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Agreement between the Government of Canada and the Government of the Republic of Chile on Air Transport [2005] CATSer 16 (27 September 2005)

E104984

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

THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF CHILE, 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 ensure the highest degree of safety and security in international air transportation,

RECOGNIZING the importance of international air transportation in promoting trade, tourism and investment,

DESIRING to promote their interests in respect of international air transportation,

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 Chile, la Junta de Aeronautica Civil 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) "Change of Aircraft" refers to the operation of one of the agreed services in such a way that one section of the route is flown by a different aircraft from that used on another section; 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 the 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 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 at any point or points in the territory of the other Contracting Party or at any intermediate point or points in third countries on the routes specified in this Agreement provided that:

(a) a designated airline shall not provide, or represent itself by advertisement or otherwise as providing, any service other than an agreed service on the routes specified in this Agreement;

(b) where an agreed service involves a change of aircraft, the operator of the aircraft and the aircraft type shall be identified in all transportation documents, service schedules, timetables, computer reservation systems, electronic displays and any other public advertising of the air service;

(c) the aircraft operating on the sector more distant from the territory of the Contracting Party designating the airline shall operate in connection with the aircraft on the nearer sector for the purpose of providing continuous transportation through the point of change and, for own-aircraft operations, the capacity provided on the more distant sector shall be determined with primary reference to this purpose;

(d) where a designated airline of one Contracting Party makes a change of aircraft in the territory of the other Contracting Party with its own aircraft, and when more than one aircraft is operated beyond the point of change, the number of flights on the sector of the route more distant from the territory of the Contracting Party designating the airline shall not exceed the number of flights on the nearer sector, unless specifically provided for in this Agreement or otherwise authorized by the aeronautical authorities of that other Contracting Party; and

(e) all operations involving change of aircraft shall be conducted in conformity with the capacity provisions of this Agreement.

2. The provisions of paragraph 1 of this Article shall:

(a) not restrict the right of a designated airline to change aircraft in the territory of the Contracting Party designating that airline; and

(b) not allow a designated airline of one Contracting Party to station its own aircraft in the territory of the other Contracting Party for the purpose of change of aircraft.

ARTICLE IV

Designation

Each Contracting Party shall have the right to designate, by diplomatic note, an airline or airlines to operate the agreed services on the routes specified in this Agreement for that Contracting Party and to withdraw a designation 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, issue without delay to the airline or airlines so designated the required 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 provisions of this Agreement.

ARTICLE VI

Withholding, 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, and to revoke, 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 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 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 action in accordance with the provisions of Articles VIII or IX, the rights enumerated in paragraph 1 of this Article shall be exercised only after consultations between the aeronautical authorities 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 relating to the admission to, remaining in, or departure from its territory of passengers, crew members and cargo including mail (such as regulations relating to entry, clearance, transit, aviation security, 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 such passengers, crew members and cargo including mail, upon transit of, admission to, departure from and while within the said territory. In the application of such laws and regulations, a Contracting Party shall, under similar circumstances, accord to the designated airline or airlines of the other Contracting Party treatment no less favourable than that accorded to its own or any other airline engaged in similar international air services.

ARTICLE VIII

Safety Standards, Certificates and Licences

1. Certificates of airworthiness, certificates of competency and licences, issued or rendered valid by the aeronautical authorities of one Contracting Party and still in force, shall be recognized as valid by the aeronautical authorities of 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. The aeronautical authorities of each Contracting Party reserve 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 used in the operation of 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 other Contracting Party may request consultations between the aeronautical authorities in conformity with Article XX of this Agreement with a view to clarifying the practice in question.

3. Consultations concerning the safety standards and requirements maintained and administered by the aeronautical authorities of the other Contracting Party relating to aeronautical facilities, aircrew, aircraft, and operation of the designated airlines shall be held within fifteen (15) days of receipt of a request from either Contracting Party. If, after fifteen (15) days from the date of the request for consultations, the aeronautical authorities of one Contracting Party find that the aeronautical authorities of the other Contracting Party do not effectively maintain and administer safety standards and requirements in these areas that are at least equal to the minimum standards which may be established pursuant to the Convention, the aeronautical authorities of the other Contracting Party shall be notified of such findings and the steps considered necessary to conform with these minimum standards. Failure to take appropriate corrective action within a reasonable time shall constitute grounds for withholding, revoking, suspending or imposing conditions on the authorizations of the airline or airlines designated by the other Contracting Party.

4. When immediate action is essential to the safety of airline operations, the aeronautical authorities of one Contracting Party may withhold, revoke, suspend or impose conditions on the authorizations of the airline or airlines designated by the other Contracting Party.

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 Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo on September 14, 1963, the Convention for the Suppression of Unlawful Seizure of Aircraft, signed at The Hague on December 16, 1970, 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 24 February 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 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. Accordingly, each Contracting Party shall advise the other Contracting Party of any difference between its national regulations and practices and the aviation security standards of the Annexes referred to in this paragraph. Either Contracting Party may request immediate consultations with the other Contracting Party at any time to discuss any such differences.

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, mail and aircraft stores prior to and during boarding and loading.

6. Each Contracting Party shall, as far as may be practicable, meet 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, within sixty (60) days following notice (or such shorter period as may be agreed between the aeronautical authorities), for its aeronautical authorities to conduct an assessment in the territory of the other Contracting Party of the security measures being carried out, or planned to be carried out, by aircraft operators in respect of flights arriving from, or departing to the territory of the first Contracting Party. 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 expeditiously.

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 taking 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 consultations. Such consultations shall start within fifteen (15) days of receipt of such a request from either Contracting Party. Failure to reach a satisfactory agreement within fifteen (15) days from the start of consultations shall constitute grounds for withholding, revoking, suspending or imposing conditions on the authorizations of the airline or airlines designated by the other Contracting Party. When justified by an emergency, or to prevent further non-compliance with the provisions of this Article, the first Contracting Party may take interim action at any time.

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 provided in the territory of one Contracting Party shall be available for use by the airlines of the other Contracting Party on terms no less favourable than the most favourable terms available to any airline engaged in similar international air services at the time arrangements for use are made.

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 and reasonable. Any such fees and charges shall be assessed on an airline of the other Contracting Party on terms no 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 discussions between its competent charging authorities and the airlines using the services and facilities, or where practicable, 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.

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

3. Except as otherwise specified in the Annex to this Agreement, each designated airline of a Contracting Party shall be free to use its commercial judgment with respect to the capacity to be provided, consistent with the principles set out in this Article. Neither Contracting Party or its aeronautical authorities may unilaterally impose any restrictions additional to any restrictions specified in the Annex to this Agreement on the designated airline or airlines of the other Contracting Party with respect to capacity, frequency or type of aircraft employed in connection with services over any of the routes specified in the Annex to this Agreement.

4. In instances where either Contracting Party considers that the services provided by one or more airlines of the other Contracting Party do not comply with the requirements and principles provided by this Article, it may ask for consultations in accordance with Article XX of this Agreement in order to examine the operations in question.

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, including statistics 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 of aircraft of that airline as well as printed ticket stock, air waybills, 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 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

Definitions

1. For purposes of this Article,

a) “Price” means any fare, rate or charge contained in tariffs (including frequent flyer plans or other benefits provided in association with air transportation) for the carriage of passengers (including their baggage) and/or cargo (excluding mail) on scheduled air services and the conditions directly governing the availability or applicability of such fare, rate or charge but excluding general terms and conditions of carriage;

b) “General Terms and Conditions of Carriage” means those terms and conditions contained in tariffs which are broadly applicable to air transportation and not directly related to any price; and

c) the term “match” means the continuation or introduction, on a timely basis, of an identical or similar (but not lower) price.

Factors in Determining Prices

2. Prices for carriage by the designated airline or airlines of one Contracting Party to or from the territory of the other Contracting Party shall be established at reasonable levels due regard being paid to all relevant factors including the interests of users, cost of operation, characteristics of service, reasonable profit, prices of other airlines and other commercial considerations in the marketplace.

Development/Justification of Prices

3. The prices referred to in paragraph 2 of this Article may be developed individually or, at the option of the designated airline or airlines, through coordination with each other or with other airlines. A designated airline shall be responsible only to its own aeronautical authorities for the justification of its prices.

Filing of Prices for Carriage Between the Contracting Parties

4. Each Contracting Party may require the filing with its aeronautical authorities by the designated airline or airlines of their prices for carriage between the territories of the Contracting Parties. Such filing, if required, shall be received by the aeronautical authorities at least one (1) day before the proposed effective date. A designated airline which has established a price individually shall, at the time of filing, ensure that the filed price is accessible to other designated airlines.

