Proposal for a Council Decision on the signature and conclusion of the Agreement between the European Community and the Republic of Panama on certain aspects of air services

Grounds for and objectives of the proposal

Following the judgements of the Court of Justice in the so-called “Open Skies” cases, on 5 June 2003 the Council granted the Commission a mandate to open negotiations with third countries on the replacement of certain provisions in existing agreements with a Community agreement(the “horizontal mandate”). The objectives of such agreements are to give all EU air carriers non-discriminatory access to routes between the Community and third countries, and to bring bilateral air service agreements between Member States and third countries in line with Community law.

General context

International aviation relations between Member States and third countries have traditionally been governed by bilateral air services agreements between Member States and third countries, the Annexes to such agreementsand other related bilateral or multilateral arrangements.
Traditional designation clauses in Member States’ bilateral air services agreements infringe Community law. They allow a third country to reject, withdraw or suspend the permissions or authorisationsof an air carrier that has been designated by a Member State but that is not substantially owned and effectively controlled by that Member State or its nationals. This has been found to constitute discrimination against Community carriers established in the territory of a Member State but owned and controlled by nationals of other Member States. This is contrary to Article 43 of the Treaty which guarantees nationals of Member States who have exercised their freedom of establishment the same treatment in the host Member State as that accorded to nationals of that Member State. There are further issues, such as aviation fuel taxation or tariffs introduced by third country air carriers on intra-Community routes, where compliance with Community law should be ensured through amending orcomplementing existing provisions in bilateral air services agreements between Member States and third countries.

Existing provisions in the area of the proposal

The provisions of the Agreement supersede or complement the existing provisions in the six bilateral air services agreements between Member States and the Republic of Panama.

Consistency with the other policies and objectives of the Union

The Agreement will serve a fundamental objective of the Community external aviation policy by bringing existing bilateral air services agreements in line with Community law.

• Primary Source

ESO: Background information: Relations between Panama and the European Union http://www.europeansources.info/record/relations-between-panama-and-the-european-union/

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