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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

Agreement Between the Government of the United States of America and the Government of Hong Kong Concerning Air Services


April 7, 1997

   
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The Government of the United States of America and the Government of
Hong Kong (hereinafter referred to as the "Contracting Parties"),
Desiring to conclude an Agreement for the purpose of providing the
framework for air services between the United States of America and Hong
Kong,

Have agreed as follows :

ARTICLE 1
Definitions

For the purpose of this Agreement, unless the context otherwise requires:

(a) the term "aeronautical authorities" means in the case of Hong Kong,
the Director of Civil Aviation, and in the case of the United States, the
Department of Transportation, or, in both cases, any person or body
authorized to perform any functions at present exercisable by the
above-mentioned authorities or similar functions ;

(b)the term "designated airline" means an airline which has been
designated and authorized in accordance with Article 4 of this Agreement ;

(c) the term "area" in relation to Hong Kong includes Hong Kong Island,
Kowloon and the New Territories and in relation to the United States means
the land areas under the sovereignty, jurisdiction, protection, or trusteeship
of the United States, and the territorial waters adjacent thereto ;

(d) the term "air service" means any scheduled air service performed
by aircraft for the public transport of passengers, mail or cargo ;

(e) the term " international air service" means an air service which passes
through the airspace over the territory of more than one state ;

(f) the term "airline" means any air transport enterprise offering or
operating an international air service ;

(g) the term "stop for non-traffic purposes" means a landing for any
purpose other than the taking on or discharging of passengers, cargo or mail ;

(h) the term "user charge" means a charge imposed by a competent
charging authority on airlines for airport or air navigation property or
facilities, including related services and facilities ;

(i) the term "tariff' means one or more of the following

(1) the fare charged by an airline for the carriage of passengers
and their baggage on scheduled air services and the charges
and conditions for services ancillary to such carriage ;

(2) the rate charged by an airline for the carriage of cargo(excluding
mail) on scheduled air services ; and

(3) the conditions governing the availability or applicability of any
such fare or rate including any benefits attaching to it ;

(j) the term "this Agreement" means this Agreement, its Annex and any
amendments thereto .

ARTICLE 2
Provisions of the Chicago Convention Applicable to
International Air Services

In implementing this Agreement, the Contracting Parties shall act in
conformity with the provisions of the Convention on International Civil
Aviation, opened for signature at Chicago on 7 December 1944, including
the Annexes and any amendments to the Convention or to its Annexes which
apply to both Contracting Parties, insofar as these provisions are applicable
to international air services .
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ARTICLE 3
Grant of Rights

(1) Each Contracting Party grants to the other Contracting Party the
following rights in respect of its international air services :

(a) the right to fly across its area without landing ;

(b) the right to make stops in its area for non- traffic purposes .

(2) Each Contracting Party grants to the other Contracting Party the rights
hereinafter specified in this Agreement for the purpose of operating
international air services on the routes specified in the appropriate Section
of the Annex to this Agreement . Such services and routes are hereinafter
called "the agreed services" and "the specified routes" respectively. While
operating an agreed service on a specified route, the designated airlines of
each Contracting Party shall enjoy in addition to the rights specified in
paragraph (1) of this Article the right to make stops in the, area of the other
Contracting Party at points determined for that route in accordance with the
Annex to this Agreement for the purpose of taking on board and discharging
passengers and cargo, including mail, separately or in combination .

(3) Nothing in paragraph (2) of this Article shall be deemed to confer
on the designated airlines of one Contracting Party the right to take on
board, at one point in the area of the other Contracting Party, passengers
and cargo, including mail, carried for hire or reward and destined for another
point in the area of the other Contracting Party .

(4) If because of armed conflict, political disturbances or developments,
or special and unusual circumstances, a designated airline of one Contracting
Party is unable to operate a service on its normal routeing, the other
Contracting Party shall use its best efforts to facilitate the continued operation
of such service through appropriate temporary rearrangements of routes .

ARTICLE 4
Designation of and Authorization of Airlines

(1) Each Contracting Party shall have the right to designate in writing to the
other Contracting Party one or more airlines for the purpose of operating the
agreed services on the specified routes and to withdraw or alter such designations .

(2) On receipt of such a designation the other Contracting Party shall, subject
to the provisions of paragraphs (3) and (4) of this Article, without delay grant
to the airline or airlines designated the appropriate operating authorizations .

(3) (a) The Government of Hong Kong shall have the right to refuse to grant
the operating authorizations referred to in paragraph (2) of this Article, or to
impose such conditions as it may deem necessary on the exercise by a designated
airline of the rights specified in Article 3(2) of this Agreement, in any case where
it is not satisfied that substantial ownership and effective control of that airline
are vested in the Government of the United States or its nationals.

(b)The Government of the United States shall have the right to refuse
to grant the operating authorizations referred to in paragraph (2) of this
Article, or to impose such conditions as it may deem necessary on the
exercise by a designated airline of the rights specified in Article 3(2) of this
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Agreement, in any case where it is not satisfied that that airline is incorporated
and has its principal place of business in Hong Kong .

(4) The aeronautical authorities of one Contracting Party may require an
airline designated by the other Contracting Party to satisfy them that it is
qualified to fulfil the conditions prescribed under the laws and regulations
normally applied to the operation of international air services by such
authorities . Appropriate operating authorizations shall be granted to such
airlines with minimum delay.

(5) When an airline has been so designated and authorized it may begin
to operate the agreed services, provided that the airline complies with the
applicable provisions of this Agreement .

ARTICLE 5
Application of Laws and Regulations

(1) The laws and regulations of one Contracting Party relating to the
admission to or departure from its area of aircraft engaged in international air
navigation, or to the operation and navigation of such aircraft while within its
area, shall be applied to the aircraft of the airline or airlines designated by the
other Contracting Parry and shall be complied with by such aircraft upon entry
into, departure from, or while within, the area of the first Contracting Party.

(2) The laws and regulations of one Contracting Party relating to the
admission to or departure from its area of passengers, crew and cargo

(including mail), such as regulations relating to entry, clearance, immigration,
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passports, customs and quarantine, shall be complied with by or on behalf
of such passengers, crew and cargo (including mail) of the airline or airlines
designated by the other Contracting Party upon entry into, departure from,
or while within, the area of the first Contracting Party .

ARTICLE 6
Revocation or Suspension of Operating Authorization

(1) Each Contracting Party shall have the right to revoke or suspend an
operating authorization for the exercise of the rights specified in Article 3(2) of
this Agreement by an airline designated by the other Contracting Party, or to
impose such conditions as it may deem necessary on the exercise of those rights :

(a) (i) in the case of the Government of Hong Kong, in any case where
it is not satisfied that substantial ownership and effective control of that airline
are vested in the Government of the United States or its nationals ;

(ii) in the case of the Government of the United States, in any case
where it is not satisfied that that airline is incorporated and has its principal
place of business in Hong Kong ; or

(b) in the case of failure by that airline to comply with the laws or
regulations of the Contracting Party granting those rights ; or

(c) if the other Contracting Party is not maintaining and administering
safety standards as set forth in Article 7 (Recognition of Certificates and
Licenses) .

(2) Unless immediate revocation or suspension of the operating
authorization mentioned in paragraph (1) of this Article or imposition of the
conditions therein is essential to prevent further infringements of
subparagraphs (1)(b) or (1)(c), such right shall be exercised only after
consultation with the other Contracting Party .

(3) This Article does not limit the rights of either Contracting Party to
suspend, limit or condition air transportation in accordance with the
provisions of Article 12 (Aviation Security) .

ARTICLE 7
Recognition of Certificates and Licences

(1) Certificates of airworthiness, certificates of competency, and licences,
issued or rendered valid by one Contracting Party and still in force, shall
be recognized as valid by the other Contracting Party for the purpose of
operating the agreed services on the specified routes provided that such
certificates or licences were issued or rendered valid pursuant to, and in
conformity with, the standards established under the Convention on
International Civil Aviation, opened for signature at Chicago on 7 December
1944 (hereinafter referred to as the "Convention") .

(2) The Government of the United States reserves the right, however, to
refuse to recognize as valid for the purposes of flights above its own area,
certificates of competency and licenses granted to or validated for its own
nationals by non-U .S . authorities.
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(3) Each Contracting Party may request consultations concerning the
safety standards maintained by the other Contracting Party relating to
aeronautical facilities, aircrew, aircraft, and operation of the designated
airlines . If, following such consultations, one Contracting Party finds that
the other Contracting Party does not effectively maintain and administer
safety standards and requirements in these areas that at least equal the
minimum standards which may be established pursuant to the Convention
and which are applicable to them or on their behalf, the other Contracting
Party shall be notified of such findings and the steps considered necessary
to conform with these minimum standards ; and the other Contracting Party
shall take appropriate corrective action . Each Contracting Party reserves
the right to withhold, revoke or limit the operating authorization or technical
permission of an airline or airlines designated by the other Contracting Party
in the event the other Contracting Party does not take such appropriate
corrective action within a reasonable time .

ARTICLE 8
Principles Governing Operation of Agreed Services

(1) There shall be fair and equal opportunity for the designated airlines
of each Contracting Party to compete with the designated airlines of the
other Contracting Party.

(2) In operating the agreed services the designated airlines of each
Contracting Party shall take into account the interests of the designated
airlines of the other Contracting Party so as not to affect unduly the services
which the latter provide on all or part of the same routes . In particular, when
a designated airline of one Contracting Party proposes to inaugurate services
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between a point in the area of that Contracting Party and a point in the area
of the other Contracting Party already served by a designated airline or
airlines of the other Contracting Party, the incumbent airline or airlines shall
each refrain from increasing the frequency of their services to the extent and
for the time necessary to ensure the airline inaugurating service may fairly
exercise its rights under paragraph (1) of thus Article . Such obligation to
refrain from increasing frequency shall not last longer than two years or
beyond the point when the inaugurating airline matches the frequencies of
any incumbent airline, whichever occurs first, and shall not apply if the
services to be inaugurated are limited as to their capacity by the license or
certificate granted by the designating Contracting Party .

(3) Services provided by a designated airline under this Agreement shall
retain as their primary objective the provision of capacity adequate to the
traffic demands between the area of the Contracting Party which has
designated the airline and the country of ultimate destination of the traffic .
The right to embark or disembark on such services international traffic
destined for or coming from third countries at a point or points on the routes
specified in this Agreement shall be exercised in accordance with the general
principles of orderly development of international air transport to which both
Contracting Parties subscribe and shall be subject to the general principle
that capacity should be related to:

(a) traffic requirements between the area of origin and the countries of
ultimate destination of the traffic ;

(b) the requirements of through airline operation ; and

(c) traffic requirements of the area through which the airline passes, after
taking account of local and regional services .

(4) The Contracting Parties recognize that airline actions leading to excess
capacity or the underprovision of capacity can both run counter to the
interests of the travelling public . If one Contracting Party believes that the
operations of a designated airline or airlines of the other Contracting Party
have been inconsistent with the principles set forth in this Article, it may
request consultations pursuant to Article 16 (Consultations) for the purpose
of reviewing the operations in question to determine whether they are in
conformity with these principles. In such consultations there shall be taken
into consideration the operations of all airlines serving the market in question
and designated by the Contracting Party whose airline or airlines are under
review . If the Contracting Parties conclude that the operations under review
are not in conformity with the provisions set forth in this Article, they may
decide upon appropriate corrective or remedial measures, except that, where
frequency or capacity limitations are already provided for a route specified
in the Annex, the Contracting Parties may not vary those limitations or
impose additional limitations except by mutual agreement .