Government Intervention, Criteria and Procedures

5. Neither Contracting Party nor its aeronautical authorities shall take unilateral action to prevent the inauguration or continuation of an existing or proposed price for carriage between the territories of the Contracting Parties.

Intervention shall have as its primary objective:

(a) Prevention of unreasonably discriminatory prices or practices;

(b) Protection of consumers from prices that are unreasonably high or restrictive due to abuse of a dominant position;

(c) Protection of airlines from prices to the extent that they are artificially low due to direct or indirect subsidy or support; or

(d) Protection of airlines from prices that are artificially low, where evidence exists as to an intent to eliminate competition.

6. If the aeronautical authorities of one Contracting Party are dissatisfied with an existing or proposed price for carriage between the territories of the Contracting Parties, they shall so notify the aeronautical authorities of the other Contracting Party and the designated airline(s) concerned. The aeronautical authorities receiving the notice of dissatisfaction shall advise the other aeronautical authorities within ten (10) days of receipt of the notice, as to whether they also are dissatisfied with the price, in which case the price shall not come into effect or remain in effect.

Filing of Prices for Carriage Between Other Contracting Party and Third Countries

7. A designated airline of one Contracting Party may be required by the other Contracting Party to file prices for carriage between the territory of the other Contracting Party and third countries. Such filing, if required, shall be received at least thirty (30) days before the proposed effective date unless a longer period of notice is required for the airlines operating third and fourth freedom services in that specific market, in which case the latter shall apply.

Approval/Acceptance of Prices for Carriage Between Other Contracting Party and Third Countries

8. If within fifteen (15) days from the date of receipt of a price proposed by a designated airline of one Contracting Party for carriage between the other Contracting Party and a third country, the aeronautical authorities of the other Contracting Party have not notified that designated airline of their dissatisfaction, such price shall be considered to be accepted or approved and shall be permitted to come into effect on the date proposed. Such acceptance or approval may subsequently be withdrawn on at least thirty (30) days notice to the designated airline concerned in the case of an agreed service and fifteen (15) days otherwise, and the price shall cease to be applied at the end of the applicable notice period.

9. A price for carriage by a designated airline of one Contracting Party between the territory of the other Contracting Party and a third country shall not be lower than the lowest publicly available lawful price for scheduled international air services by the airline(s) of the other Contracting Party in that market, unless otherwise authorized by the aeronautical authorities of that other Contracting Party.

10. Any designated airline of one Contracting Party shall have the right to match any publicly available lawful price on scheduled services between the territory of the other Contracting Party and any third country. The aeronautical authorities of the other Contracting Party may require the designated airline proposing the price to provide satisfactory evidence of the availability of the price being matched and of the consistency of matching with the requirements of this Article. A price introduced for matching purposes shall remain in effect only for the period of availability of the price being matched.

Discussions Between Aeronautical Authorities

11. The aeronautical authorities of either Contracting Party may request discussions on prices at any time. Such discussions, which may be conducted orally or in writing, shall be held within fifteen (15) days of receipt of the request, unless otherwise agreed between the aeronautical authorities. The aeronautical authorities shall cooperate in securing information necessary for consideration of a price. If agreement is reached as a result of discussions, the aeronautical authorities of the Contracting Parties shall put that agreement into effect.

General Terms and Conditions of Carriage

12. Each Contracting Party may require the designated airlines to file their respective general terms and conditions of carriage with the aeronautical authorities at least thirty (30) days before the proposed effective date or such lesser period as may be permitted by the aeronautical authorities. Acceptance or approval of such terms and conditions shall be subject to national laws and regulations. The aeronautical authorities of either Contracting Party may at any time withdraw such acceptance or approval upon not less than fifteen (15) days notice to the designated airlines concerned and the term or condition shall cease to have any force or effect thereafter.

ARTICLE XV

Sales and Transfer of Funds

1. 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, at its discretion, in freely convertible currencies of other countries, and any person shall be free to purchase such transportation in currencies accepted by that airline.

2. Each designated airline shall have the right to convert and remit abroad, on demand, funds obtained in the normal course of its operations. Conversion and remittance shall be permitted without restrictions at the foreign exchange market rates for current payments prevailing at the time of submission of the request for transfer, and shall not be subject to any charges except normal service charges collected by banks for such transactions.

ARTICLE XVI

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 the 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 for other airlines.

