AIR SERVICES AGREEMENT BETWEEN THE GOVERNMENT OF JAPAN AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES

　AIR SERVICES AGREEMENT BETWEEN THE GOVERNMENT OF JAPAN AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES(No1)

　The Government of Japan and the Government of the Republic of the Philippines,

　Desiring to conclude an agreement for the purpose of establishing and operating air services between and beyond their respective territories,

　Being parties to the Convention on International Civil Aviation and the International Air Services Transit Agreement both opened for signature at Chicago on December 7, 1944,

　Have agreed as follows:

ARTICLE 1
1. For the purpose of the present Agreement, unless the context otherwise requires:-

(a) the term "aeronautical authorities" means, in the case of Japan, the Minister of Transport and/or any person or body authorized to perform any functions on civil aviation at present exercised by the said Minister or similar functions, and, in the case of the Republic of the Philippines, the Civil Aeronautics Board and/or any person or body authorized to perform any functions on civil aviation at present exercised by the said Civil Aeronautics Board or similar functions;

(b) the term "designated airline" means an airline which one contracting Party has designated by written notification to the other contracting Party for the operation of air services on the routes specified in the Schedule, and to which the appropriate operating permission has been given by that other contracting Party, in accordance with the provisions of Article 3 of the present Agreement;

(c) the term "territory" in relation to a State means the land areas and territorial waters adjacent thereto under the sovereignty,suzerainty, protection or trusteeship of that State;

(d) the term "air service" means any scheduled air service performed by aircraft for the public transport of passengers, cargo or mail;

(e) the term "international air service" means an air service which passes through the air space over the territory of more than one State;

(f) the term "airline" means any air transport enterprise offering or operating an international air service;

(g) the term "stop for non-traffic purposes" means a landing for any purpose other than taking on or discharging passengers, cargo or mail;

(h) the term "Schedule" means the Schedule to the present Agreement or as amended in accordance with the provisions of Article 13 of the present Agreement;

(i) the term "the Convention" means the Convention on International Civil Aviation opened for signature at Chicago on December 7, 1944 and includes any Annex adopted under Article 90 of that Convention and any amendment of t he Annexes or Convention under Articles 90 and 94 thereof;

(j) the term "agreed services" means any air service operated on the routes specified in the Schedule;

(k) the term "specified routes" means routes specified in the Schedule.

2. The Schedule forms an integral part of the present Agreement, and all reference to the "Agreement" shall include reference to the Schedule except where otherwise provided.

ARTICL2
1. Each Contracting Party grants to the other contracting Party the rights specified in the present Agreement to enable its designated airlines to establish and operate international air services on the specified routes.

2. Subject to the provisions of the present Agreement, the designated airlines of each contracting Party s hall enjoy, while operating an agreed service on a specified route, the following privileges: -

(a) to fly without landing across the territory of the other contracting Party;

(b) to make stops in the said territory for non-traffic purposes; and

(c) to make stops in the said territory at the points specified for that route in the Schedule for the purposes of discharging and of taking on international traffic in passengers j cargo and mail.

3. Nothing in paragraph 2 of this Article shall be deemed to confer on the airlines of one contracting Party the privilege of taking up, in the territory of the other contracting Party, passengers, cargo or mail carried for remuneration or hire and destined for another point in the territory of that other contracting Party.

ARTICLE 3
1. Each contracting Party s hall have the right to designate in writing to the other contracting Party one or more airlines for the purpose of operating the agreed services on the specified routes.

2. On receipt of the designation, the other contracting Party shall, subject to the provisions of paragraphs 3 and 4 of this Article,without delay grant to the airline or airlines designated the appropriate operating permission.

3. The aeronautical authorities of one contracting Party may require an airline designated by the other contracting Party to satisfy them that it is qualified to fulfill the conditions prescribed under the laws and regulations normally and reasonably applied by them in a manner not inconsistent with the provisions of the Convention to the operation of international air services.

4. Each contracting Party shall have the right to refuse, withhold or revoke the grant to an airline of the operating permission referred to in paragraph 2 of this Article or to impose such conditions as it may deem necessary on the exercise by such airline of the privileges specified in paragraph 2 of Article 2 of the present Agreement, in any case where it is not satisfied that substantial ownership and effective control of that airline are vested in the contracting Party designating the airline or in its nationals.

5. Subject to the statutory powers of the aeronautical authorities of the contracting Parties with regard to the capacity referred to in Article 8 of the present Agreement, an airline designated and  authorized in accordance with the provisions of paragraphs 1 and 2 of this Article may begin to operate the agreed services provided that tariffs established in accordance with the provisions of Article 9 of the present Agreement are in force in respect of those services.