(5) Neither Contracting Party shall unilaterally restrict the operations of the
designated airlines of the other except according to the terms of this Agreement .

ARTICLE 9
Tariffs

(1) The tariffs to be charged by the designated airlines of the Contracting
Parties for carriage between Hong Kong and the United States shall be those
approved by the aeronautical authorities of both Contracting Parties and shall
be established at reasonable levels, due regard being had to all relevant factors,
including the cost of operating the agreed services, the interests of users,
reasonable profit and the tariffs of other airlines operating over the whole or part
of the same route . To further the reasonable interests of users of air transport
services, and to encourage the further development of civil aviation, individual
airlines should be encouraged to initiate innovative, cost-based tariffs .

(2) Any tariff agreements with respect to carriage by the designated
airlines concluded as a result of inter-carrier discussions, including those
held under the traffic conference procedures of the International Air
Transport Association, or any other association of international airlines, and
involving the airlines of the Contracting Parties will be subject to the
approval of the aeronautical authorities of those Contracting Parties, and may
be disapproved at any time whether or not previously approved . The
submission of such agreements is not the filing of a tariff for the purposes
of the provisions of paragraph (3) of this Article . Such agreements shall
be submitted to the aeronautical authorities of both Contracting Parties for
approval at least 105 days before the proposed date of effectiveness,
accompanied by such justification as each Contracting Party may require
of its own designated airlines . The period of 105 days may be reduced with
the consent of the aeronautical authorities of the Contracting Party with whom
a filing is made . The aeronautical authorities of each Contracting Party shall
use their best efforts to approve or disapprove (in whole or in part) each
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agreement submitted in accordance with this paragraph on or before the 60th
day after its submission . Each Contracting Party may require that tariffs
reflecting agreements approved by it be filed and published in accordance
with its laws .

(3) Any proposed tariff for carriage between Hong Kong and the United
States shall be filed with the aeronautical authorities of the Contracting Parties
by the designated airline or airlines seeking its approval in such form as the
aeronautical authorities may separately require to disclose the particulars referred
to in Article 1, paragraph (i). It shall be filed not less than 40 days (or such
shorter period as the aeronautical authorities of the Contracting Parties may
agree) before the proposed effective date . The proposed tariff shall be treated
as having been filed with the aeronautical authorities of a Contracting Party on
the date on which it is received by those aeronautical authorities .

(4) Any proposed tariff may be approved by the aeronautical authorities of
a Contracting Party at any time and, provided it has been filed in accordance
with paragraph (3) of this Article, shall be deemed to have been approved by
the aeronautical authorities of that Contracting Party unless, within 30 days (or
such shorter period as the aeronautical authorities of the Contracting Parties may
agree) after the date of filing, the aeronautical authorities of one Contracting Party
have served on the aeronautical authorities of the other Contracting Party written
notice of disapproval of the proposed tariff .

(5) If a notice of disapproval is given in accordance with the provisions
of paragraph (4) of this Article either Contracting Party may, within 30 days
of the service of the notice of disapproval, request consultations between
the Contracting Parties which shall be held within 30 days from the date the
other Contracting Party receives such request in writing for the purpose of
attempting to reach agreement on the appropriate tariffs .
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(6) If agreement is reached on the appropriate tariff under paragraph (5) of this Article, each Contracting Party shall exercise its best efforts to put
such tariff into effect . If an agreement is not reached prior to the proposed
effective date of the tariff, or if consultations are not requested, the
aeronautical authorities of the Contracting.-Party expressing dissatisfaction
with that tariff may take action to continue in force the existing tariffs beyond
the date on which they would otherwise have expired at the levels and under
the conditions (including seasonal variations) set forth therein . In this event,
the other Contracting Party shall similarly take any action necessary to
continue the existing tariffs in effect.

(7) A tariff established in accordance with the provisions of this Article
shall remain valid until a replacement tariff has been established .

