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Agreement between the Government of Canada and the Government of the Republic of the Philippines on Air Transport [1997] CATSer 20 (30 May 1997)

E100250 - CTS 1997 No. 18

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

The Government of Canada and the Government of the Republic of the Philippines, 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 Canadian Transportation Agency and, in the case of the Republic of the Philippines, the Civil Aeronautics Board and/or any person or body authorized to perform any functions exercised at present by the said Civil Aeronautics Board or similar functions, 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, 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) "Specified route" means a route specified in the Annex to this Agreement;

(g) "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;

(h) "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 (Designation) 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 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 capacity offered by the designated airline on the aircraft used 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) 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;

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, where a change of aircraft is made in the territory of the other contracting party, the number of incoming flights shall not exceed the number of outgoing flights, unless otherwise authorised by the aeronautical authorities of the other Contracting Party; and

h) that all operations involving change of aircraft shall be conducted in conformity with capacity provisions set forth in 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.

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

4. Aircraft may be changed at intermediate points only for the purpose of code-sharing.

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 (Designation) of this Agreement, the aeronautical authorities of the other 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 bas 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 provision of this Agreement, in particular, that tariffs are established in accordance with the provisions of Article XIV (Tariffs) of this Agreement.

ARTICLE VI

(Revocation and Limitation of Authorization)

The aeronautical authorities of each Contracting Party shall have the right to withhold the authorizations referred to in Article V (Authorization) 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 to fulfill the conditions prescribed under the laws and regulations normally and reasonably applied by them in a manner not inconsistent with the provisions of the Convention to the operation of international commercial air services;

(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 case the airline otherwise fails to operate in accordance with the conditions prescribed under 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 Article VIII (Recognition of Certificates and Licences) or Article IX (Aviation Security), 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 XX (Consultations) 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 bas been filed with the International Civil Aviation Organization, the aeronautical authorities of the other Contracting Party may request consultations in accordance with Article XX (Consultations) 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 this 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 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 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 of 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 legs 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, and where practicable, through airline 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 each Contracting Party to operate the agreed services on the routes specified in this Agreement.

2. In the operation by the designated airline of either Contracting Party of the specified air services, the interests of the airline of the other Contracting Party shall be taken into the consideration so as not to affect unduly the services which the latter provide on all or part of the same route.

3. The agreed services provided by the designated airlines of the Contracting Parties shall bear reasonable relationship to the requirement 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 originating from the territory of either Contracting Party and destined for the territory of the other Contracting Party.

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(s) 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(s);

(b) traffic requirements of the area through which the agreed services pass 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. Capacity to be operated in excess of the entitlements set out in this Agreement 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 endeavor to resolve the problem, if necessary, pursuant to Article XX (Consultations) of this Agreement.

6. Increases to capacity pursuant to paragraph 5 of this Article shall not constitute a change in capacity entitlements. Any changes to capacity entitlement must be agreed between the Contracting Parties.

ARTICLE XII

(Statistics)

1. The aeronautical authorities of each Contracting Party shall provide to the extent possible 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 each designated airlines on the routes specified in this Agreement, showing the initial origins and final destinations of 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 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 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.

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 XIV

(Tariffs)

1. The tariffs for carriage on agreed services to and from the territory of the other Contracting Party shall be established by the designated airlines at reasonable levels, due regard being paid to relevant factors including the cost of operation, the interests of users, reasonable profit, class of service and, when it is deemed suitable, the tariffs of the other airlines operating over whole or party of the specified route.

2. The aeronautical authorities of either Contracting Party may require tariffs to be filed for approval (in such forms as they may separately require), in which case such filing shall be submitted at least thirty (30) days before the proposed effective date, unless those aeronautical authorities permit the filing to be made on a shorter notice. Each designated airline shall be responsible only to its own aeronautical authorities for justification of its tariffs.

3. Such Tariffs may be agreed by the designated airlines of both Contracting Parties seeking approval of the tariffs. However, a designated airline will not be precluded from proposing a tariff unilaterally, nor the aeronautical authorities from approving such a tariff.

4. Where any tariffs are required to be filed, they shall become effective after their approval by the aeronautical authorities of both contracting Parties. If the aeronautical authorities of neither Contracting Party have expressed disapproval within fifteen (15) days from the date of submission, those tariffs shall be deemed approved. In the event of the period for submission being reduced, as provided for in paragraph 2 above, the aeronautical authorities of the two Contracting Parties may agree that the period within which any disapproval must be notified shall be less than fifteen (15) days.

5. The tariffs to be charged by the designated airlines of one Contracting Party for carriage between the territory of the other Contracting Party and the territory of a State which is not a Contracting Party shall be subject to the approval of the aeronautical authorities of the other Contracting Party provided, however, that the aeronautical authorities of that Contracting Party shall not require a different tariff from the tariff of their own airlines for services between the same points. The designated airlines of each Contracting Party shall file such tariffs with the aeronautical authorities of the other Contracting Party in accordance with the requirements of the aeronautical authorities of the Contracting Party. Approval of such tariffs may be withdrawn on no less than fifteen (15) days' notice provided, however, that the aeronautical authority of a Contracting Party shall permit the designated airline concerned to apply the same tariffs as its own airlines for services between the same points.

6. The aeronautical authorities of either Contracting Party may request consultations on tariffs at any time. Such consultations shall be within fifteen (15) days of receipt of request of consultations, unless otherwise agreed. Consultations pursuant to this article may be done by means of a letter or any method of communication.

7. No tariff shall come into effect or remain in effect if the aeronautical authorities of either Contracting Parties are dissatisfied with it.

ARTICLE XV

(Sales and Transfer of Funds)

l. Each designated airline shall have the right to 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 shall have the right to sell transportation in the currency of that territory or, to the extent permitted by national law at its discretion, in freely convertible currencies of the other countries, and any person shall be free to purchase such transportation in currencies accepted for sale by that airline.

2. 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. Conversion and remittance shall be permitted without restrictions at 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 XVI

(Taxation)

The Contracting Parties shall act in accordance with the provisions of Article VIlI of the Convention between the Philippines and Canada for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Manila on March 31, 1976 and entered into force on December 21, 1977, 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 or company authorized to perform such services in the territory of the other Contracting Party in accordance with the laws and regulations 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 requirement of employment authorizations for personnel performing certain temporary duties not exceeding ninety (90) days.

ARTICLE XVIII

(Ground Handling)

Each designated airline may provide its own ground handling in the territory of the other Contracting Party and, subject to the domestic laws and regulations of the other Contracting Party, to have ground handling services provided in the whole or in part by selecting among organizations or companies authorized by the competent authorities of the other Contracting Party to provide such services. Where a designated airline of one Contracting Party is precluded from using its own ground handling in the territory of the other Contracting Party, access to such services shall be available without preference or discrimination to any airline engaged in similar international air services. To the extent permitted under the national laws and regulations, designated airlines shall be permitted to acquire the services of any entity or personnel authorized by the other Contracting Party to perform ground handling and technical services. The foregoing shall be effected on the basis of reciprocity.

ARTICLE XIX

(Applicability to Non-scheduled Flights)

1. The provisions set out in Articles VII (Application of Laws), VII (Recognition of Certificates and Licences), IX (Aviation Security), X (Use of Airports and Aviation Facilities), XII (Statistics), XIII (Customs Duties and Other Charges), XV (Sales and Transfer Funds), XVI (Taxation), XVII (Airline Representatives), 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 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 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 which may be between Contracting Parties or aeronautical authorities shall begin within a period of sixty (60) days of the date of receipt of such request through diplomatic channels, 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 through diplomatic channels 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 (60) days from the date of the request. Any modification agreed pursuant to such consultations shall come into force when it bas been confirmed by an exchange of diplomatic notes.

ARTICLE XXII

(Settlement of 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, 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 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 a 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 case 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 was 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 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 XXIV

(Registration with ICAO)

The present Agreement and any modification thereto in accordance with Article XXI (Modification of Agreement) above 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 provisions of such convention shall prevail. Consultations in accordance with Article XX (Consultations) 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)

The present Agreement shall enter into force and effect on the date of Exchange of Diplomatic Notes indicating that the formalities required by each Contracting Party have been complied with.

ARTICLE XXVII

(Titles)

Titles used in this 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 Manila on this 14th day of January 1997 in the English and French languages, each version being equally authentic.

Arthur Eggleton

FOR THE GOVERNMENT OF CANADA

Domingo Siazon

FOR THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES

ANNEX

SCHEDULE OF ROUTES

SECTION 1

ROUTE 1

The following route may be operated by the airline(s) designated by the Government of the Republic of the Philippines:

Notes:

1. Points in Canada may be served separately or as co-terminals without stopover privileges between points in Canada. Points in Canada may be changed each IATA season, unless a shorter period is agreed by the aeronautical authorities of Canada.

2. Transit and stopover rights shall be available at the Intermediate Points, and at the Points in Canada for traffic to and from the Beyond Points.

3. The Intermediate Points and/or the Beyond Points may at the option of the designated airline(s) of the Philippines be omitted or any or all flights provided that all services originate or terminate in the Philippines. The selection of the Intermediate Points and Beyond Points may be changed on not less than ten (10) days' notification to the aeronautical authorities of Canada where only transit rights are exercised and each IATA season where fifth freedom rights are exercised, unless a shorter period is agreed by the aeronautical authorities of Canada.

4. Fifth freedom traffic rights shall be available between intermediate points in the USA and the Points in Canada (except between points in California and Toronto) and between the Points in Canada and beyond points in the USA. Fifth freedom rights may only be exercised on up to two (2) route sectors at any one time. The frequency for the exercise of fifth freedom rights on each route sector shall be restricted to a maximum of four (4) flights per week in each direction. Fifth freedom traffic carried on each route sector shall be restricted to no more than fifty percent (50%) of the aircraft capacity used on that route sector, calculated on an annual basis.

