U.S.-Costa Rica Air Transport Agreement of May 8, 1997

May 8, 1997



The Government of the United States of America and the Government of the Republic of Costa Rica (hereinafter, "the Parties") ; Desiring to promote an international aviation system based on competition among airlines in the marketplace with minimum government interference and regulation ; Desiring to facilitate the expansion of international air transport opportunities ; Desiring to make it possible for airlines to offer the traveling and shipping public a variety of service options at the lowest prices that are not discriminatory and do not represent abuse of a dominant position, and wishing to encourage individual airlines to develop and implement innovative and competitive prices ; Desiring to ensure the highest degree of safety and security in international air transport and reaffirming their grave concern about acts or threats against the security of aircraft, which jeopardize the safety of . persons or property, adversely affect the operation of air transportation, and undermine public confidence in the safety of civil aviation ; and Being Parties to the Convention on International Civil Aviation, opened for signature at Chicago on December 7, 1944 ; Have agreed as follows :

Article 1 Definitions

For the purposes of this Agreement, unless otherwise stated, the term :

1 . "Aeronautical authorities" means, in the case of the United States, the Department of Transportation, or its successor, and in the case of Costa Rica, the Ministry of Public Works and Transportation and any person or agency authorized to perform the functions exercised by the said official(s) ;

2 . "Agreement" means this Agreement, its Annexes, and any amendments thereto;

3 . "Air transportation" means the public carriage by aircraft of passengers, baggage, cargo, and mail, separately or in combination, for remuneration or hire ;

4 . "Convention" means the Convention on International Civil Aviation, opened for signature at Chicago on December 7, 1944,and includes : a. any amendment that has entered into force under Article 94(a) of the Convention and has been ratified by both Parties, and b. any Annex or any amendment thereto adopted under Article 90 of the Convention, insofar as such Annex or amendment is at any given time effective for both Parties ;

5 . "Designated airline" means an airline designated and authorized in accordance with Article 3 of this Agreement ;

6 . "Full cost" means the cost of providing service plus areasonable charge for administrative overhead ;

7. "International air transportation" means air transportationthat passes through the airspace over the territory of morethan one State ;

8. "Price" means any fare, rate or charge for the carriage ofpassengers (and . their baggage) and/or cargo (excluding mail) inair transportation charged by airlines, including their agents,and the conditions governing the availability of such fare, rate or charge ;

9 . "Stop for non-traffic purposes" means a landing for anypurpose other than taking on or discharging passengers,baggage, cargo and/or mail in air transportation ;

10 . "Territory" means the land areas under the sovereignty,jurisdiction, protection, or trusteeship of a Party, and the territorial waters adjacent thereto; and


1 . "User charge" means a charge imposed on airlines for the provision of airport, air navigation, or aviation securityfacilities or services including related services and facilities .

Article 2

Grantof Riqhts

1 . Each Party grants to the other Party the following rightsfor the conduct of international air transportation by theairlines of the other Party:
a. the right to fly across its territory without landing;
b. the right to make stops in its territory for non-trafficpurposes; and c . the rights otherwise specified in this Agreement .

2 . Nothing in this Article, shall be deemed to confer on theairline or airlines of one Party the rights to take on board, in the territory of the other Party, passengers, their baggage,cargo, or mail carried for compensation and destined foranother point in the territory of that other Party .

Article 3 Designation and Authorization

1. Each Party shall have the right to designate as manyairlines as it wishes to conduct international air transportation in accordance with this Agreement and towithdraw or alter such designations. Such designations shallbe transmitted to the other Party in writing through diplomaticchannels, and shall identify whether the airline is authorizedto conduct the type of air transportation specified in Annex Ior in Annex II or both .

