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Whereas:

(1) International aviation relations between Member States and third countries have been traditionally governed by bilateral air service agreements between Member States and third countries, their Annexes and other related bilateral or multilateral arrangements.

(2) Following the judgments of the Court of Justice of the European Communities in cases C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, the Community has exclusive competence with respect to various aspects of such agreements.

(3) The Court has also clarified the right of Community air carriers to benefit from the right of establishment within the Community, including the right to non-discriminatory market access. (4)

Where it is apparent that the subject-matter of an agreement falls partly within the competence of the Community and partly within that of its Member States, it is essential to ensure close cooperation between the Member States and the Community institutions, both in the process of negotiation and conclusion and in the fulfilment of the commitments entered into. That obligation to cooperate flows from the requirement of unity in the international representation of the Community. The Community institutions and the Member States should take all necessary steps to ensure the best possible cooperation in that regard.

(5) The cooperation procedure between Member States and the Commission established by this Regulation should be without prejudice to the division of competencies between the Community and Member States, in accordance with Community law as interpreted by the Court of Justice.

(6) All existing bilateral agreements between Member States and third countries that contain provisions contrary to Community law should be amended or replaced by new agreements that are wholly compatible with Community law. (7)

Without prejudice to the Treaty, and in particular Article 300 thereof, Member States may wish to make amendments to existing agreements and make provision to manage their implementation until such time as an agreement concluded by the Community enters into force.

(8) It is essential to ensure that a Member State conducting negotiations takes account of Community law, broader Community interests and ongoing Community negotiations.

(9) If a Member State wishes to involve air carriers in the process of negotiation, all air carriers with an establishment in the territory of the Member State concerned should be treated equally. (10)

Establishment on the territory of a Member State implies the effective and real exercise of air transport activity through stable arrangements; the legal form of such an establishment, whether a branch or a subsidiary with a legal personality, should not be the determining factor in this respect. When an undertaking is established on the territory of several Member States, as defined by the Treaty, it should ensure, in order to avoid any circumvention of national law, that each of the establishments fulfils the obligations which may, in accordance with Community law, be imposed by the national law applicable to its activities.

(11) In order to ensure that the rights of Community air carriers are not unduly restricted, no new arrangements that reduce the number of Community air carriers which may be designated to provide air services in a given market should be introduced in bilateral air service agreements.

(12) Member States should establish non-discriminatory and transparent procedures for the distribution of traffic rights between Community air carriers. In applying those procedures Member States should have due regard to the need to preserve continuity of air services. (13)

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 19.99 laying down the procedures for the exercise of implementing powers conferred on the Commission.

(14) Any Member State may invoke the confidentiality of the provisions of bilateral agreements it has negotiated and request the Commission not to share the information with other Member States.

(15) Arrangements for greater cooperation over the use of Gibraltar airport were agreed in London on 2 December 1987 by the Kingdom of Spain and the United Kingdom in a joint declaration by the Ministers of Foreign Affairs of the two countries. Such arrangements have yet to enter into operation. (16)

Since the objectives of this Regulation, namely the coordination of negotiations with third countries with a view to concluding air service agreements, the necessity to guarantee a harmonised approach in the implementation and application of those agreements and the verification of their compliance with Community law, cannot be sufficiently achieved by the Member States and can therefore, by reason of the Community-wide scope of this Regulation, be better achieved at Community level, the Community may adopt measures in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives, HAVE ADOPTED THIS REGULATION: