[Senate Executive Report 105-20]
[From the U.S. Government Publishing Office]



105th Congress                                               Exec. Rpt.
                                 SENATE

 2d Session                                                      105-20
_______________________________________________________________________


 
                        MONTREAL PROTOCOL NO. 4

                                _______
                                

                August 25, 1998.--Ordered to be printed

_______________________________________________________________________


   Mr. Helms, from the Committee on Foreign Relations, submitted the 
                               following

                              R E P O R T

    [To accompany Treaty Doc. 95-2 B (old Treaty Doc. Ex. B. 95-1)]

    The Committee on Foreign Relations, to which was referred 
the Montreal Protocol No. 4 to Amend the Convention for the 
Unification of Certain Rules Relating to International Carriage 
by Air, signed at Warsaw on October 12, 1929, as amended by the 
Protocol done at the Hague on September 8, 1955 (hereinafter, 
Montreal Protocol No. 4), having considered the same, reports 
favorably thereon with one declaration and two provisos, and 
recommends that the Senate give its advice and consent to the 
ratification thereof as set forth in this report and the 
accompanying resolution of ratification.


                                CONTENTS

                                                                   Page
  I. Purpose..........................................................1
 II. Background.......................................................2
III. Summary..........................................................3
 IV. Entry Into Force and Termination.................................4
  V. Committee Action.................................................5
 VI. Committee Comments...............................................5
VII. Article by Article Analysis......................................8
VIII.Text of the Resolution of Ratification..........................16

 IX. Appendices......................................................19

                               I. Purpose

    The primary purpose of Montreal Protocol No. 4 to Amend the 
Convention for the Unification of Certain Rules Relating to 
International Carriage by Air, signed at Warsaw on October 12, 
1929, as amended by the Protocol done at the Hague on September 
8, 1955 (hereinafter, Montreal Protocol No. 4), is to amend and 
update the cargo provisions of the Convention for the 
Unification of Certain Rules Relating to International 
Transportation by Air of 1929 (the Warsaw Convention).

                             II. Background

    The Warsaw Convention was adopted in 1929. The United 
States became a party to it in 1934. The Warsaw Convention 
establishes uniform rules as to the rights and obligations 
between air carriers and users of international air 
transportation and creates uniformity with respect to 
transportation documentation--passenger tickets, baggage 
checks, and air waybills. It also establishes uniform rules 
relating to the liability of an air carrier to its passengers 
in cases of death or injury from an accident or delay.
    Montreal Protocol No. 4, as well as the Additional Protocol 
No. 3 to the Warsaw (hereinafter Montreal Protocol No. 3), have 
been pending before the Foreign Relations Committee since 1977. 
The Committee, as well as the full Senate, have debated the 
protocols several times over this period.
    In 1977 the Committee held hearings on the protocols but 
took no action. In 1981 the Committee again held hearings on 
the protocols and reported them favorably with certain provisos 
requiring the establishment of a Supplemental Compensation Plan 
to make additional compensation available to passengers under 
the protocols.
    In 1983 the Committee once again ordered the protocols 
favorably reported. This time they were taken up by the Senate, 
which failed to approve the Protocols by a 50 to 42 vote, 
falling short of the two-thirds majority needed for advice and 
consent to ratification. During the debate, opponents argued 
that whatever may have been the justification for limits on 
airline liability for death or injury of passengers in 1929--at 
a time when the airline industry was in its infancy--there was 
no possible justification for such limits in a day and age when 
many international airlines have substantial financial 
resources and carry substantial amounts of liability insurance. 
The opponents, who were able to block Senate approval, objected 
to any limit on airline liability.
    Following the Senate's negative action in 1983, the 
Department of Transportation revised the draft Supplemental 
Compensation Plan in order to make it more generous to 
passengers in air accidents. The Foreign Relations Committee 
held hearings on the protocols and the revised Supplemental 
Compensation Plan in 1989 and 1990 and again reported them 
favorably. The Senate adjourned in 1990 without taking any 
action on the protocols. In 1991 the Committee again took 
favorable action on the protocols, but the Senate again took no 
action.
    In response to governmental inaction, the International Air 
Transport Association (IATA) recently drafted two inter-airline 
agreements on international passenger liability. They were 
approved by the Department of Transportation in January 1997. 
In these agreements international airlines agree to waive the 
limits of liability in the Warsaw Convention for death or 
injury of passengers. The first of these agreements is the IATA 
Intercarrier Agreement on Passenger Liability which, as of June 
12, 1998, had 105 airline signatories. The second is the 
Agreement on Measures to Implement the IATA Intercarrier 
Agreement which as of June 12, 1998, had 66 airline 
signatories, including all or most American international 
airlines as well as the major foreign international airlines.
    Such waiver does not nullify the entire Warsaw Convention. 
Rather, Article 22 of the Warsaw Convention permits the carrier 
and the passenger, ``by special contract,'' to agree to a 
higher limit of liability than that contained in the 
Convention. Thus, although the liability limits of Warsaw have 
been waived by the Intercarrier Agreement, the remainder of the 
Warsaw Convention remains in effect.
    There appears to be some question whether or not these 
agreements are self-executing. If they are not self-executing 
their implementation would be left up to each airline in its 
conditions of carriage and/or its tariffs filed with the 
Department of Transportation. The major U.S. international 
carriers have filed tariffs implementing the agreements, thus 
waiving the Warsaw Convention's passenger liability limits. As 
of June 12, 1998, 51 carriers officially had waived their 
liability limits by filing tariffs or by other means.

                              III. Summary

    While the Senate always considered Montreal Protocol No. 3 
and Montreal Protocol No. 4 as a single package, opposition in 
the Senate was focused solely on Protocol No. 3. No opposition 
was expressed to Protocol No. 4, which updates and modernizes 
the Warsaw Convention's cargo provisions. Protocol No. 4 is 
divided into three major topics: documentation required in 
relation to cargo; the system of liability in relation to 
cargo; and the unit of account in which liability limits are 
expressed.
    Documentation in Relation to Cargo. Article III of the 
Protocol No. 4 amends Articles 5 to 16 of the Warsaw Convention 
to improve and update the rules on cargo documentation and 
carriage. Amended Article 5 allows an air carrier to substitute 
computer entries of necessary cargo information for the air 
waybill, provided that the shipper consents. The shipper may 
then request from the carrier a receipt for the cargo which 
permits identification of the shipment and access to the 
carrier's computer records. These provisions will allow 
carriers to expand the electronic processing system which they 
already use for domestic cargo shipments.
    Amended Article 6 will simplify in important respects the 
existing cargo documentation system to allow air shipments to 
commence even before documentation has been completed. It will 
no longer be necessary for the air waybill to accompany the 
goods. Though signatures on air waybills will still be 
required, these can now be printed or stamped, allowing them to 
be entered by computer.
    System of Liability in Relation to Cargo. Article IV of 
Protocol No. 4 amends Article 18 of the Convention to provide 
that the carrier shall be subject to strict liability for 
destruction, loss, or damage to cargo occurring during 
carriage, though the carrier shall not be liable if he proves 
that the damage, destruction or loss was due solely to one of 
the following:

   inherent defect, quality or vice of the cargo;
   defective packing of the cargo performed by someone 
        other than the carrier or his employees or agents;
   an act of war, armed conflict, or civil disturbance;
   an act of a public authority carried out in 
        connection with the entry, exit or transshipment of the 
        cargo.

The word ``solely'' in this provision makes these defenses 
unavailable whenever the carrier or some other factor is 
partially the cause of the damage.
    Article VI of Protocol No. 4 updates Article 21 of the 
Convention with a comparative negligence scheme for cargo. 
Thus, if the claimant contributed to the damage to cargo, this 
will not wholly exonerate the carrier. The responsibilities of 
the parties will be apportioned and compensation adjusted 
accordingly.
    Article VII of Protocol No. 4 amends Article 22 of the 
Convention to increase the limits of carrier liability and to 
restate the new limits in terms of Special Drawing Rights 
(SDRs) of the International Monetary Fund. The limit of 
liability for cargo is set at 17 SDRs per kilogram (about 
$23.65 at present conversion rates), unless a shipper makes 
appropriate declaration of special value and pays any necessary 
supplementary fee at the time of delivery of the cargo to the 
carrier. Unless damage to a portion of the cargo affects the 
value of the entire shipment, the weight to be considered is 
that of the damaged packages. Nations that are not members of 
the International Monetary Fund and whose law does not permit 
application of the SDR formula are allowed to use liability 
limits expressed in gold.
    Article VIII of Protocol No. 4 amends Article 24(2) of the 
Convention to make it clear that the liability limits in 
connection with the carriage of cargo are maximum limits and 
may not be exceeded.
    The Unit of Account. One of the important changes made by 
the Montreal protocols was to change the unit of account in the 
Warsaw Convention from the Poincare gold franc to SDRs. In 
1934, after the devaluation of the dollar to $35 = 1 troy ounce 
of gold, a Poincare franc was equal to about $0.0666. However, 
in 1973 the global system of fixed exchange rates for 
currencies was abandoned and a new system of ``floating'' 
exchange rates evolved. Gold, no longer linked to the U.S. 
dollar, fluctuated widely and no longer served as an anchor to 
which a fixed price--or limit of liability--could be tied. 
Meanwhile the International Monetary Fund in 1970 began issuing 
a new asset, known as Special Drawing Rights, eventually fixing 
its value in terms of a ``basket'' of 16 currencies. At the 
suggestion of the United States government, the 1975 Montreal 
conference decided to change the limits of liability in the 
Warsaw Convention from Poincare francs to SDRs.

                  IV. Entry Into Force and Termination

                          a. entry into force

    Montreal Protocol No. 4 enters into force on the 90th day 
following the deposit of the 30th instrument of ratification. 
The treaty entered into force on June 14, 1998. The Protocol 
enters into force for Parties ratifying after entry into force 
of the Protocol 90 days after the deposit of instruments of 
ratification with the Government of Poland.

                             b. termination

    Parties may withdraw from the Convention upon written 
notification to the Government of Poland. The withdrawal shall 
take effect six months after the date the notification is 
received.

                          V. Committee Action

    The Committee on Foreign Relations held a public hearing on 
the proposed Protocol on May 13, 1998 (a transcript of the 
hearing and questions for the record can be found in the 
appendix to this report). The Committee considered the proposed 
protocol on June 23, 1998, and ordered the proposed Protocol 
favorably reported by voice vote, with the recommendation that 
the Senate give its advice and consent to the ratification of 
the proposed protocol subject to one declaration, and two 
provisos.

                         VI. Committee Comments

    The Committee on Foreign Relations recommends favorably the 
proposed Protocol. On balance, the Committee believes that the 
proposed Protocol is in the interest of the United States and 
urges the Senate to act promptly to give its advice and consent 
to ratification. Several issues did arise in the course of the 
Committee's consideration of the Protocol, and the Committee 
believes that the following comments may be useful to Senate in 
its consideration of the proposed Convention and to the State 
Department.

        a. economic benefits of streamlining air carriage rules

    The Warsaw Convention is one of the most widely adhered to 
treaty systems in the world. Since its inception the treaty has 
brought uniformity to the rules governing international air 
carriage, providing shippers and carriers worldwide with a 
predictable set of rules with which they can conduct business. 
However, this treaty system badly needs to be modernized. The 
cargo liability rules of the Warsaw Convention were developed 
in the middle and late 1920s, before the first DC-3 flew, and 
they reflect requirements that were developed even earlier by 
surface carriers.
    The Committee supports the goal of Montreal Protocol No. 4 
to make more efficient the uniform air cargo rules and believes 
the revisions required by the Protocol will benefit the economy 
of the United States. U.S. industry estimates that compliance 
with the outdated rules contained in the Warsaw Convention cost 
U.S. companies nearly $1 billion annually. Given the high 
volume of cargo shipments and widespread automation in the 
airline industry, the present paper-based system required by 
the Warsaw Convention inhibits the free flow of international 
air commerce. The proposed Protocol would thus benefit 
carriers, shippers, forwarders, and customers by streamlining 
and modernizing the air cargo rules.
    First, Montreal Protocol No. 4 will eliminate the 
Convention's archaic requirement that the carrier provide a 
paper air waybill. Montreal Protocol No. 4 amends Article 5 of 
the Warsaw Convention to allow the substitution of an 
electronic record for the written air waybill. This amendment 
will permit carriers to expand to international air cargo the 
electronic record-keeping systems already practiced by domestic 
air cargo transportation.
    Second, Montreal Protocol No. 4 will eliminate antiquated 
rules that require the use of paper documents containing 
numerous entries of commercially insignificant information. For 
example, Article 8 of the Warsaw Convention currently requires 
the air waybill to list the agreed stopping places. At the time 
the waybill is completed, however, a carrier often does not 
know the routing of the shipment, yet the failure to include 
this information may keep the carrier from enforcing the Warsaw 
Convention's cargo liability rules. In a working environment 
characterized by high-volume activity, multiple possible 
routings, and the commercial need for timeliness, many of the 
current documentation requirements are not necessary.
    Third, uniform international cargo rules that avoid 
conflicts and uncertainty will facilitate international trade. 
Uniform international rules are particularly important in the 
case of transportation services where the product being offered 
is, by its very nature, transnational. Shippers, in particular, 
need to know what their rights and responsibilities are with 
respect to the cargo they ship, so they can price their 
products accordingly and protect themselves against risks.

   b. requirement to return montreal protocol no. 3 to the president

    For more than 20 years, the Senate has considered 
ratification of Montreal Protocol Nos. 3 and 4 together as a 
package. President Ford first transmitted the two protocols 
together to the Senate in 1977, and many attempts have been 
made since then to gain Senate advice and consent for both 
protocols. The delay in obtaining the advice and consent of the 
Senate resulted from the controversy concerning retention of 
the passenger liability limits of Montreal Protocol No. 3. 
Montreal Protocol No. 4, which reforms and modernizes the 
Warsaw Convention's cargo liability rules, is not, and never 
has been, controversial.
    Air carriers and governments have now effectively abandoned 
efforts to bring into force Montreal Protocol No. 3. Efforts to 
reform passenger liability instead have taken the form of an 
industry initiative to waive the Convention's passenger 
liability limits by special contract under Article 22 of the 
Warsaw Convention. In particular, the October 1995 IATA General 
Meeting endorsed a proposed IATA Intercarrier Agreement on 
Passenger Liability (IIA), which requires signatory carriers to 
waive liability limits for passenger injury and death. 
Passenger carriers have now developed special contracts, 
approved by the U.S. Department of Transportation, to implement 
the IIA. Major U.S. carriers and many foreign carriers have now 
waived those limits by revising their tariffs or conditions of 
carriage.
    As a result the Committee has included in its resolution of 
ratification a provision that requires that upon submission of 
this resolution of ratification to the President, the Secretary 
of the Senate will also return Montreal Protocol No. 3 to the 
President.

       c. failure of state department to coordinate its testimony

    In testifying before the Committee on May 13, Assistant 
Secretary of State for Economic and Business Affairs Alan P. 
Larson stated that the Administration strongly urged the Senate 
to take favorable action on Montreal Protocol No. 4. In doing 
so, Assistant Secretary Larson recommended that ratification of 
the treaty be subject to a declaration permitted by Article XXI 
of Protocol No. 4. That article allows countries to opt-out of 
the Warsaw Convention in cases involving the carriage of 
persons, baggage, and cargo for military authorities on 
aircraft registered in that country, the ``whole capacity'' of 
which has been reserved by or on behalf of such authorities.
    Two days later, in unofficial communication the Department 
of State notified the Committee that the ``Administration 
wishes to amend the written testimony'' of Assistant Secretary 
Larson. Specifically, it expressed its desire to withdraw the 
proposed declaration, and urged that Montreal Protocol 4 be 
approved without any reservation. (A letter was subsequently 
sent to the Committee by Assistant Secretary of State Barbara 
Larkin on June 22, formally requesting this declaration be 
withdrawn. The letter and other related questions for the 
record are reprinted in the annex to this report.)
    Subsequent questions for the record revealed that the 
Department of State's testimony before the Committee on May 13 
had not been cleared through the normal inter-agency process by 
the other Executive Branch departments. Indeed, prior to the 
May 13 testimony, the Department of State had not even 
contacted the Department of Defense, the cabinet department 
most directly affected by the proposed declaration. The State 
Department's error might never had been discovered but for the 
presence at the hearing of aviation industry representatives, 
who, immediately following the hearing, questioned the State 
Department concerning the proposed declaration. When the 
Department of State contacted the Department of Defense, it 
learned that, in fact, the Defense Department preferred that no 
such declaration be made.
    No harm was done in this instance, as the mistake was 
discovered before the Committee acted on the proposed Protocol. 
The error did, however, delay the Committee's consideration of 
the proposed Protocol. The Committee wishes to express its deep 
concern with the failure of the State Department to adequately 
prepare for the Committee hearing on the Protocol. The making 
of a treaty is a solemn undertaking, entrusted by the U.S. 
Constitution to the President, by and with the advice and 
consent of the Senate. The Senate is an equal partner in the 
treaty process, but it cannot properly perform this function 
unless it can rely upon the Executive Branch to provide 
authoritative testimony in presenting a treaty to the Senate. 
Unfortunately, on this occasion, the Executive Branch--
specifically the State Department--failed to ensure that it was 
providing authoritative testimony. This failure led the 
Department of State representative to request action by the 
Committee that was directly contrary to the position of the 
Department of Defense. This blunder easily could have been 
prevented had the State Department taken the time to contact 
the Defense Department in advance of the hearing.
    If the Committee cannot rely on the State Department to 
coordinate its testimony with other Executive Branch 
departments, the Committee will have to undertake the time-
consuming task of contacting each agency that might be affected 
by a particular matter before the Committee. The Committee 
strongly urges the Department of State, the lead agency on 
treaties, to review its processes for coordinating Executive 
Branch testimony to ensure that this error does not recur.

                    VII. Article by Article Analysis

    Pursuant to Article XIX of Protocol No. 4, if the United 
States ratifies Protocol No. 4, it also will accede to the 
Hague Protocol of 1955. That Protocol modifies several 
provisions of the underlying Warsaw Convention. Most of these 
changes are minor technical amendments to the Warsaw 
Convention. The analysis below describes the Warsaw Convention, 
as amended by Protocol No. 4, and the Hague Protocol (the 
integrated text is contained in the annex of this report).

                               article 1

    Article 1 defines the international air carriage to which 
the Warsaw Convention applies. The new text substitutes 
``international carriage'' for ``international transportation'' 
and ``agreement between the parties'' for ``contract made by 
the parties.''

                               article 2

    Article 2(2) brings carriage by air of postal items within 
the scope of the Warsaw Convention, but makes the carrier 
liable only to postal authorities. Carriers are not liable to 
the addressee or sender of postal items because the carrier has 
no control over the contents of the mail bags and, hence, 
cannot determine the value of individual shipments to take out 
the necessary insurance. The Convention of the Universal Postal 
Union governs the liability of postal authorities to 
individuals making use of the mails.

                               article 3

    Article 3 makes it possible for airlines to adopt 
efficient, modern passenger ticketing procedures. Paragraph 1 
reduces the complexity of passenger tickets. Article 3 still 
requires the carrier to deliver a ticket as evidence of the 
contract of carriage. While Article 3 denies the carrier the 
right to invoke the liability limits if it does not deliver a 
ticket, it provides flexibility to the industry to determine 
what constitutes a ticket for these purposes, and it will allow 
the industry to continue to modernize its ticketing practices.
    Paragraph 2 provides that the ticket shall constitute prima 
facie evidence of the conclusions and conditions of the 
contract of carriage.

                               article 4

    The revised provisions on registered baggage documentation 
in Article 4 parallel the new ticketing rules in Article 3. 
Paragraph 1 substantially reduces the number of entries 
required on each baggage check. These changes clear the way for 
more efficient check-in procedures.
    Paragraph 2 provides that the baggage check shall 
constitute prima facie evidence of the registration of the 
baggage and the conditions of the contract of carriage.

                               article 5

    Paragraph 1 of Article 5 retains the Warsaw requirement 
that the cargo shipper deliver an air waybill to the carrier. 
This document is described in the articles that follow.
    Paragraph 2 allows an air carrier to substitute computer 
recordation of necessary cargo information for the air waybill, 
if the shipper consents. The shipper may request from the 
carrier a receipt for the cargo that permits identification of 
the shipment and access to the carrier's computer records. 
These provisions will allow carriers to expand the electronic 
processing systems that they already use for domestic cargo 
shipments.
    Paragraph 3 provides that the absence of electronic 
processing facilities at certain airports does not entitle a 
carrier to refuse cargo shipments.

                               article 6

    Article 6 will simplify the existing cargo documentation 
system; it will permit air shipments to commence even before 
documentation has been completed. The old requirement that the 
air waybill ``be handed over with the goods'' is specifically 
omitted from paragraph 1, and the old requirement that the 
document ``shall accompany the goods'' is likewise omitted from 
paragraph 2. In his final statement to the 1975 Montreal 
Conference, the U.S. delegate emphasized that it is no longer 
necessary for the air waybill physically to accompany the 
goods.
    Although Article 6(2) still requires signatures on air 
waybills, Article 6(3) allows these signatures to be printed or 
stamped. This permits electronic recordation.

                               article 7

    Article 7(a) repeats the Warsaw requirement that the 
carrier can require a shipper to make out separate air waybills 
when there is more than one package. The new material in 
Article 7(b) corresponds to the provisions for electronic 
recordation of cargo documentation of Article 5(2). Article 7 
currently provides for separate cargo receipts in those 
situations where separate air waybills could be required.

                               article 8

    New Article 8 simplifies cargo documentation. It applies to 
air waybills and cargo receipts. Instead of the long list of 
particulars formerly required on an air waybill, Article 8 
contemplates a brief waybill or cargo receipt which sets out 
only the weight of the consignment and the information 
necessary to give notice that the carriage comes within the 
scope of the Convention (as defined in Article 1).

                               article 9

    Article III of No. 4 deletes language in Article 9 of 
Warsaw that formerly precluded a carrier from availing itself 
of the Convention's liability limit if the air waybill was 
either not made out or the list of particulars was not 
completed as required by Article 8 in the original Convention.

                               article 10

    Paragraphs 1 and 2 of Article 10 restate the provisions of 
the old article with additional language allowing for 
electronic records, and paragraph 1 now refers to cargo 
receipts. These paragraphs make the consignor of cargo 
responsible for the correctness of information that he or she 
furnishes for cargo documentation. They are revised to make 
clear that the air waybill or the data for electronic 
recordation can be supplied on behalf of the consignor by some 
other party. The consignor is required to indemnify the carrier 
under paragraph 2 for damages arising from deficiencies in the 
information furnished by or on behalf of the consignor under 
paragraph 1.
    An added provision, paragraph 3, requires the carrier to 
indemnify the consignor for deficiencies in the entries on 
cargo documents made by or on behalf of the carrier. This 
provision does not affect the consignor's responsibility to 
furnish complete and correct information to the carrier.

                               article 11

    Article 11(1) is amended to provide that cargo receipts, as 
well as air waybills, are prima facie evidence of the carrier's 
acceptance of the goods, the contract between the parties, and 
the conditions of carriage specified in the receipts or 
waybills. In Article 11(2), statements regarding the weight, 
dimensions, and packing of the cargo in airway bills and cargo 
receipts are prima facie evidence of those facts. Statements 
regarding the quantity, volume, and condition of the cargo are 
not prima facie evidence unless they have been checked by the 
carrier in the shipper's presence and the air waybill or 
alternative cargo documentation authorized by Article 5 so 
states, or the conditions to which they relate are apparent. 
This does not hold true for cargo receipts.

                               article 12

    Paragraph 1 of Article 12 reserves to the shipper the power 
to withdraw or redirect the cargo shipment, subject to his 
obligations to the carrier and other consignors. The Protocol 
does not significantly change this paragraph. The words ``to a 
person other than the consignee named in the air waybill'' in 
the Convention have been replaced by ``to a person other than 
the consignee originally designated.'' This change reflects the 
possibility that if computer recordation is used for the 
movement of cargo, no documentation may be issued and the 
consignee may be ``designated'' in the computer only. Paragraph 
2 of the article, also unchanged, requires the carrier to 
notify the shipper promptly whenever execution of the 
instructions given under paragraph 1 is impossible.
    Paragraph 3 is also basically unchanged, except for adding 
a reference to cargo receipts as a consequence of the changes 
made in Article 5(2). Paragraph 3 makes the carrier liable for 
damages to any person lawfully holding the shipper's part of 
the air waybill or cargo receipt, if the carrier obeys the 
shipper's instructions under paragraph 1 without requiring 
production of the shipper's part of the air waybill or the 
receipt for cargo.
    Paragraph 4 likewise contains only minor changes. This 
provision terminates the shipper's power under Article 12 at 
the moment when the consignee's rights under Article 13 
commence. The shipper may retain control of the cargo, however, 
if the consignee either refuses delivery or cannot be found.

                               article 13

    This article defines the consignee's rights to receive 
cargo. Except for minor drafting changes, the article is 
unchanged.
    Article 13(1) provides that, subject to the shipper's power 
under Article 12, the consignee is entitled to delivery of the 
cargo on its arrival at the destination. The shipper will not 
be able to withdraw the cargo unless his instructions reach the 
carrier before the consignee takes delivery. In addition, 
Article 13 deletes the reference to the handing over of an air 
waybill.
    Paragraphs 2 and 3 require the carrier to notify the 
consignee promptly of the cargo arrival, unless it has been 
otherwise agreed. If the carrier admits loss of the cargo or if 
the cargo has not arrived within seven days of the date on 
which it ought to have arrived, the consignee may proceed to 
enforce his contractual rights against the carrier.

                               article 14

    This article is substantially unchanged. The clarifying 
phrase ``of carriage'' was added after the word ``contract'' in 
the last clause.

                               article 15

    Article 15(1) declares that Articles 12, 13, and 14 do not 
affect the basic contractual relations between parties 
interested in a cargo shipment. Article 15(2) is amended to 
make the cargo receipt an alternative vehicle for varying the 
provisions of Articles 12, 13, and 14.
    A paragraph added to this article by The Hague Protocol 
declared that nothing in the Convention prevented the use of 
negotiable air waybills. The 1975 Montreal Conference decided 
that such a provision was unnecessary and the paragraph was not 
retained given that nothing in the Convention prevents use of 
negotiable air waybills.

                               article 16

    Paragraph 1 of Article 16 obliges the shipper to provide 
the documents needed for customs, tax, or police procedures. 
The requirement that these documents accompany the cargo is 
deleted to accommodate the revisions in Article 6. Paragraph 2, 
a restatement of the Warsaw Convention, absolves the carrier of 
any obligation to check the accuracy or sufficiency of Article 
16 documentation. The carrier is not relieved of its 
responsibility with respect to the proper classification of 
cargo under its tariffs for rate purposes.

                               article 17

    Article 17 is unchanged from the Warsaw Convention.

                               article 18

    Paragraph 1 of Article 18 makes the carrier liable for 
destruction, loss, or damage to any registered baggage 
occurring during the carriage by air, as defined in paragraphs 
4 and 5. Paragraph 2 makes the carrier strictly liable, subject 
to certain exceptions, for destruction, loss, or damage to 
cargo occurring during the carriage by air, as defined in 
paragraphs 4 and 5.
    Paragraph 3 provides that the carrier is not liable in 
those cases where it proves that the destruction, loss, or 
damage to cargo resulted solely from inherent defect, quality 
or vice of that cargo; defective packing of that cargo 
performed by a person other than the carrier or his servants or 
agents; an act of war or an armed conflict; and an act of 
public authority carried out in connection with the entry, 
exit, or transit of cargo. The word ``solely'' in paragraph 3 
makes these defenses unavailable if the carrier or some other 
factor is partly responsible for the damage. Articles 18(3) and 
(4) of the Warsaw Convention are renumbered as Articles 18(4) 
and (5), and are adopted without change.

                               article 19

    Carriers continue to be liable for the results of delay. 
This provision is unchanged from the Warsaw Convention.

                               article 20

    Article 20 makes due care a defense to claims against the 
carrier relating to passengers, baggage, and delay of cargo. 
The carrier's due care defense is established if it can be 
proved ``that he and his servants and agents have taken all 
necessary measures to avoid the damage or that it was 
impossible for them to take such measures.'' It is described as 
the defense of non- negligence; that is, the carrier has the 
burden of proving that it was not negligent.

                               article 21

    Article 21(1) retains the comparative negligence defense of 
the 1929 Convention for the carriage of passengers and baggage. 
Paragraph 2 updates the Convention by replacing the 
contributory negligence defense with a comparative negligence 
regime for the carriage of cargo. Thus, a contribution by the 
claimant damaging cargo will not wholly exonerate the carrier. 
The responsibilities of the parties will be apportioned and 
compensation adjusted accordingly.

