52022PC0726

EUROPEAN COMMISSION

Brussels, 15.12.2022

COM(2022) 726 final

2022/0418(NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, of the Agreement between the European Union and Japan on certain aspects of air services

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons 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 authorised the Commission to open negotiations with third countries on the replacement of certain provisions in existing bilateral air services agreements with an agreement at Union level (the “horizontal authorisation”). The objectives of such agreements are to give all EU air carriers non-discriminatory access to routes between the European Union and third countries, and hence to bring bilateral air services agreements between Member States and third countries in line with Union law.

•Consistency with existing policy provisions in the policy area

The provisions of the Agreement supersede the corresponding existing provisions in 13 bilateral air services agreements between Member States and Japan.

•Consistency with other Union policies

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

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

Articles 100(2) and 218(5) TFEU.

•Subsidiarity (for non-exclusive competence)

The Union has exclusive external competence in the field if air transport agreements. Furthermore, the objectives of the Agreement cannot be adequately achieved by the Member States as the matters covered by the Agreement are of horizontal nature. Action at Union level is more effective as the Union has a greater negotiating power than individual Member States. This single agreement will cover the relevant provisions of all bilateral air services agreements between Member States and Japan. Lastly, the proposal is entirely based on the “horizontal authorisation” granted by the Council, taking into account the issues covered by Union law and bilateral air services agreements.

•Proportionality

The Agreement will amend or complement provisions in bilateral air services agreements only to the extent necessary to ensure compliance with Union law.

•Choice of the instrument

The Agreement between the Union and Japan is the most efficient instrument to bring all existing bilateral air services agreements between Member States and Japan into conformity with Union law.

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

•Ex-post evaluations/fitness checks of existing legislation

Not applicable.

•Stakeholder consultations

In line with Article 218(4) TFEU, the Commission has conducted the negotiations in consultation with a special committee. Industry has equally been consulted during the negotiations. Comments made in this process have been taken into account. The Member States concerned verified the accuracy of the references to the bilateral air services agreements. Industry underlined the importance of a sound legal basis for their commercial operations.

•Collection and use of expertise

Not applicable.

•Impact assessment

Not applicable.

•Regulatory fitness and simplification

The proposal provides for simplification of legislation. The relevant provisions of bilateral air services agreements between Member States and Japan will be superseded by provisions in one single agreement.

•Fundamental rights

Not applicable.

4.BUDGETARY IMPLICATIONS

The proposal has no implication for the budget of the Union.

5.OTHER ELEMENTS

•Implementation plans and monitoring, evaluation, and reporting arrangements

The Parties to the Agreement shall notify each other in writing through diplomatic channels about the completion of their respective internal procedures necessary for the entry into force of the Agreement. The Agreement shall enter into force on the date of the later notification.

The Record of Consultations to the initialled Agreement includes commitments on both sides regarding the implementation and application of the Agreement to ensure that any future arrangements on air services between Japan and EU Member States will be fully consistent with Article 2 of the Agreement., Both parties have also expressed their intention to promote regular exchanges of views on aviation matters and issues related to the Agreement.

•Explanatory documents (for directives)

Not applicable.

•Detailed explanation of the specific provisions of the proposal

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 agreements and other related bilateral or multilateral arrangements.

However, traditional designation clauses in Member States’ bilateral air services agreements infringe Union law. They allow a third country to reject, withdraw or suspend the permissions or authorisations of 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 EU air carriers established in the territory of a Member State but owned and controlled by nationals of other Member States. This is contrary to Article 49 of the Treaty on the Functioning of the European Union 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.

In accordance with the mechanisms and directives in the Annex to the “horizontal authorisation”, the Commission has negotiated an Agreement with Japan that supersedes certain provisions in the existing bilateral air services agreements between Member States and Japan. Article 2 of the Agreement replaces the traditional designation clauses with an EU designation clause, permitting all EU carriers to benefit from the right of establishment.

The negotiations on the Agreement having been successfully concluded, it should be signed on behalf of the European Union. A decision to this effect is proposed herewith.

