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Agreement between the Government of Canada and the Government of the Czech Republic on Air Transport [1996] CATSer 8 (13 March 1996)

E100245 - CTS 1996 No. 12

AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE CZECH REPUBLIC ON AIR TRANSPORT

THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE CZECH REPUBLIC, hereinafter referred to as "Contracting Parties,"

BEING Parties to the Convention on International Civil Aviation opened for signature at Chicago on the 7 day of December 1944, and

DESIRING to conclude an agreement for the purpose of promoting air transport relations between their respective territories and beyond,

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 and, in the case of the Czech Republic, the Ministry of Transport, or, in both cases, any other authority or person empowered to perform the functions exercised by the said authorities;

(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, the Route Schedule, any Annex attached thereto, and any amendments to the Agreement, the Route Schedule 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 Article 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 Article IV and V of the Agreement;

(f) "Tariff" means the prices or charges to be paid for carriage of passengers, baggage and cargo and the conditions under which those prices or charges apply, including prices or charges and conditions for other auxiliary services, but excluding remuneration and conditions for the carriage of mail.

(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

(a) to fly without landing across its territory;

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

(c) except as otherwise determined in this Agreement, to land in its territory for the purpose of taking up and discharging, on the routes specified in this Agreement, 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 1(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 Gauge

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 it is justified by reason of economy of operation;

(b) that capacity used per flight on the sector of the route more distant from the territory of the Contracting Party designating the airline is not larger than that used on the nearer sector;

(c) the aircraft used on the section more distant from the territory of the Contracting Party designating the airline shall operate as an extension of the agreed service provided by the aircraft used on the nearer section;

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

(e) 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;

(f) 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;

(g) that in connection with any one aircraft flight arriving at or departing from the point at which the change of aircraft takes place, only one departing or arriving aircraft flight shall be operated, unless otherwise authorized by the aeronautical authorities of the other Contracting Party; and

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

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.

3. The provisions of this Article shall not limit the ability of an airline to provide services through code-sharing and or blocked space arrangements as provided for in the Route Schedule of this Agreement.

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 Contracting Party shall, consistent with the laws and regulations of that Contracting 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 the Agreement.

ARTICLE VI

Revocation and Limitation of 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 qualify under the laws and regulations of the Contracting Party granting the rights normally and reasonably applied in conformity with the Convention;

(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 in its nationals; and

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

2. Unless immediate action is essential to prevent infringement of the laws and regulations referred to above, the rights enumerated in paragraph 1 of the Article shall be exercised only after consultations with the aeronautical authorities of the other Contracting Party in conformity with Article XX 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 with respect to entry, clearance, transit, immigration, passports, customs, currency 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.

4. Baggage and cargo in direct transit across the territory of either Contracting Party shall be exempt from customs duties and other similar charges.

ARTICLE VIII

Safety Standards, 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 XX 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, air crew, aircraft, and the 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 of 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 the Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, signed at Montreal on February 24, 1988 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 also 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 have the right, upon not less than sixty(60) days notice, to assess the security measures being carried out by aircraft operators in the territory of the other Contracting Party in respect of flights arriving from, or destined to its territory. The administrative arrangements for the conduct of such assessments shall be agreed between the aeronautical authorities and implemented without delay so as to ensure that assessments will be conducted on the dates requested.

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 of Airports and Aviation Facilities

1. The charges imposed in the territory of one Contracting Party on a designated airline of the other Contracting Party for the use of airports and other aviation facilities shall not be higher than those imposed on any other aircraft engaged in similar international services.

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

3. In the use of airports, airways, air traffic services and associated facilities under its control, 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 XI

Capacity

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

2. The agreed services to be operated by the designated airlines of the Contracting Parties shall have as their primary objective the provision at reasonable load factors of capacity adequate to meet current and reasonably anticipated requirements for the carriage of passengers, cargo and mail between the territories of the Contracting Parties.

3. Each Contracting Party and its designated airline(s) shall take into consideration the interests of the other Contracting Party and its designated airline(s) so as not to affect unduly the services which the latter provides.

4. Except as otherwise specified in the Route Schedule of this Agreement, the designated airlines of the Contracting Parties shall meet and endeavour to reach an agreement on the capacity to be provided on the specified routes in accordance with the principles laid down in this Article. Any such agreement shall be subject to approval of the aeronautical authorities of the Contracting Parties. In the absence of agreement between or among 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 XX of this Agreement.

ARTICLE XII

Statistics

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

2. The aeronautical authorities of both Contracting Parties shall maintain close contact with respect to the implementation of paragraph 1 of this Article including procedures for the provision of statistical information.