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 XVII

Ground Handling

1. The designated airline or airlines of one Contracting Party shall be permitted, on the basis of reciprocity, to perform its own ground handling in the territory of the other Contracting Party and, at its option, to have 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.

2. The designated airline or airlines of one Contracting Party shall also have the right to provide ground handling services for other airlines operating at the same airport in the territory of the other Contracting Party.

3. The exercise of the rights set forth in paragraphs 1 and 2 of this Article shall be subject only to physical or operational constraints resulting from considerations of airport safety or security. Any constraints shall be applied uniformly and on terms no less favourable than the most favourable terms available to any airline engaged in similar international air services at the time the constraints are imposed.

ARTICLE XVIII

Smoking Ban

1. Each Contracting Party shall prohibit or cause their airlines to prohibit smoking on all flights carrying passengers operated by its airlines between the territories of the Contracting Parties. This prohibition shall apply to all locations within the aircraft and shall be in effect from the time an aircraft commences enplanement of passengers to the time deplanement of passengers is completed.

2. Each Contracting Party shall take all measures that it considers reasonable to secure compliance by its airlines and by their passengers and crew with the provisions of this Article, including the imposition of appropriate penalties for non-compliance.

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), XII (Statistics), XIII (Customs Duties and Other Charges), XV (Sales and Transfer of Funds), XVI (Airline Representatives), XVII (Ground Handling), XVIII (Smoking Ban) and XX (Consultations) of this Agreement shall be applicable 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 flights or the conduct of air carriers or other parties involved in the organization of such operations.

ARTICLE XX

Consultations

1. Either Contracting Party may request consultations on the implementation, interpretation, application or amendment of this Agreement. 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 a written request, unless otherwise agreed by the Contracting Parties.

2. In a spirit of close co-operation, the aeronautical authorities of the Contracting Parties may hold discussions with each other from time to time with a view to ensuring the proper implementation of, and satisfactory compliance with, the provisions of this Agreement. Such discussions 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 convenient to modify any provision of this Agreement, it may request consultations with the other Contracting Party. Such consultations, which may be carried out through discussion or by correspondence between the Aeronautical Authorities, shall begin within a period of sixty (60) days from the date of the request. Any modification agreed pursuant to such consultations shall come into force on the date of an exchange of Diplomatic Notes in which the Contracting Parties confirm to each other the completion of their respective constitutional or legal requirements.

Notwithstanding the provisions of letter c) of Article I (Definitions), modifications of the Annex to the Agreement may be agreed between the Aeronautical Authorities of both Contracting Parties, confirmed by means of 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 consultations held in conformity with Article XX of this Agreement.

2. If the dispute is not resolved by consultations, the Contracting Parties may agree to refer the dispute for decision to mutually agreed 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.

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 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 an 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, and to the extent that it is applicable to both Contracting Parties, the provisions of such convention shall prevail.

ARTICLE XXVI

Entry into Force

This Agreement shall be applied provisionally from the date of its signature, and shall enter into force on the later of the dates on which the Contracting Parties shall each have notified the other by diplomatic note that they have obtained whatever internal approval may be required to give effect to this Agreement.

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 Santiago, on this 4^th day of December 2003, in the English, French and Spanish languages, each version being equally authentic.

Bernard Giroux

GOVERNMENT OF CANADA

Carlos Portales Cifuentes

FOR THE GOVERNMENT OF THE REPUBLIC OF CHILE

ANNEX

ROUTE SCHEDULE

SECTION I

The following route may be operated in either or both directions by an airline(s) designated by the Government of Canada:

Notes:

1. Any Intermediate Points and/or Points Beyond may be omitted on any or all services, provided that all services originate or terminate in Canada. Points in Chile may be served separately or in combination.

2. Transit and own stopover rights shall be available at Intermediate Points and at Points in Chile except that stopover rights shall not be available at Points in Chile en route to/from other Points in Chile. At the option of each designated airline, intra-airline connections may be made at any of the points on the route.

