Brussels, 24/11/2006 (Agence Europe) - On 24 November, the EU and Russia signed an agreement to abolish the EUR 300 million royalty charges on EU airlines flying over Siberia on 1 January 2014. Initialled on the fringes of the EU-Russia Summit in Helsinki, Finland, the deal and its associated protocol will end a situation that has been a trade irritant between the EU and Russia for a long time and which cost EU airlines EUR 300 million in total in 2005-2006. The Commission is delighted with the agreement, which comes after six long months of tough negotiations connected with Russia's accession to the World Trade Organisation (WTO). It is also a relief for the Finnish Presidency which, by helping to broker the deal, has a tangible positive outcome under its belt from the summit, marred by Poland's refusal to allow talks to start over a future EU-Russia partnership agreement (see related article).
In a press release, EU Transport Commissioner Jacques Barrot described the agreement as a "big step forward in our relations and towards a normalisation of aviation relations between the Russian Federation and the EU". Barrot initialled the deal with Russian transport minister Igor Levitin, at a ceremony attended by Finnish transport minister Susanna Huovinen. Barrot added: "This is a big success; the agreement will significantly improve the competitive situation of our European airlines and ease their operations between Europe and the growing markets in Asia". The agreement puts an end to a longstanding practice which, according to the EU, is not in line with international law, in particular the Chicago Convention. In addition to normal air navigation charges, EU airlines have to pay royalties to the Russian company Aeroflot in order to obtain the right to fly over Russian territory on routes between the EU and Japan, China and South Korea.
What will the Helsinki agreement change in practice? Not later than 31 December 2013, all royalty payments to Aeroflot will be abolished and airlines will have to pay only air navigation charges in line with the Chicago Convention (all fees and charges in the new system will be cost-based and transparent). From 1 January 2014 onwards, airlines will no longer have to sign compulsory trade deals with Aeroflot to be allowed to fly over Siberia. During the period between 2010 and 2013, existing payments will be gradually reduced (by between 5% and 15%) in line with bilateral agreements. EC airlines will be able to keep overflight frequencies currently leased from Aeroflot in the new system and new operations by EC carriers on the Trans-Siberian routes in the transition period will be free of payments. The Russian Federation has agreed to grant new frequencies to EU airlines in the framework of bilateral negotiations.
The European Commission will submit the deal to the Transport Council on 12 December. Once the deal comes into force, the Member States will have six months to amend their bilateral air services agreements with Russia in line with the new agreement. (dt)