5. Subject only to normal regulatory requirements, the designated airline(s) of the Philippines shall have the right, while operating the agreed services, to enter into co-operative arrangements for the purpose of code sharing (selling transportation under its own code) on flights of the designated airline(s) of Canada. Subject to the approval of the aeronautical authorities of Canada, the designated airline(s) of the Philippines may also operate code sharing services between the Points in Canada and Beyond Points on the flights of any third country airline licensed by Canada which is operating scheduled air services on the route sector. Each route sector used for code sharing on the flights of a third country airline shall reduce by one (1) the number of route sectors in Note 4 specified as available for the exercise of fifth freedom rights. No fifth freedom rights shall be exercised in conjunction with code sharing on the flights of a third country airline.

6. For the purposes of Article XI (Capacity), the Government of the Republic of the Philippines shall be entitled to allocate among its designated airlines up to a maximum of four (4) flights per week in each direction for own aircraft flights.

SECTION I

ROUTE 2

The following air-cargo route may be operated by an airline designated by the Government of the Republic of the Philippines:

Notes:

1. Points in Canada may be served separately or as co-terminals. Points may be changed each IATA season, unless a shorter period is agreed by the aeronautical authorities of Canada.

2. Transit rights shall be available at the Intermediate Points at the Points in Canada.

3. The Intermediate Points and/or the Beyond Points may at the option of the designated airline of the Philippines be omitted on any or all flights provided that all services originate or terminate in the Philippines. The selection of the Intermediate Points and Beyond Points may be changed on not less than ten (10) days' notification to the aeronautical authorities of Canada where only transit rights are exercised.

4. Capacity shall be agreed between Contracting Parties.

ANNEX

SCHEDULE OF ROUTES

SECTION II

ROUTE 1

The following route may be operated by the airline(s) designated by the Government of Canada:

Notes:

1. Points in the Philippines may be served separately or as co-terminals without stopover privileges between points in the Philippines. Points in the Philippines may be changed each IATA season, unless a shorter period is agreed by the aeronautical authorities of the Philippines.

2. Transit and stopover rights shall be available at the Intermediate Points, and at Points in the Philippines for traffic to and from the Beyond Points.

3. The Intermediate Points and/or the Beyond Points may at the option of the designated airline(s) of Canada be omitted on any or all flights provided that all services originate or terminate in Canada. The selection of the Intermediate Points and Beyond Points may be changed on not less than ten (10) days' notification to the aeronautical authorities of the Philippines where only transit rights are exercised and each IATA season where fifth freedom rights are exercised, unless a shorter period is agreed by the aeronautical authorities of the Philippines.

4. Fifth freedom traffic rights shall be available between intermediate points in Asia (east of India and north of Australia) and the Points in the Philippines (except between points in Korea and Manila) and between the Points in the Philippines and points beyond in Asia (east of India and north of Australia). Fifth freedom rights may only be exercised on up to two (2) route sectors at any one time. The frequency for the exercise of fifth freedom rights on each route sector shall be restricted to a maximum of four (4) flights per week in each direction. Fifth freedom traffic carried on each route sector shall be restricted to no more than fifty percent (50%) of the aircraft capacity used on that route sector, calculated on an annual basis.

5. Subject only to normal regulatory requirements, the designated airline(s) of Canada shall have the right, while operating the agreed services, to enter into co-operative arrangements for the purpose of code sharing (selling transportation under its own code) on the flights of the designated airline(s) of the Philippines. Subject to the approval of the aeronautical authorities of the Philippines, the designated airline(s) of Canada may also operate code sharing services between the Points in the Philippines and Beyond Points on the flights of any third country airline licensed by the Philippines which is operating scheduled air services on the route sector. Each route sector used for code sharing on the flights of a third country airline shall reduce by one (1) the number of route sectors in Note 4 specified as available for the exercise of fifth freedom rights. No fifth freedom rights shall be exercised in conjunction with code sharing on the flights of third country airline.

6. For the purposes of Article XI (Capacity), the Government of the Canada shall be entitled to allocate amount its designated airlines up to maximum of four (4) flights per week in each direction for own aircraft flights.

SECTION II

ROUTE 2

The following all-cargo route may be operated by an airline designated by the Government of Canada:

Notes:

1. Points in the Philippines may be served separately or as co-terminals. Points in the Philippines may be changed each IATA season, unless a shorter period is agreed by the aeronautical authorities of the Philippines.

2. Transit rights shall be available at the Intermediate Points and at the Points in the Philippines.

3. The Intermediate Point and/or the Beyond Points may at the option of the designated airline of Canada be omitted on any or all flights provided that all services originate or terminate in Canada. The selection of the Intermediate Points and Beyond Points may be changed on not less than ten (10) days' notification to the aeronautical authorities of the Philippines where only transit rights are exercised.

4. Capacity shall be agreed between the Contracting Parties.