Proposal for a Decision of the Council and the representatives of the Governments of the Member States of the European Union, meeting within the Council on the signature and provisional application of the Air Transport Agreement between the European Community and its Member States, on the one hand, and Canada, on the other hand
Date: 2009-02-17
Institutions: European Commission
Subjects: Canada, European Community, air transport, signature of an agreement

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.2.2009 
COM(2009)62 final 

2009/0018 (CNS) 

Proposal for a 

Decision of the Council and the representatives of the Governments of the Member 
States of the European Union, meeting within the Council 

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

Proposal for a 

Decision of the Council and the representatives of the Governments of the Member 
States of the European Union, meeting within the Council 

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

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EXPLANATORY MEMORANDUM 

1. 

Context of the proposal 

•  Grounds for and objectives of the proposal 

The  Air  Transport  Agreement  between  the  European  Community  and  its  Member 
States,  on  the  one  hand,  and  Canada,  on  the  other  hand  has  been  negotiated  under  a 
mandate received from the Council in October 2007. Air services between the EU and 
Canada  presently  operate  on  the  basis  of  bilateral  agreements  between  individual 
Member  States  and  Canada.  These  bilateral  agreements  contain  provisions  that  the 
European  Court  of  Justice  ruled  in  November  2002  to  be  incompatible  with 
Community  law.  It  is  therefore  essential  that  a  new  Community-level  framework  for 
EU/Canada  air  services  is  established.  The  Agreement  represents  a  comprehensive 
agreement  and  includes  a  gradual  phasing-in  of  traffic  rights  and  investment 
opportunities.  It  would  meet  the  legal  requirements  of  the  Community  and  deliver 
substantial immediate economic benefits for transatlantic air travellers and shippers. 

•  General context 

The  negotiating  mandate  set  the  objective  of  establishing  an  Open  Aviation  Area 
(OAA) between the EU and Canada. This would create a single market for air transport 
between  the  EU  and  Canada  in  which  investment  could  flow  freely  and  in  which 
European  and  Canadian  airlines  would  be  able  to  provide  air  services  without  any 
restriction,  including  in  the  domestic  markets  of  both  parties.  Achievement  of  the 
mandate in full would require significant legislative changes in Canada, in particular to 
remove  the  existing  legal  restrictions  on  foreign  ownership  and  control  of  Canadian 
airlines  and  on  cabotage.  For  this  reason,  the  mandate  explicitly  recognises  the 
possibility of implementing an agreement in a phased approach. 

The  EU  accepted  during  the  negotiations  that  full  investment  opening  could  not  be 
achieved from the start, but would be gradually introduced in different phases during a 
transitional period.  

Based on the negotiating directives of the mandate, and in line with conclusions of the 
EU-Canada summit of October 2008, the draft Agreement with Canada was finalised 
by the Commission in November 2008.  

•  Existing provisions in the area of the proposal 

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

•  Consistency with the other policies and objectives of the Union 

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

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bringing existing bilateral air services agreements in line with Community law. 

2. 

Consultation of interested parties and impact assessment 

•  Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

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

Summary of responses and how they have been taken into account 

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

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

The  Agreement  ensures  the  gradual  establishment  of  an  EU/Canada  Open  Aviation 
Area. A report prepared for the Commission in 2006 by consultants, estimated that an 
EU/Canada  Open  Aviation  Area  would  generate  upwards  of  17  million  extra 
passengers  a  year,  consumer  benefits  of  at  least  €5billion  a  year,  and  would  support 
employment on both sides of the Atlantic. 

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

3. 

Legal elements of the proposal 

•  Summary of the proposed action 

The  Agreement  represents  a  comprehensive  agreement  that  will  replace  the  existing 
bilateral  agreements  concluded  by  Member  States  with  Canada.  The  Agreement 
removes  all  existing  restrictions  on  the  rights  of  both  Community  air  carriers  and 
Canadian air carriers to operate between points in the European Community and points 
in  Canada.  In  this  respect,  the  Agreement  removes  the  obstacles  to  the  ability  of 
Community  air  carriers  to  benefit  from  the  right  of  establishment  within  the 
Community, including the right to non-discriminatory market access, in relation to the 
provision of air services to and from Canada. 

•  Legal basis 

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

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•  Subsidiarity principle 

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

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

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

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

The  Agreement  allows  for  the  simultaneous  extension  of  its  terms  to  the  27  Member 
States,  applying  the  same  rules  without  discrimination  and  benefiting  all  Community 
air carriers regardless of their nationality. These carriers can now operate freely from 
any point in the European Union to any point in Canada. 

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

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

The proposal therefore complies with the subsidiarity principle. 

•  Proportionality principle 

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

A Joint Committee will be established to discuss matters related to the implementation 
of  the  Agreement.  The  Joint  Committee  will  foster  expert-level  exchanges  on  new 
legislative  or  regulatory  initiatives  or  developments  and  consider  potential  areas  for 
further  development  of  the  Agreement.  The  Joint  Committee  will  be  composed  of 
representatives  of  the  Commission  and  the  Member  States.  The  position  on  matters 
related to Article 8 will be discussed in the relevant Community fora such as the VAT 

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Committee. 

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

•   

•  Choice of instruments 

Proposed instruments: other. 

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

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

4. 

Budgetary implication 

The proposal has no implication for the Community budget. 

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Proposal for a 

Decision of the Council and the representatives of the Governments of the Member 
States of the European Union, meeting within the Council 

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

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

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

Whereas 

(1) 

the Commission has negotiated on behalf of the Community and of the Member States 
an  Agreement  on  Air  Transport  with  Canada  (hereinafter,  the  “Agreement”)  in 
accordance  with  the  Council  Decision  authorising  the  Commission  to  open 
negotiations; 

(2) 

the Agreement was initialled on 30 November 2008; 

(3) 

(4) 

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

it is necessary to lay down procedural arrangements for deciding, if appropriate, how 
to discontinue the provisional application of the Agreement. It is also necessary to lay 
down appropriate procedural arrangements for the participation of the Community and 
the Member States in the Joint Committee set up under Article 17 of the Agreement 
and in the dispute settlement procedures provided in Article 21 of the Agreement, as 
well as for implementing certain provisions of the Agreement concerning security and 
safety. 

HAVE DECIDED AS FOLLOWS:  

Article 1 (Signature) 

1. 

The signing of the Air Transport Agreement between the European Community and 
its  Member  States,  of  the  one  part,  and  Canada,  of  the  other  part,  (hereinafter  the 
Agreement),  is  hereby  approved  on  behalf  of  the  Community,  subject  to  a  Council 

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Decision concerning the conclusion of the Agreement. The text of the agreement is 
attached to this Decision. 

2. 

The  President  of  the  Council  is  hereby  authorised  to  designate  the  person(s) 
empowered  to  sign  the  Agreement  on  behalf  of  the  Community,  subject  to  its 
conclusion. 

Article 2 (Provisional application) 

Pending  its  entry  into  force,  the  Agreement  shall  be  applied  on  a  provisional  basis  by  the 
Community  and  by  the  Member  States,  in  accordance  with  the  application  of  national  law, 
from the first day of the month following the date of the latest note of which the Parties have 
notified each other of the completion of the procedures necessary to provisionally apply the 
Agreement. 

Article 3 (Joint Committee) 

1. 

2. 

3. 

4. 

5. 

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

The position to be taken by the Community within the Joint Committee with respect 
to matters of exclusive Community competence that do not require the adoption of a 
decision having legal effects shall be established by the Commission.  

For other Joint Committee decisions concerning matters that fall within Community 
competence, the position to be taken by the Community and its Member States shall 
be  adopted  by  the  Council,  acting  by  qualified  majority  on  a  proposal  from  the 
Commission.  

For  other  Joint  Committee  decisions  concerning  matters  that  fall  within  Member 
States'  competence,  the  position  to  be  taken  by  the  Community  and  its  Member 
States shall be adopted by the Council, acting by unanimity, on a proposal from the 
Commission or from Member States.  

The  position  of  the  Community  and  of  the  Member  States  within  the  Joint 
Committee  shall  be  presented  by  the  Commission,  except  in  areas  that  fall 
exclusively within Member States' competence, in which case it shall be presented by 
the Presidency of the Council or, if the Council so decides, by the Commission. 

Article 4 (Settlement of Disputes) 

1. 

The  Commission  shall  represent  the  Community  and  the  Member  States  in  dispute 
settlement proceedings under Article 21 of the Agreement.  

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2. 

3. 

1. 

2. 

3. 

The decision to suspend the application of benefits pursuant to Article 21 (7) of the 
Agreement shall be taken by the Council on the basis of a Commission proposal. The 
Council shall decide by qualified majority. 

Any  other  appropriate  action  to  be  taken  under  Article  21  of  the  Agreement  on 
matters which fall within the Community competence shall be decided upon by the 
Commission,  with  the  assistance  of  a  Special  Committee  of  representatives  of  the 
Member States appointed by the Council.  

Article 5 (Information to the Commission) 

Member  States  shall  inform  in  advance  the  Commission  of  any  decision  to  refuse, 
revoke, suspend or limit the authorisation of an airline of Canada that they intend to 
adopt under Article 3 of the Agreement. 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or 
notifications made or received by them under Article 6 (Safety) of the Agreement. 

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

Done at Brussels, […] 

For the Council 
The President 
[…] 

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2009/0018 (CNS) 

Proposal for a 

Decision of the Council and the representatives of the Governments of the Member 
States of the European Union, meeting within the Council 

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

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

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

Having regard to the opinion of the European Parliament 

Whereas: 

(1) 

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

(2) 

the Agreement was signed on ….; 

(3) 

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

(4) 

it is necessary to lay down procedural arrangements for deciding, if appropriate, how 
to  terminate  the  Agreement.  It  is  also  necessary  to  lay  down  appropriate  procedural 
arrangements  for  the  participation  of  the  Community  and  the  Member  States  in  the 
Joint  Committee  set  up  under  Article  17  of  the  Agreement  and  in  the  arbitration 
procedures  provided  in  Article  21  of  the  Agreement,  as  well  as  for  implementing 
certain provisions of the Agreement concerning security and safety. 

HAVE DECIDED AS FOLLOWS:  

Article 1 (Approval) 

1. 

2. 

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

Upon  completion  of  its  internal  procedures  for  entry  into  force  of  the  Agreement, 
each  Member  State  shall  transmit  to  the  Secretariat  of  the  Council  the  diplomatic 
note provided for in Article 23 (1) of the Agreement.  

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3. 

The President of the Council is hereby authorised to designate the person empowered 
to deliver to Canada the diplomatic notes provided in Article 23 (1) of the Agreement 
on behalf of the Community and of the Member States. 

Article 2 (Termination) 

A decision to terminate the Agreement and give notice thereof to Canada in accordance with 
Article  24  of  the  Agreement,  and  a  decision  to  withdraw  such  notice,  shall  be  taken  by  the 
Council, on behalf of the Community and of the Member States, acting unanimously on the 
basis of a Commission proposal. 

Article 3 (Joint Committee) 

1. 

2. 

3. 

4. 

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1. 

2. 

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

The position to be taken by the Community within the Joint Committee with respect 
to matters of exclusive Community competence that do not require the adoption of a 
decision having legal effects shall be established by the Commission.  

For other Joint Committee decisions concerning matters that fall within Community 
competence, the position to be taken by the Community and its Member States shall 
be  adopted  by  the  Council,  acting  by  qualified  majority  on  a  proposal  from  the 
Commission.  

For  other  Joint  Committee  decisions  concerning  matters  that  fall  within  Member 
States'  competence,  the  position  to  be  taken  by  the  Community  and  its  Member 
States shall be adopted by the Council, acting by unanimity, on a proposal from the 
Commission or from Member States.  

