The Coordination Council for North American Affairs (CCNAA) and
the America Institute in Taiwan (AIT). in order to promote exte-
nsive, close and friendly commercial, cultural, and other relat-
ions; desiring to facilitate the expansion of air transport opp-
ortunities on the basis of competition among airlines; desiring
to make it possible for airlines to offer the traveling and shi-
pping public a variety of service options at the lowest prices
that are not predatory or discriminatory and do not represent a-
buse of a dominant position; wishing to encourage individual ai-
rlines to develop and implement innovative and competitive pric-
es; desiring to ensure the highest degree of safety and security
in air transport and reaffirming their grave concern about acts
or threats against the security of aircraft, which jeopardize t-
he safety of persons or property, adversely affect the operation
of air transportation, and undermine public confidence in the s-
afety of civil aviation; desiring to maintain and expand air se-
rvices by concluding an agreement to succeed all previous Air T-
ransport Agreements;
Have agreed as follows:
ARTICLE 1
Definitions
For the purposes of this Agreement, unless otherwise stated, the
term:
(a) "Agreement" means this Agreement, its Annexes, and any amen-
dments thereto;
(b) "Air transportation" means any operation performed by aircr-
aft for the public carriage of traffic in passengers (and.
their baggage), cargo and mail, separately or in combinati-
on, for remuneration or hire;
(c) "Convention" means the Convention on International Civil Av-
iation, opened for signature at Chicago on December 7,1944;
(d) "Designated airline" means an air-line designated and autho-
rized in accordance with Artile 2 of this Agreement;
(e) "Full economic costs" means the direct cost of providing se-
rvice plusa reasonable charge for administrative over-head;
(f) "Party" means the AIT or the CCNAA, as the context may requ-
ire;
(g) "Price" means:
(i) any fare, rate or price to be charged by airlines, or the-
ir agents, and the conditions governing the availability
of such fare, rate or price;
(ii) the charges and conditions for services ancillary to carr-
iage of traffic which are offered by airlines; and
(iii) amount charged by airlines to air transportation intermed-
iaries;
for the carriage of passengers (and their baggage) and/or cargo
(excluding mail) in air transportation.
(h) "Stop for non-traffic purposes" means a landing for any pur-
pose other than taking on or discharging passengers (and t-
heir baggage), cargo and mail in air transportation;
(i) "User charge" means a charge made to airlines for the provi-
sion of airport, air navigation or aviation security prope-
rty or facilities.
ARTICLE 2
Designation and Authorization
(1) Each party may designate as many airlines as it wishes to c-
onduct air transportation in accordance with this Agreement
and may withdraw or alter such designations. Such designati-
ons shall be transmitted to the other party in writing and
shall identify what type or types of air transportation the
airline is authorized to conduct. Types of air transportati-
on are specified in Annex I and Annex Ⅱ.
(2) On receipt of such a designation and of applications in the
form and manner prescribed from the designated airline for
operating authorizations and permissions are granted with m-
inimum procedural delay, provided:
(a) substantial ownership and effective control of that airli-
ne are appropriately vested in the party or in persons re-
presented by the party designating the airline;
(b) the designated airline is qualified to meet the conditions
spescribed under the laws and regulations normally applic-
able to the operation of air transportation; and
(c) the party designating the airline is ensuring that the st-
andards set forth in Article 5 (Safety) are maintained and
administered.
ARTICLE 3
Cabotage
Nothing in this Agreement shall be deemed to grant the right for
one party's designated airlines to participate in cabotage.
ARTICLE 4
Revocation of Authorization
(1) Each party may revoke, suspend or limit the operating autho-
rizations or technical permissions of an airline designated
by the other party where:
(a) substantial ownership and effective control of that airli-
ne are not appropriately vested in the party or in person
represented by the party designating the airline;
(b) that airline has failed to comply with applicable laws and
regulations relating to the operation and navigation of a-
ircraft or admission or departure of passengers, crew or
cargo on aircraft; or
(c) the other party is not ensuring that the standards set fo-
rth in Article 5 (Safety) are maintained and administered.
(2) Unless immediate action is essential to prevent further non-
compliance with paragraph (1) of this Article, the rights e-
stablished by this Article shall be exercised only after co-
nsultation with the other party.
