Air Services Agreement between the Government of the Republic of Latvia and the Government of the Republic of Lithuania

The Government of the Republic of Latvia and the Government of the Republic of the Lithuania, hereinafter called “The Contracting Parties”,

Desiring to conclude an Agreement, in conformity with the Convention on International Civil Aviation opened for signature at Chicago on the seventh day of December, 1944, for the purpose of establishing schedule air services between and beyond their respective territories and regulation of civil aviation activities,

Have agreed as follows:

Article 1

Definitions

1. For the purpose of this Agreement and its Route Schedule unless the context otherwise requires:

a) the term the 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 the Convention under Articles 90 and 94 thereof, which have been adopted by both Contracting Parties;

b) the term aeronautical authorities means in the case of the Republic of Latvia the Ministry of Transport, in the case of the Republic of Lithuania the Ministry of Transport, or in both cases any person or body authorized to perform any functions at present exercisable by the above mentioned authorities;

c) the term designated airline means an airline which has been designated and authorized in accordance with Article 3 of this Agreement to operate the specified routes corresponding to the Route Schedule to this Agreement;

d) the term territory, air service, international air service, airline, and stop for non-traffic purposes have the meaning laid down in Articles 2 and 96 of the Convention;

e) the term tariff means:

(i) the fare charged by an airline for the carriage of passengers and their baggage on scheduled air services;

(ii) the charges and conditions for services ancillary to such carriage, which are offered by airliners;

(iii) the amount charged or to be charged by an airline for the carriage of cargo (mail excluded) on schedules air services;

(iv) the commission to be paid by an airline to an agent on the sales of tickets for the carriage of passengers and their baggage or completing air waybills on scheduled air services;

(v) the conditions governing the availability of such tariff and any significant benefits attached to it.

f) the term user charge means a charge made to airlines by the competent authorities for the use of an airport or air navigation facilities for aircraft, their crews, passengers and cargo;

g) the term capacity means

• in relation to an aircraft, the payload of that aircraft available on the route or section of a route;

• in relation to an agreed service, the capacity of the aircraft used on such service multiplied by the frequency operated by such aircraft over a given period and route or section of a route.

h) the terms agreed service and specified route means international air service pursuant to Article 2 of this Agreement and the route specified in the Route Schedule.

2. The headlines of each Article of this Agreement have only reference and auxiliary character and by no means limit or describe the purpose or the intention of the present Agreement.

Article 2

Traffic Rights

1. Each Contracting Party grants to the other Contracting Party the following rights for the conduct of international air services by the airline designated by the other Contracting Party:

a) to fly without landing across their territory;

b) to make stops in the said territory for non-traffic purpose;

c) to make stops in the said territory at the points specified in the Route Schedule to this Agreement for the purpose of taking up and discharging on international traffic in passengers, cargo and mail, separately ore in combination.

2. The airlines of each Contracting Party, other than those designated under Article 3 of this Agreement shall also enjoy the rights in paragraph 1 a) and b) of this Article on scheduled air services.

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

Article 3

Designation of Article

1. Each Contracting Party shall have the right to designate in writing to the other Contracting Party airline or airlines for the purpose of operating the agreed services on the specified routes. However, each Contracting Party may designate only one airline to operate on any single route in the Route Schedule to this Agreement.

2. Each Contracting Party shall have the right to withdraw or alter such designations.

3. On receipt of such a written designation the other Contracting Party shall, subject to paragraph 4 and 5 of this Article, without delay grant to the designated airline or airlines the appropriate operating authorizations.

4. 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 prescribe under the laws and regulations normally and reasonably applied to the operation of international air services by such authorities in conformity with the provisions of the Convention.

5. Each Contracting Party shall the right to refuse to grant the operating authorization referred to in paragraph 3 of this Article, or to impose such conditions, as it mat deem necessary, in the exercise by a designated airline of the rights specified in Article 2, in any case where it is not satisfied that substantial ownership and effective control of that airline are vested in the Contracting Party designating this airline or in its national, or both.

