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Agreement between the Government of Canada and the Government of Malaysia on Air Transport [1996] CATSer 3 (18 January 1996)

E100243 - CTS 1996 No. 6

AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF MALAYSIA ON AIR TRANSPORT

THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF MALAYSIA, hereinafter referred to as the Contracting Parties,

BEING parties to the Convention on International Civil Aviation opened for signature at Chicago, on the 7th day of December, 1944;

DESIRING to conclude an agreement on air transport, supplementary to the said Convention;

HAVE AGREED as follows:

ARTICLE I

Definitions

For the purpose of this Agreement, unless otherwise stated:

(a) "Aeronautical authorities" means, in the case of Canada, the Minister of Transport and the National Transportation Agency of Canada or any other authority or person empowered to perform the functions exercised by the said authorities; and in the case of Malaysia, the Minister of Transport and any other person or body authorized to perform any functions at present exercised by the said Minister or similar functions;

(b) "Agreed services" means scheduled air services on the routes specified in this Agreement for the transport of passengers and cargo, including mail, separately or in combination;

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

(d) "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 of the Convention under Articles 90 and 94 thereof so far as those Annexes and amendments have been adopted by both Contracting Parties;

(e) "Designated airline" means an airline which has been designated and authorized in accordance with Articles IV and V of this Agreement;

(f) "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; and

(g) "Territory", "Air services", "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.

ARTICLE II

Grant of Rights

1. Each Contracting Party grants to the other Contracting Party the following rights for the conduct of international air services by the airline or airlines designated by that other Contracting Party:

(a) the right to fly without landing across its territory;

(b) the right to land in its territory for non-traffic purposes; and

(c) to the extent permitted in this Agreement, the right to make stops in its territory on the routes specified in this Agreement for the purpose of taking up and discharging international traffic in passengers and cargo, including mail, separately or in combination.

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

3. Nothing in paragraph 1 of this Article shall be deemed to confer on a designated airline of one Contracting Party the right of taking up, in the territory of the other Contracting Party, passengers and cargo, including mail, carried for remuneration or hire and destined for another point in the territory of that other Contracting Party.

ARTICLE III

Change of Aircraft

1. A designated airline of one Contracting Party may make a change of aircraft in the territory of the other Contracting Party or at an intermediate point in third countries on the routes specified in this Agreement under the following conditions:

(a) that the change of aircraft is justified by reason of economy of operation;

(b) that the aircraft used on the sector of the route more distant from the territory of the Contracting Party designating the airline shall operate in connection with the agreed service provided with the aircraft used on the nearer sector and shall be scheduled so to do;

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

(d) that the airline shall not hold itself out, directly or indirectly and whether in timetables, computer reservation systems, fare quote systems or advertisements, or by other like means, as providing any service other than the agreed service on the relevant specified routes;

(e) that, where an agreed service includes a change of aircraft, this fact is shown in all timetables, computer reservation systems, fare quote systems, advertisements and other like means of holding out the service;

(f) that, where a change of aircraft is made in the territory of the other Contracting Party, the number of outgoing flights shall not exceed the number of incoming flights, unless otherwise authorized by the aeronautical authorities of that other Contracting Party or specifically provided for in this Agreement; and

(g) that all operations involving change of aircraft shall be conducted in conformity with Article XI of this Agreement.

2. The provisions of paragraph 1 of this Article shall not affect the right of an airline to change aircraft in the territory of the Contracting Party designating that airline.

ARTICLE IV

Designation

Each Contracting Party shall have the right to designate, by diplomatic note, an airline or airlines to operate the agreed services for such a Contracting Party and to withdraw the designation of any airline or to substitute another airline for one previously designated.

ARTICLE V

Authorization

1. Following receipt of a notice of designation or of substitution pursuant to Article IV of this Agreement, the aeronautical authorities of the other I Contracting Party shall, consistent with the laws and regulations of that Contacting Party, grant without delay to the airline or airlines so designated the appropriate authorizations to operate the agreed services for which that airline has been designated.

2. Upon receipt of such authorizations the designated airline may begin at any time to operate the agreed services, in whole or in part, provided that the airline complies with the applicable provisions of this Agreement, in particular, that tariffs are established in accordance with the provisions of Article XIV of this Agreement.

ARTICLE VI

Withholding, Revocation and Limitation or Authorization

1. The aeronautical authorities of each Contracting Party shall have the right to withhold the authorizations referred to in Article V of this Agreement with respect to an airline designated by the other Contracting Party, to revoke or suspend or impose conditions on such authorizations, temporarily or permanently:

(a) in the event of failure by such airline to comply with the laws and regulations normally applied by the aeronautical authorities of the Contracting Party granting the rights;

(b) in the event of failure by such airline to comply with the laws and regulations of the Contracting Party granting the rights;

(c) in the event that they are not satisfied that substantial ownership and effective control of the airline are vested in the Contracting Party designating the airline or its nationals; and

(d) in the event that the other Contracting Party is not maintaining and administering the standards as set forth in Article VllI and Article IX of this Agreement.

2. Unless immediate action is essential to prevent infringement of the laws and regulations referred to above or unless safety or security requires immediate action under this Article, Article VIll or Article IX, the rights enumerated in paragraph 1 of this Article shall be exercised only after consultations with the aeronautical authorities of the other Contracting Party in conformity with Article XVIII of this Agreement.

ARTICLE VII

Application of Laws

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

2. 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 or airlines of the other Contracting Party and by or on behalf of its crews, passengers and cargo, including mail, upon transit of, admission to, departure from and while within the territory of such a Contracting Party.

3. In the application of its customs, immigration, quarantine and similar regulations, neither Contracting Party shall give preference to its own or any other airline over an airline of the other Contracting Party engaged in similar international air services.

ARTICLE VIII

Recognition of Certificates and Licences

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 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 above its own territory, certificates of competency and licences granted to its own nationals 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, 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 XVIII of this Agreement with the aeronautical authorities of that Contracting Party with a view to clarifying the practice in question.

3. Each Contracting Party may request consultations concerning the safety standards maintained by the other Contracting Party relating to aeronautical facilities, aircrew, aircraft, and operation of the designated airlines. If following such consultations, one Contracting Party finds that the other Contracting Party does not effectively maintain and administer safety standards and requirements in these areas that at least equal the minimum standards which may be established pursuant to the Convention, the other Contracting Party shall be notified of such findings and the steps considered necessary to conform with these minimum standards, and shall take appropriate corrective action. In the event the other Contracting Party does not take such appropriate action within a reasonable time, the provisions of Article VI shall apply.

ARTICLE IX

Aviation Security

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 Offenses 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 and any other multilateral agreement governing aviation security binding upon both Contracting Parties.

3. The Contracting 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, 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 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 to enter into reciprocal administrative arrangements whereby the aeronautical authorities of one Contracting Party could make in the territory of the other Contracting Party their own assessment of the security measures being carried out by aircraft operators in respect of flights destined to the territory of the first Contracting Party.

8. 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.

9. 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 shall constitute grounds for the application of Article VI of this Agreement.

ARTICLE X

Use or Airports and Aviation Facilities

1. Airports, airways, air traffic control and air navigation services, aviation security, and other related facilities and services that are available shall be provided without preference to any airline over an airline of the other Contracting Party engaged in similar international air services.

2. The setting and collection of fees and charges imposed in the territory of one Contracting Party on an airline of the other Contracting Party for the use of airports, airways, air traffic control and air navigation services, aviation security, and other related facilities and services shall be just, reasonable and not unjustly discriminatory. Any such fees and charges shall be assessed on an airline of the other Contracting Party on terms not less favourable than the most favourable terms available to any airline engaged in similar international air services at the time the fees or charges are imposed.

3. Each Contracting Party shall encourage consultations between its competent charging authorities and the airlines using the services and facilities, or through airlines' representative organizations. Reasonable notice shall be given to users of any proposals for changes in user charges to enable them to express their views before changes are made.

ARTICLE XI

Capacity

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 between their respective territories.

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 the whole or part of the same routes.

3. The agreed services provided by the designated airlines of the Contracting Parties shall bear close 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 carry the current and reasonably anticipated requirement for the carriage of passengers, cargo and mail originating from or destined for the territory of the Contracting Party which has designated the airline. Provision for the carriage of passengers, cargo and mail both taken up and put down at points on specified routes in the territories of States other than that designating the airline shall be made in accordance with the general principles 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 economical requirements of through airline operations.

4. Capacity of the services to be operated in excess of the capacity entitlements set out in this Agreement or agreed between the aeronautical authorities of both Contracting Parties under paragraph 5 of this Article, may from time to time be agreed by the designated airlines of the Contracting Parties, subject to the approval of the aeronautical authorities of both Contracting Parties. In the absence of 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 the aeronautical authorities fail to agree on the capacity to be provided on the agreed services, the capacity that may be provided by the designated airlines of the Contracting Parties shall not exceed the total capacity, including variations by International Air Transport Association (IATA) seasons, previously agreed and approved to be provided.

5. Any changes to capacity operated shall not constitute a change in capacity entitlements unless agreed between the aeronautical authorities of the Contracting Parties.