2 . On receipt of such a designation, and of applications fromthe designated airline, in the form and manner prescribed foroperating authorizations and technical permissions, the otherParty shall grant appropriate authorizations and permissionswith minimum procedural delay, provided : a. substantial ownership and effective control of thatairline are vested in the Party designating the airline,nationals of that party, or both ;

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. the designated airline is qualified to meet the conditions prescribed under the laws and regulationsnormally applied to' the operation of international airtransportation by the Party considering the application or applications ; and c . the Party designating the airline is maintaining andadministering the standards set forth in Article 6 (Safety)and Article 7 (Aviation Security) . Article 4 Revocation of Authorization

1 . Either Party may revoke, suspend or limit the operatingauthorizations or technical permissions of an airlinedesignated by the other Party where : a. substantial ownership and effective control of thatairline are not vested in the other Party, the Party'snationals, or both; b. that airline has failed to comply with the laws andregulations referred to in Article 5 (Application of Laws) of this Agreement ; or c . the other Party is not maintaining and administeringthe standards as set forth in Article 6 (Safety) .

2 . Unless immediate action is essential to prevent furthernoncompliance with subparagraphs lb or lc of this Article, therights established by this Article shall be exercised onlyafter consultation with the other Party.

3 . This Article does not limit the rights of either Party towithhold, revoke, limit or impose conditions on the operatingauthorization or technical permission of an airline or airlinesof the other Party in accordance with the provisions ofArticle 7 (Aviation Security) . Article 5 Application of Laws

1 . While entering, within, or leaving the territory of oneParty, its laws and regulations relating to the operation andnavigation of aircraft shall be complied with by the otherParty's airlines .

2 . While entering, within, or leaving the territory of oneParty, its laws and regulations relating to the admission to or


from its territory of passengers, crew or cargo onaircraft (including regulations relating to entry, clearance, aviation security, immigration, passports, customs andquarantine or, in the case of mail, postal regulations) shallbe complied with by, or on behalf of, such passengers, crew orcargo of the other Party's airlines . Article 6 Safety

1 . Each Party shall recognize as valid, for the purpose ofoperating-the air transportation provided for in thisAgreement, certificates of airworthiness, certificates ofcompetency, and licenses issued or validated by the other Partyand still in force, provided that the requirements for suchcertificates or licenses at least equal the minimum standardsthat may be established pursuant to the Convention . Each Partymay, however, refuse to recognize as valid for the purpose offlight above its own territory, certificates of competency andlicenses granted to or validated for its own nationals by the other Party .

2 . Either Party may request consultations concerning thesafety standards maintained by the other Party relating to aeronautical facilities, aircrews, aircraft, and operation ofthe designated airlines . If, following such consultations, oneParty finds that the other Party does not effectively maintainand administer safety standards and requirements in these areasthat at least equal the minimum standards that may be established pursuant to the Convention, the other Party shallbe notified of such findings and the steps considered necessaryto conform with these minimum standards, and the other Party shall take appropriate corrective action. Each Party reservesthe right'to withhold, revoke, or, limit the operatingauthorization or technical permission of an airline or airlinesdesignated by the other Party in the event the other Party doesnot take such appropriate corrective action within a reasonabletime . Article 7 Aviation Security 1. In accordance with their rights and obligations underinternational law, the Parties reaffirm that their obligationto each other to protect the security of civil aviation againstacts of unlawful interference forms an integral part of thisAgreement . Without limiting the generality of their rights and obligations under international law, the Parties shall inparticular act in conformity with the provisions of theConvention on Offenses and Certain Other Acts Committed on


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, when the Protocol enters into force for both Parties, the Protocol for the Suppression of Unlawful Acts of Violence atAirports Serving International Civil Aviation, done at Montreal on February 24, 1988 . 2. The Parties shall provide upon request all necessaryassistance to each other to prevent acts of unlawful seizure ofcivil aircraft and other unlawful acts against the safety ofsuch aircraft, of their passengers and crew, and of airportsand air navigation facilities, and to address any other threatto the security of civil air navigation .

3 . The Parties shall, in their mutual relations, act in conformity with the aviation security provisions establishedby the International Civil Aviation Organization and designatedas Annexes to the Convention; they shall require that operatorsof aircraft of their registry, operators of aircraft who havetheir principal place of business or permanent residence intheir territory, and the operators of airports in theirterritory act in conformity with such aviation security provisions .

4 . Each Party agrees to observe the security provisionsrequired by the other Party for entry into, for departure from, and while within the territory of that other Party and to takeadequate measures to protect aircraft and to inspectpassengers, crew, and their baggage and carry-on items, as wellas cargo and aircraft stores, prior to and during boarding orloading. Each Party shall also give positive consideration toany request from the other Party for special security measuresto meet a particular threat .

5 . When an incident or threat of an incident of unlawful , seizure of aircraft or other unlawful acts against the safetyof passengers, crew, aircraft, airports or air navigationfacilities occurs, the Parties shall assist each other byfacilitating communications and other appiopriate measuresintended to terminate rapidly and safely such incident orthreat .

6 . When a Party has reasonable grounds to believe that the other Party has departed from the aviation security provisions of this Article, the aeronautical authorities of that Party mayrequest immediate consultations with the aeronauticalauthorities of the other Party. Failure to reach a satisfactory agreement within 15 days from the date of suchrequest shall constitute grounds to withhold, revoke, limit, orimpose conditions on the operating authorization and technical


of an airline or airlines of that Party . When required by an emergency, a Party may take interim action priorto the expiry of 15 days . Article 8 Commercial Opportunities 1. The airlines of each Party shall have the right toestablish offices in the territory of the other Party for thepromotion and sale of air transportation .

2 . The designated airlines of each Party shall be entitled, inaccordance with the laws and regulations of the other Partyrelating to entry, residence, and employment, to bring in andmaintain in the territory of the other Party managerial, sales,technical, operational, and other specialist staff required forthe provision of air transportation .

3 . Each designated airline shall have the right to perform itsown ground-handling in the territory of the other Party("self-handling") or, at its option, select among competingagents for such services in whole or in part . The rights shallbe subject only to physical constraints resulting fromconsiderations of airport. safety. Where such considerations preclude self-handling, ground services shall be available onan equal basis to all airlines ; charges shall be based on the costs of services provided; and such services shall be comparable to the kind and quality of services as ifself-handling were possible .

4 . Any airline of each Party may engage in the sale of airtransportation in the territory of the other Party directlyand, at the airline's discretion, through its agents, except asmay be specifically provided by the charter regulations of thecountry in which the charter originates that relate to theprotection-of passenger funds, and passenger cancellation andrefund rights . Each airline shall have the right to sell suchtransportation, and any person shall be free to purchase suchtransportation, in the currency of that territory or in freelyconvertible currencies .

5 . Each airline shall have the right to convert and remit toits country, on demand, local revenues in excess of sums locally disbursed. Conversion and remittance shall be permitted promptly without restrictions or taxation in respectthereof at the rate of exchange applicable to currenttransactions and remittance on the date the carrier makes the initial application for remittance .

6 . The airlines of each Party shall be permitted to pay forlocal expenses, including purchases of fuel, in the territoryof the other Party in local currency . At their discretion, the



of each Party may pay for such expenses in theterritory of the other Party in freely convertible currencies according to local currency regulation . 7 . In operating or holding out the authorized services on theagreed routes, any designated airline of one Party may enterinto cooperative marketing arrangements such as blocked-space,code-sharing or leasing arrangements, with a. an airline or airlines of either Party; and b. an airline or airlines of a third country,providedthat such third country authorizes or allows comparablearrangements between the airlines of the other Party andother airlines on services to, from and via such third country; provided that all airlines in such arrangements 1) hold theappropriate authority and 2) meet the requirements normallyapplied to such arrangements . 8 . Notwithstanding any other provision of this Agreement,airlines and indirect providers of cargo transportation of bothParties shall be permitted, without restriction, to employ inconnection with international air transportation any surfacetransportation for cargo to or from any points in theterritories of the Parties or in third countries, includingtransport to and from all airports with customs facilities, andincluding, where applicable, the right to transport cargo in bond under applicable laws and regulations. Such cargo,whether moving by surface or by air, shall have access to airport customs processing and facilities. Airlines may electto perform their own surface transportation or to provide itthrough arrangements with other surface carriers, includingsurface transportation operated by 'other airlines and indirect providers. of cargo air transportation . Such intermodal cargoservices may be offered at a single, through price for the air and surface transportation combined, provided that shippers arenot misled as to the facts concerning such transportation . Article 9 10 Customs Duties and Charges