6. When an airline has been so designated and authorized, it may at any time being to operate the agreed services, provided that the airline complies with all applicable provisions of this Agreement, including tariff established according to Article 9 of this Agreement, and in force in respect of that service.

Article 4

Revocation, Suspension and Imposition of Conditions

1. Each Contracting Party shall have the right to withhold or revoke an operating authorization or to suspend the exercise of the rights specified in Article 2 of this Agreement by an airline designated by the other Contracting Party, or to impose such conditions, as it may deem necessary, in the exercise of these rights:

a) in the case of failure by such airline to comply with the laws or regulations of the Contracting Party granting these rights;

b) in the case the airline otherwise fails to operate in accordance with the conditions prescribed under this Agreement;

c) in any case where it is not satisfied that substantial ownership and effective control of that designated airline are vested in the Contracting Party designating the airline or in its nationals, or both.

2. Unless immediate revocation or suspension of the operating authorization mentioned in paragraph 1 of this Article or imposition of the conditions therein is essential to prevent further infringements of laws or regulations, such right shall be exercised only after consultation with the other Contracting Party. In this case consultations shall be held within thirty (30) days from the date, when the other Contracting Party receives such request in writing.

Article 5

User Charges

The charges levied in the territory of either Contracting Party for the use of airports and other aviation facilities by the aircraft of any designated airline of the other Contracting Party shall not be higher than those levied on aircraft of a national airline engaged in similar international air services.

Article 6

Customs Duties

1. Aircraft operated on international air services by the designated airlines of either Contracting Party, as well as their regular equipment, supplies of fuel and lubricants and aircraft stores (including food, beverages and tobacco) on board such aircraft shall be exempt from all custom duties, inspection fees and other duties or taxes on arriving in the territory of the other Contracting Party, provided such equipment and supplies remain on board the aircraft up to such time as they are reexported.

2. There shall also be exempt from the duties, fees and charges referred to in paragraph 1 of this Article, with the exception of charges based on the cost of the service provided:

a) aircraft stores (including food, beverages and tobacco), introduced into or supplied in the territory of a Contracting Party, and taken on board, within reasonable limits, for use on outbound aircraft engaged in an international air service of a designated airline of the other Contracting Party;

b) spare parts including engines introduced into territory of a Contracting Party for the maintenance or repair of the aircraft used in international air service of a designated airline of the other Contracting Party;

c) fuel, lubricants and consumable technical supplies introduced into or supplied in the territory of a Contracting Party for use in an aircraft engaged in an international air service of a designated airline of the other Contracting Party, even when these supplies are to be used on a part of the journey performed over the territory of the Contracting Party in which they are taken on board.

3. Equipment and supplies referred to in paragraph 2 of this Article may be required to be kept under the supervision or control of the appropriate authorities.

4. There shall also be exempt from all customs duties and taxes on mutual basis on advertising and information materials and transport documents which are to be used by the designated airline.

5. The regular airborne equipment, as well as the materials and supplies retained on board the aircraft 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 said authorities up to such time as they are reexported or otherwise disposed of in accordance with customs regulations.

6. Baggage and cargo in direct transit across the territory of a Contracting Party shall be exempt from customs duties, excise taxes and similar fees and charges not based on the cost of services provided on arrival.

Article 7

Application of Laws and Regulations

1. While entering, within or leaving the territory of one Contracting Party, its laws and regulations relating to the operation and navigation of aircraft shall be complied with by the other Contracting Party's airlines.

2. The laws and regulations of one Contracting Party regarding entry, clearance, transit, 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 its crew, passengers, cargo and mail, upon transit of, admission to, departure from and while within the territory of such a Contracting Party.

3. Passengers in transit across the territory of either Contracting Party shall be subject to no more than a very simplified customs and immigration control, except in respect of security measures against violence and piracy, unless they leave the territory of the airport, designated for this purpose.

Article 8

Capacity Provisions

1. There shall be fair and equal opportunity for the designated airlines of each Contracting Party to operate air services on any route specified in the Route Schedule to this Agreement.