                               article 22

    Article 22 increases some of the carrier liability limits 
and restates the new limits in terms of the Special Drawing 
Rights (SDRs) of the International Monetary Fund (IMF). It also 
permits the carrier and passenger, by special contract, to 
``agree to a higher limit of liability.''
    Paragraph 1 raises the carrier liability limit for death or 
injury from about $8,300 per passenger to about $16,600 per 
passenger. This change is inapplicable to the United States, 
because, pursuant to a 1966 intercarrier agreement (similar to 
the intercarrier agreement described in Section II, supra), 
known as the Montreal Agreement, all U.S. carriers and carriers 
flying to the United States have established a limit of 
$75,000. Further, all major U.S. airlines and many major 
foreign airlines have now waived the Convention's passenger 
liability limit. For claims below 100,000 SDRs (approximately 
$130,000), carriers have also waived the defense under Article 
20(1) of the Convention that they have taken all necessary 
measures to avoid the damage or that it was impossible to do 
so. To the extent claims exceed 100,000 SDRs, the carriers have 
retained the right to assert that defense.
    By waiving the liability limit, the carriers have 
essentially agreed to pay all compensatory damages, without 
monetary limit, subject to the retained defense of non-
negligence described above. Since the carriers have waived the 
limit, the level of the limit and the basis for breaking it are 
essentially irrelevant. The Committee expects that in the near 
future all airlines operating in the United States will have 
joined the major airlines, both U.S. and foreign, that have 
already taken that action, and urges the Department of 
Transportation to take all appropriate action to ensure that 
result.
    Under paragraph 2(a), the carrier liability limit for 
registered baggage remains unchanged at $9.07 per pound, using 
current conversion factors, unless the passenger or shipper 
makes a special declaration of interest and pays the necessary 
supplementary fee at the time of delivery. In that case, the 
limitation becomes the declared amount.
    Paragraph 2(b) provides that the liability limit for cargo 
will be 17 SDRs per kilogram (about $24.30 per kg. at present 
conversion rates), unless the shipper makes an appropriate 
declaration of special value and pays any necessary 
supplementary fee at the time of delivering the cargo. In that 
case, the limitation becomes the declared amount. A new 
provision states that, unless loss, damage, or delay to a 
portion of the cargo or registered baggage affects the value of 
the whole shipment, the weight to be considered is that of the 
lost, damaged, or delayed packages.
    Montreal Protocol No. 4 specifies the new cargo liability 
limit in terms of SDRs rather than the gold standard used in 
the 1929 Warsaw Convention. The gold standard will still apply 
to baggage liability limits. The United States has not set an 
official price for gold since repeal of the Par Value 
Modification Act in 1978. However, the Department of 
Transportation regulations sanction the use of the last 
official price of gold ($42.22 per ounce) as a conversion 
factor. (The SDR is defined as the average value of a defined 
basket of IMF member currencies; its current exchange value is 
published daily in major newspapers, including The Wall Street 
Journal.)
    Paragraph 3 is unchanged from the original Warsaw 
Convention, and retains the current liability limit of 5,000 
francs per passenger for ``objects of which the passenger takes 
changes himself.''
    Paragraph 4 provides that the limits of liability will not 
prevent a court from awarding legal costs in accordance with 
the law of the jurisdiction and without regard to the limit of 
liability. However, if a settlement offer, offered within six 
months of the occurrence, is more than the amount awarded, the 
clause does not apply.
    Paragraph 5 describes the process for converting gold into 
the national currency.
    Paragraph 6 provides for those High Contracting Parties 
that are not members of the IMF to calculate the conversion 
into their national currency in such manner as they determine. 
These provisions allow certain nations not belonging to the 
182-member IMF to become parties to the amended Convention.

                               article 23

    Paragraph 1, taken from the 1929 Convention, prohibits 
carriers from contracting to reduce their liability under the 
Convention. Under paragraph 2, however, carriers and shippers 
are permitted to make agreements that allocate responsibility 
for damage resulting from the inherent defect, quality, or vice 
of cargo.
    Nothing in the Convention prohibits a carrier from making 
agreements with the passenger to increase its liability.

                               article 24

    Article 24 is redrafted to make it clear that the liability 
limits set out in the amended Convention are unbreakable for 
cargo, but not for passengers and baggage. Article 24 declares 
that all damage actions arising out of international air 
carriage governed by the Convention are subject to the 
conditions and limits of liability set out in the Convention. 
Paragraph 1 continues the existing rules of the Warsaw 
Convention for the carriage of baggage and passengers with 
additional language relating to prejudice.
    Paragraph 2 of Article 24 makes clear that the liability 
limit cannot be exceeded for cargo. It is explicitly stated 
that the limits cannot be exceeded ``whatever the circumstances 
which gave rise to the liability.'' It also clarifies that any 
actions for damages, whether based on the ``Convention, or in 
contract or in tort or otherwise,'' can only be brought subject 
to the conditions and limits set out in the Convention.

                               article 25

    Currently, Article 25 applies only to passengers and 
baggage. Article 25 of the Convention currently states that a 
carrier's liability is limited to a stated amount, unless the 
plaintiff can prove that the carrier's actions constituted 
``willful misconduct'' or its equivalent. The amended Article 
25 adopts a similar standard that enables a claimant to recover 
damages in excess of the Article 22 limits "if it is proved 
that the damage resulted from an act or omission of the 
carrier, his servants or agents, done with intent to cause 
damage or recklessly with knowledge that damage would probably 
result."
    Unlike the protocol's adoption of strict liability for the 
carriage of cargo, Articles 25 and 25A allow the liability 
limits to be broken for carriage of passengers and baggage. 
Currently, Article 25 of the Convention applies to cargo, 
passengers, and baggage. As amended by the Protocol, Article 25 
applies only to passengers and baggage.
    According to the State Department, the substitution of this 
language for ``willful misconduct'' does not modify the scope 
of the standard. Instead, it is a clarifying response to the 
difficulties that arose from differing translations of the text 
in various languages. In a response to a Committee question for 
the record, the State Department stated: ``Because the concept 
of willful misconduct came to have different connotations in 
the civil and common law systems, the drafters of Hague 
replaced the legal standard with a description of the conduct 
itself, that a jury would be able to understand. This standard 
has been identified as the common law definition of ``willful 
misconduct''

                              article 25a

    Article 25A makes it explicit that the employees and agents 
of the carrier acting within the scope of their employment are 
covered by the Convention's limits of liability to the extent 
the carrier is entitled to invoke those limits.

                               article 26

    This article provides for the communication of complaints 
to the carrier. Paragraph 2 is amended to extend the time 
periods within which complaints must be filed.

                               article 27

    Article 27, allowing actions against the legal 
representatives of a deceased defendant, is unchanged.

                               article 28

    Article 28 establishes the fora in which a suit can be 
brought. It is unamended.

                               article 29

    Article 29 establishes a two-year statute of limitations 
for Warsaw suits. It is unamended.

                               article 30

    This article governs the respective liabilities of 
successive carriers that undertake parts of an undivided 
carriage (as defined in Article 1(3)). It is unchanged.

                              article 30a

    Article 30A is added to make it clear that the Convention 
is silent on the carriers' rights of recourse under local law 
against any parties who may have caused or contributed to the 
damages for which the carrier is liable.

                               article 31

    The provisions of this article, relating to intermodal 
carriage, are unamended.

                               article 32

    Article 32, which nullifies all agreements infringing the 
rules of the Convention, is unamended.

                               article 33

    The Convention itself does not require a carrier to enter 
into a contract for carriage, but Article 33 is amended to 
refer to the provision in Article 5(3) that makes absence of 
electronic processing facilities an impermissible reason for a 
carrier's refusal to accept cargo for carriage.

                               article 34

    The original Article 34 entirely excluded experimental or 
extraordinary air carriage from the Convention. The old text 
has been replaced by language that narrows the exception. 
Carriage performed in extraordinary circumstances outside the 
normal scope of the carrier's business are exempted solely from 
the Convention's provisions relating to documents of carriage 
set forth in Articles 3 through 8.

                               article 35

    The definition of the word ``days'' remains unchanged.

                             article 36-40

    These final clauses of the 1929 Convention are unamended.

                              article 40a

    This article defines the expressions High Contracting Party 
and territory.

                               article 41

    Unamended Article 41 permits any nation that is a party to 
the Convention to call for a new international conference to 
amend the treaty.

              VIII. Text of the Resolution of Ratification

    Resolved, (two-thirds of the Senators present concurring 
therein), that the Senate advise and consent to the 
ratification of the Montreal Protocol No. 4 to Amend the 
Convention for the Unification of Certain Rules Relating to 
International Carriage by Air, signed at Warsaw on October 12, 
1929, as amended by the Protocol done at The Hague on September 
8, 1955 (hereinafter Montreal Protocol No. 4) ((Treaty Doc. 95-
2B) Executive B, 95th Congress, 1st Session), subject to the 
declaration of subsection (a), and the provisos of subsection 
(b).
    (a) DECLARATION.--The Senate's advice and consent is 
subject to the following declaration:

          (1) TREATY INTERPRETATION.--The Senate affirms the 
        applicability to all treaties of the constitutionally 
        based principles of treaty interpretation set forth in 
        Condition (1) of the resolution of ratification of the 
        INF Treaty, approved by the Senate on May 27, 1988, and 
        Condition (8) of the resolution of ratification of the 
        Document Agreed Among the States Parties to the Treaty 
        on Conventional Armed Forces in Europe, approved by the 
        Senate on May 14, 1997.

    (b) PROVISOS.--The resolution of ratification is subject to 
the following provisos:

          (1) SUPREMACY OF THE CONSTITUTION.--Nothing in the 
        Treaty requires or authorizes legislation or other 
        action by the United States of America that is 
        prohibited by the Constitution of the United States as 
        interpreted by the United States.
          (2) RETURN OF PROTOCOL NO. 3 TO THE PRESIDENT.--Upon 
        submission of this resolution of ratification to the 
        President of the United States, the Secretary of the 
        Senate is directed to return to the President of the 
        United States the Additional Protocol No. 3 to Amend 
        the Convention for the Unification of Certain Rules 
        relating to International Carriage by Air, signed at 
        Warsaw on October 12, 1929, as amended by the Protocols 
        done at The Hague, on September 28, 1955, and at 
        Guatemala City, March 8, 1971 ((Treaty Doc. 95-2A) 
        Executive B, 95th Congress).



                               APPENDICES


                            C O N T E N T S

                               __________
                                                                   Page

                               Appendix 1

The Provisions of the Revised Warsaw Convention Applicable to the 
  United States in the Event of Ratification of Montreal Protocol 
  No. 4..........................................................    19

                               Appendix 2

          foreign relations committee hearing of may 13, 1998

Larson, Hon. Alan P., Assistant Secretary of State for Economic 
  and Business Affairs...........................................    35
    Prepared statement...........................................    38
U.S. Department of State letter of June 22, 1998, requesting 
  changes to testimony of Assistant Secretary Alan P. Larson.....    45
Responses to Additional Questions for the Record Submitted by the 
  Committee to Assistant Secretary Alan P. Larson Regarding the 
  Montreal Protocol No. 4
    Questions Submitted by Chairman Helms........................    46
    Questions Submitted by Senator Hagel.........................    47
    Questions Submitted by Senator Biden.........................    47
Responses to Questions Submitted by the Committee to Coordinated 
  Departments of State and Transportation Regarding Montreal 
  Protocol No. 4.................................................    52
Correspondence Pertaining to Montreal Protocol No. 4 from the 
  U.S. Department of Transportation..............................    54
List of Carriers Signatory to the IATA Intercarrier Agreement on 
  Passenger Liability, as at 12 June 1998........................    55
List of Carriers Signatory to the Agreement on Measures to 
  Implement the IATA Intercarrier Agreement, as at 12 June 1998..    56
List of Airlines Having Waived Liability Limits, as at 15 April 
  1998...........................................................    57
Responses to Additional Questions for the Record Submitted by the 
  Committee to Assistant Secretary Alan P. Larson
Questions Submitted by Senator Hagel.............................    57
Questions Submitted by Senator Biden.............................    66

                               Appendix 3

Letter from R.L. Crandall, Chairman and President, American 
  Airlines, to Chairman Jesse Helms..............................    81
Letter from Peter H. Powell, Sr., President, National Customs 
  Brokers & Forwarders Association of America, to Chairman Jesse 
  Helms..........................................................    81
Letter from Ronald A. Lane, Vice Chairman, Evergreen 
  International Airlines, Inc., to Chairman Jesse Helms..........    82
Letter from Gerald Greenwald, Chairman and Chief Executive 
  Officer, United Airlines, to Chairman Jesse Helms..............    83
Letter from John H. Dasburg, President and Chief Executive 
  Officer, Northwest Airlines, to Chairman Jesse Helms...........    83
Letter from Frederick W. Smith, Chairman of the Board and Chief 
  Executive Officer, FDX Corp., to Chairman Jesse Helms..........    84
Letter from Thomas H. Weidemeyer, President, UPS Airlines, to 
  Chairman Jesse Helms...........................................    85
Letter from Hans Ephraimson-Abt, Chairman, The American 
  Association for -Families of KAL 007 Victims, to Chairman Jesse 
  Helms..........................................................    85
Letter from Fred Mostert, President, International Trademark 
  Association, to Chairman Jesse Helms...........................    86
                               Appendix 1

   The Provisions of the Revised Warsaw Convention Applicable to the 
 United States in the Event of Ratification of Montreal Protocol No. 4 
                                  \1\
---------------------------------------------------------------------------

    \1\ Margin notes give the source of the provision (W = Warsaw 
Convention; H=The Hague Protocol; M4 = Montreal Protocol No. 4).
---------------------------------------------------------------------------

                     Chapter I. Scope--Definitions

Article 1
    1. This Convention shall apply to all international 
transportation of persons, baggage, or goods performed by 
aircraft for hire. It shall apply equally to gratuitous 
transportation by aircraft performed by an air transportation 
enterprise. (W-Art. 1)
    2. For the purposes of this Convention, the expression 
international carriage means any carriage in which, according 
to the agreement between the parties, the place of departure 
and the place of destination, whether or not there be a break 
in the carriage or a transshipment, are situated either within 
the territories of two High Contracting Parties or within the 
territory of a single High Contracting Party if there is an 
agreed stopping place within the territory of another State, 
even if that State is not a High Contracting Party. Carriage 
between two points within the territory of a single High 
Contracting Party without an agreed stopping place within the 
territory of another State is not international carriage for 
the purposes of this Convention. (H-Art. I)
    3. Carriage to be performed by several successive air 
carriers is deemed, for the purposes of this Convention, to be 
one undivided carriage if it has been regarded by the parties 
as a single operation, whether it had been agreed upon under 
the form of a single contract or of a series of contracts, and 
it does not lose its international character merely because one 
contract or a series of contracts is to be performed entirely 
within the territory of the same State. (H-Art. I)
Article 2
    1. This Convention shall apply to transportation performed 
by the State or by legal entities constituted under public law 
provided it falls within the conditions laid down in Article 1. 
(W-Art. 2)
    2. In the carriage of postal items the carrier shall be 
liable only to the relevant postal administration in accordance 
with the rules applicable to the relationship between the 
carriers and the postal administrations. (M4-Art. II)
    3. Except as provided in paragraph 2 of this Article, the 
provisions of this Convention shall not apply to the carriage 
of postal items. (M4-Art. II)

                  Chapter II. Transportation Documents

                      section i.--passenger ticket

Article 3
    1. In respect of the carriage of passengers a ticket shall 
be delivered containing:

          (a) an indication of the places of departure and 
        destination;
          (b) if the places of departure and destination are 
        within the territory of a single High Contracting 
        Party, one or more agreed stopping places being within 
        the territory of another State, an indication of at 
        least one such stopping place;
          (c) a notice to the effect that, if the passenger's 
        journey involves an ultimate destination or stop in a 
        country other than the country of departure, the Warsaw 
        Convention may be applicable and that the Convention 
        governs and in most cases limits the liability of 
        carriers for death or personal injury and in respect of 
        loss of or damage to baggage.

    2. The passenger ticket shall constitute prima facie 
evidence of the conclusion and conditions of the contract of 
carriage. The absence, irregularity or loss of the passenger 
ticket does not affect the existence or the validity of the 
contract of carriage which shall, none the less, be subject to 
the rules of this Convention. Nevertheless, if, with the 
consent of the carrier, the passenger embarks without a 
passenger ticket having been delivered, or if the ticket does 
not include the notice required by paragraph 1(c) of this 
Article, the carrier shall not be entitled to avail himself of 
the provisions of Article 22. (H-Art. III)

                       section ii.--baggage check

Article 4
    1. In respect of the carriage of registered baggage, a 
baggage check shall be delivered, which, unless combined with 
or incorporated in a passenger ticket which complies with the 
provisions of Article 3, paragraph 1, shall contain:

          (a) an indication of the places of departure and 
        destination;
          (b) if the places of departure and destination are 
        within the territory of a single High Contracting 
        Party, one or more agreed stopping places being within 
        the territory of another State, an indication of at 
        least one such stopping place;
          (c) a notice to the effect that if the carriage 
        involves an ultimate destination or stop in a country 
        other than the country of departure, the Warsaw 
        Convention may be applicable and that the Convention 
        governs and in most cases limits the liability of 
        carriers in respect of loss of or damage to baggage.

    2. The baggage check shall constitute prima facie evidence 
of the registration of the baggage and of the conditions of the 
contract of carriage. The absence, irregularity or loss of the 
baggage check does not affect the existence or the validity of 
the contract of carriage which shall, none the less, be subject 
to the rules of this Convention. Nevertheless, if the carrier 
takes charge of the baggage without a baggage check having been 
delivered or if the baggage check (unless combined with or 
incorporated in the passenger ticket which complies with the 
provisions of Article 3, paragraph 1(c)) does not include the 
notice required by paragraph 1(c) of this Article, he shall not 
be entitled to avail himself of the provisions of Article 22, 
paragraph 2. (H-Art. IV)

             section iii.--documentation relating to cargo

Article 5
    1. In respect of the carriage of cargo an air waybill shall 
be delivered.
    2. Any other means which would preserve a record of the 
carriage to be performed may, with the consent of the 
consignor, be substituted for the delivery of an air waybill. 
If such other means are used, the carrier shall, if so 
requested by the consignor, deliver to the consignor a receipt 
for the cargo permitting identification of the consignment and 
access to the information contained in the record preserved by 
such other means.
    3. The impossibility of using, at points of transit and 
destination, the other means which would preserve the record of 
the carriage referred to in paragraph 2 of this Article does 
not entitle the carrier to refuse to accept the cargo for 
carriage. (M4-Art. III)
Article 6
    1. The air waybill shall be made out by the consignor in 
three original parts.
    2. The first part shall be marked ``for the carrier''; it 
shall be signed by the consignor. The second part shall be 
marked ``for the consignee''; it shall be signed by the 
consignor and by the carrier. The third part shall be signed by 
the carrier and handed by him to the consignor after the cargo 
has been accepted.
    3. The signature of the carrier and that of the consignor 
may be printed or stamped.
    4. If, at the request of the consignor, the carrier makes 
out the air waybill, he shall be deemed, subject to proof to 
the contrary, to have done so on behalf of the consignor. (M4-
Art. III)
Article 7
    When there is more than one package:

          a) the carrier of cargo has the right to require the 
        consignor to make out separate air waybills;
          b) the consignor has the right to require the carrier 
        to deliver separate receipts when the other means 
        referred to in paragraph 2 of Article 5 are used. (M4-
        Art. III)
Article 8
    The air waybill and the receipt for the cargo shall 
contain:

          a) an indication of the places of departure and 
        destination;
          b) if the places of departure and destination are 
        within the territory of a single High Contracting 
        Party, one or more agreed stopping places being within 
        the territory of another State, an indication of at 
        least one such stopping place; and
          c) an indication of the weight of the consignment. 
        (M4-Art. III)
Article 9
    Non-compliance with the provisions of Articles 5 to 8 shall 
not affect the existence or the validity of the contract of 
carriage, which shall, none the less, be subject to the rules 
of this Convention including those relating to limitation of 
liability. (M4-Art. III)
Article 10
    1. The consignor is responsible for the correctness of the 
particulars and statements relating to the cargo inserted by 
him or on his behalf in the air waybill or furnished by him or 
on his behalf to the carrier for insertion in the receipt for 
the cargo or for insertion in the record preserved by the other 
means referred to in paragraph 2 of Article 5.
    2. The consignor shall indemnify the carrier against all 
damage suffered by him, or by any other person to whom the 
carrier is liable, by reason of the irregularity, incorrectness 
or incompleteness of the particulars and statements furnished 
by the consignor or on his behalf.
    3. Subject to the provisions of paragraphs 1 and 2 of this 
Article, the carrier shall indemnify the consignor against all 
damage suffered by him, or by any other person to whom the 
consignor is liable, by reason of the irregularity, 
incorrectness or incompleteness of the particulars and 
statements inserted by the carrier or on his behalf in the 
receipt for the cargo or in the record preserved by the other 
means referred to in paragraph 2 of Article 5. (M4-Art. III)
Article 11
    1. The air waybill or the receipt for the cargo is prima 
facie evidence of the conclusion of the contract, of the 
acceptance of the cargo and of the conditions of carriage 
mentioned therein.
    2. Any statements in the air waybill or the receipt for the 
cargo relating to the weight, dimensions and packing of the 
cargo, as well as those relating to the number of packages, are 
prima facie evidence of the facts stated; those relating to the 
quantity, volume and condition of the cargo do not constitute 
evidence against the carrier except so far as they both have 
been, and are stated in the air waybill to have been, checked 
by him in the presence of the consignor, or relate to the 
apparent condition of the cargo. (M4-Art. III)
Article 12
    1. Subject to his liability to carry out all his 
obligations under the contract of carriage, the consignor has 
the right to dispose of the cargo by withdrawing it at the 
airport of departure or destination, or by stopping it in the 
course of the journey on any landing, or by calling for it to 
be delivered at the place of destination or in the course of 
the journey to a person other than the consignee originally 
designated, or by requiring it to be returned to the airport of 
departure. He must not exercise this right of disposition in 
such a way as to prejudice the carrier or other consignors and 
he must repay any expenses occasioned by the exercise of this 
right.
    2. If it is impossible to carry out the orders of the 
consignor the carrier must so inform him forthwith.
    3. If the carrier obeys the orders of the consignor for the 
disposition of the cargo without requiring the production of 
the part of the air waybill or the receipt for the cargo 
delivered to the latter, he will be liable, without prejudice 
to his right of recovery from the consignor, for any damage 
which may be caused thereby to any person who is lawfully in 
possession of that part of the air waybill or the receipt for 
the cargo.
    4. The right conferred on the consignor ceases at the 
moment when that of the consignee begins in accordance with 
Article 13. Nevertheless, if the consignee declines to accept 
the cargo, or if he cannot be communicated with, the consignor 
resumes his right of disposition. (M4-Art. III)
Article 13
    1. Except when the consignor has exercised his right under 
Article 12, the consignee is entitled, on arrival of the cargo 
at the place of destination, to require the carrier to deliver 
the cargo to him, on payment of the charges due and on 
complying with the conditions of carriage.
    2. Unless it is otherwise agreed, it is the duty of the 
carrier to give notice to the consignee as soon as the cargo 
arrives.
    3. If the carrier admits the loss of the cargo, or if the 
cargo has not arrived at the expiration of seven days after the 
date on which it ought to have arrived, the consignee is 
entitled to enforce against the carrier the rights which flow 
from the contract of carriage. (M4-Art. III)
Article 14
    The consignor and the consignee can respectively enforce 
all the rights given them by Articles 12 and 13, each in his 
own name, whether he is acting in his own interest or in the 
interest of another, provided that he carries out the 
obligations imposed by the contract of carriage. (M4-Art. III)
Article 15
    1. Articles 12, 13 and 14 do not affect either the 
relations of the consignor and the consignee with each other or 
the mutual relations of third parties whose rights are derived 
either from the consignor or from the consignee.
    2. The provisions of Articles 12, 13 and 14 can only be 
varied by express provision in the air waybill or the receipt 
for the cargo. (M4-Art. III)
Article 16
    1. The consignor must furnish such information and such 
documents as are necessary to meet the formalities of customs, 
octroi or police before the cargo can be delivered to the 
consignee. The consignor is liable to the carrier for any 
damage occasioned by the absence, insufficiency or irregularity 
of any such information or documents, unless the damage is due 
to the fault of the carrier, his servants or agents.
    2. The carrier is under no obligation to enquire into the 
correctness or sufficiency of such information or documents. 
(M4-Art. III)

                 Chapter III. Liability of the Carrier

Article 17
    The carrier shall be liable for damage sustained in the 
event of the death or wounding of a passenger or any other 
bodily injury suffered by a passenger, if the accident which 
caused the damage so sustained took place on board the aircraft 
or in the course of any of the operations of embarking or 
disembarking. (W-Art. 17)
Article 18
    1. The carrier is liable for damage sustained in the event 
of the destruction or loss of, or damage to, any registered 
baggage, if the occurrence which caused the damage so sustained 
took place during the carriage by air.
    2. The carrier is liable for damage sustained in the event 
of the destruction or loss of, or damage to, cargo upon 
condition only that the occurrence which caused the damage so 
sustained took place during the carriage by air.
    3. However, the carrier is not liable if he proves that the 
destruction, loss of, or damage to, the cargo resulted solely 
from one or more of the following:

          a) inherent defect, quality or vice of that cargo;
          b) defective packing of that cargo performed by a 
        person other than the carrier or his servants or 
        agents;
          c) an act of war or an armed conflict;
          d) an act of public authority carried out in 
        connection with the entry, exit or transit of the 
        cargo.

