[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.