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Diplomacy in Action

U.S.-Cape Verde Air Transport Agreement of January 14, 2003


January 14, 2003

   
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AIR TRANSPORT AGREEMENT

BETWEEN

THE GOVERNMENT OF

THE UNITED STATES OF AMERICA

AND

THE GOVERNMENT OF

THE REPUBLIC OF CAPE VERDE

The Government of the United States of America and the

Government of the Republic of Cape Verde (hereinafter, "the

Parties") ;

Desiring to promote an international aviation system based

on competition among airlines in the marketplace with

minimum government interference and regulation ;

Desiring to facilitate the expansion of international air

transport opportunities ;

Desiring to make it possible for airlines to offer the

traveling and shipping public a variety of service options

at the lowest prices that are not discriminatory and do not

represent abuse of a dominant position, and wishing to

encourage individual airlines to develop and implement

innovative and competitive prices ;

Desiring to ensure the highest degree of safety and security

in international air transport and reaffirming their grave

concern about acts or threats against the security of

aircraft, which jeopardize the safety of persons or

property, adversely affect the operation of air

transportation, and undermine public confidence in the

safety of civil aviation ; and

Being Parties to the Convention on International Civil

Aviation, opened for signature at Chicago on December 7,

1944 ;

Have agraPr1AAfn11n1VS-

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Article 1 .

Definitions

For the purposes of this Agreement, unless otherwise stated,

the term :

1 .

"Aeronautical authorities" means, in the case of the

United States, the Department of Transportation, or its

successor, and in the case of Cape Verde, the Ministry of

Infrastructure and Transportation, and any person or agency

authorized to perform functions exercised by the said

Ministry;

2 .

"Agreement" means this Agreement, its Annexes, and any

amendments thereto ;

3 .

"Air transportation" means the public carriage by

aircraft of passengers, baggage, cargo, and mail, separately

or in combination, for remuneration or hire ;

4 .

"Convention" means the Convention on International

Civil Aviation, opened for signature at Chicago on

December 7, 1944, and includes :

a . any amendment that has entered into force under

Article 94(a) of the Convention and has been ratified by

both Parties, and

b . any Annex or any amendment thereto adopted under

Article 90 of the Convention, insofar as such Annex or

amendment is at any given time effective for both Parties ;

5 .

"Designated airline" means an airline designated and

authorized in accordance with Article 3 of this Agreement ;

6 .

"Full cost" means the cost of providing service plus a

reasonable charge for administrative overhead ;

7 .

"International air transportation" means air

transportation that passes through the airspace over the

territory of more than one State ;

8 .

"Price" means any fare, rate or charge for the carriage

of passengers (and their baggage) and/or cargo (excluding

mail) in air transportation charged by airlines, including

their agents, and the conditions governing the availability

of such fare, rate or charge ;

9 .

"Stop for non-traffic purposes" means a landing for any

purpose other than taking on or discharging passengers,

baggage, cargo and/or mail in air transportation ;

10 . "Territory" means the land areas under the sovereignty,

jurisdiction, protection, or trusteeship of a Party, and the

territorial waters adjacent thereto ; and

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ts

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11 . "User charge" means a charge imposed on airlines for

the provision of airport, air navigation, or aviation

security facilities or services including related services

and facilities .

Article 2

Grant of Rights

1 . Each Party grants to the other Party the following

rights for the conduct of international air transportation

by the airlines of the other Party :

a . the right to fly across its territory without

landing;

b . the right to make stops in its territory for nontraffic

purposes ; and

c . the rights otherwise specified in this Agreement .

2 . Nothing in this Article shall be deemed to confer on

the airline or airlines of one Party the rights to take on

board, in the territory of the other Party, passengers,

their baggage, cargo, or mail carried for compensation and

destined for another point in the territory of that other

Party .

Article 3

Designation and Authorization

1 . Each Party shall have the right to designate as many

airlines as it wishes to conduct international air

transportation in accordance with this Agreement and to

withdraw or alter such designations . Such designations

shall be transmitted to the other Party in writing through

diplomatic channels, and shall identify whether the airline

is authorized to conduct the type of air transportation

specified in Annex I or in Annex II or both .

