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U.S. Department of State

Diplomacy in Action

Air Transport Agreement Between the Government of the United States of America and the Government of the Republic of Maldives


May 5, 2005

   
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The Government of the United States of America and the Government of the Republic of Maldives (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 agreed as follows :

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 the Maldives, the Ministry of
    Transport and Civil Aviation, 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
  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 .

Article2
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 non-traffic 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, nationals of that Party, or both ;
    b . the designated airline is qualified to meet the conditions prescribed under the
    laws and regulations normally applied to the operation of international air 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) .

Article4
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). 

Article5
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 on aircraft (including regulations relating to entry, 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 .

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 .

Article7
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 Aviation, done at Montreal September 23, 1971, and the Protocol for the
    Suppression of Unlawful Acts of Violence at Airports Serving International Civil
    Aviation, done at Montreal February 24, 1988 .
  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
Commercial Opportunities

  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 .
  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 self-handling 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 Party;
    b . an airline or airlines of a third country ; and
    c . a surface transportation provider of any country ;
    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 I 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 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 services at the 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 .
  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 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 I 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 .

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 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 17
Entry into Force

This Agreement and its Annexes 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 at Washington, this fifth day of May, 2005, in duplicate, in the English language .

FOR THE GOVERNMENT OF THE UNITED STAT OF AMERICA:

FOR THE GOVERNMENT OF THE REPUBLIC OF MALDIVES :

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 Maldives and beyond .
  2. For all-cargo service or services, between Maldives and any point or points .

B.Routes for the airline or airlines designated by the Government of Maldives :

  1. From points behind Maldives via Maldives 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 other aircraft at any point on
    the routes ; and 
  6. serve points behind any point in its territory with or without change of aircraft or
    flight number and may hold out and advertise such services to the public as through
    services; 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 allcargo 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 allcargo
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 also have the right : (1) to make stopovers at any points
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 other Party's territory, and traffic
originating in 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 .



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