2022/0418 (NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, of the Agreement between the European Union and Japan on certain aspects of air services

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 100(2), in conjunction with Article 218(5) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)On 5 June 2003, the Council authorised the Commission to open negotiations with third countries on the superseding of certain provisions in existing bilateral agreements with an agreement at Union level.

(2)The Commission has negotiated, on behalf of the Union, an Agreement with Japan on certain aspects of air services (‘the Agreement’). The negotiations were successfully concluded by the initialling of the Agreement on 21 September 2022.

(3)The objective of the Agreement is to bring bilateral air services agreements between 13 Member States and Japan in line with Union law.

(4)Therefore, the Agreement should be signed on behalf of the Union, subject to its conclusion at a later date,

HAS ADOPTED THIS DECISION:

Article 1

The signing of the Agreement between the European Union and Japan on certain aspects of air services (‘the Agreement’) is hereby approved on behalf of the Union, subject to its conclusion 1 .

Article 2

The Council Secretariat General shall establish the instrument of full powers to sign the Agreement, subject to its conclusion, for the person(s) indicated by the Commission.

Article 3

This Decision shall enter into force on the day of its adoption.

Done at Brussels,

For the Council

The President

(1) The text of the Agreement will be published together with the decision on its conclusion.

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EUROPEAN COMMISSION

Brussels, 15.12.2022

COM(2022) 726 final

ANNEX

to the

proposal for a Council Decision

on the signing, on behalf of the European Union, of the Agreement between the European Union and Japan on certain aspects of air services

AGREEMENT BETWEEN THE EUROPEAN UNION AND JAPAN ON CERTAIN PROVISIONS OF AGREEMENTS BETWEEN MEMBER STATES OF THE EUROPEAN UNION AND JAPAN FOR AIR SERVICES

THE EUROPEAN UNION and JAPAN,

NOTING that, under the law of the European Union, air carriers, which have a valid operating licence issued by a Member State of the European Union and are established in a Member State of the European Union, have the right of non-discriminatory access to routes between Member States of the European Union and third countries;

HAVING REGARD to the agreements between the European Union and certain third countries providing for the possibility for such third countries and their nationals to acquire ownership and control of air carriers licensed in accordance with the law of the European Union;

RECOGNISING that consistency between the law of the European Union and certain provisions of agreements between Member States of the European Union and Japan for air services will provide a sound legal basis for air services between the European Union and Japan, preserve the continuity of such air services, and contribute to the further development of the relationship between the European Union and Japan in the field of air transport; and

NOTING that it is not a purpose of this Agreement to affect the interpretation of the provisions of existing agreements between Member States of the European Union and Japan for air services concerning traffic rights,

HAVE AGREED AS FOLLOWS:

ARTICLE 1

For the purposes of this Agreement:

(a)"Contracting Party" means a contracting party to this Agreement;

(b)"Member State" means a Member State of the European Union; and

(c)"party" means a contracting party to the relevant agreement between a Member State and Japan for air services listed in Annex I.

ARTICLE 2

1. The provisions in paragraph 2 of this Article shall apply in place of the corresponding provisions listed in Annex II-A.

2.(a) Each party reserves the right to withhold or revoke the privileges, the rights or the authorisation specified in the corresponding provisions listed in Annex II-B in respect of an airline designated by the other party, or to impose such conditions as it may deem necessary on the exercise by the airline of the privileges or the rights, or on the authorisation, in any case where one of the following conditions is satisfied:

(i) in the case of an airline designated by the party which is a Member State:

(A) the airline is not established in the territory of that party or does not have a valid operating licence issued by a Member State in accordance with the law of the European Union;

(B) effective regulatory control of the airline is not exercised or not maintained by the Member State responsible for issuing its air operator's certificate, or the relevant aeronautical authority is not clearly identified in the designation;

(C) majority ownership and effective control of the airline are not vested in Member States or States listed in Annex III, or in nationals of such States;

(D) the airline does not have its principal place of business in the territory of the Member State from which it has received its operating licence;

(E) the airline has been given operating permission under an agreement between another Member State and Japan for air services, and Japan can demonstrate that it would be circumventing restrictions on routes and capacity under that agreement by operating agreed services under the agreement between that party and Japan on a route which includes a point in that other Member State; or

(F) the airline holds an air operator's certificate issued by a Member State and there is no agreement between that Member State and Japan for air services and that Member State has not consented to the operation of international air services by an airline of Japan between that Member State and Japan; and

(ii) in the case of an airline designated by Japan, substantial ownership and effective control of the airline are not vested in Japan or in nationals of Japan.

