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EU And Russia Reach Siberian Overflight Agreement

by Ulrika Lomas, Tax-News.com, Brussels

06 December 2011


The European Commission and the Russian government have agreed to a revision of the system of Siberian overflight payments, which EU airlines are required to pay when flying over Russian territory.

Welcoming the agreement, the European Commission said the modernized system would from January 1, 2014, ensure that any charges EU airlines have to pay for flying over Russian territory will be "cost-related and transparent". In addition, charges levied will not vary depending on the airline operating the route.

The agreement will enter into force on January 1, 2012, subject to approval of Russia's accession to the World Trade Organization, expected to occur at the WTO Ministerial Conference on December 16, 2011.

Currently, EU air carriers are obliged to pay for flying over Siberia on flights to destinations in Asia. It is estimated that these payments cost around EUR320m (USD430m) per year – most of it going directly to the Russian carrier Aeroflot. The European Union has long been concerned that these payments are in breach of both EU antitrust law and international law (Chicago Convention). Moreover, they drive up airline costs unfairly, making air tickets from Europe to destinations in Asia more expensive and distorting competition between airlines on these markets. They also create an additional burden on trade relations between the EU and Asia.

Praising the landmark agreement, European Commission Vice-President Siim Kallas stated: "Siberian overflight royalties have for decades been the single most important obstacle for further developing EU-Russia aviation relations to the detriment of airlines and passengers. Today's agreement is therefore a very important milestone towards strengthening closer cooperation in many areas of aviation. Igor Levitin, the Russian Minister of Transport and I agreed on this during the recent EU-Russia Aviation Summit in St. Petersburg and we have worked very closely with the Polish Presidency to finalize the agreement. We now look forward to its swift implementation."

TAGS: Russia | European Commission | law | aviation | agreements | European Union (EU) | Europe

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