ARTICLE XIII

Customs Provisions

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 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 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 and until 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 tariff to be applied by the designated airline or airlines of one Contracting Party, 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 the cost of operation, reasonable profit, characteristics of service (such as standards of speed and accommodation) and the tariffs of other airlines.

2. The designated airlines of the Contracting Parties shall endeavour to agree on the tariffs, either in consultation between or among the designated airlines of the Contracting Parties, or through an appropriate international tariff co-ordination mechanism.

3. Tariffs referred to in paragraph 2 of this Article shall be submitted to and received by the aeronautical authorities of the Contracting Parties at least thirty (30) days before the proposed date of their introduction, unless the aeronautical authorities of both Contracting Parties permit the filing to be made on shorter notice. Tariffs submitted to the aeronautical authorities of both Contracting Parties shall be in such a form as the aeronautical authorities of each Contracting Party may require.

4. If within fifteen (15) 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 accepted or approved 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 permitted by the aeronautical authorities, they may also agree that the period for giving notice of dissatisfaction be less than fifteen (15) days.

5. If a tariff cannot be established in accordance with the provisions of paragraph 2 of this Article or if during the period applicable, in accordance with paragraph 4 of this Article a notice of dissatisfaction has been given, the aeronautical authorities of the Contracting Parties shall endeavour to determine the tariff by agreement between themselves.

(a) No tariff shall come into force if the aeronautical authorities of either Contracting Party have given notice of dissatisfaction unless a decision on the tariff is taken under the provisions of paragraph 5 of this Article or the provisions of Article XX of this Agreement.

(b) If the aeronautical authorities of one Contracting Party become dissatisfied with an established tariff, they shall so notify, with an appropriate explanation, the aeronautical authorities of the other Contracting Party and concurrently other designated airline(s) of both Contracting Parties shall endeavour to determine a new, or revised tariff. If within 30 days of such notification, or a shorter period acceptable to both aeronautical authorities, the designated airline(s) concerned have not satisfied the dissatisfaction expressed, then the aeronautical authorities that notified dissatisfaction shall have the right to prevent the said tariff continuing in effect, and the aeronautical authorities of the other Contracting Party can request immediate consultations between and among aeronautical authorities to resolve the dissatisfaction expressed.

6. If the aeronautical authorities cannot agree on the determination of a tariff under paragraph 5, or 5(b) of this Article, either Contracting Party may require that the dispute be settled in accordance with the provisions of Article XX of this Agreement.

7. The designated airline(s) of one Contracting Party, can file a tariff competitive with another publicly available tariff applicable to the same points either, on agreed services, or via agreed services to or from any non-agreed points. Such tariffs will match the publicly available tariffs filed with the aeronautical authorities between the same points. Such tariff(s) are always subject to the prior, and continued acceptance, or approval, of the appropriate authorities of the countries between which such tariff(s) will apply.

(a) In considering a "match" referred to in paragraph 7 above, the aeronautical authorities of the Contracting Parties shall take into account the following factors:

(i) The designated airline(s) of each Contracting Party shall have the right to match on services between the territories of the two Contracting Parties any tariff which is a publicly available lawful scheduled tariff or retail charter price, applicable to the same or adjacent points on the scheduled or charter services of another airline of either Contracting Party, on a basis which would not necessarily be identical but would be broadly equivalent.

(ii) The tariffs of the designated airline(s) 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 that applies between the same points.

(b) Any tariff filed in accordance with paragraph 7(a) shall:

(i) include satisfactory evidence of the availability of the tariff which is being matched and of the consistency of matching with the requirements of this Article, and

(ii) unless otherwise agreed between the aeronautical authorities of the Contracting Parties, remain in effect only for the period of availability of the matched scheduled tariff or charter retail price.

8. A tariff established in accordance with the provisions of this Article shall remain in force during the published period of applicability, or until a new tariff has been established. Nevertheless, except as provided in paragraph 7.b.(ii) above, no tariff shall be prolonged by virtue of this paragraph for more than twelve (12) months after the date on which it otherwise would have expired.

9. The aeronautical authorities of both Contracting Parties shall endeavour to ensure as far as possible 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.

10. Where this Article requires communicating in writing, it may be done by means of a letter, or any type of electronic communication, such as a telegram, telex or facsimile, that produces a printed text.

ARTICLE XV

Sales and Transfer of Funds

1. On the basis of reciprocity the designated airline(s) of each Contracting Party shall be free to sell air transport services in the territory of the other Contracting Party, and any person shall be free to purchase such transportation in currencies accepted for sale by that airline, subject to appropriate authorization and in accordance with the respective applicable national laws and regulations, either directly or at its discretion through its agents, in the local currency or in any freely convertible currency without preference or discrimination to any airline engaged in similar international air services.