2 .

On receipt of such a designation, and of applications

from the designated airline, in the form and manner

prescribed for operating authorizations and technical

permissions, the other Party shall grant appropriate

authorizations and permissions with minimum procedural

delay, provided :

a . substantial ownership and effective control of that

airline are vested in the Party designating the airline,

national.-- of that Party-, --or both ;

b . the designated airline iss qualified to meet the

conditions prescribed under the laws and regulations

normally applied to the operation of international air

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transportation by the Party considering the application or

applications ; and

c . the Party designating the airline is maintaining

and administering the standards set forth in Article 6

(Safety) and Article 7 (Aviation Security) .

Article 4

Revocation of Authorization

1 .

Either Party may revoke, suspend or limit the operating

authorizations or technical permissions of an airline

designated by the other Party where :

a . substantial ownership and effective control of that

airline are not vested in the other Party, the Party's

nationals, or both ;

b . that airline has failed to comply with the laws and

regulations referred to in Article 5 (Application of Laws)

of this Agreement ; or

c . the other Party is not maintaining and

administering the standards as set forth in Article 6

(Safety) .

2 .

Unless immediate action is essential to prevent further

noncompliance with subparagraphs lb or lc of this Article,

the rights established by this Article shall be exercised

only after consultation with the other Party .

3 .

This Article does not limit the rights of either Party

to withhold, revoke, limit or impose conditions on the

operating authorization or technical permission of an

airline or airlines of the other Party in accordance with

the provisions of Article 7 (Aviation Security) .

Article 5

Application of Laws

1 .

While entering, within, or leaving the territory of one

Party, its laws and regulations relating to the operation

and navigation of aircraft shall be complied with by the

other Party's airlines .

2 . While entering, within, or leaving the territory of one

Party, its laws and regulations relating to the admission to

or departure from its territory of passengers, crew or cargo

nn aircraft (inrlnriin ra nlatinnq ralarin tpP

clearance, aviation security, immigration, passports,

customs and quarantine or, in the case of mail, postal

regulations) shall be complied with by, or on behalf of,

such passengers, crew or cargo of the other Party's

airlines .

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Article 6

Safety

1 .

Each Party shall recognize as valid, for the purpose of

operating the air transportation provided for in this

Agreement, certificates of airworthiness, certificates of

competency, and licenses issued or validated by the other

Party and still in force, provided that the requirements for

such certificates or licenses at least equal the minimum

standards that may be established pursuant to the

Convention . Each Party may, however, refuse to recognize as

valid for the purpose of flight above its own territory,

certificates of competency and licenses granted to or

validated for its own nationals by the other Party .

2 .

Either Party may request consultations concerning the

safety standards maintained by the other Party relating to

aeronautical facilities, aircrews, aircraft, and operation

of the designated airlines . If, following such

consultations, one Party finds that the other Party does not

effectively maintain and administer safety standards and

requirements in these areas that at least equal the minimum

standards that may be established pursuant to the

Convention, the other Party shall be notified of such

findings and the steps considered necessary to conform with

these minimum standards, and the other Party shall take

appropriate corrective action . Each Party reserves the

right to withhold, revoke, or limit the operating

authorization or technical permission of an airline or

airlines designated by the other Party in the event the

other Party does not take such appropriate corrective action

within a reasonable time .

Article 7

Aviation Security

1 .

In accordance with their rights and obligations under

international law, the Parties reaffirm that their

obligation to each other to protect the security of civil

aviation against acts of unlawful interference forms an

integral part of this Agreement . Without limiting the

generality of their rights and obligations under

international law, the Parties shall in particular act in

conformity with the provisions of the Convention on

Offenses and Certain Other Acts Committed on Board

Aircraft, done at Tokyo September 14, 1963, the Convention

for the Suppression of Unlawful Seizure of Aircraft, done

at The Hague December 16, 1970, the Convention for the

Suppression of Unlawful Acts against the Safety of Civil

AVi At i nn Anna At MnntreAl Geptemher ?'l 1971, and the

Protocol for the Suppression of Unlawful Acts of Violence

at Airports Serving International Civil Aviation, done at

Montreal February 24, 1988 .

