal Avia-
tion Administration and, on the other hand, to the authorities of the European Community and/or the
Member States having responsibility for the issuance or validation of the certificates and licences refer-
enced in paragraph 1 or for the maintenance and administration of the safety standards and require-
ments referenced in paragraph 2, as is relevant to the matter in question. Furthermore, where
consultations are requested pursuant to paragraph 2, the responsible authorities should ensure the inclu-
sion in the consultations of any territorial or regional authorities who, by law or regulation or in prac-
tice, are exercising safety oversight responsibility relevant to the matter in question.

12. With respect to Article 9, the delegations affirmed that, to the extent practicable, the Parties intend to
ensure the greatest possible degree of coordination on proposed security measures to minimise the threat
and mitigate the potentially adverse consequences of any new measures. The delegations further noted
that the channels referred to in paragraph 7 of Article 9 are available to consider alternative measures
for current and proposed security requirements, in particular the Policy Dialogue on Border and Trans-
port Security and the EU-US Transportation Security Cooperation Group. In addition, the US delegation
stated that the US rulemaking process for adopting regulations routinely provides the opportunity for
interested parties to comment on, and propose alternatives to, proposed regulations and that such com-
ments are considered in the rulemaking proceeding.

13. During the discussion of paragraph 6 of Article 9, the US delegation explained that the Transportation
Security Administration (TSA) must immediately issue a security directive when the TSA determines that
emergency measures are necessary to protect transportation security. Such measures are intended to
address the underlying security threat and should be limited in scope and duration. Emergency measures
of a longer-term nature will be incorporated into TSA requirements using public notice and comment
procedures.

14. With respect to the procedure to be established under paragraph 11 of Article 9, the delegations con-
firmed the need to establish a protocol for the preparation, implementation and conclusions of assess-
ments carried out on the basis of this paragraph.

15. With respect to paragraph 2 of Article 10, the delegations affirmed their willingness to facilitate prompt
consideration by the relevant authorities of requests for permits, visas, and documents for the staff
referred to in that paragraph, including in circumstances where the entry or residence of staff is required
on an emergency and temporary basis.

16. The delegations noted that the reference to ‘generally applicable law or regulation’ in paragraph 5 of
Article 10 includes economic sanctions restricting transactions with specific countries and persons.

17. Both delegations recognised that, under paragraph 7 of Article 10, the airlines of each Party holding the
appropriate authority may hold out code-share services, subject to terms and conditions that apply on a
non-discriminatory basis to all airlines, to and from all points in the territory of the other Party, at which
any other airline holds out international air transportation on direct, indirect, online, or interline flights,
provided that such code-share services:

(i)

are otherwise in compliance with the Agreement;

and

(ii) meet the requirements of traffic distribution rules at the relevant airport system.

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18. The delegations discussed the importance of advising passengers which airline or surface transportation
provider will actually operate each sector of services when any code-share arrangement is involved. They
noted that each side had regulations requiring such disclosure.

19. With respect to paragraph 7 (c) of Article 10, the delegations expressed their understanding that surface
transportation providers shall not be subject to laws and regulations governing air transportation on the
sole basis that such surface transportation is held out by an airline under its own name. Moreover, sur-
face transportation providers, just as airlines, have the discretion to decide whether to enter into coop-
erative arrangements. In deciding on any particular arrangement, surface transportation providers may
consider, among other things, consumer interests and technical, economic, space, and capacity
constraints.

20. In response to a question from the EU delegation, the US delegation affirmed that, under the current
interpretation of US law, the carriage of US Government-financed air transportation (Fly America traf-
fic) by a US carrier includes transportation sold under the code of a US carrier pursuant to a code-share
arrangement, but carried on an aircraft operated by a foreign air carrier.

21. The US delegation explained that under Annex 3 to the Agreement, and in the absence of a city-pair
contract awarded by the US General Services Administration, a US Government employee or other indi-
vidual whose transportation is paid for by the US Government (other than an employee, military mem-
ber, or other individual whose transportation is paid for by the US Department of Defence or military
department) may book a flight, including on a Community airline, between the US and the European
Community, or between any two points outside the United States, that, at the lowest cost to the Gov-
ernment, satisfies the traveller’s needs. The US delegation noted further that the city pairs for which
contracts are awarded change from fiscal year to fiscal year. A US Government department, agency or
instrumentality, other than the Department of Defence or a military department, may ship cargo on a
flight, including on a Community airline, between the US and European Community, or between any
two points outside the United States, that, at the lowest cost to the Government, satisfies the agency’s
needs.