(8) (a) The tariffs to be charged by the designated airlines of Hong Kong
for carriage between the United States and another State shall be subject to
approval by the aeronautical authorities of the United States and, where
appropriate, of the other State . The tariffs to be charged by the designated
airlines of the United States for carriage between Hong Kong and a State
other than the United States shall be subject to approval by the aeronautical
authorities of Hong Kong and, where appropriate, of the other State .

(b)Any proposed tariff for such carriage shall be filed by the designated
airline of one Contracting Party seeking approval of such tariff with the
aeronautical authorities of the other Contracting Party . It shall be filed in
such form as those aeronautical authorities may require to disclose the
particulars referred to in Article 1, paragraph (i) and not less than 40 days

(or such shorter period as they may decide) prior to the proposed effective
date. The proposed tariff shall be treated as having been filed on the date
on which it is received by those aeronautical authorities .
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(c) Such tariff may be approved at any time by the aeronautical authorities
of the Contracting Party with whom it has been filed and shall be deemed
to have been approved by them unless, within 30 days after the date of filing,
they have served on the designated airline seeking approval of such tariff
written notice of disapproval .

(d) Notwithstanding the provisions of paragraph (7), a tariff approved
by virtue of paragraph (9) for carriage by a U .S . designated airline between
Hong Kong and a state other than the United States or for carriage by a
Hong Kong designated airline between the United States and another state
shall not be prolonged past the original expiry date, if any, of the tariff to
which it corresponds, if that tariff is no longer in effect or has been amended .

(9) Notwithstanding the provisions of paragraphs (4) and (8)(c) of this
Article, the aeronautical authorities of a Contracting Party shall not
disapprove any proposed tariff filed with them by a designated airline which
corresponds (e.g . in price level, conditions and date of expiry but not
necessarily the routeing being used) to the tariff charged by an airline of that
Contracting Party for comparable services between the same points or is
more restrictive or higher than that tariff .

ARTICLE 10
Commissions


The aeronautical authorities of a Contracting Party may require that the rate
of commission paid by a designated airline to an agent in respect of tickets
sold or air waybills completed by that agent for carriage on scheduled air
services originating in the area of that Contracting Party shall be filed for
approval by them in accordance with the procedures under Article 9 . Where
rates of commission are subject to such approval, the airlines shall pay only
those rates which have been approved .

ARTICLE 11
Customs Duties

(1) Aircraft operated in international air services by the designated airlines
of one Contracting Party, their regular equipment, fuel, lubricants,
consumable technical supplies, spare parts including engines, and aircraft
stores (including but not limited to such items as food, beverages and
tobacco) which are on board such aircraft shall be exempted by the other
Contracting Party on the basis of reciprocity from all customs duties, excise
taxes and similar fees and charges not based on the cost of services
provided on arrival, provided such regular equipment and such other items
remain on board the aircraft . In the case of the above-referenced charges
in the United States, the exemption for Hong Kong designated carriers shall
apply only to customs duties, excise taxes, and similar fees and charges
imposed by U .S . national authorities .

(2) Regular equipment, fuel, lubricants, consumable technical supplies,
spare parts including engines, aircraft stores (including but not limited to
such items as food, beverages and tobacco) introduced into the area of the
other Contracting Party by or on behalf of that designated airline or taken
on board the aircraft operated by that designated airline, shall be exempted
by the other Contracting Party on the basis of reciprocity from all customs
duties, excise taxes and similar fees and charges not based on the cost of
services provided on arrival, even when such regular equipment and such
other items are to be used on any part of a journey performed over the area
of the other Contracting Party . In the case of the above-referenced charges
in the United States, the exemption for Hong Kong designated carriers shall
apply only to customs duties, excise taxes, and similar fees and charges
imposed by U .S . national authorities .

(3) The regular equipment and the other items referred to in paragraphs

(1) and (2) of this Article may be required to be kept under the supervision
or control of the customs authorities of the other Contracting Party .