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2 . The Parties shall provide upon request all necessary

assistance to each other to prevent acts of unlawful seizure

of civil aircraft and other unlawful acts against the safety

of such aircraft, of their passengers and crew, and of

airports and air navigation facilities, and to address any

other threat to the security of civil air navigation .

3 .

The Parties shall, in their mutual relations, act in

conformity with the aviation security standards and

appropriate recommended practices established by the

International Civil Aviation Organization and designated as

Annexes to the Convention ; they shall require that operators

of aircraft of their registry, operators of aircraft who

have their principal place of business or permanent

residence in their territory, and the operators of airports

in their territory act in conformity with such aviation

security provisions .

4 .

Each Party agrees to observe the security provisions

required by the other Party for entry into, for departure

from, and while within the territory of that other Party and

to take adequate measures to protect aircraft and to inspect

passengers, crew, and their baggage and carry-on items, as

well as cargo and aircraft stores, prior to and during

boarding or loading . Each Party shall also give positive

consideration to any request from the other Party for

special security measures to meet a particular threat .

5 .

When an incident or threat of an incident of unlawful

seizure of aircraft or other unlawful acts against the

safety of passengers, crew, aircraft, airports or air

navigation facilities occurs, the Parties shall assist each

other by facilitating communications and other appropriate

measures intended to terminate rapidly and safely such

incident or threat .

6 . When a Party has reasonable grounds to believe that the

other Party has departed from the aviation security

provisions of this Article, the aeronautical authorities of

that Party may request immediate consultations with the

aeronautical authorities of the other Party . Failure to

reach a satisfactory agreement within 15 days from the date

of such request shall constitute grounds to withhold,

revoke, limit, or impose conditions on the operating

authorization and technical permissions of an airline or

airlines of that Party . When required by an emergency, a

Party may take interim action prior. to the expiry of 15

days .

Article 8

( rmmprri a1 Oppnrtnni ti pa

1 .

The airlines of each Party shall have the right to

establish offices in the territory of the other Party for

the promotion and sale of air transportation .

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2 .

The designated airlines of each Party shall be

entitled, in accordance with the laws and regulations of the

other Party relating to entry, residence, and employment, to

bring in and maintain in the territory of the other Party

managerial, sales, technical, operational, and other

specialist staff required for the provision of air

transportation .

3 .

Each designated airline shall have the right to perform

its own ground-handling in the territory of the other Party

("self-handling") or, at its option, select among competing

agents for such services in whole or in part . The rights

shall be subject only to physical constraints resulting from

considerations of airport safety . Where such considerations

preclude self-handling, ground services shall be available

on an equal basis to all airlines ; charges shall be based on

the costs of services provided ; and such services shall be

comparable to the kind and quality of services as if selfhandling

were possible .

4 . Any airline of each Party may engage in the sale of air

transportation in the territory of the other Party directly

and, at the airline's discretion, through its agents, except

as may be specifically provided by the charter regulations

of the country in which the charter originates that relate

to the protection of passenger funds, and passenger

cancellation and refund rights . Each airline shall have the

right to sell such transportation, and any person shall be

free to purchase such transportation, in the currency of

that territory or in freely convertible currencies .

5 .

Each airline shall have the right to convert and remit

to its country, on demand, local revenues in excess of sums

locally disbursed . Conversion and remittance shall be

permitted promptly without restrictions or taxation in

respect thereof at the rate of exchange applicable to

current transactions and remittance on the date the carrier

makes the initial application for remittance .

6 .

The airlines of each Party shall be permitted to pay

for local expenses, including purchases of fuel, in the

territory of the other Party in local currency . At their

discretion, the airlines of each Party may pay for such

expenses in the territory of the other Party in freely

convertible currencies according to local currency

regulation .

7 .