22. The EU delegation explained that the EU does not have a similar programme to Fly America.

23. Both delegations expressed their intentions to explore further possibilities for enhancing access to gov-

ernment procured air transportation.

24. In response to a question from the EU delegation concerning the economic operating authority that
Community airlines must obtain from the US Department of Transportation, the US delegation began
by noting that, over the years, DOT economic licensing procedures have been streamlined. When for-
eign airlines are seeking authority provided for in an air services agreement, their applications normally
can be processed quickly. The US delegation went on to explain that a Community airline has the option
of submitting a single application for all route authority provided for in paragraph 1 of Article 3, which
includes both scheduled and charter rights. On August 23, 2005, the DOT announced further expedited
procedures under which it is contemplated that foreign air carriers seeking new route authority would
file concurrent exemption and permit applications. Assuming that the DOT is in a position to act favour-
ably, based on the record and on the public interest considerations germane to its licensing decisions,
the DOT would proceed to issue a single order (1) granting the exemption request for whatever dura-
tion would normally have been given, or until the permit authority becomes effective, whichever is
shorter, and (2) tentatively deciding (i.e., show-cause) to award a corresponding permit, again for the
standard duration that would normally have been given (such as indefinite for agreement regimes).
Where carriers have already filed for both exemption and permit authority, and where the record regard-
ing those applications remained current, the DOT has begun to process those applications pursuant to
the 23 August approach.

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25. If a Community airline wishes to exercise any of the authority through code sharing pursuant to para-
graph 7 of Article 10, the code-share partner airlines can file a joint application for the necessary author-
ity. The airline marketing the service to the public needs underlying economic authority from the DOT
for whatever type of services (scheduled or charter) is to be sold under its code. Similarly, the airline
operating the aircraft needs underlying economic authority from the DOT: charter authority to provide
the capacity to the other airline to market its service, and either charter or scheduled authority for the
capacity it intends to market in its own right. The operating airline also needs a statement of authorisa-
tion to place its partner’s code on those flights. An operating airline can request an indefinite duration
blanket statement of authorisation for the code-share relationship, identifying the specific markets in
which the code-share authority is requested. Additional markets can be added on 30 days’ notice to the
DOT. A code-share statement of authorisation is airline-specific, and each foreign code-share partner-
ship requires its own statement of authorisation, and, if applicable, a code-share safety audit by the US
airline under the DOT’s published Guidelines.

26. If, pursuant to paragraph 9 of Article 10, a Community airline wishes to provide an entire aircraft with
crew to a US airline for operations under the US airline’s code, the Community airline would similarly
need to have charter authority from the DOT, as well as a statement of authorisation. The US delegation
indicated its belief that virtually all Community airlines that now provide scheduled service to the
United States also hold worldwide charter authority from the DOT. Therefore, from an economic licens-
ing perspective, they would only need a statement of authorisation to provide an entire aircraft with
crew to US airlines. The US delegation further indicated that it did not anticipate that applications from
other Community airlines for charter authority would raise any difficulties.

27. The issuance of a statement of authorisation, whether for code sharing or for the provision of an entire
aircraft with crew, requires a DOT finding that the proposed operations are in the public interest. This
finding is strongly facilitated by a determination that the proposed services are covered by applicable air
services agreements. Inclusion of the rights in an agreement also establishes that reciprocity exists.

28. With respect both to code sharing and to the provision of an entire aircraft with crew under para-
graphs 7 and 9 of Article 10, the primary focus of the public interest analysis would be on whether:

— a safety audit has been conducted by the US airline of the foreign airline,

— the country issuing the foreign carrier’s AOC is IASA category 1,

— the foreign airline’s home country deals with US carriers on the basis of substantial reciprocity,

— approval would give rise to competition concerns.

29. With respect to the provision of aircraft with crew, the public interest analysis would additionally focus

on whether:

— the lease agreement provides that operational control will remain with the lessor carrier,

— the regulatory oversight responsibility remains with the lessor’s AOC-issuing authority,

— approval of the lease will not give an unreasonable advantage to any party in a labour dispute where

the inability to accommodate traffic in a market is a result of the dispute.