The  position  of  the  Community  and  of  the  Member  States  within  the  Joint 
Committee  shall  be  presented  by  the  Commission,  except  in  areas  that  fall 
exclusively within Member States' competence, in which case it shall be presented by 
the Presidency of the Council or, if the Council so decides, by the Commission. 

Article 4 (Settlement of Disputes) 

The  Commission  shall  represent  the  Community  and  the  Member  States  in  dispute 
settlement proceedings under Article 21 of the Agreement.  

The decision to suspend the application of benefits pursuant to Article 21 (7) of the 
Agreement shall be taken by the Council on the basis of a Commission proposal. The 
Council shall decide by qualified majority. 

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3. 

1. 

2. 

3. 

Any  other  appropriate  action  to  be  taken  under  Article  21  of  the  Agreement  on 
matters which fall within the Community competence shall be decided upon by the 
Commission,  with  the  assistance  of  a  Special  Committee  of  representatives  of  the 
Member States appointed by the Council.  

Article 5 (Information to the Commission) 

Member  States  shall  inform  in  advance  the  Commission  of  any  decision  to  refuse, 
revoke, suspend or limit the authorisation of an airline of Canada that they intend to 
adopt under Article 3 of the Agreement. 

Member  States  shall  inform  the  Commission  immediately  of  any  requests  or 
notifications made or received by them under Article 6 (Safety) of the Agreement. 

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

Done at Brussels, […] 

For the Council 

The President 

[…] 

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ATTACHMENT 1 

AGREEMENT ON AIR TRANSPORT 

BETWEEN 

THE GOVERNMENT OF CANADA 

AND 

AND THE EUROPEAN COMMUNITY AND ITS MEMBER STATES 

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ARTICLE  TITLE 

TABLE OF CONTENTS 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

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13 

14 

15 

16 

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24 

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Headings and Definitions 

Grant of Rights 

Designation, Authorisation and Revocation 

Investment 

Application of Laws 

Aviation Safety 

Aviation Security 

Customs Duties, Taxes and Charges 

Statistics 

Consumer Interests 

Availability of Airports and Aviation Facilities and Services 

Charges for Airports and Aviation Facilities and Services 

Commercial Framework 

Competitive Environment 

Air Traffic Management 

Continuation of Designations and Authorizations  

Joint Committee 

Environment 

Labour Matters 

International Cooperation 

Settlement of Disputes 

Amendment  

Entry into Force and Provisional Application 

Termination 

Registration of the Agreement 

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26 

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Multilateral Conventions 

Relationship to Other Agreements 

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AGREEMENT ON AIR TRANSPORT 

BETWEEN 

on the one part; 

AND 

the Government of Canada 

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, 

The Republic of Malta, 

The Kingdom of the Netherlands, 

The Republic of Poland, 

The Portuguese Republic, 

Romania, 

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The Slovak Republic, 

The Republic of Slovenia, 

The Kingdom of Spain, 

The Kingdom of Sweden, 

The United Kingdom of Great Britain and Northern Ireland, 

Being parties to the Treaty Establishing the European Community and being Member States 
of the European Union (hereinafter the "Member States"), 

and the European Community, 

on the other part; 

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The  Government  of  Canada  and  the  Governments  of  Member  States  being  parties  to  the 
Convention on International Civil Aviation opened for signature at Chicago, on the 7th day of 
December, 1944, together with the European Community; 

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

Desiring to promote their interests in respect of air transportation; 

Recognizing  the  importance  of  efficient  air  transportation  in  promoting  trade, 
tourism and investment; 

Desiring to enhance air services; 

Desiring to ensure the highest degree of safety and security in air transportation; 

Determined  to  obtain  the  potential  benefits  of  regulatory  cooperation  and,  to  the 
extent practical, harmonization of regulations and approaches; 

Acknowledging the important potential benefits that may arise from competitive air 
services and viable air services industries; 

Desiring  to  foster  a  competitive  air  services  environment,  recognizing  that  where 
there is not a level competitive playing field for airlines, potential benefits may not 
be realized; 

Desiring to make it possible for their airlines to have a fair and equal opportunity to 
provide the air services under this Agreement; 

Desiring to maximize benefits to passengers, shippers, airlines and airports and their 
employees, and others benefiting indirectly; 

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

Noting the importance of protecting consumers and encouraging an appropriate level 
of consumer protection associated with air services; 

Noting the importance of capital to the airline industry for the further development of 
air services; 

Desiring  to  conclude  an  agreement  on  air  transport,  supplementary  to  the  said 
Convention; 

Have agreed as follows: 

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ARTICLE 1 

Headings and Definitions 

1. 

2. 

Headings used in this Agreement are for reference purposes only. 

For the purpose of this Agreement, unless otherwise stated: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

"Aeronautical  authorities"  means  any  authority  or  person  empowered  by  the 
Parties to perform the functions set out in this Agreement; 

"  Air  services"  means  scheduled  air  services  on  the  routes  specified  in  this 
Agreement for the transport of passengers and cargo, including mail, separately 
or in combination; 

"Agreement"  means  this  Agreement,  any  Annex  attached  thereto,  and  any 
amendments to the Agreement or to any Annex; 

"Airline"  means  an  airline  which  has  been  designated  and  authorized  in 
accordance with Article 3 of this Agreement; 

“Party”  means  either  Canada  or  the  Member  States  and  the  European 
Community taken together or individually; 

"Convention" means the Convention on International Civil Aviation opened for 
signature  at  Chicago  on  the  seventh  day  of  December  1944  and  includes  any 
Annex adopted under Article 90 of that Convention and any amendment of the 
Annexes or of the Convention under Articles 90 and 94 thereof so far as those 
Annexes and amendments have been adopted by both Parties; and, 

"Territory"  means  for  Canada,  its  land  areas  (mainland  and  islands),  internal 
waters  and territorial sea as determined  by its  domestic  law,  and includes the 
air  space  above  these  areas;  and  for  the  Member  States  of  the  European 
Community,  the  land  areas  (mainland  and  islands),  internal  waters  and 
territorial  sea  in  which  the  Treaty  Establishing  the  European  Community  is 
applied  and  under  the  conditions  laid  down  in  that  Treaty  and  any  successor 
instrument, and includes the air space above these areas; the application of this 
Agreement to the airport of Gibraltar is understood to be without prejudice to 
the  respective  legal  positions  of  the  Kingdom  of  Spain  and  the  United 
Kingdom  with  regard  to  the  dispute  over  sovereignty  over  the  territory  in 
which  the  airport  is  situated,  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 Cordoba on September 2006. 

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ARTICLE 2 

Grant of Rights 

1. 

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

2. 

1. 

2. 

(a) 

the right to fly across its territory without landing; 

(b) 

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

(c) 

to the extent permitted in this Agreement, the right to make stops in its territory 
on  the  routes  specified  in  this  Agreement  for  the  purpose  of  taking  up  and 
discharging  traffic  in  passenger  and  cargo,  including  mail,  separately  or  in 
combination; and, 

(d) 

the rights otherwise specified in this Agreement. 

Each Party also grants the rights specified in paragraphs 1 (a) and (b) of this Article 
to  the  other  Party  for  airlines  other  than  those  referred  to  under  Article  3 
(Designation, Authorisation and Revocation) of this Agreement. 

ARTICLE 3 

Designation, Authorisation and Revocation 

The Parties recognize as constituting a designation under this Agreement the licenses 
or  other  forms  of  authorisation  issued  by  the  other  Party  for  the  conduct  of  air 
services  under  this  Agreement.  Upon  request  by  the  aeronautical  authorities  of  one 
Party, the aeronautical authorities of the other Party which issued the licence or other 
form of authorization shall verify the status of such licences or authorisations. 

On  receipt  of  applications  from  a  designated  airline  of  one  Party,  in  the  form  and 
manner  prescribed,  the  other  Party  shall,  consistent  with  its  laws  and  regulations, 
grant  requested  authorisations  and  permissions  to  that  airline  to  operate  the  air 
services with minimum procedural delay, provided that: 

(a) 

(b) 

(c) 

such  airline  qualifies  under  the  laws  and  regulations  normally  applied  by  the 
aeronautical  authorities  of 
the  authorizations  and 
permissions; 

the  Party  granting 

such  airline  complies  with  the  laws  and  regulations  of  the  Party  granting  the 
authorizations and permissions; 

subject to Annex 2, in the case of an airline of Canada, effective control of the 
airline  is  vested  in  nationals  of  either  Party,  the  airline  is  licensed  as  a 
Canadian airline, and the airline has its principal place of business in Canada; 
in  the  case  of  an  airline  of  a  Member  State,  effective  control  of  the  airline  is 
vested  in  nationals  of  either  Party,  Iceland,  Liechtenstein,  Norway  or 

EN 

19 

   EN 

 
Switzerland, the airline is licensed as a Community airline, and the airline has 
its principal place of business in a Member State; and, 

(d) 

the airline otherwise operates in a manner consistent with the conditions set out 
in this Agreement. 

A Party may withhold the authorisations or permissions referred to in paragraph 2 of 
this  Article,  and  revoke,  suspend,  impose  conditions  or  limit  the  operating 
authorisations  or  permissions  or  otherwise  suspend  or  limit  the  operations  of  an 
airline or airlines of the other Party in the event of failure by that airline to comply 
with the provisions of paragraph 2 or where it has been determined by a Party that 
conditions  in  the  territory  of  the  other  Party  are  not  consistent  with  a  fair  and 
competitive environment and are resulting in a significant disadvantage or harm to its 
airline or airlines, pursuant to paragraph 5 of Article 14 (Competitive Environment). 

The  rights  enumerated  in  paragraph  3  of  this  Article  shall  be  exercised  only  after 
consultations in the Joint Committee unless immediate action is essential to prevent 
infringement of the laws and regulations referred to in paragraph 2 or unless safety or 
security  requires  action  in  accordance  with  the  provisions  of  Article  6  (Aviation 
Safety) and Article 7 (Aviation Security). 

3. 

4. 

ARTICLE 4 

Investment 

Each  Party  shall  permit  full  ownership  of  its  airlines  by  nationals  of  Canada  or  a  Member 
State or States subject to the conditions in Annex 2. 

ARTICLE 5 

Application of Laws 

Each Party shall require compliance with: 

(a) 

(b) 

its laws, regulations and procedures relating to the admission to, remaining in, 
or  departure  from  its  territory  of  aircraft  engaged  in  international  air 
navigation, or to the operation and navigation of such aircraft, by airlines upon 
entrance into, departure from and while within the said territory; and, 

to  entry,  clearance, 

its laws and regulations relating to the admission to, remaining in, or departure 
from its territory of passengers, crew members and cargo including mail (such 
as  regulations  relating 
transit,  aviation  security, 
immigration,  passports,  customs  and  quarantine)  by  airlines  and  by  or  on 
behalf  of  such  passengers,  crew  members  and  cargo  including  mail,  upon 
transit of, admission to, departure from and while within the said territory. In 
the  application  of  such  laws  and  regulations,  each  Party  shall,  under  similar 
circumstances,  accord  to  airlines  treatment  no  less  favourable  than  that 
accorded  to  its  own  or  any  other  airline  engaged  in  similar  international  air 
services. 

EN 

20 

   EN 

 
1. 

2. 

3. 

4. 

5. 

ARTICLE 6 

Aviation Safety 

The  Parties  reaffirm  the  importance  of  close  cooperation  in  the  field  of  aviation 
safety.  In  that  context,  the  Parties  shall  engage  in  further  cooperation  including  in 
relation  to  air  operations,  notably  to  allow  the  sharing  of  information  which  may 
have an impact on the safety of international air navigation, the participation in each 
other's  oversight  activities  or  conducting  joint  oversight  activities  in  the  field  of 
aviation safety and the development of joint projects and initiatives, including with 
third  countries.  This  cooperation  shall  be  developed  in  the  framework  of  [the 
Agreement on Civil Aviation Safety between the European Community and Canada, 
[entered into force on XXX], with respect to matters covered by that Agreement. 