1 . On arriving in the territory of one Party, aircraftoperated in international air transportation by the designatedairlines of the other Party, their regular equipment, groundequipment, fuel, lubricants, consumable technical supplies,spare parts (including engines), aircraft stores (including but not . limited to such items of food, beverages and liquor,tobacco and other .products destined for sale to or use bypassengers in limited quantities during flight), and otheritems intended for or used solely in connection with the



or servicing of aircraft engaged in international air transportation shall be exempt, on the basis of reciprocity,from all import restrictions, property taxes and capitallevies, customs duties, excise taxes, and similar fees and charges that are (1) imposed by the national authorities, and (2) not based on the cost of services provided,provided that such equipment and supplies remain on board the aircraft .

2 . There shall also be exempt, on the basis of reciprocity,from the taxes, levies, duties, fees and charges referred to inparagraph 1 of this Article, with the exception of chargesbased on the cost of the service provided : a. aircraft stores introduced into or supplied in theterritory of a Party and taken on board, within reasonablelimits, for use on outbound aircraft of an airline of the other Party engaged in international air transportation,even when these stores are to be used on .a part of thejourney performed over the territory of the Party in whichthey are taken on board ; b. ground equipment and spare parts (including engines)introduced into the territory of a Party for the servicing,maintenance, or repair of aircraft . of an airline of the other Party used in international air transportation ; c. fuel, lubricants and consumable technical suppliesintroduced into or supplied in the territory of a Party foruse in an aircraft of an airline of the other Party engagedin international air transportation, every when these supplies are to be .used on a part of the journey performed over the territory of the Party in which they are taken onboard; and d. promotional and advertising materials introduced intoor supplied in the territory of one Party and taken onboard, within reasonable limits, for use on outbound aircraft of an airline of the other Party engaged ininternational air transportation, even when these storesare to be .used on a part of the journey performed over theterritory of the Party in which they are taken on board .

3 . Equipment and supplies referred to in paragraphs 1 and 2 ofthis Article may be required to be kept under the supervisionor control of the appropriate authorities .

4 . The exemptions provided by this Article shall also beavailable where the designated airlines of one Party havecontracted with another airline, which similarly enjoys suchexemptions from the other Party, for the loan or transfer in the territory of the other Party of the items specified inparagraphs 1 and 2 of this Article .

-1 0 -_Article 10 UserCharqes

1 . User charges that may be imposed by the competent chargingauthorities or bodies of each Party on the airlines of the other Party shall be just, reasonable, not unjustly,discriminatory, and equitably apportioned among categories of users. In any event, any such user charges shall be assessedon the airlines of the other Party on terms not less favorablethan the most favorable terms available to any other airline atthe time the charges are assessed .

2 . User charges imposed on the airlines of the other Party mayreflect, but shall not exceed, the full cost to the competentcharging authorities or bodies of providing the appropriateairport, airport environmental, air navigation, and aviationsecurity facilities and services at the airport or within theairport system. Such full cost may include a reasonable returnon assets, after depreciation . Facilities and services for which charges are made shall be provided on an efficient andeconomic basis .