ARTICLE 5
Safety
(1) Subject to Article 32 (b) of the Convention, each party sha-
ll 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 lic-
enses at least equal the minimum standards which may be est-
ablished pursuant to the Convention.
(2) Each party may request consultations concerning safety and
security standards relating to aeronautical facilities, air-
crew, aircraft, and operation of the designated airlines. I-
f, following such consultations, one party finds that the o-
ther party does not ensure the effective maintenance and ad-
ministration of safety and security standards and requireme-
nts in these areas that at least equal the minimum standards
which may be established pursuant to the Convention, the ot-
her party shall be notified of such findings and the steps
considered necessary to conform with these minimum standard-
s; and the other party shall ensure that appropriate correc-
tive action is taken. Each party reserves the right to with-
hold, revoke or limit the operating authorization or techni-
cal permission of an airline or airlines designated by the
other party in the event the other party does not ensure th-
at such appropriate action is taken within a reasonable tim-
e.
ARTICLE 6
Aviation Security
The Parties, recognizing their responsibilities to develop inte-
rnational civil aviation in a safe and orderly manner, reaffirm
their grave concern about acts or threats against the security
of aircraft , which jeopardize the safety of persons or propert-
y, adversely affect the operation of air transportation, and un-
dermine public confidence in the safety of civil aviation. To t-
his end, each Party:
(1) Shall ensure the observance of the provisions of the Conven-
tion on Offenses and Certain Other Acts Committed on Board
Aircraft, signed at Tokyo on September 14,1963, the Convent-
ion for the Suppression of Unlawful Seizure of Aircraft, si-
gned at The Hague on December 16,1970 and the Convention for
the Suppression of Unlawful Acts Against the Safety of Civil
Aviation, signed at Montreal on September 23,1971;
(2) Shall ensure that its designated airlines act consistently
with applicable aviation security provisions established by
the International Civil Aviation Organization; and
(3) Shall ensure that maximum aid is provided with a view to pr-
eventing unlawful seizure of aircraft, sabotage to aircraft,
airports, and air navigation facilities, and threats to avi-
ation security; give sympathetic consideration to any reque-
st for special security measures for aircraft or passengers
to meet a particular threat; and, when incidents or threats
of hijacking or sabotage against aircraft, airports or air
navigation facilities occur, assist in the facilitation of
communications intended to terminate such incidents rapidly
and safely.
ARTICLE 7
Commercial Opportunities
(1) The designated airlines of each party may establish offices
for the promotion and sale of air transportation.
(2) The designated airlines of each party may, in accordance wi-
th applicable laws and regulations relating to entry, resid-
ence and employment, bring in and maintain managerial, sale-
s, technical, operational and other specialist staff requir-
ed for the provision of air transportation.
(3) Each designated airline may perform its own ground services
("self-handling") or, at its option, select among competing
agents for such services. These rights shall be subject only
to physical constraints resulting from considerations of ai-
rport safety, where agreed to by both parties. Ground servi-
ces shall be available on an equal and non-discriminatory b-
asis to all airlines; charges shall be based on the costs of
services provided; and the services provided to an airline
that does not self-handle shall be comparable to the kind a-
nd quality of services normally available with self-handlin-
g. Incorporated by reference as an in tegral part of this a-
rticle is the letter of March 5,1980 between the parties wh-
ich further elaborates the understanding of the parties.
(4) Designated airlines of each party may engage in the sale of
air transportation directly and, at the airline's discretio-
n, through its agents, except as may be specifically provid-
ed by the charter regulations in force at the point at which
a charter originates. Each designated airline may sell such
transportation, and any person shall be free to purchase su-
ch transportation, in local currency or in freely convertib-
le currencies.
(5) Each designated airline may convert and remit to its home o-
ffices, on demand, local revenues in excess of sums locally
disbursed. Conversion and remittance shall be permitted pro-
mptly without restrictions or taxation in respect thereof at
the rate of exchange applicable to current transactions and
remittance.