Certificates  of  airworthiness,  certificates  of  competency  and  licences,  issued  or 
rendered  valid  by  the  aeronautical  authorities  of  one  Party,  in  accordance  with  the 
Agreement on Civil Aviation Safety between the European Union and Canada where 
such  provisions  may  exist,  and  still  in  force,  shall  be  recognized  as  valid  by  the 
aeronautical  authorities  of  the  other  Party  for  the  purpose  of  operating  the  air 
services,  provided  that  such  certificates  or  licences  were  issued  or  rendered  valid 
pursuant to, and in conformity with, as a minimum, the standards established under 
the Convention. 

If the privileges or conditions of the licences or certificates referred to in paragraph 2 
above, issued by the aeronautical authorities of one Party to any person or airline or 
in  respect  of  an  aircraft  used  in  the  operation  of  the  air  services,  should  permit  a 
difference  that  is  lower  than  the  minimum  standards  established  under  the 
Convention,  and  which  difference  has  been  filed  with  the  International  Civil 
Aviation  Organization,  or  if  those  authorities  should  apply  a  standard  or  standards 
that  are  higher  than,  or  other  than,  standards  established  under  the  Convention,  the 
other Party may request consultations between the Parties in conformity with Article 
17  (Joint  Committee)  of  this  Agreement  with  a  view  to  clarifying  the  practice  in 
question. Until such time as consultations may lead to a consensus and, in the spirit 
of  a  regime  of  reciprocal  acceptance  of  each  others’  certificates  and  licenses,  the 
aeronautical  authorities  shall  continue  to  recognize  the  certificates  and  licenses 
rendered  valid  by  the  aeronautical  authorities  of  the  other  Party,  or  in  accordance 
with  the  Agreement  on  Civil  Aviation  Safety  between  the  European  Union  and 
Canada where provisions related to reciprocal acceptance of certificates and licenses 
may exist. 

Consistent with applicable laws and within the framework of the Agreement on Civil 
Aviation Safety between the European Community and Canada, signed at X on XXX 
the Parties undertake to achieve reciprocal acceptance of certificates and licences. 

The aeronautical authorities of a Party may request at any time consultations with the 
responsible aeronautical authorities of the other Party concerning the safety standards 
and  requirements  maintained  and  administered by those aeronautical authorities. If, 
following  such  consultations,  the  requesting  aeronautical  authorities  find  that  those 
aeronautical  authorities  do  not  effectively  maintain  and  administer  safety  standards 
and requirements in these areas, that, unless otherwise decided, are at least equal to 
the  minimum  standards  established  pursuant  to  the  Convention,  those  aeronautical 

EN 

21 

   EN 

 
authorities  shall  be  notified  of  such  findings  and  the  steps  considered  necessary  to 
conform with these minimum standards. Failure by those aeronautical authorities to 
take  appropriate  corrective  action  within  fifteen  (15)  days,  or  such  other  period  as 
may be decided, shall constitute grounds for the requesting aeronautical authorities to 
revoke,  suspend  or  limit  the  operating  authorisations  or  technical  permissions  or  to 
otherwise suspend or limit the operations of an airline, the safety oversight of which 
is the responsibility of the other aeronautical authority. 

Each  Party  accepts  that  any  aircraft  operated  by  or,  on  behalf  of,  an  airline  of  one 
Party,  may,  while  within  the  territory  of  the  other  Party,  be  the  subject  of  an 
examination  (ramp  inspection)  by  the  aeronautical  authorities  of  the  other  Party,  to 
verify the validity of the relevant aircraft documents, and those of its crew members 
and  the  apparent  condition  of  the  aircraft  and  its  equipment,  provided  that  such 
examination does not cause an unreasonable delay in operation of the aircraft. 

If the aeronautical authorities of one Party, after carrying out a ramp inspection, find 
that  an  aircraft  or  the  operation  of  an  aircraft  does  not  comply  with  the  minimum 
standards  established  at  that  time  pursuant  to  the  Convention  or  there  is  a  lack  of 
effective maintenance and administration of safety standards established at that time 
pursuant to the Convention, the aeronautical authorities of that Party shall notify the 
aeronautical  authorities  that  are  responsible  for  the  safety  oversight  of  the  airline 
operating the aircraft of such findings and the steps considered necessary to conform 
with  these  minimum  standards.  Failure  to  take  appropriate  corrective  action  within 
fifteen  (15)  days  shall  constitute  grounds  for  revoking,  suspending  or  limiting  the 
operating authorisations or technical permissions or to otherwise suspend or limit the 
operations of the airline operating the aircraft. The same determination may be made 
in the case of denial of access for ramp inspection. 

The  aeronautical  authorities  of  each  Party  shall  have  the  right  to  take  immediate 
action, including the right to revoke, suspend or limit the operating authorisations or 
technical permissions or otherwise suspend or limit the operations of an airline of the 
other  Party,  if  they  conclude  that  it  is  necessary  in  view  of  an  immediate  threat  to 
aviation safety. Where practicable, the Party taking such measures shall endeavour to 
consult the other Party before hand. 

Any action by aeronautical authorities in accordance with paragraphs 5, 7 or 8 of this 
Article  shall  be  discontinued  once  the  basis  for  the  taking  of  that  action  ceases  to 
exist. 

ARTICLE 7 

Aviation Security 

Consistent  with  their  rights  and  obligations  under  international  law,  the  Parties 
reaffirm  that  their  obligation  to  each  other  to  protect  the  security  of  civil  aviation 
against acts of unlawful interference forms an integral part of this agreement. 

Without  limiting  the  generality  of  their  rights  and  obligations  under  international 
law,  the  Parties  shall  in  particular  act  in  conformity  with  the  provisions  of  the 
Convention  on  Offences  and  Certain  Other  Acts  Committed  on  Board  Aircraft, 

6. 

7. 

8. 

9. 

1. 

2. 

EN 

22 

   EN 

 
3. 

4. 

5. 

6. 

signed  at  Tokyo  on  September  14,  1963,  the  Convention  for  the  Suppression  of 
Unlawful  Seizure  of  Aircraft,  signed  at  The  Hague  on  16  December  1970,  the 
Convention  for  the  Suppression  of  Unlawful  Acts  Against  the  Safety  of  Civil 
Aviation,  signed  at  Montreal  on  September  23,  1971,  the  Protocol  for  the 
Suppression  of  Unlawful  Acts  of  Violence  at  Airports  Serving  International 
Aviation,  signed  at  Montreal  on  February  24,  1988,  and  the  Convention  on  the 
Marking  of  Plastic  Explosives  for  the  Purpose  of  Detection,  signed  at  Montreal  on 
March  1,  1991  and  any  other  multilateral  agreement  governing  aviation  security 
binding upon the Parties. 

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

The Parties shall act in conformity with the aviation security provisions established 
by  the  International  Civil  Aviation  Organisation  and  designated  as  Annexes  to  the 
Convention on International Civil Aviation to the extent that such security provisions 
are  applicable  to  the  Parties;  they  shall  require  that  operators  of  aircraft  of  their 
registry, operators of aircraft who have their principal place of business or permanent 
residence  in  their  territory,  and  the  operators  of  airports  in  their  territory  act  in 
conformity  with  such  aviation  security  provisions.  Accordingly,  each  Party,  upon 
request,  shall  provide  the  other  Party  notification  of  any  difference  between  its 
regulations and practices and the aviation security standards of the Annexes referred 
to  in  this  paragraph,  where  these  differences  exceed  or  complement  such  standards 
and have relevance for the operators of the other Party. Either Party may at any time 
request consultations, to be held without unreasonable delay, with the other Party to 
discuss any such differences. 

With full regard and mutual respect for the sovereignty of states, each Party agrees 
that  such  operators  of  aircraft  may  be  required  to  observe  the  aviation  security 
provisions referred to in paragraph 4 above required by the other Party for entry into, 
departure  from,  or  while  within  the  territory  of  that  other  Party.  Each  Party  shall 
ensure  that  adequate  measures  are  effectively  applied  within  its  territory  to  protect 
the aircraft and to exercise security controls on passengers, crew members, baggage, 
carry-on items, cargo, mail and aircraft stores prior to boarding or loading. 

The  Parties  agree  to  work  towards  achieving  mutual  recognition  of  each  other's 
security standards and close cooperation on quality control measures on a reciprocal 
basis. The Parties also agree, where appropriate, and on the basis of decisions to be 
taken  by  Parties  separately,  to  create  preconditions  for  implementing  one-stop 
security for flights between the territories of the Parties, meaning the  exemption of 
transfer  passengers,  transfer  baggage,  and/or  transfer  cargo  from  re-screening.  To 
this end, they shall establish administrative arrangements allowing for consultations 
within the framework of the Joint Committee on existing or planned aviation security 
measures and for cooperation and sharing of information on quality control measures 
implemented by the Parties. The Parties shall consult each other on planned security 
measures of relevance for operators located in the territory of the other Party to such 
administrative arrangements. 

EN 

23 

   EN 

 
7. 

8. 

9. 

10. 

11. 

1. 

Each Party shall, as far as may be practicable, meet any request from the other Party 
for  reasonable  special  security  measures  to  meet  a  particular  threat  for  a  specific 
flight or a specific series of flights. 

The Parties agree to cooperate on inspections undertaken by them in either territory 
through the establishment of mechanisms, including administrative arrangements, for 
the  reciprocal  exchange  of  information  on  results  of  such  inspections.  The  Parties 
agree to consider positively requests to: 

(a) 

(b) 

participate, as observers, in security inspections undertaken by theother Party; 
or, 

jointly conduct, as appropriate, an assessment in the territory of the other Party 
as regards the security measures undertaken by aircraft operators in respect of 
flights arriving from, or departing to the territory of either Party. 

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

When  a  Party  has  reasonable  grounds  to  believe  that  the  other  Party  has  departed 
from  the  provisions  of  this  Article,  the  responsible  authorities  may  request 
consultations.  Such  consultations  shall  start  within  fifteen  (15)  days  of  receipt  of 
such  a  request.  Failure  to  reach  a  satisfactory  agreement  within  fifteen  (15)  days 
from  the  start  of  consultations  shall  constitute  grounds  for  the  Party  that  requested 
the consultations to take action to withhold, revoke, suspend or impose appropriate 
conditions on the authorisations of the airlines of the other Party. When justified by 
an  emergency,  or  to  prevent  further  non-compliance  with  the  provisions  of  this 
Article, the Party that believes that the other Party has departed from the provisions 
of this Article may take interim appropriate action at any time. 

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

ARTICLE 8 

Customs Duties, Taxes and Charges 

Each Party shall, to the fullest extent possible under its national laws and regulations, 
and on the basis of reciprocity, exempt airlines of the other Party with respect to their 
aircraft  operated  in  international  air  transport,  their  regular  equipment,  fuel, 
lubricants, consumable technical supplies, ground equipment, spare parts (including 
engines), aircraft stores (including  but  not  limited  to  such  items  as  food,  beverages 
and  liquor,  tobacco  and  other  products  destined  for  sale  to  or  use  by  passengers  in 

EN 

24 

   EN 

 
limited  quantities  during  flight),  and  other  items  intended  for  or  used  solely  in 
connection  with  the  operation  or  servicing  of  aircraft  engaged  in  international  air 
transport  from  all  import  restrictions,  property  taxes  and  capital  levies,  customs 
duties, excise taxes, and similar fees and charges that are imposed by the Parties, and 
not based on the cost of services provided. 

2. 

The Parties shall also exempt, to the fullest extent possible under national laws and 
regulations  and  on  the  basis  of  reciprocity,  from  the  taxes,  levies,  duties,  fees  and 
charges referred to in paragraph 1 of this Article, with the exception of charges based 
on the cost of the service provided: 

(a) 

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

(b)  ground  equipment  and  spare  parts  (including  engines)  introduced  into  the 
territory  of  a  Party  for  the  servicing,  maintenance,  or  repair  of  aircraft  of  an 
airline of the other Party used in international air transport as well as computer 
equipment  and  component  parts  for  the  handling  of  passengers  or  cargo,  or 
security checks; 

(c) 

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

(d)  printed  matter,  including  airline  tickets,  ticket  covers,  airway  bills  and  other 

related advertising materials distributed without charge by the airline. 

