Identifier
Created
Classification
Origin
05MONTREAL1196
2005-09-09 15:07:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Montreal
Cable title:  

FRENCH PROPOSAL TO TAX AIRLINE TICKETS - USICAO

Tags:  EAIR ECIN EAID EFIN UNGA ICAO 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 MONTREAL 001196 

SIPDIS

SENSITIVE

FROM USMISSION ICAO

USUN FOR IO DAS TERRY MILLER; DEPT FOR IO/T, EB/TRA, AND
SA/A; FAA FOR FELDMAN AND CAPESTANY

E.O. 12958: N/A
TAGS: EAIR ECIN EAID EFIN UNGA ICAO
SUBJECT: FRENCH PROPOSAL TO TAX AIRLINE TICKETS - USICAO
RESPONSE TO DEMARCHE REQUEST

Reftel: State 162146

This cable is Sensitive But Unclassified. Please handle
accordingly.

UNCLAS SECTION 01 OF 02 MONTREAL 001196

SIPDIS

SENSITIVE

FROM USMISSION ICAO

USUN FOR IO DAS TERRY MILLER; DEPT FOR IO/T, EB/TRA, AND
SA/A; FAA FOR FELDMAN AND CAPESTANY

E.O. 12958: N/A
TAGS: EAIR ECIN EAID EFIN UNGA ICAO
SUBJECT: FRENCH PROPOSAL TO TAX AIRLINE TICKETS - USICAO
RESPONSE TO DEMARCHE REQUEST

Reftel: State 162146

This cable is Sensitive But Unclassified. Please handle
accordingly.


1. (SBU) Summary. The Acting US Representative to the
International Civil Aviation Organization (ICAO) met with
the representatives of Canada, Austria, Saudi Arabia, Japan,
Korea, Russia and Egypt to notify them of the demarche
(reftel) being delivered in their capitals and to request
their support. She also discussed the matter of proposed
airline taxes and other "innovative" means of financing
development with ICAO Council President Kotaite. All
Representatives with whom she spoke opposed the ticket tax.
President Kotaite said that for procedural reasons, he would
not be in a position to offer a statement unless something
comes out of New York that mentions ICAO. He said that he
had met recently with the French Foreign Ministry's
Secretary General on the proposed airline tax, noting its

SIPDIS
inconsistency with ICAO policy, and suggesting that payment
of the tax be voluntary. End Summary.


2. (SBU) Per reftel, the Acting US Representative held a
series of meetings on September 7 on the draft declaration
on innovative sources of financing to deliver the US
position and request support.


3. (SBU) ICAO Council President Dr. Assad Kotaite agreed
with the US's evaluation of the proposed airline tax as
contained in reftel in that it is inconsistent with ICAO
Council resolutions on taxation -- the most recent of which
was published in ICAO Document 8632, Third Edition, Section
1, Council Resolution on Taxation of International Air
Transport (OP 3). US Rep asked if the President would issue
a statement on the proposed tax. Kotaite recalled that
France had requested insertion of the matter on the next
(October-November) Council Session agenda in the event of
"new developments" -- presumably the initiative in New York.
If/when a UN resolution on the matter mentions ICAO, he
would be in a position to respond. He said that if the
proposal had been for a new "charge" to support

development/HIV/AIDS research, it would clearly have been
ICAO-illegal, but an additional tax, Kotaite said, is not
illegal. The most ICAO has been able to achieve in
opposition to taxation of airline tickets is the Council
Resolution cited above.


4. (SBU) Kotaite suggested that for political reasons, the
United States should consider accepting a voluntary tax,
such as UNICEF contributions requested of (but not required
from) departing passengers at certain airports. He said
that he had recently met with the Secretary General of the
French Foreign Ministry about the GOF's airline tax
proposal. Kotaite said that he had told him that the tax
would be inconsistent with ICAO policy and therefore the GOF
should consider instead a voluntary contribution. He said
the French official appeared to like the idea and would
raise it with others in his government. The US Rep
responded that even a voluntary tax poses problems,
including the difficulty of insuring clarity and
transparency on management and distribution of the proceeds.


5. (SBU) The US Rep then met with likely Council
supporters: Austria, Canada, Japan, Russia and Korea
(Australia, China and Singapore, also allies, are away on
vacation). The Austrian Representative said that her
government did not favor the tax, but this was a matter on
which there was no EU consensus. The airline ticket tax had
been discussed in the EU's Financial Council in June, but no
agreement had been reached. Thus, as far as she knew, it
was still an "open subject."


6. (SBU) As far as Japan was concerned, the proposed ticket
tax went beyond the competence of ICAO (all others agreed
with him). His government was "very negative" on the
subject, and believed the matter should be discussed in the
broader context of development assistance.

7. (SBU) The Canadian Ambassador agreed with the objective
(of providing increased development assistance),but not the
means, as a global tax is "not the appropriate way." Given
differences in tax laws from country to country, the
proposal would require a harmonization of fiscal regimes
before it could be implemented. This is something that
should be left up to the political leadership in New York,
not ICAO. The current price of oil was another
consideration. He promised to forward the US talking points
to Ottawa.


8. (SBU) The Korean said that his government was flatly
opposed to the ticket tax. Implementation of the tax would
be difficult, particularly in view of the increasing price
of oil and the deteriorating state of the aviation industry.
Additional taxation will only further reduce demand for
travel by air. He said he would ask his capital to support
the United States on this in New York.


9. (SBU) The Russian Ambassador said that his government
was also opposed to the tax, with his Civil Aviation
Authority "strongly opposed." ICAO was not the appropriate
forum to discuss development assistance; implementation
would be very difficult.


10. (SBU) Egypt and Saudi Arabia opposed the tax, Egypt
because of difficulties of implementation and lack of
transparency on use of the proceeds, Saudi Arabia because it
is opposed to any tax on airline tickets. Both said they
would forward our talking points to their capitals for
further guidance and to request support for the US position
in New York.


11. (SBU) While discussion with ICAO Reps focused
overwhelmingly on the proposed ticket tax, there was also
interest in the US position on the IFF and the 0.7 percent
GDP commitment. They also asked for a copy of the New York
Declaration, which the US Rep has provided, so that they
could forward the entire package to capitals.

Serwer Marshall