2. Each designated airline shall have the right to convert and remit abroad on demand, funds obtained in the normal course of its operation. Conversion and remittance shall be permitted without delay at the foreign exchange market rate prevailing at the time of submission of the request for transfer and without any restriction other than those of the foreign exchange regulations in force in the territory of the respective Contracting Party and shall not be subject to any charges except normal service charges collected by the banks for such transactions.

ARTICLE XVI

Taxation

1. Each Contracting Party shall exempt the designated airline of the other Contracting Party from all taxes on profits or incomes derived from the performance of the agreed services.

2. This provision shall not have effect as long as a Convention for the avoidance of double taxation with respect to taxes on income (and profits) providing for a similar exemption shall be in force between the two Contracting Parties.

ARTICLE XVII

Airline Representation

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 in the territory 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 dispense with the requirement of employment authorizations for personnel performing certain temporary duties not exceeding thirty (30) days.

4. The representation offices shall be established in conformity with the laws and regulations in force in the territory of the other Contracting Party and shall remain subject to those laws and regulations.

ARTICLE XVIII

Ground Handling

1. The designated airline or airlines of one Contracting Party may provide its own ground handling in the territory of the other Contracting Party or, at its option, have such ground handling services provided in whole or in part by any agent authorized by the competent authorities of the other Contracting Party to provide such services. Where a designated airline is precluded by national laws and regulations from providing its own ground handling such services shall be available without preference or discrimination to any airline engaged in similar international air services.

2. The designated airline or airlines of one Contracting Party may also provide ground handling services in whole or in part for other airlines operating at the same airport in the territory of the other Contracting Party.

ARTICLE XIX

Applicability to Non-scheduled Flights

1. The provisions set out in Articles VII (Application of Laws), VIII (Safety Standards, Certificates and Licences), IX (Aviation Security), X (Use of Airports and Aviation Facilities), XIII (Customs Provisions), XV (Sales and Transfer of Funds), XVI (Taxation), XVII (Airline Representation), XVIII (Ground Handling) and XX (Consultations) of this Agreement shall be applicable also to non-scheduled 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 provisions of paragraph 1 of this Article shall not affect national laws and regulations governing the authorization of non-scheduled operations or to the conduct of air carriers or other parties involved in the organization of such operations.

ARTICLE XX

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.

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 XXI

Modification of Agreement

If either of the Contracting Parties considers it desirable to modify any provision of this Agreement, it may request consultations with the other Contracting Party. Such consultations, which may be between aeronautical authorities and which may be through discussion or by correspondence, shall begin within a period of sixty (60) days from the date of receipt of the request. Any modification agreed pursuant to such consultations shall come into force when it has been confirmed by an exchange of diplomatic notes.

ARTICLE XXII

Settlement of Disputes

1. Any dispute relating to the interpretation or application of this Agreement shall be settled by direct consultations between the aeronautical authorities of the Contracting Parties. If the aeronautical authorities fail to reach an agreement, the dispute shall be settled through negotiations between the Contracting Parties.

2. If the Contracting Parties fail to reach a settlement by negotiations, 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 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.

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

4. The expenses of the Tribunal shall be shared equally between the Contracting Parties.

5. 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 XXIII

Termination

Either Contracting Party may at any time from the entry into force of this Agreement give a notice in writing through diplomatic channels to the other Contracting Party of its decision to terminate this Agreement. Such notice shall be simultaneously communicated to the International Civil Aviation Organization. This 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 XXIV

Registration with ICAO

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

ARTICLE XXV

Multilateral Conventions

If a general multilateral air convention comes into force in respect of both Contracting Parties, the provision of such convention shall prevail. Consultations in accordance with Article XX 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 XXVI

Entry into Force

1. As soon as this Agreement comes into force, the Air Transport Agreement between the Government of Canada and the Government of the Czechoslovak Socialist Republic signed on 20 March 1969 as amended, shall be terminated in respect of the Government of Canada and the Government of the Czech Republic.

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

ARTICLE XXVII

Titles

Titles used in the Agreement are for reference purposes only.

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

DONE in duplicate at Prague on this 13th day of March 1996, in the English, French and Czech languages, each version being equally authentic.

Arthur Eggleton

FOR THE GOVERNMENT OF CANADA

Vladimir Budinsky

FOR THE GOVERNMENT OF THE CZECH REPUBLIC

ROUTE SCHEDULE

Section I

The following route may be operated by the designated airline or airlines of Canada:

1. In the operation of an agreed service on a specified route set out in this Route Schedule, the airline or airlines designated by the Government of Canada shall have the following rights:

(a) to pick up and discharge in the territory of the Czech Republic international traffic in passengers, mail and cargo destined for or coming from Canada;

(b) to carry international traffic in passengers, mail and cargo between Canada and intermediate points;

(c) to carry into and out of the territory of the other Contracting Party on the same flight with stop-over privilege through-international traffic originating in or destined for points so specified in third countries.