(b) In exercising its right under this paragraph, and without prejudice to its rights under subparagraphs (a)(i)(E) and (F) of this paragraph, Japan shall not discriminate between airlines designated by the party which is a Member State, of which majority ownership and effective control are vested in Member States or States listed in Annex III, or in nationals of such States, on the basis of their ownership and control.

ARTICLE 3

1. References in each of the agreements listed in Annex I to airlines of the Member State which is a party to that agreement shall be understood as referring to airlines designated by that Member State.

2. In addition to paragraph 1 of this Article, references in each of the provisions listed in Annex IV of the relevant agreement listed in Annex I to airlines of the Member State which is a party to that agreement shall be understood as referring also to airlines of that Member State which are not designated by that Member State.

ARTICLE 4

The Annexes to this Agreement shall form an integral part of this Agreement.

ARTICLE 5

1. Either Contracting Party may at any time request consultations with the other Contracting Party for the purpose of amending this Agreement. Such consultations shall begin within a period of sixty days from the date of receipt of such request.

2. This Agreement may be amended by agreement between the Contracting Parties and amendments shall enter into force in the manner as described in Article 6 of this Agreement.

3. Notwithstanding paragraph 2 of this Article, amendments related only to the Annexes may be made by means of an exchange of diplomatic notes between the European Union and the Government of Japan, in conformity with their applicable domestic procedures.

ARTICLE 6

1.Each Contracting Party shall send through diplomatic channels to the other Contracting Party the notification confirming that its internal procedures necessary for the entry into force of this Agreement have been completed.

2.This Agreement shall enter into force on the first day of the next month following the date of receipt of the latter notification.

ARTICLE 7

1. In the event that an agreement listed in Annex I is terminated, the provisions of this Agreement shall cease to apply to that agreement as from the date of termination. References in this Agreement to the terminated agreement shall be deemed null and void as from that date.

2. In the event that all agreements listed in Annex I are terminated, this Agreement shall terminate on the date of the termination of the last agreement.

ARTICLE 8

1. This Agreement is drawn up in duplicate in the Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish, Swedish and Japanese languages, all texts being equally authentic.

2. In case of any divergence of interpretation, the English text shall prevail.

IN WITNESS WHEREOF, the undersigned, duly authorised to this effect, have signed this Agreement.

Done at [….] on [….] day of […] in the year two thousand and twenty-two.

For the European Union

For Japan

ANNEX I

List of agreements referred to in Articles 1, 3 and 7 of this Agreement

Agreements between Member States and Japan for air services, as may have been amended, which are in force at the date of the signature of this Agreement, are as follows:

– Agreement between the Republic of Austria and Japan for Air Services, done at Vienna on 7 March 1989 ("Austria-Japan Agreement");

– Agreement between Belgium and Japan for Air Services, done at Tokyo on 20 June 1959 ("Belgium-Japan Agreement");

– Agreement between Denmark and Japan for Air Services, done at Copenhagen on 26 February 1953 ("Denmark-Japan Agreement");

– Agreement between the Republic of Finland and Japan for Air Services, done at Helsinki on 23 December 1980 ("Finland-Japan Agreement");

– Agreement between France and Japan for Air Services, done at Paris on 17 January 1956 ("France-Japan Agreement");

– Agreement between the Federal Republic of Germany and Japan for Air Services, done at Bonn on 18 January 1961 ("Germany-Japan Agreement");