In operating or holding out the authorized services on

the agreed routes, any designated airline of one Party may

enter into cooperative marketing arrangements such as

blocked-space, code-sharing, or leasing arrangements, with

a) an airline or airlines of either Part_

b) an airline or airlines of a third country ; and

c) a surface transportation provider of any country ;

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provided that all participants in such arrangements (i) hold

the appropriate authority and (ii) meet the requirements

normally applied to such arrangements .

8 . Notwithstanding any other provision of this Agreement,

airlines and indirect providers of cargo transportation of

both Parties shall be permitted, without restriction, to

employ in connection with international air transportation

any surface transportation for cargo to or from any points

in the territories of the Parties or in third countries,

including transport to and from all airports with customs

facilities, and including, where applicable, the right to

transport cargo in bond under applicable laws and

regulations . Such cargo, whether moving by surface or by

air, shall have access to airport customs processing and

facilities . Airlines may elect to perform their own surface

transportation or to provide it through arrangements with

other surface carriers, including surface transportation

operated by other airlines and indirect providers of cargo

air transportation . Such intermodal cargo services may be

offered at a single, through price for the air and surface

transportation combined, provided that shippers are not

misled as to the facts concerning such transportation .

Article 9

Customs Duties and Charges

1 .

On arriving in the territory of one Party, aircraft

operated in international air transportation by the

designated airlines of the other Party, their regular

equipment, ground equipment, fuel, lubricants, consumable

technical supplies, spare parts (including engines),

aircraft stores (including but not limited to such items of

food, beverages and liquor, tobacco and other products

destined for sale to or use by passengers in limited

quantities during flight), and other items intended for or

used solely in connection with the operation or servicing of

aircraft engaged in international air transportation shall

be exempt, on the basis of reciprocity, from all import

restrictions, property taxes and capital levies, customs

duties, excise taxes, and similar fees and charges that are

(a) imposed by the national authorities, and (b) not based

on the cost of services provided, provided that such

equipment and supplies remain on board the aircraft .

2 .

There shall also be exempt, on the basis of

reciprocity, from the taxes, levies, duties, fees and

charges referred to in paragraph 1 of this Article, with the

exception of charges based on the cost of the service

provided :

a . aircraft stores introduced into or supplied in the

territory of a Party and taken on board, within reasonable

limits, for use on outbound aircraft of an airline of the

other Party engaged in international air transportation,

even when these stores are to be used on a part of the

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journey performed over the territory of the Party in which

they are taken on board ;

b . ground equipment and spare parts (including

engines) introduced into the territory of a Party for the

servicing, maintenance, or repair of aircraft of an airline

of the other Party used in international air transportation ;

c . fuel, lubricants and consumable technical supplies

introduced into or supplied in the territory of a Party for

use in an aircraft of an airline of the other Party engaged

in international air transportation, even when these

supplies are to be used on a part of the journey performed

over the territory of the Party in which they are taken on

board ; and

d . promotional and advertising materials introduced

into or supplied in the territory of one Party and taken on

board, within reasonable limits, for use on outbound

aircraft of an airline of the other Party engaged in

international air transportation, even when these stores are

to be used on a part of the journey performed over the

territory of the Party in which they are taken on board .

3 .

Equipment and supplies referred to in paragraphs 1 and

2 of this Article may be required to be kept under the

supervision or control of the appropriate authorities .

4 .

The exemptions provided by this Article shall also be

available where the designated airlines of one Party have

contracted with another airline, which similarly enjoys such

exemptions from the other Party, for the loan or transfer in

the territory of the other Party of the items specified in

paragraphs 1 and 2 of this Article .

Article 10

User Charges

1 . User charges that may be imposed by the competent

charging authorities or bodies of each Party on the airlines

of the other Party shall be just, reasonable, not unjustly

discriminatory, and equitably apportioned among categories

of users . In any event, any such user charges shall be

assessed on the airlines of the other Party on terms not

less favorable than the most favorable terms available to

any other airline at the time the charges are assessed .

2 .

User charges imposed on the airlines of the other Party

may reflect, but shall not exceed, the full cost to the

competent charging authorities or bodies of providing the

appropriate airport, airport environmental, air navigation,

and aviation security facilities and servicesatthe airport

or within the airport system . Such charges may include a

reasonable return on assets, after depreciation . Facilities

and services for which charges are made shall be provided on

an efficient and economic basis .

