Concerning additional matters related to ownership, investment and control
ANNEX 4Supplementary provisions
ANNEX 4 Concerning additional matters related to ownership, investment and control Article 1 Ownership of airlines of a Party 1. Ownership by nationals of a Member State or States of the equity of a US airline shall be permitted, subject to two limitations. First, ownership by all foreign nationals of more than 25 % of a corporation's voting equity is prohibited. Second, actual control of a US airline by foreign nationals is also prohibited. Subject to the overall 25 % limitation on foreign ownership of voting equity: (a) ownership by nationals of a Member State or States of: (i) as much as 25 % of the voting equity; and/or (ii) as much as 49,9 % of the total equity of a US airline shall not be deemed, of itself, to constitute control of that airline; and (b) ownership by nationals of a Member State or States of 50 % or more of the total equity of a US airline shall not be presumed to constitute control of that airline. Such ownership shall be considered on a case-by-case basis. 2. Ownership by US nationals of a Community airline shall be permitted subject to two limitations. First, the airline must be majority owned by Member States and/or by nationals of Member States. Second, the airline must be effectively controlled by such States and/or such nationals. 3. For the purposes of paragraph (b) of Article 4 and subparagraph 1(b) of Article 5 of this Agreement, a member of the ECAA as of the date of signature of this Agreement and citizens of such a member shall be treated as a Member State and its nationals, respectively. The Joint Committee may decide that this provision shall apply to new members of the ECAA and their citizens. 4. Notwithstanding paragraph 2, the European Community and its Member States reserves the right to limit investments by US nationals in the voting equity of a Community airline made after the signature of this Agreement to a level equivalent to that allowed by the United States for foreign nationals in US airlines, provided that the exercise of that right is consistent with international law. Article 2 Ownership and control of third-country airlines 1. Neither Party shall exercise any available rights under air services arrangements with a third country to refuse, revoke, suspend or limit authorisations or permissions for any airlines of that third country on the grounds that substantial ownership of that airline is vested in the other Party, its nationals, or both. 2. The United States shall not exercise any available rights under air services arrangements to refuse, revoke, suspend or limit authorisations or permissions for any airline of the Principality of Liechtenstein, the Swiss Confederation, a member of the ECAA as of the date of signature of this Agreement, or any country in Africa that is implementing an Open-Skies air services agreement with the United States as of the date of signature of this Agreement, on the grounds that effective control of that airline is vested in a Member State or States, nationals of such a State or States, or both. 3. The Joint Committee may decide that neither Party shall exercise the rights referred to in paragraph 2 of this Article with respect to airlines of a specific country or countries. Article 3 Control of airlines 1. The rules applicable in the European Community on ownership and control of Community air carriers are currently laid down in Article 4 of Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers. Under this Regulation, responsibility for granting an Operating Licence to a Community air carrier lies with the Member States. Member States apply Regulation 2407/92 in accordance with their national regulations and procedures. 2. The rules applicable in the United States are currently laid down in Sections 40102(a)(2), 41102 and 41103 of Title 49 of the United States Code (USC), which require that licences for a US ‘air carrier’ issued by the Department of Transportation, whether a certificate, an exemption, or commuter licence, to engage in ‘air transportation’ as a common carrier, be held only by citizens of the United States as defined in 49 USC §40102(a)(15). That section requires that the president and two-thirds of the board of directors and other managing officers of a corporation be US citizens, that at least 75 % of the voting stock be owned by US citizens, and that the corporation be under the actual control of US citizens. The requirement must be met initially by an applicant, and continue to be met by a US airline holding a licence. 3. The practice followed by each Party in applying its laws and regulations is set out in the Appendix to this Annex.