    4. The carriage by air within the meaning of the preceding 
paragraphs of this Article comprises the period during which 
the baggage or cargo is in the charge of the carrier, whether 
in an airport or on board an aircraft, or, in the case of a 
landing outside an airport, in any place whatsoever.
    5. The period of the carriage by air does not extend to any 
carriage by land, by sea or by river performed outside an 
airport. If, however, such carriage takes place in the 
performance of a contract for carriage by air, for the purpose 
of loading, delivery or transshipment, any damage is presumed, 
subject to proof to the contrary, to have been the result of an 
event which took place during the carriage by air. (M4-Art. IV)
Article 19
    The carrier shall be liable for damage occasioned by delay 
in the transportation by air of passengers, baggage, or goods. 
(W-Art. 19)
Article 20
    In the carriage of passengers and baggage, and in the case 
of damage occasioned by delay in the carriage of cargo, the 
carrier shall not be liable if he proves that he and his 
servants and agents have taken all necessary measures to avoid 
the damage or that it was impossible for them to take such 
measures. (M4-Art. V)
Article 21
    1. In the carriage of passengers and baggage, if the 
carrier proves that the damage was caused by or contributed to 
by the negligence of the person suffering the damage the Court 
may, in accordance with the provisions of its own law, 
exonerate the carrier wholly or partly from his liability.
    2. In the carriage of cargo, if the carrier proves that the 
damage was caused by or contributed to by the negligence or 
other wrongful act or omission of the person claiming 
compensation, or the person from whom he derives his rights, 
the carrier shall be wholly or partly exonerated from his 
liability to the claimant to the extent that such negligence or 
wrongful act or omission caused or contributed to the damage. 
(M4-Art. VI)
Article 22
    1. In the carriage of persons the liability of the carrier 
for each passenger is limited to the sum of two hundred and 
fifty thousand francs. Where, in accordance with the law of the 
court seised of the case, damages may be awarded in the form of 
periodical payments, the equivalent capital value of the said 
payments shall not exceed two hundred and fifty thousand 
francs. Nevertheless, by special contract, the carrier and the 
passenger may agree to a higher limit of liability. (H-Art. XI)

  2.    a) In the carriage of registered baggage, the liability 
            of the carrier is limited to the sum of two hundred 
            and fifty francs per kilogram, unless the passenger 
            or consignor has made, at the time when the package 
            was handed over to the carrier, a special 
            declaration of interest in delivery at destination 
            and has paid a supplementary sum if the case so 
            requires. In that case the carrier will be liable 
            to pay a sum, not exceeding the declared sum, 
            unless he proves that the sum is greater than the 
            passenger's or consignor's actual interest in 
            delivery at destination. (H-Art. XI; M4-Art. VII)

        b) In the carriage of cargo, the liability of the 
            carrier is limited to a sum of 17 Special Drawing 
            Rights per kilogramme, unless the consignor has 
            made, at the time when the package was handed over 
            to the carrier, a special declaration of interest 
            in delivery at destination and has paid a 
            supplementary sum if the case so requires. In that 
            case the carrier will be liable to pay a sum not 
            exceeding the declared sum, unless he proves that 
            the sum is greater than the consignor's actual 
            interest in delivery at destination. (M4-Art. VII)

        c) In the case of loss, damage or delay of part of 
            registered baggage or cargo, or of any object 
            contained therein, the weight to be taken into 
            consideration in determining the amount to which 
            the carrier's liability is limited shall be only 
            the total weight of the package or packages 
            concerned. Nevertheless, when the loss, damage or 
            delay of a part of the registered baggage or cargo, 
            or of an object contained therein, affects the 
            value of other packages covered by the same baggage 
            check or the same air waybill, the total weight of 
            such package or packages shall also be taken into 
            consideration in determining the limit of 
            liability. (H-Art. XI)

    3. As regards objects of which the passenger takes charge 
himself the liability of the carrier is limited to five 
thousand francs per passenger. (H-Art. XI)
    4. The limits prescribed in this Article shall not prevent 
the court from awarding, in accordance with its own law, in 
addition, the whole or part of the court costs and of the other 
expenses of the litigation incurred by the plaintiff. The 
foregoing provision shall not apply if the amount of the 
damages awarded, excluding court costs and other expenses of 
the litigation, does not exceed the sum which the carrier has 
offered in writing to the plaintiff within a period of six 
months from the date of the occurrence causing the damage, or 
before the commencement of the action, if that is later. (H-
Art. XI)
    5. The sums mentioned in francs in this Article shall be 
deemed to refer to a currency unit consisting of sixty-five and 
a half milligrams of gold of millesimal fineness nine hundred. 
These sums may be converted into national currencies in round 
figures. Conversion of the sums into national currencies other 
than gold shall, in case of judicial proceedings, be made 
according to the gold value of such currencies at the date of 
the judgment. (H-Art. XI)
    6. The sums mentioned in terms of the Special Drawing Right 
in this Article shall be deemed to refer to the Special Drawing 
Right as defined by the International Monetary Fund. Conversion 
of the sums into national currencies shall, in case of judicial 
proceedings, be made according to the value of such currencies 
in terms of the Special Drawing Right at the date of the 
judgment. The value of a national currency, in terms of the 
Special Drawing Right, of a High Contracting Party which is a 
Member of the International Monetary Fund, shall be calculated 
in accordance with the method of valuation applied by the 
International Monetary Fund, in effect at the date of the 
judgment, for its operations and transactions. The value of a 
national currency, in terms of the Special Drawing Right, of a 
High Contracting Party which is not a Member of the 
International Monetary Fund, shall be calculated in a manner 
determined by that High Contracting Party.
    Nevertheless, those States which are not Members of the 
International Monetary Fund and whose law does not permit the 
application of the provisions of paragraph 2 b) of Article 22 
may, at the time of ratification or accession or at any time 
thereafter, declare that the limit of liability of the carrier 
in judicial proceedings in their territories is fixed at a sum 
of two hundred and fifty monetary units per kilogramme. This 
monetary unit corresponds to sixty-five and a half milligrammes 
of gold of millesimal fineness nine hundred. This sum may be 
converted into the national currency concerned in round 
figures. The conversion of this sum into national currency 
shall be made according to the law of the State concerned. (M4-
Art. VII)
Article 23
    1. Any provision tending to relieve the carrier of 
liability or to fix a lower limit than that which is laid down 
in this convention shall be null and void, but the nullity of 
any such provision shall not involve the nullity of the whole 
contract, which shall remain subject to the provisions of this 
convention. (W-Art. 23, designated as para. 1 by H-Art. XII)
    2. Paragraph 1 of this Article shall not apply to 
provisions governing loss or damage resulting from the inherent 
defect, quality or vice of the cargo carried. (H-Art. XII)
Article 24
    1. In the carriage of passengers and baggage, any action 
for damages, however founded, can only be brought subject to 
the conditions and limits set out in this Convention, without 
prejudice to the question as to who are the persons who have 
the right to bring suit and what are their respective rights.
    2. In the carriage of cargo, any action for damages, 
however founded, whether under this Convention or in contract 
or in tort or otherwise, can only be brought subject to the 
conditions and limits of liability set out in this Convention 
without prejudice to the question as to who are the persons who 
have the right to bring suit and what are their respective 
rights. Such limits of liability constitute maximum limits and 
may not be exceeded whatever the circumstances which gave rise 
to the liability. (M4-Art. VIII)
Article 25
    In the carriage of passengers and baggage, the limits of 
liability specified in Article 22 shall not apply if it is 
proved that the damage resulted from an act or omission of the 
carrier, his servants or agents, done with intent to cause 
damage or recklessly and with knowledge that damage would 
probably result; provided that, in the case of such act or 
omission of a servant or agent, it is also proved that he was 
acting within the scope of his employment. (M4-Art. IX)
Article 25A
    1. If in action is brought against a servant or agent of 
the carrier arising out of damage to which this Convention 
relates, such servant or agent, if he proves that he acted 
within the scope of his employment, shall be entitled to avail 
himself of the limits of liability which that carrier himself 
is entitled to invoke under Article 22. (H-Art. XIV)
    2. The aggregate of the amounts recoverable from the 
carrier, his servants and agents, in that case, shall not 
exceed the said limits. (H-Art. XIV)
    3. In the carriage of passengers and baggage, the 
provisions of paragraphs 1 and 2 of this Article shall not 
apply if it is proved that the damage resulted from an act or 
omission of the servant or agent done with intent to cause 
damage or recklessly and with knowledge that damage would 
probably result. (M4-Art. X)
Article 26
    1. Receipt by the person entitled to the delivery of 
baggage or goods without complaint shall be prima facie 
evidence that the same have been delivered in good condition 
and in accordance with the document of transportation. (W-Art. 
26)
    2. In the case of damage, the person entitled to delivery 
must complain to the carrier forthwith after the discovery of 
the damage, and, at the latest, within seven days from the date 
of receipt in the case of baggage and fourteen days from the 
date of receipt in the case of cargo. In the case of delay the 
complaint must be made at the latest within twenty-one days 
from the date on which the baggage or cargo have [has] been 
placed at his disposal. (H-Art. XV)
    3. Every complaint must be made in writing upon the 
document of transportation or by separate notice in writing 
dispatched within the times aforesaid. (W-Art. 26)
    4. Failing complaint within the times aforesaid, no action 
shall lie against the carrier, save in the case of fraud on his 
part. (W-Art. 26)
Article 27
    In the case of the death of the person liable, an action 
for damages lies in accordance with the terms of this 
convention against those legally representing his estate. (W-
Art. 27)
Article 28
    1. An action for damages must be brought, at the option of 
the plaintiff, in the territory of one of the High Contracting 
Parties, either before the court of the domicile of the carrier 
or of his principal place of business, or where he has a place 
of business through which the contract has been made, or before 
the court at the place of destination.
    2. Questions of procedure shall be governed by the law of 
the court to which the case is submitted. (W-Art. 28)
Article 29
    1. The right to damages shall be extinguished if an action 
is not brought within 2 years, reckoned from the date of 
arrival at the destination, or from the date on which the 
aircraft ought to have arrived, or from the date on which the 
transportation stopped.
    2. The method of calculating the period of limitation shall 
be determined by the law of the court to which the case is 
submitted. (W-Art. 29)
Article 30
    1. In the case of transportation to be performed by various 
successive carriers and falling within the definition set out 
in the third paragraph of Article 1, each carrier who accepts 
passengers, baggage or goods shall be subject to the rules set 
out in this convention, and shall be deemed to be one of the 
contracting parties to the contract of transportation insofar 
as the contract deals with that part of the transportation 
which is performed under his supervision.
    2. In the case of transportation of this nature, the 
passenger or his representative can take action only against 
the carrier who performed the transportation during which the 
accident or the delay occurred, save in the case where, by 
express agreement, the first carrier has assumed liability for 
the whole journey.
    3. As regards baggage or goods, the passenger or consignor 
shall have a right of action against the first carrier, and the 
passenger or consignee who is entitled to delivery shall have a 
right of action against the last carrier, and further, each may 
take action against the carrier who performed the 
transportation during which the destruction, loss, damage, or 
delay took place. These carriers shall be jointly and severally 
liable to the passenger or to the consignor or consignee. (W-
Art. 30)
Article 30A
    Nothing in this Convention shall prejudice the question 
whether a person liable for damage in accordance with its 
provisions has a right of recourse against any other person. 
(M4-Art. XI)

       Chapter IV. Provisions Relating to Combined Transportation

Article 31
    1. In the case of combined transportation performed partly 
by air and partly by any other mode of transportation, the 
provisions of this convention shall apply only to the 
transportation by air, provided that the transportation by air 
falls within the terms of Article 1.
    2. Nothing in this convention shall prevent the parties in 
the case of combined transportation from inserting in the 
document of air transportation conditions relating to other 
modes of transportation, provided that the provisions of this 
convention are observed as regards the transportation by air. 
(W-Art. 31)
Chapter V. General and Final Provisions
Article 32
    Any clause contained in the contract and all special 
agreements entered into before the damage occurred by which the 
parties purport to infringe the rules laid down by this 
convention, whether by deciding the law to be applied, or by 
altering the rules as to jurisdiction, shall be null and void. 
Nevertheless for the transportation of goods arbitration 
clauses shall be allowed, subject to this convention, if the 
arbitration is to take place within one of the jurisdictions 
referred to in the first paragraph of Article 28. (W-Art. 32)
Article 33
    Except as provided in paragraph 3 of Article 5, nothing in 
this Convention shall prevent the carrier either from refusing 
to enter into any contract of carriage or from making 
regulations which do not conflict with the provisions of this 
Convention. (M4-Art. XII)
Article 34
    The provisions of Articles 3 to 8 inclusive relating to 
documents of carriage shall not apply in the case of carriage 
performed in extraordinary circumstances outside the normal 
scope of an air carrier's business. (M4-Art. XIII)
Article 35
    The expression ``days'' when used in this convention means 
current days, not working days. (W-Art. 35)
Articles 36 to 40. \2\
---------------------------------------------------------------------------
    \2\ Articles 36 to 40 govern participation in and withdrawal from 
the Convention. Montreal Protocol No. 4 would largely supersede these 
clauses for the United States and they are therefore omitted here.
---------------------------------------------------------------------------
Article 40A
    1. In Article 37, paragraph 2 and Article 40, paragraph 1, 
the expression High Contracting Party shall mean State. In all 
other cases, the expression High Contracting Party shall mean a 
State whose ratification of or adherence to the Convention has 
become effective and whose denunciation thereof has not become 
effective.
    2. For the purposes of the Convention the word territory 
means not only the metropolitan territory of a State but also 
all other territories for the foreign relations of which that 
State is responsible. (H-Art. XVII)
Article 41
    Any High Contracting Party shall be entitled not earlier 
than two years after the coming into force of this convention 
to call for the assembling of a new international conference to 
consider any improvements which may be made in this convention. 
To this end it will communicate with the Government of the 
French Republic which will take the necessary measures to make 
preparations for such conference. (W-Art. 41)



                               Appendix 2

                    MONTREAL PROTOCOL NO. 4 TO AMEND

                 THE CONVENTION FOR THE UNIFICATION OF

                CERTAIN RULES RELATING TO INTERNATIONAL

               CARRIAGE BY AIR. (EX.B, 95-1), AND OTHERS



 MONTREAL PROTOCOL NO 4 TO AMEND THE CONVENTION FOR THE UNIFICATION OF 
 CERTAIN RULES RELATING TO INTERNATIONAL CARRIAGE BY AIR EX B 95-1 AND 
                                 OTHERS

                              ----------                              


                        WEDNESDAY, MAY 13, 1998

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:15 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Chuck Hagel, 
presiding. Present: Senator Hagel.
    Senator Hagel. Good morning. Mr. Secretary, welcome.
    Mr. Larson: Thank you, sir.
    Senator Hagel. The committee meets this morning to consider 
five treaties that together ratified will have important and 
beneficial impacts on the economic interests of the United 
States. Each treaty on its own will facilitate different 
segments of the U.S. economy, particularly in the areas of 
international shipping and transportation, agriculture, 
intellectual property, trademark law and international trade.
    The Montreal Protocol No. 4 will enhance the efficiency of 
the air cargo transportation industry by streamlining cargo 
documentation requirements. Internationally cargo tracking 
operates in the Dark Ages using paper tracking methods, 
requiring information that is commercially irrelevant in 
today's electronic age. This protocol will encourage the 
phaseout of paper airway bills in exchange for electronic 
processing systems which carriers already use domestically. 
This will bring both ease and cost efficiency to the industry.
    The International Grains Agreement consists of two 
treaties, the Grains Trade Convention and the Food Aid 
Convention, both of which are strongly supported by U.S. 
farmers. The Grains Trade Convention reauthorizes U.S. 
membership in the International Grains Council, an 
intergovernmental organization of exporting and importing 
members that provides objective and timely statistical 
information. This information is used by farmers to plan crop 
demands and other market needs, thereby eliminating trade 
barriers involving these commodities and promoting market 
stability. Let me be clear, however, that the convention does 
not contain economic provisions and thus does not regulate 
levels of grain trade between countries or price ranges for 
grain sales.
    In addition, the Food Aid Convention commits the United 
States to a minimum of 2.5 million metric tons of U.S. food aid 
which is carried out by the P.L. 480 program and other 
bilateral aid programs. The convention permits donor countries 
to coordinate food aid commitments around the world and 
provides certainty regarding available food aid levels.
    Another treaty before the committee this morning that is 
important to our farmers and the agriculture industry in the 
United States is the International Convention for the 
Protection of New Varieties of Plants. The United States 
exports over $6 billion in seed each year, largely in the form 
of cereal such as corn, wheat, oats, and other important food 
plants such as potatoes developed by agricultural and bio-tech 
companies.
    The need for protection of intellectual property 
represented in these seed varieties cannot be understated. 
Approval of the revised UPOV Convention will increase the level 
of protection for businesses from unauthorized use or 
reproduction of plant varieties. Specifically, the UPOV 
convention grants certain property rights to breeders of new 
plants on a showing that a plant variety is distinct, 
sufficiently homogenous, stable, and new.
    The Trademark Law Treaty will streamline and thereby 
facilitate international trademark registration. A myriad of 
rules and regulations for registering trademarks can cause both 
expense and delay for trademark owners. Key provisions of the 
treaty relate to the elimination of notarization requirements, 
general power of attorney requirements, single trademark 
applications for multiple goods, and a requirement that 
countries accept service trademarks in addition to trademarks 
on goods.
    Finally, the committee is considering two technical 
amendments to the Convention on the International Maritime 
Organization, an intergovernmental organization that advances 
international shipping trade. One amendment would formalize the 
Facilitation Committee of the IMO by making it one of five 
standing committees of the organization. The second amendment 
would increase the size of the council from 32 members to 40.
    The committee now will hear about these important treaties 
from Alan P. Larson our Assistant Secretary of State for 
Economic and Business Affairs.
    Secretary Larson, welcome. We look forward to your 
testimony.

STATEMENT OF HON. ALAN P. LARSON, ASSISTANT SECRETARY OF STATE 
               FOR ECONOMIC AND BUSINESS AFFAIRS

    Mr. Larson. Thank you very much, Mr. Chairman. I have a 
statement, a longer statement, for the record. Could I submit 
that?
    Senator Hagel. It will be included in the record.
    Mr. Larson. Thank you. With your permission, sir, I would 
like to make a short summary of that statement; all right?
    Senator Hagel. Please do.
    Mr. Larson. Mr. Chairman, we do appreciate very much the 
opportunity to present views of the administration regarding 
the five agreements under consideration today. I have never had 
the privilege before of testifying on behalf of five different 
treaties. I will have to say that in reviewing the background 
to these agreements I was struck about how each one of them 
relates in its own way to the boom in U.S. exports and commerce 
over the last 10 years.
    Our prosperity is increasingly dependent on broadening and 
deepening our flow of exports overseas, and to facilitate that 
flow we do need to maintain, strengthen and update the 
international agreements that provide the rules of the road. I 
would agree completely with your characterization that these 
agreements deal with very important aspects of international 
trade including the transportation of goods, the protection of 
intellectual property and arrangements that really facilitate 
and create the right type of environment for our agricultural 
exports. If I could just briefly comment on each of the 
treaties.
    Ratification of the International Grains Agreement will 
assist U.S. farmers by providing an independent source of 
information and an important marketing tool. As you noted, Mr. 
Chairman, the Agreement places absolutely no restrictions on 
the parties with regard to pricing, a position that is strongly 
supported by the United States. In addition, the Council's Food 
Aid Committee is helping to lay the necessary groundwork for 
the next WTO round on agriculture; because we believe that, if 
the United States is to gain broad support for further 
agricultural liberalization, it will be essential that we 
remain active in the Food Aid Committee.
    The State Department's fiscal year 1998 contribution 
appropriation includes funding to pay our assessment to this 
organization, but that money can only be disbursed once the 
International Grains Agreement is ratified. If we are not in a 
position to pay that assessment by June 30, we will fall into 
arrears and will lose our vote and potentially undercut our 
leadership role in the organization.
    The accession of the United States to the 1991 
International Convention for the Protection of New Variety of 
Plants will help bring about stronger intellectual property 
protection in emerging markets for a crucial U.S. industry 
that, again as you indicated, exported over $6 billion worth of 
seed stock and plant varieties last year. We think that our 
accession to this agreement will send a very clear signal to 
our trading partners that their WTO commitment to implement 
intellectual property protection for plant varieties is best 
met through their prompt accession to the 1991 UPOV Convention.
    Mr. Chairman, the Montreal Protocol No. 4 to the Warsaw 
Convention of 1929 reforms and modernizes in important ways the 
convention's rules governing air cargo liability and 
documentation. Protocol 4 does not contain controversial 
provisions and it has universal endorsement from the U.S. air 
transport industry.
    With Protocol 4 due to enter into force in June, U.S. 
industry runs the risk of being significantly disadvantaged 
vis-a-vis international competitors, unless the U.S. is in a 
position to become a party. For that reason, we would encourage 
favorable and the promptest possible action and ratification of 
the Montreal Protocol 4 without any reservation. \1\
---------------------------------------------------------------------------
    \1\ After Secretary Larson's appearance before the Committee, 
changes were made in both his testimony and his prepared statement. For 
an explanation of those changes see the Department of State's letter of 
June 22, 1998, which has been reproduced in this report on page 45.
---------------------------------------------------------------------------
    On a more general note, Mr. Chairman, I would draw 
attention to the fact that in my written statement I have 
submitted a consolidated text of the Warsaw Convention as it 
was amended at the Hague by the Hague Protocol and by the 
Montreal Protocol No. 4, so the complete record is available.
    Turning to the International Maritime Organization 
Convention, we believe that these two sets of amendments will 
ensure that the ships that visit our ports meet our high 
standards for safety and environmental protection. The 
International Maritime Organization plays an important part in 
establishing standards accepted by the international maritime 
community. Within the IMO, the U.S. Coast Guard is helping to 
ensure that all ships meet international standards that are on 
a level equivalent to our own. These two amendments to the 
convention on the International Maritime Organization will help 
the organization carry out its mission more effectively.
    The 1991 amendments establish the Facilitation Committee as 
a standing committee. This committee will contribute to better 
operating efficiency for the maritime industry, and in that way 
I think assist our efforts to combat narcotics trafficking and 
the threat of maritime terrorism. The amendments also increase 
the size of the governing council from 32 to 40 members which 
will ensure that more members play a part in advancing the 
IMO's efforts to strengthen the maritime safety and 
environmental protection.
    Finally, Mr. Chairman, the Trademark Law Treaty will, again 
as you indicated, help U.S. business by harmonizing many 
complex trademark application procedures that differ from 
country to country. In that way, we believe that the Trademark 
Law Treaty will help U.S. business file for and maintain 
trademark protection in more countries at lower cost.
    Thank you once again, Mr. Chairman, for the opportunity to 
present views on treaties that we think are important for the 
U.S. economy that do modernize arrangements in important areas 
and that we believe enjoy broad support from the private 
sector.
    Thank you, sir.
    [The prepared statement of Mr. Larson follows:]

                  Prepared Statement of Alan P. Larson

    Mr. Chairman, the State Department appreciates the opportunity to 
present the views of the Administration regarding the five agreements 
under consideration today.
    In reviewing the background behind each of these five agreements, I 
was struck by how they each relate to the boom in U.S. exports over the 
last ten years. Our economic prosperity is increasingly dependent on 
broadening and deepening the flow of exports overseas. To facilitate 
this growing flow of trade, we must maintain and strengthen the 
international agreements that provide the ``rules of the road'' for 
trade.
    Each of these five agreements does exactly that. Ratification of 
the International Grains Agreement will ensure that the United States 
has a voice in an organization that will help pave the way for future 
agricultural liberalization agreements. Membership in the 1991 
Convention for the Protection of Plant Varieties will strengthen 
intellectual property protection for over $6 billion in U.S. seed stock 
exports. By becoming a party to the Montreal Protocol Four, the U.S. 
will ensure that US air cargo carriers are not put at a competitive 
disadvantage. The amendments to the Convention on the International 
Maritime Organization will help ensure that the ships of other maritime 
nations meet the same high safety and environmental standards as our 
own. Finally, accession to the Trademark Law Treaty will facilitate 
trademark application and maintenance for U.S. trademark holders.
    I would now like to make some brief comments on each of the five 
agreements, starting with the International Grains Agreement.
    Ratifying the International Grains Agreement will advance several 
important American interests. The United States is the world's top 
grains exporter and the Agreement enjoys strong support from American 
grains producer groups. The International Grains Council's data on 
international grains flows and prices provides our producers with an 
important source of information and a valuable marketing tool. The 
Agreement places no restrictions on parties regarding pricing, a 
position strongly supported by the United States.
    In addition, the International Grains Council's Food Aid Committee 
is playing a pivotal role in laying the groundwork for the next WTO 
round. With Committee members having agreed to re-examine food aid 
levels, the Committee's work is viewed by less developed countries as 
part of a package which included their agreement to undertake 
agricultural reforms. The American farmer has been a major beneficiary 
of these reforms. We believe that if the United States is to gain broad 
support for further agricultural liberalization in the next round, it 
is essential that we continue our efforts in the Food Aid Committee.
    Finally, it is important to note that the International Grains 
Council has demonstrated true fiscal restraint over the last several 
budget periods. Its overall expenditure budgets have remained virtually 
constant since 1995. The organization relocated to less expensive 
rental space and reduced both its professional and support staff, all 
the while maintaining a high quality product.
    We need to move quickly on this Agreement. The State Department's 
FY98 Contributions to International Organizations (CIO) appropriation 
includes funding to pay our International Grains Council assessment, 
but this money can only be disbursed once the International Grains 
Agreement is ratified. If we do not pay our assessment by June 30, the 
U.S. will fall into arrears and lose its vote, undercutting the 
leadership role we have been taking in this organization.
    I would now briefly like to talk about the 1991 UPOV Convention.
    Mr. Chairman, implementation of the 1991 Act of the International 
Convention for the Protection of New Varieties of Plants has been a 
priority for the Administration. The 1991 UPOV Convention broadens the 
types of plant varieties entitled to protection, further defines the 
rights of plant breeders and farmers, and allows member countries 
greater flexibility in implementing patent and sui generis forms of 
protection.
    U.S. ratification of the 1991 UPOV Convention is important for an 
American industry that exported over $6 billion in seed stock and plant 
varieties last year. The US is the world's leader in developing high 
tech, high yield seed strains of wheat, corn, and most of the world's 
other important crops. We believe the 1991 UPOV Convention will help 
protect our investment in this industry by setting a rigorous and 
comprehensive international standard of protection for those countries 
now seeking to implement their WTO obligation to provide seed and plant 
variety intellectual property protection.
    With only two years to go before developing countries must fully 
implement their WTO intellectual property obligations, our ratification 
of the 1991 UPOV Convention will send a timely signal that protection 
for plant varieties is best accomplished through adherence to this 
Convention's standards.
    In 1995, Congress unanimously passed implementing legislation for 
the obligations of the 1991 UPOV Convention. No further changes to our 
laws need be made. By safeguarding the sizable investment that US 
industry makes in developing new varietals, the UPOV Union helps assure 
that emerging markets have access to the latest high yield seed stock. 
Your advice and consent to this Convention will yield an immediate and 
tangible harvest for U.S. agriculture.
    I would now like to comment on the Montreal Protocol.
    Mr. Chairman, the Montreal Protocol 4 to the Warsaw Convention of 
1929 reforms and modernizes the Warsaw Convention's rules governing air 
cargo liability and documentation. Protocol 4 does not contain 
controversial provisions, and it has the universal endorsement of the 
air transport industry. Among other things, Protocol 4 will simplify 
and modernize data processing requirements for air cargo waybills, 
resulting in millions of dollars in processing cost savings for the 
industry.
    Under its own terms, ratification of Protocol 4 by a State, such as 
the United States, that is not a party to the Warsaw Convention as 
amended at The Hague, 1955, will have the effect of binding that State 
to the terms of Warsaw as amended at The Hague, as well as to Protocol 
4. To assist the Committee on Foreign Relations and the Senate in its 
consideration of Protocol 4, the State Department submits as part of 
this testimony a consolidated text of the Warsaw Convention, as amended 
at The Hague, 1955, and by Protocol 4. This consolidated text reflects 
the treaty provisions to which the United States would be bound if it 
becomes party to Protocol 4.
    In the past, Protocol 4 has been considered in conjunction with 
Montreal Protocol 3, which addresses passenger liability issues. 
Currently, the Administration is pursuing other avenues for modernizing 
the passenger liability system.
    Accordingly, the Administration now advocates separate 
consideration of Protocol 4 on its own merits.
    The Government of Poland, depositary for the Warsaw Convention, 
informed us very recently that the required 30 countries have ratified 
Protocol 4, and it will enter into force on June 14, 1998. U.S. 
industry may be significantly disadvantaged vis-a-vis its international 
competitors if the U.S. now fails to become a Party in timely fashion.
    We strongly urge the Senate to take favorable action by ratifying 
Montreal Protocol 4, without any reservation. \2\
---------------------------------------------------------------------------
    \2\ See footnote 1.
---------------------------------------------------------------------------
    Finally, I would like to briefly speak about the two amendments to 
the Convention on the International Maritime Organization.
    Maritime transportation is an integral part of our nation's 
transportation system and is essential to our economy. More than 95 
percent of our exports and imports are shipped by sea, including the 9 
million barrels of oil that we import every day. It is essential that 
ships carrying our foreign trade be safe and protect the environment. 
Large numbers of foreign vessels call on our ports and we must work 
with other maritime countries to ensure that all ships meet the highest 
standards. The International Maritime Organization (IMO) plays a major 
part in establishing standards accepted by the international maritime 
community. In the IMO, the U.S. Coast Guard has had a major role in 
bringing these standards up to a level that parallel our own.
    The two amendments to the Convention on the International Maritime 
Organization we are discussing today are technical, noncontroversial 
changes that will update the basic mandate drafted in 1948 and help the 
organization carry out its mission more effectively. The 1991 
amendments establish the Facilitation Committee as one of the IMO's 
standing committees. The Committee contributes to greater efficiencies 
and profits for the U.S. maritime industry, while assisting our efforts 
to combat narcotics trafficking and the threat of maritime terrorism. 
The 1993 amendments increase the size of the IMO's governing Council 
from 32 to 40 members. Increasing the size will ensure a more adequate 
representation of the more than 150 member states in vital maritime 
safety and environmental protection efforts around the world.
    As the IMO celebrates its 50th anniversary, ratification of these 
amendments will contribute to our interest in facilitating cooperation 
among maritime nations. Therefore, the State Department respectfully 
requests the Senate to give its advice and consent to acceptance of 
these amendments.
    Finally, the Trademark Law Treaty harmonizes a number of the 
requirements and procedures associated with the filing, registration, 
and renewal of trademarks. By enhancing standardization across 
countries, this treaty will reduce overall filing costs, thereby 
enabling U.S. business to register and maintain trademarks in more 
markets.

    Senator Hagel. Secretary Larson, thank you.
    I have a few questions that I would like to ask, and then 
we have a number of questions that we will submit in writing 
for the record.
    Mr. Larson. OK.
    Senator Hagel. I suspect I have some colleagues that will 
be interested in submitting questions as well. The status of 
the Montreal Protocol No. 4 we are talking about this morning 
is that if all questions are answered satisfactorily then it 
would be the intent of the chairman to take this up at our 
business meeting. We will work with you to facilitate getting 
the questions to you. If you could, as you will I know, work 
with us on getting answers back and we will see if we can get 
this wrapped up at the business meeting next week.
    Mr. Larson. Excellent. We will work very hard to meet any 
requirements you have for more information.
    Senator Hagel. OK. Thank you. Now let me ask a couple of 
questions while you are here. You mention in your statement 
that the Food Aid Committee of the International Grains Council 
is playing a pivotal role in laying the groundwork for the next 
WTO round of agricultural liberalization. In that statement, 
you indicated the committee is engaged in some reform with 
regard to developing countries. Could you talk a little bit 
about what the nature of those reforms are, what food aid might 
be used to leverage those reforms, and then also who monitors 
those reforms?
    Mr. Larson. I think the basic idea, Mr. Chairman, is that 
as part of the negotiations that led to the built-in agenda on 
agriculture under the auspices of the WTO there were a number 
of compromises that needed to be made. One of the compromises 
represented the interest on the part of a number of developing 
countries, particularly food importing developing countries, to 
know that there was going to be a continuing commitment on the 
part of major grain and food exporters to continuing food aid. 
So in a broad political sense we believe that our continued 
interest, involvement, engagement, and leadership in the Food 
Aid Committee is an important demonstration of our commitment 
to the broad package of issues that are important to countries 
around the world when they think about agriculture.
    Now we will be undertaking in the near future as part of 
this WTO built-in agenda efforts to make further progress to 
liberalize agricultural trade. Much of that agenda will be 
carrying on and trying to extend the agenda of the last Round, 
that is: reducing trade-distorting agricultural subsidies, and 
getting rid of agricultural barriers to our trade. We think 
that one of the big accomplishments of the Uruguay Round was 
the progress that was made on agriculture. We think that there 
is a lot more work to be done.
    With respect to your specific question about how would 
these new undertakings be monitored, it would be through the 
WTO surveillance dispute settlement systems that are now in 
place.
    Senator Hagel. Thank you. You also mentioned in your 
statement that ratification of the UPOV Convention will send a 
timely signal to developing countries must meet with the WTO 
intellectual property obligations over the next 2 years. As you 
know, the president's 1998 trade policy agenda and annual 
report indicate that a number of these countries have been slow 
or uneven in their efforts to pass and enforce these tough 
intellectual property laws. In your opinion, will developing 
nations meet these targets?
    Mr. Larson. Mr. Chairman, I am not a very good forecaster 
sometimes, but I think what I can say that would be responsive 
to your question is that, first of all, we have made it a very 
high priority to see to it that countries do meet their 
commitments under the TRIPs, the ``Trade related aspects of 
intellectual property'' arrangement. One of the things that we 
did almost immediately after or very soon after the TRIPs 
Agreement came into force was to take some actions in the WTO 
under its dispute settlement system, to force the pace. We took 
those actions against some relatively important countries, and 
we were quite widespread in the type of enforcement-prodding 
actions that we have taken.
    The second dimension of our effort to encourage protection 
of intellectual property rights around the world and early 
adherence to TRIPs commitments has been to work with countries 
to help them understand how it is in their own interest. I 
mean, we believe very sincerely that countries that have high 
intellectual property standards are contributing to their 
attractiveness as a place to invest and a place for trade. 
Because if intellectual property is not respected, then 
obviously businesses around the world will have a certain 
reluctance in going and doing business there. We have been 
working assiduously with countries around the world through or 
embassies and building up coalitions of private sector groups 
in those countries to help them understand why it is in their 
own interests.
    Our accession to UPOV itself is going to make a 
contribution in this regard because we believe that many 
trading partners are waiting to see us move before they move. 
It in part would indicate our signaling that we believe that 
this is the most appropriate mechanism for meeting the TRIPs 
commitments in the area of the protection of plant varieties. 
So I think this is another one of a series of things that we 
can do and that we are trying to do to make sure that countries 
do live up to their commitments, they do it fully, they do it 
on time. To the extent that they do not do it, I think we have 
demonstrated a willingness to use the machinery of the WTO to 
push them to do it.
    Senator Hagel. Thank you. Let me take another facet of your 
statement regarding the U.S. military, particularly U.S. 
military aircraft. You mentioned that the U.S. would be seeking 
a declaration in the Senate resolution ratification for the 
Montreal Protocol that exempts U.S. military authorities from 
application of the treaty. What rules now govern U.S. military 
aircraft?
    Mr. Larson. Could you give me a second to double check?
    Senator Hagel. Sure.
    [Pause.]
    Mr. Larson. Please allow me to divide your question into 
two parts. You asked what rules govern U.S. military aircraft. 
The applicable rules do not change for U.S. military aircraft. 
At the time it became a Party to the Warsaw Convention of 1929, 
the United States made a reservation which exempted state 
aircraft, which includes all flights on aircraft owned and 
operated by the U.S. military. This reservation remains 
effective.
    However, it has been determined that the reservation under 
the Warsaw Convention does not extend to aircraft that are not 
actually military aircraft, but are chartered by military 
authorities. Accordingly, the declaration available under 
Montreal Protocol 4 was designed to permit these charter 
aircraft also to be exempted from the Convention.
    The U.S. military has addressed liability issues for such 
chartered aircraft by negotiating special contracts with U.S. 
commercial airlines that provide the aircraft and crews. The 
U.S. military is able to meet its need through these special 
contracts, which modify the liability limits of the Convention. 
Because the contracts are based on the Convention, and because 
the U.S. military is able to meet its needs through these 
special contracts, the Administration does not seek the 
declaration available under Montreal Protocol No. 4. \3\
---------------------------------------------------------------------------
    \3\ See footnote 1.
---------------------------------------------------------------------------
    Senator Hagel. OK. So nothing different or new that you are 
proposing?
    Mr. Larson. That is correct.
    Senator Hagel. OK. The issue of Protocol 3, which you are 
aware of, let me ask for the record, does the administration 
support the Senate consideration of Montreal Protocol No. 4 
without also considering the Montreal Protocol No. 3?
    Mr. Larson. Yes, we do.
    Senator Hagel. Is there any intent on the administration's 
part to request ratification of Protocol No. 3 at this time?
    Mr. Larson. No. There is not at this time. We are currently 
engaged in a multilateral effort to negotiate a new agreement 
to replace the Warsaw Convention and that in specific terms 
would replace these passenger-related provisions of Protocol 
No. 3. If we were successful, we would want to come back to the 
Senate with those arrangements. But at this time, we are not 
seeking any action on Protocol 3.
    Senator Hagel. Thank you. Regarding the IMO amendments, 
membership in the IMO, as you know, has increased I think by 
more than 30 states now, a total of 150 or 155 since the size 
of the Council was last increased in the early 1980's. Do you 
believe that this increase is the primary reason for increasing 
the size of the Council at this time?
    Mr. Larson. Well, it is my understanding, sir, that we have 
an increase to membership and we also have sort of increased 
involvement in international shipping. The way that this 
arrangement is organized there are different categories of 
members. There is a category of member that includes states 
that have the largest interest in providing shipping services. 
We find ourselves in that particular group.
    There is a category of states that have the largest 
interest in sea-born trade, which includes another group of 
states, and then there are others who have special interests in 
maritime transport and whose representation on the Council we 
think will contribute to the effectiveness of the organization 
as being an authoritative organization in its areas of 
competence. So it is an effort to provide opportunities for 
participation and leadership on countries who have a stake in 
international maritime transport.
    Senator Hagel. Do you believe that increasing the size of 
the Council might complicate its operation?
    Mr. Larson. We don't believe that. As you know in other 
contexts, we look very, very hard at proposals to change the 
size, increase the size of groups that play important roles in 
international organizations. So this is something that is a 
serious concern for us always. It has been a judgment that this 
relatively modest increase in size based as it is on the stake 
that countries have in international maritime commerce is 
something that reflects our interest and would contribute to 
the effectiveness of the organization.
    Senator Hagel. The Facilitation Committee, which as you 
know was created by the Council in 1967, my understanding is 
now being made a permanent committee and only now. I guess for 
the record it would be important for us to get your sense of 
what in your opinion has this committee accomplished really.
    Mr. Larson. OK. We believe that the institutionalization of 
the committee will provide an important tool to promote the 
flow of trade and to provide updates of the IMO Convention, 
which was originally drafted in 1948. We think that the work 
that the IMO does in terms of establishing recommendations and 
guidelines to simplify, to harmonize procedures for the 
movement of ships and cargo and passengers in and out of 
international ports is extremely important work, that it can be 
carried out more effectively by a full committee.
    We envisioned this committee having a work program that 
would include a wide variety of issues including: electronic 
data interchange, customs formalities and interface between the 
ship and the port. For example, in this regard the IMO recently 
updated approaches for the prevention of drug smuggling on 
ships. We think that the committee will also be in a position 
to assist ports in making their operations more efficient.
    I might add just on perhaps a slightly extraneous note 
these are obviously technical issues. One reads ones notes to 
make sure that one understands precisely what is going on. At 
the same time, I know from some experience last autumn with 
port practices issues with the country of Japan these are 
extraordinarily important issues. The efficient operation of 
ports and having good rules and standards and common approaches 
to how these issues are handled can be absolutely vital to 
commerce particularly in a day and age when ``just in time 
inventory approaches'' means that if you interfere--if there is 
a problem or a bottleneck in one place, it starts having 
repercussions all throughout the international trading system 
and the international maritime network. So I think that these 
issues although they can sound fairly technical at times are 
really quite important.
    Senator Hagel. Mr. Secretary, thank you. As I mentioned, I 
have other questions and my colleagues have other questions. We 
will keep the record open until close of business on Thursday. 
You have other issues to attend to, important business to deal 
with, and so I think for right now we have accomplished what we 
need to accomplish.
    I appreciate very much you taking time to come up here. As 
I said, if we can get the questions, which we will do, to you 
and if you can get them back to us, and the chairman has 
assured us that we should be able to get on the regular 
committee work meeting schedule next weed, then hopefully we 
could get this accomplished.
    Mr. Larson. Great. Thank you.
    Senator Hagel. Would you like to add anything for the 
record, Mr. Secretary?
    Mr. Larson. Mr. Chairman, I would only want to reiterate my 
appreciation for having the opportunity to testify. I think we 
agree that these are important treaties and we really welcome 
the opportunity to be here to express our views on them. We 
pledge to work with you in particular in this Montreal Protocol 
4 to get prompt answers to the questions you may have.
    Senator Hagel. Good. Thank you.
    [Whereupon, at 10:40 a.m., the hearing was adjourned.]



                     H E A R I N G  A P P E N D I X

                              ----------                              

U.S. Department of State Letter of June 22, 1998, Requesting Changes to 
          the Testimony of Assistant Secretary Alan P. Larson

                          U.S. Department of State,
                                          Washington, D.C.,
                                                     June 22, 1998.
Hon. Jesse Helms,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, D.C.
    Dear Mr. Chairman, At the request of the Senate Foreign Relations 
Committee staff, we wish to clarify for you and the other members of 
the Committee the Administration's position regarding the Montreal 
Protocol No. 4 to the Warsaw Convention, to which the Administration 
has urged the Senate to give its advice and consent.
    Specifically, we wish to reaffirm that the Administration does not 
recommend the United States make a declaration upon ratification of 
Protocol 4 which would exempt from the Warsaw liability system the 
carriage of persons, baggage and cargo for its military authorities on 
aircraft registered in the United States, the whole capacity of which 
has been reserved by or on behalf of U.S. military authorities. This 
position represents a change from the verbal statement of Assistant 
Secretary of State for Economic and Business Affairs Alan P. Larson 
before the Committee at the May 13, 1998 hearing on Protocol 4 and four 
other treaties; it is consistent with, and confirms, Assistant 
Secretary Larson's amended written statement submitted to the Committee 
for the record on May 15, 1998, and with subsequent communications with 
the Committee staff on this issue.
    The original testimony failed to represent the position of the 
Department of Defense (DOD) on making the declaration. We have since 
consulted extensively with them, and expressed the regrets of the 
Department.
    Immediately following the May 13 hearing, aviation industry 
representatives questioned the State Department concerning the 
declaration. We promptly contacted Brigadier General Gilbert J. Regan, 
USAF, Chief Counsel for the U.S. Transportation Command at Scott Air 
Force Base, who worked with our office of the Legal Adviser to develop 
a position on the U.S. option to make a declaration exempting military 
charters. These efforts resulted in a letter from General Regan dated 
15 May 1998, stating and explaining his view that no declaration should 
be made. We have since received a letter (enclosed) from James B. 
Emahiser, Principal Deputy Under Secretary of Defense (Logistics), 
confirming that this is the official position of the Department of 
Defense. This revised position has been reflected in Assistant 
Secretary Larson's amended statement and in the Administration's 
responses to the Committee's questions for the record.
    We regret any confusion caused by this revision. Fortunately, the 
system worked to correct our position before the Government took any 
formal action relative to Montreal Protocol 4. As Assistant Secretary 
Larson testified on May 13, this Protocol offers very important 
benefits for the U.S. air cargo industry, and the Administration 
continues strongly to urge the Senate to take favorable action by 
ratifying Montreal Protocol 4 with any reservation.
    We hope this information will be helpful to you. Please do not 
hesitate to contact us if we can be of further assistance.
            Sincerely,
                                    Barbara Larkin,
                                       Assistant Secretary,
                                               Legislative Affairs.

                               __________

 Responses to Additional Questions Submitted by the Committee for the 
                Record Regarding Montreal Protocol No. 4

                 Questions Submitted by Chairman Helms

    Question. In your opening statement you indicated that the United 
States is seeking a declaration in the Senate's resolution of 
ratification for the Montreal Protocol that exempts U.S. military 
authorities from application of the treaty. Please detail the effect of 
this declaration.
    Answer. As will be reflected in the amended written testimony of 
Assistant Secretary Larson, the Administration does not recommend that 
the United States make a declaration upon ratification of Montreal 
Protocol No.4 for the purpose of exempting the carriage of persons, 
baggage and cargo for its military authorities on aircraft registered 
in the United States, the whole capacity of which has been reserved by 
or on behalf of U.S. military authorities.
    At the time it became a Party to the Warsaw Convention, the United 
States made a reservation exempting from the Convention international 
air transport performed by the United States of America or any 
territory or possession under its jurisdiction. Accordingly, all 
flights on aircraft owned and operated by the U.S. military, among 
other entities, are exempted from the provisions of the Convention. The 
Administration does not propose withdrawing this reservation.
    The reservation provided for under Montreal Protocol No. 4 would 
expand the reservation made with respect to the 1929 Warsaw Convention 
to exempt from the Convention U.S. registered civil aircraft chartered 
by the U.S. military, where the entire capacity of the aircraft has 
been reserved by or on behalf of the military authorities.
    Currently, the liability of airlines operating aircraft under 
charter to the U.S. military is determined under the Warsaw Convention, 
as modified by special contracts between the U.S. Government and the 
airline providing the aircraft and crew. A sample ``special contract'' 
used for this purpose is attached as Appendix A. We understand that 
these special contracts, which are expressly provided for in the Warsaw 
Convention, meet the needs of the Department of Defense. Because the 
problem of passenger liability limitations is being revised by the 
intercarrier agreements, which would be incorporated into special 
contracts between the airlines and the military, there is no need to 
exempt charters to the military from the provisions of the Convention.
    Question. Please detail the rules that govern U.S. military 
personnel.
    Answer. Recoveries of U.S. military personnel in the event of an 
aircraft accident vary according to the circumstances of the flight. 
Because the Convention applies only to international flights, we 
address only international operations:
   When U.S. military personnel fly on aircraft owned and 
        operated by the U.S. military, the Convention has no 
        application and U.S.G. liability to injured military personnel 
        is determined under U.S. law.
   When U.S. military personnel fly internationally on 
        scheduled commercial airlines, whether U.S. or foreign, they 
        are covered by the Warsaw Convention, entitled to the same 
        recovery from the airline, under the same restrictions, as 
        civilians. Relative to this category of flights, we note that 
        military personnel are subject to the provisions of 49 U.S.C. 
        1517 (``Fly America Act''), which requires the use of U.S. flag 
        air carriers to transport government-financed travel. 
        Regulations implementing that statute are found at 4 CFR Sec. 
        51, et seq.
   When U.S. military personnel fly internationally on civil 
        aircraft chartered by the U.S. military, they currently are 
        covered by the Warsaw Convention, as modified by special 
        contracts entered into between the U.S. Government and the 
        airline providing the aircraft. Department of Defense rules 
        generally require that only U.S. registered aircraft be 
        chartered for such operations, in accordance with the 
        provisions of 49 U.S.C. 1517 (``Fly America Act''), which 
        requires the use of U.S. flag air carriers to transport 
        government-financed travel.
    Question. What rules govern U.S. military personnel on aircraft not 
registered in the United States?
    Answer. As noted above, U.S. military personnel are subject to the 
provisions of the Fly America Act and, accordingly, are generally 
required to use U.S. flag air carriers for government-financed travel. 
There are, however, situations in which such personnel will fly on 
foreign registered aircraft. In such situations, they are covered by 
the Warsaw Convention, entitled to the same recovery from the airline, 
under the same restrictions, as civilians.
    Question. Please explain the meaning of ``the whole capacity of 
which has been reserved by or on behalf of such authorities.''
    Answer. This refers to a contract whereunder military authorities 
procure from another entity an aircraft and full crew to transport 
passengers or cargo, solely as directed by the military authorities. 
The Civil Reserve Air Fleet (CRAF) program is an example of the U.S. 
military reserving the whole capacity of civil aircraft. In contrast, 
if the U.S. military contracted with an aircraft operator to carry 
specified personnel or cargo, but permitted the operator to carry other 
passengers or cargo, the requirements of this provision would not be 
met.

                  Question Submitted by Senator Hagel

    Question. There are a few provisions in Protocol No. 4 that deal 
with the carriage of passengers and baggage. The United States 
delegation at the Montreal Conference stated that, as authorized under 
Protocol No. 4, the United States would submit a reservation to these 
provisions to that Protocol No. 4 would apply only to the carriage of 
cargo. Why isn't such a reservation now necessary?
    Answer. The reservation was proposed in a context where the United 
States would ratify both Protocol No. 3 and Protocol No. 4. 
Ratification of Protocol No. 3 is a precondition for making the 
referenced reservation under Article XXI of Protocol No. 4. As 
described previously, the Administration is pursuing avenues other than 
Protocol No. 3 for modifying the passenger liability regime. 
Accordingly, the Administration now advocates pursuing ratification of 
Protocol No. 4, independent of Protocol No. 3.

                  Questions Submitted by Senator Biden

    Question. Article IX of Montreal Protocol No. 4 amends Article 25 
of the underlying Warsaw Convention by deleting the ``willful 
misconduct'' standard for escaping liability and replacing it with an 
alternative formulation. Please explain the history of, and rationale 
for, altering this formulation.
    Answer. As noted, under the Warsaw Convention, airlines lost the 
benefit of the limit of liability for harm to passengers if the airline 
activity constituted willful misconduct or a failure to act that, in 
accordance with the law of the court to which the case is submitted, is 
considered to be equivalent to willful misconduct. Under Protocol 4, 
the Convention's liability limits may be exceeded where ``damage 
resulted from an act or omission of the carrier, his servants or 
agents, done with intent to cause damage or recklessly and with 
knowledge that damage would probably result.''
    The reason for the change derives from the fact that the Warsaw 
Convention was written in French and there is no authentic English 
text. The French standard was stated as, ``dol ou d'une faute qui, 
d'apres la loi du tribunal saisi, est consideree comme equivalent au 
dol.'' In translating that phrase, the United States adopted the then 
existing legal standard of ``willful misconduct.'' However, other 
countries adopted different translations that lead to disparate results 
and, as a result, lead to confusion among lawyers and judges attempting 
to apply the Warsaw Convention.
    Delegates at The Hague Conference adopted a standard that in all 
substantive respects was similar to the charge to the jury by a New 
York trial court in Froman v. Pan American Airways (Supreme Court of 
New York County, March 9, 1953). Because the concept of willful 
misconduct came to have different connotations in the civil and common 
law systems, the drafters of Hague replaced the legal standard with a 
description of the conduct itself, that a jury would be able to 
understand. The Hague Protocol standard has been identified as the 
common law definition of ``willful misconduct.''
    Question. Does the Executive Branch regard this change as modifying 
the scope of the standard?
    Answer. Recognizing that The Hague Protocol standard is merely an 
alternative interpretation of the original French text, developed to 
harmonize the various legal interpretations that had developed from the 
original, it is the Executive Branch's view that this change does not 
modify the scope of the standard.
    Question. Assuming that the Executive Branch believes this change 
will not effect a substantive change, would the Executive Branch 
support the adoption of an understanding in the Senate's Resolution of 
Ratification stating that no change is intended?
    Answer. The Executive Branch would not support adoption of such an 
understanding, believing that it would confuse, rather than clarify, 
the applicable standard. As noted above, the negotiating history of The 
Hague Protocol indicates that the standard was revised to promote 
uniformity among nations applying the Warsaw Convention.
    Question. Article XXI of Montreal Protocol No. 4 permits a state to 
make a reservation that the Warsaw Convention, as amended by The Hague 
Protocol and Montreal Protocol No. 4, will not apply to the ``carriage 
of persons, baggage, and cargo for its military authorities on 
aircraft, registered in that State, the whole capacity of which has 
been reserved by or on behalf of such authorities.''
    In your testimony, you indicated that the Senate take a 
``declaration'' on this subject. Should it be a declaration or 
reservation?
    Answer. As will be reflected in the amended written testimony of 
Assistant Secretary Larson, the Administration does not recommend that 
the United States make any declaration upon ratification of Montreal 
Protocol No. 4 for the purpose of exempting the carriage of persons, 
baggage and cargo for its military authorities on aircraft registered 
in the United States, the whole capacity of which has been reserved by 
or on behalf of U.S. military authorities.
    Question. Why does the Executive Branch support the United States 
taking this reservation?
    Answer. The Executive Branch does not support taking this 
reservation.
    Question. If it were taken, would it apply to the Civil Reserve Air 
Fleet (CRAF) program?
    Answer. Yes, the Civil Reserve Air Fleet (CRAF) program is an 
example of the type of operation described in Article XXI to which the 
reservation would apply.
    Question. What is the current passenger liability scheme under the 
CRAF?
    Answer. When U.S. military personnel fly internationally on civil 
aircraft chartered by the U.S. military under the CRAF program, they 
are covered by the Warsaw Convention, as modified by special contracts 
entered into between the U.S. Government and the airline providing the 
aircraft and crew.
    Question. What does the term ``whole capacity'' mean?
    Answer. This refers to a contract whereunder military authorities 
procure from another entity an aircraft and full crew to transport 
passengers or cargo, solely as directed by the military authorities. 
The Civil Reserve Air Fleet (CRAF) program is an example of the U.S. 
military reserving the whole capacity of civil aircraft. In contrast, 
if the U.S. military contracted with an aircraft operator to carry 
specified personnel or cargo, but permitted the operator to carry other 
passengers or cargo, the requirements of this provision would not be 
met.
    Question. Several other allied nations, such as Canada and France, 
have yet to ratify Protocol No. 4. Why have they not yet done so?
    Answer. We believe that, like the United States, many countries 
have not ratified Montreal Protocol No. 4 because of its linkage to 
passenger provisions of Montreal Protocol No. 3. We believe that with 
the recent changes in circumstances, including the intercarrier 
agreement and the imminent entry into force of Montreal Protocol No. 4 
in June of 1998, these and other countries are likely to follow the 
United States in ratifying Montreal Protocol No. 4, to maintain 
competitiveness in international cargo services.
    Question. If the United States ratifies Montreal Protocol No. 4, it 
will also, pursuant to Article XVII (or XIX) of Protocol No. 4, accede 
to The Hague Protocol of 1955. Has the Executive Branch ever submitted 
The Hague Protocol to the Senate as a separate document?
    Answer. Upon ratifying Montreal Protocol No. 4, the United States 
would be bound by the provisions of the Warsaw Convention as amended by 
The Hague Protocol and as amended by Montreal Protocol No. 4. The 
Executive Branch did submit The Hague Protocol to the Senate for its 
advice and consent to ratification on July 24, 1959 (86th Congress, 1st 
Session, Executive H). However, because the proposed legislation 
providing for supplemental accident insurance for passengers, which was 
essential to the Administration's support for the Protocol, failed to 
be adopted, and because the passenger liability regime was improved by 
the 1966 intercarrier agreement, the Protocol was withdrawn from Senate 
consideration in 1967.
    To assist the Senate in its consideration of Montreal Protocol No. 
3 and No. 4, the Executive Branch submitted a consolidated text of the 
provisions of the revised Warsaw Convention applicable to the United 
States in the event of ratification of Montreal Protocols No. 3 and No. 
4 following its submission of those two Protocols to the Senate for 
advice and consent in 1977 (see 98th Congress, 1st Session, Executive 
Report No. 89-1, pp. 23-37). A consolidated text of the Warsaw 
Convention as amended by the Hague Protocol and Protocol No. 4 was 
presented as part of the testimony of Assistant Secretary Larson on May 
13.
    Question. Please discuss any significant changes to the Warsaw 
Convention that will result.
    Answer. The provisions of The Hague Protocol will not have 
significant impact on the Warsaw Convention, as amended by The Hague 
Protocol and Montreal Protocol No. 4, as applied in the United States. 
The main purpose of The Hague Protocol was to double the limit of 
liability under the Warsaw Convention to the equivalent of 
approximately $16,600. This has no relevance in the United States 
today, because all airlines serving the United States are required to 
accede to the Montreal Agreement of 1966, an agreement among airlines 
whereunder the limit of liability was raised to $75,000. This limit has 
been further liberalized by the recent inter-carrier agreements, which 
a number of airlines have signed and implemented.
    The Hague Protocol also provides that a court may award, in 
accordance with its own law, litigation costs incurred by the 
plaintiff; subject to the exception that such costs could not be 
awarded in excess of the limitations of the Convention if the defendant 
made a timely written offer to the plaintiff in an amount that exceeded 
the amount of the final judgment.
    Another notable aspect of The Hague Protocol is that it replaces 
the willful misconduct standard of the Warsaw Convention with a 
standard that defines willful misconduct, based on the jury charge from 
a case in New York Supreme Court (trial court), which referred to acts 
``done with the intent to cause damage or recklessly and with the 
knowledge that damage would probably result.'' It was considered, at 
the conference, that adopting this interpretation of the original 
language of the Convention would help harmonize decisions around the 
world and would reduce interpretation problems.
    Hague also made express the common interpretation of Warsaw that 
provided for the application of the limitations of the Warsaw 
Convention to suits against employees of an airline. (Article 25A).
    Question. The language used in Article 18(1) and 18(2) of Warsaw 
(as modified by Article IV of Protocol No. 4) is similar, but there is 
a slight distinction. Specifically, paragraph 1 provides that the 
carrier is liable for damage to any registered baggage, ``if the 
occurrence which caused the damage so sustained took place during the 
carriage by air.'' By contrast, paragraph 2 provides that the carrier 
is liable for damage to cargo ``upon condition only that the occurrence 
which caused the damage so sustained took place during the carriage by 
air.'' Does the use of different words (in the language italicized) 
suggest that a different meaning is intended?
    Answer. Yes. Protocol No. 4 established airline strict liability 
for damaged cargo. The referenced language, relative to cargo, 
emphasizes this strict liability standard by noting that the only 
condition that a shipper must establish is that the cargo was damaged 
during carriage by air. After stating this standard, Article 18(3), in 
Protocol No. 4, then sets out the four defined exceptions to airline 
strict liability for damage to cargo.
    Question. Article 23(1) of Warsaw (as modified by The Hague 
Protocol) states that ``Any provision tending to relieve the carrier of 
liability. . . .'' Does this mean any provision of the contract of 
carriage?
    Answer. Yes, this means any provision that affects the contractual 
relationship between the air carrier and the passenger. The provision 
is designed to prevent air carriers from effectively taking any action 
that would diminish the air carrier's obligations to the passenger or 
shipper pursuant to the Convention. This provision of the Warsaw 
Convention is not modified by The Hague Protocol.
    Question. Why is there different treatment of baggage and cargo in 
Article VIII of Protocol No. 4 (inserting a new Article 24 into the 
Warsaw Convention)?
    Answer. Baggage and cargo are treated separately in recognition of 
the fact that passengers may have control of baggage during the period 
of air transportation, whereas the air carrier has exclusive control 
over cargo during the transportation. Furthermore, the rights relative 
to cargo are definitively established by air waybills and other 
relevant contracts of shipment, whereas the persons entitled to recover 
in the event of death of a passenger and destruction of baggage are not 
so clearly established.
    Question. What is intended by the phrase ``In the case of delay'' 
in the second sentence of Article 26(2) of Warsaw (as modified by Hague 
Art. XV)? In other words, delay by whom?
    Answer. The provision refers to air carrier delay in delivering 
baggage or cargo.
    Question. Why was Article XI of Protocol No. 4 (inserting Art. 30A 
into Warsaw) deemed necessary?
    Answer. Article 30A was initially proposed in the Guatemala 
Protocol of 1971 to make clear that the Convention is silent on the 
carrier's rights of recourse under local law against any third parties 
who may have caused or contributed to the damages for which the carrier 
is liable.
    Question. What would constitute ``extraordinary circumstances 
outside the normal scope of an air carrier's business'' in Article 34 
of Warsaw (as modified by Art. XIII of Protocol No. 4)?
    Answer. This provision allows for airlines to enter into contracts 
to provide some form of customized service, without having to abide by 
contracting standards developed for routine service. One example might 
be where an airline charters aircraft to operate into a war zone.
    Question. Why is there a limitation on reservations in Article XXI 
of Montreal Protocol No. 4?
    Answer. The principal purpose of the Warsaw Convention and all of 
the amendments thereto is to unify certain rules relating to 
international transportation by air that affect the carriage of 
persons, baggage and cargo. Because the Warsaw Convention was designed 
to create international uniformity with respect to contract 
documentation and liability regime applicable to international air 
transportation, the restrictions on reservations, which have appeared 
in each of the Warsaw Convention related treaties, are essential.
    Question. Was there such a limitation in the original Warsaw 
Convention?
    Answer. By way of reservations, the original Convention preserved 
only the right of a state to declare the inapplicability of the 
Convention to international air transportation provided by the State or 
subordinate authorities.
    Question. Did the Executive Branch consult with this Committee 
before agreeing to this limitation?
    Answer. This limitation on reservations is substantially similar to 
that found in The Hague Protocol. We have found no indication that the 
Executive Branch consulted with this Committee prior to the June 28, 
1956, signing of The Hague Protocol or the subsequent protocols.
    Question. Over 90 air carriers have pledged in the Intercarrier 
Agreement on Passenger Liability (IIA) to ``waive the limitation on 
liability on recoverable compensatory damages in Article 22(1) of the 
Warsaw Convention.'' Signatories to the IIA pledged to implement it by 
November 1, 1996. As of last month, however, only 44 carriers had 
formally done so. As of today, how many carriers have formally waived 
the liability limits?
    Answer. We were advised by the International Air Transport 
Association (IATA) that as of April 1, 1998, 49 carriers, including 13 
U.S. carriers and 36 foreign carriers, have implemented the IIA 
Agreement. The implementing carriers represent most of the major world 
airlines, and a majority of the world's air traffic. Implementation of 
the IIA Agreement does not require formal tariff action. As of April 1, 
1998, 103 carriers had signed the IIA Agreement Lists are attached as 
Appendix 2. [The lists referred to appear on page XXX.]
    Question. What is the reason for the delay by signatories to the 
IIA in implementing it?
    Answer. There are many reasons for delayed implementation. In some 
cases, delay is attributable to airline confusion and uncertainty 
regarding exactly how the waivers apply, where more than one air 
carrier is involved in a journey covered by the Warsaw Convention. 
Also, implementation requires negotiations with insurance companies and 
frequently with government officials. We believe that in most cases the 
delays are due to uncertainty and the complexity of the issues, rather 
than a reluctance to finalize the waivers.
    Question. What options does the Executive Branch have to encourage 
or require carriers flying within or to the United States to implement 
the IIA?
    Answer. The Executive Branch has many options to encourage or 
require implementation, including permit or certificate conditions and/
or regulations. For the time being we are attempting to encourage 
implementation voluntarily. There are two reasons for this. First, the 
Agreement applies worldwide on a system-wide basis. Premature U.S. 
coercive action could detract from worldwide implementation on flights 
other than those to and from the United States. Second, the Legal 
Committee of the International Civil Aviation Organization is working 
on a new Convention, which would replace the Warsaw Convention. There 
is general consensus that the new Convention should eliminate passenger 
liability limits. However, other issues are controversial and it is too 
early to determine whether the process will result in a new Convention 
acceptable to the United States. A new Convention would have the 
advantage of applying a worldwide standard. Coercive action at this 
time could impair efforts to achieve broad support for the new 
Convention.
    Question. What is the position of the industry associations, such 
as the Air Transport Association or the National Air Carrier 
Association, regarding the disparity in liability limits that has 
occurred because of the failure of several carriers (many of them 
foreign) to carry out the commitment made to IIA?
    Answer. To the best of our knowledge, both ATA and NACA would 
support application of the IATA Agreements for all flights to and from 
the United States. They also understand our reasons for not taking 
coercive action at this time and they and their members have supported 
and assisted our efforts to achieve voluntary compliance.
    Question. Since 1983, the Department of Transportation has required 
all U.S. and foreign direct air carriers serving the United States to 
be a party to the 1966 Montreal Intercarrier Agreement. Is similar 
action under consideration in order to assure that all U.S. carriers, 
as well as foreign carriers, adhere to the most recent intercarrier 
agreements?
    Answer. As detailed in response to a previous question, regulatory 
action to universalize implementation of the IATA Agreements is one of 
the options being considered for meeting the Administration's 
objectives for enhancing passenger rights. For the reasons stated in 
that response, we believe such action would be premature at this time.
    Question. On May 15, 1998, the Department of State requested that 
its testimony regarding Montreal Protocol No. 4 be amended. In the 
amended testimony, the Department withdrew a proposed reservation to 
the Protocol related to the application of the Warsaw Convention to the 
carriage of persons, baggage, and cargo for U.S. military authorities 
on aircraft registered in the United States, the ``whole capacity'' of 
which was reserved by or on behalf of such authorities.
    Had this or a similar reservation been proposed by the Executive 
previously in testimony regarding Montreal Protocol 4?
    Answer. The Administration has not previously testified regarding 
Montreal Protocol No. 4 alone. Rather, past testimony related to 
ratification of Montreal Protocol Nos. 3 and 4, together. In that 
testimony, no reference was made to the reservation. However, the 
reservation was proposed much earlier in testimony relating to the 1955 
Hague Protocol to the Warsaw Convention.
    Question. If so, why has the Executive's position changed?
    Answer. We are unable to ascertain the precise reasons why the 
Administration previously held the view that aircraft chartered by the 
military should be exempted from the Warsaw Convention, consistently 
with the treatment of aircraft owned or operated by the military.
    However, we confirm that at present, the Administration recommends 
that the reservation to Protocol 4 not be taken, and that aircraft 
chartered by the military should be subject to the Warsaw Convention, 
although U.S. military aircraft are not subject to the Convention. We 
note the following reasons for that position:
   Currently, provisions of the Warsaw Convention provide great 
        predictability for military charters in terms of claims 
        procedures, limits of liability, burdens of proof, choices of 
        forums, statutes of limitations, and notice requirements. This 
        predictability benefits both Department of Defense (DOD) 
        passengers and DOD contractors. That certainty in procedures 
        would be lost if the reservation were made--The current 
        ``strict liability'' concepts contained in the Convention 
        benefit DOD passengers. Without Warsaw Convention coverage, 
        these concepts would be replaced by a requirement that the 
        claimant prove fault.
   The Warsaw Convention does not impede the DOD's ability to 
        contract with the carriers. In fact, DOD's current contracts 
        contain provisions which are more demanding on the carrier than 
        those in the Warsaw Convention.--It is the DOD's longstanding 
        policy to maintain a bright line between DOD charter flights 
        and ``state'' aircraft to avoid problems regarding diplomatic 
        clearances, the law of armed conflict, and other ``state'' 
        aircraft issues. Taking the reservation would blur that line.
    Question. It is my understanding that the Department's testimony 
before the Committee on May 13 was not reviewed by other government 
departments. This inter-agency process is normally managed by the 
Office of Management and Budget.
    Why wasn't the testimony cleared by the inter-agency process?
    Answer. The portion of the testimony concerning Montreal Protocol 4 
was cleared with the Department of Transportation prior to inclusion in 
the complete testimony on Protocol 4 and other treaties. Last-minute 
changes to the complete testimony just prior to the May 13 hearing, 
including addition of text on a fifth treaty beyond the four originally 
incorporated, regrettably did not allow sufficient time to clear the 
complete testimony through the Office of Management and Budget (OMB).
    Question. Which office at the State Department is normally 
responsible for assuring that testimony is cleared by the inter-agency 
process?
    Answer. The drafting office should seek input from other relevant 
agencies in preparing the draft testimony. The Bureau of Legislative 
Affairs is normally responsible for clearing the final draft testimony 
through OMB.
    Question. Was Assistant Secretary Larson aware that the testimony 
was not cleared by the other departments?
    Answer. Assistant Secretary Larson was not aware prior to the 
hearing that the testimony had not been cleared through OMB.
    Question. Has the amended testimony, submitted on May 15, been 
cleared by the other departments?
    Answer. The amended testimony was reviewed by representatives of 
the Departments of Justice and Transportation, and by the U.S. 
Transportation Command of the Department of Defense, prior to submittal 
to the Committee.
    Question. It is my understanding that the Department of State did 
not contact the Department of Defense regarding the proposed 
reservation--a reservation affecting the Department of Defense--until 
after the Committee's hearing on May 13?
    Question. Is that indeed the case?
    Answer. Yes.
    Question. If so, why did the Department of State fail to contact 
the Department of Defense prior to the Committee hearing?
    Answer. The failure to contact the Department of Defense was simply 
a case of human error on the part of the various State Department 
offices involved. We have since consulted extensively with the 
Department of Defense and expressed to them our regrets.