ARTICLE XII

Statistics

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 and related to the traffic carried by its designated airlines on the routes specified in this Agreement, showing the initial origins and final destinations of the traffic.

ARTICLE XIII

Customs Duties and Other Charges

1. Each Contracting Party shall, to the fullest extent possible under its national law and on a basis of reciprocity, exempt the designated airline or airlines of the other Contracting Party 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 that 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 a designated airline of the other Contracting Party;

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

(c) taken on board aircraft of a designated airline of one Contracting Party in the territory of the other Contracting Party;

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 alienated in the territory of the said Contracting Party.

3. The regular airborne equipment, as well as the materials and supplies normally 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 territory. In such case, they may be placed under the supervision of the said authorities up to such time as they are re-exported or otherwise disposed of in accordance with Customs regulations.

ARTICLE XIV

Tariffs

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 (such as standards of speed and accommodation) and, where it is deemed suitable, the tariffs of other airlines for any part of the specified route.

2. Any of the designated airlines may consult together about tariff proposals, but shall not be required to do so before filing a proposed tariff. The aeronautical authorities of each Contracting Party shall not accept a filing unless the designated airline making such filing gives an assurance that it has informed the other designated airlines of the proposed tariffs.

3. The tariffs shall be submitted by the airlines to and received by the aeronautical authorities of the Contracting Parties at least sixty (60) days before the proposed date of their introduction; in special cases, a shorter period may be accepted by the aeronautical authorities. If within forty-five (45) 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 forty-five (45) days.

4. If a notice of dissatisfaction has been given, the aeronautical authorities of the Contracting Parties shall endeavour to determine the tariff by agreement between themselves. Consultations between the aeronautical authorities will be held in accordance with Article XVIII of this Agreement.

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 XX of this Agreement.

6. (a) No tariff shall come into force if the aeronautical authorities of either Contracting Party are dissatisfied with it except under the provisions of paragraph 3 of Article XX of this Agreement.

(b) 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 XX of this Agreement. Nevertheless, a tariff shall not be prolonged by virtue of this paragraph for more than twelve (12) months after the date on which it would otherwise have expired.

7. 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 a period of ninety (90) days from the date of receipt of such notification, 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.

8. The designated airline or airlines of each Contracting Party shall have the right to match on routes between the territories of the two Contracting Parties any tariff which is a publicly available lawful tariff on scheduled services of another carrier on a basis which would not necessarily be identical but would be broadly equivalent. The tariffs of a designated airline of one Contracting Party for carriage between the territory of the other Contracting Party and points in third countries, can, for the same class of service, match but shall not be lower or their conditions less restrictive than the tariffs of any scheduled airline of the other Contracting Party. In all cases of matching, tariff filing shall include satisfactory evidence of the availability of the tariffs which are being matched and of the consistency of matching with the requirements of this Article.

9. The aeronautical authorities of both Contracting Parties shall endeavour to ensure that:

(a) the tariffs charged and collected conform to the tariffs accepted or approved by both aeronautical authorities; and

(b) no airline rebates any portion of such tariffs by any means.

ARTICLE XV

Sales and Transfer or Funds

1. Each Contracting Party grants to the designated airline of the other Contracting Party the right to engage in the sale of air transportation in its territory directly and, at the airline's discretion, through its agents. 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, subject to the national laws and regulations, in freely convertible currencies of other countries.

2. To the extent permitted by national laws and on a non-discriminatory basis, each designated airline shall have the right to convert and remit to its country, on demand, funds obtained in the normal course of its operations, and such conversion and remittance shall be permitted without restrictions.

ARTICLE XVI

Taxation

The Contracting Parties shall act in accordance with the provisions of Article VIII of the Agreement between the Government of Canada and the Government of Malaysia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Ottawa on October 15, 1976, and any amendments thereto, in respect of the operation of aircraft in international traffic.

ARTICLE XVII

Airline Representatives

1. The designated airline or airlines of one Contracting Party shall be allowed, on the basis of reciprocity, to bring into and 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 option of the designated airline or airlines of one Contracting Party, 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, consistent with such laws and regulations:

(a) each Contracting Party shall, on the basis of reciprocity and with the minimum of delay, grant the necessary employment authorizations, visitor visas or other similar documents to the representatives and staff referred to in paragraph 1 of this Article; and

(b) both Contracting Parties shall facilitate and expedite the issuance of employment authorizations for personnel performing certain temporary duties not exceeding ninety (90) days.

ARTICLE XVIII

Consultations

1. In a spirit of close co-operation, 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 and of its Annex.

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 XIX

Modification of Agreement

1. If either of the Contracting Parties considers it desirable to modify any provisions of this Agreement, it may at any time request consultations with the other Contracting Party. Such consultation shall begin within a period of sixty days from the date of receipt of such request.