3. Intermediate and beyond fifth freedom rights shall only be available between Points in Chile and Buenos Aires and between Points in Chile and one other point in South America to be selected by Canada and which may be changed. The Government of Canada shall be entitled to allocate among its designated airlines up to a total of seven own-aircraft flights per week in each direction for fifth freedom services at each of Buenos Aires and the one other point in South America to be selected by Canada. The Government of Canada shall also be entitled to allocate among its designated airlines up to a total of seven flights per week in each direction for code-sharing, as described in Note 4. (a), for fifth freedom services at each of Buenos Aires and the one other point in South America to be selected by Canada. For any two consecutive calendar months, fifth freedom traffic carried by each designated airline to and from each of Buenos Aires and the one other point in South America to be selected by Canada shall not exceed 50 % of the aircraft capacity made available by that designated airline to and from Chile at each of Buenos Aires and the one other point in South America to be selected by Canada.

4. Subject to the regulatory requirements normally applied to such operations by the aeronautical authorities of Chile, each designated airline of Canada may enter into co-operative arrangements for the purpose of

a) operating the agreed services on the specified routes by code-sharing (i.e., selling transportation under its own code) on flights operated by the airline(s) of Canada, of Chile, and/or of any third country; and/or

b) carrying traffic under the code of any other airline(s) where such other airline(s) has been authorised by the aeronautical authorities of Chile to sell transportation under its own code on flights operated by the designated airline(s) of Canada.

Code sharing services involving transportation between the Points in Chile shall be restricted to flights operated by an airline(s) authorised by the aeronautical authorities of Chile to provide services between the Points in Chile and all transportation between the Points in Chile under the code of the designated airline(s) of Canada shall only be available as part of an international journey. All airlines involved in code sharing arrangements shall hold the appropriate underlying route authority. For the purpose of code-sharing and notwithstanding the provisions of Article III (Change of Aircraft), airlines shall be permitted to transfer traffic between aircraft without limitation. The aeronautical authorities of Chile shall not withhold permission for code sharing services identified in Note 4 (a) by the designated airline(s) of Canada on the basis that the airline(s) operating the aircraft does not have the right from Chile to carry traffic under the code of the airline(s) designated by Canada.

ANNEX

ROUTE SCHEDULE

SECTION II

The following route may be operated in either or both directions by an airline(s) designated by the Government of the Republic of Chile:

Notes:

1. Any Intermediate Points and/or Points Beyond may be omitted on any or all services, provided that all services originate or terminate in Chile. Points in Canada may be served separately or in combination.

2. Transit and own stopover rights shall be available at Intermediate Points and at Points in Canada except that stopover rights shall not be available at Points in Canada en route to/from other Points in Canada. At the option of each designated airline, intra-airline connections may be made at any of the points on the route.

3. Intermediate and beyond fifth freedom rights shall only be available between Points in Canada and Miami and between Points in Canada and New York. The Government of the Republic of Chile shall be entitled to allocate among its designated airlines up to a total of seven own-aircraft flights per week in each direction for fifth freedom services at each of Miami and New York. The Government of the Republic of Chile shall also be entitled to allocate among its designated airlines up to a total of seven flights per week in each direction for code-sharing, as described in Note 4. (a), for fifth freedom services at each of Miami and New York. For any two consecutive calendar months, fifth freedom traffic carried by each designated airline to and from each of Miami and New York shall not exceed 50 % of the aircraft capacity made available by that designated airline to and from Canada at each of Miami and New York.

4. Subject to the regulatory requirements normally applied to such operations by the aeronautical authorities of Canada, each designated airline of Chile may enter into co-operative arrangements for the purpose of

(a) operating the agreed services on the specified routes by code-sharing (i.e., selling transportation under its own code) on flights operated by the airline(s) of Canada, of Chile, and/or of any third country; and/or

(b) carrying traffic under the code of any other airline(s) where such other airline(s) has been authorised by the aeronautical authorities of Canada to sell transportation under its own code on flights operated by the designated airline(s) of Chile.

Code sharing services involving transportation between the Points in Canada shall be restricted to flights operated by an airline(s) authorised by the aeronautical authorities of Canada to provide services between the Points in Canada and all transportation between the Points in Canada under the code of the designated airline(s) of Chile shall only be available as part of an international journey. All airlines involved in code sharing arrangements shall hold the appropriate underlying route authority. For the purpose of code-sharing and notwithstanding the provisions of Article III (Change of Aircraft), airlines shall be permitted to transfer traffic between aircraft without limitation. The aeronautical authorities of Canada shall not withhold permission for code sharing services identified in Note 4 (a) by the designated airline(s) of Chile on the basis that the airline(s) operating the aircraft does not have the right from Canada to carry traffic under the code of the airline(s) designated by Chile.