(4) The regular equipment and the other items referred to in paragraph

(1) of this Article may be unloaded in the area of the other Contracting Party
with the approval of the customs authorities of that other Contracting Party .
In these circumstances, such regular equipment and such items shall enjoy,
on the basis of reciprocity, the exemptions provided for by paragraph (1) of this Article until they are re-exported or otherwise disposed of in
accordance with customs regulations . The customs authorities of that other
Contracting Party may however require that such regular equipment and
such items be placed under their supervision up to such time .

(5) The exemptions provided for by this Article shall also be available
in situations where a designated airline of one Contracting Party has entered
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into arrangements with another airline or airlines for the loan or transfer in
the area of the other Contracting Party of the regular equipment and the other
items referred to in paragraphs (1) and (2) of this Article, provided that that
other airline or airlines similarly enjoy such exemptions from that other
Contracting Party.

(6) Each Contracting Party shall use its best efforts to secure for the
designated airlines of the other Contracting Party on a reciprocal basis an
exemption from taxes, charges, and fees imposed by State, regional, and
local authorities on the items listed in paragraphs (1) and (2) of this Article,
as well as from fuel through-put charges, in the circumstances described in
those paragraphs, except to the extent that the charges are based on the
actual cost of providing the service .

ARTICLE 12
Aviation Security

(1) Each Contracting Party reaffirms that its obligation to the other
Contracting Party to protect the security of civil aviation against unlawful
interference forms an integral part of this Agreement. Each Contracting Party
shall in particular act in conformity with the aviation security provisions of the
Convention on Offences and Certain Other Acts Committed on Board Aircraft,
signed at Tokyo on 14 September 1963, the Convention for the Suppression
of Unlawful Seizure of Aircraft, signed at The Hague on 16 December 1970
and the Convention for the Suppression of Unlawful Acts against the Safety
of Civil Aviation, signed at Montreal on 23 September 1971 .
-19-

(2) Each Contracting Party shall be provided at its request with all
necessary assistance by the other Contracting Party to prevent acts of
unlawful seizure of civil aircraft and other unlawful acts against the safety
of such aircraft, their passengers and crew, airports and air navigation
facilities, and any other threat to the security of civil aviation .

(3) The Contracting Parties shall, in their mutual relations, act in
conformity with

(a) the Aviation Security Standards (except to the extent to which
a difference thereto in accordance with the Convention on
International Civil Aviation has been filed by them or on their
behalf); and

(b) so far as they are applied by them or on their behalf, the
Recommended Practices established by the International Civil
Aviation Organization and designated as Annexes to the Convention .
Each Contracting Party shall require that operators of aircraft of its registry
or operators of aircraft having their principal place of business or permanent
residence in its area, and the operators of airports in its area, act in
conformity with such aviation security provisions .

(4) Each Contracting Party agrees that such operators of aircraft may be
required to observe the aviation security provisions required by the other
Contracting Party for entry into, departure from, or while within the area of that
other Contracting Party. Each Contracting Party shall ensure that adequate
measures are effectively applied within its area to protect the aircraft and to
inspect passengers, crew, carry-on items, baggage, cargo and aircraft stores prior
to and during boarding or loading. Each Contracting Party shall also give positive
consideration to any request from the other Contracting Party for reasonable
special security measures to meet a particular threat .

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

(6) Should a Contracting Party depart from the aviation security provisions
of this Article, the other Contracting Party may request immediate consultations
with the first Contracting Party. Failure to reach agreement within 30 days from
the date of receipt of such a request shall constitute grounds for suspending,
limiting or imposing conditions on the operating authorizations or technical
permissions of the airline or airlines of the first Contracting Party . When justified
by an emergency, a Contracting Party may take the same action on an interim
basis prior to the expiry of 30 days . Any action taken in accordance with this
paragraph shall be discontinued upon compliance by the first Contracting Party
with the security provisions of this Article .