ARTICLE 8
Customs Duties and Taxes
(1) On arriving in the territory of one party, aircraft operated
by the designated airlines of the other party, their regular
equipment, ground equipment, fuel, lubricants, consumable t-
echnical supplies, spare parts including engines, aircraft
stores (including but not limited to such items as food, be-
verages and liquor, tobacco and other products destined for
sale to or use by passengers in limited quantities during t-
he flight), and other items intended for or used solely in
connection with the operation or servicing of aircraft enga-
ged in international air transportation shall be exempt, on
the basis of reciprocity, from all import restrictions, pro-
perty taxes and capital levies, customs duties, excise taxes
, and similar fees and charges which are not based on the c-
ost of services provided, provided such equipment and suppli
es remain on board the aircraft.
(2) There shall also be exempt, on the basis of reciprocity, fr-
om the taxes, duties, fees and charges referred to in parag-
raph (1) of this Article, with the exception of charges bas-
ed on the cost of the services provided:
(a) aircraft stores introduced into or supplies in the territ-
ory of a party and taken on board, within reasonable limi-
ts, for use on outbound aircraft of a designated airline
of the other party engaged in international air transport-
ation, 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 introd-
uced into the territory of a party for the servicing., ma-
intenance or repair of aircraft of a designated airline of
the other party used in international air transportation;
and
(c) fuel, lubricants and consumable technical supplies introd-
uced into or supplied in the territory of a party for use
in an aircraft of a designated airline of the other party
engaged in international air transportation, even when th-
ese supplies are to be used on a part of the journey perf-
ormed over the territory of the party in which they are t-
aken on board.
(3) Equipment and supplies referred to in paragraphs (1) and (2)
of this Article may be required to be kept under the superv-
ision or control of the appropriate authorities.
(4) The exemption provided for by this Article shall also be av-
ailable where the designated airlines of one party have con-
tracted with another airline, which similarly enjoys such e-
xemptions for the loan or transfer in the territory of the
other party of the items specified in paragraphs (1) and (2)
of this Article.
(5) The exemptions provided for by this Article shall apply only
to those taxes, duties, fees and charges for which the part-
ies are authorized to provide for exemption. The parties un-
dertake to use their best efforts to secure similar exempti-
ons, on the basis of reciprocity, with respect to other such
charges, except to the extent that such charges are based on
the actual cost of providing a service.
ARTICLE 9
User Charges
(1) User charges imposed by the competent charging authorities
on designated airlines shall be just, reasonable, and nondi-
scriminatory.
(2) User charges imposed on designated airlines may reflect, but
shall not exceed, an equitable portion of the full economic
cost to the competent charging authorities of providing the
airport, air navigation, and aviation security facilities a-
nd services. Facilities and services for which charges are
made shall be provided on an efficient and economic basis.
Reasonable notice shall be given prior to changes in user c-
harges. Each party shall encourage the competent charging a-
uthorities and the airlines to exchange such information as
may be necessary to permit an accurate review of the reason-
ableness of the charges, and shall arrange for consultations
as appropriate to discuss these charges.
ARTICLE 10
Fair Competition
(1) The designated airlines of each party shall have a fair and
equal opportunity to compete in the air transportation cove-
red by this Agreement.
(2) Each party shall ensure that appropriate action is taken to
eliminate all forms of discrimination or unfair competition
practices adversely affecting the competitive position of t-
he designated airlines of the other party.
(3) Unilateral limitations on the volume of traffic, frequency
or regularity of service, or aircraft type or types shall n-
ot be imposed, except as may be required for customs, techn-
ical, operational or environmental reasons under uniform co-
nditions consistent with Article 15 of the Convention.
(4) Designated airlines of either party shall not be subjected
to a first refusal requirement, uplift ratio, no-objection
fee, or any other requirement with respect to the capacity,
frequency or traffic which would be inconsistent with the p-
urposes of this Agreement.
(5) Designated airlines shall not be required to file schedules,
programs for charter flights, or operational plans for appr-
oval, except as may be required on a nondiscriminatory basis
to enforce uniform conditions as foreseen by paragraph (3)
of this Article or as may be specifically authorized in an
Annex to this Agreement. If filings are required for inform-
ation purposes, the administrative burdens of filing requir-
ements and procedures on air transportation intermediaries
and on designated airlines shall be minimized.
ARTICLE 11
Pricing
(1) Prices for air transportation shall be established by each
designated airline based upon commercial considerations in
the market place. Intervention shall be limited to:
(a) prevention of predatory or discriminatory prices or pract-
ices;
(b) protection of consumers from prices that are unduly high
or restrictive because of the abuse of a dominant positio-
n; and
(c) protection of airlines from prices that are artificially
low because of direct or indirect subsidy or support.
(2) Each party may require notification to or filing with the r-
espective aeronautical authorities of prices proposed to be
charged to or from its territory by designated airlines of
the other party. Notification or filing may be required no
more than 60 days before the proposed date of effectiveness.
In individual cases, notification or filing may be permitted
on shorter notice than normally required. Neither party sha-
ll require the notification or filing by airlines of the ot-
her party or by airlines of third parties of prices charged
by charterers to the public for traffic originating in the
territory of that other party.
(3) Unilateral action shall not be taken to prevent the inaugur-
ation or continuation of a price proposed to be charged or
charged by (a) a designated airline of either party or an a-
irline of a third party for air transportation between the
territories of the parties of (b) a designated airline of o-
ne party or an airline of a third party for air transportat-
ion between the territory of the other party and any interm-
ediate or beyond point including in both cases transportati-
on an interline or intra-line basis. If either party believ-
es that any such price is inconsistent with the considerati-
ons set forth in paragraph (1) of this Article, it shall re-
quest consultations and notify the other party of the reaso-
ns for its dissatisfaction as soon as possible. These consu-
ltations 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 part-
y shall use its best efforts to put that agreement into eff-
ect. Without mutual agreement, that price shall go into or
continue in effect.
(4) Notwithstanding paragraph (3) of this Article, each party s-
hall allow (a) any designated airline of either party or any
airline of a third party to meet a lower or more competitive
price proposed or charged by any other airline or charterer
for air transportation between the territories of the parti-
es, and (b) any designated airline of one party to meet a l-
ower or more competitive price proposed or charged by any o-
ther airline or charterer for air transportation between the
territories of the parties, and (b) any designated airline
of one party to meet a lower or more competitive price prop-
osed or charged by any other airline or charterer for air t-
ransportation between the territory of the other party and
an intermediate or beyond point. As used herein, the term "
meet" means the right to establish on a timely basis, using
such expedited procedures as may be necessary, an identical
or similar price on a direct, interline or intra-line basis,
notwithstanding differences in conditions relating to routi-
ng, roundtrip requirements, connections, type of service or
aircraft type, or such price through a combination of price-
s.
ARTICLE 12
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 oth-
er party receives the request unless otherwise agreed. Each par-
ty shall prepare and present during such consultations relevant
evidence in support of its position in order to facilitate info-
rmed, rational and economic decisions.
ARTICLE 13
Settlement of Disputes
(1) Any dispute arising under this Agreement which is not resol-
ved by a first round of formal consultations, except those
which may arise under paragraph 3 of Article 11 (Pricing),
may be referred to arbitration in accordance with the proce-
dures set forth below, unless the parties agree on other pr
ocedures.
(2) Arbitration shall be by a tribunal of three arbitrators. Wi-
thin 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 agreem-
ent appoint a third arbitrator, who shall act as President
of the arbitral tribunal.
(3) Except as otherwise agreed, the arbitral tribunal shall det-
ermine the limits of its jurisdiction in accordance with th-
is Agreement and shall establish its own procedure. 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 no later than 15 days after the tribunal is fully c-
onstituted.
(4) Except as otherwise agreed, each party shall submit a memor-
andum within 45 days of the time the tribunal is fully cons-
tituted. Replies shall be due 60 days later. The tribunal s-
hall hold a hearing at the request of either party or at its
discretion within 15 days after replies are due.
(5) The tribunal shall attempt to render a written decision wit-
hin 30 days after completion of the hearing or, if no heari-
ng is held, after the date both replies are submitted, whic-
hever is sooner. The decision of the majority of the tribun-
al shall prevail.
(6) The parties may submit requests for clarification of the de-
cision within 15 days after it is rendered and any clarific-
ation given shall be issued within 15 days of such request.
(7) Each party shall use its best efforts to ensure that any de-
cision or award of the arbitral tribunal is given effect in
accordance with domestic law.