3 . Each Party shall encourage consultations between thecompetent charging authorities or bodies in its territory andthe airlines using the services and facilities, and shallencourage the competent charging authorities or bodies and theairlines to exchange such information as may be necessary topermit an accurate review of the reasonableness of the chargesin accordance with the principles of paragraphs (1) and (2) ofthis Article . Each Party shall encourage the competent charging authorities to provide users with reasonable notice ofany proposal for changes in user charges to enable users toexpress their views before changes are made . 4. Neither Party shall be held, in dispute resolutionprocedures pursuant to Article 14, to be in breach of aprovision of this Article, unless (i) it fails to undertake areview of the charge or practice that is the subject ofcomplaint by-the other Party within a reasonable amount of time; or (ii) following such a review it fails to take allsteps within its power to remedy any charge or practice that isinconsistent with this Article . Article 11 Fair Competition

1 . Each Party shall allow a fair and equal opportunity for thedesignated airlines of both Parties to compete in providing theinternational air transportation governed by this Agreement .

2 . Each Party shall allow ea6h designated airline to determinethe frequency and capacity of the international air transportation it offers based upon commercial considerationsin the marketplace . Consistent with this right, neither Party shall unilaterally limit the volume of traffic, frequency orregularity of service, or the aircraft type or types operatedby the designated airlines of the other Party, except as may berequired for customs, technical, operational, or environmentalreasons under uniform conditions consistent with Article 15 of the Convention .

3 . Neither Party shall impose on the other Party's'designatedairlines a first-refusal requirement, uplift ratio,no-objection fee, or any other requirement with respect tocapacity, frequency or traffic that would be inconsistent withthe purposes of this Agreement .

4 . Neither Party shall require the filing of schedules,programs for charter flights, or operational plans by airlinesof the other Party for approval, except as may be required on anon-discriminatory basis to enforce the uniform conditionsforeseen by paragraph 2 of this Article or as may bespecifically authorized in an Annex to this Agreement . If a Party requires filings for information purposes, it shall minimize the administrative burdens of filing requirements andprocedures on air transportation intermediaries and ondesignated airlines of the other Party . Article 12 Pricing

1 . Each Party shall allow prices for air transportation to beestablished by each designated airline based upon commercialconsiderations in the marketplace. Intervention by the Partiesshall be limited to : a. prevention of unreasonably discriminatory prices orpractices ; b. protection of consumers from prices that areunreasonably high or restrictive due to the abuse of adominant position; and c . protection of airlines from prices that areartificially low due to direct or indirect governmentalsubsidy or support .

2 . Each Party may require notification to or filing with itsaeronautical authorities of prices to be charged to or from its territory by airlines of the other Party . Notification or

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by the airlines of both Parties may be required no morethan 30 days before the proposed date of effectiveness . In individual cases´┐Ż notification or filing may be permitted onshorter notice than normally required . Neither Party shallrequire the notification or filing by airlines of the otherParty of prices charged by charterers to the public, except asmay be required on a non-discriminatory basis for information purposes .

3 . Neither Party shall take unilateral action to prevent theinauguration or continuation of a price proposed to be chargedor charged by (a),an airline of either Party for internationalair transportatioh between the territories of the Parties, or(b) an airline of one Party for international airtransportation between the territory of the other Party and any other country, including in both cases transportation on aninterline or intraline.basis. If either Party believes thatany such price is inconsistent with the considerations setforth in paragraph (1) of this Article, it shall requestconsultations and notify the other Party of the reasons for itsdissatisfaction as soon as possible . These consultations shall be held not later than 30 days after receipt of the request,and the Parties shall cooperate in securing informationnecessary for reasoned resolution of the issue . If the Parties reach agreement with respect to a price for which a notice ofdissatisfaction has been given, each Party shall use its bestefforts to put that agreement into effect. Without such mutual agreement, the price shall go into effect or continue in effect . Article 13 Consultations Either Party may, at any time, request consultations relatingto this Agreement. Such consultations shall begin at theearliest possible date, but not later than 60 days from thedate the other Party receives the request unless otherwiseagreed. This Agreement may be amended by the mutual writtenagreement of the Parties . Amendments shall enter into force upon an exhange of notes following the completion of allnecessary internal procedures of the Parties . Article 14 Settlement of Disputes 1. Any dispute arising under this Agreement, except those thatmay arise under paragraph 3 of Article 12 (Pricing), that is not resolved by a first round of formal consultations may bereferred by agreement of the Parties for decision to some

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or body. If the Parties do not so agree, the disputeshall, at the request of either Party, be submitted toarbitration in accordance with the procedures set forth below .

