[DOCID: f:er020.105]
From the Executive Reports Online via GPO Access
[wais.access.gpo.gov]

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:

  <bullet> inherent defect, quality or vice of the cargo;
  <bullet> defective packing of the cargo performed by someone 
        other than the carrier or his employees or agents;
  <bullet> an act of war, armed conflict, or civil disturbance;
  <bullet> 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:
  <bullet> 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.
  <bullet> 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.
  <bullet> 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.'