The  regular  airborne  equipment,  as  well  as  the  materials  and  supplies  normally 
retained on board the aircraft used by an airline of a Party, may be unloaded in the 
territory of the other Party only with the approval of the Customs authorities of that 
territory. In such case, they may be required to be placed under the supervision of the 
said authorities up to such time as they are re-exported or otherwise disposed of in 
accordance with Customs regulations. 

The exemptions provided by this Article shall also be available where the airlines of 
a 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. 

The provisions of the respective conventions in force between a Member State and 
Canada for the avoidance of double taxation on income and on capital are not altered 
by this Agreement. 

3. 

4. 

5. 

EN 

25 

   EN 

 
ARTICLE 9 

Statistics 

Each  Party  shall  provide  to  the  other  Party  statistics  that  are  required  by  domestic 
laws  and  regulations,  and,  upon  request,  other  available  statistical  information  as 
may  be  reasonably  required  for  the  purpose  of  reviewing  the  operation  of  the  air 
services. 

The Parties shall cooperate in the framework of the Joint Committee under Article 17 
to facilitate the exchange of statistical information between them for the purpose of 
monitoring the development of the air services. 

ARTICLE 10 

Consumer Interests 

The  Parties  recognise  the  importance  of  protecting  the  interests  of  consumers  and 
may  require  airlines,  on  a  non-discriminatory  basis,  to  take  reasonable  and 
proportionate measures, including but not limited to: 

(a) 

requirements to protect funds advanced to airlines; 

(b)  denied boarding compensation initiatives; 

(c) 

passenger refunds; 

(d)  public disclosure of the identity of an air carrier actually operating the aircraft; 

(e) 

financial fitness of its own airlines; 

(f) 

passenger injury liability insurance; and, 

(g) 

setting accessibility measures. 

The  Parties  endeavour  to  consult  each  other,  within  the  framework  of  the  Joint 
Committee under Article 17, on matters of consumer interest, including their planned 
measures, with a view to achieve compatible approaches to the extent possible. 

ARTICLE 11 

Availability of Airports and Aviation Facilities and Services 

Each  Party  shall  ensure  that  airports,  airways,  air  traffic  control  and  air  navigation 
services, aviation security, ground handling, and other related facilities and services 
that are provided in its territory shall be available for use by the airlines of the other 
Party on a non-discriminatory basis at the time arrangements for use are made. 

To  the  fullest  extent  possible,  Parties  shall  take  all  reasonable  measures  to  ensure 
effective  access  to  facilities  and  services,  subject  to  legal,  operational  and  physical 

1. 

2. 

1. 

2. 

1. 

2. 

EN 

26 

   EN 

 
3. 

4. 

1. 

2. 

3. 

constraints  and  on  the  basis  of  fair  and  equal  opportunity,  and  transparency  with 
respect to the procedures for gaining access. 

Each  Party  shall  ensure  that  its  procedures,  guidelines  and  regulations  to  manage 
slots applicable to airports in its territory are applied in a transparent, effective and 
non-discriminatory manner. 

If a Party believes that the other Party is in violation of this Article, it may notify the 
other Party of its findings and request consultations under paragraph 4 of Article 17 
(Joint Committee). 

ARTICLE 12 

Charges for Airports and Aviation Facilities and Services 

Each  Party  shall  ensure  that  user  charges  that  may  be  imposed  by  its  competent 
charging  authorities  or  bodies  on  the  airlines  of  the  other  Party  for  the  use  of  air 
navigation  and  air  traffic  control  services  shall  be  just,  reasonable,  cost-related  and 
not unjustly discriminatory. 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 favourable 
terms available to any other airline. 

Each  Party  shall  ensure  that  user  charges  that  may  be  imposed  by  its  competent 
charging authorities or bodies on the airlines of the other Party for the use of airport, 
aviation  security  and  related  facilities  and  services  shall  be  just,  reasonable,  not 
unjustly discriminatory, and equitably apportioned among categories of users. These 
charges  may  reflect,  but  shall  not  exceed,  the  full  cost  to  the  competent  charging 
authorities  or  bodies  of  providing  the  appropriate  airport  and  aviation  security 
facilities  and  services  at  that  airport  or  within  that  airport’s  system.  These  charges 
may include a reasonable return on assets, after depreciation. Facilities and services 
for  which  user  charges  are  made  shall  be  provided  on  an  efficient  and  economic 
basis. In any event, these charges shall be assessed on the airlines of the other Party 
on  terms  not  less  favourable  than  the  most  favourable  terms  available  to  any  other 
airline at the time the charges are assessed. 

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

4. 

No  Party  shall  be  held,  in  dispute  resolution  procedures  pursuant  to  Article  21 
(Settlement of Disputes), 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, 

EN 

27 

   EN 

 
(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 

Commercial Framework 

1. 

Each Party shall allow a fair and equal opportunity for the airlines of the other Party 
to provide the air services under this Agreement. 

Capacity 

2. 

Each Party shall allow any airline of the other Party to determine the frequency and 
capacity  of  the  air  services  it  offers  under  this  Agreement  based  upon  the  airline’s 
commercial  considerations  in  the  marketplace.  No  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, 
programmes  for  charter  flights,  or  operations  plans  by  airlines  of  the  other  Party, 
except  as  may  be  required  for  technical,  operational  or  environmental  (local  air 
quality and noise) reasons under uniform conditions consistent with Article 15 of the 
Convention. 

Codesharing 

3. 

(a)  Subject to the regulatory requirements normally applied to such operations by 
the  aeronautical  authorities  of  each  Party,  any  airline  of  the  other  Party  may 
enter into cooperative arrangements for the purposes of: 

(i) 

(ii) 

holding  out  the  air  services  on  the  specified  routes  by  codesharing  (i.e. 
selling  transportation  under  its  own  code)  on  flights  operated  by  any 
airlines  of  Canada,  or  of  Member  States,  and/or  of  any  third  country; 
and/or a surface (land or marine) transportation provider of any country; 
and/or, 

carrying  traffic  under  the  code  of  any  other  airline  where  such  other 
airline  has  been  authorized  by  the  aeronautical  authorities  of  a  Party  to 
sell transportation under its own code on flights operated by any airline 
of a Party. 

(b)  The  aeronautical  authorities  of  a  Party  may  require  all  airlines  involved  in 

codesharing arrangements to hold the appropriate underlying route authority. 

(c)  The  aeronautical  authorities  of  a  Party  shall  not  withhold  permission  for 
codesharing  services  identified  in  paragraph  (3)  (a)  (i)  of  this  Article  on  the 
basis  that  the  airline  operating  the  aircraft  does  not  have  the  right  to  carry 
traffic under the codes of other airlines. 

(d)  The  aeronautical  authorities  of  the  Parties  shall  require  all  airlines  in  such 
codesharing  arrangements  to  ensure  that  passengers  are  fully  informed  of  the 

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identity of the operator and the mode of transportation for each segment of the 
journey. 

Ground Handling 

4. 

Each Party shall permit the airlines of the other Party when operating in its territory: 

(a) 

on the basis of reciprocity, to perform their own ground handling in its territory 
and, at their option, to have ground handling services provided in whole or in 
part  by  any  agent  authorized  by  its  competent  authorities  to  provide  such 
services; and, 

(b) 

to  provide  ground  handling  services  for  other  airlines  operating  at  the  same 
airport, where authorised and consistent with applicable laws and regulations. 

5. 

The exercise of the rights set forth in paragraphs 4 (a) and (b) of this Article shall be 
subject  only  to  physical  or  operational  constraints  resulting  primarily  from 
considerations  of  airport  safety  or  security.  Any  constraints  shall  be  applied 
uniformly and on terms no less favourable than the most favourable terms available 
to any airline of any country engaged in similar international air services at the time 
the constraints are imposed. 

Airline Representatives 

6. 

Each Party shall permit: 

(a) 

(b) 

the airlines of the other Party on the basis of reciprocity, to bring into and to 
maintain in its territory their representatives and commercial managerial, sales, 
technical, operational, and other specialist staff, as required in connection with 
their services; 

these  staff  requirements  at  the  option  of  the  airlines  of  the  other  Party,  to  be 
satisfied  by  their  own  personnel  or,  by  using  the  services  of  any  other 
organization,  company  or  airline  operating  in  its  territory  and  authorized  to 
perform such services for other airlines; and, 

(c) 

the  airlines  of  the  other  Party  to  establish  offices  in  its  territory  for  the 
promotion and sale of air transportation and related activities. 

7. 

Each Party shall require the representatives and staff of the airlines of the other Party 
to be subject to its laws and regulations. Consistent with such laws and regulations: 

(a) 

(b) 

each Party shall, with the minimum of delay, grant the necessary employment 
authorisations,  visitor  visas  or  other  similar  documents  to  the  representatives 
and staff referred to in paragraph 6 of this Article; and, 

each  Party  shall  facilitate  and  expedite  the  approval  of  any  requirement  for 
employment  authorisations  for  personnel  performing  certain  temporary  duties 
not exceeding ninety (90) days. 

Sales, Local Expenses, and Transfer of Funds 

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8. 

Each Party shall permit the airlines of the other Party: 

(a) 

(b) 

(c) 

to  engage  in  the  sale  of  air  transportation  in  its  territory  directly  or,  at  the 
discretion of the airlines, through their agents and to sell transportation in the 
currency of its territory or, at the discretion of the airlines, in freely convertible 
currencies  of  other  countries,  and  any  person  shall  be  free  to  purchase  such 
transportation in currencies accepted by those airlines; 

to  pay  local  expenses,  including  purchases  of  fuel,  in  its  territory  in  local 
currency,  or  at  the  discretion  of  the  airlines,  in  freely  convertible  currencies; 
and, 

to convert and remit abroad, on demand, funds obtained in the normal course 
of their operations. Such conversion and remittance shall be permitted without 
restrictions or delay at the foreign exchange market rates for current payments 
prevailing at the time of submission of the request for transfer, and shall not be 
subject  to  any  charges  except  normal  service  charges  collected  by  banks  for 
such transactions. 

Intermodal Services 

9. 

Each Party shall permit airlines operating: 

(a) 

(b) 

passenger-combination  services,  to  employ  surface  transportation  (land  or 
maritime)  in  connection  with  the  air  services.  Such  transportation  may  be 
provided  by  the  airlines  through  arrangements  with  surface  carriers,  or  the 
airlines may elect to perform the surface transportation themselves; 

cargo services, to employ without restriction in connection with the air services 
any surface transportation (land or maritime) 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; access 
to airport customs processing and facilities for cargo moving by surface or by 
air;  and  to  elect  to  perform  their  own  cargo  surface  transportation,  subject  to 
domestic  laws  and  regulations  governing  such  transportation,  or  to  provide  it 
through  arrangements  with  other  surface  carriers, 
including  surface 
transportation operated by airlines of any other country; and, 

(c) 

intermodal  services,  to  offer,  at  a  single  through  price  air  and  surface 
transportation combined, provided that passengers and shippers are not misled 
as to the facts concerning such transportation. 

Pricing 

10. 

11. 

12. 

The Parties shall permit prices to be freely established by the airlines on the basis of 
free and fair competition. 

The Parties shall not require prices to be filed with aeronautical authorities. 

Discussions between aeronautical authorities may be held to discuss matters such as, 
but not limited to prices which may be unjust, unreasonable or discriminatory. 

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Computer Reservation Systems 

13. 

The Parties shall apply their respective laws and regulations relating to the operations 
of Computer Reservation Systems in their territories on a fair and non-discriminatory 
basis. 

Franchising and Branding 

14. 

The airlines of any Party may provide air services under this Agreement, pursuant to 
a franchising or branding arrangement with companies, including airlines, provided 
that  the  airline  providing  the  air  services  holds  the  appropriate  route  authority,  the 
conditions prescribed under domestic laws and regulations are met, and subject to the 
approval of aeronautical authorities. 

Wet Leasing 

15. 

For  the  purposes  of  providing  the  air  services  under  this  Agreement,  provided  that 
the  airline  providing  the  air  services  and  the  operator  of  the  aircraft  in  such 
arrangements hold the appropriate authorities, airlines of the Parties may provide air 
services  under  this  Agreement  using  aircraft  and  flight  crew  provided  by  other 
airlines,  including  from  other  countries,  subject  to  the  approval  of  aeronautical 
authorities. For the purposes of this paragraph, airlines operating the aircraft shall not 
be required to have underlying route authority. 

Charter / Non-scheduled Flights 

16. 

The  provisions  set  out  in  Articles  4  (Investment),  5  (Application  of  Laws),  6 
(Aviation Safety), 7 (Aviation Security), 8 (Customs Duties, Taxes and Charges), 9 
(Statistics),  10  (Consumer  Interests),  11  (Availability  of  Airports  and  Aviation 
Facilities  and  Services),  12  (Charges  for  Airports  and  Aviation  Facilities  and 
Services),  13  (Commercial  Framework),  14  (Competitive  Environment),  15  (Air 
Traffic Management), 17 (Joint Committee) and 18 (Environment) of this Agreement 
apply as well to charters and other non-scheduled flights operated by air carriers of 
one Party into or from the territory of the other Party. 

17. 

When granting requested authorisations and permissions to an air carrier on receipt 
of applications to operate charters and other non-scheduled flights, the Parties shall 
act with minimum procedural delay. 

ARTICLE 14 

Competitive Environment 

1. 

The Parties acknowledge that it is their joint objective to have a fair and competitive 
environment  for  the  operation  of  the  air  services.  The  Parties  recognize  that  fair 
competitive practices by airlines are most likely to occur where these airlines operate 
on a fully commercial basis and are not state subsidized. They recognize that matters, 
such  as,  but  not  limited  to  the  conditions  under  which  airlines  are  privatised,  the 
removal of competition distorting subsidies, equitable and non-discriminatory access 

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2. 

3. 

4. 

5. 

to airport facilities and services and computer reservation systems are key factors to 
achieve a fair and competitive environment. 

If one Party finds that conditions exist in the territory of the other Party that would 
adversely affect a fair and competitive environment and its airlines’ operation of the 
air  services  under  this  Agreement,  it  may  submit  observations  to  the  other  Party. 
Furthermore,  it  may  request  a  meeting  of  the  Joint  Committee,  as  provided  for  in 
Article  17  of  the  Agreement.  The  Parties  accept  that  the  degree  to  which  the 
objectives  in  the  Agreement  related  to  a  competitive  environment  may  be 
undermined by a subsidy or other intervention is a legitimate subject for discussion 
in the Joint Committee. 

Issues  that  may  be  raised  under  this  Article,  include  but  are  not  limited  to,  capital 
injections, cross subsidisation, grants, guarantees, ownership, relief or tax exemption, 
protection  against  bankruptcy  or  insurance,  by  any  government  entities.  Subject  to 
paragraph  4  of  this  Article,  a  Party,  upon  notification  to  the  other  Party,  may 
approach responsible government entities in the territory of the other Party including 
entities at the state, provincial or local level to discuss matters relating to this Article. 

The  Parties  recognise  the  cooperation  between  their  respective  competition 
authorities as evidenced by the “Agreement between the Government of Canada and 
the  European  Communities  regarding  the  Application  of  their  Competition  Laws”, 
which entered into force on June 17, 1999. 

If,  following  consultations  in  the  Joint  Committee,  a  Party  believes  that  the 
conditions  referred  to  in  paragraph  3  persist  and  are  likely  to  result  in  significant 
disadvantage  or  harm  being  caused  to  its  airline  or  airlines,  it  may  take  action.  A 
Party may take action under this paragraph from the earlier of the establishment of 
procedures and criteria by the Joint Committee for the exercise of such action or one 
year  from  the  date  on  which  rights  under  this  Agreement  become  available.  Any 
action  taken  pursuant  to  this  paragraph  shall  be  appropriate,  proportionate  and 
restricted with regard to scope and duration to what is strictly necessary. It shall be 
exclusively directed towards the entity benefiting from the conditions referred to in 
paragraph  3,  and  shall  be  without  prejudice  to  the  right  of  any  Party  to  take  action 
under Article 21 (Settlement of Disputes). 

ARTICLE 15 

Air Traffic Management 

The  Parties  shall  cooperate  on  addressing  safety  oversight  and  policy  issues  relating  to  air 
traffic  management,  with  a  view  to  optimizing  overall  efficiency,  reducing  cost,  and 
enhancing  the  safety  and  capacity  of  existing  systems.  The  Parties  shall  encourage  their  air 
navigation service providers to continue to collaborate on interoperability to further integrate 
both  sides’  systems  where  possible,  reduce  the  environmental  impact  of  aviation,  and  share 
information where appropriate. 

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ARTICLE 16 

Continuation of Designations and Authorizations 

1. 

2. 

Any airline of Canada or of a Member State holding a current designation from its 
respective government under an air transport agreement with Canada superceded by 
this Agreement shall be deemed to be an airline designated to conduct air services. 

Any airline of Canada or of a Member State holding a licence or authorization issued 
by the aeronautical authorities of a Party valid for the operation of air services on the 
date  of  entry  into  force  of  this  Agreement  shall,  pending  issuance  of  any  new  or 
amended  licence  or  authorization  under  this  Agreement,  continue  to  have  all  the 
authorities  provided  in  the  said  licence  or  authorization  and  be  deemed  to  have 
therein the authority to operate air services as provided for in this Agreement. 

3. 

Nothing in this Article shall prevent an airline of a Party not referred to in paragraphs 
1 or 2 above from being designated or authorised to conduct air services. 

ARTICLE 17 

Joint Committee 

1. 

2. 

3. 

4. 

5. 

6. 

A  committee  composed  of  representatives  of  the  Parties  (hereinafter  referred  to  as 
the Joint Committee) is hereby established. 

The  Joint  Committee  shall  identify  and  facilitate  contacts  between  aeronautical 
authorities  and  other  competent  authorities  for  matters  covered  under  this 
Agreement. 

The  Joint  Committee  shall  meet  as  and  when  necessary  and  at  least  once  a  year. 
Either Party may request the convening of a meeting. 

A Party may also request a meeting of the Joint Committee to consult regarding any 
question  relating  to  the  interpretation  or  application  of  this  Agreement  and  seek  to 
resolve  any  concerns  raised  by  the  other  Party.  Such  a  meeting  shall  begin  at  the 
earliest  possible  date,  but  not later than two months from the date  of receipt  of  the 
request, unless otherwise decided by the Parties. 

The  Joint  Committee  shall  adopt  decisions  where  expressly  provided  by  the 
Agreement. 

The Joint Committee shall foster cooperation between the Parties and may consider 
any matter related to the operation or implementation of this Agreement, including, 
but not limited to: 

(a) 

reviewing market conditions affecting air services under this agreement; 

(b) 

exchanging information, including advising as to changes to domestic law and 
policies, which affect the Agreement; 

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33 

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(c) 

(d) 

(e) 

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

recommending  conditions,  procedures,  and  amendments  required  for  new 
Member  States  of  the  European  Union  to  become  Parties  to  this  Agreement; 
and, 

discussing issues related to investment, ownership and control, and confirming 
when the conditions for the progressive opening of traffic rights as set out in 
Annex 2 are met. 

The Joint Committee shall develop cooperation and foster expert-level exchanges on 
new legislative or regulatory initiatives. 

The Joint Committee shall adopt, by a decision, its rules of procedure. 

All decisions of the Joint Committee shall be made by consensus. 

ARTICLE 18 

Environment 

The Parties recognize the importance of protecting the environment when developing 
and implementing international aviation policy. 

Without prejudice to the rights and obligations of the Parties under international law 
and the Convention, each Party within its own sovereign jurisdiction shall have the 
right  to  take  and  apply  the  appropriate  measures  to  address  the  environmental 
impacts of air transport provided that such measures are applied without distinction 
as to nationality. 

The  Parties  recognize  that  the  costs  and  benefits  of  measures  to  protect  the 
environment must be carefully weighed in developing international aviation  policy. 
When  a  Party  is  considering  proposed  environmental  measures,  it  should  evaluate 
possible adverse effects on the exercise of rights contained in this Agreement, and, if 
such  measures  are  adopted,  it  should  take  appropriate  steps  to  mitigate  any  such 
adverse effects. 

The Parties recognise the importance of working together, and within the framework 
of multilateral discussions, to consider the effects of aviation on the environment and 
the economy, and to ensure that any mitigating measures are fully consistent with the 
objectives of this Agreement. 

When environmental measures are established, the aviation environmental standards 
adopted by International Civil Aviation Organization in Annexes to the Convention 
shall be followed except where differences have been filed. 

The  Parties  will  endeavour  to  consult  each  other  on  matters  of  the  environment, 
including on planned measures likely to have a significant effect on the international 
air  services  covered  by  this  Agreement,  with  a  view  to  achieve  compatible 

7. 

8. 

9. 

1. 

2. 

3. 

4. 

5. 

6. 

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approaches to the extent possible. Consultations shall start within 30 days of receipt 
of such a request, or any other period of time where mutually determined. 

ARTICLE 19 

Labour Matters 

1. 

2. 

The Parties recognise the importance of considering the effects of this Agreement on 
labour, employment and working conditions. 

Either Party may request a meeting of the Joint Committee under Article 17 in order 
to discuss the labour matters referred to in paragraph 1 of this Article. 

ARTICLE 20 

International Cooperation 

The Parties may bring to the Joint Committee under Article 17 issues related to: 

(a) 

air transport and international organisations; 

(b)  possible  developments  in  relations  between  the  Parties  and  other  countries  in 

air transport; and, 

(c) 

trends in bilateral or multilateral arrangements 

including,  where  possible,  proposals  on  the  development  of  coordinated  positions  in  these 
fields. 

ARTICLE 21 

Settlement of Disputes 

1. 

2. 

3. 

If any dispute arises between the Parties relating to the interpretation or application 
of this Agreement they shall in the first place endeavour to settle it through formal 
consultations  within  the  Joint  Committee.  Such  formal  consultations  shall  begin  as 
soon as possible and notwithstanding paragraph 4 of Article 17 within a period of no 
more than 30 days from the date of receipt by one Party of the written request made 
by the other Party, referring to this Article, unless otherwise decided by the Parties. 

If the dispute is not resolved within 60 days of the receipt of the request for formal 
consultations, it may be referred to a person or body for decision by consent of the 
Parties.  If  the  Parties  do  not  so  consent,  the  dispute  shall,  at  the  request  of  either 
Party be submitted to arbitration by a tribunal of three arbitrators in accordance with 
the procedures set forth below. 

Within 30 days from the receipt of a request for arbitration each Party to the dispute 
shall  nominate  an  independent  arbitrator.  The  third  arbitrator  shall  be  appointed 

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within a further period of 45 days by agreement between the two arbitrators named 
by the Parties. If either of the Parties fails to nominate an arbitrator within the period 
specified,  or  if  the  third  arbitrator  is  not  appointed  within  the  period  specified,  the 
President  of  the  Council  of  the  International  Civil  Aviation  Organization  may  be 
requested by either Party to appoint an arbitrator or arbitrators as the case requires. If 
the  President  is  of  the  same  nationality  as  one  of  the  Parties,  the  most  senior  Vice 
President who is not disqualified on that ground shall make the appointment. In all 
cases the third arbitrator shall be a national of a third State, shall act as President of 
the Tribunal and shall determine the place where arbitration will be held. 

