61 STAT.] CHINA-AIR TRANSPORT SERVICES-DEC. 20, 1946 3. The adjustment of fifth freedom traffic with regard to: (a) Traffic requirements between the country of origin and the countries of destination; (b) The requirements of through airline operation; (c) The traffic requirements of the area through which the airline passes after taking account of local and regional services. D. 1 . Rates to be charged by the air carriers of either contracting party between points in the territory of the United States and points in the territory of China referred to in this Annex shall be subject to the approval of the contracting parties within their respective constitutional powers and obligations. In the event of disagreement the matter in dispute shall be handled as provided below. 2. The Civil Aeronautics Board of the United States having an- nounced its intention to approve the rate conference machinery of the International Air Transport Association (hereinafter called "IATA"), as submitted, for a period of one year beginning in February, 1946, any rate agreements concluded through this ma- chinery during this period and involving United States air carriers will be subject to approval by the Board. 3. Any new rate proposed by the air carrier or carriers of either contracting party shall be filed with the aeronautical authorities of both contracting parties at least thirty days before the proposed date of introduction; provided that this period of thirty days may be reduced in particular cases if so agreed by the aeronautical au- thorities of both contracting parties. 4. The contracting parties hereby agree that where: (a) during the period of the Board's approval of the IATA rate conference machinery, either any specific rate agreement is not approved within a reasonable time by either contracting party or a conference of IATA is unable to agree on a rate, or (b) at any time no IATA machinery is applicable, or (c) either contracting party at any time withdraws or fails to renew its approval of that part of the IATA rate conference machinery relevant to this provision, the procedure described in paragraphs 5, 6 and 7 hereof shall apply. 5. In the event that power is conferred by law upon the aero- nautical authorities of the United States to fix fair and economic rates for the transport of persons and property by air on interna- tional services and to suspend proposed rates in a manner compa- rable to that in which the Civil Aeronautics Board at present is empowered to act with respect to such rates for the transport of persons and property by air within the United States, each of the contracting parties shall thereafter exercise its authority in such manner as to prevent any rate or rates proposed by one of its carriers for services from the territory of one contracting party to a point or points in the territory of the other contracting party from becom- ing effective, if in the judgment of the aeronautical authorities 95347 -49-PT . II--34 2805 Approval of rates. "IAT A." Prevention of un- fair or uneconomic rates.
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