[Senate Treaty Document 106-45] [From the U.S. Government Publishing Office] 106th Congress Treaty Doc. SENATE 2d Session 106-45 _______________________________________________________________________ CONVENTION FOR INTERNATIONAL CARRIAGE BY AIR __________ MESSAGE from THE PRESIDENT OF THE UNITED STATES transmitting THE CONVENTION FOR THE UNIFICATION OF CERTAIN RULES FOR INTERNATIONAL CARRIAGE BY AIR, DONE AT MONTREAL, MAY 28, 1999
September 6, 2000.--The Convention was read the first time, and together with the accompanying papers, referred to the Committee on Foreign Relations and ordered to be printed for the use of the Senate ------- U.S. GOVERNMENT PRINTING OFFICE 79-118 WASHINGTON : 2000 LETTER OF TRANSMITTAL ---------- The White House, September 6, 2000. To the Senate of the United States: I transmit herewith, for Senate advice and consent to ratification, the Convention for the Unification of Certain Rules for International Carriage by Air, done at Montreal May 28, 1999 (the ``Convention''). The report of the Department of State, including an article-by-article analysis, is enclosed for the information of the Senate in connection with its consideration of the Convention. I invite favorable consideration of the recommendation of the Secretary of State, as contained in the report provided herewith, that the Senate's advice and consent to the Convention be subject to a declaration on behalf of the United States, pursuant to Article 57(a) of the Convention, that the Convention shall not apply to international carriage by air performed and operated directly by the United States for noncommercial purposes in respect to its functions and duties as a sovereign State. Such a declaration is consistent with the declaration made by the United States under the Convention for the Unification of Certain Rules Relating to International Carriage by Air, done at Warsaw October 12, 1929, as amended (the ``Warsaw Convention'') and is specifically permitted by the terms of the new Convention. Upon entry into force for the United States, the Convention, where applicable, would supersede the Warsaw Convention, as amended by the Protocol to Amend the Warsaw Convention, done at Montreal September 25, 1975 (``Montreal Protocol No. 4''), which entered into force for the United States on March 4, 1999. The Convention represents a vast improvement over the liability regime established under the Warsaw Convention and its related instruments, relative to passenger rights in the event of an accident. Among other benefits, the Convention eliminates the cap on carrier liability to accident victims; holds carriers strictly liable for proven damages up to 100,000 Special Drawing Rights (approximately $135,000) (Special Drawing Rights represent an artificial ``basket'' currency developed by the International Monetary Fund for internal accounting purposes to replace gold as a world standard); provides for U.S. jurisdiction for most claims brought on behalf of U.S. passengers; clarifies the duties and obligations of carriers engaged in code-share operations; and, with respect to cargo, preserves all of the significant advances achieved by Montreal Protocol No. 4. I recommend that the Senate give early and favorable consideration to this Convention and that the Senate give its advice and consent to ratification, subject to a declaration that the Convention shall not apply to international carriage by U.S. State aircraft, as provided for in the Convention. William J. Clinton. LETTER OF SUBMITTAL ---------- Department of State, Washington, June 23, 2000. The President, The White House. The President: I have the honor to submit to you the Convention for the Unification of Certain Rules for International Carriage by Air, done at Montreal May 28, 1999 (``the Convention''). I recommend that this Convention be transmitted to the Senate for its advice and consent to ratification, subject to a declaration to be made on behalf of the Untied States that the Convention shall not apply to international carriage by air performed and operated directly by the United States for non-commercial purposes in respect to its functions and duties as a sovereign State. Such a declaration is consistent with the declaration made by the United States under the Convention for the Unification of Certain Rules Relating to International Transportation by Air, done at Warsaw October 12, 1929 (the ``Warsaw Convention'') and is specifically permitted by the terms of the new Convention. A detailed article-by-article analysis of the new Convention is enclosed for the information of the Senate. background 1. The Warsaw Convention (1929) and The Hague Protocol (1955) The Convention represents the culmination of more than four decades of efforts by the United States, initially to increase, and later to eliminate, the meager and arbitrary limits of liability (approximately $8,300 per passenger) applicable when passengers are killed or injured in international air carrier accidents and the harm was not due to the carrier's willful misconduct. The liability limits were set first in 1929 by the Warsaw Convention, which provides limitations on liability and uniform liability rules applicable to international air transport of passengers, cargo and mail. The United States has been a party to the Warsaw Convention since 1934. Efforts by the United States in the early 1950s to raise the limits of liability succeeded only in doubling the original Warsaw Convention liability limit to $16,600, as codified in the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, done at the Hague September 28, 1955 (``The Hague Protocol''). In response to the inadequacy of that limit, the United States considered a form of accident insurance legislation in conjunction with considering ratification of The Hague Protocol. The proposed legislation fixed various levels of compensation based upon the type of injury sustained by the passenger. The cost of the insurance would have been built into international carrier ticket prices. The Hague Protocol was sent to the Senate for its advice and consent to ratification, but when the insurance legislation package failed, due largely to the inadequacy of the proposed liability limits, The Hague Protocol was withdrawn. 2. The Montreal Inter-carrier Agreement (1966) Failure of the insurance legislation domestically, coupled with increasing dissatisfaction with the Warsaw liability limits, even as increased by The Hague Protocol, led the United States, in 1965, to submit a notice of denunciation of the Warsaw Convention. However, before it went into effect, the United States withdrew this notice of denunciation in consideration of a private voluntary agreement negotiated under the auspices of the International Air Transport Association (IATA) that was signed by all major foreign and U.S. carriers serving the United States (the ``Montreal Inter-carrier Agreement''). The Montreal Inter-carrier Agreement ensured that accident victims on flights to or from the United States are compensated for up to $75,000 of proven damages, whether or not the negligence of the carrier was the cause of the accident. In time, all foreign carriers operating services to or from the United States accepted the terms of the Montreal Inter-carrier Agreement. 3. The Guadalajara Convention (1961) During the period when The Hague Protocol and supplemental insurance legislation were under consideration, a further diplomatic conference was heldin Guadalajara, Mexico for the limited purpose of supplementing the Warsaw Convention to address indirect carriage of cargo. In operations involving indirect carriage of cargo, a consignor purchases transportation from one carrier, such as an air freight forwarder or consolidator (``the contracting officer''), but the transportation is provided by another carrier (the ``actual carrier''), in accordance with an agreement between the carriers. The product of the diplomatic conference was the Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other than the Contracting Carrier, done at Guadalajara September 18, 1961 (the ``Guadalajara Convention''). The United States did not ratify the Guadalajara Convention, due in part to questions within the U.S. Government as to whether, in light of the unreasonable limits on airline liability for passengers, the United States should withdraw from the Warsaw Convention. The essential terms of the Guadalajara Convention have been incorporated into the Convention at Chapter V, which addresses, among other things, modern code-share arrangements. 4. The Guatemala City Protocol (1971) Further efforts to advance the cause of passenger rights were reflected in the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as amended by The Hague Protocol, done at Guatemala City March 8, 1971 (``Guatemala City Protocol''). This Protocol held carriers strictly liable for up to 1,500,000 francs ($100,000) of proven damages in the event of passenger death or injury, but that amount constituted an unbreakable limit on liability per passenger, even if the carrier engaged in willful misconduct. However, the Guatemala City Protocol expressly recognized the right of States to supplement passenger recoveries through State legislated insurance plans. This Protocol had not been sent to the U.S. Senate for its advice and consent to ratification, when there arose another opportunity to negotiate a more favorable and more comprehensive revision of the Warsaw Convention. This opportunity was the 1975 Diplomatic Conference on Air Law in Montreal. 5. The 1975 Montreal Protocols At the 1975 diplomatic conference, called primarily to deal with cargo issues, the key substantive provisions of the Guatemala City Protocol were incorporated into Additional Protocol No. 3 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as amended by The Hague Protocol and the Guatemala City Protocol, done at Montreal September 25, 1975 (``Montreal Protocol No. 3''). In translating the Guatemala City Protocol provisions into the Montreal Protocol No. 3, the only change in content was the replacement of the gold standard with the currency conversion formula based on ``Special Drawing Rights'' (hereinafter referred to as ``SDR,'' which is an artificial `basket' currency developed by the International Monetary Fund for internal accounting purposes). Also negotiated at the same diplomatic conference as Montreal Protocol No. 3 was the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as amended by The Hague Protocol, done at Montreal September 25, 1975 (``Montreal Protocol No. 4''). Among other things, this Protocol eliminated the outmoded cargo documentation provisions of the Warsaw Convention, thereby facilitating the application of electronic commerce to international air cargo. For example, Montreal Protocol No. 4 eliminated the need for consignors of cargo to complete detailed air waybills prior to consigning goods to a carrier. In place of such detailed air waybills, consignors could use simplified electronic records of facilitate shipments. Finally, there were two other Protocols negotiated at the 1975 diplomatic conference, referred to as Montreal Protocols numbers 1 and 2. These protocols related solely to the conversion from a gold standard to the SDR standard for purposes of calculating allquantitative limitations on liability under the Warsaw Convention and under the Warsaw Convention as amended by The Hague Protocol. The United States signed Montreal Protocols Nos. 3 and 4, but not Nos. 1 and 2, when they were opened for signature on September 25, 1975. Following the singing of Montreal Protocol No. 3, and consistent with its provisions, the United States considered domestic legislation that would have established a Supplemental Compensation Plan providing for a $200,000 insurance based supplement to the Montreal Protocol No. 3 carrier liability limit for passengers (increasing total recovery to approximately $300,000). An effort in 1981 to achieve Senate advice and consent to U.S. ratification of that Protocol, along with Montreal Protocol No. 4, was unsuccessful, due in large part to concerns about accepting any limits on passenger recoveries. Similarly, a subsequent effort to achieve Senate advice and consent to ratification of Montreal Protocol No. 3 in conjunction with a new Supplemental Compensation Plan that contained no liability limits also did not garner the necessary support in the Senate. 6. The IATA and ATA Inter-carrier Agreements (1997) In the face of the failure of governmental efforts to modernize the liability regime for passengers, the Department of Transportation facilitated communications among U.S. and foreign carriers, under the auspices of the IATA and the Air Transport Association (ATA) to develop private voluntary agreements under which carriers would waive the passenger liability limits of the Warsaw Convention and its related instruments (the ``Warsaw liability limits''). In February 1997, the Department of Transportation approved a set of two IATA and one ATA inter-carrier agreements, all of which, at a minimum, waived the Warsaw liability limits in their entirety. Because these agreements waived the Warsaw liability limits for participating carriers, they effectively superseded the 1966 Montreal Inter-carrier Agreement, by which carriers had merely waived the limits on liability up to $75,000 per passenger. As of June 1, 2000, 122 international carriers, representing more than ninety percent of the world's air transport industry, have signed the IATA Inter-carrier Agreement on Passenger Liability (IIA), which waives the Warsaw liability limits. Most of the carriers signing the IIA also signed the second IATA agreement, which requires carriers to pay up to 100,000 SDR (approximately $135,000) to accident victims, regardless of carrier negligence. Consequently, any accident victim having a claim against a carrier that was party to this second IATA agreement would have an absolute right to recover up to 100,000 SDR of proven damages. The ATA agreement, signed by a number of U.S. carriers, describes the manner in which carriers agree to implement the two IATA agreements. In addition to waiving the Warsaw liability limit for passenger injuries and accepting 100,000 SDR of strict liability, airlines signatory to the ATA agreement also agree, subject to application law, that compensation for passenger injuries may be determined by reference to the law of the domicile or permanent residence of the passenger. Meanwhile, at governmental levels, a number of States adopted domestic laws or regulations to address their growing dissatisfaction with the Warsaw liability limits. 7. Montreal Protocol No. 4 and Cargo Operations Until 1988, nothing had been done in the United States to modernize the rules relating to the air cargo industry. Accordingly, following Senate advice and consent to ratification, given on September 28, 1998, the United States accomplished its objective of modernizing rules for the international air-cargo industry by ratifying Montreal Protocol No. 4, which entered into force for the United States on March 4, 1999. Among other things, this Protocol eliminated requirements for paper-based transactions, including the requirement to completed detailed air waybills. In accordance with the provisions of Montreal Protocol No. 4, the United States also became bound by the provisions of The Hague Protocol when it ratified Montreal Protocol No. 4. The passengerliability limitations contained in The Hague Protocol, although objectionable to the United States decades earlier, no longer were an obstacle, because they were effectively superseded by the IATA and ATA Inter-carrier Agreements, by which most major international scheduled carriers had waived those limits. 8. The 1999 International Conference on Air Law The IIA and Montreal Protocol No. 4 together represented a reasonable interim fix, but not a long-term solution, to the problem of creating a modernized uniform liability regime for international air transportation. Work on that larger task commenced at the International Civil Aviation Organization (ICAO) in 1997 and was completed at the May 1999 International Conference on Air Law in Montreal at which the convention was negotiated and open for signature. ICAO had long recognized the need for a new convention to replace the patchwork of liability regimes around the world. At present, carriers are subject to vastly different liability regimes, depending upon the treaties to which their governments are parties and the private inter-carrier agreements that they have signed. In addition, differences in size and financial strength of the world's carriers, as well as differences in the objectives and legal systems of ICAO member States, have complicated any effort to achieve international consensus on modernization. Despite these differences, the Convention adopted on May 28, 1999 in Montreal represents a success with respect to all key U.S. policy objectives. It was immediately signed by 52 countries, including the United States. The Convention requires ratification, acceptance, approval or accession by thirty States before it enters into force. Upon entry into force, the Convention will take precedence over the Warsaw Convention and any of its amendments and related instruments, and as a practical matter will supersede the private inter-carrier agreements, when the State or States relevant in a particular accident are party to the new Convention. For the United States, the new Convention, following U.S. ratification and entry into force, would supersede the Warsaw Convention, as amended, for flights between the United States and Foreign States also party to the Convention and for international flights having their origin and destination in the United States (round-trips). the convention There are currently more than 135 parties to the Warsaw Convention either in its original form or one of its amended forms. Some States separately have adopted laws or regulations relating to international carrier liability. In addition, as noted earlier, there are private voluntary agreements among carriers relating to liability. The result of these many instruments is a patchwork of liability regimes. The new Convention is designed to replace the Warsaw Convention and all of its related instruments and to eliminate the need for the patchwork of regulation and private voluntary agreements. The most notable features of the new Convention include: (1) it removes all arbitrary limits on recovery for passenger death or injury; (2) it imposes strict liability on carriers for the first 100,000 SDR of proven damages in the event of passenger death or injury; (3) it expands the bases for jurisdiction for claims relating to passenger death or injury to permit suits in the passenger's homeland if certain conditions are met; (4) it clarifies the obligations of carriers engaged in code-sharing operations; and (5) it preserves all key benefits achieved for the air cargo industry by Montreal Protocol No. 4. A more detailed review of the essential elements of the Convention follows. The Convention generally is limited by Article 1 to commercial international air carriage, including flights between two States Parties to the Convention or a round trip from a State Party to the Convention with an agreed stopping point in another State, regardless of whether that State is party to the Convention. Article 2 notesthat the Convention may cover air carriage provided by a State for compensation. Articles 3 through 11 of the Convention discuss documentation requirements for international air carriage of passengers, baggage, and cargo. Most significantly, they preserve the benefits to the cargo industry achieved under Montreal Protocol No. 4, including the elimination of the need for consignors of cargo to complete detailed air waybills prior to consigning goods to a carrier. Under the new provisions, as under Montreal Protocol No. 4, consignors may use simplified electronic records to facilitate shipments. Articles 12 through 16 address the relative rights and obligations of carriers, consignors, and consignees of air cargo. As with Articles 3 through 11, these provisions preserve all of the significant advances benefiting the air cargo industry established by Montreal Protocol No. 4. Article 17 defines conditions required for carrier liability for harm to passengers, including a death or bodily injury and an accident occurring within a defined time frame. At the International Conference on Air Law at which the