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Agreement between the Government of Canada and the Government of the Republic of Korea for Air Services between and beyond their Respective Territories [1989] CATSer 21 (20 September 1989)

E100222 - CTS 1989 No. 50

AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF KOREA FOR AIR SERVICES BETWEEN AND BEYOND THEIR RESPECTIVE TERRITORIES

The Government of Canada and the Government of the Republic of Korea (hereinafter referred to as "the Contracting Parties"),

Being parties to the Convention on International Civil Aviation opened for signature at Chicago on the seventh day of December, 1944,

Desiring to conclude an Agreement for the purpose of establishing and operating air services between and beyond their respective territories,

Have agreed as follows:

ARTICLE 1

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

(a) the term “the Convention” means the Convention on International Civil Aviation opened for signature at Chicago on the seventh day of December, 1944, and includes any Annex adopted under Article 90 of that Convention and any amendment of the Annexes or Convention under Articles 90 and 94 thereof so far as those Annexes and amendments have been adopted by both Contracting Parties;

(b) the term “aeronautical authorities” means, in the case of Canada, the Minister of Transport and the Canadian Transport Commission or any other authority or person empowered to perform the functions now exercised by the said authorities, and, in the case of the Republic of Korea, the Minister of Transportation or any person or body authorized to perform any function exercised at present by the said Minister or similar functions;

(c) the term “Agreement” means this Agreement, the Annex attached thereto, and any amendments to the Agreement or to the Annex;

(d) the term “designated airline” means an airline which one Contracting Party shall have designated, by written notification to the other Contracting Party, in accordance with Article 3 of the Agreement, for the operation of air services on the routes specified in the Annex;

(e) the terms “territory”, “air service”, “international air service”, “airline” and “stop for non-traffic purposes” have the meaning respectively assigned to them in Articles 2 and 96 of the Convention;

(f) the term “prohibited area” means the area and the air space above that area over or through which any prohibition to the flying of an aircraft of any description may be imposed by the Contracting Party concerned in accordance with Article 9 of the Convention;

(g) the term “agreed services” means scheduled air services on the routes specified in the Annex to this Agreement for the transport of passengers, cargo and mail, separately or in combination;

(h) the term “tariffs” means the prices to be paid for the carriage of passengers, baggage and cargo and the conditions under which those prices apply, including prices and conditions for other services performed by the carrier in connection with air transportation, but excluding remuneration and conditions, for the carriage of mail;

(i) the term “change of gauge” means the operation of one of the agreed services by a designated airline in such a way that one section of the route is flown, in accordance with Article 3 of this Agreement, by aircraft different in capacity from those used on another section.

ARTICLE 2

1. Each Contracting Party grants to the other Contracting Party the rights specified in the Agreement to enable its designated airline to establish and operate international air services on the routes specified in the Annex thereto hereinafter referred to as “the specified routes”.

2. Each Contracting Party grants to the other Contracting Party except as otherwise specified in the Annex the following rights for the conduct of international air services by the airline designated by the other Contracting Party:

(a) to fly without landing across the territory of the other Contracting Party;

(b) to make stops in the said territory for non-traffic purposes; and

(c) to make stops in the said territory for the purpose of taking up and discharging, while operating the specified routes, international traffic in passengers, cargo and mail, separately or in combination.

3. The airlines of each Contracting Party, other than those designated under Article 3 of this Agreement, shall also enjoy the rights specified in sub-paragraphs 2(a) and (b) of this Article.

4. Nothing in paragraph 2 of this Article shall be deemed to confer on the designated airline of one Contracting Party the privilege of taking up, in the territory of the other Contracting Party, passengers, cargo and mail carried for remuneration or hire and destined for another point in the territory of that other Contracting Party.

ARTICLE 3

1. Each Contracting Party shall have the right to designate by diplomatic note to the other Contracting Party an airline for the purpose of operating the agreed services on the specified routes and to substitute another airline for that previously designated.