6. Each contracting Party shall have the right to suspend the exercise by a designated airline of the privileges specified in paragraph 2 of Article 2 of the present Agreement or to impose such conditions as it may deem necessary on the exercise by a designated airline of those privileges, in any case where that airline fails to comply with the laws and regulations referred to in Article 7 of the present Agreement or otherwise fails to operate in accordance with the conditions prescribed in the present Agreement; provided that,unless immediate suspension or imposition of conditions is essential to prevent further infringements of such laws or regulations, this right shall be exercised only after consultation with the other contracting Party.

ARTICLE 4
　The charges which either of the contracting Parties may impose, or permit to be imposed, on the designated airlines of the other contracting Party for the use of airports and other facilities under its control shall be just and reasonable and not higher than would be paid for the use of such airports and facilities by the airlines of a0ny third country, or national airline of the first contracting Party engaged in international air services.

ARTICLE 5
1. Fuel, lubricating oils) spare parts) regular equipment and aircraft stores retained on board aircraft engaged in the agreed services operated by the designated airlines of either contracting Party shall be exempt from customs duties, excise taxes, inspection fees and other similar duties, taxes or charges in the territory of the other contracting Party, even when they are consumed or used on the part of the journey performed over that territory.

2. Fuel, lubricating oils, spare parts, regular equipment and aircraft stores taken on board aircraft of the designated airlines of either contracting Party in the territory of the other contracting Party and used in the agreed services shall, subject to the regulations of the latter contracting Party, be exempt from customs duties, excise taxes,inspection fees and other simi1ar duties, taxes or charges.

3. Fuel, lubricating oils, spare parts, regular equipment and aircraft stores introduced for the account of the designated airlines of either contracting Party and stored in the territory of the other contracting Party under customs supervision for the purpose of supplying aircraft of those designated airlines, shall, subject to the regulations of the latter contracting Party, be exempt from customs duties, excise taxes, inspection fees and other similar duties, taxes or charges.

ARTICLE6
　Certificates of airworthiness, certificates of competency and licenses issued or rendered valid by one contracting Party, and still in force, shall be recognized as valid by the other contracting Party for the purpose of operating the agreed services, provided that the requirements under which such certificates  or licenses were issued or rendered valid are equal to or above the minimum standards which may be established pursuant to the Convention. Each contracting Party reserves the right, however, to refuse to recognize, for the purpose of flight above its own territory, certificates of competency and licenses granted to its own nationals by another State.

ARTICLE 7
1. The laws and regulations of one contracting Party relating to the admission to or departure from its territory of aircraft engaged in international air navigation, or to the operation and navigation of such aircraft while with in its territory, shall be applied to the aircraft of the designated airlines of the other contracting Party, and shall be complied with by such aircraft upon entering or departing from or while within the territory of the first contracting Party.

2. The laws and regulations of one contracting Party relating to the admission to or departure from its territory of passengers, crew or cargo of aircraft, such as regulations relating to entry, clearance, immigration, passports, customs and quarantine, shall be complied with by or on behalf of passengers, crew or cargo of the aircraft of the designated airlines of the other contracting Party upon entrance into or departure from or while within the territory of the first contracting Party.

ARTICLE 8
　In order to develop the air services on the specified routes or sectors thereof, for the purpose of achieving and maintaining equilibrium between the capacity of the agreed services and the requirements of the public for air transportation, as determined by the aeronautical authorities of the contracting Parties: -

1. The designated airline or airlines of each contracting Party shall enjoy fair and equal opportunity for the operation of the agreed services between the territories of the two contracting Parties.

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

3. The agreed services provided by the designated airlines of the contracting Parties shall bear a close relationship to the requirements of the public for such services.

4. The agreed services provided by a designated airline shall retain as their primary objective the provision at a reasonable load factor of capacity adequate to current and reasonably anticipated requirements for the carriage of passengers, cargo and mail originating from or destined for the territory of the contracting Party which has designated the airline. Provision for the carriage of passengers, cargo and mail both taken up and discharged at points on the specified routes in the territories of States other than that designating the airline shall be made in accordance with the general principles that capacity shall be related to:

(a) traffic requirements between the territory of the contracting Party which has designated the airline and the countries of destination of the traffic;

(b) traffic requirements of the area through which the airline passes;and

(c) the requirements of through airline operations.

ARTICLE 9
1. The tariffs on any agreed service shall be established at reasonable levels, due regard being paid to all relevant factors including cost of operation, reasonable profit, characteristics of service (such as standards of speed and accommodation) and the tariffs of other airlines as applied on the specified routes or sectors thereof.