Convention was adopted, delegates considered making express reference to recovery for mental injury, but instead resolved to leave untouched legal precedents developed under the language of the Warsaw Convention, acknowledging that such precedents currently allow the recovery of mental injury in certain situations and that the law in this area will continue to develop in the future. Article 17 also contains rules for carrier liability for lost, damaged or destroyed baggage, just as Article 18 contains such rules for cargo. Liability for damages associated with the delay of passengers, baggage or cargo is addressed in Article 19. Consistent with provisions of the Warsaw Convention and its related instruments, Article 20 details the conditions under which a carrier can exonerate itself, wholly or partly, from liability by showing, for example, that the person claiming compensation caused or contributed to the damage by negligence or a wrongful act or omission. The Convention, at Article 21, eliminates all arbitrary limits on air carrier liability with respect to accident victims. The carrier may avoid liability for the full amount of damages only if it proves that it was not negligent or that a third party was solely responsible for the damages. Thus, victims or their heirs may recover all provable damages allowed under applicable State law, in contrast to the arbitrary caps under the Warsaw Convention and its related instruments. As a further benefit for accident victims, Article 21 holds carriers strictly liable for the first 100,000 SDR of proven damages for each passenger, i.e., the carrier may not avoid liability for this amount, even if the carrier can prove that the harm was not caused by its negligence. The only exception to this strict liability is that the carrier may be able to avoid paying any damages under the exoneration (i.e., contributory negligence) provisions of Article 20. Article 22 generally preserves limits on liability in relation to delay, baggage, and cargo. These limits--4,150 SDR (approximately $5,600) for delay of passengers; 1,000 SDR (approximately $1,350) per passenger for claims related to baggage; 17 SDR (approximately $23) per kilogram for cargo-- follow precedents set by the Warsaw Convention, as amended by The Hague Protocol and Montreal Protocol Nos. 3 and 4. Article 24 of the Convention provides for inflation based increases every five years of the various SDR amounts and limits that remain in the Convention. Operation of the provision would result in inflation-based increases whenever the inflation factor exceeds ten percent at the time of a review. However, if a majority of States Parties register timely disapproval of an increase, then the matter is referred to a meeting of States Parties. This provision applies to the limit of ``strict'' liability set by Article 21 for passenger claims and the Article 22 limits in relation to delay, baggageand cargo. Article 25 acknowledges the rights of carriers to stipulate to raising or eliminating the limits of liability established by the Convention. The Convention has a provision on advance payments, Article 28, which acknowledges the right of States to have national laws that require their own carriers to make such payments in the event of passenger death or injury and addresses certain procedural issues related to such payments. In addition, a resolution adopted by the Diplomatic Conference as part of the Final Act encourages States to adopt such laws. The Convention's provision on jurisdiction, Article 33, reflects the U.S. success in achieving a key U.S. objective with regard to the Convention--the creation of a ``fifth jurisdiction'' to supplement the four bases of jurisdiction provided under the Warsaw Convention. Article 33(1), like the Warsaw Convention, allows a suit to be brought against a carrier in the country: (1) of its incorporation, (2) of its principal place of business; (3) where the ticket was purchased, and (4) of destination of the passenger. Article 33(2) of the new Convention allows cases involving the death or injury of a passenger to be brought in the country of the passenger's principal and permanent residence, so long as the carrier provides service to that country, either directly or via a code share or other similar arrangement with another carrier, and the carrier conducts business there from premises leased or owned by it or by a carrier with which it has a commercial arrangement, for example, a code-share arrangement. Given the number of carriers whose operations in the United States satisfy these criteria, this fifth jurisdiction provision should ensure that nearly all U.S. citizens and other permanent residents of the United States have access to U.S. courts to pursue claims under the Convention. Articles 39-48 of the Convention define the rights of passengers and consignors in operations where all or part of the carriage is provided by an airline that is not party to the contract of carriage (e.g., code-share operations, freight consolidators, etc.). The provisions follow the precedent set by the Guadalajara Convention. Pursuant to Article 40, when a claim arises under the Convention, a claimant may bring suit against the carrier from which the carriage was purchased or against the code-sharing carrier operating the aircraft at the time of the accident. In accordance with the provisions of Article 53, the Convention requires that thirty States consent to be bound to the Convention before it may enter into force. Article 53 also permits Regional Economic Integration Organizations (REIO) (such as the European Union) to be parties, but does not grant them the right to vote or otherwise to be counted. Accordingly, as noted in Article 53(2), a REIO would not be counted for purposes of a determination, in accordance with Article 24, as to whether liability limitations in the Convention should be adjusted for inflation. Similarly, a REIO would not be counted for purposes of bringing the Convention into force, as noted in Article 53(6). The Convention has no termination date, but may be denounced by any State Party, pursuant to Article 54. To accomplish its fundamental purpose of establishing uniformity in the context of international carriage by air, the Convention limits reservations available to States party to it. Article 57 describes the only two possible reservations that States may make. These reservations allow States to exempt from application of the Convention: (a) the operations of State aircraft and (b) the operations of aircraft chartered by the military. These limited reservations generally are consistent with the reservations available under the Warsaw Convention and its related instruments. The reservation relating to State aircraft operations was revisited to clarify that the reservation is available only for non-commercial operations related to the functions and duties of a sovereign State. Consistent with the past practice of the United States under the WarsawConvention and its related instruments, I recommend that the United States make the declaration, pursuant to Article 57(a) of the Convention, to exempt only the operations of State aircraft from application of the Convention. conclusion The provisions described above reflect the many benefits that will accrue under the Convention to the air transportation industry and its consumers. One key benefit not reflected in the provisions themselves is the benefit of uniformity. Based upon the response to the Convention at the diplomatic conference and communications with other governments since that time, I believe that U.S. ratification of this Convention will encourage ratification by a number of other States and will lead to a much-needed and long sought after modernized unification of the liability regime applicable to international air carriers. Certain of the passenger benefits codified in the Convention already are provided for under the IATA/ATA Agreements. However, those agreements are voluntary on the part of carriers; they are not embodied in law. Also, while airlines that have signed those agreements uniformly waive the Warsaw liability limits, they do not all accept strict liability up to 100,000 SDR. Furthermore, the inter-carrier agreements do not contain provisions to protect against inflation. In addition, those agreements do not contain the invaluable supplementary ``fifth'' jurisdictional provision codified at Article 33(2) of the Convention. Finally, in the case of code-share operations, the IATA/ATA Agreements do not assure passengers and cargo consignors of recourse against both the contracting carrier and the actual carrier operating the flight. A more detailed article-by-article analysis of the provisions of the Convention is enclosed for the information of the Senate. The Department of Transportation and the Department of State cooperated in the negotiation of the Convention. Together with the Department of State, the Departments of Defense, Justice, and Transportation all concur in the submission of the Convention to the Senate for its advice and consent to ratification. Support for the Convention within the United States is broadly based and includes groups representing families of aircraft accident victims, the carriers, manufacturers, and lawyers specializing in representing plaintiffs and defendants in aviation accidents. Responses from all fronts have been positive. The entry into force of the new Convention would represent the culmination of a four decades-long effort by the United States and other countries to persuade the international aviation community to provide increased economic protection for the international air traveler and shipper with a regime of liability and modernized procedures that match the developments in today's aviation industry. I therefore recommend that you transmit the new Convention to the Senate at an early date with the recommendation that the convention be approved at the earliest possible time, subject to a declaration on behalf of the United States that the Convention shall not apply to international carriage by air performed and operated directly by the United States for non-commercial purposes in respect to its functions and duties as a sovereign State. Respectfully submitted, Strobe Talbott.