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30. Statements of authorisation for the provision of an entire aircraft with crew will be issued, at least ini-
tially, on a limited-term (e.g., six to nine months) or exceptional basis, which is consistent with the
approach in the European Union.

31. In response to a concern expressed by the EU delegation about the discretion that the DOT has under
the ‘public interest’ standard, the US delegation stated that, in the context of Open-Skies aviation rela-
tionships, the DOT has found code-share arrangements to be in the public interest and has consistently
issued statements of authorisation with a minimum of procedural delay. The US delegation indicated
that, in relation to both code sharing and the provision of aircraft with crew involving only airlines of
the Parties, the DOT, unless presented with atypical circumstances, such as those relating to national
security, safety or criminality, would focus its analysis of the public interest on the elements described
above. Furthermore, in the event that such atypical circumstances exist, the United States would expedi-
tiously inform the other Party.

32. In response to a question from the US delegation, the EU delegation affirmed that, under the currently
applicable legislation in the EU (Council Regulation (EEC) No 2407/92 of 23 July 1992), aircraft used
by a Community airline are required to be registered in the Community. However, a Member State may
grant a waiver to this requirement in the case of short-term lease arrangements to meet temporary needs
or otherwise in exceptional circumstances. A Community airline that is party to such an arrangement
must obtain prior approval from the appropriate licensing authority, and a Member State may not
approve an agreement providing aircraft with crew to an airline to which it has granted an operating
licence unless the safety standards equivalent to those imposed under Community law or, where rel-
evant, national law are met.

33. Both delegations recognised that the failure to authorise airlines to exercise the rights granted in the
Agreement or undue delay in granting such authorisation could affect an airline’s fair and equal oppor-
tunity to compete. If either Party believes that its airlines are not receiving the economic operating
authority to which they are entitled under the Agreement, it can refer the matter to the Joint Committee.

34. With respect to paragraph 4 of Article 14, the EU delegation recalled that, in accordance with its
Article 295, the Treaty establishing the European Community does not prejudice in any way the rules in
Member States governing the system of property ownership. The US delegation in response noted its
view that government ownership of an airline may adversely affect the fair and equal opportunity of
airlines to compete in providing the international air transportation governed by this Agreement.

35. With respect to Article 15, the delegations noted the importance of international consensus in aviation
environmental matters within the framework of
the International Civil Aviation Organisation
(ICAO). In this connection, they underscored the significance of the unanimous agreement reached at
the 35th ICAO Assembly, which covers both aircraft noise and emissions issues (Resolution A35-5).
Both sides are committed to respecting that Resolution in full. In accordance with this Resolution, both
sides are committed to applying the ‘balanced approach’ principle to measures taken to manage the
impact of aircraft noise (including restrictions to limit the access of aircraft to airports at particular times)
and to ensuring charges for aircraft engine emissions at airport level should be based on the costs of
mitigating the environmental impact of those aircraft engine emissions that are properly identified and
directly attributed to air transport. Both sides also noted that where relevant legal obligations existed,
whether at international, regional, national or local level, they also had to be respected in full; for the
United States, the relevant date was 5 October 2001, and for the European Community, the relevant
date was 28 March 2002.

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36. The delegations further noted the provisions on Climate Change, Energy, and Sustainable Development
contained in the 2005 ‘Gleneagles Communiqué’ of the G8 nations as well as the framework for coop-
eration on air traffic management issues in the Memorandum of Understanding signed by the Federal
Aviation Administration and the Commission on July 18, 2006. The delegations noted the intention of
the responsible US and EU authorities to enhance technical cooperation, including in areas of climate
science research and technology development, that will enhance safety, improve fuel efficiency, and
reduce emissions in air transport. Having regard to their respective positions on the issue of emissions
trading for international aviation, the two delegations noted that the United States and the European
Union intend to work within the framework of the International Civil Aviation Organisation.

37. With regard to the composition of the Joint Committee, the US delegation indicated that it was the US
intention to have multi-agency representation, chaired by the Department of State. The EU delegation
indicated that the EU would be represented by the European Community and its Member States. The
two delegations also indicated that stakeholder participation would be an important element of the Joint
Committee process, and that stakeholder representatives would therefore be invited as observers, except
where decided otherwise by one or both Parties.