2. In the operation of the agreed services on the routes specified in the Route Schedule to this Agreement the designated airlines of either Contracting Party shall take into account the interests of the designated airline or airlines of the other Contracting Party so as not to affect unduly the air services which the latter airline or airlines operate.

3. The agreed services provided by a designated airline shall retain as their primary objective the provision of capacity adequate to current and reasonably anticipated requirements for the carriage of passengers, mail and cargo, coming from or destined for the territory of the Contracting Party designated the airline.

4. The capacity to be provided on the specified routs shall be such as is from time to time jointly determined by the aeronautical authorities of the Contracting Parties.

Article 9

Tariffs

1. The tariffs to be charged by a designated airline on any agreed service shall be established at reasonable levels, due regard being paid to all relevant factors, including cost of operation, reasonable profit, standards of service, the conditions of competition and of the market as well as the interests of transport users. The aeronautical authorities may refuse to approve a tariff only, if it does not comply with the above mentioned principle. These tariffs shall be fixed in accordance with the following provisions of this Article.

2. The tariffs referred to in paragraph 1 of this Article may be agreed between the designated airlines concerned in respect of each of the specified routes. However, such agreement shall not be mandatory requirement for the filing and establishment of tariffs.

3. Each tariff shall be filed for the approval to the aeronautical authorities of both Contracting Parties at least thirty (30) days before the proposed date of its introduction.

The aeronautical authorities of both Contracting Parties may shorten this period by mutual agreement.

4. Each proposed tariff may be approved by the aeronautical authorities of either Contracting Party at any time. In the absence of such approval it will be treated as having been approved by the aeronautical authorities of a Contracting Party unless within twenty (20) days after the date of filing the aeronautical authorities of that Contracting Party have served a written notice of disapproval of the proposed tariff. However, in case of disapproval the aeronautical authorities may at the request of either try to determine the tariff by agreement.

5. If the aeronautical authorities cannot determine a tariff under the provisions of paragraph 4 of this Article the dispute may at the request of either be settled in accordance with the provisions of Article 17 of this Agreement.

6. Each tariff established in accordance with the provisions of this Article shall remain in force until it has been replaced by a new tariff determined in accordance with the provisions of this Article. Unless otherwise agreed by the aeronautical authorities of both Contracting Parties a tariff shall not have its validity extended by virtue of this paragraph for more than twelve (12) months from the date on which it would otherwise have expired.

Article 10

Commercial and Financial Provisions

1. Each Contracting Party grants to the designated airline or airlines of the other Contracting Party, on the basis of reciprocity, the right to maintain in its territory offices and representatives, including administrative, commercial, and technical personnel, as may be necessary for the requirements of the designated airline.

2. The designated airline or airlines of each Contracting Party shall have the right to engage in the sale of air transportation in the territory of the other Contracting Party, either directly or through agents. The Contracting Parties shall not restrict the right of the designated airlines of each Contracting Party to sell, and of any person to purchase, such transportation, provided reciprocity is applied.

3. The above mentioned activities shall be carried out in accordance with the laws and regulations of the Contracting Party in which they take place.

4. Accounts and payments between the designated airlines of Contracting Parties shall be settled in conformity with the provisions of the payment agreement being in force between both countries. In the absence of the appropriate provisions of payment agreement, the above mentioned accounts and payments shall be settled in conformity with laws and regulations being in force in their territories.

5. The designated airlines of the Contracting Parties shall be free to transfer the excess of the receipts over expenditure in the territory of the ale. The revenues from sales of air transport services and ancillary or supplemental services provided directly or through agents, as well as commercial interest earned on such revenues while on deposit awaiting transfer, shall be included in such net transfer.

6. The conversion and remittance of such revenues shall be conducted at the rate of exchange applicable to current transaction which is in effect at the time such revenues are presented for conversion and remittance, and shall not be subject to any charges except those normally made by banks for carrying out such conversion and remittance.