ARTICLE 13
Conversion and Remittance of Revenue

(1) The designated airlines of Hong Kong shall have the right to convert
and remit from the United States on demand local revenues in excess of
sums disbursed to pay for local expenses, including purchases of fuel, in
the United States. The designated airlines of the United States shall have
the right to convert and remit from Hong Kong on demand local revenues
in excess of sums disbursed to pay for local expenses, including purchases
of fuel, in Hong Kong .

(2) The conversion and remittance of such revenues shall be permitted
without restriction at the rate of exchange applicable to current transactions
which is in effect at the time such revenues are presented for conversion
and remittance, and shall not be subject to any charges except those
normally made by banks for carrying out such conversion and remittance .

ARTICLE 14
Commercial Operations

(1) The designated airlines of each Contracting Party shall have the right,
in accordance with the laws and regulations of the other Contracting Party
relating to entry, residence and employment, to bring into and maintain in
the area of that other Contracting Party those of their own managerial,
technical, operational and other specialist staff who are required for the
provision of air transportation .

(2) The designated airlines of each Contracting Party shall have the right
to engage in the sale of air transportation in the area of the other Contracting
Party, either directly or through agents . The designated airlines of each
Contracting Party shall have the right to sell, and any person shall be free
to purchase, such transportation in local currency or in any freely convertible
other currency.(3) Each Contracting Party agrees to use its best efforts to ensure that the
designated airlines of the other Contracting Party are offered the choice, subject
to reasonable limitations that may be imposed by airport authorities, of providing
their own services for ground handling operations ; of having such operations
performed entirely or in part by another airline, an organization controlled by
another airline, or a servicing agent, as authorized by the airport authority ; or of
having such operations performed by the airport authority .

ARTICLE 15
User Charges

(1) A Contracting Party shall not impose or permit to be imposed on the
designated airlines of the other Contracting Party user charges higher than
those imposed on its own airlines operating similar international air services .
Such charges shall be just and reasonable and equitably apportioned among
categories of users.

(2) A Contracting Party shall not be held to be in breach of this Article
unless: (a) it fails to undertake a review of the charging practice that is the
subject of a complaint by the other Contracting Party within a reasonable
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 .

(3) Each Contracting Party shall encourage consultation on user charges
between its competent charging authorities and airlines using the services
and facilities provided by those charging authorities, where practicable
through those airlines' representative organisations . Reasonable notice of
any proposals for changes in user charges should be given to such users
to enable them to express their views before changes are made . Each
Contracting Party shall further encourage its competent charging authorities
and such users to exchange such information as may be necessary to permit
an accurate review of the reasonableness of the charges.

ARTICLE 16
Consultations


Either Contracting Party may at any time request consultations on the
implementation, interpretation, application or amendment of this Agreement .
Such consultations shall begin, within 60 days from the date the other
Contracting Party receives such request in writing, unless otherwise agreed
by the Contracting Parties .

ARTICLE 17
Settlement of Disputes

(1) If any dispute arises between the Contracting Parties relating to the
interpretation or application of this Agreement the Contracting Parties shall
in the first place try to settle it by negotiation .

(2) If the Contracting Parties fail to reach a settlement of the dispute by
negotiation, other than disputes under Article 9 (Tariffs), it may be referred
by them to such person or body as they may agree on or, at the request of
a Contracting Party, shall be submitted for decision to a tribunal of three
arbitrators which shall be constituted in the following manner :

(a) within 30 days after receipt of a request for arbitration, each
Contracting Party shall appoint one arbitrator. Within 60 days after these
two arbitrators have been nominated, they shall by agreement appoint a third
arbitrator, who shall act as President of the arbitral tribunal ;

(b) if within the time limits specified above any appointment has not
been made, a Contracting Party may request the President of the Council
of the International Civil Aviation Organization to make the necessary
appointment within 30 days . If the President of the Council considers that
his impartiality might be called into question by either Contracting Party on
the grounds of his nationality or otherwise, the most senior Vice President
who is not so disqualified shall make the appointment .

(3) Except as hereinafter provided in this Article or as otherwise agreed
by the Contracting Parties, the tribunal shall determine the limits of its
jurisdiction and establish its own procedure . At the direction of the tribunal,
or at the request of a Contracting Party, a conference to determine the
precise issues to be arbitrated and the specific procedures to be followed
shall be held not later than 30 days after the tribunal is fully constituted .

(4) Except as otherwise agreed by the Contracting Parties or prescribed
by the tribunal, each Contracting Party shall submit a memorandum within
45 days after the tribunal is fully constituted . Replies shall be due 60 days
later. The tribunal shall hold a hearing at the request of a Contracting Party,
or at its discretion, within 30 days after replies are due .

(5) The tribunal shall attempt to give 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 shall be taken by a majority vote .

(6) A Contracting Party may submit a request for clarification of the
decision within 15 days after it is received-and such clarification shall be
issued within 15 days of such request .

(7) Each Contracting Party shall, consistent with its laws, give full effect
to any decision or award of the arbitral tribunal . In the event that one
Contracting Party does not give full effect to any decision or award, the
other Contracting Party may take such proportionate steps as may be
appropriate .

(8) Each Contracting Party shall bear the costs of the arbitrator appointed
by it. The other costs of the tribunal shall be shared equally by the
Contracting Parties including any expenses incurred by the President or Vice-
President of the Council of the International Civil Aviation Organization in
implementing the procedures in paragraph (2)(b) of this Article .

ARTICLE 18
Amendment


Any amendments to this Agreement, including any amendment which may
be required as a result of any multilateral convention which may in the future
apply to both Contracting Parties, shall be agreed by the Contracting Parties
and shall enter into force on a date to be determined in a written exchange
between the Contracting Parties, indicating that all necessary procedures have
been completed by them.

ARTICLE 19
Termination

Either Contracting Party may at any time give notice in writing to the other
Contracting Party of its decision to terminate this Agreement . This
Agreement shall terminate at midnight (at the place of receipt of the notice) immediately before the first anniversary of the date of receipt of such notice
by that other Contracting Party, unless such notice is withdrawn by
agreement before the end of this period.
-


ARTICLE 20
Registration with the
International Civil Aviation Organization


This Agreement and any amendment thereto shall be registered with the
International Civil Aviation Organization .

ARTICLE 21
Entry into Force


This Agreement shall enter into force on the date of signature .
In witness whereof, the undersigned, being duly authorized by their respective
Governments, have signed this Agreement .
Done, in duplicate at Hong Kong this 7th day of April 1997 .
For the Government of
For the Government of
the United States of America:
Hong Kong:
4.

ANNEX
Scheduled Air Services
ROUTE SCHEDULE
Section 1


Routes to be operated by the designated airline or airlines of Hong Kong :
Hong Kong - intermediate points - points in the United States - points
beyond .
Notes :

1 . The points to be served on the routes specified above are to be jointly
determined by the Contracting Parties .
2. The designated airline or airlines of Hong Kong may on any or all flights omit
calling at any points on the routes specified above, and may serve points in any
order provided that the agreed services on these routes begin at Hong Kong .
3. No traffic may be taken on board at an intermediate point or at a point
beyond and discharged at points in the United States or vice versa, except
as may from time to time be jointly determined by the Contracting Parties .
4. No point in the mainland of China may be served as an intermediate
point or a point beyond .

Section 2
Routes to be operated by the designated airline or airlines of the United
States:
Points in the United States - intermediate points - Hong Kong - points
beyond.
Notes:

1 . The points to be served on the routes specified above are to be jointly
determined by the Contracting Parties .
2. The designated airline or airlines of the United States may on any or all
flights omit calling at any points on the routes specified above, and may
serve points in any order provided that the agreed services on these routes
begin at points in the United States .
3 . No traffic may be taken on board at an intermediate point or at a point
beyond and discharged at Hong Kong or vice versa, except as may from
time to time be jointly determined by the Contracting Parties .
4. No point in the mainland of China may be served as an intermediate
point or a point beyond .



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