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September 08, 1997

The Government of the Republic of the Philippines and the Government of the People's Republic of Bangladesh hereinafter described as the Contracting Parties.

Being Parties to the Convention on International Civil Aviation and the International Air Service Transit Agreement both opened for signature at Chicago on the seventh day of December, 1944, and

Desiring to conclude an Agreement for the purpose of establishing and operating air services between (and beyond) the territories of the Philippines and of Bangladesh.

HAVE AGREED AS FOLLOWS:

For the purpose of this Agreement, unless the context otherwise requires:

(a) the term "the Convention" means the Convention on International Civil Aviation, opened for signature at Chicago on the seventh day of December, 1944, and includes any Annex adopted under Article 90 of that Convention and any amendment of the Annexes or Convention under Articles 90 and 94 thereof;

(b) The term "aeronautical authorities" means in the case of the Republic of the Philippines, Civil Aeronautics Board and/or any person or body authorized to perform any functions exercised at present by the said authority or similar functions, and in the case of the People's Republic of Bangladesh, the Chairman, Civil Aviation Authority of Bangladesh and/or any person or body authorized to perform any functions exercised at present by the said authority or similar functions;

(c) the terms "designated airline" means an airline which one Contracting Party shall have designated, by written notification to the other Contracting Party, in accordance with Article III of the present Agreement, for operation of air services on the routes specified in the Annex thereto;

(2) Subject to the provisions of the present Agreement, the airline designated by each Contracting Party shall enjoy (while operating an agreed service on a specified route) the following privileges:

(a) to fly without landing across the territory of the other Contracting Party;

(b) to make stops in the said territory for non-traffic purposes; and

(c) to make stops in the said territory at the points specified for that route in the Annex for the purpose of putting down and taking on international traffic in passengers, cargo and mail coming from or destined for other points so specified.

(3) Nothing in paragraph (2) of this Article shall be deemed to confer on the airline of one Contracting Party the privilege of taking up, in the territory of the other Contracting Party, passengers, cargo or mail carried for remuneration or hire and destined for another point in the territory of that other Contracting Party.

(1) Each Contracting Party shall have the right to designate in writing to the other Contracting Party one airline for the purpose of operating the agreed services on the specified routes.

(2) On receipt of the designation the other Contracting Party shall, subject to the provisions of paragraphs (3) and (4) of this Article, without unnecessary delay grant to the airline designated the appropriate operating authorization.

(3) The aeronautical authorities of one Contracting Party may require an airline designated by the other Contracting Party to satisfy them that it is qualified to fulfill the conditions prescribed under the laws and regulations normally and reasonably applied by them in a manner not inconsistent with the provisions of the Convention to the operation of international commercial air services.

(4) Each Contracting Party shall have the right to refuse to accept the designation of an airline and to withhold or revoke the grant to an airline of the operating authorization specified in paragraph (2) of this Article or to impose such conditions as it may deem necessary in the exercise by an airline of the operating authorization in any case where it is not satisfied that substantial ownership and effective control of that airline are vested in the Contracting Party designating the airline or in nationals of the Contracting Party designating the airline.

(5) Subject to the provisions of Article VII of the present Agreement, and to the statutory powers of the aeronautical authorities of the Contracting Parties, at any time after the provisions of paragraphs (1), (2) and (3) of this Article have been complied with, an airline so designated and authorized may begin to operate the agreed services, provided that a tariff established in accordance with the provisions of Article IX of this Agreement, is in force in respect of those services.

(6) Each Contracting Party shall have the right to revoke an operating authorization or to suspend the exercise of the privileges specified in Article 2 of this Agreement by an airline designated by the other Contracting Party or to impose such conditions as it may deem necessary on the exercise by the said airline of those privileges:

(a) Where it is not satisfied that substantial ownership and effective control of that airline are vested in the Contracting Party designating the airline or in nationals of such Contracting Party; or

(b) Where such airline fails or neglects to comply with the laws or regulations in force in the territory of the Contracting Party granting these privileges; or

(c) Where such airline otherwise fails or neglects to operate in accordance with the conditions prescribed under this Agreement.

