carrier or carriers of the country concerned by the Secretary of the Treasury as a condition to acceptance of the general declaration at the time of landing or takeoff of aircraft of such foreign air carrier or carriers. The amounts so collected shall accrue to an account established for that purpose by the Secretary of the Treasury. Payments shall be made from that account to air carriers in such amounts as shall be certified by the Secretary of Transportation in accordance with such regulations as he shall adopt to compensate such air carriers for excessive or discriminatory charges paid by them to the foreign countries involved."

See House Rept. No. 93-1475, 93d Cong., 2d Sess., Nov. 19, 1974. The quotation above is at p. 5.

On August 27, 1974, a new Civil Aeronautics Board regulation concerning the filing of schedules by foreign air carriers with the Board for approval became effective. The amendment adds a new category of action by any foreign government with which the United States has in effect a bilateral air transport agreement which would form the basis for such Board action.

Before the amendment, the Board could invoke such procedures when the government or aeronautical authorities of the government of an airline holding a foreign air carrier permit from the United States had, over U.S. objections, taken action which impaired, limited, terminated or denied operating rights of any U.S. airline which held authority to operate to, from, through or over the territory of that foreign government.

The amendment enables the CAB to invoke the schedule filing procedures as well in cases in which a foreign government or aeronautical authorities, over U.S. objections, have "otherwise denied or failed to prevent the denial of . . . the fair and equal opportunity to exercise the operating right . . ." of U.S. airlines under a bilateral agreement.

The Board noted that "the purpose of the amendment was to clarify the regulation (on filing of schedules) in order to leave no doubt that its provisions could be invoked under various circumstances whereby action or inaction of the foreign government, or its aeronautical authorities, resulted in the failure to maintain a fair and equal opportunity for U.S. carriers to exercise their bilateral rights, even though such action (or inaction) in contravention of bilateral obligations fell short of a direct restriction upon the exercise of such rights."

In its May 7, 1974, notice of proposed rule-making, the Board pointed out that particular problems of denial of fair and equal opportunity for U.S. airlines to exercise operating rights arose from

"excessive scheduling made possible by drawing upon a large volume of so-called 'Sixth Freedom' traffic; i.e., traffic originating or destined to points beyond the homeland of the carrier and carried via the homeland to or from the United States." The Board also noted that "services geared substantially to traffic from beyond the homeland in essence constitutes third-country operations, outside the scope of homeland-originating through services contemplated by the Fifth Freedom traffic authorized in the bilateral." Fifth Freedom traffic involves two countries, neither of which is the country of nationality of the airline. It is the privilege to take on passengers, mail and cargo destined for the territory of any other state and the privilege to put down passengers, mail and cargo coming from any such territory.

The Board also emphasized in adopting the amendment that the amendment "was intended to further the 'Bermuda Principles' incorporated in United States bilateral air transport agreements with other countries, and that the Board would, in invoking the regulation, observe all relevant provisions of any applicable bilateral agreement." The Board also noted that "the proposed amendment would, as was the case in the initial promulgation (of the scheduling regulation), give this government the same control over foreign air carriers' schedules as the governments of those carriers possess over U.S.-flag carriers' schedules."

Civil Aeronautics Board press release CAB 74–186, Aug. 22, 1974.

Preferences for U.S. Air Carriers

The International Air Transportation Fair Competitive Practices Act of 1974 (P.L. 93-623; 88 Stat. 2102; approved January 3, 1975) requires, inter alia, that transportation of government-financed passengers and property be on U.S. carriers, and encourages travel to and from the United States on U.S. carriers. Section 5 of the Act amends Title XI of the Federal Aviation Act of 1958 (49 U.S.C. 1501 et seq.) by adding a new section on transportation of government-financed passengers and property as follows:

Sec. 1117. Whenever any executive department or other agency or instrumentality of the United States shall procure, contract for, or otherwise obtain for its own account or in furtherance of the purposes or pursuant to the terms of any contract, agreement, or other special arrangement made or entered into under which payment is made by the United States or payment is made from funds appropriated, owned, controlled, granted, or conditionally granted or utilized by or otherwise established for the account of the United States, or shall furnish to or for the account of any foreign nation, or any international agency, or other organization, of whatever na

569-769-75-27

tionality, without provisions for reimbursement, any transportation of persons, and their personal effects) or property by air between a place in the United States and a place outside thereof or between two places both of which are outside the United States, the appropriate agency or agencies shall take such steps as may be necessary to assure that such transportation is provided by air carriers holding certificates under section 401 of this Act to the extent authorized by such certificates or by regulations or exemption of the Civil Aeronautics Board and to the extent service by such carriers is available. The Comptroller General of the United States shall disallow any expenditure from appropriated funds for payment for such personnel or cargo transportation on an air carrier not holding a certificate under section 401 of this Act in the absence of satisfactory proof of the necessity therefor. Nothing in this section shall prevent the application to such traffic of the antidiscriminatory provisions of this Act.

Section 6 of the International Air Transportation Fair Competitive Practices Act of 1974 amends section 2 of the International Travel Act of 1961 (22 U.S.C. 2122) adds a new para. (6) requiring the Secretary of Commerce to "encourage to the maximum extent feasible travel to and from the United States on United States carriers."