Article 11

Approval of Flight Schedules

1. The airline or airlines of each Contracting Party shall submit its or their traffic programmes (for summer and winter seasons) for approval to the aeronautical authorities of the other Contracting Party at least thirty (30) days prior to the beginning of the operation. The programme shall include in particular the timetables, the frequency of the services, and the types of aircraft to be used and number of seats available. The aeronautical authorities of the other Contracting party shall inform the airline or airlines in writing of their affirmative or negative decision on this matter within twenty (20) days.

2. Each alteration made at later date shall be submitted fort approval to the aeronautical authorities of the other Contracting Party.

3. Requests for permission to operate additional flights can be submitted by the designated airline of one Contracting Party for approval directly to the aeronautical authorities of the other Contracting Party.

Article 12

Exchange of Statistics

The aeronautical authorities of either Contracting Party shall, on request, provide to the aeronautical authorities of the other Contracting Party such periodic or other statements of statistics, as may be reasonably required for the purpose of reviewing the capacity provided on the agreed services by the designated airline or airlines. Such information shall include, as far as possible, details of the origins and destinations of the traffic carried.

Article 13

Safety

1. Each Contracting Party shall recognize as valid, for the purpose of operating the air transportation provided for in this Agreement, certificates of airworthiness, certificates of competency, and licenses issued or validated by the other Contracting Party and still in force, provided that the requirements for such certificates or licenses at least equal the minimum standards which may be established pursuant to the Convention. Each Contracting Party may, however, refuse to recognize as valid for the purpose of flight above its own territory, certificates of competency and licenses granted to or validated for its own nationals by the other contracting Party.

2. Each Contracting Party may request consultations concerning the safety standards maintained by the other Contracting Party relating to aeronautical facilities, aircrew, aircraft, and security requirements for operation of the designated airlines. If, following such consultations, one Contracting Party finds that the other Contracting Party does not effectively maintain and administer safety standards and requirements in these areas that at least equal the minimum standards which may be established pursuant to the Convention, the other Contracting Party shall be notified of such findings and the steps considered necessary to conform with these minimum standards, and the other Contracting Party shall take appropriate corrective action. Each Contracting Party reserves the right to withhold, revoke or limit the operating authorization of an airline or airlines designated by the other Contracting Party in the event the other Contracting Party does not take such appropriate action within a reasonable time.

Article 14

Aviation Security

1. Each Contracting Party reaffirms that its obligation to the other Contracting Party to protect the security of civil aviation against unlawful interference forms an integral part of this Agreement.

2. Each Contracting Party shall in particular act in conformity with the aviation security provisions of the Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo on 14 September, 1963, the Convention for the Suppression of Unlawful Seizure of Aircraft, signed at The Hague on 16 December, 1970, the Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal on 23 September, 1971 and the Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, done at Montreal on 23 September 1971, signed at Montreal on 24 February 1988.

3. Each Contracting Party shall be provided at its request with all necessary assistance by the other Contracting Party 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 in their mutual relations, act in conformity with the applicable aviation security provisions established by the International civil Aviation Organization and designated as Annex to the Convention. Each Contracting Party shall require that operators of aircraft of its registry or operators of aircraft having their principal place of business or permanent in its area operators of airports in its territory, act in conformity with such aviation security provisions.

5. Each Contracting party agrees that operators of aircraft may be required to observe the aviation security provisions referred to in paragraph 4 of this Article 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 or loading. Each Contracting Party shall also give sympathetic consideration to any request from the other Contracting Party for reasonable special security measures to meet a particular threat.

6. 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, each Contracting Party shall assist the other Contracting Party by facilitating communications and other appropriate measures intended to terminate rapidly and safely such incident or threat thereof.

Article 15

Consultations

1. In a spirit of close co-operation, the aeronautical authorities of the Contracting Parties shall consult each other from time to time with a view to ensuring the satisfactory compliance with the provisions of this Agreement and of its Route Schedule.

2. Either Contracting Party may request consultations, which may be through discussion or by correspondence and shall begin within a period of thirty (30) days of the date of receipt of the request, unless otherwise agreed by the Contracting Parties.