38. With respect to Article 18, the delegations affirmed their intention to hold a preliminary meeting of the

Joint Committee not later than 60 days after the date of signature of this Agreement.

39. The Delegations confirmed their understanding that practices such as a first-refusal requirement, uplift
ratio, no-objection fee, or any other restriction with respect to capacity, frequency or traffic are incon-
sistent with the Agreement.

40. The EU delegation suggested that both Parties should understand as clearly as possible the extent to
which representatives of the US Department of Transportation (DOT) and the European Commission
could exchange information on competition matters covered by Annex 2 to the Agreement under their
respective laws, regulations and practices, particularly regarding data and perspectives on issues involv-
ing proceedings being actively considered by those authorities.

41. The US delegation indicated that the proceedings covered by Annex 2 to the Agreement are adjudica-
tions under US law and are subject to statutory, regulatory and judicial constraints to ensure that the
agency decision is based only on the information that is included in the docket of the proceeding, includ-
ing public information that the DOT has determined is officially noticeable, on which the parties have
had an opportunity to comment before final agency decision.

42. The US delegation explained that these constraints do not preclude representatives advising the DOT
decision-maker in an active proceeding from discussing with representatives of the Commission such
matters as (1) the state of competition in any markets based upon non-confidential data; (2) the impact
of existing alliances or other cooperative ventures and the results of previously imposed conditions or
other limitations to address competition issues; (3) general approaches to competition analysis or meth-
odology; (4) past cases, including records and decisions; (5) substantive law, policies, and procedures
applicable to any cases; (6) issues that might be raised by potential cases that have not been formally
initiated, so long as DOT representatives do not ‘prejudge’ the facts or results of such cases; and (7) in
active proceedings, what issues have already been raised by the parties and what non-confidential evi-
dence has been provided for the record, again up to the point of potential ‘prejudgment’ of the facts and
outcome.

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43. There are two basic procedural constraints on discussion of ongoing cases. The first applies largely to
communications from the Commission to the DOT: the latter’s decision cannot be based on any sub-
stantive information or argument unavailable to all parties for comment on the record before final deci-
sion. Should such information be received, it cannot be considered in the decision unless it is made
available. The second constraint involves communications from, rather than to, the DOT: the agency
cannot demonstrate or appear to demonstrate ‘prejudgment’ of the issues — that is, articulating a con-
clusion before the record in the case is ripe and a final decision has been publicly released. This con-
straint applies to DOT in any context, whether in discussions with the EU or with any other entity not
legitimately part of the US Government’s internal decision-making process, interested or not. DOT intends
to notify the Commission’s representatives immediately whenever, in its experience, prejudgment or deci-
sional input becomes a consideration in discussing a particular topic, so that the representatives can
decide how to proceed.

44. The EU delegation requested assurance from the US delegation that the statutory ‘public interest’ crite-
rion is not used under the US competition regime to prefer the interests of individual US airlines over
those of other airlines, US or foreign. The US delegation responded that this criterion and the competi-
tion standards that the DOT must use for its decisions are designed and used to protect competition in
markets as a whole, not individual airline competitors. Among other considerations, the US delegation
noted that the ‘public interest’ in international air transportation is defined by statute to include equality
of opportunity among US and foreign airlines, as well as maximum competition. Moreover, the public
interest criterion in the statutes governing DOT approval of, and antitrust immunity for, inter-carrier
agreements, is not an ‘exception’ to the competition analysis that the agency must follow, but rather an
additional requirement that must be met before the DOT may grant antitrust immunity. Finally, the US
delegation emphasised that all DOT decisions must be consistent with domestic law and international
obligations, including civil aviation agreements that uniformly contain the requirement for all Parties to
provide a ‘fair and equal opportunity to compete’ to the airlines of the other Parties.

