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(43 pages)ATConf.5.WP.17.Add.en.wpd

ATConf/5-WP/1727/1/03Addendum18/2/03

WORLDWIDE AIR TRANSPORT CONFERENCE: CHALLENGES ANDOPPORTUNITIES OF LIBERALIZATION

Montreal, 24 to 29 March 2003

Agenda Item 3: Review of template air services agreement3.1: Comprehensive template air services

agreement

TEMPLATE AIR SERVICES AGREEMENTS FORBILATERAL, REGIONAL OR PLURILATERAL LIBERALIZATION

(Presented by the Secretariat)

This Addendum to WP/17 presents, as Attachment B, the Template Air Services Agreement(TASA) for use in a regional or plurilateral situation.

— — — — — — — —

Addendum to ATConf/5-WP/17Attachment B

B-1

* Note“Traditional” in the context of regional or plurilateral agreements is not a reflection of States’ practice or usage overtime but rather of an approach of stricter control as compared with full liberalization.

ATTACHMENT B

REGIONAL OR PLURILATERAL TEMPLATE AIR SERVICESAGREEMENT

As indicated in ATConf/5-WP/17, while most of the provisions contained in Attachment A,the Bilateral Template Air Services Agreement (TASA), can be adapted for regional or plurilateral use,requiring minor or no changes to the content and explanatory notes, there remains however a number ofimportant issues that are specific to regional or plurilateral agreements and which either require substantialchanges to the bilateral provision or have no counterpart in bilateral agreements.

The table below, in Column 1, Part I, lists the articles and annexes which appear in theBilateral TASA in Attachment A, and in Columns 2 through 4 identifies whether and what changes arenecessary for the regional or plurilateral situation.

Column 2 indicates articles and one annex in the Bilateral TASA which contain provisionsthat use the terminology “each designated airline”, “a designated airline of each Party”or a similarformulation. Such provisions can be used in a regional or plurilateral agreement without any changes requiredto the text and therefore are not included in this Attachment B and may be found in Attachment A.

Column 3 includes several articles and one annex in the Bilateral TASA which can beamended using appropriate wording to enable its use in a regional or plurilateral agreement. For example,wordings such as “the other Party”, “one Party”, “another Party” can be changed to “each Party”, “any Party”,and “every other Party”. Also, terms such as “neither Party” and “either Party”can be changed to “no Party”and “any Party” respectively. These articles and annex, also found in Attachment A and not reproduced inAttachment B, can therefore be readily amended.

Column 4 reflects the articles and annex that are new or rewritten in order to be adapted toa regional or plurilateral situation. Column 4 includes articles in the regional or plurilateral TASA that haveno counterpart in Attachment A and are listed as Part II of Column 1. All such provisions are covered inAttachment B, including the different options, approaches (Traditional*, Transitional and Full liberalization)and explanatory notes. Attachment B accordingly includes only those provisions that are substantiallydifferent or new in a regional or plurilateral context, other provisions being readily adaptable from theBilateral TASA as indicated by identification in Column 2 or 3. The format of Attachment B is the same asthe Bilateral TASA in Attachment A.

Addendum to ATConf/5-WP/17Attachment B B-2

** Article 32 (Approval of schedules), Article 36 (Multilateral agreements), Article 37 (Termination) and Annex I (Routeschedules) are not applicable to Attachment B.

Column 1 Column 2(no changenecessary)

Column 3(Party

designationchange only)

Column 4(rewrite oradditionrequired)

Part I - Articles in Attachment A **

Preamblex

Art. 1 - Definitions x

Art. 2 - Grant of rights x

Art. 3 - Designation and authorization x

Art. 4 - Withholding, revocation and limitation ofauthorization

x

Art. 5 - Application of laws x

Art. 6 - Direct transit x

Art. 7 - Recognition of certificates x

Art. 8 - Safety x

Art. 9 - Aviation security x

Art. 10 - Security of travel documents x

Art. 11 - Inadmissible and undocumented passengers and deportees

x

Art. 12 - User charges x

Art. 13 - Customs duties x

Art. 14 - Taxation x

Art. 15 - Fair competition x

Art. 16 - Capacity x

Art. 17 - Pricing (Tariffs) x

Art. 18 - Safeguards x

Art. 19 - Competition laws x

Art. 20 - Currency conversion and remittance of earnings

x

Art. 21 - Sale and marketing of air service products x


B-3

Column 1 Column 2(no changenecessary)

Column 3(Party

designationchange only)

Column 4(rewrite oradditionrequired)

Art. 22 - Non-national personnel and access to localservices

x

Art. 23 - Change of gauge x

Art. 24 - Ground handling x

Art. 25 - Codesharing/Cooperative arrangements x

Art. 26 - Leasing x

Art. 27 - Intermodal services x

Art. 28 - Computer reservation systems (CRS) x

Art. 29 - Ban on smoking x

Art. 30 - Environmental protection x

Art. 31 - Statistics x

Art. 33 - Consultations x

Art. 34 - Settlement of disputes x

Art. 35 - Amendments x

Art. 38 - Registration with ICAO x

Art. 39 - Entry into force x

Annex II - Non-scheduled/Charter operations x

Annex III - Air cargo operations x

Annex IV - Transitional measures x

Part II - Articles not in Attachment A

Exceptionsx

Existing agreements x

Review x

Withdrawal x

Depository x

Signature and ratification x

Accession x


Throughout this document:

1) an asterisk is used to indicate that a specific provision within an article iscommon to each of the traditional, transitional and full liberalizationapproaches. No asterisk appears if the whole article applies to all threeapproaches. However in some articles, such as “Designation andauthorization”, the provision is reproduced in full for each approach forpurposes of readability and clarity of the Article;

2) in an article which provides for more than one approach, i.e. traditional,transitional, full liberalization, the same sequential order of presentation ismaintained down the page, for ease of readability;

3) similarly, where there are options within an approach (for example, twooptions within the transitional approach) these are also provided separately,but not in any order of priority.


B-5

Index

Page

Article ! Grant of rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6 Article ! Designation and authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11Article ! Withholding, revocation and limitation of authorization . . . . . . . . . . . . . . . . . . . . . . . B-16Article ! Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-20Article ! Tariffs (Pricing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-22Article ! Settlement of disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23Article ! Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30Article ! Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-33Article ! Existing agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-34Article ! Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-35Article ! Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-36Article ! Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-37Article ! Signature and ratification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-38Article ! Accession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-39Article ! Entry into force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-40

Annex ! Transitional measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-41


Article _Grant of rights

A key issue for States negotiating a regional orplurilateral agreement is what provisions, if any,should be made in the regional or plurilateralagreement with respect to rights for air servicesbetween Parties to the agreement and non-PartyStates.

Traditional

1.* Each Party grants to the other Parties thefollowing rights for the conduct of international airtransportation by the airlines of the other Parties:

a)* the right to fly across its territory withoutlanding; b)* the right to make stops in its territory fornon-traffic purposes;

The foregoing first two freedoms of the air, althoughincluded in multilateral agreements (for scheduledservices, the International Air Services TransitAgreement (IASTA); for non-scheduled services,Article 5 of the Convention), are also commonlyincluded in regional or plurilateral agreements,either because some States may not be, or may ceaseto be, parties to the IASTA.

c) the right to provide international airtransportation to and from any other Party, providedsuch services originate or terminate in the territoryof the Party designating the airline. [Internationalair transportation to or coming from the territoriesof non-Party State shall require the authorization ofthe Parties involved.]

In a traditional approach, an agreement does notdeal with air services between a Party and a non-Party, leaving those rights to be determined by therelevant agreements between a Party and non-Parties. In this sense such agreements could bedescribed as self-contained. An alternative for thistype of self-contained agreement is for the Parties todefine and exchange the first five freedoms of the air.

[Paragraph 2, option 1 of 2]

2. Nothing in this Agreement shall be deemed toconfer on the airline or airlines of one Party theright to take on board, in the territory of anotherParty, passengers, baggage, cargo, or mail carriedfor remuneration and destined for another point inthe territory of that other Party.

In a manner similar to the practice in bilateralagreements, an approach may be for Parties toexplicitly exclude cabotage rights (option 1), or tomake it clear in the agreement that Parties to theAgreement are not required to grant such rights,leaving this decision to the Parties to the Agreement(option 2).


2. A Party shall not be required to grant cabotagerights to an airline of another Party.


B-7

Article _Grant of rights (cont’d)

Transitional


a)* the right to fly across its territory withoutlanding; b)* the right to make stops in its territory fornon-traffic purposes; and


c) the right to provide international airtransportation to and from any other Party, andbetween non-Party States and those other Partieswith which the designating State has negotiatedFifth freedom rights, provided such servicesoriginate or terminate in the territory of the Partydesignating the airline; and

This transitional approach envisions the negotiationbetween Parties to the Agreement of beyond rights tonon-Parties (Fifth freedom rights) on the basis ofspecific criteria. Exercise of these rights would, ofcourse, be dependent on obtaining the correspondingrights from the non-Party State.

d) the right to provide [scheduled and]non-scheduled air cargo services between any otherParty and a non-Party State.

This approach includes Seventh freedom forscheduled (as an option) and non-scheduled allcargo services.


2. Until [insert a date agreed to by the Parties], aParty shall authorize cabotage traffic rights for thedesignated airline(s) of every other Party, providedthat the traffic rights are exercised on a servicewhich constitutes and is scheduled as an extensionof a service from, or as preliminary to, the Partydesignating the airline.

The transitional approach to cabotage would usuallyprecede a conversion to unrestricted cabotage afterthe agreed date.

The direct link of domestic and international flightsegments caused this type of operation to bedescribed as consecutive cabotage (Eighth freedom).


2. A Party shall authorize cabotage rights for thedesignated airline(s) of every other Party providedthe cabotage segment is operated between twointernational segments of the flight.

This option limits cabotage to situations where anair carrier provides international transportation totwo points in another State on a co-terminal basis(where the same flight serves two points in anotherState.)



Full liberalization


a)* the right to fly across its territory withoutlanding; b)* the right to make stops in its territory fornon-traffic purposes; and


c) the right, in accordance with the terms of theirdesignations, to perform scheduled and charterinternational air transportation between points onthe following routes:

i) from points behind the territory of theParty designating the airline via the territory of thatParty and intermediate points to any point or pointsin the territory of the Party granting the right andbeyond;

ii) for passenger and all-cargo service orservices, between the territory of the Party grantingthe right and any point or points; and

The full liberalization formula accords each Partynot only full traffic rights to/from every other Partyto the agreement but Fifth freedom rights to/from theterritory of every other Party and non-Party Statesas well as Seventh freedom for all-cargo services.However, as with the transitional formulation, theexercise of Fifth freedom rights between anotherParty and a non-Party will depend on the rightsavailable between the non-Party and the Partyexercising the Fifth freedom rights in the regional orplurilateral agreement. (For example, the more“open skies”bilateral agreements which a Party haswith non-Party States, the more potential Fifthfreedom routes it will have to/from other Parties tothe agreement.) Some agreements may also grantrights with respect to a specific type of service, forexample including a provision dealing with nonscheduled cargo flights to non-Party States.

d) the rights otherwise specified in theAgreement.

2. Each designated airline may on any or allflights and at its option:

Most of these provisions on operational flexibilityare similar to that of liberal bilateral provisions thatare usually covered in a Route schedule.

a) operate flights in either or both directions;

b) combine different flight numbers within oneaircraft operation;


B-9


Full liberalization (cont’d)

c) serve behind, intermediate and beyond pointsand points in the territories of the Parties on theroutes in any combination and in any order;

d) omit stops at any point or points;

e) transfer traffic from any of its aircraft to any ofits other aircraft at any point on the routes;

f) serve points behind any point in its territorywith or without change of aircraft or flight numberand hold out and advertise such services to thepublic as through services;

g) make stopovers at any points whether within oroutside the territory of any Party;

h) carry transit traffic through any other Party’sterritory; and

i) combine traffic on the same aircraft regardlessof where such traffic originates;

without directional or geographic limitation andwithout loss of any right to carry traffic otherwisepermissible under the present Agreement.

3. On any international segment or segments ofthe agreed routes, a designated airline may performinternational air transportation without anylimitation as to change, at any point on the route, intype or number of aircraft operated; provided that[with the exception of all-cargo services] thetransportation beyond such point is a continuationof the transportation from the territory of the Partythat has designated the airline and, in the inbounddirection, the transportation to the territory of theParty that has designated the airline is acontinuation of the transportation from beyond suchpoint.

This provision may not be needed if the agreementincludes an article on Change of gauge.

The provision provides extensive operationalflexibility in the use of equipment. This type ofprovision would , for example, enable a hub typeoperation to be established at the change point,subject of course to agreement being reached withother relevant partners. The only restriction is thatservices be conducted in a linear fashion, that is thatthe flight on the second sector be the extension orcontinuation of the prior connecting outbound orinbound flight. The bracketed language removes thisrestriction for all-cargo services.




4. A Party shall authorize cabotage rights for thedesignated airline(s) of every other Party withoutrestriction.

Full liberalization does not require any link betweenthe cabotage segment and any internationalsegment; it would permit a designated airline of oneParty to establish a hub and spoke operation (withdomestic segments as the spokes) in the territory ofany other Party (stand alone cabotage or Ninthfreedom).


B-11

Article _Designation and authorization

The formulation of the Designation andauthorization provision may be simplified byaddressing the reasons in paragraph 2 for a Stateto receive an authorization in the Revocation ofauthorization Article, since the conditions for notgranting an authorization are the same.

Traditional

1. Each Party shall have the right to designate inwriting an airline [or an eligible airline fromanother Party State] to operate the agreed servicesin accordance with this Agreement and to withdrawor alter such designation. Such designation shall betransmitted to the other Parties in writing throughdiplomatic channels [and to the Depository].

The traditional approach refers to one airline or asingle designation. An option may also be for aState Party to designate an eligible airline fromanother State Party to operate air services on itsbehalf. In this case the Parties, prior to grantingthe authorization, should agree on certaineligibility criteria such as the right ofestablishment, licensing, and safety and securitystandards.

2.* On receipt of such a designation, and ofapplication from the designated airline, in the formand manner prescribed for operating authorization[and technical permission], each Party shall grantthe appropriate operating authorization withminimum procedural delay, provided that:

a) the airline is substantially owned andeffectively controlled by one or more of the Partiesto this Agreement, their nationals or both;

The traditional ownership and control criteria inregional or plurilateral agreements andarrangements is common ownership and control ofthe air carrier concerned by Parties to theagreement and/or their nationals. As an attempt tobroaden the ownership and control requirementand to encourage multinational airlines this hasfaced the problem of the acceptance of this criteriaby non-Party States. In the absence of widespreadacceptance by non-Party States of commonownership and control criteria, regionally ownedairlines may find their markets confined to theterritories of other Parties to the regional orplurilateral agreement or arrangement.


Article _ Designation and authorization (cont’d)

Traditional (cont’d)

b)* the Party designating the airline is incompliance with the provisions set forth in Article _(Safety) and Article _ (Aviation Security); andc)* the designated airline is qualified to meet otherconditions prescribed under the laws andregulations normally applied to the operation ofinternational air transport services by the Partyconsidering the application or applications.

For a Party which receives the designation, itwould retain the discretionary right of refusal as ameasure of control to address legitimate concernsif and when required. This provision addressespotential concerns such as safety, security or othereconomic aspects including potential emergence of"flags of convenience".

3.* On receipt of the operating authorization ofparagraph 2, a designated airline may at any timebegin to operate the agreed services for which it isso designated, provided that the airline complieswith the applicable provisions of this Agreement.

[4.* Parties granting operating authorizations inaccordance with paragraph 2 of this Article shallnotify such action to the Depository.]

As an option, upon granting of an authorization,Parties agree to notify the Depository of theagreement who is responsible of maintaining acentralized register of airline designation andoperating authorizations.

Transitional

1. Each Party shall have the right to designate oneor more airlines to operate the agreed services inaccordance with this Agreement and to withdraw oralter such designation. Such designation shall betransmitted to the other Parties in writing throughdiplomatic channels [and to the Depository].

The transitional approach refers to one or moreairlines or multiple designation. The phrasing wassometimes interpreted as being met by thedesignation of two airlines. The transitionalapproach also includes formulae for increasing thenumber of designated airlines on specific routesbased on, for example, negotiated multi-yearincreases or the achievement of a specified level ofpassenger traffic in city-pair markets.



B-13


Transitional (cont’d)

a) the designated airline has its principal place ofbusiness (see (i) below) [and permanent residence]in the territory of the designating Party;b) the Party designating the airline has andmaintains effective regulatory control (see (ii)below) of the airline;

This transitional approach recommended by ICAOremoves the ownership requirement but retainseffective control (including safety and securityoversight) while adding incorporation in andprincipal place of business in the designating Party.It would permit investment by entities from non-Parties in airlines of the Parties. Such control isenvisioned primarily through licensing which caninclude both economic and operational elements.The arrangement would not require the State tochange its existing laws, policies or regulationspertaining to national ownership and control of itsown national air carrier(s), but would allow suchchange if and when the State wishes to do so.

Notes.—(i) evidence of principal place of businessincludes such factors as: the airline is establishedand incorporated in the territory of the designatingParty in accordance with relevant national laws andregulations, has a substantial amount of itsoperations and capital investment in physicalfacilities in the territory of the designating Party,pays income tax, registers and bases its aircraftthere, and employs a significant number ofnationals in managerial, technical and operationalpositions.

(ii) evidence of effective regulatory controlincludes but is not limited to: the airline holds avalid operating licence or permit issued by thelicensing authority such as an Air OperatorCertificate (AOC), meets the criteria of thedesignating Party for the operation of internationalair services, such as proof of financial health, abilityto meet public interest requirement, obligations forassurance of service; and the designating Party hasand maintains safety and security oversightprogrammes in compliance with ICAO standards.



Transitional (cont’d)c)* the Party designating the airline is incompliance with the provisions set forth in Article _(Safety) and Article _ (Aviation Security); andd)* the designated airline is qualified to meet otherconditions prescribed under the laws andregulations normally applied to the operation ofinternational air transport services by the Partyconsidering the application or applications.





Full liberalization1. Each Party shall have the right to designate asmany airlines as it wishes to operate the agreedservices in accordance with this Agreement and towithdraw or alter such designation. Suchdesignation shall be transmitted to the other Partiesin writing through diplomatic channels [and to theDepository].

The full liberalization approach refers to as manyairlines or no quantitative limit on the number ofairlines which can be designated.


a) the airline is under the effective regulatorycontrol of the designating Party;

Full liberalization removes all criteria pertaining tothe airline, but requires effective regulatory controlby the designating State to ensure compliance withSafety and Security standards. It would also includea “right of establishment” that is a right fornon-nationals to establish and operate an airline inthe territory of a Party which could then engage indomestic and international air services.



B-15


b)* the Party designating the airline is incompliance with the provisions set forth in Article _(Safety) and Article _ (Aviation Security); andc)* the designated airline is qualified to meet otherconditions prescribed under the laws andregulations normally applied to the operation ofinternational air transport services by the Partyconsidering the application or applications.






Article _Withholding, revocation and limitation of

authorization

The reasons for any Party that receives a requestfor an authorization to not authorize initially or tosubsequently revoke, suspend or condition anauthorization it has granted are the same.Consequently, if the criteria for designationrequires such formulation as common ownershipand control of the air carrier concerned by Partiesto the agreement and/or their nationals or“principal place of business”, then the failure tomeet that requirement will be grounds forrevocation, suspension or the imposition ofconditions on the operating permission.

Traditional1.* The aeronautical authorities of each Party shallhave the right to withhold the authorizationsreferred to in Article _ (Designation andauthorization) of this Agreement with respect to anairline designated by any other Party, and to revoke,suspend or impose conditions on suchauthorizations, temporarily or permanently:a) in the event that they are not satisfied thatsubstantial ownership and effective control arevested in one or more of the Parties designating theairline, their nationals, or both;b)* in the event of failure of the Party designatingthe airline to comply with the provisions set forth inArticle _ (Safety) and Article _ (Aviation security);andc)* in the event of failure that such designatedairline is qualified to meet other conditionsprescribed under the laws and regulations normallyapplied to the operation of international airtransport services by the Party receiving thedesignation.

Other bases for revocation are broader in scopeand are covered by cross reference to therequirements to comply with the provisions onsafety, security and the laws and regulations of thatParty. The reasons for adverse action on anauthorization are the same as those in the BilateralTASA (Attachment A).

Transitional1.* The aeronautical authorities of each Party shallhave the right to withhold the authorizationsreferred to in Article _ (Designation andauthorization) of this Agreement with respect to anairline designated by any other Party, and to revoke,suspend or impose conditions on suchauthorizations, temporarily or permanently:


B-17


authorization (cont’d)


a) in the event that they are not satisfied that thedesignated airline has its principal place of business(see (i) below) [and permanent residence] in theterritory of the designating Party;b) in the event that they are not satisfied that theParty designating the airline has and maintainseffective regulatory control (see (ii) below) of theairline;

This transitional criteria removes the ownershiprequirement but retains effective control whileadding incorporation in and principal place ofbusiness in the designating Party. It would permitinvestment by entities from non-Parties in airlinesof the Parties.

Notes.—(i) evidence of principal place of businessincludes such factors as: the airline is establishedand incorporated in the territory of the designatingParty in accordance with relevant national laws andregulations, has a substantial amount of itsoperations and capital investment in physicalfacilities in the territory of the designating Party,pays income tax, registers and bases its aircraftthere, and employs a significant number ofnationals in managerial, technical and operationalpositions.

(ii) evidence of effective regulatory controlincludes but is not limited to: the airline holds avalid operating licence or permit issued by thelicensing authority such as an Air OperatorCertificate (AOC), meets the criteria of thedesignating Party for the operation of internationalair services, such as proof of financial health, abilityto meet public interest requirement, obligations forassurance of service; and the designating Party hasand maintains safety and security oversightprogrammes in compliance with ICAO standards.

c)* in the event of failure of the Party designatingthe airline to comply with the provisions set forth inArticle _ (Safety) and Article _ (Aviation security);and





d)* in the event of failure that such designatedairline is qualified to meet other conditionsprescribed under the laws and regulations normallyapplied to the operation of international airtransport services by the Party receiving thedesignation.

Full liberalization1.* The aeronautical authorities of each Party shallhave the right to withhold the authorizationsreferred to in Article _ (Designation andauthorization) of this Agreement with respect to anairline designated by any other Party, and to revoke,suspend or impose conditions on suchauthorizations, temporarily or permanently:

a) in the event that they are not satisfied that theairline is under the effective regulatory control ofthe designating State;

b)* in the event of failure of the Party designatingthe airline to comply with the provisions set forth inArticle _ (Safety) and Article _ (Aviation security);and

c)* in the event of failure that such designatedairline is qualified to meet other conditionsprescribed under the laws and regulations normallyapplied to the operation of international airtransport services by the Party receiving thedesignation.


B-19



Traditional/Transitional/Full liberalization

2.* Unless immediate action is essential to preventinfringement of the laws and regulations referred toabove or unless safety or security requires action inaccordance with the provisions of Article _(Safety) or Article _ (Aviation security), the rightsenumerated in paragraph 1 of this Article shall beexercised only after consultations between theaeronautical authorities in conformity with Article _(Consultation) of this Agreement.

Compliance with the laws and regulations as wellas safety and security provisions is constrained inparagraph 2 by the need in the first instance forconsultation.


Article _Capacity

[Option 1 of 2]


Capacity offered on air services shall be subject toArticle _ (Fair competition).

An alternative, applicable to all three approaches,where a Party believes the amount of additionalcapacity to be an unfair competitive practice wouldbe to invoke Article _ (Fair competition).

[Option 2 of 2]

Traditional[Paragraphs 1 and 2, option 1 of 2]

1. Any Party may require designated airlines ofthe other Parties to file their schedules for any routeto or from its territory.

2. Any Party may prevent an increase in capacityon any route to or from its territory which wouldlead to a serious financial loss to the designatedairlines operating services on that route.

Although no predetermination of capacity provisionis found in any regional/plurilateral agreement,there are instances of limitations being permittedon capacity in such agreements. These limitationsare designed to meet concerns of States withsmaller airlines that their services would not bedisplaced by excessive capacity.

[Option 2 of 2]

Any Party may limit the offer of non-scheduledpassenger services on a route on which scheduledpassenger service exists, if additionalnon-scheduled passenger services would endangerthe stability of such scheduled service.

A variation on a general right to limit capacity isapplying the limitation to a certain type of service,such as non-scheduled passenger services.

Transitional

Until [an agreed date] any Party may limit thecapacity of a designated airline on a route to orfrom its territory to [an agreed percentage] of thetotal capacity offered on that route.

A time-limited transitional measure is to allow thecapacity offered on a route to vary from thetraditional 50/50 division to a 60/40 proportion orsome other formula. This is not suited to routes withmore than two airlines.

Full liberalization

1. Each Party shall allow each designated airlineto determine the frequency and capacity of theinternational air transportation it offers based oncommercial considerations of the marketplace.

Each designated airline may offer capacity basedon Free determination where individual airlinesdetermine capacity to be offered withoutgovernment approval or intervention , subject tocompetition law(s) where applicable.


B-21

Article _Capacity (cont’d)


2. No Party shall unilaterally limit the volume oftraffic, frequency, or regularity of service, or theaircraft type or types operated by the designatedairlines of any other Party, except as may berequired for customs, technical, operational, orenvironmental reasons under uniform conditionsconsistent with Article15 of the Convention.

The Parties agree to abrogate their direct control ofcapacity while retaining the ability to applynon-discriminatory, multilateral controls consistentwith the Convention.

3. No Party shall impose on another Party'sdesignated airlines a first refusal requirement, upliftratio, no-objection fee, or any other requirementwith respect to the capacity, frequency or trafficwhich would be inconsistent with the purposes ofthis Agreement.

No specific provision on the relationship betweencapacity and demand is contained in the Freedetermination method, the competitive pricing andscheduling responses of airlines to market forcesbeing relied on to bring about necessaryadjustment. This mechanism may work lesseffectively where the free play of market forces isimpaired or inhibited.

4. No Party shall require the filing of schedules,programmes for charter flights, or operational plansby airlines of the other Party for approval, except asmay be required on a non-discriminatory basis toenforce uniform conditions as foreseen byparagraph 2 of this Article or as may be specificallyauthorized in an Annex to this Agreement. If aParty requires filings for information purposes, itshall minimize the administrative burdens of filingrequirements and procedures on air transportationintermediaries and on designated airlines of theother Party.

The Free determination method normallyproscribes all forms of discrimination or unfaircompetitive practices, including predatory pricing,such practices being the cause for possibleconsultation and remedy. The provision onsafeguards for unfair competitive practicesaddresses this additional and complimentaryprocedure.

Given the wide latitude accorded designatedairlines on the capacity they may offer and in viewof the increased potential for anti-competitiveactions such as "capacity dumping", the Fullliberalization approach should be subject tointervention on the basis of the competition laws ofthe Parties where applicable.


Article _Tariffs (Pricing)

[Option 1 of 2]


Prices (Tariffs) shall be subject to Article _ (Faircompetition).

An alternative, applicable to all three approaches,where any Party invokes Article _ (Faircompetition) due to prices charged that mayconstitute unfair competitive behavior.

[Option 2 of 2]

Transitional

1. The tariffs to be applied by the designatedairline or airlines of any Party for services coveredby this Agreement shall be subject to the principleof Country of Origin tariff approval.

This transitional approach to approve tariffsbetween the Parties is based on the principle ofcountry of origin

2. Each Party shall have the right to approve ordisapprove tariffs for one-way or round-tripcarriage between the territories of the Parties whichcommences in its own territory. No Party shall takeunilateral action to prevent the inauguration ofproposed tariffs or the continuation of effectivetariffs for one-way or round-trip carriage betweenthe territories of the Parties commencing in theterritory of the other Party.

The scope of approval falls primarily on tariffs forthird and fourth freedom services which arecompletely within the regulatory ambit of theconcerned Parties.

[3. Notwithstanding the provisions of this Article,a designated airline shall be free to apply tariffs inrespect of carriage on non-scheduled services, aslong as these tariffs have been notified to the Partiesconcerned.]

A provision on the approval of tariffs for non-scheduled services is included on an optional basis.

Full liberalization

Prices (Tariffs) charged by airlines shall not berequired to be filed with, or approved by, any Party.

Under Full liberalization, tariffs could not bedisapproved for any reason. Airlines practices withrespect to tariffs could be made subject to thecompetition laws of the Parties where applicable.


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Article _Settlement of disputes

A principle difference between the disputesettlement process in bilateral and those regionalagreements which are based on broader regionalorganizations is the recourse to, and the role playedby, inter alia, supra-national bodies such as theEuropean Commission, the Commission of theCartagena Agreement (The Andean Pact) and theCouncil of Ministers of the Common Market forEastern and Southern Africa, as well as the disputesettlement processes of the broader regionalorganization which can make binding decisionswith respect to disputes between member Stateswhich are Parties to a regional agreement orarrangement.

Traditional

1. Any dispute which is not settled byconsultations or negotiation shall be submitted toarbitration if any one of the Parties in dispute sorequests and shall be referred accordingly to one ormore arbitrators selected by agreement by theParties in dispute. If within forty-five days from thedate of the request for arbitration the Parties indispute are unable to agree on the selection of anarbitrator or arbitrators, any of those Parties mayrequest the [official or entity of the regionalorganization] to nominate a single arbitrator towhom the dispute shall be referred for decision.

Traditional dispute settlement provisions followclosely the bilateral pattern of consultations,negotiation and arbitration but takes into accountin its arbitral process the possibility that disputesmay involve more than two Parties. In addition, inthe event that the Parties in the dispute are unableto agree on an arbitrator, the process provides forrecourse to a regional entity which plays anintermediate role in the selection process.

2. The decision of the arbitrator or arbitratorsshall be binding on all Parties to the dispute.

3. If a Party does not comply with an arbitraldecision, the other Parties can adopt measuresrestricting the operation of the airlines of thenon-complying State to achieve compliance.


Article _Settlement of disputes (cont’d)

Transitional and Full liberalization

This alternative developed by ICAO is to addressthose commercial disputes, such as on pricing,capacity and other competitive practices that arisein a liberalized environment. It could also be usedto address disputes beyond unfair practices, forexample, disputes related to market access in a lessregulatory controlled environment. The mechanismis deliberately broader in scope and could apply toissues not specifically included in the agreement. Itis not intended as a substitute for the formalarbitration process, but rather as a means toresolve disputes in a relatively simple, responsiveand cost effective manner.

1. Any dispute which cannot be resolved byconsultations and negotiations, may at the requestof either Party to the agreement be submitted to amediator or a dispute settlement panel. Such amediator or panel may be used for mediation,determination of the substance of the dispute or torecommend a remedy or resolution of the dispute.

The normal consultation process may resolve suchdisputes but could also have the effect of prolongingan unfair competitive practice to the commercialdetriment of one or more airlines. Consequently,this procedure, which is less formal and timeconsuming than arbitration, is designed, by meansof a panel, to reach a resolution through mediation,fact finding or decision, using the services of anexpert or experts in the subject matter of thedispute. The primary objective is to enable theParties to restore a healthy competitiveenvironment in the airline market place asexpeditiously as possible.

2. The Parties shall agree in advance on the termsof reference of the mediator or of the panel, theguiding principles or criteria and the terms of accessto the mediator or the panel. They shall alsoconsider, if necessary, providing for an interimrelief and the possibility for the participation of anyParty that may be directly affected by the dispute,bearing in mind the objective and need for a simple,responsive and expeditious process.

The mechanism requires the Parties to agree inadvance on such matters as the purpose of thepanel, viz its terms of reference and procedure, andin particular whether the panel is permitted to grantany interim or injunctive relief to the complainant.Such relief could take the form, for example, of atemporary freeze or reversion to the status quoante.


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Transitional and Full liberalization (cont’d)

3. A mediator or the members of a panel may beappointed from a roster of suitably qualifiedaviation experts maintained by ICAO. The selectionof the expert or experts shall be completed withinfifteen (15) days of receipt of the request forsubmission to a mediator or to a panel. If the Partiesfail to agree on the selection of an expert or experts,the selection may be referred to the President of theCouncil of ICAO. Any expert used for thismechanism should be adequately qualified in thegeneral subject matter of the dispute.

The two important time-frames built in to themechanism are 15 days for selection of the expertsto constitute the panel, and 60 days for therendering of a decision or determination. Thus theemphasis is on minimizing legal formalities andprocedural time-frames, yet allowing adequate timefor the panel to arrive at a decision ordetermination.

4. A mediation should be completed within sixty(60) days of engagement of the mediator or thepanel and any determination including, ifapplicable, any recommendations, should berendered within sixty (60) days of engagement ofthe expert or experts. The Parties may agree inadvance that the mediator or the panel may grantinterim relief to the complainant, if requested, inwhich case a determination shall be made initially.

5. The Parties shall cooperate in good faith toadvance the mediation and to implement thedecision or determination of the mediator or thepanel, unless they otherwise agree in advance to bebound by decision or determination. If the Partiesagree in advance to request only a determination ofthe facts, they shall use those facts for resolution ofthe dispute.

6. The costs of this mechanism shall be estimatedupon initiation and apportioned equally, but withthe possibility of re-apportionment under the finaldecision.

7. The mechanism is without prejudice to thecontinuing use of the consultation process, thesubsequent use of arbitration, or Withdrawal underArticle _.




8. If the Parties fail to reach a settlement throughmediation, the dispute may, at the request of oneParty, be submitted to arbitration with respect toanother Party in accordance with the procedures setforth below. The Party submitting the dispute toarbitration shall notify all other Parties of thedispute at the same time that it submits itsarbitration request.