Article 16

Amendments

1. In either of the contracting Parties consider it desirable to modify any provision of this Agreement, it may request consultation with the other Contracting Party; such consultation, which may be between aeronautical authorities, and which may be through discussion or by correspondence, shall begin within a period of sixty (60) days of the date of the receipt of the request, unless otherwise agreed by the Contracting Parties. Any modifications so agreed shall come into force when approved in accordance with the procedures necessary under national laws of both Contracting Parties and as confirmed by an exchanges of diplomatic notes.

2. Modifications to the Route Schedule to this Agreement may be made by direct agreement between the aeronautical authorities of the Contracting Parties and shall come into force after exchange of appropriate letters.

Article 17

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 negotiation.

2. If the Contracting Parties fail to reach a settlement of the dispute by negotiation, they may agree to refer the dispute for decision to some person or body, or the dispute may at request of either Contracting Party be submitted 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 so nominated. Each of the Contracting Parties shall nominate an arbitrator within a period of sixty (60) days form 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 as the case requires. In all cases, the third arbitrator shall be national of a third State, shall act as president of the tribunal, and shall determine the place, where arbitrator will be held. If the President considers that he is a national of a State which cannot be regarded as neutral in relation to the dispute, the most Senior Vice-President who is not disqualified on that ground shall make the appointment.

3. Each Contracting Party shall bear the expenses and remuneration necessary for its arbitrator, the fee for the third arbitrator and the expenses necessary fir this one as well as those due to the activity of the tribunal shall be equally shared by the Contracting Parties.

4. The Contracting Parties undertake to comply with any decision given under paragraph 2 of this Article.

5. If and so long as either Contracting Party fails to comply with any decision 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 or airlines in default.

Article 18

Termination

1. Either Contracting Party may at any time give notice in writing to the other Contracting Party of its decision to terminate this Agreement; such notice shall be simultaneously communicated to the International Civil Aviation Organization. In such case the Agreement shall terminate twelve (12) months after the date of receipt of the notice by the other Contracting Party, unless the notice to terminate is withdrawn by agreement before the expiry of this period.

2. In the absence of acknowledgement of receipt by the other Contracting Party, notice shall be deemed to have been received fourteen (14) days after the receipt of the notice by the International Civil Aviation Organization.

Article 19

Conformity with Multilateral Conventions

1. If a general Multilateral Air Convention concerning any matter covered by this Agreement, accepted by both Contracting parties, comes into force, the relevant provisions of such convention shall prevail.

2. Consultations in accordance with Article 15 of this Agreement may be held with a view to determining the extent to which this Agreement is affected by the provisions of the Multilateral Convention.

Article 20

Registrations

This Agreement and any subsequent amendment thereto shall be registered with the International Civil Aviation Organization.

Article 21

Duration, Entry into Force

1. This Agreement shall be valid for five (5) years. In the even that neither of the Contracting Parties gives a notice to terminate the Agreement twelve (12) months prior to the expiry date of the said five (5) years period, its validity shall be extended for an indefinite time.

2. The two contracting Parties shall notify each other by exchange of diplomatic notes that their respective requirements for the entry into force of the Agreement have been completed.

The Agreement shall enter into force on the date of the later of two notes.

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

Done at Riga this 9th day of September, 1996, in duplicate in Latvian, Lithuanian and English languages, all three texts being equally authentic. In case of differences in interpretation and application of the present Agreement, the English text shall prevail.

For the Government For the Government

of the Republic of Latvia of the Republic of Lithuania

ROUTE SCHEDULE to the Air Services Agreement between the Government of the Republic of Latvia and the Government of the Republic of Lithuania

1. The designated airlines of the Republic of Latvia shall be entitled to operate air services on the routes specified hereunder;

points in Latvia - points in Lithuania - points beyond and vice versa.

2. The designated airlines of the Republic of Lithuania shall be entitled to operate air services on the routes specified hereunder;

points in Lithuania - points in Latvia - points beyond and vice versa.

3. Any points beyond may be served by the designated airline(s) of each Contracting Party without exercising fifth freedom traffic rights.

The eventual exercise of fifth freedom traffic rights may be agreed upon by the aeronautical authorities of the two Contracting Parties.