45. In the context of this discussion, both delegations affirmed that their respective competition regimes are
applied in a manner to respect the fair and equal opportunity to compete accorded to all airlines of the
Parties, and in accordance with the general principle of protecting and enhancing competition in mar-
kets as a whole, notwithstanding possible contrary interests of individual airline competitors.

ability

results

agencies

on the

from restrictions

46. Regarding the European Commission’s procedures, the EU delegation explained that the principal limi-
tation on the ability of the European Commission to engage in active cooperation with foreign govern-
mental
confidential
information. Information acquired by the Commission and the authorities of the Member States in the
course of an investigation, and which is of the kind covered by professional secrecy, is subject to
Article 287 of the EC Treaty and Article 28 of Regulation (EC) No 1/2003. Essentially, this refers to
information which is not in the public domain and which may be discovered during the course of an
investigation, be communicated in a reply for information or which may be voluntarily communicated
to the Commission. This information also includes business or trade secrets. Such information may not
be disclosed to any third country agency, save with the express agreement of the source concerned.
Therefore, where it is considered appropriate and desirable for the Commission to provide confidential
information to a foreign agency(ies), the consent of the source of that information must be obtained by
means of a waiver.

communicate

to

47. Information which is related to the conduct of an investigation, or the possible conduct of an investiga-
tion, is not submitted to the abovementioned provisions. Such information includes the fact that an
investigation is taking place, the general subject-matter of the investigation, the identity of the enter-
prise(s) being investigated (although this also may, in some circumstances, be protected information),
the identity of the sector in which the investigation is being undertaken, and the steps which it is pro-
posed to take in the course of the investigation. This information is normally kept confidential to ensure
proper handling of the investigation. However, it may be communicated to the DOT, as the latter is
obliged to maintain the confidentiality of the information under the terms of Article 5 of Annex 2 to
the Agreement.

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48. In response to a question from the EU delegation, the US delegation confirmed that the competent US
authorities will provide fair and expeditious consideration of complete applications for antitrust immu-
nity of commercial cooperation agreements, including revised agreements. The US delegation further
confirmed that, for Community airlines, the US–EU Air Transport Agreement, being applied pursuant
to Article 25 or in force pursuant to Article 26, will satisfy the DOT requirement that, to consider such
an application from foreign airlines for antitrust immunity or to continue such immunity, an Open-
Skies agreement must exist between the United States and the homeland(s) of the applicant foreign air-
line(s). The foregoing assurance does not apply to applicants from Ireland until Section 4 of Annex 1
expires.

49. In response to a question from the EU delegation, the US delegation stated that all of the DOT rules on
computer reservations systems (CRSs or systems) terminated on 31 July 2004. The DOT, however,
retains the authority to prohibit unfair and deceptive practices and unfair methods of competition in the
airline and airline distribution industries, and the DOT can use that authority to address apparent anti-
competitive practices by a system in its marketing of airline services. In addition, the Department of
Justice and the Federal Trade Commission have jurisdiction to address complaints that a system is engaged
in conduct that violates the antitrust laws.

50. With respect to Article 25, the EU delegation explained that in some Member States provisional appli-
cation must be approved first by their parliaments in accordance with their constitutional requirements.

51. Both delegations confirmed that, in the event that one of the Parties decided to discontinue provisional
application of the Agreement in accordance with Article 25(2), the arrangements in Section 4 of Annex 1
to the Agreement may continue to apply if the Parties so agree.

52. With respect to Article 26, the EU delegation explained that in some Member States the procedures

referred to in this Article include ratification.

53. In response to a question from the US delegation concerning restrictions arising from the residual ele-
ments of bilateral air services agreements between Member States, the EU delegation affirmed that any
such restrictions affecting the ability of US and Community airlines to exercise rights granted by this
Agreement would no longer be applied.

54. The two delegations emphasised that nothing in the Agreement affects in any way their respective legal

and policy positions on various aviation-related environmental issues.

55. The two delegations noted that neither side will cite the Agreement or any part of it as a basis for oppos-
ing consideration in the International Civil Aviation Organisation of alternative policies on any matter
covered by the Agreement.

56. Any air services agreements between the United States and a Member State the applicability of which
was in question as of the signing of the Agreement have not been listed in Section 1 to Annex 1 of the
Agreement. However, the delegations intend that the Agreement be provisionally applied by the
United States and such Member State or States according to the provisions of Article 25 of the Agreement.

For the Delegation of the European
Community and its Member States

For the Delegation of the
United States of America

Daniel CALLEJA

John BYERLY

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Written Declaration to be submitted to the USA by the Presidency upon signing on behalf of the EC and
its Member States

This Agreement will be applied on a provisional basis until its entry into force by the Member States in good faith and in
accordance with the provisions of domestic law in force.