2. On receipt of the designation, the aeronautical authorities of the other Contracting Party shall, subject to the provisions of paragraphs 3 and 4 of this Article, grant without delay to the designated airline the appropriate operating authorization.

3. The aeronautical authorities of one Contracting Party may require the designated airline of the other Contracting Party to satisfy them that it is qualified to fulfil the conditions prescribed under the laws and regulations normally and reasonably applied by them, in conformity with the provisions of the Convention, to the operation of international air services.

4. Each Contracting Party reserves the right to withhold, revoke or suspend the grant to the designated airline of the privileges specified in paragraph 2, sub-paragraph (c) of Article 2 of the Agreement or to impose such conditions as it may deem necessary on the exercise by such airline of those privileges, in any case where it is not satisfied that substantial ownership and effective control of that airline are vested in the Contracting Party designating the airline or in its nationals.

5. Each Contracting Party reserves the right to revoke an authorization for operation or to suspend the exercise by the designated airline of the other Contracting Party of the privileges specified in paragraph 2, sub-paragraph (c) of Article 2 of the Agreement or to impose such conditions as it may deem necessary on the exercise by such designated airline of those privileges, in any case where such airline fails to comply with the laws and regulations of the Contracting Parties granting those privileges or otherwise fails to operate in accordance with the conditions prescribed in the Agreement; provided that, unless immediate revocation, suspension or imposition of conditions is essential to prevent further infringements of such laws and regulations, or for reason of safety of air navigation, this right shall be exercised only after consultation in conformity with Article 13 and 14.

6. The airline designated and authorized in accordance with the provisions of paragraphs 1 and 2 of this Article may begin to operate the agreed services, in whole or in part, provided that tariffs established in accordance with the provisions of Article 10 of the Agreement are in force in respect of those services.

ARTICLE 4

1. Each Contracting Party shall on a basis of reciprocity exempt the designated airline of the other Contracting Party to the fullest extent possible under its national law from import restrictions, customs duties, excise taxes, inspection fees and other national duties and charges on aircraft, fuel, lubricating oils, consumable technical supplies, spare parts including engines, regular aircraft equipment, aircraft stores (including liquor, tobacco and other products destined for sale to passengers in limited quantities during the flight) and other items intended for use or used solely in connection with the operation or servicing of aircraft of the designated airline of such other Contracting Party operating the agreed services, as well as printed ticket stock, air way bills, any printed material which bears the insignia of the company printed thereon and usual publicity material distributed without charge by that designated airline.

2. The exemptions granted by this Article shall apply to the items referred to in paragraph 1 of this Article:

(a) introduced into the territory of one Contracting Party by or on behalf of the designated airline of the other Contracting Party;

(b) retained on board aircraft of the designated airline of one Contracting Party upon arriving in or leaving the territory of the other Contracting Party;

(c) taken on board aircraft of the designated airline of one Contracting Party in the territory of the other Contracting Party and intended for use in operating the agreed services;

whether or not such items are used or consumed wholly within the territory of the Contracting Party granting the exemption, provided such items are not diverted for domestic use or consumption in the territory of the said Contracting Party and may be required to be kept under customs supervision or control.

3. The regular airborne equipment, as well as the materials and supplies retained on board the aircraft of a designated airline of either Contracting Party may be unloaded in the territory of the other Contracting Party only with the approval of the customs authorities of that other Contracting Party. In such case, they may be placed under the supervision of said authorities up to such time as they are re-exported or otherwise disposed of in accordance with customs regulations.

ARTICLE 5

A designated airline of one Contracting Party may make a change of gauge at any point on the specified route only on the following conditions:

(i) that it is justified by reason of economy of operation;

(ii) that the capacity of the aircraft used on the section of the route more distant from the territory of the Contracting Party designating the airline is not larger in capacity than that used on the nearer section;

(iii) that the aircraft of smaller capacity shall operate only in connection with the aircraft of larger capacity and shall be scheduled so to do; the former shall arrive at the point of change for the purpose of carrying traffic transferred from, or to be transferred into, the aircraft of larger capacity; and their capacity shall be determined with primary reference to this purpose;

(iv) that there is an adequate volume of through traffic;

(v) that the airline shall not hold itself out to the public by advertisement or otherwise as providing a service which originates at the point where the change of gauge is made, unless otherwise permitted by the Annex;

(vi) that in connection with any one aircraft flight into the territory of the other Contracting Party, only one flight may be made out of that territory unless the airline is authorized by the aeronautical authorities of the other Contracting Party to operate more than one flight; and

(vii) that the provisions of Article 9 of the present Agreement shall govern all arrangements made with regard to change of gauge.

ARTICLE 6

1. The laws, regulations and procedures of one Contracting Party relating to the admission to, remaining in, or departure from its territory or flights over its territory by aircraft engaged in international air navigation or to the operation and navigation of such aircraft shall be complied with by the designated airline of the other Contracting Party upon entrance into, departure from and while within or over the said territory.

2. The operation of the air services in the areas declared as prohibited areas by a Contracting Party shall be subject to the approval of the Contracting Party.

3. The laws and regulations of one Contracting Party respecting entry, clearance, transit, immigration, passports, customs and quarantine shall be complied with by the designated airline of the other Contracting Party and by or on behalf of its crews, passengers, cargo and mail upon transit of, admission to, departure from and while within the territory of such a Contracting Party.

4. Passengers in transit across the territory of either Contracting Party shall be subject to no more than a simplified control. Baggage and cargo in direct transit shall be exempt from customs duties and other similar taxes.

5. Neither Contracting Party shall grant any preferences to its own airline over the designated airline of the other Contracting Party in the application of the laws and regulations provided for by this Article.

ARTICLE 7

1. The designated airline of one Contracting Party shall be allowed, on the basis of reciprocity, to maintain in the territory of the other Contracting Party their representatives and commercial, operational and technical staff as required in connection with the operation of agreed services.

2. These staff requirements may, at the operation of the designated airline, be satisfied by its own personnel or by using the services of any other organization, company or airline operating in the territory of the other Contracting Party, and authorized to perform such services in the territory of that Contracting Party.

3. The representatives and staff shall be subject to the laws and regulations in force of the other Contracting Party, and each Contracting Party shall, on the basis of reciprocity and with the minimum of delay and to the extent permitted under the national laws and regulations, grant the necessary employment authorizations, visitor visas or other similar documents to the representatives and staff referred to in paragraph 1 of this Article.

4. Both Contracting Parties shall, to the extent possible and subject to national laws and regulations, dispense with the requirement of employment authorizations or other similar documents for personnel performing certain temporary services and duties except in special circumstances determined by the national authorities concerned. Where such authorizations or documents are required, they shall be issued promptly so as not to delay the entry into the State of the personnel concerned.

ARTICLE 8

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. Each Contracting Party reserves the right, however, to refuse to recognize, for the purpose of flights over its own territory, certificates of competency and licences granted to its own nationals or rendered valid for them by the other Contracting Party.

2. If the privileges or conditions of the licences or certificates referred to in paragraph 1 above, issued by the aeronautical authorities of one Contracting Party to any person or designated airline or in respect of an aircraft operating the agreed services on the specified routes should permit a difference from the standards established under the Convention, and which difference has been filed with the International Civil Aviation Organization, the aeronautical authorities of the other Contracting Party may request consultations in accordance with Article 13 of this Agreement with the aeronautical authorities of that Contracting Party with a view to satisfying themselves that the practice in question is acceptable to them. Failure to reach a satisfactory agreement in matters regarding flight safety will constitute grounds for the application of Article 3 of this Agreement.

ARTICLE 9

1. There shall be fair and equal opportunity for the designated airlines of both Contracting Parties to operate the agreed services on the specified routes.

2. In operating the agreed services, the designated airline of each Contracting Party shall take into account the interests of the designated airline of the other Contracting Party so as not to affect unduly the services which the latter provides on all or part of the same routes.