The  Tribunal  shall  establish  its  own  rules  of  procedure  and  the  timetable  for  the 
proceedings. 

At  the  request  of  a  Party  the  Tribunal  may  order  the  other  Party  to  the  dispute  to 
implement interim relief measures pending the Tribunal's final determination. 

The  Tribunal  shall  attempt  to  render  a  written  decision  within  180  days  from  the 
receipt  of  the  request  for  arbitration.  The  decision  of  the  majority  of  the  Tribunal 
shall prevail. 

If the Tribunal determines that there has been a violation of this Agreement and the 
responsible Party does not cure the violation, or does not reach a resolution with the 
other  Party  to  the  dispute  on  a  mutually  satisfactory  solution  within  30  days  after 
notification of the Tribunal's decision, the other Party may suspend the application of 
equivalent  benefits  arising  under  this  Agreement  until  such  time  as  the  dispute  has 
been resolved. 

The  expenses  of  the  Tribunal  shall  be  shared  equally  between  the  Parties  to  the 
dispute. 

For  the  purposes  of  this  Article,  the  European  Community  and  the  Member  States 
shall act together. 

4. 

5. 

6. 

7. 

8. 

9. 

ARTICLE 22 

Amendment 

Any  amendment  to  this  Agreement  mutually  determined  by  the  Parties,  which  may  be 
pursuant  to  consultations  held  in  conformity  with  Article  17  (Joint  Committee)  of  this 
Agreement,  shall  come  into  force  in  accordance  with  the  terms  set  out  in  Article  23  (Entry 
into Force and Provisional Application). 

ARTICLE 23 

Entry into Force and Provisional Application 

1. 

This  Agreement  or  any  amendment  to  this  Agreement  shall  enter  into  force  one 
month after the date of the latest diplomatic note in which the Parties confirm that all 
necessary procedures for the entry into force of the Agreement have been completed. 

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For purposes of this exchange, Canada shall deliver to the European Community the 
diplomatic  note  to  the  European  Community  and  its  Member  States,  and  the 
European  Community  shall  deliver  to  Canada  the  diplomatic  notes  from  the 
European Community and its Member States. 

2. 

Notwithstanding paragraph 1 of this Article, the Parties agree to provisionally apply 
this Agreement from the first day of the month following the date of the latest note of 
which  the  Parties  have  notified  each  other  of  the  completion  of  the  procedures 
necessary to provisionally apply this Agreement. 

ARTICLE 24 

Termination 

A Party may at any time from the entry into force of  this Agreement give notice in writing 
through  diplomatic  channels  to  the  other  Party  of  its  decision  to  terminate  this  Agreement. 
Such  notice  shall  be  communicated  simultaneously  to  the  International  Civil  Aviation 
Organization and the United Nations Secretariat. The Agreement shall terminate one (1) year 
after  the  date  of  receipt  of  the  notice  by  the  other  Party,  unless  the  notice  to  terminate  is 
withdrawn  by  mutual  consent  before  the  expiry  of  this  period.  In  the  absence  of  an 
acknowledgement  of  receipt  by  the  other  Party,  the  notice  shall  be  deemed  to  have  been 
received fourteen (14) days after the receipt of the notice by the International Civil Aviation 
Organization and the United Nations Secretariat. 

ARTICLE 25 

Registration of the Agreement 

This  Agreement  and  any  amendment  thereto  shall  be  registered  with  the  International  Civil 
Aviation Organization and the United Nations Secretariat upon entry into force. 

ARTICLE 26 

Multilateral Conventions 

If a multilateral convention comes into force in respect of the  Parties,  consultations  may  be 
held in the framework of the Joint Committee under Article 17 of this Agreement with a view 
to  determining  the  extent  to  which  this  Agreement  is  affected  by  the  provisions  of  the 
multilateral convention. 

ARTICLE 27 

Relationship to Other Agreements 

1. 

If  the  Parties  become  parties  to  a  multilateral  agreement,  or  endorse  a  decision 
adopted  by  the  International  Civil  Aviation  Organisation  or  another  international 
organisation, that addresses matters covered by this Agreement, they shall consult in 

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the Joint Committee to determine whether this Agreement should be revised to take 
into account such developments. 

2. 

During  the  period  of  provisional  application  pursuant  to  paragraph  2  of  Article  23 
(Entry  into  Force  and  Provisional  Application)  of  the  Agreement,  the  bilateral 
agreements  in  force  listed  in  Annex  3  shall  be  suspended  except  to  the  extent 
provided in Annex 2. Upon entry into force pursuant to paragraph 1 of Article 23 of 
this  Agreement,  this  Agreement  shall  supersede  the  relevant  provisions  of  the 
bilateral  agreements  in  force  listed  in  Annex  3  except  to  the  extent  provided  in 
Annex 2. 

IN  WITNESS  WHEREOF,  the  undersigned,  duly  authorized  thereto  by  their  respective 
Governments, have signed this Agreement. 

DONE  in  duplicate  at  ………………..  on  this  …………..  day  of  ………..  ,  200  …  in  the 
Bulgarian,  Czech,  Danish,  Dutch,  English,  Estonian,  Finnish,  French,  German,  Greek, 
Hungarian,  Italian,  Latvian,  Lithuanian,  Maltese,  Polish,  Portuguese,  Romanian,  Slovak, 
Slovene, Spanish, Swedish languages, each version being equally authentic. 

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ANNEX 1 

ROUTE SCHEDULE 

1. 

For the purposes of paragraph 1 (c) of Article 2 of this Agreement each Party shall 
permit the airlines of the other Party to provide transportation on the routes specified 
hereunder: 

(a)  For the airlines of Canada: 

Points  Behind  –  Points  in  Canada  –  Intermediate  Points  –  Points  in  and  within 
Member States – Points Beyond 

(b)  For the airlines of the European Community: 

Points  Behind  –  Points  in  Member  States  –  Intermediate  Points  –  Points  in  and 
within Canada – Points Beyond 

2. 

Airlines of a Party 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 territory of any 
Party and in any combination or any order; 

(d)  omit stops at any point or points; 

(e) 

(f) 

transfer traffic from any of its aircraft to any of its other aircraft without  any 
limitation as to change in type or number of aircraft operated at any point; 

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

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

Party; 

(h) 

carry  transit  traffic  at  intermediate  points  and  at  points  in  the  territory  of  the 
other Party; 

(i) 

(j) 

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

provide service through codesharing consistent with paragraph 3 of Article 13 
(Commercial Framework) of this Agreement; 

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

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ANNEX 2 

ARRANGEMENTS FOR THE AVAILABILITY OF RIGHTS 

SECTION 1 

Ownership and Control of the Airlines of both Parties 

1. 

2. 

Notwithstanding Article 4 (Investment), ownership of a Party’s airlines by nationals 
of  all  other  Parties  shall  be  allowable,  on  the  basis  of  reciprocity,  to  the  extent 
permitted  by  Canada’s  domestic  laws  and  regulations  for  foreign  investment  in 
airlines. 

Notwithstanding  paragraph  2  (c)  of  Article  3  (Designation,  Authorisation  and 
Revocation)  and  Article  4  (Investment)  of  the  Agreement,  the  following  provision 
shall apply with respect to ownership and control of airlines in place of paragraph 2 
(c)  of  Article  3  (Designation,  Authorisation  and  Revocation)  until  the  laws  and 
regulations referred to in paragraph 2 (c) and (d) of Section 2 of this Annex dictate 
otherwise: 

“in  the  case  of  an  airline  of  Canada,  substantial  ownership  and  effective  control  of 
the  airline  are  vested  in  nationals  of  Canada,  the  airline  is  licensed  as  a  Canadian 
airline, and the airline has its principal place of business in Canada; in the case of an 
airline of a Member State, substantial ownership and effective control of the airline is 
vested in nationals of Member States, Iceland, Liechtenstein, Norway or Switzerland, 
the airline is licensed as a Community airline, and the airline has its principal place 
of business in a Member State”. 

SECTION 2 

Progressive Availability of Traffic Rights 

1. 

When exercising the traffic rights set out in paragraph 2 of this Section, the airlines 
of  the  Parties  shall  enjoy  the  operational  flexibilities  permitted  in  paragraph  2  of 
Annex 1. 

2. 

Notwithstanding the traffic rights set out in Annex 1 of this Agreement: 

(a)  when the national laws and regulations of both Parties permit nationals of the 
other  Party  to  own  and  control  up  to  a  total  of  25  per  cent  of  the  voting 
interests of its airlines, the following rights shall apply: 

(i) 

for  passenger-combination  and  all-cargo  services,  for  Canadian  airlines, 
the  right  to  provide  international  transportation  between  any  Points  in 
Canada  and  any  Points  in  Member  States;  for  Community  airlines,  the 
right  to  provide  air  services  between  any  Points  in  Member  States  and 
any  Points  in  Canada.  In  addition,  for  passenger-combination  and  all-
cargo  services,  for  airlines  of  a  Party,  the  right  to  provide  international 
transportation to and from Points in third countries via any points in the 
territory of that Party with or without change of aircraft or flight number 

EN 

40 

   EN 

 
and  hold  out  and  advertise  such  services  to  the  public  as  through 
services; 

(ii) 

for  all-cargo  services,  for  airlines  of  both  Parties,  the  right  to  provide 
international  transportation  between  the  territory  of  the  other  Party  and 
points in third countries in conjunction with services between points in its 
territory and points in the territory of the other Party; 

(iii)  for  passenger-combination  and  all-cargo  services,  for  airlines  of  both 
Parties,  operating  rights  that  are  provided  for  in  bilateral  air  transport 
agreements  in  force  between  Canada  and  individual  Member  States,  as 
specified  in  Section  1  of  Annex  3,  and  the  operating  rights  in 
arrangements  that  were  being  applied  between  Canada  and  individual 
Member  States,  as  specified  in  Section  2  of  Annex  3.  With  respect  to 
beyond fifth freedom rights specified in this subparagraph, all limitations 
other than geographic limitations, limitations as to the number of points 
and specified frequency limitations shall no longer apply; and, 

(iv)  for  greater  certainty,  the  rights  contained  in  subparagraph  (i)  and  (ii) 
above  shall  be  available  where  no  bilateral  agreement  or  arrangement 
existed at the time signature of this Agreement, or where the rights in an 
agreement that were available immediately prior to the signature of this 
Agreement  are  not  as  liberal  as  the  rights  contained  in  subparagraph  (i) 
and (ii) above. 

(b)  when the national laws and regulations of both Parties permit nationals of the 
other  Party  to  own  and  control  up  to  a  total  of  49  per  cent  of  the  voting 
interests  of  its  airlines,  the  following  rights  additional  to  subparagraph  2  (a) 
shall apply: 

(i) 

for passenger-combination services, for the airlines of both Parties, fifth 
freedom  rights  shall  be  available  at  any  Intermediate  Points,  and  for 
Canadian airlines, between any Points in Member States and any Points 
in other Member States, provided that in the case of Canadian airlines the 
service includes a Point in Canada, and in the case of Community airlines 
the service includes a Point in any Member State; 

(ii) 

for  passenger-combination  services,  for  the  airlines  of  Canada,  fifth 
freedom  rights  shall  be  available  between  any  Points  in  Member  States 
and  any  Points  in  Morocco,  Switzerland,  the  European  Economic  Area, 
and other members of the European Common Aviation Area; and, 

(iii)  for  all-cargo  services,  for  the  airlines  of  a  Party,  the  right  to  provide 
international  transportation  between  Points  in  the  territory  of  the  other 
Party and points in third countries without a requirement to serve a Point 
in the territory of that Party. 

(c)  when the national laws and regulations of both Parties permit the nationals of 
the  other  Party  to  establish  an  airline  in  its  territory  for  domestic  and 
international air services, and pursuant to paragraphs 5, 6 (e) and 9 of Article 

EN 

41 

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17  (Joint  Committee)  of  this  Agreement,  the  following  rights  additional  to 
subparagraphs 2 (a) and (b) shall apply: 

(i) 

for  passenger-combination  services,  for  airlines  of  both  Parties,  fifth 
freedom rights shall be available to any Points Beyond without frequency 
limitations. 

(d)  when  the  national  laws  and  regulations  of  both  Parties  permit  the  full 
ownership and control of their airlines by nationals of the other Party and both 
Parties permit full application of Annex 1, pursuant to paragraphs 5, 6 (e) and 9 
of  Article  17  (Joint  Committee)  of  this  Agreement  and  pursuant  to  a 
confirmation by the Parties through their respective procedures, the provisions 
of Annex 2 above shall no longer apply and Annex 1 shall take effect. 

EN 

42 

   EN 

 
ANNEX 3 

BILATERAL AGREEMENTS BETWEEN 
CANADA AND THE MEMBER STATES OF THE EUROPEAN COMMUNITY 

1. 

As provided in Article XXX of this Agreement, the following bilateral agreements, 
entered  into  force  and  otherwise,  between  Canada  and  the  Member  States  shall  be 
suspended or superseded by this Agreement: 

(a)  The Republic of Austria: Agreement between the Government of Canada and 
the Austrian Federal Government on Air Transport, signed June 22, 1993; 

(b)  The  Kingdom  of  Belgium:  Agreement  between  the  Government  of  Canada 
and  the  Government  of  Belgium  on  Air  Transport,  signed  May  13,  1986; 
PROTOCOL  To  amend  the  Agreement  between  the  Government  of  Belgium 
and the Government of Canada on Air Transport, initialled ad referendum May 
23, 2000; 

(c)  The  Republic  of  Bulgaria:  Agreement  between  the  Government  of  Canada 
and the Government of the Republic of Bulgaria on Air Transport, initialled ad 
referendum April 12, 1991, ad referendum; 

(d)  The Czech Republic: Agreement between the Government of Canada and the 
Government of the Czech Republic on Air Transport, signed March 13, 1996; 
Exchange of Notes amending the Agreement, initialled ad referendum June 28, 
2004; 

(e)  The Kingdom of Denmark: Agreement between Canada and Denmark for Air 
Services  between  the  Two  Countries  signed  December  13,  1949.  Agreement 
between  the  Government  of  Canada  and  the  Government  of  the  Kingdom  of 
Denmark on Air Transport, initialled ad referendum on February 17, 1989; 

(f)  The Republic of Finland: Agreement between the Government of Canada and 
the  Government  of  Finland  for  Air  Services  between  and  Beyond  their 
Respective  Territories,  signed  May  28,  1990.  Exchange  of  Notes  constituting 
an  Agreement  amending  the  Agreement  between  the  Government  of  Canada 
and  the  Government  of  Finland  for  Air  Services  between  and  beyond  their 
Respective  Territories,  done  at  Helsinki  on  May  28,  1990,  signed  1  October 
1999; 

(g)  The  French  Republic: Air  Transport  Agreement  between  the  Government  of 
Canada  and  the  Government  of  the  French  Republic,  signed  June  15,  1976 
Exchange of Notes between the Government of Canada and the Government of 
the  French  Republic  amending  the  Air  Transport  Agreement  signed  in  Paris 
June 15, 1976, signed December 21, 1982; 

(h)  The  Federal  Republic  of  Germany:  Air  Transport  Agreement  between  the 
Government  of  Canada  and  the  Government  of  the  Federal  Republic  of 
Germany, signed March 26, 1973; Exchange of Notes between the Government 
of Canada and the Government of the Federal Republic of Germany amending 
the  Air  Transport  Agreement  signed  at  Ottawa  on  March  26,  1973  done  20 

EN 

43 

   EN 

 
January 1983; Amendments to the Agreement) initialled ad referendum, July 9, 
1993 and Amendments to the Agreement, initialled ad referendum October 24, 
1996. 

(i)  The  Hellenic  Republic:  Agreement  between  the  Government  of  Canada  and 
the  Government  of  the  Hellenic  Republic  on  Commercial  Scheduled  Air 
Services,  signed  August  20,  1984;  Exchange  of  Notes  constituting  an 
Agreement  between  the  Government  of  Canada  and  the  Government  of  the 
Hellenic Republic amending the Agreement on Air Transport, done at Toronto 
on August 20, 1984 signed June 23, 1995; 

(h)  The  Republic  of  Hungary:  Agreement  between  the  Government  of  Canada 
and  the  Government  of  the  Republic  of  Hungary  on  Air  Transport,  signed 
December 7, 1998; 

(i) 

Ireland: 
Agreement  between  the  Government  of  Canada  and  the 
Government of Ireland on Air Transport, signed April 27, 2007, provisionally 
in force; Agreement between Canada and Ireland for Air Services between the 
two countries, signed 08 August 1947; Exchange of Notes (April 19 and May 
31,  1948)  between  Canada  and  Ireland  amending  the  Agreement  for  Air 
Services  between  the  two  countries,  signed  31  May  1948;  Exchange  of  Notes 
between Canada and Ireland constituting an Agreement amending the Annex to 
the Air Agreement of August 8, 1947, signed 09 July 1951. Exchange of Notes 
between Canada and Ireland modifying the Air Agreement of August 8, 1947 
between the two countries, signed 23 December 1957; 

(j)  The Italian Republic: Agreement between the Government of Canada and the 
Government  of  Italy  on  Air  Transport,  done  May  16,  2002  ad  referendum; 
Agreement between Canada and Italy for Air Services, signed 13 April 1962; 
Exchange of Notes between the Government of Canada and the Government of 
the  Republic  of  Italy  constituting  an  Agreement  to  Amend  the  Agreement  for 
Air  Services  as  specified  in  the  Agreed  Minute  of  April  28,  1972,  signed  28 
August 1972; 

(k)  The  Kingdom  of  the  Netherlands:  Agreement  between  the  Government  of 
Canada and the Government of the Kingdom of the Netherlands relating to Air 
Transport, signed June 2, 1989; 

(l)  The Republic of Poland: Agreement between the Government of Canada and 
the  Government  of  the  Republic  of  Poland  on  Air  Transport,  initialled  ad 
referendum  on  April  5,  2001;  Air  Transport  Agreement  between  the  Polish 
People's Republic and the Government of Canada , done 14 May 1976; 

(m)  The  Portuguese  Republic:  Agreement  between  the  Government  of  Canada 
and the Government of Portugal on Air Transport, initialled ad referendum on 
June  8  2006;  Agreement  between  the  Government  of  Canada  and  the 
Government of Portugal on Air Transport, signed April 10, 1987; 

(n)  Romania: Agreement between the Government of Canada and the Government 
of  the  Socialist  Republic  of  Romania  on  Civil  Air  Transport,  signed  October 
27,  1983;  Exchange  of  Notes  between  the  Government  of  Canada  and  the 

EN 

44 

   EN 

 
Government  of  Romania  amending  the  Agreement,  signed  May  31,  1999  and 
July 12, 1999; 

(o)  The Kingdom of Spain: Agreement between the Government of Canada and 
the Government of Spain on Air Transport, signed September 15, 1988; 

(p)  The Kingdom of Sweden: Agreement between the Government of Canada and 
the  Government  of  Sweden  for  Air  Services  between  Canadian  and  Swedish 
Territories  signed  June  27,  1947.  Agreement  between  the  Government  of 
Canada and the Government of the Kingdom of Sweden on Air Transport, done 
February 17, 1989, ad referendum; and, 

(q)  The  United  Kingdom  of  Great  Britain  and  Northern  Ireland:  Agreement 
between  the  Government  of  Canada  and  the  Government  of  the  United 
Kingdom  of  Great  Britain  and  Northern  Ireland  Concerning  Air  Services, 
initialled  ad  referendum  on  April  12,  2006;  Agreement  between 
the 
Government  of Canada  and the  Government of the United Kingdom of Great 
Britain and Northern Ireland Concerning Air Services, signed June 22, 1988. 

2. 

Notwithstanding  Article  1  of  this  Annex,  for  areas  that  are  not  included  within  the 
definition of "territory" in Article 1 of this Agreement, the agreements in paragraphs 
(e)  The  Kingdom  of  Denmark,  (g)  The  French  Republic,  (k)  The  Kingdom  of  the 
Netherlands,  and  (q)  The  United  Kingdom  of  Great  Britain  and  Northern  Ireland 
shall continue to apply, according to their terms. 

EN 

45 

   EN 

 
ATTACHMENT 2 

MEMORANDUM OF CONSULTATION 

1. 

2. 

3. 

4. 

1. 

5. 

6. 

Delegations  representing  Canada  and  the  European  Community  and  its  Member 
States participated in four rounds of negotiations, held between November 2007 and 
September 2008, on a comprehensive Air Transport Agreement. Delegation lists are 
attached as Appendix A. 

The discussions took place in a cordial and constructive atmosphere, reflective of the 
excellent  relations  between  Canada  and  the  European  Community  and  its  Member 
States. 

Delegations concluded negotiations at the level of officials of an Agreement on Air 
Transport between the Government of Canada and the European Community and its 
Member States (“the Agreement”), the text of which was initialled and is attached as 
Appendix  B  to  this  Memorandum.  Both  Delegations  acknowledged  that  the  act  of 
initialling the text only represents the close of negotiations on the substantive issues 
and does not indicate that the text is adopted or authenticated, and will remain open 
to linguistic and textual changes required prior to signature to accurately describe the 
obligations undertaken by the Parties to this Agreement. 

The  delegations  undertook  to  submit  the  Agreement  to  their  respective  authorities 
with a recommendation that the Parties adopt the attached Agreement, subject to any 
necessary  adjustments  for  legal,  linguistic  or  textual  purposes,  as  authentic  and 
definitive by signature and to bring it into force in accordance with their respective 
legal requirements. Delegations confirmed that upon signature, the Agreement in its 
entirety will be applied administratively. Prior to signature, Canada and the Member 
States may, at their discretion, make all the rights set out in the Agreement available 
administratively to each other. With the goal of completing ratification and definitive 
entry into force as soon as possible, the Canadian delegation undertook to provide to 
the European Union delegation a French language version of the Agreement for its 
review. Similarly, the European Union delegation undertook to provide the Canadian 
delegation with texts in all other official languages of the European Community for 
review. 

DESIGNATION 

With  regard  to  Article  3  as  well  as  Article  16,  the  European  Union  delegation 
indicated  that  no  formal  diplomatic  designation  of  airlines  would  be  undertaken  by 
EU  Member  States  authorities.  The  delegations  concurred  that  licences  or  other 
forms of authorisation issued by each Party to its airlines constitute designation for 
the purposes of this Agreement. 

The  European  Union  delegation  concurred  that,  should  Canada  become  a  member 
country of a single air transport market based on common safety and licensing rules 

EN 

46 

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acceptable  to  Canada  and  comparable  to  the  provisions  of  this  Agreement,  the 
European  Community  and  its  Member  States  will  grant  Canada  a  reciprocal 
designation entitlement allowing Canada to designate airlines of its partners, where 
those partners provide reciprocal treatment to European Community airlines for the 
purpose  of  designation,  and  allowing  the  designation  of  Canada’s  airlines  by 
Canada’s  partners  to  operate  air  services  under  their  respective  air  transport 
agreements with the European Community and/or Member States. 

INVESTMENT, OWNERSHIP, AND CONTROL OF AIRLINES 

Delegations constructed an agreement that provides for the possibility of even more 
liberal  arrangements  should  each  side’s  policies  and  legislation  permit  a  higher 
foreign ownership limit and/or relaxation of control requirements of its airlines in the 
future. 