The use of the mechanism does not preclude theimplementation of the arbitration process if that isalso provided for in the agreement and if the abovemechanism has failed to resolve the dispute to thesatisfaction of one or more Parties. Nevertheless, itmay be expected that the subsequent use ofarbitration should be unnecessary if the Partieshave committed to this complementary procedurefor resolving certain kinds of commercial and timesensitive disputes.

9. Arbitration shall be by a panel of threearbitrators to be constituted as follows:

In the case Parties fail to reach settlement throughmediation, the dispute is referred for decision by apanel of arbitrators. The Article includes a verydetailed arbitration procedure for disputesinvolving more than two parties as well as aprocedure for Parties to intervene in an arbitralprocedure involving other Parties. Time frames areprovided for the various steps in the arbitralprocess.

a) within 30 days after the receipt of a request forarbitration, each Party to the dispute shall name onearbitrator. Within 60 days after these two arbitratorshave been named, the Parties to the dispute shall byagreement appoint a third arbitrator, who shall actas President of the arbitral panel;

b) if either Party to the dispute fails to name anarbitrator, or if the third arbitrator is not appointedin accordance with subparagraph a) of thisparagraph, either Party may request the President ofthe Council of the International Civil AviationOrganization to appoint the necessary arbitrator orarbitrators within 30 days. If the President of theCouncil is of the same nationality as one of theParties to the dispute, the most senior VicePresident who is not disqualified on that groundshall make the appointment.


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10. Except as otherwise agreed by the Parties tothe dispute, the arbitral panel shall determine thelimits of its jurisdiction in accordance with thisAgreement and shall establish its own proceduralrules. The arbitral panel, once formed, mayrecommend interim measures pending its finaldetermination. At the direction of the arbitral panelor at the request of either of the Parties to thedispute, a conference concerning the precise issuesto be arbitrated and the specific procedures to befollowed shall be held on a date determined by thearbitral panel, in no event later than 15 days afterthe third arbitrator has been appointed. If the Partiesto the dispute are unable to reach agreement onthese issues, the arbitral panel shall determine theprecise issues to be arbitrated and the specificprocedures to be followed.

The arbitral panel determines its procedural rulesincluding the recommendation of any interim reliefmeasures for the Parties pending a final decision.

11. Except as otherwise agreed by the Parties tothe dispute or as directed by the panel, thecomplaining Party shall submit a memorandumwithin 45 days of the time the third arbitrator isappointed, and the reply of the responding Partyshall be due 60 days after the complaining Partysubmits its memorandum. The complaining Partymay submit a pleading in response to such replywithin 30 days after the submission of theresponding Party's reply and the responding Partymay submit a pleading in response to thecomplaining Party's pleading within 30 days afterthe submission of such pleading. The arbitral panelshall hold a hearing at the request of either Party oron its own initiative within 15 days after the lastpleading is due.

12. The arbitral panel shall attempt to render awritten decision within 30 days after completion ofthe hearing or, if no hearing is held, after the datethe last pleading is submitted. The decision of themajority of the arbitral panel shall prevail.




13. The Parties to the dispute may submit requestsfor clarification of the decision within 15 days afterit is rendered, and any clarification given shall beissued within 15 days of such request.

14. In the case of a dispute involving more thantwo Parties, multiple Parties may participate oneither or both sides of a proceeding described in thisArticle. The procedures set out in this Article shallbe applied with the following exceptions:

a) with respect to paragraph 9 a), the Parties oneach side of a dispute shall together name onearbitrator;b) with respect to paragraph 9 b), if the Parties onone side of a dispute fail to name an arbitratorwithin the permitted time, the Party or Parties onthe other side of the dispute may utilize theprocedures in paragraph 9 b) to secure theappointment of an arbitrator; andc) with respect to paragraphs 10, 11, and 13, eachof the Parties on either side of the dispute has theright to take the action provided to a Party.

15. Any other Party that is directly affected by thedispute has the right to intervene in the proceedings,under the following conditions: a) a Party desiring to intervene shall file adeclaration to that effect with the arbitral panel nolater than 10 days after the third arbitrator has beennamed;b) the arbitral panel shall notify the Parties to thedispute of any such declaration, and the Parties tothe dispute shall each have 30 days from the datesuch notification is sent to submit to the arbitralpanel any objection to an intervention under thisparagraph. The arbitral panel shall decide whetherto allow any intervention within 15 days after thedate such objections are due;


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c) if the arbitral panel decides to allow anintervention, the intervening Party shall notify allother Parties to the Agreement of the intervention,and the arbitral panel shall take the necessary stepsto make the documents of the case available to theintervening Party, who may file pleadings of a typeand within a time limit to be set by the arbitralpanel, within the timetable set out in paragraph 11of this Article to the extent practical, and mayparticipate in any subsequent proceedings; and

d) the decision of the arbitral panel will beequally binding upon the intervening Party.

16. All Parties to the dispute, including interveningParties, shall, to the degree consistent with theirlaw, give full effect to any decision or award of thearbitral panel.

17. The arbitral panel shall transmit copies of itsdecision or award to the Parties to the dispute,including any intervening Parties. The arbitral panelshall provide to the Depository a copy of thedecision or award, provided that appropriatetreatment shall be accorded to confidential businessinformation.

18. The expenses of the arbitral panel, includingthe fees and expenses of the arbitrators, shall beshared equally by all of the Parties to the dispute,including intervening Parties. Any expensesincurred by the President of the Council of theInternational Civil Aviation Organization inconnection with the procedures of paragraph 9 b) ofthis Article shall be considered to be part of theexpenses of the arbitral panel.


Article _Amendments

As with the settlement of disputes, for regional airtransport arrangements which are based onbroader regional organizations [for example, theEuropean Union, the Andean Pact, and theCommon Market for Eastern and Southern Africa]the relevant council or commission amends thearrangement through its power to issue new oramended regulations.

Traditional[Option 1 of 2]

Any Party may propose any amendment to theprovisions of this Agreement. Such amendmentshall only come into force after it has been acceptedby all the other Parties.

One of the decisions which States contemplating aregional or plurilateral agreement with a formalamendment provision is what criteria to apply withrespect to such amendments coming into force. Atraditional approach would require unanimity, allParties to ratify an amendment before it enters intoforce.

[Option 2 of 2]

1. Any Party may propose an amendment to thisAgreement. The text of any such amendment andthe reasons therefor shall be transmitted to the[official of the regional organization] who shalltransmit them to the Government of each Party.

An alternative traditional approach assigns aprocedural role in the amendment process to anofficial of the regional organization. Amendmentsrequire the approval of all Parties to come intoforce.

2. The Parties shall communicate to the [officialof the regional organization] whether or not theproposed amendment is acceptable and also tosubmit any comments thereon.

3. If all Parties agree to the proposed amendmentand deposit their respective Instruments ofRatification with the [official of the regionalorganization], the amendment shall enter into forceon the deposit of the last such Instrument ofRatification.


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Article _Amendments (cont’d)

Transitional

1. The [body created by the Agreement] shallreview and where necessary propose amendmentsto this Agreement.

This transitional approach relies on a moresimplified amendment process, nevertheless,approval by all Parties is required before theamendment enters into force.

2. Such amendments shall come into force whenapproved by all Parties.

Full liberalization

1. The Agreement may be amended in accordancewith the following procedures:

The full liberalization approach provides flexibility,but also potential complexity to the amendmentprocess by providing two procedures foramendment.

One procedure is based on acceptance andratification of an amendment by a simple majorityof the Parties attending a negotiation to amend theagreement. The amendment is in force only betweenthe Parties which have ratified it, but other Statescan accept and ratify the amendment subsequently.

a) if agreed by at least a simple majority of allParties as of the date of proposal of the amendment,negotiations shall be held to consider the proposal;

b) unless otherwise agreed, the Party proposingthe amendment shall host the negotiations, whichshall begin not more than 90 days after agreementis reached to hold such negotiations. All Partiesshall have a right to participate in the negotiations;

c) if adopted by at least a simple majority of theParties attending such negotiations, the Depositoryshall then prepare and transmit a certified copy ofthe amendment to the Parties for their acceptance;

d) any amendment shall enter into force, asbetween the Parties which have accepted it, 30 daysfollowing the date on which the Depository hasreceived written notification of acceptance from asimple majority of the Parties; and

e) following entry into force of such anamendment, it shall enter into force for any otherParty 30 days following the date the Depositoryreceives written notification of acceptance from thatParty.


Article _Amendments (cont’d)


2. In lieu of the procedures set forth inparagraph 1, the Agreement may be amended inaccordance with the following procedures:

The second procedure envisions an amendmentwhich is accepted by all the Parties when it isproposed, but goes into effect only after all Partieshave ratified it.

Depending on the Parties’ initial reaction to aproposed amendment as well as its perceivedurgency, Parties proposing an amendment to theAgreement can choose the option most likely toresult in a prompt ratification.

a) if all Parties as of the time of proposal of theamendment give written notice through diplomaticor other appropriate channels to the Party proposingthe amendment of their consent to its adoption, theParty proposing the amendment shall so notify theDepository, which shall then prepare and transmita certified copy of such amendment to all of theParties for their acceptance; and

b) an amendment so adopted shall enter into forcefor all Parties 30 days following the date on whichthe Depository has received written notification ofacceptance from all of the Parties.


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Article _Exceptions

Traditional

Any Party may refuse to authorize additional airservices on any route it declares to be of nationalinterest and on which the annual capacity offereddoes not exceed [an agreed number of seats].

A traditional approach provides an exception to theagreement which is not time limited. The traditionalapproach to Article _ (Capacity) also falls in thiscategory.

Transitional[Option 1 of 2]

By a formal declaration made in writing to the otherParties, any Party shall have the option not to grantand receive the rights and obligations provided forin Article(s) _ for a transitional period notexceeding [agreed time frame].

In contrast, a transitional exception is time-limitedand may apply to some potential articles such as onGrant of rights, Capacity or Tariff. Therefore, theexemptions from the application of the agreementterminate at the end of the set transitional period.In the first option, a Party informs other Parties inwriting that specific rights and obligations in theagreement will not be granted for a period of time.

[Option 2 of 2]

Notwithstanding the provisions in the Agreement,the Parties agree to apply the transitional measuresset out in Annex _ (Transitional measures) for aperiod not exceeding [agreed time frame].

In this option, Parties agree to apply for a limitedperiod of time some measures that they jointlydetermine in an annex to the agreement.

Full liberalization

In addition to the rights in the Agreement, theParties to a Protocol to this Agreement also grantthe rights for their designated airlines to perform:

a) scheduled and charter international airtransportation in passenger and combinationservices between the territory of the party grantingthe rights and any point or points; and

A full liberalization exception in the form of aProtocol to the basic agreement, may provideadditional rights, such as Seventh Freedom andlimited cabotage, for those Parties willing toexchange them. Note that if the rights are in theagreement then a Protocol would not be needed. AProtocol would be used for those Parties wanting togo further than the whole group.

b) scheduled and charter international airtransportation between points in the territory of theParty granting the rights.


Article _Existing agreements

Parties need to decide what will be the relationshipbetween the regional or plurilateral agreement andexisting bilateral and other agreements 1) betweenParties to the regional or plurilateral agreement,and 2) between Parties and non-Party States.

Traditional

This Agreement shall not affect any bilateral,multilateral or other agreement or arrangementsalready in force between Parties or between a Partyand a non-Party.

The traditional approach recognizes all existingother agreements both between Parties and betweenParties and non-Parties. In effect this subordinatesthe regional agreement to existing agreements.

Transitional[Option 1 of 2]

This Agreement shall supersede any bilateral ormultilateral air services agreement between theParties to the extent that those agreements areincompatible with this Agreement.

One transition approach allows provisions ofexisting agreement which are compatible with theregional agreement to remain in force, while thoseincompatible with it are superseded. This couldraise questions as to which provisions of existingagreements fall in which category.

[Option 2 of 2]

The provisions of this Agreement do not permitrestrictions upon what is established in the airservices agreements which the Parties haveconcluded between themselves.

Another transitional approach would tend to treatthe flexibility of the regional agreement as aminimum level, with more flexible arrangementspermitted in bilateral agreements between Parties.

Full liberalization

Upon entry into force of this Agreement betweenone Party and any other Party, any bilateral airservices agreement existing between them at thetime of such entry into force shall be superseded bythis Agreement.

The full liberalization formulation simply replacesany existing bilateral agreements between Partieswith the regional or plurilateral agreement. Thisprevents a dual system of agreements between andamong Parties to the regional or plurilateralagreement (where some provisions of the bilateralcontinue in effect) and eliminates potentialquestions as to whether certain bilateral provisionsare compatible or incompatible with the regional orplurilateral agreement.


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Article _Review

1. The Agreement shall be subject to reviewevery [number of years] in order to determinewhether any amendments are required. An earlierreview may take place if requested by [number ofParties] of the Parties.

This article provides the opportunity for a review totake place in order to assess the operation of theAgreement and decide if any amendments areneeded to improve its effectiveness. Procedures forthe review may be agreed by the Parties.

2. After consultation with the Parties, theDepository shall notify the Parties of the agreeddate and the procedures for the review of theAgreement. Such notice should take place [numberof days] days before the meeting.


Article _Withdrawal

1. Any Party may withdraw from this Agreementby giving written notice of withdrawal to theDepository who shall within [agreed number ofdays] of receipt of the notification of withdrawalnotify the other Parties.

In the case of some regional agreements based onbroader regional organizations, the notice ofwithdrawal is provided to an official or entity of theregional organization. A Party, for its own nationalinterest, has the right to withdraw from theagreement by giving notice within a certain timeframe.

2. The withdrawal shall be effective 12 monthsafter receipt of the notice by the Depository, unlessthe Party withdraws its notice by writtencommunication to the Depository within the12-month period.

[3. If, as a result of withdrawals, the number ofParties to this Agreement is less than [an agreednumber], this Agreement shall cease to be in forcefrom the date on which the last of such withdrawalsbecomes effective.]

The optional text provides for situations where thewithdrawal of a Party may render an agreementineffective since some agreements may require acertain number of ratifications for the agreement toremain in force.


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Article _Depository

1. The original of this Agreement shall bedeposited with [the Party or regional entity agreedto], which shall be designated as the Depository ofthe Agreement.

Parties will need to designate a Depository who isresponsible to transmit certified copies of thisAgreement and any amendments or protocols to allsignatory and acceding Parties.

2. The Depository shall transmit certified copiesof the Agreement to all Parties of the Agreementand to any States that may subsequently accede tothe Agreement.

3. Following entry into force of this Agreement,the Depository shall transmit a certified true copy ofthis Agreement to the Secretary General of theUnited Nations for registration and publication inaccordance with Article 102 of the Charter of theUnited Nations [and to the Secretary General of theInternational Civil Aviation Organization inaccordance with Article 83 of the Convention.] TheDepository shall likewise transmit certified truecopies of any amendments which enter into force.

Notification to ICAO by the Depository may becovered in a separate Article on Registration withICAO.

4. The Depository shall make available to theParties copies of any arbitral decision or awardissued under Article _ (Settlement of disputes) ofthis Agreement.

[5. The Depository shall maintain a centralizedregister of airline designations and operatingauthorizations in accordance with Article _(Designation and authorization), paragraph 4 of thisAgreement.]

An optional text should the Parties agree tomaintain a centralized register of airlinedesignations and operating authorizations.


Article _Signature and ratification

1. The Agreement shall be open for signature bythe [Government of the Parties to the Agreement]

This article follows usual practice for multilateralagreements where the agreement is to be open forsignature by all governments which are listed. Thesigning could take place at any time, for example,at a meeting of Ministers, or subsequently by dulyauthorized representatives of those governments.

2. The Agreement shall be subject to ratification.Instruments of ratification shall be deposited withthe Depository.

To become a Party to the agreement, a Partygovernment must then also ratify its decision inaccordance with its own constitutional procedures.The documents recording ratification are to bedeposited with the assigned Depository.


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Article _Accession

Traditional[Option 1 of 2]

This Agreement shall be open to accession by anyParty of (name of regional organization).

The traditional approach to adding Parties to aregional or plurilateral agreement based on abroader regional organization is when new Statesare admitted to the organization.

[Option 2 of 2]

This Agreement shall be open to accession by otherParties in (description of region) subject to theapproval of all Parties to the Agreement.

A traditional approach for regional agreements notbased on a broader regional organization is torequire unanimity of the existing Parties to allowother States in the region to become Parties to theagreement.

Transitional

1. This Agreement shall apply, on the one hand tothe territories in which the (agreement creating thebroader regional organization) is applied and underthe conditions laid down in that (agreement) and onthe other hand, to the territory of (name of Statebeing included in agreement).

A transitional approach is to negotiate anagreement for the inclusion of a State not a memberof the broader regional organization in the regionalair transport arrangement.

2. The acceding Party shall deposit an appropriateinstrument of accession with the Depository. Theaccession shall take effect on the date of the receiptof such Instrument with the Depository who shalltransmit a certified copy to all Party.

Full liberalization

After this Agreement has entered into force anyState which is a Party to the aviation securityconventions listed in Article _ (Aviation security)may accede to this Agreement by deposit of aninstrument of accession with the Depository.

With full liberalization, the agreement is open toany State which has ratified the aviation securityconventions and therefore has the most flexiblecriteria for expansion of the agreement to otherStates.


Article _Entry into force

Traditional

This Agreement shall enter into force when allsignatory Parties have deposited their instrumentsof ratification with the Depository.

The traditional entry into force provision requiresall Parties which have negotiated and/or signed theagreement to ratify it before it comes into force forany Party.

Transitional/Full liberalization

1. This Agreement shall enter into force on the[agreed day] from the date of deposit of the [agreednumber] instrument of ratification, and thereafterfor each Party [number of days] days after thedeposit of its instrument of ratification or accession.

Parties will need to agree on the date of deposit aswell as the number of signatory States necessary tobring the agreement into force for those Partiesratifying it. Agreeing on the number of ratificationswill have an impact on the speed with which theagreement enters into force. A reasonablecompromise formula (for example 50 per cent ofratifications) will allow it to come into forcerelatively quickly.

2. The Depository shall inform each Party of thedate of entry into force of this Agreement.


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Annex _Transitional measures

The Annex is an ICAO recommendation whichaddresses the issues of participation as well assustainability in moving towards liberalization. Itis drawn from existing practices and approachescovering both participation and preferentialmeasures. It consists of one or more of three typesof clauses. If these clauses apply to each Party inthe same manner, then they would be considered tobe participation measures. If not, then they wouldbe regarded as preferential measures.

The following is an indicative list of subjects thatStates may cover as transitional measures in theAnnex: the number of designated airlines,ownership and control criteria, capacity andfrequency, route and traffic rights, codesharing,charter operations, intermodal services, tariffs, slotallocation, and "doing business" matters such asground handling. Any one of the subjects listedcould be dealt with by any of the approaches set outin the three clauses. Doc 9587 contains material onpossible participation and preferential measures.

The following transitional measures shall expire on(date), or such earlier date as is agreed upon by theParties:

1. Notwithstanding the provisions of Article_ (orAnnex_ ), the designated airline (or airlines) ofParty A (or each Party) may (shall) .....

This clause is to be used when a particular Article(or Annex) would not take effect immediately but beimplemented in a limited way during the transitionperiod. By way of example, the Parties would agreethat, notwithstanding the Annex on Route schedulesgranting each Party unlimited Fifth Freedomrights, the airline(s) of one Party (the developedState) would not be permitted to exercise thoselocal traffic rights fully between the other Party (thedeveloping State) and a third State until a specifieddate.

2. Notwithstanding the provisions of Article _ (orAnnex _ ), the designated airline (or airlines) ofParty A (or each Party) may (shall) .... as follows:

a) From (date) through (date), ....; andb) From (date) through (date), .....

This clause is similar to the first clause but withphase-in periods. For example, the Parties wouldagree that, notwithstanding an Article allowingunlimited codesharing, the airlines of each Partywould be permitted to expand their third-countrycodeshare services (frequencies) only in a gradualmanner for specified periods.


Annex _Transitional measures (cont’d)

3. Notwithstanding the provisions of Article_ (orAnnex_ ), the following provisions shall govern .....

This clause is used when an Article (or Annex)would not take effect immediately and a differentscheme would be applied during the transitionalperiod. For example, the Parties would agree that,notwithstanding a tariff Article with no requirementfor filing and approval of tariffs, acountry-of-origin regime would govern pricing untila specific date.

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