3. The agreed services provided by the designated airlines of the Contracting Parties shall bear reasonable relationship to the requirements of the public for transportation on the specified routes and shall have as their primary objective the provision, at a reasonable load factor, of capacity adequate to meet the current and reasonably anticipated requirements for the carriage of passengers, cargo and mail between the territory of the Contracting Party which has designated the airline and the countries of ultimate destination of the traffic.

4. Provision for the carriage of passengers, cargo and mail both taken up and discharged at points on the specified routes in the territories of States other than that designating the airline shall be made in accordance with the general principle that capacity shall be related to:

(a) traffic requirements to and from the territory of the Contracting Party which has designated the airline;

(b) traffic requirements of the area through which the airline passes after taking account of other transport services established by airlines of the States comprising the area; and

(c) the requirements of through airline operation.

5. The capacity to be provided on the specified routes shall be agreed between the designated airlines in accordance with the principles laid down in this Article and subject to the approval of the aeronautical authorities of the Contracting Parties. In the absence of an agreement between the designated airlines, the matter shall be referred to the aeronautical authorities of the Contracting Parties which will endeavour to resolve the problem, if necessary, pursuant to Article 13 of this Agreement.

ARTICLE 10

1. The tariffs for carriage on agreed services to and from the territory of the other Contracting Party shall be established at reasonable levels, due regard being paid to all relevant factors including cost of operation, reasonable profit, characteristics of service, the interest of users and, where it is deemed suitable, the tariffs of other airlines operating over all or part of the same route.

2. The tariffs shall be agreed upon between the designated airlines of the Contracting Parties; such agreement shall be reached whenever possible, through the international tariff coordination mechanism of the International Air Transport Association. Each designated airline shall be responsible only to its own aeronautical authorities for the justification and reasonableness of the tariffs.

3. The tariffs shall be submitted to and received by the aeronautical authorities of the Contracting Parties at least forty-five (45) days before the proposed date of their introduction; in special cases, a shorter period may be accepted by the aeronautical authorities.

If within thirty (30) days from the date of receipt, the aeronautical authorities of one Contracting Party have not notified the aeronautical authorities of the other Contracting Party that they are dissatisfied with the tariff submitted to them, such tariff shall be considered to be acceptable and shall come into effect on the date stated in the proposed tariff.

In the event that a shorter period for the submission of a tariff is accepted by the aeronautical authorities, they may also agree that the period for giving notice of dissatisfaction be less than thirty (30) days.

4. If a tariff cannot be established in accordance with the provisions of paragraph 2 of this Article, or if a notice of dissatisfaction has been filed in accordance with paragraph 3 of this Article, the aeronautical authorities of the Contracting Parties shall hold consultations in accordance with Article 13 of this Agreement and endeavour to determine the tariff by agreement between themselves.

5. If the aeronautical authorities cannot agree on any tariff submitted to them under paragraph 3 of this Article or on the determination of any tariff under paragraph 4 of this Article, the dispute shall be settled in accordance with the provisions of Article 14 of this Agreement.

6. If the aeronautical authorities of one of the Contracting Parties become dissatisfied with an established tariff, they shall so notify the aeronautical authorities of the other Contracting Party and the designated airlines shall attempt, where required, to reach an agreement.

If within the period of ninety (90) days from the date of receipt of a notice of dissatisfaction, a new tariff cannot be established in accordance with the provisions of paragraphs 2 and 3 of this Article, the procedures as set out in paragraphs 4 and 5 of this Article shall apply.

7. When tariffs have been established in accordance with the provisions of this Article, those tariffs shall remain in force until new tariffs have been established in accordance with the provisions of this Article or Article 14 of this Agreement.

8. No tariff shall come into force if the aeronautical authorities of either Contracting Party are dissatisfied with it except under the provision of paragraph 3 of Article 14 of this Agreement.

9. The aeronautical authorities of both Contracting Parties shall endeavour to ensure that the tariffs charged and collected conform to the tariffs approved by them and are not subject to rebates.