Effective October 21, 1974, new Federal procurement regulations set forth as U.S. policy the requirement that all Federal agencies, Government contractors and subcontractors use U.S. flag air carriers for international air transportation of personnel and cargo. 41 CFR § 1-1.3 was amended to add a new § 1-1.323 establishing the policy, and requiring that a contract clause, as set out below, be included in (1) invitation for bids, (2) requests for proposals, and (3) contracts (including contracts resulting from unsolicited proposals) whenever it is possible that international air transportation of personnel and cargo will be required in the performance of the contract. The requirements of the new section do not apply to small purchases made in accordance with section 1-3.6. The prescribed contract clause is as follows:

(a) It is the policy of the United States that all Federal agencies and Government contractors and subcontractors utilize U.S. flag air carriers for international air transportation of personnel and

cargo.

(b) The Contractor agrees to utilize U.S. flag air carriers to the maximum extent practicable in connection with the performance of this contract in the transportation by air of any personnel and cargo between the United States and a foreign country, or between foreign countries.

(c) The terms used in this clause have the following meanings: (1) "International air transportation" means transportation by air of personnel and cargo from the United States to a foreign country, between two or more foreign countries, and between a foreign country and the United States.

(2) "U.S. flag air carrier" means one of a class of air carriers holding a certificate of public convenience and necessity issued by the Civil Aeronautics Board, approved by the President, authorizing scheduled operations over specified routes between the United States and/or its territories and one or more foreign

countries.

(3) The term "United States" includes the fifty States, Commonwealth of Puerto Rico, possessions of the United States and the District of Columbia.

(4) "Practicable" includes (i) satisfactory servicing of agency programs, and (ii) timely deliveries at fair and reasonable prices. (d) The Contractor shall include the substance of this clause, including this paragraph (d) in each subcontract or purchase hereunder which may involve air transportation between the United States and a foreign country or between foreign countries.

See the Fed. Reg., Vol. 39, No. 189, Sept. 27, 1974, pp. 34664-34665.

Mail Transportation

The International Air Transportation Fair Competitive Practices. Act of 1974 (P.L. 93-623; 88 Stat. 2102; approved January 3, 1975) requires, in Section 4, that expeditious action be taken on any proposed changes in rates for transportation of mail by U.S. international carriers and mandates that any Universal Postal Union (UPU) rates which are higher than "fair and reasonable rates" be opposed by the Secretary of State and the Postmaster General. Section 4 of the Act is as follows:

Sec. 4. Subsection (h) of section 406 of the Federal Aviation Act of 1958 (49 U.S.C. 1376) is amended by inserting "(1)" immediately after "(h)", and by adding at the end thereof the following new paragraphs:

"(2) The Secretary of State and the Postmaster General each shall take all necessary and appropriate actions to assure that the rates paid for the transportation of mail pursuant to the Universal Postal Union Convention shall not be higher than fair and reasonable rates for such services. The Secretary of State and the Postmaster General shall oppose any present or proposed Universal Postal Union rates which are higher than such fair and reasonable

rates.

"(3) The Civil Aeronautics Board shall act expeditiously on any proposed changes in rates for the transportation of mail by aircraft in foreign air transportation. In establishing such rates, the Board shall take into consideration rates paid for transportation of mail pursuant to the Universal Postal Union Convention as ratified by the United States Government, shall take into account all of the ratemaking elements employed by the Universal Postal Union in fixing its airmail rates, and shall further consider the competitive disadvantage to United States flag air carriers resulting from foreign air carriers receiving Universal Postal Union rates for the car

riage of United States mail and the national origin mail of their own countries."

Two different rates are paid to carriers of U.S. international mail. The UPU rate, which is paid by the U.S. Postal Service to foreign air carriers carrying U.S. mail from the United States to foreign countries, is a maximum amount equal to $1.73 per ton mile for carriage of letters and $.577 per ton mile for other mail. The CAB rate, which is set pursuant to § 406 of the Federal Aviation Act of 1958, to be paid to U.S. carriers for the carriage of international mail, is 30 to 33¢ per ton mile. The House Report on the legislation states that § 4 "is structured so as to require action that will result in the lowering of the UPU rate internationally, while also achieving an increase in the CAB-set mail rate." See House Rept. No. 93-1475, 93d Cong., 2d Sess., Nov. 19, 1974, p. 7.

On May 28, 1974, the Legal Sub-Committee of the United Nations Committee on the Peaceful Uses of Outer Space approved a draft Convention on Registration of Objects Launched Into Outer Space. U.S. Representative Herbert Reis made a statement in the Sub-Committee on May 31 with respect to the draft Convention. The following are excerpts:

The United States has adopted the practice of reporting on its launchings at regular intervals, generally about every two or three months. Consistent with our own notion that the registry should constitute a complete and current tabulation of manmade orbiting vehicles, the United States has from the very beginning also reported U.S. space objects that have deorbited. Our practice was not, however, universally copied. The United States has also reported in detail when a single object in orbit has split into a number of fragments having different orbits.

Article II of the Convention concerns national registration, while Articles III, IV, and V deal with the international census of space objects to be maintained by the U.N. Secretary-General. Article II embodies the basic idea that each launching authority should, in an appropriate manner, record in a national registry the fact that a given object has been launched into earth orbit or into other sustained space transit. In our opinion, a primary purpose of Article II is to encourage every state engaging in space activities to establish and maintain an orderly national record of launchings. But each party to the Convention remains entirely free to decide the manner in which it wishes to maintain its national registry. In particular, a national registry may be maintained as a public document or, conversely, given no publicity. This is made clear by the third paragraph of Article II, which states that "The contents of each registry