2. Any modification to this Agreement if agreed between the Contracting Parties shall enter into force after they have been confirmed by an exchange of notes through diplomatic channels.

ARTICLE XX

Settlement or Disputes

1. If any dispute arises between the Contracting Parties relating to the interpretation or application of this 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 under the provision of paragraph 1 of this Article, they shall endeavour to settle the dispute through diplomatic channels.

3. If the Contracting Parties fail to reach a settlement, they may agree to refer the dispute for decision to some person or body, or either Contracting Party may submit the dispute 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 arbitrators. Each of the Contracting Parties shall nominate an arbitrator within a period of sixty (60) 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 of the Contracting Parties fails to nominate an arbitrator within the period specified, or if the third arbitrator is not appointed within the period specified, 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. If the President is of the same nationality as one of the Contracting Parties, the most senior Vice-President who is not disqualified on that ground, shall make the appointment. In all cases the third arbitrator shall be a national of a third State, shall act as President of the Tribunal and shall determine the place where arbitration will be held.

4. The Contracting Parties undertake to comply with any decision given under paragraph 3 of this Article.

5. The expenses of the Tribunal shall be shared usually between the Contracting Parties.

6. If and so long as either Contracting Party fails to comply with any decision given under paragraph 3 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 XXI

Registration with ICAO

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

ARTICLE XXII

Multilateral Conventions

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 Article XVIII of this Agreement may be held with a view to determining the extent to which this Agreement is affected by the provisions of the multilateral convention.

ARTICLE XXIII

Titles

Titles used in this Agreement are for reference purposes only.

ARTICLE XXIV

Termination

Either Contracting Party may at any time from the entry into force of this Agreement given 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 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 XXV

Entry into Force

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

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

DONE in duplicate at Kuala Lumpur, Malaysia, on this 18th day of January, 1996, in the English, French and Malay languages, each version being equally authentic.

Roy MacLaren

FOR THE GOVERNMENT OF CANADA

Ling Liong Sik

FOR THE GOVERNMENT OF MALAYSIA

ANNEX

ROUTE SCHEDULE

SECTION I

Routes to be operated in both directions by the designated airline(s) of Malaysia.

Notes:

1. Pursuant to Article XI, the airline(s) designated by Malaysia shall be entitled to operate a total of two flights per week in each direction with own equipment of any type.

2. No traffic may be taken on board at the point in Column C to be set down at the point in Column B and vice-versa.

3. The intermediate point may be omitted on any or all flights provided that all services originate or terminate in Malaysia.

4. Intransit rights shall be available at Taipei only.

5. In providing and holding out transportation on its licensed routings, a designated airline of Malaysia may enter into cooperative arrangements for the purpose of blocking space and selling transportation under its own code on the flights of the designated airline of Canada, subject to the regulatory requirements normally applied by aeronautical authorities to such arrangements.

6. Notwithstanding Note 1 above, pursuant to the cooperative arrangement between a designated airline of each country, the designated airline of Malaysia shall be entitled to block-space and code-share on up to seven flights per week in each direction on the agreed routes. The capacity made available under such an arrangement to the designated airline of Malaysia for the transportation of traffic between its home country and an intermediate point in a third country may be held out under its own code or, at its option, under the code of the airline of that third country.

7. Additional capacity may be agreed to in conformity with the provisions of Article XI.

SECTION II

Routes to be operated in both directions by the designated airline(s) of Canada.

Notes:

1. Pursuant to Article XI, the airline(s) designated by Canada shall be entitled to operate a total of two flights per week in each direction with own equipment of any type.

2. No traffic may be taken on board at the point in Column C to be set down at the point in Column B and vice-versa.

3. The intermediate point may be omitted on any or all flights provided that all services originate or terminate in Canada.

4. Intransit rights shall be available at Taipei only.

5. In providing and holding out transportation on its licensed routings, a designated airline of Canada may enter into cooperative arrangements for the purpose of blocking space and selling transportation under its own code on the flights of the designated airline of Malaysia, subject to the regulatory requirements normally applied by aeronautical authorities to such arrangements;

6. Notwithstanding Note I above, pursuant to the cooperative arrangement between a designated airline of each country, the designated airline of Canada shall be entitled to block-space and code-share on up to seven flights per week in each direction on the agreed routes. The capacity made available under such an arrangement to the designated airline of Canada for the transportation of traffic between its home country and an intermediate point in a third country may be held out under its own code or, at its option, under the code of the airline of that third country.

7. Additional capacity may be agreed to in conformity with the provisions of Article XI.