10. Without prejudice to the application of the provisions of the preceding paragraphs of this Article, the designated airlines shall be allowed to match, on sectors of the agreed services on which they exercise the fifth freedom traffic rights, tariffs applied by the third and fourth freedom airlines on the same sectors. The prices applied by the fifth freedom airlines shall not be lower and the tariff conditions shall not be less restrictive than those of the said third and fourth freedom airlines.

ARTICLE 11

1. Each designated airline may engage in the sale of air transportation in the territory of the other Contracting Party directly and, at its discretion through its agents. Each designated airline may sell transportation in the currency of that territory or, subject to the foreign currency laws and regulations of that Contracting Party and at its discretion, in freely convertible currencies of other countries and any person shall be free to purchase such transportation in currencies accepted for sale by that airline.

2. Subject to the foreign currency laws and regulations of the other Contracting Party, each designated airline shall be entitled to convert and remit to its country on demand funds obtained in the normal course of its operations after deduction of expenses incurred in the territory of that other Contracting Party. Conversion and remittance shall be permitted without restrictions at the foreign exchange market rates for current payments prevailing at the time of submission of the request for transfer and shall not be subject to any charges except normal service charges collected by banks for such transactions.

ARTICLE 12

1. The aeronautical authorities of each Contracting Party shall provide or shall cause their designated airlines to provide the aeronautical authorities of the other Contracting Party, upon request, periodic or other statements of statistics as may be reasonably required for the purpose of reviewing the operation of the agreed services, including, but not limited to, statements of statistics related to the traffic carried by its designated airline between points on the specified routes showing the initial origins and final destinations of the traffic.

2. The details of the methods by which such statistics shall be provided shall be agreed upon between the aeronautical authorities and implemented without delay after the designated airline of one or both Contracting Parties commences operation, in whole or in part, on the agreed services.

ARTICLE 13

1. In a spirit of close cooperation, the aeronautical authorities of the Contracting Parties shall consult each other from time to time with a view to ensuring the implementation of, and satisfactory compliance with, the provisions of this Agreement.

2. Such consultations shall begin within a period of sixty (60) days of the date of receipt of such a request, unless otherwise agreed by the Contracting Parties.

ARTICLE 14

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

2. If the Contracting Parties fail to reach a settlement by negotiation, they may agree to refer the dispute for decision to some person or body, or the dispute may at the request of either Contracting Party be submitted for decision to a tribunal of three arbitrators, one to be nominated by each Contracting Party and the third to be appointed by the two so nominated.

Each Contracting Party shall nominate an arbitrator within a period of sixty days from the date of receipt by either Contracting Party from the other of a notice through diplomatic channels requesting arbitration of the dispute and the third arbitrator shall be appointed within a further period of sixty (60) days. If either Contracting Party fails to nominate an arbitrator within the period specified, or if the third arbitrator is not agreed, the President of the Council of the International Civil Aviation Organization may be requested by either Contracting Party to appoint an arbitrator or arbitrators as the case requires. In such case, the third arbitrator shall be a national of a third State and shall act as president of the arbitral body.

3. The Contracting Parties shall comply with any decision given under paragraph 2 of this Article.

4. If and so long as either Contracting Party fails to comply with any decision given under paragraph 2 of this Article, the other Contracting Party may limit, withhold or revoke any rights or privileges which it has granted by virtue of this Agreement to the Contracting Party in default or to the designated airline in default.

ARTICLE 15

1. If either Contracting Party considers it desirable to amend the terms of the Agreement, it may at any time request consultations with the other Contracting Party for the purpose of amending the Agreement. Such consultations shall begin within a period of sixty days (60) from the date of the request any agreed amendment shall come into effect after it has been confirmed by an exchange of diplomatic notes.

2. If a general multilateral air convention comes into force in respect of both Contracting Parties, the provisions of such convention shall prevail. Consultations in accordance with paragraph 1 of this Article may be held in order to determine the extent to which this Agreement should be amended to bring it into conformity with the provisions of the multilateral convention.