2 . Arbitration shall be by a tribunal of three arbitrators tobe constituted as follows : a. Within 30 days after the receipt of a request forarbitration, each Party shall name one arbitrator . Within 60 days after these two arbitrators have been named, theyshall by agreement appoint a third arbitrator, who shall act . as President of the arbitral tribunal ; b. If either Party fails to name an arbitrator, or if thethird arbitrator is not appointed in accordance withsubparagraph a of this paragraph, either Party may requestthe President of the Council of the International Civil Aviation Organization to appoint the necessary arbitratoror arbitrators within 30 days . if the President of the Council is of the same nationality as one of the Parties,the most senior Vice President who is not disqualified onthat ground shall make the appointment .

3 . Except as otherwise agreed, the arbitral tribunal shalldetermine the limits of its jurisdiction in accordance withthis Agreement and shall establish its own procedural rules . The tribunal, once formed, may recommend interim reliefmeasures pending its final determination . At the direction of the tribunal or at the request of either of the Parties, aconference to determine the precise issues to be arbitrated andthe specific procedures to be followed shall be held not laterthan 15 days after the tribunal is fully constituted . 4. Except as otherwise agreed or as directed by the tribunal,each Party shall submit a memorandum within 45 days of the time the tribunal is fully constituted., Replies shall be due 60days later . The tribunal shall hold a hearing at the requestof either Party or on its own initiative within. 15 days afterreplies are due .

5 . The tribunal shall attempt to render a written decisionwithin 30 days after completion of the hearing or, if nohearing is held, after the date both replies are submitted . The decision of the majority of the tribunal shall prevail .

6 . The Parties may submit requests for clarification of thedecision within 15 days after it is rendered and anyclarification given shall be issued within 15 days of such request .

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. Each Party shall, to the degree consistent with its national law, give full effect to any decision or award of the arbitral tribunal . 8 . The expenses of the arbitral tribunal, including the fees and expenses of the arbitrators, shall be shared equally by theParties. Any expenses incurred by the President of the Councilof the International Civil Aviation Organization in connectionwith the procedures of paragraph 2b of this Article shall be considered to be part of the expenses of the arbitral tribunal . Article 15 Termination Either Party may, at any time, give notice in writing to the other Party of its decision to terminate this Agreement . Such notice shall be sent simultaneously to the International CivilAviation Organization . This Agreement shall terminate atmidnight (at the place of receipt of the notice to the otherParty) immediately before the first anniversary of the date ofreceipt of the notice by the . other Party, unless the notice iswithdrawn by agreement of the Parties before the end of thisperiod . Article 16 Registration with ICAO This Agreement and all amendments thereto shall be registeredwith the International Civil Aviation Organization . Article 17 Entry into Force This Agreement and its Annexes shall enter into force upon anexchange of notes following completion of all necessaryinternal procedures by the Parties . Upon entry into force,this Agreement shall supersede the prior Air TransportAgreement, between the Government of the United States ofAmerica and the Government of the Republic of Costa Rica signedAugust 16, 1979, and approved by the Costa Rican LegislativeAssembly on July 8, 1983, which entered into force on November 23, 198

3 .


WITNESS WHEREOF the undersigned, being duly authorized bytheir respective Governments, have signed this Agreement . DONE AT San Jose, Costa Rica this 8th day of May, 1997, induplicate, in the English and Spanish languages, each textbeing equally authentic . FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT OF UNIT STATES OF E CA: THE REPUBLIC OF COSTA RICA :

ANNEX I Scheduled Air Transportation Section 1 Routes Airlines of each Party designated under this Annex shall, inaccordance with the terms of their designation, be entitled toperform scheduled international air transportation betweenpoints on the following routes : A. Routes for the airline or. airlines designated by theGovernment of the United States : From points behind the United States via the United States and intermediate points to a point or points in Costa Rica andbeyond . B . Routes for the airline or airlines desiqnated by theGovernment of Costa Rica : From points behind Costa Rica via Costa Rica and intermediatepoints to a point or points in the United States and beyond . Section 2 Operational Flexibility Each designated airline may, on any or all flights and at itsoption : 1. Operate flights in either or both directions;

2 . Combine different flight numbers within one aircraftoperation ;

3 . Serve behind, intermediate, and beyond points and points in the territories of the Parties on the routes in anycombination and in any order;

4 . Omit stops at any point or points ;


. Transfer traffic from any of its aircraft to any of its other aircraft at any point on the routes ; and

6 . Serve points behind any point in its territory with orwithout change of aircraft or flight number and may holdout and advertise such services to the public as throughservices ; without directional or geographic limitation and without lossof any right to carry traffic otherwise permissible under thisAgreement ; provided that-, the service serves a point in theterritory of the Party designating the airline . Section 3 Chancre of Gauge On any segment or segments of the routes above, any designatedairline may perform international air transportation withoutany limitation as to change, at any point on the route, in type or number of aircraft operated ; provided that, in the outbound direction, the transportation beyond such point is acontinuation of the transportation from the territory of theParty that has designated the airline and, in the inbounddirection, the transportation to the territory of the Partythat has designated the airline is a continuation of-thetransportation from beyond such point .

ANNEX II Charter Air Transportation Section1 Airlines of each . Party designated under this Annex shall, inaccordance with the terms of their designation, have the rightto carry international charter traffic of passengers (and theiraccompanying baggage) and/or cargo (including, but not limitedto, freight forwarder, split, and combination (passenger/cargo) charters) : Between any point or points in the territory of the Partythat has designated the airline and any point or points in the territory of the other Party; and Between .any point or points in the territory of the otherParty and any point or points in a third country orcountries, provided that, such service constitutes part ofa continuous operation, with or without a change ofaircraft, that includes service to the homeland for the . purpose of carrying local traffic between the homeland andthe territory of the other Party . In the performance of services covered by this Annex, airlines of each Party designated under this Annex shall also have theright: (1) to make stopovers at any points whether within oroutside of the territory of either Party ; (2) to carry transit traffic through the other Party's territory; (3) to combine on the same aircraft traffic originating in one Party's territory,traffic originating in the other Party's territory, and trafficoriginating in third countries; and (4) to performinternational air transportation without any limitation as tochange, at any point on the route, in type or number of aircraft operated ; provided that, in the outbound direction, the transportation beyond such point is a continuation of the transportation from the. territory of the Party that hasdesignated the airline and in the inbound direction, thetransportation to the territory of the Party that hasdesignated the airline is a continuation of the transportation from beyond such point . Each Party shall extend favorable consideration to applicationsby airlines of the other Party to carry traffic not covered bythis Annex on the basis of comity and reciprocity . Section 2 Any airline designated by either Party performing internationalcharter air transportation originating in the territory ofeither Party, whether on a one-way or round-trip basis, shall


the option of complying with the charter laws, regulations, and rules either of its homeland or of the other Party. If a Party applies different rules, regulations, terms, conditions, or limitations to one or more of its airlines, or to airlines of different countries, each designated airline shall be subject to the least restrictive of such criteria. However, nothing contained in the above paragraph shall limit the rights of either Party to require airlines designated under this Annex by either Party to adhere to requirements relating to the protection of passenger funds and passenger cancellation and refund rights. Section 3 Except with respect to the consumer protection rules referred to in the preceding paragraph above, neither Party shall require an .airline designated under this Annex by the other Party, in respect of the carriage of traffic from the territory of that other Party or of a third country on a one-way or round-trip basis, to submit more than a declaration of conformity with the applicable laws, regulations and rules referred to under section 2 of this Annex or of a waiver of these laws, regulations, or rules granted by the applicable aeronautical authorities .

ANNEX III Principles of Non-Discrimination Within and Competition among Computer Reservations Systems Recognizing that Article 11 (Fair Competition) of the U .S .Costa

Rica Agreement guarantees the airlines of both. Parties "a fair and equal opportunity to compete," Considering that one of the most important aspects of the ability of an airline to compete is its ability to inform the public of its services in a fair and impartial manner, and that, therefore, the quality of information about airline services available to travel agents who directly distribute such information to the traveling public and the ability of an airline to offer those agents competitive computer reservations systems (CRSs) represent the foundation for an airline's competitive opportunities, and Considering that it is equally necessary to ensure that the interests of the consumers of air transport products are protected from any misuse of such information and its misleading presentation and that airlines and travel agents have access to effectively competitive computer reservations systems :

1 . The Parties agree that CRSs will have integrated primary displays for which: a. Information regarding international air services, including the construction of connections on those services, shall be edited and displayed based on non-discriminatory and objective criteria that are not influenced, directly or indirectly, by airline or market identity. Such criteria shall apply uniformly to all participating airlines. b. CRS data bases shall be as comprehensive as possible. c . CRS vendors shall not delete information submitted by participating airlines; such information shall be .accurate and transparent; for example, code-shared and change-of-gauge flights and flights with stops should be clearly identified as having those characteristics. d. All CRSs that are available to travel agents who directly distribute information about airline services tithe traveling public in either Party's territory shall not only be obligated to, but shall also be entitled to, operate in conformance with the CRS rules that apply in the territory where the CRS is being operated, regardless of where the computer mainframe is located.


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. Travel agents shall be allowed to use any of the secondary displays available through the CRS so long as the travel agent makes a specific request for that display.

2 . A Party shall require that each CRS vendor operating in its territory allow all airlines willing to pay any applicable on-discriminatory fee to participate in its CRS. A Party shall require that all distribution facilities that a system vendor provides shall be offered on a non-discriminatory basis to participating airlines. A Party shall require that CRS vendors display, on a non-discriminatory, objective, carrier-neutral and market-neutral basis, the international air services of participating airlines in all markets in which they wish to sell those services. Upon request, a CRS vendor shall disclose details of its data base update and storage procedures, its criteria for editing and ranking information, the weight given to such criteria, and the criteria used for selection of connect points and inclusion of connecting flights.

3 . CRS vendors operating in the territory of one Party shall be entitled to bring in, maintain, and make freely available their CRSs to travel agencies or travel companies whose principal business is the distribution of travel-related products in the territory of the other Party 'if the CRS complies with these principles .

4 . Neither Party shall, in its territory, impose or permit tube imposed on the CRS vendors of the other Party more stringent requirements with respect to access to and use of communication facilities, selection and use of technical CRS hardware and software, and the technical installation of CRS hardware, than those imposed on its own CRS vendors.

5 . Neither Party shall, in its territory, impose or permit to be imposed on the CRS vendors of the other Party more restrictive requirements with respect to CRS displays (including edit and display parameters), operation, or sale than those imposed on its own CRS vendors.

6 . CRSs in use in the territory of one Party that comply with these principles and other relevant non-discriminatory regulatory, technical, and security standards shall be entitled to effective and unimpaired access in the territory of the other Party. One aspect of this is that a designated airline shall participate in such a system as fully in its homeland territory as it does in any system offered to travel agents in the territory of the other Party. Owners/operators of CRSs of one Party shall have the same opportunity to own/operate CRSsthat conform to these principles within the territory of the other Party as do owners/operators of that Party . Each Party shall ensure that its airlines and its CRS vendors do not discriminate against travel agents in their territory because of their use or possession of a CRS also operated in the territory of the other Party .