Bill 70.

Summary.

The bill proposes to approve in full the Air Services Agreement between the Government of the Republic of Panama (Gobierno de la República de Panamá) and the Government of Barbados (Gobierno de Barbados), including its annex. The agreement supplements the Convention on International Civil Aviation (Convenio sobre Aviación Civil Internacional), opened for signature in Chicago, and defines agreed services, designated airlines, territory, user charges and other terms used in its provisions. The route schedule forms an integral part of the agreement. Each party would grant the other party’s airlines rights to overfly, make stops for noncommercial purposes and take on or discharge international traffic on the agreed routes. Airlines that have not been designated could also overfly and make noncommercial stops. The agreement excludes paid carriage between points within the other party’s territory and provides for temporary route changes in exceptional circumstances.

Each party could designate, replace or withdraw one or more airlines in writing. Operating authorization would depend on applicable international air transport requirements, security and safety provisions, and conditions concerning effective ownership and control. A party could revoke, suspend or limit authorizations for failure to comply with the agreement or applicable rules, for safety reasons or for failure to comply with the decisions provided for in the agreement. Except where action is necessary to prevent a violation, the measure would require prior consultations. Designated airlines would compete freely, determine their capacity and frequencies, and use available facilities without discrimination. Unilateral restrictions would be confined to customs, technical, operational or environmental needs consistent with the Convention.

The agreement provides for reciprocal exemptions, within each party’s laws, for aircraft, fuel, spare parts, supplies and other goods used in the services. Unloading equipment and materials would require customs approval. Aircraft and the people and goods carried on them would comply with national rules on entry, stay and departure, without preference for other airlines. Direct transit would receive the inspection and customs treatment specified in the agreement. Valid certificates and licenses issued in accordance with the Convention would be recognized, subject to the reservation concerning certificates and licenses granted to a party’s own nationals.

For operational safety, the parties could consult about each other’s standards, conduct ramp inspections and require corrective measures; where urgent action is needed, they could suspend or vary an authorization. Charges for using airports and aeronautical facilities would be subject to reasonableness and nondiscriminatory treatment, with consultations on proposed changes. To protect civil aviation against unlawful interference, the parties would assist each other and apply the relevant provisions of the International Civil Aviation Organization (Organización de Aviación Civil Internacional) and the instruments signed in Tokyo, The Hague and Montreal. They would require protective and screening measures from aircraft and airport operators and could consult or take measures in response to noncompliance.

Designated airlines could establish offices, retain staff, sell services in local or convertible currency and perform specified ground handling activities, subject to local rules. The parties would apply the International Civil Aviation Organization’s Code of Conduct (Código de Conducta) concerning computer reservation systems. Airlines could transfer surplus receipts under foreign exchange rules; special agreements on transfers or double taxation would prevail. Income from international air traffic and capital associated with aircraft would be taxed where the airline has its administrative headquarters, unless an applicable special agreement provides otherwise.

Before beginning services or changing schedules, airlines would submit their programs to the relevant aeronautical authority; supplementary flights would require prior permission. Each airline would set fares on commercial grounds. Intervention by the parties would be limited to anticompetitive practices, excessive fares arising from abuse of a dominant position and artificially low fares. The authorities would exchange authorizations and traffic statistics and hold consultations on the agreement. Disputes would proceed through negotiation, possible mediation and arbitration; the Council of the International Civil Aviation Organization (Consejo de la Organización de Aviación Civil Internacional) could participate in appointing arbitrators. The agreement governs amendments, registration with that organization and termination by diplomatic notice. It would enter into force after the last diplomatic note confirming completion of internal procedures. The annex permits various route combinations and traffic rights, subject to specific approval for seventh freedom rights on cargo only services. The proposed law would take effect upon its promulgation.

The public bodies concerned are the Government of the Republic of Panama, the Government of Barbados, the Civil Aviation Authority (Autoridad Aeronáutica Civil) and the International Civil Aviation Organization; the agreement also assigns functions to the Council of the International Civil Aviation Organization. Its provisions would reach airlines, airport operators, aeronautical service providers, passengers and sectors involved in cargo and mail transport between Panama and Barbados.