– Agreement between the Kingdom of Greece and Japan for Air Services, done at Athens on 12 January 1973 ("Greece-Japan Agreement");

– Agreement between the Government of the Republic of Hungary and the Government of Japan for Air Services, done at Budapest on 23 February 1994 ("Hungary-Japan Agreement");

– Agreement between Italy and Japan for Air Services, done at Tokyo on 31 January 1962 ("Italy-Japan Agreement");

– Agreement between the Kingdom of the Netherlands and Japan for Air Services, done at The Hague on 17 February 1953 ("Netherlands-Japan Agreement");

– Agreement between the Government of the Republic of Poland and the Government of Japan for Air Services, done at Tokyo on 7 December 1994 ("Poland-Japan Agreement");

– Agreement between Spain and Japan for Air Services, done at Madrid on 18 March 1980 ("Spain-Japan Agreement"); and

– Agreement between Sweden and Japan for Air Services, done at Stockholm on 20 February 1953 ("Sweden-Japan Agreement").

ANNEX II-A

List of provisions referred to in Article 2(1) of this Agreement

– Article 7(1) of the Austria-Japan Agreement;

– Article 6(1) of the Belgium-Japan Agreement;

– Article 7(1) of the Denmark-Japan Agreement;

– Article 7(1) of the Finland-Japan Agreement;

– Article 6(1) of the France-Japan Agreement;

– Article 3(4) and second sentence of Article 4 of the Germany-Japan Agreement;

– Article 7(1) of the Greece-Japan Agreement;

– Article 7(1) of the Hungary-Japan Agreement;

– Article 6(1) of the Italy-Japan Agreement;

– Article 7(1) of the Netherlands-Japan Agreement;

– Article 7(1) of the Poland-Japan Agreement;

– Article 9(1) of the Spain-Japan Agreement;

– Article 7(1) of the Sweden-Japan Agreement.

ANNEX II-B

List of provisions referred to in Article 2(2) of this Agreement

– Article 4(1) and (2) of the Austria-Japan Agreement;

– Article 4(1) of the Belgium-Japan Agreement;

– Article 5(1) of the Denmark-Japan Agreement;

– Article 4(1) and (2) of the Finland-Japan Agreement;

– Article 4(1) of the France-Japan Agreement;

– Article 3(2) of the Germany-Japan Agreement;

– Article 4(1) of the Greece-Japan Agreement;

– Article 4(1) and (2) of the Hungary-Japan Agreement;

– Article 4(1) of the Italy-Japan Agreement;

– Article 5(1) of the Netherlands-Japan Agreement;

– Article 4(1) and (2) of the Poland-Japan Agreement;

– Article 4(1) of the Spain-Japan Agreement;

– Article 5(1) of the Sweden-Japan Agreement.

ANNEX III

List of States referred to in Article 2(2) of this Agreement

–Iceland (under the Agreement on the European Economic Area);

–the Principality of Liechtenstein (under the Agreement on the European Economic Area);

–the Kingdom of Norway (under the Agreement on the European Economic Area);

–the Swiss Confederation (under the Agreement between the European Community and the Swiss Confederation on Air Transport).

ANNEX IV

List of provisions referred to in Article 3(2) of this Agreement

– Article 4(1), Article 5, and Article 13(3) and (4) of the Austria-Japan Agreement;

– Article 5(1) and (2) of the Belgium-Japan Agreement;

– Article 6(1) and (2), and Article 8 of the Denmark-Japan Agreement;

– Article 4(1) and Article 5 of the Finland-Japan Agreement;

– Article 5(1) and (2), and Article 7 of the France-Japan Agreement;

– Articles 5 and 6 of the Germany-Japan Agreement;

– Article 4(1), Article 5, and Article 13(3) and (4) of the Hungary-Japan Agreement;

– Article 6(1) and (2), and Article 8 of the Netherlands-Japan Agreement;

– Article 4(1), Article 5, and Article 13(3) and (4) of the Poland-Japan Agreement;

– Article 6(1) and (2), and Article 8 of the Sweden-Japan Agreement.

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