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3 .

Each Party shall encourage consultations between the

competent charging authorities or bodies in its territory

and the airlines using the services and facilities, and

shall encourage the competent charging authorities or bodies

and the airlines to exchange such information as may be

necessary to permit an accurate review of the reasonableness

of the charges in accordance with the principles of

paragraphs 1 and 2 of this Article . Each Party shall

encourage the competent charging authorities to provide

users with reasonable notice of any proposal for changes in

user charges to enable users to express their views before

changes are made .

4 .

Neither Party shall be held, in dispute resolution

procedures pursuant to Article 14, to be in breach of a

provision of this Article, unless (a) it fails to undertake

a review of the charge or practice that is the subject of

complaint by the other Party within a reasonable amount of

time ; or (b) following such a review it fails to take all

steps within its power to remedy any charge or practice that

is inconsistent with this Article .

Article 11

Fair Competition

1 .

Each Party shall allow a fair and equal opportunity for

the designated airlines of both Parties to compete in

providing the international air transportation governed by

this Agreement .

2 .

Each Party shall allow each designated airline to

determine the frequency and capacity of the international

air transportation it offers based upon commercial

considerations in the marketplace . Consistent with this

right, neither Party shall unilaterally limit the volume of

traffic, frequency or regularity of service, or the aircraft

type or types operated by the designated airlines of the

other Party, except as may be required for customs,

technical, operational, or environmental reasons under

uniform conditions consistent with Article 15 of the

Convention .

3 .

Neither Party shall impose on the other Party's

designated airlines a first-refusal requirement, uplift

ratio, no-objection fee, or any other requirement with

respect to capacity, frequency or traffic that would be

inconsistent with the purposes of this Agreement .

4 .

Neither Party shall require the filing of schedules,

programs for charter flights, or operational plans by

airlines of the other Party for approval, except as may be

required on a non-discriminatory basis to enforce the

uniform conditions foreseen by paragraph 2 of this Article

or as may be specifically authorized in an Annex to this

Agreement . If a Party requires filings for information

purposes, it shall minimize the administrative burdens of

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filing requirements and procedures on air transportation

intermediaries and on designated airlines of the other

Party .

Article 12

Pricing

1 .

Each Party shall allow prices for air transportation to

be established by each designated airline based upon

commercial considerations in the marketplace . Intervention

by the Parties shall be limited to :

a . prevention of unreasonably discriminatory prices or

practices ;

b . protection of consumers from prices that are

unreasonably high or restrictive due to the abuse of a

dominant position ; and

c . protection of airlines from prices that are

artificially low due to direct or indirect governmental

subsidy or support .

2 .

Prices for international air transportation between the

territories of the Parties shall not be required to be

filed . Notwithstanding the foregoing, the designated

airlines of the Parties shall continue to provide immediate

access, on request, to information on historical, existing,

and proposed prices to the aeronautical authorities of the

Parties in a manner and format acceptable to those

aeronautical authorities .

3 .

Neither Party shall take unilateral action to prevent

the inauguration or continuation of a price proposed to be

charged or charged by (i) an airline of either Party for

international air transportation between the territories of

the Parties, or (ii) an airline of one Party for

international air transportation between the territory of

the other Party and any other country, including in both

cases transportation on an interline or intraline basis . If

either Party believes that any such price is inconsistent

with the considerations set forth in paragraph 1 of this

Article, it shall request consultations and notify the other

Party of the reasons for its dissatisfaction as soon as

possible . These consultations shall be held not later than

30 days after receipt of the request, and the Parties shall

cooperate in securing information necessary for reasoned

resolution of the issue . If the Parties reach agreement

with respect to a price for which a notice of

dissatisfaction has been given, each Party shall use its

best efforts to put that agreement into effect . Without

such mutual agreement, the price shall go into effect or

continue in effect .

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Article 13

Consultations

Either Party may, at any time, request consultations

relating to this Agreement . Such consultations shall begin

at the earliest possible date, but not later than 60 days

from the date the other Party receives the request unless

otherwise agreed .

Article 14

Settlement of Disputes

1 . Any dispute arising under this Agreement, except those

that may arise under paragraph 3 of Article 12 (Pricing),

that is not resolved by a first round of formal

consultations may be referred by agreement of the Parties

for decision to some person or body . If the Parties do not

so agree, the dispute shall, at the request of either Party,

be submitted to arbitration in accordance with the

procedures set forth below .

2 .

Arbitration shall be by a tribunal of three arbitrators

to be constituted as follows :

a . Within 30 days after the receipt of a request for

arbitration, each Party shall name one arbitrator . Within

60 days after these two arbitrators have been named, they

shall by agreement appoint a third arbitrator, who shall act

as President of the arbitral tribunal ;

b . If either Party fails to name an arbitrator, or if

the third arbitrator is not appointed in accordance with

subparagraph a of this paragraph, either Party may request

the President of the Council of the International Civil

Aviation Organization to appoint the necessary arbitrator or

arbitrators within 30 days . If the President of the Council

is of the same nationality as one of the Parties, the most

senior Vice President who is not disqualified on that ground

shall make the appointment .

3 .

Except as otherwise agreed, the arbitral tribunal shall

determine the limits of its jurisdiction in accordance with

this Agreement and shall establish its own procedural rules .

The tribunal, once formed, may recommend interim relief

measures pending its final determination . At the direction

of the tribunal or at the request of either of the Parties,

a conference to determine the precise issues to be

arbitrated and the specific procedures to be followed shall

be held not later than 15 days after the tribunal is fully

constituted .

4 .

Except as otherwise agreed or as directed by the

tribunal, each Party shall submit a memorandum within 45

days of the time the tribunal is fully constituted . Replies

shall be due 60 days later . The tribunal shall hold a

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hearing at the request of either Party or on its own

initiative within 15 days after replies are due .

5 .

The tribunal shall attempt to render a written decision

within 30 days after completion of the hearing or, if no

hearing is held, after the date both replies are submitted .

The decision of the majority of the tribunal shall prevail .

6 .

The Parties may submit requests for clarification of

the decision within 15 days after it is rendered and any

clarification given shall be issued within 15 days of such

request .

7 .

Each Party shall, to the degree consistent with its

national law, give full effect to any decision or award of

the arbitral tribunal .

8 .

The expenses of the arbitral tribunal, including the

fees and expenses of the arbitrators, shall be shared

equally by the Parties . Any expenses incurred by the

President of the Council of the International Civil Aviation

Organization in connection with the procedures of paragraph

2b of this Article shall be considered to be part of the

expenses of the arbitral tribunal .

Article 15

Termination

Either Party may, at any time, give notice in writing to the

other Party of its decision to terminate this Agreement .

Such notice shall be sent simultaneously to the

International Civil Aviation Organization . This Agreement

shall terminate at midnight (at the place of receipt of the

notice to the other Party) immediately before the first

anniversary of the date of receipt of the notice by the

other Party, unless the notice is withdrawn by agreement of

the Parties before the end of this period .

Article 16

Registration with ICAO

This Agreement and all amendments thereto shall be

registered with the International Civil Aviation

Organization .

Article 17

Entry into Force

This Agreement and its Annexes shall enter into force on the

date of signature .

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IN WITNESS WHEREOF the undersigned, being duly authorized by

their respective Governments, have signed this Agreement .

DONE at ~ , this /"h day of 2003 in

two originals, in the English and Portugue e langu ges, each

text being equally authentic .

FOR THE GOVERNMENT OF

FOR THE GOVERNMENT OF

THE UNITED STATES OF AMERICA : THE REPUBLIC OF CAPE VERDE :

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ANNEX I

Scheduled Air Transportation

Section 1

Routes

Airlines of each Party designated under this Annex shall, in

accordance with the terms of their designation, be entitled

to perform scheduled international air transportation

between points on the following routes :

A .

Routes for the airline or airlines designated by the

Government of the United States :

1 .

From points behind the United States via the United

States and intermediate points to a point or points in Cape

Verde and beyond .

2 . For all-cargo service or services, between Cape Verde

and any point or points .

B .

Routes for the airline or airlines designated by the

Government of Cape Verde :

1 . From points behind Cape Verde via Cape Verde and

intermediate points to a point or points in the United

States and beyond .

2 .

For all-cargo service or services, between the United

States and any point or points .

Section 2

Operational Flexibility

Each designated airline may, on any or all flights and at

its option :

1 . operate flights in either or both directions ;

2 . combine different flight numbers within one aircraft

operation ;

3 . serve behind, intermediate, and beyond points and

points in the territories of the Parties on the routes

in any combination and in any order ;

4 . omit stops at any point or points ;

5 . transfer traffic from any of its aircraft to any of its

6 . serve points behind any point in its territory with or

without change of aircraft or flight humber and may

hold out and advertise such services to the public as

throug) services ;

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without directional or geographic limitation and without

loss of any right to carry traffic otherwise permissible

under this Agreement ; provided that, with the exception of

all-cargo services, the service serves a point in the

territory of the Party designating the airline .

Section 3

Change of Gauge

On any segment or segments of the routes above, any

designated airline may perform international air

transportation without any limitation as to change, at any

point on the route, in type or number of aircraft operated ;

provided that, with the exception of all-cargo services, in

the outbound direction, the transportation beyond such point

is a continuation of the transportation from the territory

of the Party that has designated the airline and, in the

inbound direction, the transportation to the territory of

the Party that has designated the airline is a continuation

of the transportation from beyond such point .

ANNEX II

Charter Air Transportation

Section 1

A. Airlines of each Party designated under this Annex

shall, in accordance with the terms of their designation,

have the right to carry international charter traffic of

passengers (and their accompanying baggage) and/or cargo

(including, but not limited to, freight forwarder, split,

and combination (passenger/cargo) charters) :

1 . Between any point or points in the territory of the

Party that has designated the airline and any point or

points in the territory of the other Party ; and

2 .

Between any point or points in the territory of the

other Party and any point or points in a third country or

countries, provided that, except with respect to cargo

charters, such service constitutes part of a continuous

operation, with or without a change of aircraft, that

includes service to the homeland for the purpose of carrying

local traffic between the homeland and the territory of the

other Party .

B .

In the performance of services covered by this Annex,

airlines of each Party designated under this Annex shall

whether within or outside of the territory of either Party ;

(2) to carry transit traffic through the other Party's

territory ; (3) to combine on the same aircraft traffic

originating in one Party's territory, traffic originating in

the oth r Party's territory, and traffic originating in

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third countries ; and (4) to perform international air

transportation without any limitation as to change, at any

point on the route, in type or number of aircraft operated;

provided that, except with respect to cargo charters, in the

outbound direction, the transportation beyond such point is

a continuation of the transportation from the territory of

the Party that has designated the airline and in the inbound

direction, the transportation to the territory of the Party

that has designated the airline is a continuation of the

transportation from beyond such point .

C .

Each Party shall extend favorable consideration to

applications by airlines of the other Party to carry traffic

not covered by this Annex on the basis of comity and

reciprocity .

Section 2

A . Any airline designated by either Party performing

international charter air transportation originating in the

territory of either Party, whether on a one-way or roundtrip

basis, shall have the option of complying with the

charter laws, regulations, and rules either of its homeland

or of the other Party . If a Party applies different rules,

regulations, terms, conditions, or limitations to one or

more of its airlines, or to airlines of different countries,

each designated airline shall be subject to the least

restrictive of such criteria .

B . However, nothing contained in the above paragraph shall

limit the rights of either Party to require airlines

designated under this Annex by either Party to adhere to

requirements relating to the protection of passenger funds

and passenger cancellation and refund rights .

Section 3

Except with respect to the consumer protection rules

referred to in the preceding paragraph, neither Party shall

require an airline designated under this Annex by the other

Party, in respect of the carriage of traffic from the

territory of that other Party or of a third country on a

one-way or round-trip basis, to submit more than a

declaration of conformity with the applicable laws,

regulations and rules referred to under section 2 of this

Annex or of a waiver of these laws, regulations, or rules

granted by the applicable aeronautical authorities .

ANNEX III

Principles of Non-Discrimination Within

Recognizing that Article 11 (Fair Competition) of this

Agreement guarantees the airlines of both Parties "a fair

and equal opportunity to compete,"

18

Considering that one of the most important aspects of the

ability of an airline to compete is its ability to inform

the public of its services in a fair and , impartial manner,

and that, therefore, the quality of information about

airline services available to travel agents who directly

distribute such information to the traveling public and the

ability of an airline to offer those agents competitive

computer reservations systems (CRSs) represent the

foundation for an airline's competitive opportunities, and

Considering that it is equally necessary to ensure that the

interests of the consumers of air transport products are

protected from any misuse of such information and its

misleading presentation and that airlines and travel agents

have access to effectively competitive computer reservations

systems :

1 .

The Parties agree that CRSs will have integrated

primary displays for which :

a . Information regarding international air services,

including the construction of connections on those services,

shall be edited and displayed based on non-discriminatory

and objective criteria that are not influenced, directly or

indirectly, by airline or market identity . Such criteria

shall apply uniformly to all participating airlines .

b . CRS data bases shall be as comprehensive as

possible .

c . CRS vendors shall not delete information submitted

by participating airlines ; such information shall be

accurate and transparent ; for example, code-shared and

change-of-gauge flights and flights with stops should be

clearly identified as having those characteristics .

d . All CRSs that are available to travel agents who

directly distribute information about airline services to

the traveling public in either Party's territory shall not

only be obligated to, but shall also be entitled to, operate

in conformance with the CRS rules that apply in the

territory where the CRS is being operated .

e . Travel agents shall be allowed to use any of the

secondary displays available through the CRS so long as the

travel agent makes a specific request for that display .

2 . A Party shall require that each C S v ndor operating in

its territory allow all airlines willi g t pay any

applicable non-discriminatory fee to p r i ipate in its CRS .

A Party shall require that all distributio facilities that

a system vendor provides shall, be offered v a nondiscriminatory

basis to participating airlines . A Party

shall require that CRS vendors display, on a nondiscriminatory,

objective, carrier-neutral and marketneutral

basis, the international air services of

participating airlines in all markets in which they wish to

19

sell those services . Upon request, a CRS vendor shall

disclose details of its data base update and storage

procedures, its criteria for editing and ranking

information, the weight given to such criteria, and the

criteria used for selection of connect points and inclusion

of connecting flights .

3 .

CRS vendors operating in the territory of one Party

shall be entitled to bring in, maintain, and make freely

available their CRSs to travel agencies or travel companies

whose principal business is the distribution of travelrelated

products in the territory of the other Party if the

CRS complies with these principles .

4 .

Neither Party shall, in its territory, impose or permit

to be imposed on the CRS vendors of the other Party more

stringent requirements with respect to access to and use of

communication facilities, selection and use of technical CRS

hardware and software, and the technical installation of CRS

hardware, than those imposed on its own CRS vendors .

5 .

Neither Party shall, in its territory, impose or permit

to be imposed on the CRS vendors of the other Party more

restrictive requirements with respect to CRS displays

(including edit and display parameters), operation, or sale

than those imposed on its own CRS vendors .

6 .

CRSs in use in the territory of one Party that comply

with these principles and other relevant non-discriminatory

regulatory, technical, and security standards shall be

entitled to effective and unimpaired access in the territory

of the other Party . One aspect of this is that a designated

airline shall participate in such a system as fully in its

homeland territory as it does in any system offered to

travel agents in the territory of the other Party .

Owners/operators of CRSs of one Party shall have the same

opportunity to own/operate CRSs that conform to these

principles within the territory of the other Party as do

owners/operators of that Party . Each Party shall ensure

that its airlines and its CRS vendors do not discriminate

against travel agents in their homeland territory because of

their use or possession of a CRS also operated in the

territory of the other Party .



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