ARTICLE 16

Either Contracting Party may at any time give notice in writing through diplomatic channels to the other Contracting Party of its decision to terminate this Agreement; such notice shall be communicated simultaneously to the International Civil Aviation Organization. The Agreement shall terminate one (1) year after the date of receipt of the notice by the other Contracting Party unless the notice to terminate is withdrawn by mutual consent before the expiry of this period.

In the absence of acknowledgement of receipt by the other Contracting Party, the notice shall be deemed to have been received fourteen (14) days after the receipt of the notice by the International Civil Aviation Organization.

ARTICLE 17

1. Consistent with their rights and obligations under international law, the Contracting 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.

2. Without limiting the generality of their rights and obligations under international law, the Contracting Parties shall in particular act in conformity with the provisions of the Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo on September 14, 1963, the Convention for the Suppression of Unlawful Seizure of Aircraft, signed 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.

3. The Contracting Parties shall provide upon request all possible assistance to each other 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.

4. The Contracting Parties shall act in conformity with the aviation security provisions established by the International Civil Aviation Organization and designated as Annexes to the Convention on International Civil Aviation to the extent that such security provisions are applicable to the Contracting Parties; 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.

5. Each Contracting Party agrees that its operators of aircraft may be required to observe the aviation security provisions referred to in paragraph 4 above required by the other Contracting Party for entry into, departure from, or while within the territory of that other Contracting Party. Each Contracting Party shall ensure that adequate measures are effectively applied within its territory to protect the aircraft and to inspect passengers, crew, carry-on items, baggage, cargo and aircraft stores prior to and during boarding and loading.

6. Each Contracting Party shall give sympathetic consideration to any request from the other Contracting Party for reasonable special security measures to meet a particular threat.

7. Each Contracting Party shall also give sympathetic consideration to a request from the other Contracting Party, in accordance with Article 13, paragraph (1) whereby the aeronautical authorities of one Contracting Party could visit the aeronautical authorities of the other Contracting Party, on a reciprocal basis, for the purpose of assessing the security measures being carried out by aircraft operators in respect of flights destined to the territory of the first Contracting Party.

8. When a Contracting Party has reasonable grounds to believe that the other Contracting Party has departed from the provisions of this Article, the first Contracting Party may request immediate consultations with the other Contracting Party. Failure to reach a satisfactory agreement will constitute grounds for the application of Article 3 of this Agreement.

9. 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, the Contracting Parties shall assist each other by facilitating communications and other appropriate measures intended to terminate rapidly and safely such incident or threat thereof.

ARTICLE 18

1. The charges which either of the Contracting Parties may impose, or permit to be imposed, on the designated airline of the other Contracting Party for the use of airports and other facilities under its control shall not be higher than would be paid for the use of such airports and facilities by the airlines of the most favoured nation or by any national airline of the first Contracting Party engaged in international air services.

2. Each Contracting Party shall encourage consultations between its competent charging authorities and the designated airline using the services and facilities, and where practicable, through the airline’s representative organizations. Reasonable notice should be given to users of any proposals for changes in user charges to enable them to express their views before changes are made.

3. Neither Contracting Party shall give preference to its own or any other airline over the airline engaged in similar international air services of the other Contracting Party in the use of airports, airways, air traffic services and associated facilities under its control.

ARTICLE 19

1. The provisions set out in Article 4, 6, 7, 8, 11, 12, 13, 17, 18 and 20 of this Agreement shall be applicable also to charter flights operated by an air carrier of one Contracting Party into or from the territory of the other Contracting Party and to the air carrier operating such flights.

2. The provision of paragraph 1 of this Article shall not affect national laws and regulations governing the right of air carriers to operate charter flights or the conduct of air carriers or other parties involved in the organization of such operations.

ARTICLE 20

The Contracting Parties shall act in accordance with the relevant provisions of the Agreement between the Government of the Republic of Korea and the Government of Canada for the Avoidance of Double Taxation of Income Derived from the Operation of Ships and Aircraft in International Traffic which entered into force on November 15, 1974 between the two countries, or as amended with respect to the profits derived by any designated airline of a Contracting Party from the operation of aircraft in international traffic in accordance with the present Agreement.