(7) Unless immediate revocation, suspension or imposition of the conditions mentioned in paragraph (1) of this Article is essential to prevent further infringements of the laws or the regulations or the provisions of this Agreement, such right shall be exercised only after consultation with the aeronautical authorities of the other Contracting Party.

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

(2) There shall also be exemption from the same duties and taxes, with the exception of charges corresponding to the service performed:

(a) aircraft stores taken on board in the territory of either Contracting Party, and for use on board aircraft engaged in an international air service of the other Contracting Party;

(b) spare parts entered into the territory of either Contracting Party for the maintenance or repair of aircraft used on international air services by the designated airline of the other Contracting Party;

(c) fuel and lubricants destined to supply aircraft operated on international air services by the designated airline of the other Contracting Party, even, when these supplies are to be used on the part of the journey performed over the territory of the Contracting Party in which they are taken on board.

Materials referred to in sub paragraphs (a), (b) and (c) may be required to be kept under customs supervision or control.

(3) The exemptions provided by paragraph (2) of this Article shall also be available where the airline of one Contracting Party have contracted with another airline, which similarly enjoys such exemptions from the other Contracting Party, for loan or transfer in the territory of the other Contracting Party of the items specified in paragraph (2) of this Article

The designated airline of each Contracting Party shall be granted the right to establish office/offices and station representatives and staff required for the operation of the agreed services in the territory of the other Contracting Party. Such representatives and staff shall be stationed subject to the approval of the competent authorities of both Contracting Parties. They shall observe the laws and regulations in force of the other Contracting Party.

Each Contracting Party shall grant to the designated airline of the other Contracting Party the right to transfer in freely convertible currencies of the excess of receipts over expenditure earned in the territory of the other Contracting Party. The procedure for such transfer, however, shall be in accordance with the foreign exchange regulations of the Contracting Party in the territory of which the revenue accrued and which procedure shall not be any less liberal than the procedure applicable to third parties.

(1) The laws and regulations of one Contracting Party relating to the admission to or departure from its territory of aircraft engaged in international air services, or to the operation and navigation of such aircraft while within its territory, shall be applied to the aircraft of the airline designated by the other Contracting Party, and shall be complied with by such aircraft upon entering or departing from or while within the territory of the first Contracting Party.

(2) The laws and regulations of one Contracting Party as to the admission to or departure from its territory of passengers, crew or cargo of aircraft, such as regulations relating to entry, clearance, immigration, passports, customs and quarantine shall be complied with by or on behalf of such passengers, crew, or cargo of the airline designated by the other Contracting Party upon entrance into or departure from and while within the territory of the first Party.

(1) In order to develop the air transport services along the routes or mentioned thereof specified in the schedule made part of the Annex and for the purpose of achieving and maintaining equilibrium between the capacity of the specified air services and the requirements of the public for air transportation, as determined by the aeronautical authorities of the Contracting Parties, the following principles shall apply:

(a) The designated airline of each Contracting Party shall enjoy fair and equal opportunity for the operation of air services for the carriage of traffic between the territories of the two parties;

(b) In the operation by the designated airline of either Contracting Party of the specified air services, the interests of the airline of the other Contracting Party shall be taken into consideration so as not to affect unduly the services which the latter provides on all or part of the same route;

(c) The agreed services provided by the designated airlines of the Contracting Parties shall bear close relationship to the requirements of the public for transportation on the specific routes and shall have as their primary objective the provision, at a reasonable load factor, of capacity adequate to carry the current and reasonably anticipated requirements of passengers and cargo including mail between the territories of the Contracting Parties. Provisions for the carriage of passengers, baggage and cargo including mail both taken on board and discharged at points on the specified routes in the territories of states other than that designating the airline shall be made in accordance with the general principles that capacity shall be related to:

(1)traffic requirements to and from the territory of the Contracting Party which has designated the airline;

(2)the requirements of through airline operations;

(3) the air transport needs of the area through which the airline passes; and

(4) the adequacy of other air transport services established by airlines of the States concerned between their respective territories.

(1) The tariffs to be charged by the airline of one Contracting Party for carriage of traffic to or from the territory of the other Contracting Party shall be established at reasonable levels, due regard being paid to all relevant factors including cost of operation, reasonable profit, and the tariffs of other airlines.

(2) The tariffs referred to in paragraph (1) of this Article shall, if possible, be agreed by the designated airlines of both Contracting Parties, in consultation with other airlines, if applicable, operating over the whole or part of the route, and such agreement shall, where possible, be reached through the rate-fixing machinery of the International Air Transport Association.

(3) The tariffs so agreed shall be submitted for the approval of the aeronautical authorities of the Contracting Parties at least thirty (30) days before the proposed date of their introduction; in special cases, this time, limit may be reduced, subject to the agreement of the said authorities.

(4) If the designated airlines cannot agree on any of these tariffs, or if for some other reason a tariff cannot be fixed in accordance with the provisions of paragraph (2) of this Article, or if during the first fifteen (15) days of the thirty (30) days period referred to in paragraph (3) of this Article one Contracting Party gives the other Contracting Party notice of its dissatisfaction with any tariff agreed in ;? accordance with the provisions of paragraph (3) of this Article, the aeronautical authorities of the Contracting Parties shall try to determine the tariff by agreement between themselves.

(5) If the aeronautical authorities cannot agree on the approval of any tariff submitted to them under paragraph (3) of this Article and on determination of any tariff under paragraph (4), the dispute shall be settled in accordance with the provisions of Article XIII of the present Agreement.

(6) No tariff shall come into force if the aeronautical authorities of either Contracting Party have not approved it.

(7) The tariffs established in accordance with the provisions of this Article shall remain in force until new tariffs have been established in accordance with the provisions of this Article. Nevertheless, a tariff shall not be prolonged by virtue of this paragraph for more than twelve (12) months after the date in which it would otherwise have expired.

(1) The Contracting Parties agree to provide maximum aid to each other to prevent hijackings of aircraft and sabotage to aviation security or airports and air navigation facilities, and undertake to observe the provisions of the Convention on Offenses and Certain other Acts Committed on Board Aircraft, done at Tokyo on 14th September, 1963, the Convention for the Suppression of Unlawful Seizure of Aircraft, done at the Hague on 16th December, 1970, the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, done at Montreal on 23rd September, 1971 and such other conventions or protocol to which both the Contracting Parties are signatories.

(2) The Contracting Parties shall provide upon request all necessary assistance to each other to prevent acts of unlawful seizure of civil aircraft and other unlawful acts against the safety of such aircraft, their passengers and crew, airports and air navigation facilities, and any other threat to the security of civil aviation.

(3) The Contracting Party shall, in their mutual relations, act in conformity with the aviation security provisions established by the International Civil Aviation Organization and designated as annexes to the Convention to the extent that such security provisions are applicable to the Contracting Parties; they shall require that operators of aircraft of their registry or operators of aircraft who have their principal place of business or permanent residence in their territory and the operators of airports in their territory act in conformity with such aviation security provisions.

(4) Each Contracting Party agrees that such operators of aircraft may be required to observe the aviation security provisions referred to in paragraph (3) above required by the other Contracting Party for entry into, departure from, or while within the territory of that other Contracting Party.

(5) Each Contracting Party shall ensure that adequate measures are effectively applied within its territory to protect the aircraft and to inspect passengers, crew, carry-on items, baggage, cargo and aircraft stores prior to and during boarding or loading.

(6) Each Contracting Party shall also give sympathetic consideration to any request from the other Contracting Party for reasonable special security measures to meet a particular threat.

(7) When an incident or threat of an incident of unlawful seizure of civil aircraft or other unlawful acts against the safety of such aircraft, their passengers and crew, airports or air navigation facilities occurs, the Contracting Parties shall assist each other by facilitating communications and other appropriate measures intended to terminate rapidly and safely such incident or threat thereof.

(8) When a Contracting Party has reasonable grounds to believe that the other Contracting Party has departed from the aviation security provisions of this Article, the aeronautical authorities of that Contracting Party may request immediate consultations with the aeronautical authorities of the other Contracting Party.

Certificates of airworthiness, certificates of competency and licenses issued or rendered valid by one of the Contracting Parties shall be recognized as valid by the other Contracting Party for the purpose of operating the routes and services described in the Annex to this Agreement. Each Contracting Party reserves the right not to recognize for the purpose of flight above its own territory, certificate of competency and licenses granted to its own nationals by another state.

(1) In a spirit of close co-operation, the aeronautical authorities of the Contracting Parties shall consult each other from time to time with a view to ensuring the implementation of, and satisfactory compliance with the provisions of the present Agreement and the Annex thereto and shall consult when necessary to provide for modification thereof.

(2) Either Contracting Party may request consultation in writing which shall begin within a period of sixty (60) days of the date of receipt of the request, unless both Contracting Parties agree to an extension of this period.

(1) If any dispute arises between the Contracting Parties relating to the interpretation or application of the present Agreement, the Contracting Parties shall in the first place endeavor to settle it by negotiation between themselves. Such negotiation shall begin within sixty (60) days after the receipt of the request by one Contracting Party from the other.

(2) If the Contracting Parties fail to reach a settlement by negotiation, the dispute shall be submitted for decision to a tribunal of three arbitrators, one to be named by each Contracting Party and the third to be agreed upon by the two arbitrators so chosen, provided that such third arbitrator shall not be a national of either Contracting Party. Each of the Contracting Parties shall designate an arbitrator within sixty (60) days of the date of delivery by either Party to the other diplomatic note requesting arbitration of the dispute and the third arbitrator shall be agreed upon within thirty (30) days after such period of sixty (60) days. If either Contracting Party fails to designate its arbitrator within the period specified, or if the third arbitrator is not agreed, the President of the Council of the International Civil Aviation Organization may be requested by either Contracting Party to appoint an arbitrator or arbitrators as the case requires. In such case, the third arbitrator shall be a national of a third state and shall act as President of the arbitral body.

(3) The Contracting Parties undertake to comply with any decision given under Paragraph (2) of this Article.

(4) Each Contracting Party shall bear the expenses of its designated arbitrator and both Contracting Parties shall share equally all further expenses resulting from the activities of the tribunal including those of the president.

(5) If and so long as either Contracting Party or the designated airline of either Contracting Party fails to comply with a decision given under this Article, the other Contracting Party may limit, withhold or revoke any rights or privileges which it has granted by virtue of this Agreement to the Contracting Party or to the designated airline in default.

(1) If either of the Contracting Parties considers it desirable to modify the terms of the present Agreement, it may request consultation with the other Contracting Party; such consultation, which may be between aeronautical authorities and which may be through discussion or by correspondence, shall begin within a period of sixty (60) days of the date of the request. Any modifications so agreed shall come into force when they have been confirmed by an exchange of diplomatic notes.

(2) If the amendment relates to the provisions of the Agreement other than routes and capacity, the amendment shall be approved by each Contracting Party and shall come into effect when confirmed by an exchange of notes through diplomatic channel.

(3) Modifications to routes may be made by direct agreement between the competent aeronautical authorities of the Contracting Parties.

(4) In the event of the conclusion of a multilateral convention or agreement concerning air transport to which both Contracting Parties adhere, the present Agreement shall be modified to conform to the provisions of such convention or agreement.

The present Agreement and any modifications thereto in accordance with Article XII above, shall be registered with the International Civil Aviation Organization.

Either Contracting Party may at any time give notice to the other Contracting Party of its decision to terminate the present Agreement; such notice shall be simultaneously communicated to the International Civil Aviation Organization. In such case the Agreement shall terminate twelve (12) months after the dale of receipt of the notice by the other Contracting Party, unless the notice to terminate is withdrawn by agreement before the expiry of this period. In the absence of the acknowledgment of receipt by the other Contracting Party, notice shall be deemed to have been received fourteen (14) days after the receipt of the notice by the International Civil Aviation Organization.

The present Agreement shall enter into force and effect on the date of exchange of diplomatic notes, indicating that the respective constitutional requirements of each Contracting Party have been complied with.

In witness whereof the undersigned, being duly authorized by thereto by their respective Government, have signed the present Agreement and affixed thereto their seals.

Done in duplicate in the English language at MANILA this 8th day of September 1997.