Bill 550.

Summary.

Article 1 proposes approving in full the Air Services Agreement between the Government of Panama and the Government of the Kingdom of Saudi Arabia, made in Paris. The agreement draws on the Convention on International Civil Aviation opened for signature in Chicago and defines, among other terms, designated airline, tariff, capacity, air transport and code sharing. It identifies the Civil Aviation Authority (Autoridad de Aviación Civil) and the General Civil Aviation Authority (Autoridad General de Aviación Civil) as the parties’ aeronautical authorities. Each party would grant the other rights to establish scheduled services on the appendix routes: overflight, stops for nontraffic purposes, and the boarding or disembarking of international traffic at specified points. Traffic rights at intermediate and beyond points would require negotiation and approval; the agreement would not grant domestic carriage between points in the other party’s territory.

Each party could designate one or more airlines through diplomatic channels, withdraw designations and authorize operations subject to ownership, control, safety and applicable legal requirements. The authorities could withhold, revoke, suspend or condition authorizations if those requirements were not met. The parties would designate airports and provide facilities and services for the agreed routes, without imposing user charges higher than those imposed on comparable international services of their own airlines. The agreement provides reciprocal exemptions from customs duties, taxes and certain charges for aircraft, fuel, supplies, spare parts and airline documents, subject to stated conditions. It also provides equitable operating opportunities, approval of capacity, frequencies and timetables, submission of schedules sixty (60) days in advance, and traffic statistics upon request.

Aircraft and the persons or goods they carry would be subject to the relevant territory’s rules on navigation, entry, departure, immigration, customs, health and related matters, without preference for its own airline. Designated airlines would have the right to transfer revenue under domestic law and subject to normal bank charges; reciprocal restrictions could apply, as could a double taxation agreement if one were in force. The agreement governs recognition of certificates and licenses, consultations on aviation safety, aircraft inspections and immediate suspension of authorizations when essential to operational safety. For aviation security, it provides mutual assistance against unlawful interference and obligations connected with instruments signed in Tokyo, The Hague and Montreal, as well as applicable provisions of the International Civil Aviation Organization (OACI).

Designated airlines could maintain specialized staff and commercial representation in the other territory, subject to rules on entry, residence and employment. They would set fares freely on the basis of fair competition, with possible notification or filing of their own fares. The agreement establishes consultations and amendment procedures, including appendix amendments approved by both authorities. It requires controls over the issuance and use of travel documents, exchange of information on forged documents, and a direct transit regime with a customs exemption for baggage and cargo. It calls for the removal of discrimination and unfair competition practices, provides for consultations on questioned operations, and requires exchange of information about applicable competition laws.

Designated airlines could sell services through offices, agents and online channels; select ground handling providers; enter into cooperation and code sharing arrangements subject to authorizations and disclosure to buyers; use leased aircraft under the specified arrangements; and employ surface transport for passengers or cargo. The parties would apply the OACI code governing computerized reservation systems and the environmental standards and guidance identified in the agreement. They would prohibit smoking on passenger flights between their territories, from boarding through disembarkation, and adopt compliance measures, including appropriate penalties.

Disputes over interpretation or application would first proceed through negotiation and could be referred for an advisory opinion or to an arbitral tribunal whose decisions would bind the parties. The agreement provides for adaptation to binding multilateral agreements, termination by diplomatic notice, registration with OACI and entry into force after the last notification that internal procedures have been completed. The annex permits routes in both directions between any point in Panama and any point in Saudi Arabia, with intermediate and beyond points, and makes fifth freedom traffic rights subject to agreement between the parties. Article 2 provides that the proposed law would take effect upon promulgation. Its provisions concern the parties’ aeronautical and customs authorities, OACI, airlines, airports, ground handling providers, passengers, cargo shippers, and the tourism, trade and transport sectors.