2. These tariffs shall be fixed in accordance with the following provisions:-

(a) Agreement on the tariffs shall, wherever possible, be reached by the designated airlines concerned through the ratefixing machinery of the International Air Transport Association. When this is not possible, tariffs in respect of each of the specified routes and sectors thereof shall be agreed between the designated airlines concerned. In any case the tariffs shall be submitted for the approval of the aeronautical authorities of the contracting Parties at least thirty days before the proposed date of their introduction; in specia1 cases, this time limit may be reduced, subject to the agreement of the said authorities.

(b) If the designated airlines concerned cannot agree on the tariffs, or if the aeronautical authorities of either contracting Party do not approve the tariffs submitted, in accordance with the provisions of paragraph 2 (a) of this Article, the aeronautical authorities of the contracting Parties shall endeavor to reach agreement on the appropriate tariffs.

(c) If the agreement under the provisions of paragraph 2 (b) of this Article cannot be reached, the dispute shall be settled in accordance with the provisions of Article 12 of the present Agreement.

(d) No new tariff shall come into effect if the aeronautical authorities of either contracting Party are dissatisfied with it except under the terms of paragraph 4 of Article 12 of the present Agreement Pending determination of the tariffs in accordance with the provisions of this Article, the tariffs already in force shall prevail.

ARTICLE 10
　The aeronautical authorities of either contracting Party shall supply to the aeronautical authorities of the other contracting Party, at their request, such information and statistics relating to traffic carried on the agreed services by the designated airlines of the first contracting Party to and from the territory of the other contracting Party as may normally be prepared and submitted by the designated airlines to their national aeronautical authorities for publication. Any additional statistical traffic data which the aeronautical authorities of one contracting Party may desire from the aeronautical authorities of the other contracting Party shall, upon request, be a subject of mutual discussion between the aeronautical authorities of the two contracting Parties.

ARTICLE 11
　It is the intention of both contracting Parties that there should be regular and frequent consultations between the aeronautical authorities of the contracting Parties to ensure close collaboration in all matters affecting the fulfillment of the present Agreement.

ARTlCLE 12
1. If any dispute arises between the contracting Parties relating to the interpretation or application of the present Agreement,the contracting Parties shall in the first place endeavor to settle it by negotiation between themselves. This negotiation shall begin within a period of sixty days from the date of receipt of request for such negotiation by one contracting Party from the other contracting Party.

2. If the contracting Parties fail to reach a settlement by negotiation, the dispute may,at the request of either contracting Party, be submitted for decision to a tribunal of three arbitrators, one to be named by each contracting Party and the third to be agreed upon by the two arbitrators so chosen, provided that such third arbitrator shall not be a national of either contracting Party. Each of the contracting Parties shall designate an arbitrator within a period of sixty days from the date of receipt by either contracting Party from the other contracting Party of a diplomatic note requesting arbitration of the dispute and the third arbitrator shall be agreed upon within a further period of sixty days. If either of the contracting Parties fails to designate its own arbitrator within the period of sixty days or if the third arbitrator is not agreed upon within the period indicated, the President of the Council of the lnternational Civil Aviation Organization may be requested by either contracting Party to appoint an arbitrators,  provided that the third arbitrator shall not be a national of either contracting Party.

3. The arbitral tribunal shall determine its seat, prescribe its own rules of procedure and give its decision by a majority vote.

4. The contracting Parties undertake to comply with any decision given under paragraphs 2 and 3 of this Article.

ARTICLE 13
1. Either contracting Party may at any time request consultation with the other contracting Party for the purpose of amending the present Agreement,  such consultation to begin within a period of sixty days from the date of receipt of such request.

2. If the amendment relates to the provisions of the present Agreement other than those of the Schedule, the amendment shall be approved by each contracting Party in accordance with its constitutional procedures and shall enter into force on the date of exchange of diplomatic notes indicating such approval.

3. If the amendment relates only to the Schedule, the consultation shall be between the aeronautical authorities of both contracting Parties. When these authorities agree on a new or revised Schedule, the agreed amendments on the matter shall come into effect after they have been confirmed by an exchange of diplomatic notes.

ARTICLE 14
　If a general multilateral convention concerning air transport comes into force in respect of both contracting Parties, the present Agreement shall be amended so as to conform with the provisions of such convention.

ARTICLE 15
　Either of the contracting Parties may at any time notify the other of its intent ion to terminate the present Agreement. A copy of the notice shall be sent simultaneously to the International Civil Aviation Organization. If such notice is given, the present Agreement shall terminate one year after the date of receipt by the other contracting Party of the notice to terminate, unless by agreement between the contracting Parties the notice under reference is withdrawn before the expiration of that period. If the other contracting Party fails to acknowledge receipt) notice shall be deemed to have been received fourteen days after the date of receipt by the International Civil Aviation Organization of its copy.