                               __________

    Responses to Additional Questions Submitted by the Committee to 
Coordinated Departments of State and Transportation Regarding Montreal 
                             Protocol No. 4

    Question 1. Warsaw Convention Article 25 provided that Article 22 
liability limits would not apply if damage resulted from carrier 
``willful misconduct.'' As amended by Protocol 4, it would read ``. . . 
if it is proved that the damage resulted from an act of the carrier, 
his servants or agents, done with intent to cause damage or recklessly 
and with knowledge that damage would probably result.'' What is the 
practical effect of this language change? Will the Administration 
testify that they are essentially the same?
    Answer 1. Article 22 of the Convention defines the limits of 
airlines' liability in the event of an accident. Article 25 explains 
when an airline waives those limits, thereby permitting a claimant to 
collect more than the amount specified in Article 22. Under the 1929 
Convention, Article 22 limits are waived upon a finding of airline 
``willful misconduct'' with the common law definition of that standard. 
We believe that in practice, there will be no difference between the 
old and the new provisions.
  Article 25 of the Convention reads:
          The carrier shall not be entitled to avail himself of the 
        provisions of this convention which exclude or limit his 
        liability, if the damage is caused by his willful misconduct or 
        by such default on his part as, in accordance with the law of 
        the court to which the case is submitted, is considered to be 
        equivalent to willful misconduct.
  The Convention, as amended by Hague and Montreal Protocol 4, reads:
          In the carriage of passengers and baggage, the limits of 
        liability specified in Article 22 shall not apply if it is 
        proved that the damage resulted from an act of omission of the 
        carrier, his servants or agents done with intent to cause 
        damage or recklessly and with knowledge that damage would 
        probably result; provided that, in the case of such act or 
        omission of a servant or agent, it is also proved that he was 
        acting within the scope of his employment.

    The change in Article 25 was intended to eliminate a discrepancy 
between common and civil law concerning the nature of conduct required 
to remove limits on liability. Because the concept of willful 
misconduct came to have different connotations in the civil and common 
law systems, the drafters of Hague replaced the legal standards with a 
description of the conduct itself.
  U.S. courts have defined willful misconduct as:
          . . . the intentional performance of an act with knowledge 
        that the performance of that act will probably result in injury 
        or damage, or it may be the intentional performance of an act 
        in such a manner as to imply reckless disregard for the 
        probable consequences of the performance of the act; or

          . . . the intentional omission of some act, with knowledge 
        that such omission will probably result in damage or injury, or 
        the intentional omission of some act in a manner from which 
        could be implied reckless disregard of the probable 
        consequences of the omission, would also be willful misconduct. 
        (Pekeleis v. Transcontinental & Western Airlines. Inc., 187 
        F.2d 122 (2d Cir), cert. denied U.S. 951 (1951)).

    It similarly has been defined as ``a conscious intent to do or omit 
doing an act from which harm results to another, or an intentional 
omission of a manifest duty. There must be a realization of the 
probability of injury from the conduct, and a disregard of the probable 
consequences of such conduct.'' (Grey v. American Airlines. Inc., 227 
F.2d 282 (2d Cir. 1955)).

    The restatement of Laws, Second, Torts Sec. 500, defines ``Reckless 
disregard of safety,'' which standard is incorporated into the amended 
Article 25, as follows:

          The actor's conduct is in reckless disregard of the safety of 
        another if he does an act or intentionally fails to do an act 
        which it is his duty to the other to do knowing or having 
        reason to know of facts which would lead a reasonable man to 
        realize, not only that his conduct creates an unreasonable risk 
        of physical harm to another, but also that such risk is 
        substantially greater than that which is necessary to make his 
        conduct negligent.

    In light of the understanding that the change to Article 25 was 
intended merely to replace the term ``willful misconduct'' with its 
common law definition, and in light of the above-quoted definitions, it 
is our view that the amendment to Article 25 will have no practical 
effect on the rights of claimants in cases under the Warsaw Convention.
    Question 2. What is the meaning of the term ``Octroi,'' as it 
appears in Article 16, para. 1, line 2 of the amended Convention?
    Answer 2. ``Octroi'' is a French term that refers to a branch of 
the French customs authorities.
    Question 3. What is the meaning of Article 18, para. 5 of the 
Warsaw Convention as amended? Why was this amendment necessary?
    Answer 3. The referenced paragraph provides:

          5. The period of the carriage by air does not extend to any 
        carriage by land, by sea, or by river performed outside an 
        airport. If, however, such carriage takes place in the 
        performance of a contract for carriage by air, for the purposes 
        of loading, delivery or transshipment, any damage is presumed, 
        subject to proof to the contrary, to have been the result of an 
        event which took place during the carriage by air.

    This provision is not new; it is a reiteration of Article 18, para. 
3 of the unamended 1929 Convention, which stated:

          3. The period of the transportation by air shall not extend 
        to any transportation by land, by sea, or by river performed 
        outside an airport. If, however, such transportation takes 
        place in the performance of a contract for transportation by 
        air, for the purpose of loading, delivery or transshipment, any 
        damage is presumed, subject to proof to the contrary, to have 
        been the result of an event which took place during the 
        transportation by air.

    Because the entire Article 18 was restated in Montreal Protocol 4, 
this provision had to be restated. The only notable change to the 1929 
text was the replacement of the word ``transportation'' with the word 
``carriage,'' a conforming change for consistency with amendments 
introduced by the Hague Protocol, and for consistency with the U.K. 
English translation of the Warsaw Convention's official French text.
    The provision recognizes that a contract for transportation of 
cargo that anticipates air shipment, often involves other modes of 
transportation as well. This is due in part to the consumer's 
expectation of door-to-door, rather than airport-to-airport, service. 
Appropriately, the referenced provision specifies the circumstances 
under which the terms of the Warsaw Convention will apply to intermodal 
transportation in the event of damage or loss.
    Pursuant to Article 18, para. 5, the terms of the Convention will 
not apply to overland or overwater transportation outside an airport. 
However, the transportation was incidental to the contract for carriage 
by air; that is, for the purpose of loading, delivery, or 
transshipment, the provision creates a presumption that any claim for 
loss occurring during performance of a contract for carriage by air 
will be subject to the rules of the Convention. In the case of 
concealed damage, the rules and limits of the Convention would apply 
unless the carrier proved that the damage occurred on the surface 
portion of the transport.
    The only substantive change in Article 18, as amended by Montreal 
Protocol 41 is the addition of an exclusive list of four situations 
under which a carrier may be relieved of liability for loss during the 
period of carriage by air, in paragraph 3.
    Question 4. There are two reservations specified in Article XXI of 
Montreal Protocol 4.

          (a) Are these reservations new, or are they carryovers from 
        either 1929 Warsaw or 1955 Hague?
          (b) Has the USG taken either of these two reservations to 
        Warsaw? Will the Administration recommend that we take either 
        of them in conjunction with ratification of Protocol 4?
    Answer 4. The first reservation dates back to the Hague Protocol. 
The second is new. Neither has been formally considered by the United 
States to date. The Administration will recommend taking the first 
reservation, in connection with ratification of Montreal Protocol 4.
    The two reservations are:

          (a) that the amended convention shall not apply to traffic 
        carried for the state's military authorities on aircraft 
        registered in that state, where the entire capacity of the 
        aircraft has been reserved by or on behalf of the military 
        authorities;
          (b) on or after the state's ratification of Montreal Protocol 
        3, the state may declare that it is not bound by the provisions 
        of the Warsaw Convention, as amended by Hague and Montreal 
        Protocol 4, that concern the carriage of passengers and 
        baggage.

    The 1929 Convention provided for only one reservation. It enabled 
the contracting parties to declare the inapplicability of the 
Convention to international carriage by air performed directly by the 
States of governmental entities under the State. The United States took 
that reservation, declaring in writing at the time of ratification:

          Article 2, paragraph 1, of the present Convention shall not 
        apply to international air transport which may be effected by 
        the United States of America or any territory or possession 
        under its jurisdiction.

    The first reservation in Montreal Protocol 4, noted above, dates 
back to the Hague Protocol of 1955. It effectively extends the 
reservation available under the Warsaw Convention to include aircraft 
serving military purposes, even when they are not operated directly by 
the State.
    The Administration would recommend that the United States deposit, 
with ratification, a reservation declaring the non-application of the 
provisions of the Warsaw Convention to the carriage of persons, baggage 
and cargo for U.S. military authorities on aircraft, registered in the 
United States, the whole capacity of which has been reserved by or on 
behalf of such authorities. This reservation would have direct 
application to the Civil Reserve Air Fleet (CRAF) program, whereunder 
U.S. flag air carriers agree to provide aircraft to supplement military 
aircraft in transporting U.S. troops and supplies in certain 
situations.
    The second reservation provided for in Montreal Protocol 4 has 
relevance only for States ratifying Montreal Protocol 3. The 
reservation originates with Protocol 4. Inasmuch as the Administration 
is not pursuing Senate advice and consent to ratification of Protocol 3 
at this time, the second reservation presently is not at issue.

                               __________

  Correspondence Pertaining to Montreal Protocol No. 4 from the U.S. 
                      Department of Transportation

                 U.S. Department of Transportation,
           Assistant General Counsel for International Law,
                     400 Seventh St., S.W., Washington, D.C. 20590.
Brian P. McKeon,
Minority Counsel, Committee on Foreign Relations,
U.S. Senate, Washington, D.C. 20510-6225.
    Dear Mr. McKeon: You have asked that we compare the baggage 
liability limitations in the event that Montreal Protocol No. 4 
(relating to cargo) is ratified, with domestic baggage liability 
limitations.
    Domestic liability limitations are governed by Part 254.4 of the 
Department's Regulations (14 C.F.R. Part 254.4), which precludes 
airline limits on liability for passenger baggage below $1250 per 
passenger.
    If Protocol No. 4 (which includes the 1965 Hague Protocol) were 
ratified, the baggage liability limit would remain unchanged from that 
applicable under the currently effective Warsaw Convention. That 
liability is equal to 250 gold francs per kilogram, which the Civil 
Aeronautics Board concluded in Order 74-1-16 (39 F.R. 1526, January 10, 
1974) was equivalent to $20.00 per kilogram, or $9.07 per pound. In 
addition, liability for carry-on baggage under Warsaw is 5,000 gold 
francs, or up to $400 per passenger.
    A direct comparison of the domestic baggage liability limit with 
the Warsaw limit is difficult, since the domestic baggage limit is a 
total per passenger limit, while the Warsaw limit is based on the 
weight of checked baggage lost or damaged plus a per passenger limit on 
carry-on baggage. In actuality, for U.S. origination passengers, 
baggage is not weighed, but is limited to a set number of pieces and 
restricted by the size of the baggage. Carriers have adopted tariffs 
that provide an assumed 70-pound weight limit for lost baggage, the 
maximum weight of baggage permitted under the piece baggage system 
applicable for passenger transportation from the United States.
    Using this formula, and assuming one lost bag, the maximum 
liability of the carrier under Warsaw would be 70 lbs. times $9.07 per 
pound, or $634.90, plus the $400 unchecked baggage limit, for a total 
of $1034.90. If two bags were lost (the maximum number of bags which 
may be checked under the piece baggage system), the liability would be 
$1,269.80 (2 X 70 X $9.07), plus the $400 for unchecked baggage, for a 
maximum total of $1669.80. Accordingly, the current baggage liability 
limit under Warsaw, which is the same as the baggage liability limit if 
Montreal Protocol No. 4 were ratified, is similar to the $1250 domestic 
baggage liability limitation permissible under Section 254.4 of the 
Department's Regulations.
    If I can be of further assistance, please do not hesitate to call 
on me.

            Sincerely,
                                    Donald H. Horn,
           Assistant General Counsel For International Law.

                               __________

   List of Carriers Signatory to the IATA Intercarrier Agreement on 
                Passenger Liability, As at 12 June 1998

1. Aer Lingus plc
2. Aerolineas Argentinas S.A.
3. Aeromexpress
4. Aerovias de Mexico, S.A. de C.V. (Aeromexico)
5. Air Afrique
6. Air Aruba
7. Air Baltic Corporation SIA
8. Air Canada
9. Air Excel Commuter
10. Air France
11. Air Jamaica Limited
12. Air Mauritius
13. Air New Zealand
14. Air Pacific Limited
15. Air UK Group Limited
16. Air Vanuatu
17. Alaska Airlines
18. Alitalia
19. All Nippon Airways Co., Ltd
20. Allegheny Airlines, Inc.
21. America West Airlines, Inc.
22. American Airlines
23. American Trans Air, Inc.
24. Asiana
25. Augsburg Airways GmbH
26. Austrian Airlines
27. Avianca
28. Azerbaijan Hava Yollary
29. Braathens S.A.F.E.
30. British Airways p.l.c.
31. Canadian Airlines International
32. Cathay Pacific Airways Ltd.
33. Central Mountain Air Ltd
34. Cimber Air A/S
35. Compagnie Air France Europe
36. Continental Airlines Inc.
37. Continental Express
38. Continental Micronesia
39. Croatia Airlines
40. Crossair
41. CSA--Czech Airlines
42. Delta Air Lines, Inc.
43. Deutsche BA Luftfahrtgesellschaft mbH
44. Deutsche Lufthansa AG
45. Egyptair
46. Emirates
47. Eurowings Luftverkehrs AG
48. Finnair OY
49. Garuda Indonesia
50. GB Airways
51. Hawaiian Airlines
52. Heli Air AG
53. Heli-Linth AG
54. Iberia
55. Icelandair
56. Intermpex-Avioimpex
57. Japan Air Charter (JAZ)
58. Japan Air System Co. Ltd
59. Japan Airlines Co. Ltd.
60. Japan Asia Airways (JAA)
61. Jet Airways (India ) Pvt Ltd.
62. Kenya Airways
63. Kiwi International Air Lines
64. KLM Cityhopper B.V.
65. KLM Royal Dutch Airlines
66. Korean Air Lines Co., Ltd.
67. LAPSA Lineas Aereas Paraguayas
68. Landa Air Luftfahrt AG
69. Luxair
70. Maersk Air A/S
71. Maersk Air Ltd.
72. Malaysia Airlines
73. Malex--Hungarian Airlines Public Ltd. Co.
74. Martinair Holland N.V.
75. Midwest express Airlines, Inc.
76. Northwest Airlines, Inc.
77. Pakistan International Airlines (PIA)
78. Piedmont Airlines, Inc.
79. Polskie Linie Lotnicze--Polish Airlines
80. PSA Airlines, Inc.
81. Qantas Airways Limited
82. Reeve Aleutian Airways, Inc.
83. Regional Airlines
84. Royal Air Maroc
85. SABENA
86. Saudi Arabian Airlines Corp.
87. Scandinavian Airlines System (SAS)
88. Singapore Airlines Ltd.
89. Sobelair
90. South African Airways
91. Swissair
92. TACA
93. TAP Air Portugal
94. TAT European Airlines
95. Trans World Airlines Inc. (TWA)
96. Transavia airlines C.V.
97. Transbrasil S/A Linhas Aereas
98. Trinidan & Tobago BWIA International
99. Turk Hava Yollari A.O. (Turkish Airlines)
100. Tyrolean Airways--Tiroler Luftfahrt AG
101. United Airlines
102. UPS Airlines
103. US Airways, Inc.
104. Varig S.A.
105. VIASA

 List of Carriers Signatory to the Agreement on Measures to Implement 
          the IATA Intercarrier Agreement, As at 12 June 1998

1. Air Afrique
2. Air Baltic Corporation AIA
3. Air Canada
4. Air France
5. Air New Zealand
6. Air Pacific Limited
7. Alaska Airlines
8. Allegheny Airlines, Inc.
9. America West Airlines, Inc.
10. American Airlines
11. American Trans Air, Inc.
12. AMR Combs BJS, Inc.
13. AMR Eagle, Inc
14. asiana
15. Austrian Airlines
16. Avianca
17. British Airways p.l.c.
18. Canadian Airlines International
19. Cathay Pacific Airways Ltd.
20. Central Mountain Air Ltd
21. Compagnie Air France Europe
22. Continental Airlines Inc.
23. Continental Express
24. Continental Micronesia
25. Crossair
26. CSA--Czech Airlines
27. Delta Air Lines, Inc.
28. Deutsche BA Luftfahrtgesellschaft mbH
29. Deutsche Lufthansa AG
30. Finnair OY
31. GB Airways
32. Hawaiian Airlines
33. Heli Air AG
34. Heli-Linth AG
35. Icelandair
36. Kenya Airways
37. Kiwi International Air Lines
38. KLM Royal DutchAirlines
39. Korean Air Lines Co., Ltd.
40. Lauda Air Luftfahrt AG
41. Luxair
42. Maersk Air A/S
43. Maersk Air Ltd.
44. Midwest Express Airlines, Inc.
45. Northwest Airlines
46. Piedmont Airlines, Inc.
47. PSA Airlines, Inc.
48. Qantas Airways Limited
49. Reeve Aleutian Airways, Inc.
50. Royal Air Maroc
51. SABENA
52. Scandinavian Airlines System (SAS)
53. Singapore Airlines Ltd.
54. Sobelair
55. Swissair
56. TAP Air Portugal
57. TAT European Airlines
58. Trans World Airlines Inc. (TWA)
59. Transavia airlines C.V.
60. Transbrasil S/A Linhas Aereas
61. Turk Hava Yollari A.O. (Turkish Airlines Inc.)
62. Tyrolean Airways--Tiroler Luftfahrt-AG
63. United Airlines
64. UPS Airlines
65. US Airways, Inc.
66. Varig S.A.

     List of Airlines Having Waived Liability Limits, 15 April 1998

1. Air Canada\1\
2. Air France\1\
3. Alaska Airlines Inc.
4. All Nippon Airways\2\
5. America Trans Air\1\
6. American Airlines\1\
7. Asiana Airlines\3\
8. Austrian Airlines\4\
9. Avianca\1\
10. British Airways\1\
11. British Midland \5\
12. British Regional Airlines \5\
13. Canadian Airlines\1\
14. Cathay Pacific\1\
15. Continental Airlines\1\
16. Continental Micronesia\1\
17. Delta Air Lines\1\
18. Finnair\4\
19. GB Airways
20. Hawaiian Airlines\1\
21. Icelandair\4\
22. Japan Air Charter (JAZ) \2\
23. Japan Air System\2\
24. Japan Airlines\2\
25. Japan Asia Airways (JAA) \2\
26. KLM \4\
27. KLM City Hopper\4\
28. Korean Airlines\1\
29. Lauda-air
30. Loganair\5\
31. Lufthansa\1\
32. Maersk Air A/S
33. Malaysian Airlines System\1\
34. Martinair\4\
35. Manx Airlines\5\
36. Northwest Airlines\1\
37. Qantas
38. Royal Air Maroc
39. SAS \1\ \4\
40. Singapore Airlines Limited
41. Swissair\1\ \4\
42. Balair\1\ \4\
43. Crossair\1\ \4\
44. Tower Air\6\
45. Trans World Airlines\1\
46. Transavia Airlines C.V.\4\
47. United Airlines\1\
48. UPS
49. US Airways, Inc.\1\
50. El Al Israel Airlines
51. Braathens ASA

    Notes:
    \1\ Filed tariff with US DoT in course of 1996/1997/1998.
    \2\ Have not signed MIA--filed tariffs in 1992.
    \3\ Government Approval--1 November 1997.
    \4\ By declaration of 25 November 1996.
    \5\ Have not signed ILA/MIA.
    \6\ Have not signed ILA/MIA, only filed tariff with US DoT waiving 
liability limits worldwide.