2. Prague and the other point in the Czech Republic may be served on the same flight or separately.

3. Fifth freedom rights shall be available at up to four points of Canada's choice, intermediate to or beyond the Czech Republic.

4. Points to be named by Canada may be changed on 30 days notice.

5. The designated airline or airlines of Canada while operating an agreed service on a specified route may omit any or all intermediate or beyond points.

6. The designated airline or airlines of Canada shall have the right to block-space and code-share on the designated airline or airlines of the Czech Republic and/or third country carriers on services between Canada and the Czech Republic and on fifth freedom sectors. Any such block-space and code-share arrangement shall require prior notification to the aeronautical authorities of the Czech Republic. The block-space and code-share arrangement with third country carriers will not be available while a Canadian designated airline operates with its own equipment between Canada and the Czech Republic.

7. While the designated airline or airlines of Canada operate single track service with its own equipment to the second point in the Czech Republic, such service shall be subject to a mandatory commercial agreement with a designated airline of the Czech Republic.

8. For the purpose of Article XI, the airline or airlines designated by Canada shall be entitled to operate in total:

(a) three weekly flights in each direction using B767 or A310 or equivalent aircraft; or

(b) where the designated airline or airlines of Canada serve the agreed routes in this section by blocking space and/or code-sharing on the designated airline or airlines of the Czech Republic and\or third country carriers, including on a daily basis, such services shall be subject only to a limit of 450 seats per week in each direction.

Any changes to the permitted frequency and capacity shall be determined pursuant to the provisions of Article XI.

Section II

The following route may be operated by the designated airline or airlines of the Czech Republic:

Notes:

1. In the operation of an agreed service on a specified route set out in this Route Schedule, the airline or airlines designated by the Government of the Czech Republic shall have the following rights:

(a) to pick up and discharge in the territory of Canada international traffic in passengers, mail and cargo destined for or coming from the Czech Republic;

(b) to carry international traffic in passengers, mail and cargo between the Czech Republic and intermediate points;

(c) to carry into and out of the territory of the other Contracting Party on the same flight with stop-over privilege through-international traffic originating in or destined for points so specified in third countries.

2. Montreal and Toronto may be served on the same flight or separately.

3. No point in the USA may be served on any flight serving Toronto.

4. Fifth freedom rights shall be available only between Montreal and two points in the USA north of and including Washington, D.C. and east of and including Chicago. The selection of the U.S. fifth freedom points may be changed on 30 days notice by the Czech Republic.

5. The designated airline or airlines of the Czech Republic while operating an agreed service on a specified route may omit any or all intermediate or beyond points.

6. Intermediate points in Europe to be named by the Czech Republic may be changed on 30 days notice.

7. The designated airline or airlines of the Czech Republic shall have the right to block space and code-share on the designated airline or airlines of Canada on services between the Czech Republic and Canada, subject to agreement between the designated airlines of the two countries and to normal regulatory requirements.

8. While the designated airline or airlines of the Czech Republic operates single track service with its own equipment to Toronto, such service shall be subject to a mandatory commercial agreement with a designated airline of Canada. The obligation shall not be in effect during the period that a Canadian designated airline blocks space and/or sells under its code on a third country carrier on service between Canada and the Czech Republic.

9. Service to Toronto shall be at times of the day and at a terminal building acceptable to the management of Lester B. Pearson International Airport.

10. For the purpose of Article XI, the airline or airlines designated by the Czech Republic shall be entitled to operate in total:

(a) two weekly flights in each direction using B767 or A310 or equivalent aircraft; or

(b) three weekly flights in each direction using B767 or A310 or equivalent aircraft, provided that at least two of these flights serve Montreal.

Any changes to the permitted frequency and capacity shall be determined pursuant to the provisions of Article XI.

Section III

1. An airline of each Contracting Party shall be permitted to operate a weekly all-cargo flight in each direction between Montreal and Prague with all-cargo equipment. The capacity to be operated on such service shall not exceed forty (40) tonnes per week in each direction.

2. Any such services shall be in addition to the passenger services provided for in Sections I and II of this Route Schedule. Any such service by a Canadian carrier shall not be deemed to constitute operation by a designated airline of Canada with its own equipment for the purpose of the application of Note 6 of Section I and Note 8 of Section II of this Route Schedule.