The  Canadian  delegation  explained  to  the  European  Union  delegation  that  Canada 
has  taken  a  relatively  flexible  approach  with  respect  to  foreign  ownership  of 
Canadian airlines. While Canada’s foreign ownership limit of Canadian air carriers is 
25  percent  of  voting  interests  at  this  time,  Canada  permits  variable  voting  equity 
structures,  which  potentially  allow  more  than  50  percent  of  an  air  carrier’s  voting 
shares  to  be  owned  by  non-Canadians.  Under  the  traditional  structure,  Canada  had 
interpreted  each  voting  share,  whether  held  by  a  Canadian  or  a  non-Canadian,  to 
carry  one  vote.  Under  a  variable  voting  structure,  each  voting  share  does  not 
necessarily  convey  one  vote.  In  addition,  Canada’s  practice  is  to  permit  non-
Canadian  nationals  to  potentially  hold  up  to  100  percent  of  non-voting  shares  in 
Canadian air carriers. A Canadian air carrier must be controlled in fact by Canadians. 
With  respect  to  control  in  fact  of  Canadian  carriers  by  nationals  of  EU  Member 
States,  the  Canadian  Transportation  Agency  does  not  have  codified  and  published 
criteria for determining control in fact, allowing every case to be fully assessed on its 
own merits with full flexibility to consider positively all relevant elements. 

The  European  Union  delegation  indicated  that  the  European  Community  is  in  a 
position  to  allow  its  airlines  to  be  100  percent  owned  by  non-EU  Member  States’ 
nationals where provided for in an international agreement to which the Community 
is a Party. Furthermore, as a result of treaty commitments with European Economic 
Area  countries  and  Switzerland,  nationals  of  Iceland,  Liechtenstein,  Norway  and 
Switzerland are permitted to own and control European Community airlines. 

With  respect  to  existing  discretion  under  bilateral  agreements  pertaining  to  foreign 
ownership structures of many of its bilateral partners’ airlines, Canada has, to date, 
not found it inimical to its interests and, therefore, has not exercised its discretion to 
take  action  regarding  third  country  nationals’  investment  in  bilateral  partners’ 
airlines.  The  Canadian  delegation  accepted  the  right  for  nationals  of  Iceland, 
Liechtenstein,  Norway  and  Switzerland  immediately  to  own  and  control  European 
Community airlines. 

Both  delegations  noted  that  potential  changes  to  rules  on  ownership  and  control 
related to Article 4 as well as paragraph 2 (c) and 2 (d) of Section 2 in Annex 2 of the 
Agreement  would  not  impose  obligations  on  any  of  the  Parties  to  secure  the 
recognition by third countries of airlines owned by nationals of another Party. 

2. 

7. 

8. 

9. 

10. 

11. 

EN 

47 

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3. 

12. 

4. 

13. 

5. 

14. 

CUSTOMS DUTIES, TAXES, AND CHARGES 

During  the  discussion  on  Article  8,  the  European  Union  delegation  underlined  that 
the present Agreement will not affect the area of Value Added Tax (VAT), with the 
exception of turnover tax on imports. The European Union delegation also explained 
that  under  Community  law  (Council  Directive  2006/112/EC),  goods  supplied  on 
board intra-Community flights other than for immediate consumption must be taxed 
under the conditions and subject to the VAT rate applicable in the Member State of 
departure. Excisable goods intended for such purpose are considered to have left the 
suspension  system  put  in  place  under  Community  law  (Council  Directive 
92/12/EEC) and would not be able to be carried in an untaxed state. The law applies 
to  intra-EU  flights  whether  operated  by  Community  or  third-country  carriers.  As 
regards flights between any of the Member States and Canada, the legal position is 
different. The European Union delegation confirmed that in the case of a flight from 
Canada to a Member State, there is nothing in Community legislation which would 
prevent duty free sales to passengers on board who, upon disembarkation, will in any 
case  be  subject  to  customs  control.  Similarly,  if  the  flight  is  from  a  Member  State, 
directly  or  via  a  third  country,  to  Canada  as  destination,  duty  free  sales  are  also 
possible  under  the  export  rules,  with  customs  control  taking  place  in  Canada.  In 
neither  case  would  the  situation  change  merely  by  a  stopover  in  the  Community, 
provided there is no embarkation or disembarkation. With regard to the same Article, 
the  European  Union  delegation  also  noted  that  the  general  rule  under  Community 
law  (Council  Directive  2003/96/EC)  is  that  Member  States  shall  exempt  energy 
products  used  for  commercial  air  transportation.  The  Directive  contains  provisions, 
however, that would allow Member States to limit the general exemption and to tax 
aviation  fuel  for  domestic  or  intra-Community  flights.  The  Canadian  delegation 
noted  that  under  previous  bilateral  air  transport  arrangements  with  Member  States, 
Canada  has  exemptions  from  tax  on  aviation  fuel.  The  Canadian  delegation  further 
noted that prior to implementation of tax on aviation fuel by Member States for intra-
Community flights, Canada would require discussions at Joint Committee. 

STATISTICS 

With regard to Article 9, both delegations reaffirmed that it was not their intention to 
create  administrative  burden  by  requiring  the  submission  of  statistics  to  authorities 
that are not normally required by existing legislation and regulations. The Canadian 
delegation  explained  that  all  air  carriers  flying  to  Canada  are  required  to 
electronically  submit  basic  operational  data.  The  European  Union  delegation 
acknowledged 
for  various  Member  State 
requirements  exist 
governments. 

that  similar 

CHARGES FOR AIRPORTS AND AVIATION FACILITIES AND SERVICES 

With  regard  to  Article  12  of  the  Agreement,  the  European  Union  delegation 
expressed  its  interest  in  including  a  reference  to  the  need  for  charges  to  be  ‘cost-
related’.  The  Canadian  delegation  accepted  that  the  term  be  included  in  the 
provisions  dealing  with  air  navigation  services,  provided  that  it  is  understood  that, 
for Canada, the cost elements and process for establishing air navigation charges are 
set  out  in  legislation  which  prohibits  discrimination  and  differentiation  between 

EN 

48 

   EN 

 
categories  of  users,  and  specifies  costs  which  are  to  be  taken  into  account  in  the 
establishment  of  air  navigation  charges.  Under  the  Civil  Air  Navigation  Services 
Commercialization Act, charges must not be set at a level that, based on reasonable 
and  prudent  projections,  would  generate  revenues  exceeding  NavCanada’s  current 
and  future  financial  requirements  in relation to the provision of civil air navigation 
services. The charging principles and financial requirements are defined in this Act 
as well as the delineation where charges could deviate from being cost-related. The 
European Union delegation took note of this explanation. 

COMMERCIAL FRAMEWORK: AIRLINE REPRESENTATIVES 

With  regard  to  paragraphs  6  and  7  of  Article  13  of  the  Agreement,  the  delegations 
expressed that one objective of the provisions is to facilitate requests for employment 
authorizations,  visas,  and  other  relevant  documents  for  airline  representatives/staff, 
including  in  circumstances  where  the  entry  or  residence  of  staff  is  required  on  an 
emergency and temporary basis. 

COMMERCIAL FRAMEWORK: INTERMODAL SERVICES 

With regard to paragraph 9 (b) of Article 13 of the Agreement, delegations concurred 
that  with  respect  to intermodal services and where airlines elect to perform surface 
transportation themselves, such services are subject to domestic laws and regulations. 

COMMERCIAL FRAMEWORK: PRICES 

With  regard  to  paragraphs  10  to  12  of  Article  13  of  the  Agreement,  delegations 
concurred that although prices are not required under the Agreement to be filed with 
the aeronautical authorities, it is necessary for those authorities from time to time to 
seek information from airlines regarding specific prices to allow, for example, for the 
resolution of complaints such as overcharging or failing to apply the applicable price. 
Delegations further concurred that such requests for information are not to be used as 
an alternative filing process. 

CHARTER AIR SERVICES 

The European Community no longer distinguishes by regulation between scheduled 
and charter air services. Canada continues to have regulations distinguishing between 
scheduled and charter air services and establishing consumer protection requirements 
for  charter  programmes.  The  delegations  continue  to  encourage  the  further 
development of charter air services and confirmed that all Parties may benefit from 
the  flexibility  provided  by  national  laws  and  regulations  relating  to  charter  air 
services. 

JOINT COMMITTEE AND SETTLEMENT OF DISPUTES 

With  regard to Article  17 and Article 21 of the Agreement, delegations understood 
that  the  Joint  Committee  would  consist  of  representatives  of  Canada,  the  European 

6. 

15. 

7. 

16. 

8. 

17. 

9. 

18. 

10. 

19. 

EN 

49 

   EN 

 
11. 

20. 

12. 

21. 

13. 

22. 

Commission  and  the  Member  States.  Delegations  further  understood  that,  for  the 
resolution of disputes pursuant to the Agreement, the Parties will be represented by 
Canada  and  the  European  Commission.  In  all  dispute  settlement  proceedings,  the 
Member State or States concerned will be present. 

ENVIRONMENT 

The  delegations  noted  that  sovereign  jurisdiction  includes  jurisdiction  over  the 
territory of a Party. 

LABOUR MATTERS 

With  regard  to  Article  19  of  the  Agreement,  the  European  Union  delegation  noted 
the importance that it attaches to labour issues in the context of the Agreement and 
recommended that the Parties monitor the effects of the Agreement, in particular on 
employment  conditions,  to  promote  better  understanding  of  each  Party’s  labour 
systems  related  to  mobile  aviation  employees,  sound  labour  policies  and  practices 
and  to  improve  the  capacities  and  capabilities  of  the  Parties  to  find  appropriate 
responses  where  necessary.  The  European  Union  delegation  also  noted  the 
obligations  of  signatories  to  abide  by  the  principles  of  the  ILO  Declaration  on 
Fundamental  Principles  and  Rights  at  Work  and  its  Follow-up  (1998),  notably  the 
right to freedom of association and effective recognition and enforcement of the right 
to collective bargaining. At the same time, the delegations recognised their respective 
sovereign rights to set their own policies and national priorities and to set, administer 
and enforce their own labour laws and regulations. The European Union delegation 
stressed the opportunities for the social partners to strengthen cooperation on labour 
matters through the Agreement. The Canadian delegation recommended that it be left 
to each Party to decide how it may want to monitor the effects of the Agreement on 
labour.  The  delegations  concurred  that  the  provisions  of  the  Agreement  have  no 
application  to  specific  instances  of  collective  bargaining  or  other  private  industrial 
relations actions. 

FUTURE RIGHTS 

The  Canadian  delegation  indicated  that  full  ownership  of  Canada’s  air  carriers  by 
foreign  nationals,  seventh  freedom  rights  for  passenger-combination  services  for 
airlines of both Parties (separate and apart from Community airlines operating from 
any  EU  Member  States),  cabotage  and  rights  of  establishment  are  not  within 
Canada’s  air  transportation  policy,  and  would  require  changes  to  Canadian  policy 
and/or laws and regulations. 

Overseas Territories 

23. 

With respect to the overseas territories of Member States, delegations acknowledged 
that this Agreement will apply only to the overseas territories of the Member States 
as  dictated  by  the  Treaty  Establishing  the  European  Community.  The  overseas 
territories  are  the  French  Overseas  Departments  (French  Guyana,  Guadeloupe, 
Martinique  and  Réunion),  the  Azores,  Madeira  and  the  Canary  Islands.  For  the 
Member  States’  overseas  territories  to  which  the  Treaty  does  not  apply,  the 

EN 

50 

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appropriate bilateral air transport agreement between Canada and that Member State 
listed in Annex 3 continues to apply. 

Done in London, United Kingdom on the 30th day of November 2008. 

For the Delegation of Canada 

the  Delegation  of 
For 
Community and its Member States 

the  European 

Nadir Patel 

Olivier Onidi 

Head of Delegation 

Head of Delegation 

Chief Air Negotiator  

Directorate General for Energy and Transport 

Government of Canada 

European Commission 

EN 

51 

   EN