ARTICLE 16
　The present Agreement and any amendment thereto shall be registered with the International Civil Aviation Organization.

ARTICLE  17
　The present Agreement shall be approved by each contracting Party in accordance with its constitutional procedures and shall enter into force on the date of exchange of diplomatic notes indicating such approval.

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

　DONE in duplicate, in the English language, at Tokyo this day of January, 1970.

　FOR THE GOVERNMENT OF JAPAN:

　FOR THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES:

SCHEDULE

1. Route to be operated in both directions by the designated air line or airlines of Japan:

　Points in Japan- Taipei- Kaohsiung - Hongkong - Manila - Points in Indochina- Bangkok - Kuala Lumpur and/or Singapore - Djakarta- Points in Australia - Points in New Zealand - Points in the South Pacific - Honolulu

Note: Any flight operating to and from Points in the South Pacific or Honolulu shall make a scheduled stop at a point in Australia or New Zealand.

2. Route to be operated in both directions by the designated airline or airlines of the Republic of the Philippines:

　Points in the Philippines - Tokyo - Honolulu - San Francisco - New York

Note: Any flight operating to and from New York shall make a scheduled stop at San Francisco.

3. The agreed services provided by the designated airline or airlines of either contracting Party shall begin at a point in the territory of that contracting Party, but, except where otherwise provided, other points on the specified route may at the option of the designated airline be omitted on any or all flights.

　Tokyo, January 20, 1970

　Excellency,I have the honour to refer to the Air Services Agreement between the Government of Japan and the Government of the Republic of the Philippines signed today and to confirm on behalf of the Government of Japan, the understanding reached between the representatives of both Governments during the course of the negotiations on the said Agreement concerning the following measures to be taken by their Governments within the scope of the laws and regulations in force in the respective countries.

1. The designated airlines of either country shall be permitted within the territory of the other country to establish and maintain their branches and to engage in activities necessary for the operation of the agreed services.

2. The designated airlines of either country shall be permitted to maintain at their branches in the territory of the other country their respective managers, senior staff and technical staff.

3. The designated airlines of either country shall be permitted to transfer freely ,in U.S. dollars, at the prevailing rate of exchange in the official market at the time of remittance, the excess of receipts over expenditure earned in the territory of the other country in connection with the operation of agreed services, and to establish and maintain, for the operation of such services, deposit accounts in foreign currencies and in convertible domestic currency.

　I have further the honour to request to Your Excellency to be good enough to confirm. on behalf of your Government, that this is also the understanding of the Government of the Republic of the Philippines.

　I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

　Kiichi Aichi
Minister for Foreign Affairs:

　His Excellency
R.S. Busuego
Chairman, Philippine Air Panel

　Tokyo, 20 January 1970

　I have the honor to acknowledge the receipt of Your Excellency's Note of today's date, which reads as follows:

"(Japanese Note)"

　I have the honor to confirm on behalf of my Government that the foregoing is also the understanding of the Government of the Republic of the Philippines.

　I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

　R.S. BUSUEGO
Chairman
Philippine Air Panel

　His Excellency
Kiichi Aichi
Minister for Foreign Affairs of. Japan

MEMORANDUM OF UNDERSTANDING

　During the course of the negotiations on the Air Services Agreement between the Government of Japan and the government of the Republic of the Philippines signed today (hereinafter referred to as "the Agreement") and the Exchange of Notes effected on the same date (hereinafter referred to as "the Exchange of Notes"), the representatives of the two governments reached the following understanding

1. For the purpose of Article 5 of the Agreement, the term "excise taxes" shall be understood to refer to the taxes leviable by either contracting Party on fuel, lubricating oils,spare parts, regular equipment and/or such article ordinarily considered as aircraft stores.

2. The charges for services actually rendered such as those beyond the official working hours shall, by their nature, not be exempt under Article 5 of the Agreement.

3. With regard to paragraph 2 of the Exchange of Notes,managers, senior staff and technical staff of the designated airlines of Japan will be permitted to enter and stay in the Philippines, for the purpose of operating the agreed services, on a prearranged employee status under Section 9 (g) of the Philippine Immigration Act of 1940,as amended,and managers,senior staff and technical staff of the designated airlines of the Republic of the Philippines will be permitted to eater and stay in Japan, for the purpose of operating the agreed services,on a resident status under 4-1-5, 4-1-16-1 of 4-1-16-3 of the Japanese Immigration Control Order of 1951,as amended.

　The permission referred to herein shall be given on the basis of reciprocity.

　Tokyo,January 20,1970.

　FOR THE GOVERNMENT OF JAPAN

　FOR THE GOVERNMENT OF THE REPUBLIC OF  THE PHILIPPINES: