BILATERAL ARRANGEMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP05C01629R000200360008-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: August 18, 2011
• Sequence Number: 8
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/08/18: CIA-RDP05C01629R000200360008-9 ?
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nclude
'control' within the weaning of section 408 of the Act. so long as the
interest is substantial, we believe it should ttltinutlely be eliminated.
This policy is soundly rooted In the desire to (a) avoid the danger
of subsidy front the United States taxpayer finding its way into for-
eign air carriers, and (b) prevent interference in the negotiation
of suitable agreements with foreign governments for the exchange of
operating rights. Moreover, It Is the affiliation of American air car-
riers with foreign air carriers that has given rise to the problem of
foreign air carriers trading upon this affiliation, and the attempt: to
control this matter through restrictive conditions. To the extent that
these affiliations are eliminated, there will be no need to face the prob-
lem of foreign air carriers attracting traffic on the basis of relation-
ships with United States carriers." 20 C.A.R. (195:5) 746, 747.
Still later the Civil Aeronautics Board issued a foreign air carrier per-
mit to l'ontpania de Aviachin "Fawcett" to operate between Peru and Miami,
Florida, under the lernw of the bilateral Air Transisn't .1;;reenieut between
the United States and Peru (I'.S. TIAS 1.187). ('outpattia Iii Ariacion
"Fa ueett", .C.A., Permit to Foreign Air Carrier, 3?1 C.A.B. ( it>rl ) 296. The
Board limited the 1x'rmit to 5 years, not been use there was not presently sub-
stantial ownership and control !it Peruvian citizens but because a minority
stock interest was held by Panagra, and the Board wished to be able to
review the situation with respect to ownership and control after it period
of tinge during which Faucett, I'anagra, and Braniff would be competing
for the same business to and from Miami. In short, the ownership-and-con-
trol requirement is a continuing one, not one which is resolved permanently
when the air carrier first starts operations.
For a related aspect of the relationship between it U.S. airline and a
foreign airline i.e., the question of jurisdiction over the foreign airline,
see Lawson v. Pan .1nwrirnn World Airways, Inc., holding that a New
York court acquired jurisdiction in personam over 1'anair do Brasil through
service of it summons upon Pan American as Panair's agent. 216 N.Y.S. 2d
549 (N.Y. Sup. ('t. 1961) .
As indicated in the instance of Linea Area Nacional (le Chile, sovereigii
supra, many cases arise, where airlines designate(1 for service to the
United-States under bilateral agreements are substant Tally owned by
the government designst ing the airline rather bawl by lint ionals of that
government. For this reason one of the reytlireutents nnifornilv
imposed by the Civil Aeronautics Board in granting foreign air car-
rier permits is that the permit include a so-called "sovereign im-
munity" clause. That, clause, in the permit issued to Linea Afrea
Nacional de Chile, for example, read :
"By accepting this permit the holder waives array right it may
possess to assert any defense of sovereign inliuunity from suit in
tiny action or proceedings instituted against the holder in any court
or other tribunaI in the. United States (or its territories or )osses-
sions) based upon any claim arising out of operattions by the
holder under this permit." (26) CiA.B. (1955) 601, (007.)
In one instance thw waiver of sovereign limnunnity was handled on a
government-to-government basis instead of ill the foreign air carrier
permit. In connection with renewal of the permit for K.L.M. Royal
STAT
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 Sanitized Copy Approved for Release 2011/08/18: CIA-RDP05CO1629R000200360008-9
Plaintiffs 111)011 the current applicatio11 attach copies of corre-
spondence front the united States Mate Department :tad the Irish
government tending to support their contention that the Italian gov-
ernment which has it controlling interest in Alitalia is rtrponsihle for
plaintiffs' inability to gain access to the Irish government's rois)rts of
its i
i
11vest
gaIion of the airplane crash at Shannon. Irolau(l. Plaintiffs
further note l)ersuasively that the CAR in gritliti g it t
o
and iutermediatt, lxtints in France, I:ngl:utd, Ireland a11d t'au:tda-to
R
oston and New York required the carrier to waive any fright to assert
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Dutch Airlines, the examiner's findings and conclusions, adopted by
the Civil Aeronautics Board, included the following statements:
"K.I..M. has requested that the customary provisions in foreign
air carrier permits relative to the waiver of sovereign immunity
be omitted from its authority since there is currently in effect an
exchange of notes on this subject between the (xoverninents of the
ITnite(I States and the Netherlands. K.L.M. made a similar pro-
posal in connection with the renewal of its Mianti-Netherlands
Antilles service in 1952 and the, Board, in deciding this case, said
at that tinge that, it would entertain a request by the applicant for
removal of this condition in the event of a satisfactory exchange
of notes on the subject between the Governments of the United
States and the Netherlands.
"It appears that in an exchange of notes, the Governments of
the United States and the Netherlands have agreed that neither
will assert, on behalf of any air carrier of its nationality the
defense of sovereign immunity, nor will either authorize any air
carrier of its nationality to assert such defense in its own behalf
'
'
[U,S.
I
IAS 2828, 4 UST 1610]. 1n tlie. light of this international
agreement, the question arises as to the necessity for provisions
relative to the waiver of sovereign inununity. .
"While as a matter of policy, the provisions relative to waiver
of sovereign inimunit should be incorporated in foreign air car-
rier pernuts, it woul(I appear that where there is an exchange of
notes, such as in this case, such provisions are superfluous. The
evidence discloses that K.L.M. is it private corporation and cannot
in its own right assert the defense of sovereign Immunity. The
Government of the Netherlands has agreed that it will not assert
this defense nor permit, K.L.M. to (10 so if it could. It, this cir-
cunist:ince, the public is protected by the word of the Netherlands
Government and no such provisions are needed in the permits. If
there is an abrogation of agreement then the Board, reserving as
it will the right to prescribe reasonable terms and conditions, may
reimpose the necessary conditions."
K.L..if. Royal Dutch Airlines, Forcigr: Air Carrier I'crnlit, C.A.B.
2.1 (1957) 438, 448.
In Como etc. v. Linec Aeree Itaiianc (Alitalia), Douglas Aircraft Co., Inc.,
and Curtis-1vright Corporation, the court, in denying a motion by the plain-
tiffs to sever and give priority to the cl:tint of one plaintiff against Alitalia
front the other claims of all the plaintiffs against all the defemlittits including
Alitalia, stated :
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