                               __________

   Responses to Additional Questions for the Record Submitted by the 
            Committee to Assistant Secretary Alan P. Larson

                  Questions Submitted by Senator Hagel

1991 Convention for the Protection of New Varieties of Plants
    Question. The 1991 Plant Variety Protection Convention 
distinguishes between ``varieties'' of plants and ``protectable 
varieties.''
   What practical impact will this distinction have on the 
        protection of plant varieties?
    Answer. This distinction has no impact on protection. When the 
Convention refers to ``varieties,'' it means those varieties that are 
eligible for protection, but where such protection has not yet been 
granted. When it refers to ``protected varieties,'' it generally does 
so in the context of what the scope and limitations of the breeder's 
right are after protection has been obtained.
    Question. Article 3 of the treaty requires the UPOV system to apply 
to all botanical genera and species. This will broaden commitments 
beyond those genera and species that are deemed to be of economic 
importance.
   How will this impact tropical plant species?
   Who will assert these rights if there is no economic 
        interest at this time?
    Answer. The answer to the first part of this question is that the 
broadening of the definition of plant varieties eligible for protection 
will benefit tropical species. To the extent that these species meet 
the four criteria for obtaining protection of distinctiveness, 
uniformity, stability, and novelty, they will now be eligible for 
protection in those countries that had previously limited protection to 
specific lists of genera and species. The United States has provided 
protection to all genera and species by way of the PVPA, the Plant 
Patent Act, and by utility patents under 35 USC 101.
    The obtainment of rights can be distinguished from the assertion of 
rights. Even if there is no economic interest, a plant breeder may 
under the 1991 UPOV Convention obtain breeder's rights if the plant 
variety meets the criteria outlined above. If a plant breeder obtains a 
right to a variety, it is his choice whether to assert this right. If 
the variety is not commercialized and not infringed, it would not be 
necessary to assert a right.
    Question. Under the Convention, Member States must treat nationals 
and residents of other States no less favorably, for purposes of 
granting and protecting breeder's rights, than its laws accord its own 
nationals.
   Does this ``national treatment'' provision provide any 
        private right of action? Any right of action before the WTC?
   How will be it be enforced in the United States?
    Answer. All holders of breeder's rights may seek to exercise their 
rights to the extent permitted under domestic law to nationals of each 
UPOV member. Holders of breeder's rights do not have access to the 
World Trade Organization Dispute Settlement Mechanism. The provisions 
of the 1991 UPOV Convention will be enforced in the United States in 
accordance with The Plant Variety Act, as amended (7 USC 2321 et seq.) 
and the Plant Patent Act (35 USC 161 et seq.) and the Utility Patent 
Act (35 USC 101 et seq.).
    Question. The TRIPs Agreement of the World Trade organization 
contains an obligation to provide adequate and effective protection for 
plant varieties.
   How does the 1991 UPOV Amendment interrelate with these 
        requirements? Is compliance with UPOV understood to be 
        ``adequate and effective'' protection in this area?
   Would compliance with the UPOV Convention, but not the 1991 
        Amendments to the Convention, be ``adequate and effective'' 
        protection in this area?
    Answer. The decision as to whether the 1991 UPOV Convention meets 
the requirements of the TRIPs Agreement has not so far been made by the 
TRIPs Council. However, it appears that implementation and enforcement 
of the provisions of the 1991 UPCV Convention should meet the TRIPs 
obligation outlined in Article 27: ``Members shall provide for the 
protection of plant varieties either by patents or by an effective sui 
generis system or by any combination thereof.'' On the other hand, it 
appears likely that membership in the 1978 UPOV Convention in and of 
itself cannot be considered as fulfilling TRIPs Article 27 obligations 
since the 1978 UPOV Convention does not require members to protect all 
botanical species or genera that are eligible for protection. In 
addition, the 1978 Act permits UPOV member states to discriminate 
against foreign breeders by limiting their rights of protection in the 
member State to those afforded in their own country. Under the 1991 
Act, a Contracting Party must treat nationals and residents of another 
Contracting Party no less favorably, for purposes of granting and 
protecting breeder's rights, than itS laws accord its own nationals. 
Unlike the national treatment provisions in the 1978 UPOV Convention, 
The 1991 UPCV Convention national treatment provisions are compatible 
With TRIPS.
    Question. These Amendments were signed by the United States in 1991 
yet were never sent to the Senate for its advice and consent until 
1995. Why was there such a long delay? Does this reflect a lack of 
priority by the State Department on this issue?
    Answer. The delay in submission of the treaty package was directly 
linked to uncertainty as to whether implementing legislation would be 
passed by the Congress. Certain provisions of the implementing 
legislation--notably, language prohibiting farmers from selling 
protected seeds--were controversial at the time. The 1995 Supreme Court 
decision in Asgrow Seed Co. v. Winterboer laid to rest any uncertainty 
in this area. Implementing legislation entered into effect in April, 
1995, and the treaty package was transmitted shortly afterwards.
    Question. Under the UPOV Convention, how can U.S. farmers and seed 
businesses raise violations of the treaty? What is the procedure for 
enforcing the Convention and the new Amendments?
    Answer. Private parties may seek all remedies available through the 
domestic legal system of a country not in compliance with UPOV 
commitments. Sovereign entities may be able to seek implementation of a 
WTO member's TRIPs obligations under Article 27 to provide ``protection 
of plant varieties either patents or by an effective sui generis system 
or by any combination thereof'' through the WTO Dispute Settlement 
Mechanism.
    Question. The 1991 Amendment grants the European Union the ability 
to become a member of the Convention. Under the terms of the treaty, 
the E.U. as an organ may cast the votes of all E.U. members. Does this 
procedure ensure that the E.U. will control the agenda at the UPOV 
Council? If not, why not?
    Answer. The 1991 UPOV Convention, Article 26(6)(b) states: ``Any 
contracting Party that is an intergovernmental organization may, in 
matters within its competence, exercise the rights to vote of its 
member States that are members of the Union. Such an intergovernmental 
organization shall not exercise the rights to vote of its member States 
if its member States exercise their right to vote, and vice versa.''
    UPOV currently has 38 members of whom 13 belong to the European 
Union. There currently are no intergovernmental organizations that are 
members of UPOV, including the EC. If the EC were to become party to 
the 1991 UPOV Convention and cast the votes of its member states as a 
bloc, the EU would still not constitute a majority within UPOV.
Trademark Law Treaty
    Question. Do you support the implementing legislation for the 
Trademark Law Treaty, H.R. 1661? If not, what changes should be made in 
the implementation bill? Are you aware of any opposition to the 
implementation bill?
    Answer. The Administration supports the implementing legislation in 
its present form. We are unaware of any opposition to H.R. 1661 The 
American Bar Association, the International Trademark Association, and 
the American Intellectual Property Lawyers Association have all given 
their unequivocal support for U.S. entrance into the Trademark Law 
Treaty. The latter two organizations testified in favor of H.R. 1661 
during a House Committee on the Judiciary, Subcommittee on Courts and 
Intellectual Property hearing (chaired by Rep. Coble) held on May 22, 
1997.
    Question. The Trademark Law Treaty incorporates by reference 
detailed regulations and a standard trademark application form. Will 
these regulations impose any administrative burden on the United 
States? What changes will be needed in U.S. trademark applications? 
What is the phase-in time period?
    Answer. The regulations will impose no additional administrative 
burdens on either the U.S. government or on trademark holders. Only 
minor changes will have to be made to the U.S. trademark application 
form. For example, the drawing will be incorporated onto the first page 
of the application form.
    The legislation to implement the Trademark Law Treaty will become 
effective either one year after the date of enactment or upon entry 
into force of the Treaty, whichever occurs first. Article 20(3) of the 
Treaty provides that a Contracting Party shall be bound by the Treaty 
three months after the date on which it deposits its instrument of 
ratification or accedes to the Trademark Law Treaty.
    Question. The Trademark Law Treaty eliminates several formalities 
in the registration process. Are you confident that the requisite proof 
of trademark will be available under this new regime?
    Answer. The U.S. trademark bar has enthusiastically welcomed the 
U.S. becoming party to the Trademark Law Treaty and the incorporation 
of the Trademark Law Treaty obligations into U.S. law. The 
Administration is unaware of any circumstances in which accession to 
the Trademark Law Treaty would jeopardize the ability of trademark 
holders to demonstrate ``proof of trademark.''
Hearing on the International Grains Agreement, 1995 (Treaty Doc. 105-4)
    Question. Have the Food Aid Convention and Grains Trade Convention 
been extended beyond June 1998, as permitted by the treaties? If so, to 
what date?
    Answer. Yes. The Food Aid and Grains Trade Conventions have both 
been extended to June 1999.
Hearing on the International Grains Agreement, 1995 (Treaty Doc. 105-4)
    Question. The Grains Convention attempts to set guidelines 
regarding concessional transactions. Concessional transactions are not 
supposed to interfere with normal commercial trade in these products.
   How is this monitored by the Council?
   What steps does the Grains Council take when Member States 
        attempt to gain trade advantages through concessional sales?
   Are there any recent examples of countries ``dumping'' grain 
        products at concessional levels to the detriment of other 
        member states' commercial activities?
    Answer. Guidelines regarding concessional transactions are 
established under the Food and Agricultural Organization's ``Principles 
of Surplus Disposal and Consultative Obligations of Member Nations.'' 
The FAO's Committee on Surplus Disposal (CSSD), headquartered in 
Washington, is the organization that actually monitors concessional 
transactions to see that they do not interfere with normal commercial 
sales. It is also the organization that ensures, through its 
consultative mechanisms, that members do not gain trade advantages 
through concessional sales. International Grains Council data on grains 
trade is critical to this process. This data establishes the baseline 
of normal commercial activity against which any concessional sale must 
be judged to be an addition to commercial purchases rather than an 
alternative to such purchases -- the guiding principle of surplus 
disposal. Accordingly, the Secretariats of the IGC and the CSSD remain 
in close contact and regularly exchange data. There are no recent 
examples of ``dumping'' of grains under such concessional transactions.
    Question. The Food Aid Convention permits countries to specify 
recipients of their grains. Does the United States apply its laws that 
limit foreign assistance to certain rogue regimes to its commitments 
under the treaty?
    Answer. Yes. The United States applies these laws and does not 
provide food aid assistance to proscribed destinations.
    Question. Member states are permitted under the Food Aid Convention 
to make contributions in the form of cash grants as well as grain 
grants. What precautions are taken to ensure these grants are in fact 
used for food assistance?
    Answer. When a member state seeks to meet its annual Food Aid 
Convention commitment in the form of a cash grant, it must provide 
information to the FAC Secretariat detailing precisely how that money 
was spent to purchase food aid for needy recipients. Moreover, it must 
demonstrate that the cash it provided--typically to the World Food 
Program--was sufficient to purchase the tonnage of food assistance 
required to meet its annual commitment, a commitment expressed in 
Article 111(4) of the FAC in tonnage rather than in value terms.
    Question. If the International Grains Council reallocates votes 
because of ``significant shift in world trading patterns,'' as provided 
in Article 11(4) of the Convention, is the reallocation to be treated 
as an amendment to the Convention? Will the Administration submit any 
reallocation of votes to the Senate for its advice and consent?
    Answer. Pursuant to Article 11(4) of the Convention, if the Council 
decides that a significant shift in world grain trading patterns has 
occurred, it shall review, and may adjust, the votes of members. Such 
adjustments are regarded as amendments to the Convention, and thus are 
subject to the provisions of Article 32. As such, we plan to submit 
such adjustments to the Senate.
    By contrast, routine adjustments to the votes of members may result 
from (1) review of the distribution of votes when the Convention is 
extended (Article 11(3)), or (2) countries either becoming or ceasing 
to be parties to the Convention (Article 12(7)). The Convention 
provides that such adjustments shall be handled by the Council, through 
the Rules of Procedure where applicable, rather than as amendments to 
the Convention. In these cases, we would not expect to submit the 
adjustments to the Senate.
    Question. One of the Ministerial Decisions adopted as part of the 
Final Act of the Uruguay Round of Multilateral Trade Negotiations in 
April 1994 addresses the ``possible negative effects'' of the Uruguay 
Round agricultural reform program on least-developed and net food-
importing developing countries. In the Decision, trade ministers 
agreed, among other things, to review the level of food aid established 
by the Food Aid Committee under the Food Aid Convention, 1986, to 
initiate negotiations ``in the appropriate forum to establish a level 
of food aid commitments sufficient to meet the legitimate needs of 
developing countries during the reform programme,'' and ``to adopt 
guidelines to ensure that an increasing proportion of basic foodstuffs 
is provided to least-developed countries in fully grant form and/or on 
appropriate concessional terms in line with Article IV of the Food Aid 
Convention, 1986.''
   How has the World Trade Organization since interacted with 
        the Food Aid Committee?
   Will these Uruguay Round commitments have an effect on the 
        Food Aid Convention as a vehicle for international obligations 
        in the area?
    Answer. Since the meeting of the WTO Ministers in Singapore (in 
December 1996), when it was decided that the Food Aid Committee would 
play a key role in implementing the ``Marrakesh Decision'' described 
above, the Food Aid Committee and the World Trade Organization (WTO) 
have been in frequent contact. Renato Ruggiero, the Director-General of 
the WTO and Germain Denis, the Executive Director of the International 
Grains Council/Food Aid Committee, have corresponded concerning actions 
to be taken by the Food Aid Committee. (A copy of this correspondence 
is attached.) In addition, Mr. Denis has attended WTO Committee on 
Agriculture meetings to report on actions taken by the Food Aid 
Committee. Finally, the WTO's Paul Shanahan attends open Food Aid 
Committee sessions to monitor progress.
    WTO Ministers at Singapore sought to encourage additional countries 
to provide food aid when they urged the FAC to establish a level of 
food aid commitments ``covering as wide a range of donors and donable 
foodstuffs as possible.'' This commitment is having an important impact 
in Food Aid Committee discussions on renewal of the Food Aid 
Convention, with many members, including the United States, pushing to 
broaden both the list of food aid donors and the types of commodities 
considered food aid.
    [The correspondence referred to above follows:]

Correspondence Concerning Actions to be Taken by the Food Aid Committee

                                        Food Aid Committee,
                                                   24 January 1997.
To: All members of the Food Aid Committee

From: G. Denis, Executive Director, International Grains Council

Subject: Informal meeting--31 January 1997

    We are circulating under cover, for your information, a copy of the 
letter dated 20 January, 1997 (without its attachments) from the WTO 
director General conveying the formal outcome of the Singapore 
Ministerial Conference as it relates to the Food Aid Convention.
                                 ______
                                 
                                   Renato Ruggiero,
                                          Director-General,
                                          World Trade Organization,
                                                   20 January 1997.
Mr. Germain Denis,
Executive Director,
International Grains Council
    Dear Mr. Denis,
    At the first meeting of the WTO Ministerial Conference, which was 
held in Singapore from 9 to 13 December 1996, Ministers agreed to the 
recommendations of the WTO Committee on Agriculture relative to the 
Marrakesh Ministerial Decision on Measures Concerning the Possible 
Negative Effects of the Reform Programme on Least-Developed and Net 
Food-Importing Developing Countries.
    As you are aware, one of these recommendations provides for action 
to be initiated in 1997 within the framework of the Food Aid 
Convention. I am therefore conveying to you under cover of this letter 
a copy of the Singapore Ministerial Declaration (WT/MIN(96)/DEC), 
paragraph 6 of which records the agreement of WTO Ministers in this 
regard. I also enclose a copy of the relevant report of the WTO 
Committee on Agriculture (G/L/125), paragraph 18(i) of which sets out 
the relevant recommendation. In so doing I would like to underline the 
importance which Ministers generally attach to this endeavour and would 
greatly appreciate it if you could continue to use your good offices to 
foster early and effective follow-up action as appropriate. In this 
regard it is encouraging to note that the Food Aid Committee has 
already taken the initiative in getting the process under way.
    I would also like to take this opportunity to express my 
appreciation for the contributions made to the work of the WTO 
Committee on Agriculture by your Secretariat and to assure you and the 
Members of the International Grains Council and the Food Aid Committee 
of the WTO Secretariat's willingness to provide such assistance as may 
be required in implementing the recommendation of the WTO Ministerial 
Conference.
    With my best personnel wishes for a happy and successful 1997.
            Yours sincerely,
                                    Renato Ruggiero
                                 ______
                                 

                                        Food Aid Committee,
                                                      13 June 1997.
To: All members of the Food Aid Committee

From: G. Denis, Executive Director, International Grains Council

Subject: Follow-up to the Singapore WTO Ministerial Conference

    For the information of members, I attach a copy of a letter sent to 
me on 12 June 1997 by the Director-General of the World Trade 
Organisation (WTO).

                                 ______
                                 

                                   Renato Ruggiero,
                                          Director-General,
                                          World Trade Organization,
                                                      12 June 1997.
Mr. Germain Denis,
Executive Director,
International Grains Council
    Dear Mr. Denis,
    I am writing to you in connection with the follow-up to the 
recommendation of the Singapore WTO Ministerial Conference relating to 
implementation of the Marrakesh Ministerial Decision on Measures 
Concerning the Possible Negative Effects of the Reform Programme on 
Least-Developed and Net Food-Importing Developing Countries (the NFIDC 
Decision) on the level of food aid commitments and concessionality 
guidelines. This matter was the subject of discussion at an informal 
meeting in Geneva this week with representatives of developing country 
WTO Members. In the light of this discussion it appears to me that it 
would be useful if I were to enlarge on the general point made in my 
letter of 20 January 1997 concerning the importance which WTO Ministers 
generally attach to effective implementation of the recommendation of 
the Singapore Ministerial Conference.
    The least developed and net food-importing developing countries 
attach very considerable importance to achieving a positive outcome to 
next weeks meeting of the Food Aid Committee in terms of implementing 
the recommendation in paragraph 18(i) of the report of the Committee on 
Agriculture (G/L/125, of 24 October 1996). This I believe is a 
legitimate and reasonable expectation on their part, not only given the 
fact that the Marrakesh NFIDC Decision is an integral part of the 
overall Uruguay Round results, but equally importantly because the 
Singapore Ministerial recommendation itself is the result of the 
carefully and extensively negotiated package that went to the Singapore 
Conference.
    Representatives of the least developed and net food-importing 
countries will have the opportunity to register their positions and 
exchange views with Members of the Food Aid Committee at the 
information meeting convened for this purpose on Tuesday 17 June. This 
is obviously a constructive start to the process provided for in the 
recommendation to enable recipient countries to participate in the 
development of ``recommendations with a view towards establishing a 
level of food aid commitments, covering as wide range of donors and 
donable foodstuffs as possible, which is sufficient to meet the 
legitimate needs of developing countries during the reform programme.'' 
no doubt Members of the Food Aid Convention will be giving 
consideration to arrangements which will enable an on-going dialogue to 
be maintained with least-developed and net food-importing developing 
countries with regard to implementation of the Singapore Ministerial 
recommendation.
    The general interest on the part of WTO Members in the follow-up to 
the recommendation of the Singapore Ministerial Conference is also 
reflected by the fact that this subject will be on the agenda of the 
26-27 June meeting of the WTO Committee on Agriculture. I would hope 
that a representative of the International Grains Council will be able 
to attend this meeting with a view to providing a report on the general 
outcome of the Food Aid Committee's deliberations.
    I would be most grateful if arrangements could be made, as 
appropriate, for this letter to be brought to the attention of the 
Chairman and members of the Food Aid Committee together with my 
appreciation for the prompt and efficient manner in which the follow-
up[ process generally has been initiated.
    With my best personal regards and best wishes for a successful 
meeting of the Food Aid Committee.
            Yours sincerely,
                                   Renato Ruggiero.

                                 ______
                                 

                      International Grains Council,
                                        Executive Director,
                                                      17 June 1997.
Mr. Renato Ruggiero
Director-General
World Trade Organization
    Dear Mr. Ruggiero,
    I wish to acknowledge receipt of your letter dated 12 June 1997 
concerning the Food Aid Convention and the interests of Net Food-
Importing Developing Countries.
    On Tuesday 17 June, FAC members initiated consultations on the 
matters covered by your letter with developing country representatives. 
The same day, FAC members also held preliminary discussions on the 
future of the Food Aid Convention beyond 30 June 1998.
    In light of these developments, I will attend the meeting of the 
Committee on Agriculture in Geneva on Friday, 19 June 1997, and make an 
oral report on the situation.
            Yours sincerely,
                                          G. Denis.

                                 ______
                                 
                                        Food Aid Committee,
                                                      11 July 1997.
To: All members of the Food Aid Committee

From: G. Denis, Executive Director, International Grains Council

Subject: WTO Agriculture Committee, Geneva, 26-27 June 1997

    For information, attached is the text of a statement made by the 
ICC Executive Director at the WTO Agriculture Committee in respect of 
the Decision of the WTO Singapore Ministerial conference concerning the 
question of Net-Food Importing Developing Countries.

                                 ______
                                 

WTO Agriculture Committee: Statement by IGC Executive Director (27 June 
                                 1997)

    I am pleased to provide you with a report on recent and planned 
activities by the Food Aid Committee in relation to the Decision of the 
WTO Singapore Ministerial Conference concerning the question of Net-
Food Importing Developing Countries.
Background
    To put the activities of the Food Aid Committee in some 
perspective, I would like briefly to recall a few points.
    First, the present Food Aid Convention (FAC) came into effect on 1 
July 1995, for a duration of three years, unless extended in its 
present form or otherwise modified.
    Second, since then, there has been a number of developments which 
have taken place in the area of food aid:
   the role of food aid was discussed by the World Food Summit 
        in the context of world food security objectives;
   the financial impact of world grain prices on the import 
        bills of developing countries was drawn to the attention of 
        international financial institutions by the WTO Singapore 
        Ministerial Conference;
   food aid policies have been under review in a number of 
        donor countries. These reviews are taking place in the light of 
        broader longer-term food security concerns, the fact that an 
        increasing proportion of food aid is going to emergency 
        humanitarian assistance as opposed to program food aid, as well 
        as mounting budgetary pressures on ODA's;
   world wheat prices are currently are in the U.S. $140-150 
        range, compared to a U.S. $250 peak about one and a half year 
        ago.
    Third, over the years, food aid levels have generally exceeded the 
minimum annual commitments under the FAC. Since that are now at about 
the minimum levels set it the Convention, this situation effectively 
increases the value of the international food safety net which is being 
guaranteed to food deficit and poor developing countries. Because the 
obligations are in volume terms (of wheat equivalents) not in value, 
this minimum level food aid is made available irrespective of world 
grain prices.
FAC Activities
    In January 1997, I received a letter from the Director General of 
the WTO asking to inform members of the Food Aid Committee about the 
outcome of your Singapore Ministerial Conference, in respect of food 
deficit developing countries.
    FAC members immediately started meeting to develop an approach, 
which would both respond to the WTO Decision and their own requirements 
bearing on the future of the Convention.
    As a practical matter, FAC members have arranged meetings along 
four lines:
          1. First, with potential new FAC members as food aid donors. 
        On April 9, a meeting was held with some 16 non-FAC members. 
        About one-third have subsequently shown interest in follow-up 
        activities. In the autumn, dialogue with all the 16 governments 
        will continue.
          2. Second, with relevant international organisations. On June 
        16, the Food Aid Committee held discussions with 
        representatives of the WFP and FAO, on the basis of written 
        submissions setting out their views on the current Convention 
        as well as on elements that should be covered by a new 
        Convention. Discussions will continue on certain matters of 
        particular interest to FAC members. At the appropriate time, 
        similar discussions will also take place with the World Bank, 
        the IMF, as well as UNCAD and OECD.
          3. Third, with food aid recipients. All representatives of 
        countries and territories on the WTO list of Net-Food importing 
        Developing Countries were invited to a meeting with the Food 
        Aid Committee on 17 June. In attendance, there were eighteen 
        representatives, ten from Africa, four from Asia Pacific, and 
        four from the Caribbean and South America. The main elements of 
        the Convention were explained and the views of recipients 
        expressed on what a future Convention might include.
          The immediate follow-up to discussions with food aid 
        recipients include this briefing of the WTO Committee on 
        Agriculture concerning FAC activities, and an information 
        letter I will send shortly to participants on the outcome of 
        the Food Aid Committee on the future of the Convention. If and 
        when FAC members formally decide to open the convention to 
        modifications, further discussions will take place on matters 
        of mutual interest. It was agreed to maintain liaison in London 
        through the High Commission of Mauritius.
          4. Fourth, among members of the Food Aid Committee 
        themselves. At its 17 June meeting, the Committee decided to 
        maintain the momentum created by the activities of recent 
        months. It agreed that a decision on whether to open the FAC 
        for possible modifications on certain elements would be taken 
        at its next regular meeting in December 1997. In the meantime, 
        members will continue their examination of what the specific 
        issues for possible modifications could be, the terms of 
        reference for any review and the time-frame for completing it.
          Areas of particular interest mentioned by some members 
        include the list of potential FAC donors, the list of donable 
        products, the list of eligible recipients, an strengthening of 
        triangular and local transactions, improving the coordination 
        and effectiveness of food aid, the terms of aid, the role and 
        objectives of a new Food Aid Convention in the world food 
        security and trade liberalisation context.
          Members also agreed, in principle, that subject to a formal 
        decision in December 1997, the FAC should be extended for one 
        year. This would avoid any legal vacuum after 30 June 1998, 
        when the Convention expires, and allow time for the necessary 
        legislative approvals and ratification procedures by members.
    Throughout these activities, liaison between the Secretariats of 
the IGC and the WTO is being actively maintained.

                                 ______
                                 
                                        Food Aid Committee,
                                                  26 November 1997.
To: Members of the Food Aid Committee

From: G. Denis, Executive Director, International Grains Council

Subject: Future of FAC, 1995: Letter from WTO Director-General

    I am bringing to your attention a letter from the WTO Director-
General, dated 25 November 1997, in which he strongly urges members of 
the Food Aid Committee, at their forthcoming meeting, to take the 
necessary decisions in order ``to initiate negotiations'' on the future 
of the current Convention, covering those ``elements and objectives'' 
established by member governments in the context of their WTO 
commitments to net-food importing developing countries.

                                 ______
                                 

                                   Renato Ruggiero,
                                          Director-General,
                                          World Trade Organization,
                                                  25 November 1997.
Mr. Germain Denis,
Executive Director,
International Grains Council
    Dear Mr. Denis,
    You will recall that in June this year I wrote to you, and through 
you to the Chairman and Members of the Food Aid Committee, in order to 
stress the importance which Members of the WTO, in particular the least 
developed and net food-importing developing countries, attach to an 
effective follow-up to the Singapore WTO Ministerial Conference 
recommendations on the implementation of the Marrakesh Ministerial Net 
Food-Importing Developing Country (NFIDC) Decision relating to food aid 
commitments and concessionality guidelines in the context of 
preparations for the renegotiation of the Food Aid Convention. These 
recommendations provide that: ``in anticipation of the expiry of the 
current Food Aid Convention in June 1998 and in preparation for the 
renegotiation of the Food Aid Convention, action be initiated in 1997 
within the framework of the Food Aid Convention, under arrangements for 
participation by all interested countries and by relevant international 
organizations as appropriate, to develop recommendations with a view 
towards establishing a level of food aid commitments, covering as wide 
a range of donors and donable foodstuffs as possible, which is 
sufficient to meet the legitimate needs of developing countries during 
the reform programme. These recommendations should include guidelines 
to ensure that an increasing proportion of food aid is provided to 
least-developed and net food-importing developing countries in fully 
grant form and/or on appropriate concessional terms in line with 
Article IV of the current Food Aid Convention, as well as means to 
improve the effectiveness and positive impact of food aid.''
    I would first of all like to express my appreciation and that of 
the WTO Members concerned for the effective and expeditious manner in 
which action has been taken by the Food Aid Committee to move matters 
forward on a basis which has enabled the least developed and net food-
importing countries, as well as the relevant international 
organizations, to be consulted and make a contribution to the process.
    I understand that the stage has now been reached where the Food Aid 
Committee, at its meeting in London next week, is to take decisions 
regarding the future of the Convention, in particular on whether a new 
or revised Convention is to be negotiated. having regard to the 
commitments undertaken by their governments in their capacity as 
members of the WTO under Article 16 of the WTO Agreement on 
Agriculture, I would, on a personal basis, strongly urge Members of the 
Food Aid Convention at next week's meeting of the Food Aid Committee to 
adopt a decision to initiate negotiations that embrace, inter alia, the 
elements and objectives provided for by Ministers in paragraphs 3 (i) 
and (ii) of the Marrakesh Ministerial NFIDC Decision and in the 
recommendations adopted at the Singapore WTO Ministerial Conference on 
food aid commitments and concessionality guidelines. To be perfectly 
frank I personally do not see how it would be possible for these 
commitments and recommendations to be implemented otherwise than in the 
context of re-negotiation of the present Food Aid Convention.
    In the event that a decision is taken to modify or revise the 
Convention, I would very much hope that provision could be made in the 
ensuing process for continuation of appropriate arrangements for co-
operative dialogue and contacts with the least-developed and net food-
importing developing countries.
    I would be most grateful if arrangements could be made, as 
appropriate, for his letter to be brought to the attention of the 
Chairman and the Members of the Food Aid Committee.
    With my best personal regards and wishes for a successful and 
productive meeting of the Food Aid Committee.
            Yours sincerely,
                                   Renato Ruggiero,

                                 ______
                                 

                      International Grains Council,
                                        Executive Director,
                                                   3 December 1997.
Mr. Renato Ruggiero
Director-General
World Trade Organization
    Dear Mr. Ruggiero,
    Thank you for your letter of 25 November 1997 concerning the future 
of the Food Aid Convention, 1995 as it bears on the follow up to the 
WTO Singapore Ministerial Conference on the question of Net Food 
Importing Developing Countries.
    I am pleased to inform you that, at their 2 December 1997 Session, 
FAC members decided:

   to open the current Convention for re-negotiation during 
        1998, in the expectation that a new Convention aimed at 
        increasing the effectiveness of food aid and reflecting WTO and 
        World Food Security considerations, would come into effect on 1 
        July 1999; and,
   to extend the life of the current Convention by one year to 
        30 June 1999, while the negotiations for a new Convention are 
        being carried out.

    FAC members also agreed that the dialogue already initiated with 
FAC recipients, potential new FAC members as well as with relevant 
international organisations, should be continued during the re-
negotiations of the Convention.
    WTO co-operation with the Food Aid Committee, as well as the IGC 
and its Secretariat is well appreciated.
            Yours sincerely,
                                          G. Denis.

                                 ______
                                 

                                   Renato Ruggiero,
                                          Director-General,
                                          World Trade Organization,
                                                  11 December 1997.
Mr. Germain Denis,
Executive Director,
International Grains Council
    Dear Mr. Denis,
    Thank you very much for your up-date on the future of the Food Aid 
Convention 1995. I am very pleased that the recommendations of the 
Singapore Ministerial Conference regarding a re-negotiation of the 
Convention are now being put into practice. I also welcome very much 
that throughout the process of re-negotiation the dialogue with the net 
food-importing developing countries, potential new donors and the 
relevant international organizations will be further pursued.
    I wish to take this opportunity to convey my season's greetings and 
best wishes for 1998.
            Yours sincerely,
                                   Renato Ruggiero.

                               __________

                  Questions Submitted by Senator Biden

1991 Convention for the Protection of New Varieties of Plants
    Question. In Article 1(iv), does the phrase ``where the laws of the 
relevant Contracting Party so provide'' apply both to a person who has 
employed the breeder and a person who has commissioned the breeder's 
work?
    Answer. The wording of Article 1(iv) permits the national law of a 
member state to provide that a person may be considered to be the 
``breeder'' if he is the employer of the actual breeder or if he 
commissioned the breeder's work. Accordingly, the phrase in question 
applies to both instances The Plant variety Protection Act provides 
that if an agent creates or develops a variety on behalf of a 
principal, the latter shall be considered to be the ``breeder'' (7 USC 
2401(a)(2)).
    Question. Article 12 permits a national authority in conducting an 
examination for compliance with the conditions under Articles 5 to 9 to 
``take into account the results of growing tests or other trials which 
have already been carried out.'' In the analysis submitted with the 
Convention, it is asserted that this provision ``implicitly includes'' 
tests conducted by the breeder.
   Is this understanding shared by the other signatories to the 
        Convention?
   Was it discussed during the negotiations?
    Answer. The answer to the both parts of this question is yes. In 
formulating the language of Article 12 quoted in the question, members, 
including the United States, discussed their domestic practices on 
numerous occasions during negotiations at committees of experts 
formulating the basic draft treaty proposal.
    Question. What is the scope of the term ``public interest'' in 
Article 17(1)?
    Answer. Each member of the 1991 UPOV Convention must make a 
sovereign determination of what it considers to be the ``public 
interest.'' This language is unchanged from the 1978 UPCV Convention to 
which the United States is a member.
    Question. Presuming that revisions to the Convention are adopted in 
the future by a conference conducted pursuant to Article 38, how would 
such revisions take effect?
   Specifically, how many States must ratify a revision for it 
        to enter into force?
    Answer. Revisions must be approved by a majority of three quarters 
of the members of the Union present and voting at a conference (Article 
38). The Convention as revised in the future would then enter into 
force in accordance with the provisions of the revised text referring 
to the entry into force of the Convention. The present text and 
previous versions of the Convention provided that the Convention would 
enter into force one month after five States have deposited their 
instruments of ratification (Article 37 of the revised Act). No member 
country is obligated to become party to the revised Convention and may 
remain an adherent to previous versions of the Convention.
    Question. Please elaborate on the meaning of Article 39(4).
    Answer. If a State wishes to withdraw from the 1991 UPOV 
Convention, any rights which were acquired by a national of that state 
shall continue to exist. For example, if a member state granted a 
breeder's right for a term of twenty years and withdrew from the 
Convention in the 15th year of the protected right, the breeder (if a 
national of that country) would continue to enjoy protection for 
another five years.
    Question. Article 35(1) of the Convention bars reservations, 
although an exception is provided for in Article 35(2).
   Why was Article 35(1) deemed necessary?
   Did the Executive Branch consult with this Committee before 
        consenting to the inclusion of this provision in the 
        Convention?
    Answer. During the negotiations in 1991, the United States 
determined that the rights and obligations provided in this technical 
convention were very beneficial to the United States.
    For example, unlike the 1978 UPOV Convention, the 1991 UPOV 
Convention requires UPOV members to protect all botanical genera and 
species that meet the four criteria of distinctiveness, stability, 
uniformity, and novelty, rather than just the species that are of 
economic importance in their own countries. For example, northern 
European UPOV members of the 1991 Act are now required to restrict the 
imports of pirated varietals of citrus fruit. Other revisions in the 
1991 UPOV Convention provide greater protection against ``cosmetic 
breeding'' that borders on piracy, clarify and narrow the exception 
given to farmers for the hoarding of seed, and extend the period of 
protection to 25 years for trees and vines and 20 years for all other 
species.
    The United States is the world's largest exporter of seed grains 
and other agricultural exports that would qualify for protection under 
the UPOV Convention. Negotiators felt that the revisions deepening and 
strengthening protection that are incorporated in the 1991 UPOV 
Convention were advantageous to the United States. As such, thus a ``no 
reservations'' clause secures the protection in these revisions for the 
United States by prohibiting UPOV Convention members from implementing 
only those revisions that were felt to be in that member's economic 
interests.
    With regards to consultations, the United States delegation did not 
discuss a ``no reservations'' clause with the SFRC clause prior to 
negotiations. In addition to the considerations noted above, the United 
States considered the effect of such a clause in Article 35(1) with its 
notification exception in Article 35(2) was, for the United States, 
substantively identical to the 1978 Act (which also contains a ``no 
reservations'' clause)
Trademark Law Treaty
    Question. The United States signed the treaty in October, 1994. It 
was submitted to the Senate in January, 1998. What was the reason for 
the delay?
    Answer. The Administration did not wish to submit the treaty 
package to the Senate for advice and consent well in advance of 
Congressional consideration of implementing legislation. Trademark Law 
Treaty implementing legislation (H.R. 1661--The Trademark Law Treaty 
Implementation Act) was introduced into Congress in 1997 following 
extensive consultations with U.S. bar associations on proposed 
amendments to domestic law.
    Question. Is there a negotiating history or understanding as to 
what constitutes a ``reasonable time limit'' in Article 16?
    Answer. This issue was discussed by delegates during the 
negotiations. It was understood by delegates that time limits would be 
consistent with the domestic law of their country, i.e. approximately 
one month to six months. The U.S. time limit is six months
    Question. What is the legal status of the accompanying Regulations? 
Are they an integral part of the treaty?
    Answer. Article 17 of the Treaty states that:

        ``1(a) The Regulations annexed to this Treaty provide rules 
        concerning (i) matters which this Treaty expressly provides to 
        be ``prescribed in the Regulations;
        (ii) matters which this Treaty expressly provides to be 
        ``prescribed in the Regulations'';
        (iii) any administrative requirements, matters or procedures.
        (b) The Regulations contain the Model International Forms
        (2) In the case of conflict between the provisions of this 
        Treaty and those of the Regulations, the former shall prevail--
        ''

    The Treaty therefore provides that the regulations set out specific 
direction as to the details useful in the implementation of the Treaty. 
Further, the Treaty provides that, where there is any conflict between 
the Rules and the Treaty, the language of the Treaty shall prevail. 
Inasmuch as there is no mechanism for amending the Rules set out in the 
Treaty, those Rules would have to be amended as a result of a 
Diplomatic Conference, as required by Article 18. We sent the 
Regulations for Advice and Consent, and consider them binding with the 
Treaty.
    Question. Article 21(4) limits the reservations which a state may 
take. Why was this provision necessary? Did the Executive Branch 
consult with the Committee before agreeing to it?
    Answer. In the case of this technical treaty, the provision 
limiting reservations was necessary in order to ensure that member 
states could not opt out of any of the treaties' simple procedures for 
establishing and maintaining trademark rights in favor of continuing 
their own more complex and cumbersome procedures.
    For example, this treaty does not permit a member country to 
require the legalization, notarization, or other means of demonstrating 
the authenticity of a signature except under specific, limited 
circumstances. Trademark owners are often faced with months of delay, 
and must spend thousands of dollars to meet the legalization-of-
signature requirements imposed by some countries. Permitting a 
potential member to ``opt out'' of such a provision would seriously 
undermine the purpose of the Treaty.
    The Executive did not consult with the Committee before accepting 
the clause. While we are aware that the Senate has concerns over ``no 
reservations'' clauses, in the situation of this technical treaty, the 
Executive's view was that such a clause protected U.S. interests and 
was necessary to achieve the treaty's benefits.
    Question. How will obligations under the treaty be enforced? Does 
the World Intellectual Property Organization have any mechanism for 
ensuring compliance?
    Answer. When a country becomes party to the Trademark Law Treaty, 
it is expected to modify its rules and regulations to meet the 
requirements of the Treaty. There is no enforcement mechanism within 
the Treaty to ensure that member states are in compliance with its 
compliance. WIPO does not have an enforcement mechanism and does not 
administer any treaties that provide for action against member states 
that are not in compliance. To the extent that Trademark Law Treaty 
obligations are congruent with the intellectual property obligations of 
the Trade Related Aspects of Intellectual Property agreement (TRIPs), 
WTO member states may be able to pursue against other WTO member states 
implementation of trademark protection obligations through the WTO 
Dispute Settlement Mechanism.
Hearing on the International Grains Agreement, 1995 (Treaty Doc. 105-4)
    Question. Has a member's voting rights ever been suspended under 
the provisions of Article 21 of the Grains Trade Convention?
    Yes. At various times, Argentina, Bolivia, Ecuador, Iraq, Israel, 
the Russian Federation, Turkey and Yemen have had their voting rights 
suspended.
    Question. Has the Council thus far complied with the requirement of 
Article 21(8) of the Grains Trade Convention to publish an audited 
statement of its receipts and expenditures?
    Answer. Yes. The International Grains Council annually publishes an 
audited statement of its receipts and expenditures. We have attached 
copies of these statements.

 Audited Statements of Receipts and Expenditures of the International 
                             Grains Council

                          FISCAL YEAR 1994/95

                       International Grains Council
                                             Second Session
                                                (7th December 1995)
20th November 1995

Agenda item 8: Financial situation of the Council:
    (i) Audited accounts for the fiscal year 1994/95

                                 ______
                                 

    The report by the Auditors of the Council showing receipts and 
payments for the year ending 30th June 1995 is attached. The Council 
will be invited to approve the report, which will be included as an 
appendix to the published version of the Report for the Fiscal Year 
(the draft of which has already been circulated to members of the 
Council as document GC2/5).

                                 ______
                                 

                                  Price Waterhouse,
             Chartered Accountants and Registered Auditors,
                                            London SE1 9QL,
                                                     December 1995.

  Auditors' Report to the Members of the International Grains Council 
               (Formerly the International Wheat Council)

    In accordance with Article 21 (8) of the Wheat Trade Convention, 
1986, we have audited the statement of receipts and expenditures on 
pages 2 to 5.
Respective responsibilities of the Executive Director and auditors
    The Executive Director of the Council is required, in accordance 
with Article 21 (8) of the Wheat Trade Convention, 1986, to prepare a 
statement of the receipts and expenditures of the Council for each crop 
year. He is also responsible for keeping the accounts of the Council 
and for the maintenance of internal controls which ensure regularity in 
the receipt, disposal and custody of all funds and other resources of 
the Council and ensure conformity with the budget or other financial 
provisions approved by the Council. It is our responsibility to form an 
independent opinion, based on our audit, on the annual statement of 
receipts and expenditures and to report our opinion to you.
Basis of opinion
    We conducted our audit in accordance with Auditing Standards issued 
by the Auditing Practices Board. An audit includes examination, on a 
test basis, of evidence relevant to the amounts and disclosures in the 
annual statement of receipts and expenditures. It also includes an 
assessment of the significant estimates and judgments made in the 
preparation of the annual statement of the Council's receipts and 
expenditures.
    We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary in order to 
provide us with sufficient evidence to give reasonable assurance that 
the statement of receipts and expenditures is free from material 
misstatement, whether caused by fraud or other irregularity or error. 
In forming our opinion we also evaluated the overall adequacy of the 
presentation of information in the statement of receipts and 
expenditures.
Opinion
    In our opinion, the annual statement of the Council's receipts and 
expenditures for the year ended 30 June 1995 properly reflects the cash 
transactions of the International Wheat Council and presents fairly its 
bank and cash balances at 30 June 1995.
                                           Price Waterhouse
                      Chartered Accountants and Registered Auditors

                                 ______
                                 

                      INTERNATIONAL WHEAT COUNCIL

   Statement of Receipts and Payments for the Year Ended 30 June 1995   
                  [Amounts shown are in British pounds]                 
                                                                        
                                        1995              pound>     
                                                                        
              RECEIPTS                                                  
  Contributions, current year.......         1,274,320         1,220,792
  Contributions, past years.........           101,965           296,514
  Contributions, advance payments...             3,400             2,300
  Interest on deposit...............            56,665            38,153
  Sale of publications and                                              
   information services.............            75,133            73,409
   Services to ISO..................             5,150             5,646
                                     -----------------------------------
      Total Receipts................   1,5                  
                                                16,633   1,6
                                                                  36,814
                                     ===================================
              PAYMENTS                                                  
Staff                                                                   
  Salaries (professional staff).....           327,773           318,844
  Salaries (general service staff)..           280,869           296,566
  Translators.......................            25,281            23,774
  Dependency allowances.............             9,004             8,282
  Education allowance...............            18,396           17, 135
  National insurance................            36,400            34,631
  Overtime..........................                47               863
  End-of-service benefit schemes....           118,939            125,66
  Staff group assurance.............            16,962            17,444
  Home leave........................               612             1,778
  Incoming/outgoing staff...........            10,824                --
  Travel............................               147             1,242
                                     -----------------------------------
                                               845,254           846,225
                                     -----------------------------------
Accommodation                                                           
  Rent..............................           157,700           155,800
  Car park rent.....................             6,000             6,000
  Less: UK subsidy..................          (41,500)          (41,500)
                                     -----------------------------------
    Net rent........................           122,200           120,300
                                                                        
  Rates.............................             6,100             5,999
  Electricity, cleaning & office                                        
   maintenance......................            12,564             7,864
  Insurance.........................             5,315             6,768
  Service charges...................            19,087            17,683
                                     -----------------------------------
                                               165,266           158,614
                                     -----------------------------------
Office                                                                  
  Stationery and printing...........            23,465            25,528
  Postage...........................            21,434            20,685
  Telephones and telefax............            16,293            10,811
  News wire services................             8,732             7,247
  Periodicals and information                                           
   services.........................            13,400            13,306
  Hire and maintenance of equipment.            10,143            14,296
  Office equipment..................             4,600             4,249
  Computer..........................            18,711            18,069
  Bank charges......................             1,571             1,004
  Miscellaneous.....................             2,349             2,332
                                     -----------------------------------
                                               120,698           117,527
                                     -----------------------------------
Council and Committee                                                   
  Travel............................             5,342             5,627
  Interpreters......................            14,229            14,690
  Catering and entertainment........             3,978             7,052
  Miscellaneous.....................             1,320             1,842
                                     -----------------------------------
                                                24,869            29,211
                                     -----------------------------------
                                                                        
Conference                                                              
  Travel............................             8,384                --
  Interpreters......................             2,400             2,399
  Catering and entertainment--94....               676            10,285
  Catering and entertainment--95....            11,808                --
  Advertising & promotion...........               450               926
  Miscellaneous--June 93 conference.                --                42
  Miscellaneous--June 94 conference.               231             2,723
  Miscellaneous--June 95 conference.             2,435                --
  Receipts from delegates--June 93                                      
   conference.......................                --             (252)
  Receipts from delegates--June 94                                      
   conference.......................           (2,439)          (27,745)
  Receipts from delegates--June 95                                      
   conference.......................          (28,338)                --
  Sponsorship.......................           (5,000)                --
                                     -----------------------------------
                                               (9,393)          (11,622)
                                     -----------------------------------
Professional services                                                   
  Freight consultants...............             5,250             5,250
  Trustee...........................               400             7,250
  Audit fees........................             3,750             3,550
  Trustee indemnity insurance.......             2,420             2,200
                                     -----------------------------------
                                                11,820            18,250
                                     -----------------------------------
      TOTAL EXPENSES................         1,158,514         1,158,205
                                     -----------------------------------
                                                                        
Non-operating items                                                     
  Season ticket loans...............               678               245
  BUPA/WPA/PPP......................               140           (1,020)
  Refundable deposit--BT............                             (1,000)
  VAT...............................           (5,792)           (3,147)
  Loss on exchange..................             2,117               454
                                     -----------------------------------
                                               (2,857)           (4,468)
                                     -----------------------------------
      TOTAL PAYMENTS................   1,1                  
                                                55,657   1,1
                                                                  53,737
                                     ===================================
                                                                        
EXCESS OF RECEIPTS OVER PAYMENTS....           360,976           483,077
BALANCE BROUGHT FORWARD 1 JULY 1994.           989,472           506,395
                                     -----------------------------------
BALANCE CARRIED FORWARD 30 JUNE 1995   1,3                  
                                                50,448   989
                                                                    ,472
                                     ===================================
                                                                        
Represented by:                                                         
  Bank balances                                                         
    Deposit accounts................         1,339,571           981,179
    Current accounts................            10,687             7,132
  Cash..............................               190             1,161
                                     -----------------------------------
                                       1,3                  
                                                50,448   989
                                                                    ,472
                                     ===================================
Reserve                                                                 
  Operating reserve.................           700,000           600,000
  Capital and contingency reserve...           650,448           389,472
                                     -----------------------------------
                                       1,3                  
                                                50,448   989
                                                                    ,472
                                     ===================================
                                                                        
Notes:                                                                  
  Approved by the Council on ------------/R. Mohler--Chairman, G. Denis--
  Executive Director                                                    
  The International Wheat Council receives money from insurance         
  companies, the Staff Provident Fund and the Cash Benefit scheme, on   
  behalf of the beneficiaries of the insurance policies and funds, which
  is then paid out to those beneficiaries. These amounts are not        
  included in the above statements of receipts and payments.            
  Under the Headquarters Agreement dated 22 November 1968 between the   
  Government of the United Kingdom and the International Wheat Council, 
  within the scope of its official activities as defined by the         
  Agreement, the Council and its property and income are exempt from all
  direct taxes.                                                         


                                 ______
                                 

                          FISCAL YEAR 1995/96

                       International Grains Council
                                             Fourth Session
                                                  (3 December 1996)
25 November 1996

Agenda item 8: Financial situation of the Council:
    (i) Audited accounts for the fiscal year 1995/96

                                 ______
                                 

    The report by the Auditors of the Council showing receipts and 
payments for the year ending 30th June 1996 is attached. The Council 
will be invited to approve the report, which will be included as an 
appendix to the published version of the Report for the Fiscal Year 
(the draft of which has already been circulated to members of the 
Council as document GC4/4).

                                 ______
                                 

                                  Price Waterhouse,
             Chartered Accountants and Registered Auditors,
                                            London SE1 9QL,
                                                     December 1996.

  Auditors' Report to the Members of the International Grains Council 
               (Formerly the International Wheat Council)

    In accordance with Article 21 (8) of the Grains Trade Convention, 
1995, we have audited the statement of receipts and expenditures on 
pages 2 to 5.
Respective responsibilities of the Executive Director and auditors
    The Executive Director of the Council is required, in accordance 
with Article 21 (8) of the Grains Trade Convention, 1995, to prepare a 
statement of the receipts and expenditures of the Council for each crop 
year. He is also responsible for keeping the accounts of the Council 
and for the maintenance of internal controls which ensure regularity in 
the receipt, disposal and custody of all funds and other resources of 
the Council and ensure conformity with the budget or other financial 
provisions approved by the Council. It is our responsibility to form an 
independent opinion, based on our audit, on the annual statement of 
receipts and expenditures and to report our opinion to you.
Basis of opinion
    We conducted our audit in accordance with Auditing Standards issued 
by the Auditing Practices Board. An audit includes examination, on a 
test basis, of evidence relevant to the amounts and disclosures in the 
annual statement of receipts and expenditures. It also includes an 
assessment of the significant estimates and judgements made in the 
preparation of the annual statement of the Council's receipts and 
expenditures.
    We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary in order to 
provide us with sufficient evidence to give reasonable assurance that 
the statement of receipts and expenditures is free from material 
misstatement, whether caused by fraud or other irregularity or error. 
In forming our opinion we also evaluated the overall adequacy of the 
presentation of information in the statement of receipts and 
expenditures.
Opinion
    In our opinion, the annual statement of the Council's receipts and 
expenditures for the year ended 30 June 1996 properly reflects the cash 
transactions of the International Wheat Council and presents fairly its 
bank and cash balances at 30 June 1996.
                                           Price Waterhouse
                      Chartered Accountants and Registered Auditors

                                 ______
                                 

                      INTERNATIONAL GRAINS COUNCIL

   Statement of Receipts and Payments for the Year Ended 30 June 1996   
                  [Amounts shown are in British pounds]                 
                                                                        
                                        1996              pound>     
                                                                        
              RECEIPTS                                                  
  Contributions, current year.......           922,991         1,274,320
  Contributions, past years.........            99,564           101,965
  Contributions, advance payments...                --             3,400
  Interest on deposit...............            93,219            56,665
  Sale of publications and                                              
   information services.............            90,243            75,133
   Services to ISO..................             4,306             5,150
                                     -----------------------------------
      Total Receipts................   1,2                  
                                                10,323   1,5
                                                                  16,633
                                     ===================================
              PAYMENTS                                                  
Staff                                                                   
  Salaries (professional staff).....           377,092           327,773
  Salaries (general service staff)..           261,555           280,869
  Translators.......................            28,286            25,281
  Dependency allowances.............            10,128             9,004
  Education allowance...............            19,703            18,396
  National insurance................            35,990            36,400
  Overtime..........................             1,429                47
  End-of-service benefit schemes....           124,882           118,939
  Staff group assurance.............            15,102            16,962
  Home leave........................             2,790               612
  Incoming/outgoing staff...........             2,606            10,824
  Travel............................                --               147
                                     -----------------------------------
                                               879,563           845,254
                                     -----------------------------------
Accommodation                                                           
  Rent..............................           170,525           157,700
  Car park rent.....................             6,500             6,000
  Less: UK subsidy..................          (49,000)          (41,500)
                                     -----------------------------------
    Net rent........................           128,025           122,200
                                                                        
  Rates.............................            11,768             6,100
  Electricity, cleaning & office                                        
   maintenance......................            14,912            12,564
  Insurance.........................             7,676             5,315
  Service charges...................            26,418            19,087
                                     -----------------------------------
                                               188,799           165,266
                                     -----------------------------------
Office                                                                  
  Stationery and printing...........            31,724            23,465
  Postage...........................            18,974            21,434
  Telephones and telefax............            14,452            16,293
  News wire services................             8,648             8,732
  Periodicals and information                                           
   services.........................            14,608            13,400
  Hire and maintenance of equipment.            10,074            10,143
  Office equipment..................            15,972             4,600
  Computer..........................            13,276            18,711
  Bank charges......................             1,669             1,571
  Miscellaneous.....................             2,782             2,349
                                     -----------------------------------
                                               132,179           120,698
                                     -----------------------------------
Council and Committee                                                   
  Travel............................            11,601             5,342
  Interpreters......................            15,080            14,229
  Catering and entertainment........             6,273             3,978
  Miscellaneous.....................             2,307             1,320
                                     -----------------------------------
                                                35,261            24,869
                                     -----------------------------------
Conference                                                              
  Travel............................             1,176             8,384
  Interpreters......................             1,780             2,400
  Catering and entertainment--94....                --               676
  Catering and entertainment--95....                --            11,808
  Catering and entertainment--96....            17,694                --
  Advertising & promotion...........               462               450
  Miscellaneous--June 94 conference.                --               231
  Miscellaneous--June 95 conference.               941             2,435
  Miscellaneous--June 96 conference.             9,799                --
  Receipts from delegates--June 94                                      
   conference.......................                --           (2,439)
  Receipts from delegates--June 95                                      
   conference.......................             (590)          (28,338)
  Receipts from delegates--June 96                                      
   conference.......................          (37,231)                --
  Sponsorship 95....................           (2,227)           (5,000)
  Sponsorship 96....................           (4,200)                --
                                     -----------------------------------
                                              (12,396)           (9,393)
                                     -----------------------------------
Professional services                                                   
  Freight consultants...............             5,250             5,250
  Trustee...........................               500               400
  Audit fees........................             3,950             3,750
  Trustee indemnity insurance.......             2,481             2,420
                                     -----------------------------------
                                                12,181            11,820
                                     -----------------------------------
                                                                        
Installation of new Executive                                           
 Director                                        8,911                  
                                                                        
                                     -----------------------------------
      TOTAL EXPENSES................         1,244,498         1,158,514
                                     -----------------------------------
                                                                        
Non-operating items                                                     
  Season ticket loans...............             (587)               678
  BUPA/WPA/PPP......................              (99)               140
  VAT...............................            18,523           (5,792)
  Loss on exchange..................             (825)             2,117
                                     -----------------------------------
                                                17,012           (2,857)
                                     -----------------------------------
      TOTAL PAYMENTS................   1,2                  
                                                61,510   1,1
                                                                  55,657
                                     ===================================
                                                                        
EXCESS OF RECEIPTS OVER PAYMENTS....          (51,187)           360,976
BALANCE BROUGHT FORWARD 1 JULY 1995.         1,350,448           989,472
                                     -----------------------------------
BALANCE CARRIED FORWARD 30 JUNE 1996   1,2                  
                                                99,261   1,3
                                                                  50,448
                                     ===================================
                                                                        
Represented by:                                                         
  Bank balances                                                         
    Deposit accounts................         1,245,397         1,339,571
    Current accounts................            53,641            10,687
  Cash..............................               223               190
                                     -----------------------------------
                                       1,2                  
                                                99,261   1,3
                                                                  50,448
                                     ===================================
Reserve                                                                 
  Operating reserve.................           700,000           700,000
  Capital and contingency reserve...           599,261           650,448
                                     -----------------------------------
                                       1,2                  
                                                99,261   1,3
                                                                  50,448
                                     ===================================
                                                                        
Notes:                                                                  
Approved by the Council on 3 December 1996/L.H. Van Staden--Chairman, G.
  Denis--Executive Director                                             
The International Grains Council receives money from insurance          
  companies, the Staff Provident Fund and the Cash Benefit scheme, on   
  behalf of the beneficiaries of the insurance policies and funds, which
  is then paid out to those beneficiaries. These amounts are not        
  included in the above statements of receipts and payments.            
Under the Headquarters Agreement dated 22 November 1968 between the     
  Government of the United Kingdom and the International Wheat Council  
  (now International Grains Council), within the scope of its official  
  activities as defined by the Agreement, the Council and its property  
  and income are exempt from all direct taxes.                          


                                 ______
                                 

                          FISCAL YEAR 1996/97

                                          Shipleys,
                                     Chartered Accountants,
                                           London WC2H 7DQ,
                                                     December 1997.

