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U.S.-Colombia Memorandum of Consultations of November 11, 2010


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November 11, 2010

   
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Delegations representing the Government of the Republic of Colombia and the Government of the United States of America met in Bogota November 8-11, 2010 to negotiate an Open-Skies Agreement. The negotiations proceeded in a friendly and constructive manner, reflective of the close relationship between the two countries. The delegation lists are attached as Attachment A.

The delegations reached ad referendum agreement on, and initialed the text of, an Agreement (the “Agreement,” attached as Attachment B). The delegations intend to submit the draft Agreement to their respective authorities for approval.

The delegations recognized that the rights for charter air services are set out in Article 2 and that both Parties will allow the operation of charter flights that are authorized under this Agreement.

The Colombian delegation proposed that the Agreement include a principal place of business standard in Articles 3 and 4, because pursuant to the Colombian Constitution and law, foreign capital investment in airlines must be facilitated and, for such reason, the nationality of a Colombian airline is not determined by its ownership and control, but rather by its place of establishment.

The U.S. delegation stated that it would be a significant departure from U.S. policy and practice not to include the ownership and control provisions currently in the 1956 U.S.-Colombia Air Transport Agreement, as amended. The U.S. delegation further stated that the U.S. Department of Transportation has authority to waive the ownership and control standards with respect to foreign airlines and has an established practice of waiving such standards for airlines when all countries involved are Open-Skies partners. The U.S. delegation confirmed that the agreement of Colombia to phase-in an Open-Skies Agreement will constitute a positive consideration for the U.S. Department of Transportation in responding to requests by Colombian airlines for a waiver of the national ownership and control provisions of the U.S.-Colombia Air Transport Agreement, in particular with respect to investments from Open-Skies partners. Such requests will receive fair and expeditious treatment.

In discussing Article 5, the delegations confirmed their understanding that Article 5 is to be applied consistently with the principle of fair and equal opportunity in Article 11. They recognized that there may be occasions in which differential treatment among airlines with respect to the application of the laws, regulations, and rules referenced in Article 5 would be justified and consistent with both provisions.

In discussing Article 6, the delegations noted their mutual understanding that ramp inspections by the Parties would be consistent with the terms of the Agreement.

With respect to a question from the Colombian delegation regarding paragraph 2 of Article 6, the U.S. delegation stated that “reasonable time” to take appropriate corrective action is directly related to the seriousness of the safety concerns.

With respect to paragraph 2 of Article 6, in response to a question from the Colombian delegation, the U.S. delegation explained that only in circumstances where safety is deemed by a Party to be imminently compromised would immediate action prior to consultations be necessary.

With respect to Article 7, both delegations noted the outstanding cooperation between their respective aviation security authorities, and expressed their expectation that this cooperation would continue and yield benefits for both U.S. and Colombian airlines.

The Colombian delegation raised the question of the inspection of mail in the context of Article 7, paragraph 4. The U.S. delegation noted that ICAO Annex 17 requires contracting States to screen mail.

With reference to Article 9, the Colombian delegation proposed a paragraph that would exempt the salaries of airline employees from income tax on a reciprocal basis. The U.S. delegation noted that this issue falls under the responsibility of the U.S. Department of Treasury, and is outside the scope of this Agreement.

With reference to Article 11, the Colombian delegation proposed language with respect to anti-competitive practices. The U.S. delegation noted that the Colombian approach would require the Parties to identify such practices even without any complaints from airlines. The U.S. delegation further noted that in the United States, responsibility for competition is spread among several agencies, and confirmed that the U.S. Department of Transportation is available to discuss competition issues with all airlines.

With respect to Article 11, paragraph 3, the Colombian delegation explained that Colombian law requires that, in considering applications for charter flights, Colombian aeronautical authorities are required to determine whether scheduled carriers operating on the same route as the proposed charter flight could operate the charter. Charters are approved unless the scheduled operator can provide the service under the same conditions. The Colombian delegation stated that disapprovals of charter flights have been extremely rare and that they fully expect that charter applications from U.S. airlines to be approved. Further, the delegations confirmed that if problems arose, consultations would be held on an expedited basis.

Both delegations recognize the importance of protecting the environment when promoting and developing international aviation policy, and indicated their intention to continue to work through ICAO on environmental issues.

The Colombian delegation stressed the importance for their airlines of the use of common designator codes immediately. The U.S. delegation explained that the authority for a group of airlines to use a common designator code requires that an application be approved by the U.S. Department of Transportation, and that it only considers authorizing such common designator codes to be used by airlines from Open-Skies countries. The U.S. delegation further noted that the use of common designator codes must be consistent with U.S. consumer protection requirements. The U.S. delegation confirmed that Colombian airlines may apply for such authority at any time, and that the Department may grant such approval during the phase-in period of the U.S.-Colombia Open Skies agreement for immediate use.

The Colombian delegation underscored the importance of antitrust immunity for the future operations of their airlines. The U.S. delegation explained that each application for antitrust immunity is considered on its merits and is given fair and expeditious treatment by the U.S. Department of Transportation. Since the U.S. Department of Transportation takes into account competitive market conditions, it is not appropriate for airlines to file applications for antitrust immunity too far in advance of full implementation of Open Skies. In response to a question by the Colombian delegation, the U.S. delegation stated that airlines are encouraged to discuss their alliance plans in advance with the U.S. Department of Transportation.

The Colombian delegation stated that the Government of Colombia will send a letter stating its position regarding the relationship between antitrust immunity and the implementation of full Open Skies to the Government of the United States.

FOR THE DELEGATION OF THE REPUBLIC OF COLOMBIA

Santiago Castro G.

FOR THE DELEGATION OF THE UNITED STATES OF AMERICA

Wendell Albright



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