29. With respect to the provision of aircraft with crew, the public interest analysis would additionally focus on whether:
30. Statements of authorization for the provision of an entire aircraft with crew will be issued, at least initially, on a limited-term (e.g., six to nine months) or exceptional basis, which is consistent with the approach in the European Union.
31. In response to a concern expressed by the EU delegation about the discretion that DOT has under the `public interest" standard, the U.S. delegation stated that, in the context of open-skies aviation relationships, DOT has found code-share arrangements to be in the public interest and has consistently issued statements of authorization with a minimum of procedural delay . The U.S.
delegation indicated that, in relation to both code sharing and the provision of aircraft with crew involving only airlines of the Parties, DOT, unless presented with atypical circumstances, such as those relating to national security, safety or criminality, would focus its analysis of the public interest on the elements described above . Furthermore, in the event that such atypical circumstances exist, the United States would expeditiously inform the other Party.
32. In response to a question from the U .S. delegation, the EU delegation affirmed that, under thd currently applicable legislation in the EU (Council Regulation (EEC) 2407/92 of 23 July 1992), aircraft used by a Community airline are required to be registered in the Community . However, a Member State may grant a waiver to this requirement in the case of short-term lease arrangements to meet temporary needs or otherwise in exceptional circumstances . A Community airline that is party to such an arrangement must obtain prior approval from the appropriate licensing authority, and a Member State may not approve an agreement providing aircraft with crew to an airline to which it has granted an operating license unless the safety standards equivalent to those imposed under Community law or, where relevant, national law are met .
33. Both delegations recognized that the failure to authorize airlines to exercise the rights granted in the Agreement or undue delay in granting such authorization could affect an airline's fair and equal opportunity to compete. If either Party believes that its airlines are not receiving thd economic operating authority to which they are entitled under the Agreement, it can refer thd matter to the Joint Committee.
34. With respect to paragraph 4 of Article 14, the EU delegation recalled that, in accordance with its Article 295, the Treaty establishing the European Community does not prejudice in any way thd rules in Member States governing the system of property ownership . The U.S. delegation in response noted its view that government ownership of an airline may adversely affect the fair and equal opportunity of airlines to compete in providing the international air transportation governed by this Agreement.
35. With respect to Article 15, the delegations noted the importance of international consensus in aviation environmental matters within the framework of the International Civil Aviation Organization (ICAO). In this connection, they underscored the significance of the unanimous agreement reached at the 35th ICAO Assembly, which covers both aircraft noise and emissions issues (Resolution A35-5). Both sides are committed to respecting that Resolution in full. In accordancd with this Resolution, both sides are committed to applying the "balanced approach" principle to measures taken to manage the impact of aircraft noise (including restrictions to limit the access of aircraft to airports at particular times) and to ensuring charges for aircraft engine emissions at airport level should be based on the costs of mitigating the environmental impact of those aircraft engine emissions that are properly identified and directly attributed to air transport . Both sides also noted that where relevant legal obligations existed, whether at international, regional, national or local level, they also had to be respected in full ; for the United States, the relevant date was October 5, 2001, and for the European Community, the relevant date was March 28, 2002.
36. The delegations further noted the provisions on Climate Change, Energy, and Sustainabld Development contained in the 2005 "Gleneagles Communique" of the G8 nations as well as thd framework for cooperation on air traffic management issues in the Memorandum of Understanding signed by the Federal Aviation Administration and the Commission on July 18, 2006 . Thd delegations noted the intention of the responsible U .S. and EU authorities to enhance technical cooperation, including in areas of climate science research and technology development, that will enhance safety, improve fuel efficiency, and reduce emissions in air transport . Having regard to their respective positions on the issue of emissions trading for international aviation, the two delegations noted that the United States and the European Union intend to work within thd framework of the International Civil Aviation Organization .