  Auditors' Report to the Members of the International Grains Council

    In accordance with Article 21 (8) of the Grains Trade Convention, 
1995, we have audited the statement of receipts and expenditures on 
pages 2 to 5.
Respective responsibilities of the Executive Director and Auditors
    The Executive Director of the Council is required, under Rule 26 of 
the Rules of Procedure under the Grains Trade Convention, 1995, to 
prepare a statement of the receipts and expenditures of the Council for 
the fiscal year. He is also responsible for keeping the accounts of the 
Council and for the maintenance of internal controls which ensure 
regularity in the receipt, disposal and custody of all funds and other 
resources of the Council and ensure conformity with the budget or other 
financial provisions approved by the Council. It is our responsibility 
to form an independent opinion, based on our audit, on the annual 
statement of receipts and expenditures and to report our opinion to 
you.
Basis of opinion
    We conducted our audit in accordance with Auditing Standards issued 
by the Auditing Practices Board. An audit includes examination, on a 
test basis, of evidence relevant to the amounts and disclosures in the 
annual statement of receipts and expenditures. It also includes an 
assessment of the significant estimates and judgements made in the 
preparation of the annual statement of the Council's receipts and 
expenditures.
    We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary in order to 
provide us with sufficient evidence to give reasonable assurance that 
the statement of receipts and expenditures is free from material 
misstatement, whether caused by fraud or other irregularity or error. 
In forming our opinion we also evaluated the overall adequacy of the 
presentation of information in the statement of receipts and 
expenditures.
Opinion
    In our opinion, the annual statement of the Council's receipts and 
expenditures for the year ended 30 June 1997 properly reflects the cash 
transactions of the International Grains Council and presents fairly 
its bank and cash balances at 30 June 1997.
                                                 Shipley's,
                                                 Registered Auditor

                                 ______
                                 

                      INTERNATIONAL GRAINS COUNCIL

   Statement of Receipts and Payments for the Year Ended 30 June 1997   
                  [Amounts shown are in British pounds]                 
                                                                        
                                        1997              pound>     
                                                                        
              RECEIPTS                                                  
  Contributions, current year.......           800,640           922,991
  Contributions, past years.........           402,294            99,564
  Contributions, advance payments...                --                --
  Interest on deposit...............            74,252            93,219
  Sale of publications and                                              
   information services.............            77,237            90,243
  Services to ISO...................             9,448             4,306
                                     -----------------------------------
      Total Receipts................   1,3                  
                                                63,860   1,2
                                                                  10,323
                                     ===================================
              PAYMENTS                                                  
Staff                                                                   
  Salaries (professional staff).....           423,533           377,092
  Salaries (general service staff)..           261,202           261,555
  Translators.......................            26,642            28,286
  Dependency allowances.............             8,102            10,128
  Education allowance...............            10,506            19,703
  National insurance................            35,804            35,990
  Overtime..........................               475             1,429
  End-of-service benefit schemes....           120,903           124,882
  Staff group assurance.............             7,904            15,102
  Home leave........................               173             2,790
  Incoming/outgoing staff...........            40,197             2,606
                                     -----------------------------------
                                               936,501           879,563
                                     -----------------------------------
Accommodation                                                           
  Rent..............................           209,000           170,525
  Car park rent.....................             8,000             6,500
  Less: UK subsidy..................          (86,500)          (49,000)
                                     -----------------------------------
    Net rent........................           138,500           128,025
                                                                        
  Rates.............................           (4,550)            11,768
  Electricity, cleaning & office                                        
   maintenance......................            22,291            14,912
  Insurance.........................            10,145             7,676
  Service charges...................            35,024            26,418
                                     -----------------------------------
                                               194,010           188,799
                                     -----------------------------------
Office                                                                  
  Stationery and printing...........            24,505            31,724
  Postage...........................            17,018            18,974
  Telephones and telefax............            13,964            14,452
  News wire services................             8,160             8,648
  Periodicals and information                                           
   services.........................            11,595            14,608
  Hire and maintenance of equipment.            11,042            10,074
  Office equipment..................             8,510            15,972
  Computer..........................            27,645            13,276
  Bank charges......................             1,839             1,669
  Miscellaneous.....................             2,710             2,782
                                     -----------------------------------
                                               126,984           132,179
                                     -----------------------------------
Council and Committee                                                   
  Travel............................            16,021            11,601
  Interpreters......................             9,000            15,080
  Catering and entertainment........            10,691             6,273
  Miscellaneous.....................             5,370             2,307
  Hire of Cabot Hall meeting room...             3,000                --
                                     -----------------------------------
                                                44,082            35,261
                                     -----------------------------------
Conference                                                              
  Travel............................               989             1,176
  Interpreters......................             3,300             1,780
  Catering and entertainment--96....                --            17,694
  Catering and entertainment--97....            18,217                --
  Advertising & promotion...........             1,924               462
  Miscellaneous--June 95 conference.                --               941
  Miscellaneous--June 96 conference.                20             9,799
  Miscellaneous--June 97 conference.            14,477                --
  Receipts from delegates--June 95                                      
   conference.......................                --             (590)
  Receipts from delegates--June 96                                      
   conference.......................             (750)          (37,231)
  Receipts from delegates--June 97                                      
   conference.......................          (55,908)                --
  Sponsorship 95....................                --           (2,227)
  Sponsorship 96....................                --           (4,200)
                                     -----------------------------------
                                              (17,731)          (12,396)
                                     -----------------------------------
Professional services                                                   
  Freight consultants...............             5,250             5,250
  Trustee...........................               250               500
  Audit fees........................             3,950             3,950
  Trustee indemnity insurance.......             2,728             2,481
                                     -----------------------------------
                                                12,178            12,181
                                     -----------------------------------
Installation of new Executive                                           
 Director                                           --             8,911
                                     -----------------------------------
      TOTAL EXPENSES................         1,296,024         1,244,498
                                     -----------------------------------
Non-operating items                                                     
  Season ticket loans...............               979             (587)
  Private health insurance..........               333              (99)
  VAT...............................            18,523            18,523
  Loss on exchange..................             2,007             (825)
                                     -----------------------------------
                                                14,172            17,012
                                     -----------------------------------
      TOTAL PAYMENTS................   1,3                  
                                                10,196   1,2
                                                                  61,510
                                     ===================================
EXCESS OF RECEIPTS OVER PAYMENTS....            53,673          (51,187)
BALANCE BROUGHT FORWARD 1 JULY 1996.         1,299,261         1,350,448
                                     -----------------------------------
BALANCE CARRIED FORWARD 30 JUNE 1997   1,3                  
                                                52,834   1,2
                                                                  99,261
                                     ===================================
                                                                        
Represented by:                                                         
  Bank balances                                                         
    Deposit accounts................         1,305,000         1,245,397
    Current accounts................            47,723            53,641
  Cash..............................               211               223
                                     -----------------------------------
                                       1,3                  
                                                52,934   1,2
                                                                  99,261
                                     ===================================
                                                                        
Reserve                                                                 
  Operating reserve.................           700,000           700,000
  Capital and contingency reserve...           652,934           599,261
                                     -----------------------------------
                                       1,3                  
                                                52,934   1,2
                                                                  99,261
                                     ===================================
                                                                        
Notes:                                                                  
Approved by the Council on 1 December 1997/E. Di Emanuele--Chairman, G. 
  Denis--Executive Director                                             
The International Grains Council receives money from insurance          
  companies, the Staff Provident Fund and the Cash Benefit scheme, on   
  behalf of the beneficiaries of the insurance policies and funds, which
  is then paid out to those beneficiaries. These amounts are not        
  included in the above statements of receipts and payments.            
Under the Headquarters Agreement dated 22 November 1968 between the     
  Government of the United Kingdom and the International Wheat Council  
  (now International Grains Council), within the scope of its official  
  activities as defined by the Agreement, the Council and its property  
  and income are exempt from all direct taxes.                          


                               __________

    Question. What is the purpose of Article 22 of the Grains Trade 
Convention?
    Answer. Article 22 of the Grains Trade Convention was included at 
the insistence of a small minority of members who wished to retain the 
right to raise the possibility of including economic provisions in a 
future Convention. It is important to emphasize that the current Grains 
Trade Convention places no economic requirements on members with 
respect either to pricing or to marketing grains, a position strongly 
supported by the United States and the vast majority of other members.
    Question. Has the United States deposited a declaration of 
provisional application pursuant to Article 26 of the Grains Trade 
Convention?
    Answer. No. The United States signed the International Grains 
Agreement on June 26, 1995. The Agreement entered into force July 6, 
1995, on the basis of the mutual consent of those signatories which had 
deposited their instruments of ratification as provided for in Article 
28(2) of the Grains Trade Convention. In accordance with Article 25 of 
the Grains Trade Convention, the United States requested and has been 
granted several extensions of time to deposit its instrument of 
ratification. The United States has been allowed to participate in the 
International Grains Council as a full member with voting rights and an 
expectation--but not an obligation--that it pay its annual dues pending 
deposit of its instrument of ratification. Authority to participate in 
and make payments to the International Grains Agreement prior to 
ratification of the treaty derives from section 5 of the State 
Department Basic Authorities Act.
    Question. Has the United States deposited a declaration of 
provisional application to the Food Aid Convention, 1995 pursuant to 
Article XIX?
    Answer. No. The United States signed the International Grains 
Agreement on June 26, 1995. The United States requested and has been 
granted several extensions of time to deposit its instrument of 
ratification. The United States has been allowed to participate in the 
Food Aid Committee as a full member pending deposit of its instrument 
of ratification. Authority to participate in the Food Aid Committee 
prior to ratification of the treaty derives from section 5 of the State 
Department Basic Authorities Act. No separate dues are owed to the Food 
Aid Committee, which shares its Secretariat and its headquarters with 
the International Grains Council.

                               __________
                               Appendix 3

                           AMR (American Airlines),
                                           P.O. Box 619616,
                                                    March 25, 1998.
Honorable Jesse Helms,
Chairman, Committee on Foreign Relations,
Washington, DC 20510-6225.

Honorable Joseph R. Biden, Jr.,
Ranking Minority Member, Committee on Foreign Relations,
Washington, DC 20510-6225.

    Dear Chairman Helms and Senator Biden: I understand the Foreign 
Relations Committee will soon hold a hearing on Montreal Protocol No. 
4, a treaty that would modernize the international air cargo liability 
regime. I urge you to send this important treaty to the full Senate for 
its advice and consent.
    American Airlines provides more than 100 million pounds of cargo 
lift every week to major cities in Europe, Canada, Mexico, the 
Caribbean, Central and South America, and throughout the United States. 
Through cooperative interline agreements, we can transfer shipments to 
virtually any country in the world.
    Unfortunately, the growth of the air cargo industry has been slowed 
by its inability to use electronic waybills for international cargo 
shipments. The current air cargo liability system, established by the 
1929 Warsaw Convention, requires paper waybills containing voluminous 
information that is irrelevant to shippers and carriers. In this 
electronic age, these requirements are burdensome and costly. The time 
has come to modernize.
    Montreal Protocol No. 4 provides for electronic waybills and 
streamlined cargo documentation. Electronic waybills will reduce 
transit times, lower warehousing and staff costs, and enable the U.S. 
air cargo industry to offer its customers higher quality service.
            Sincerely,
                                    R. L. Crandall,
                                    Chairman and President.

                               __________

 National Customs Brokers & Forwarders Association 
                                        of America,
                                      Washington, DC 20036,
                                                      May 12, 1998.
The Honorable Jesse Helms,
Chairman, Senate Committee on Foreign Relations,
450 Dirksen Senate Office Building,
Washington, D.C. 20510.

    Dear Chairman Helms: The National Customs Brokers and Forwarders 
Association of America (NCBFAA) is pleased to submit the following 
comments for the record of your Committee's May 13, 1998 hearing on the 
Montreal Protocol 4. NCBFAA is the national association representing 
licensed customs brokers and freight forwarders, including air freight 
forwarders.
    The need for U.S. ratification of the Montreal Protocol 4 has never 
been greater. This treaty sets new standards for the air transport 
industry and will allow for the transmission of international air 
waybill information without the requirement of a paper document. 
Although it has been ratified by 26 nations, the treaty requires the 
approval of 30 countries to take effect. Ratification by the U.S. now 
would provide the impetus for other countries to sign on, allowing the 
treaty to formally take effect.
    By allowing the electronic transmission of air waybills, the 
Montreal Protocol 4 will benefit all aspects of the air transport 
industry. Until now, international treaties dating back to 1929 
required that liability limitations on air waybills must be on paper. 
This means that the large volume of electronic transactions in the air 
cargo industry must still be backed up with paper carbon copies 
containing the fine print about liability limits. This antiquated 
requirement is a huge impediment preventing the air freight industry 
from achieving a paperless environment.
    The elimination of the paper air waybill requirement through the 
Montreal Protocol 4 will lower costs for the industry. It also will 
significantly enhance the efficiency of the process, allowing 
electronic communications to flow more smoothly through the entire 
transportation chain.
    NCBFAA urges the Senate to ratify this noncontroversial, but highly 
necessary, treaty at the earliest opportunity. Thank you for the 
opportunity to present our comments.
            Sincerely,
                              Peter H. Powell, Sr.,
                                                 President.

                               __________

            Evergreen International Airlines, Inc.,
                            McMinnville, Oregon 97128-9496,
                                                    March 16, 1998.
The Honorable Jesse Helms,
Chairman, Committee On Foreign Relations,
United States Senate,
Washington, DC 20510.

    Dear Mr. Chairman: I am writing to you on behalf Evergreen 
International Airlines, Inc. (Evergreen), to request your support for 
obtaining the advice and consent of the U.S. Senate to ratification of 
Montreal Protocol No. 4 to the Warsaw Convention of 1929. Evergreen 
believes that ratification of the Montreal Protocol No. 4 will create a 
modern cargo liability system for American air carriers and shippers.
    As you may know, Evergreen has extensive authority to provide 
domestic and international scheduled and charter all-cargo services. 
Our fleet of 747-F aircraft currently operate scheduled and charter 
services to Australia, Hong Kong, Indonesia, New Zealand, Russia, 
Kenya, South Africa, Saudi Arabia, and other points in Europe and the 
Middle East.
    We understand that the Foreign Relations Committee will hold a 
hearing in the near future to consider the Montreal Protocol No. 4. 
Evergreen hopes that the Committee will recommend favorably the U.S. 
Senate's advice and consent for ratification of this Protocol.
    Changes in the rules governing international air cargo liability 
are long overdue. These rules were established even before the first 
DC-3 flew in commercial service, and they no longer meet the needs of 
carriers and shippers as we are about to enter the 21st century. In 
fact, these outdated liability rules impose unnecessary costs and 
burdens on air carriers and our customers.
    It is time for international cargo liability rules to catch up with 
the technology advances in the air freight industry. Montreal Protocol 
No. 4 would streamline cargo documentation requirements for shippers. 
The Warsaw Convention requires that a paper waybill accompany every 
international air shipment. This requirement is an anachronism in the 
age of electronic transmission of shipping information. Montreal 
Protocol No. 4 would embrace electronic transmission of waybill 
information, and eliminate dependence on paper-based transactions.
    The Warsaw Convention also requires information no longer necessary 
for today's shippers, such as precisely where an aircraft will stop and 
nature of the packaging of the shipment. If a carrier inadvertently 
omits any of such outdated information on a waybill, the cargo 
liability rules might not be enforceable in U.S. courts.
    Evergreen believes it is extremely important that the U.S. Senate 
consent to ratification of Montreal Protocol No. 4. Ratification of the 
Protocol will result in significant cost savings for carriers, shippers 
and freight forwarders, will enhance competitiveness of U.S. carriers 
in promoting American exports, and will protect carriers' liability in 
U.S. courts.
    Evergreen International Airlines requests your support, and hopes 
that the Foreign Relations Committee will consider favorably approval 
of the Montreal Protocol No. 4, to obtain the advice and consent of the 
U.S. Senate to ratification in the near future.
            Sincerely,
                                    Ronald A. Lane,
                                             Vice Chairman.

                               __________

                                   United Airlines,
    Gerald Greenwald, Chairman and Chief Executive Officer,
                                                    March 26, 1998.
The Honorable Jesse Helms,
Chairman, Committee on Foreign Relations,
450 Dirksen Senate Office Building,
Washington, D.C. 20510-6225.

    Dear Chairman Helms: I am writing to urge that the Foreign 
Relations Committee take prompt action to ratify Montreal Protocol No. 
4, a treaty that modernizes international air cargo liability rules by 
allowing for the transmission of electronic waybills.
    United Airlines Worldwide Cargo serves 30 countries and two U.S. 
territories on five continents from eight U.S. gateways. We generated 
$892 million in cargo revenue in 1997, up 15.4 percent from 1996. 
Flying more than 2.8 billion cargo ton miles last year, United's cargo 
operations are the largest of any passenger/cargo combination carrier 
in the United States. Increasing international demand for our air cargo 
services is driving much of our growth. Unfortunately, outdated 
international air cargo liability rules established by the 1929 Warsaw 
Convention impair our ability to provide international air cargo 
services efficiently.
    The Warsaw Convention requires that a paper waybill accompany each 
package. The waybill must include the following: the place and the date 
of execution; the places of departure and destination; the first 
carrier; the name and the address of the consignee; the nature of the 
goods; the number of packages; the method of packing and the numbers or 
marks upon them; the weight, quantity, volume or dimensions of the 
goods; a statement that the transportation is subject to the rules 
relating to liability established by the convention; the apparent 
condition of the goods and of the packing; the freight, the date and 
the place of payment and the person who is to pay it; the price of the 
goods if the goods are sent for payment on delivery and, if the case so 
requires, the amount of the expenses incurred; the amount of the value 
declared as the limitation of carrier liability; the number of parts of 
the air waybill; the documents to accompany the air waybill; and the 
time fixed for the completion of the transportation and a brief note of 
the route.
    The vast majority of this required information is commercially 
insignificant and costly to produce. These antiquated requirements 
prevent us from using simplified, electronic waybills. Ratifying the 
Montreal Protocol No. 4 would eliminate these costly requirements and 
make our customers and us more competitive internationally.
    Time for action on this non-controversial, cost-saving treaty is 
now. I appreciate your attention to this important issue, and would 
welcome the opportunity to discuss it further with you.
            Sincerely,
                                  Gerald Greenwald.

                               __________

                           John H. Dasburg,        
                President, Chief Executive Officer,        
                              Northwest Airlines. Inc.,    
                                   St. Paul, MN 55111-3034,
                                                    March 26, 1998.
The Honorable Jesse Helms,
Chairman, Committee on Foreign Relations,
SD-450 Dirksen Senate Building,
Washington, D.C. 20510.

The Honorable Joseph Biden, Jr.,
Ranking Member, Committee on Foreign Relations,
SD-450 Dirksen Senate Building,
Washington, D.C. 20510.

    Dear Chairman Helms and Senator Biden: Northwest Airlines seeks 
your support for advice and consent of Montreal Protocol No. 4, a 
treaty to amend the international air cargo liability regime 
established by the 1929 Warsaw Convention.
    The existing international air cargo regime has glaring 
deficiencies, ranging from the antiquated cargo documentation 
requirements to requiring paper waybills. Ratification of Montreal 
Protocol No. 4 would not only streamline documentation requirements, 
but would also allow carriers and shippers to substitute an electronic 
waybill for a paper waybill. Compliance with these outdated rules costs 
the U.S. economy nearly $1 billion annually.
    Northwest Airlines, flying more than 2.283 billion cargo ton miles 
last year is one of the largest U.S. passenger/cargo combination 
carriers. We serve multiple foreign markets, including Tokyo, Osaka, 
Hong Kong, Taipei, Bangkok, Singapore, and Manila. Due to the recently 
announced U.S.-Japan aviation agreement, restrictions on Northwest's 
``Fifth Freedom'' rights to carry passenger and cargo traffic between 
any city in Japan and any city in the Asia/Pacific region have been 
removed. As a result, we are anticipating growth in our international 
passenger/cargo service.
    We would like our expansion into the Pacific/Asia region to be done 
in the context of a modernized air cargo liability regime. The rules 
from 1929 are a drain on our ability to efficiently provide service to 
our international customers, and adherence to these rules is costly. To 
maintain the U.S. leadership in providing air cargo services, the 
United States needs to join the growing list of nations that have 
already ratified the treaty.
    I ask for your thoughtful consideration and support of this 
important issue. If you have any questions or need additional 
information, please contact me or Elliott Seiden, Northwest Airlines 
Vice President of Law and Government Affairs, at 202/842-3193.
            Sincerely yours,
                                   John H. Dasburg.

cc: Senator Paul Wellstone

                               __________

                               FDX Corporation,    
                                2005 Coroporate Avenue,    
                                         Memphis, TN 38132,
                                                    March 18, 1998.
The Honorable Jesse Helms,
Chairman, Committee on Foreign Relations,
450 Dirksen Senate Office Building,
Washington, DC 20510-6225.

The Honorable Joseph R. Biden, Jr.,
Committee on Foreign Relations,
450 Dirksen Senate Office Building,
Washington, DC 20510-6225.

    Dear Chairman Helms and Senator Biden: I am writing to respectfully 
request that the Committee on Foreign Relations vote to report Montreal 
Protocol No. 4, an air cargo liability treaty, favorably to the Senate 
for advice and consent.
    FedEx is the only major transportation company whose activities are 
devoted exclusively to express transportation, moving things which 
require fast, time certain, and information intensive handling. In 
1997, we delivered more than 757 million packages in 211 countries. In 
recent years, we have experienced the greatest growth of our express 
shipments to and from international markets, with import growth at 30% 
compounded per year. and export growth rates approaching 40% for door-
to-door express packages, documents, and freight shipments.
    The liability rules and paperwork requirements established by the 
1929 Warsaw Convention, however, are continuing impediments to FedEx's 
ability to efficiently service foreign markets and to take advantage of 
new international opportunities. Under the current liability regime, 
each international package must be accompanied with a paper waybill 
listing many details pertaining to the shipment that are not relevant 
to modern commerce. Producing these waybills can add up to $5 per 
shipment, costing us millions of dollars annually, but also burdens our 
ability to provide efficient express delivery overseas.
    Ratifying Montreal Protocol No. 4 would streamline and modernize 
the cargo documentation requirements of the Warsaw Convention--allowing 
FedEx to omit irrelevant information from waybills and to substitute an 
electronic record for the paper waybill. It would bring international 
law into the 21st century. Furthermore, it would cut down on 
unnecessary administrative costs for carriers, as well as facilitate 
the growth of U.S. exports.
    For these reasons, FedEx supports the immediate ratification of 
Montreal Protocol No. 4. appreciate your attention to this important 
matter.
            Sincerely,
                                Frederick W. Smith,
            Chairman of the Board, Chief Executive Officer.

                               __________

                             United Parcel Service,
                                            March 13, 1998.
Honorable Jesse Helms,
Chairman, Committee on Foreign Relations,
SD-450 Dirksen Senate Office Building,
Washington, DC 20510-6225.

Honorable Joseph R. Biden, Jr.,
Ranking Minority Member, Committee on Foreign Relations,
SD-450 Dirksen Senate Office Building,
Washington, DC 20510-6225.

    Dear Chairman Helms and Senator Biden: I am writing to urge you 
that the Committee on Foreign Relations take action to promptly ratify 
Montreal Protocol No. 4, a noncontroversial treaty that would reform 
the international air cargo liability system.
    UPS, as the world's largest package distribution company, 
transports more than 3.1 billion parcels and documents annually in more 
than 200 countries. As we move to expand our international service, the 
outdated liability rules of the 1929 Warsaw Convention are a tremendous 
barrier.
    Ratifying Montreal Protocol No. 4 would update the Warsaw 
Convention, which currently requires the air cargo industry to record 
unnecessary information on paper waybills for each shipment. The 
antiquated requirements of the Warsaw Convention impose unnecessary 
burdens and costs on U.S. air cargo carriers and keep our industry from 
using electronic waybills for international shipments. Ratification of 
the protocol would eliminate these costly requirements and make U.S. 
cargo carriers, businesses and exporters more competitive in world 
markets.
    Thank you for your attention to this very important matter. I urge 
the Committee to act promptly on this noncontroversial treaty that is 
in the nation's economic best interest.
            Sincerely,
                              Thomas H. Weidemeyer,
                                                 President,
                                                      UPS Airlines.

cc: Senator Wendell Ford
    Senator Slade Gorton
    Senator Ernest Hollings
    Senator John McCain

                               __________

  The American Association for Families of KAL 007 
                                           Victims,
                 P.O. Box 8189, New York, N.Y., 10116-8189,
                                                September 10, 1997.
The Honorable Jesse Helms,
Chairman, Senate Committee on Foreign Relations,
SD-450 Dirksen Senate Office Building,
Washington, D.C., 20510-6225.
    Mr. Chairman:  Ever since our 269 loved ones perished with Korean 
Airlines Flight 007 on September 1, 1983--and as a result of the 
convoluted legal process the surviving family members have been 
subjected to for the last fourteen years--which is still ongoing--we 
have become involved in the needed changes to bring ``The Warsaw 
Convention'' system to 1997 standards.
    In that process we have testified some years ago in favor of the 
ratification of ``The Montreal Aviation Protocols No. 3 & 4.'' The 
Protocols were voted out of your Committee three times, but did not 
pass--for various reasons--through the Senate. In fact none of the 
updates of the Warsaw Convention have as yet been voted on by the 
Senate.
    ``The Montreal Aviation Protocols No. 4'' are now before your 
Committee for its Advice and Consent.
    Those Protocols were negotiated in 1975. Their approval is 
nevertheless of great importance. It would allow the civil aviation 
industry to modernize air freight documentation and update freight as 
well as luggage liability. (However, we remain opposed to the 
imposition of any liability cap, otherwise).
    We support ratification of ``The Montreal Aviation Protocols No. 
4'' and would be willing to so testify, if useful.
            Respectfully,
                               Hans Ephraimson-Abt,
                                                  Chairman.

                               __________

               International Trademark Association,
    1990 M Street, N.W., Suite 340, Washington, D.C. 20036,
                                                      May 12, 1998.
The Honorable Jesse Helms
Chairman, Senate Foreign Relations Committee,
450 Dirksen Senate Office Building,
Washington, D.C. 20510.

Reference: Comments Submitted for the May 13, 1998 Hearing on the 
Trademark Law Treaty

    Dear Chairman Helms, The International Trademark Association (lNTA) 
appreciates the opportunity to submit this statement in strong support 
of the Trademark Law Treaty (TLT). This treaty is critical to the 
success of U.S. companies as they operate in the rapidly expanding and 
ever increasingly competitive global marketplace.
    INTA is a not-for-profit membership organization, which just this 
week is celebrating its 120th anniversary at our Annual Meeting in 
Boston, Massachusetts. Membership in INTA is open to trademark owners 
and those who serve trademark owners. INTA's membership is extremely 
diverse, crossing all industry lines and spanning a broad range of 
manufacturing, retail and service operations. It is equally important 
to note that not all of INTA's members are large corporations. Many of 
the Association's members represent small businesses which are looking 
to expand operations and contribute to the domestic economy by 
increasing their activities beyond the borders of the United States. 
Nonetheless, all of INTA's members, regardless of their size or 
international scope, share a common interest in trademarks and a 
recognition of the importance of brand identity to their owners, to the 
general public, to the economy of the United States and the global 
marketplace.
    The objective of the Trademark Law Treaty is to streamline and 
harmonize the trademark office procedures of countries around the 
world. The myriad of requirements and formalities of the more than 200 
trademark jurisdictions impose horrendous costs in time and money for 
U.S. trademark owners, not to mention the reams of paperwork they 
generate. The registration procedures in some countries are so onerous, 
they actually become an impediment to the protection of a company's 
trademarks. These cumbersome requirements are of particular concern to 
small and medium-size business owners wishing to sell their products in 
foreign markets, but who do not have the resources to overcome the 
complicated procedures to register their trademarks in these countries.
    Recognizing the clear need for the TLT and the value it would bring 
to U.S. trademark owners, the U.S. government played an active 
leadership role in negotiating the TLT and leading it to a successful 
conclusion at a Diplomatic Conference in Geneva in October 1994. With 
the streamlined trademark office procedures that the TLT will create 
world-wide, U.S. trademark owners and practitioners will be able to 
focus on the protection and defense of marks and reduce, if not 
eliminate, unnecessary and time-consuming paperwork. Of equal 
importance, the TLT will significantly reduce costs. This is especially 
critical for small and medium-size business owners, who are working on 
limited budgets. The TLT will accomplish these objectives by:

   Setting a maximum list of requirements for trademark 
        applications and registrations concerning such matters as 
        filing dates, request for name and address changes, recordation 
        of assignments and renewals.
   Standardizing forms for applications, powers of attorney, 
        and changes of name, address and ownership.
   Prohibiting requirements for notarization or other 
        certification of any signature, except in the case of 
        surrendering a trademark registration and a certificate of 
        merger.
   Making one request sufficient for changes of name, address 
        or ownership of several registrations or applications.
   Requiring the acceptance of general powers of attorney.

    Implementation of the TLT will require relatively minor, non-
controversial amendments to the Lanham Act.
    Leadership by the U.S. in ratifying and implementing the TLT will 
encourage other countries to adopt the requirements of the Treaty. In 
fact, the simplified system under the TLT will not begin to take shape 
until this nation has ``stepped up to the plate'' and demonstrated that 
the TLT can and will work to bring about needed harmonization in 
trademark procedures. We, therefore, urge the Subcommittee to give 
expedited consideration to the Trademark Law Treaty.
    Thank you for your consideration of INTA's views.
            Sincerely,
                                      Fred Mostert,
                                                 President.

                               
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