ARTICLE 21

1. This Agreement shall enter into force on the date of signature.

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

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed the present Agreement.

DONE at Seoul on this 20th day of September 1989 in duplicate in the English, French and Korean languages, each version being equally authentic.

John C. Crosbie

FOR THE GOVERNMENT OF CANADA

Choi Ho Joong

FOR THE GOVERNMENT OF THE REPUBLIC OF KOREA

ANNEX

SECTION I

Route to be operated by the designated airline of Canada:

Notes:

1. Beyond points named by Canada shall be limited to: Manila, Kuala Lumpur, Singapore and Bombay. The fourth beyond point shall be available for passenger/combination services when the Korean designated airline begins service to Montreal.

2. All-cargo services may be operated in both directions via the Pacific and/or in an easterly direction as part of an around the world service. Points named for all-cargo services may be different from those named for passenger/combination services and shall not exceed four at any one time.

3. Traffic in-transit may be carried through Seoul provided it is carried on the same flight. Own stop-over traffic is permitted.

4. Unless otherwise agreed in accordance with the provisions of Article 9, capacity for passenger/combination services shall not exceed four flights weekly in each direction, and capacity for all-cargo services shall not exceed two DC-8 freighters or one B-747 freighter flight per week in each direction.

5. Named points may be changed on sixty days notice to the aeronautical authorities of Korea.

6. Any or all named points may, at the option of the designated airline, be omitted on any or all flights provided that the point of origin or destination is in Canada.

SECTION II

Route to be operated by the designated airline of Korea:

Notes:

1. Points named by Korea shall be limited to the continental Unites States of America excluding California, Florida and Toronto-New York; the Caribbean excluding Puerto Rico; and Venezuela.

2. For passenger/combination services, points named shall not exceed two at any one time. Points named for all-cargo services may be different from those named for passenger/combination services and shall not exceed four at any one time.

3. Traffic in-transit may be carried through points in Canada provided it is carried on the same flight. Own stop-over traffic is permitted except between points in Canada.

4. Unless otherwise agreed in accordance with the provisions of Article 9, capacity for passenger/combination services shall not exceed four flights weekly in each direction, and capacity for all-cargo services shall not exceed two DC-8 freighters or one B-747 freighter flight per week in each direction.

5. Named points may be changed on sixty days notice to the aeronautical authorities of Canada.

6. Any or all named points may, at the option of the designated airline, be omitted on any or all flights provided that the point of origin or destination is in Korea.

7. Non-stop passenger/combination services to Toronto shall not begin until October 27, 1989, or until the commencement of non-stop Toronto-Seoul passenger/combination services by the designated airline of Canada, whichever is earlier.

MEMORANDUM OF UNDERSTANDING ON CAPACITY

Further to the Agreement between the Government of Canada and the Government of the Republic of Korea for Air Services (the "Agreement"), signed at Seoul today, the two Governments have reached the following understanding:

Notwithstanding the number of weekly flights to be operated for passenger/combination services by the designated airlines as specified in footnote 4 of Section I and footnote 4 of Section II of the Annex to the Agreement, the capacity operated by each designated airline shall be three B747 or five L1011 or five B767 flights weekly in each direction unless otherwise agreed in accordance with the provisions of Article 9 of the Agreement.

This Memorandum of Understanding shall form an integral part of the Agreement on Air Services between the Government of Canada and the Government of the Republic of Korea, signed at Seoul today, and shall enter into force on the date of signature.

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed the present Agreement.

DONE at Seoul on this 20th day of September 1989, in duplicate in the English, French and Korean languages, each version being equally authentic.

John C. Crosbie

FOR THE GOVERNMENT OF CANADA

Choi Ho Joong

FOR THE GOVERNMENT OF THE REPUBLIC OF KOREA