(8) The expenses of the arbitral tribunal, including the fees a-
nd expenses of the arbitrators, shall be shared equally by
the parties.
ARTICLE 14
Termination
Either party may, at any time, give notice in writing to the ot-
her of its decision to terminate this Agreement. This Agreement
shall terminate at midnight (at the place of receipt of 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 before the end of this period.
ARTICLE 15
Entry into Force
This Agreement will come into force on the date of signature, In
witness whereof, the undersigned, being duly authorized, have s-
igned the present Agreement. Done in duplicate at Washington in
the English language this 5th day of March, 1980.
(Signed) Konsin C. Shah
Coordination Council for
North American Affairs
(Signed) David Dean
American Institute in Taiwan
ANNEX Ⅰ
Scheduled Air Service
Section 1
Airlines designated to perform the type of air transportation s-
pecified in this Annex shall, in accordance with the terms of t-
heir designation, be entitled to perform air transportation (1)
between points on the following routes, and (2) between points
on such routes and other points through points in the territory
of the party which has designated the airline.
A Routes for the airline or airlines designated by AIT:
from points in the United States via intermediate points to T-
aipei and Kaohsiung and beyond via intermediate points to the
United States.
B Routes for the airline or airlines designated by CCNAA:
from Taipei/Kaohsiung via intermediate points in the Pacific
to Guam, Honolulu, Seattle 1/, San Francisco, Los Angeles, Da-
llas 1/, and New York 1/, and beyondito a point in Europe and
a point in either Central or South America.
1/ Only two of these three cities may be served prior to January
1,1984.
Section 2
Each designated airline may, on any or all flights and at its o-
ption, operate flights in either or both directions and without
directional or geographic limitation, serve points on the routes
in any order, and omit stops at any point or points outside the
territory of the party which has designated that airline, witho-
ut loss of any right to carry traffic otherwise permissible und-
er this Agreement.
Section 3
A designated airline may perform air transportation without any
limitation as to change, at any point on the route, in type or
number of aircraft operated, provided that in the outbound dire-
ction the transportation beyond such point is a continuation of
the transportation form the territory of the party which has de-
signated the airline and, in the inbound direction, the transpo-
rtation to the territory of the party which has designated the
airline is a continuation of the transportation beyond such poi-
nt.
Section 4
Airlines designated by one party to perform the type of air tra-
nsportation specified in this Annex shall, in accordance with t-
he terms of their designation, enjoy the right to over fly the
other party's territory without landing and the right to make s-
tops in the other party's territory for non-traffic purposes.
ANNEX Ⅱ
Charter Air Service
Section 1
Airlines designated to perform the type of air transportation s-
pecified in this Annex shall, in accordance with the terms of t-
heir designation, be entitled to perform air transportation to,
from and through any point or points in the territory of the ot-
her either directly or with stopovers en route, for one-way or
roundtrip carriage of the following traffic:
(a) any traffic to or from a point or points in the territory of
the party which has designated the airline;
(b) any traffic to or from a point or points beyond the territo-
ry of the party which has designated the airline and carried
between the territory of that party and such beyond point or
points (i) in transportation other than under this Annex; or
(ii) in transportation under this Annex with the traffic ma-
king a stopover of at least two consecutive nights in the t-
erritory of that party.
Section 2
With regard to traffic originating in the territory of either p-
arty, each designated airline performing air transportation und-
er this Annex shall comply with the laws, regulations and rules
in force at the point at which the traffic originates, whether
on a one-way or roundtrip basis. Airlines designated to perform
the type of air transportation specified in this Annex shall be
subject to the least restrictive terms, conditions or limitatio-
ns applicable on any airline.
Section 3
No designated airline carrying traffic originating in the terri-
tory of the other party on a one-way or roundtrip basis shall be
required to submit more than a declaration of conformity with t-
he laws, regulations and rules referred to under Section 2 of t-
his Annex or of a waiver of these rules.
Section 4
Airlines designated by one party to perform the type of air tra-
nsportation specified in this Annex shall, in accordance with t-
he terms of their designation, enjoy the right to over fly the
other party's territory with out landing and the right to make
stops in the other party's territory for non-traffic purposes.