37. With regard to the composition of the Joint Committee, the U .S. delegation indicated that it was the U.S. intention to have multi-agency representation, chaired by the Department of State . The EU delegation indicated that the EU would be represented by the European Community and its Member States. The two delegations also indicated that stakeholder participation would bean important element of the Joint Committee process, and that stakeholder representatives would therefore be invited as observers, except where decided otherwise by one or both Parties :
38. With respect to Article 18, the delegations affirmed their intention to hold a preliminary meeting of the Joint Committee not later than 60 days after the date of signature of this Agreement .
39. The Delegations confirmed their understanding that practices such as a first-refusal requirement, uplift ratio, no-objection fee, or any other restriction with respect to capacity, frequency or traffic are inconsistent with the Agreement.
40. The EU delegation suggested that both Parties should understand as clearly as possible thd extent to which representatives of the U.S. Department of Transportation (DOT) and the European Commission could exchange information on competition matters covered by Annex 2 to thd Agreement under their respective laws, regulations and practices, particularly regarding data and perspectives on issues involving proceedings being actively considered by those authorities.
41. The U.S. delegation indicated that the proceedings covered by Annex 2 to the Agreement ard adjudications under U. S. law and are subject to statutory, regulatory and judicial constraints to ensure that the agency decision is based only on the information that is included in the docket of the proceeding, including public information that DOT has determined is officially noticeable, on which the parties have had an opportunity to comment before final agency decision.
42. The U.S. delegation explained that these constraints do not preclude representatives advising the DOT decision-maker in an active proceeding from discussing with representatives of thd Commission such matters as (1) the state of competition in any markets based upon nonconfidential data ; (2) the impact of existing alliances or other cooperative ventures and the results of previously imposed conditions or other limitations to address competition issues; (3) general approaches to competition analysis or methodology; (4) past cases, including records and decisions; (5) substantive law, policies, and procedures applicable to any cases ; (6) issues that might be raised by potential cases that have not been formally initiated, so long as DOT
representatives do not 'prejudge" the facts or results of such cases ; and (7) in active proceedings, what issues have already been raised by the parties and what non-confidential evidence has been provided for the record, again up to the point of potential prejudgment of the facts and outcome .
43. There are two basic procedural constraints on discussion of ongoing cases. The first applies largely to communications from the Commission to DOT: the latter's decision cannot be based on any substantive information or argument unavailable to all parties for comment on the record before final decision. Should such information be received, it cannot be considered in the decision unless it is made available . The second constraint involves communications from rather than to DOT: the agency cannot demonstrate or appear to demonstrate `prejudgment" of the issues-that is, articulating a conclusion before the record in the case is ripe and a final decision has been publicly released. This constraint applies to DOT in any context, whether in discussions with thd EU or with any other entity not legitimately part of the U .S. Government's internal decision-making process, interested or not . DOT intends to notify the Commission's representatives immediately whenever, in its experience, prejudgment or decisional input becomes a consideration in discussing a particular topic, so that the representatives can decide how to proceed .
44. The EU delegation requested assurance from the U .S. delegation that the statutory "public interest" criterion is not used under the U.S. competition regime to prefer the interests of individual U.S. airlines over those of other airlines, U.S. or foreign. The U.S. delegation responded that this criterion and the competition standards that DOT must use for its decisions are designed and used to protect competition in markets as a whole, not individual airline competitors . Among other considerations, the U.S. delegation noted that the 'public interest" in international air transportation is defined by statute to include equality of opportunity among U .S. and foreign airlines, as well as maximum competition. Moreover, the public interest criterion in the statutes governing DOT
approval of, and antitrust immunity for, intercarrier agreements, is not an "exception" to thd competition analysis that the agency must follow, but rather an additional requirement that must bd met before DOT may grant antitrust immunity . Finally, the U.S. delegation emphasized that all DOT decisions must be consistent with domestic law and international obligations, including civil aviation agreements that uniformly contain the requirement for all Parties to provide a 'lair and equal opportunity to compete" to the airlines of the other Parties.
45. In the context of this discussion, both delegations affirmed that their respective competition regimes are applied in a manner to respect the fair and equal opportunity to compete accorded to all airlines of the Parties, and in accordance with the general principle of protecting and enhancing competition in markets as a whole, notwithstanding possible contrary interests of individual airlind competitors .
46. Regarding the European Commission's procedures, the EU delegation explained that thd principal limitation on the ability of the European Commission to engage in active cooperation with foreign governmental agencies results from restrictions on the ability to communicate confidential information . Information acquired by the Commission and the authorities of the Member States in the course of an investigation, and which is of the kind covered by professional secrecy, is subject to Article 287 of the EC Treaty and Article 28 of Regulation (EC) 112003. Essentially, this refers to information which is not in the public domain and which may be discovered during the course of an investigation, be communicated in a reply for information or which may be voluntarily communicated to the Commission. This information also includes business or trade secrets . Such information may not be disclosed to any third country agency, save with the express agreement of the source concerned . Therefore, where it is considered appropriate and desirable for the Commission to provide confidential information to a foreign agency(ies), the consent of the source of that information must be obtained by means of a waiver .
47. Information which is related to the conduct of an investigation, or the possible conduct of an investigation, is not submitted to the above mentioned provisions. Such information includes thd fact that an investigation is taking place, the general subject-matter of the investigation, the identity of the enterprise(s) being investigated (although this also may, in some circumstances, bd protected information), the identity of the sector in which the investigation is being undertaken, and the steps which it is proposed to take in the course of the investigation . This information is normally kept confidential to ensure proper handling of the investigation . However, it may be communicated to DOT, as the latter is obliged to maintain the confidentiality of the information under the terms of Article 5 of Annex 2 to the Agreement.
48. In response to a question from the EU delegation, the U .S. delegation confirmed that the competent U.S. authorities will provide fair and expeditious consideration of completd applications for antitrust immunity of commercial cooperation agreements, including revised agreements. The U.S. delegation further confirmed that, for Community airlines, the U.S.-EU Air Transport Agreement, being applied pursuant to Article 25 or in forcd pursuant to Article 26, will satisfy the Department of Transportation requirement that, to consider such an application from foreign airlines for antitrust immunity or to continue such immunity, an Open-Skies agreement must exist between the United States and thd homeland(s) of the applicant foreign airline(s) . The foregoing assurance does not apply to applicants from Ireland until Section 4 of Annex 1 expires .
49. In response to a question from the EU delegation, the U .S. delegation stated that all of thd DOT rules on computer reservations systems ("CRSs" or "systems") terminated on July 31, 2004 . DOT, however, retains the authority to prohibit unfair and deceptive practices and unfair methods of competition in the airline and airline distribution industries, and DOT can use that authority to address apparent anticompetitive practices by a system in its marketing of airline services . In addition, the Department of Justice and the Federal Trade Commission have jurisdiction to address complaints that a system is engaged in conduct that violates the antitrust laws .
50. With respect to Article 25, the EU delegation explained that in some Member States provisional application must be approved first by their parliaments in accordance with their constitutional requirements.
51 . Both delegations confirmed that, in the event that one of the Parties decided to discontinud provisional application of the Agreement in accordance with Article 25(2), the arrangements in Section 4 of Annex 1 to the Agreement may continue to apply if the Parties so agree .
52. With respect to Article 26, the EU delegation explained that in some Member States thd procedures referred to in this Article include ratification .
53. In response to a question from the U .S. delegation concerning restrictions arising from thd residual elements of bilateral air services agreements between Member States, the EU delegation affirmed that any such restrictions affecting the ability of U .S. and Community airlines to exercisd rights granted by this Agreement would no longer be applied .
54. The two delegations emphasized that nothing in the Agreement affects in any way their respective legal and policy positions on various aviation-related environmental issues .
55. The two delegations noted that neither side will cite the Agreement or any part of it as a basis for opposing consideration in the International Civil Aviation Organization of alternative policies on any matter covered by the Agreement.
56. Any air services agreements between the United States and a Member State the applicability of which was in question as of the signing of the Agreement have not been listed in Section 1 to Annex 1 of the Agreement. However, the delegations intend that the Agreement be provisionally applied by the United States and such Member State or States according to the provisions of Article 25 of the Agreement.
For the Delegation of the United States of America
For the Delegation of the European Community and Its Member States Daniel Calleja