The Interception of Civil Aircraft

Francis SCHUBERT*

This article investigates the regulatory framework that governs the interception of civil aircraft. It
analyses the various circumstances that may justify such interventions as well as the main legal
principles that apply to their conduct. Particular attention is given to the States’ obligations under
the Chicago Convention, and more specifically the obligation of due regard for the safety of civil
aircraft that applies to the adoption by States of regulations for their State aircraft. The research
investigates the civil-military cooperation framework and the procedures that must be followed by
the various civil and military stakeholders involved with a view to reducing the need for
interceptions and to ensure that those that ultimately need to be undertaken can be executed
without endangering the safety of civil aircraft.
Keywords: Interception; Due regard; Civil military cooperation; Article 3bis; Unidentified and
strayed aircraft

1 INTRODUCTION
On 23 May 2021, an airliner operated by Ryanair on a commercial flight between
Athens and Vilnius, was intercepted by military fighters of the air force of Belarus
and ordered to land at Minsk airport. The Belarusian authorities justified the
intervention by claiming they had received a bomb threat targeting the commer-
cial airliner that urgently required the aircraft to be guided to a safe landing.
The incident has triggered many reactions around the world, many of them
casting doubts regarding the true motivation of the interception and challenging its
legality under the particular circumstances. The Council of the International Civil
Aviation Organisation (ICAO) itself ‘expressed strong concern at the apparent
forced diversion of Ryanair Flight FR4978’1 and launched a fact-finding
investigation.
The purpose of this article is to discuss the rules that apply to the interception
of civil aircraft from an air navigation perspective and that might be relevant to the
case of Flight FR4978. However, since different investigations are still being

*
Adjunct Professor at the Institute for Air and Space Law, McGill University in Montreal. He is a
former Chief Corporate Officer and Deputy CEO of skyguide, Swiss Air Navigation Services ltd in
Geneva Switzerland. Email: [email protected].
1
Incident Involving Ryanair Flight FR4978 in Belarus Airspace on 23 May 2021, ICAO Council – 223rd
Session Second Meeting (Virtual Meeting on Thursday 27 May 2021) Summary of Decisions Open
Meeting, C-DEC 223/2, 27 May 2021.

Schubert, Francis. ‘The Interception of Civil Aircraft’. Air & Space Law 46, no. 6 (2021): 687–712.
© 2021 Kluwer Law International BV, The Netherlands
688 AIR AND SPACE LAW

conducted, the conclusions of which cannot be presumed, it is not the objective of

this article to comment on the legality of the actions undertaken by the different
authorities involved in the specific incident.

2 THE INTERCEPTION OF CIVIL AIRCRAFT

Although it is subject to a number of international civil aviation regulations and
explanatory documents, the concept of ‘interception of civil aircraft’ is not defined
by ICAO. The term refers to a procedure that involves a military aircraft
approaching and operating in close proximity of a civil aircraft in flight for the
purpose of verifying its identity and/or to order that aircraft to fly a specific
trajectory, for instance to a suitable aerodrome should further verification or action
be required.
The interception of civil aircraft is mentioned in Article 3bis of the Chicago
Convention2 and governed mainly by Annexes 2 and 11 to the Chicago
Convention.3 These Annexes are to be addressed jointly and their common
purpose is to ‘to ensure that flying on international air routes is carried out
under uniform conditions designed to improve the safety and efficiency of air
operation’.4 Annex 2 prescribes procedures to be applied by pilots-in-command of
civil aircraft, while Annex 11 lays down similar provisions to be applied from an
Air Traffic Services (ATS) perspective. These rules are further detailed in the
Procedures for Air Navigation (PANS) included in ICAO Document 4444.5
The relevant ICAO regulations are complemented by other documents that
do not have a formal authoritative status but provide guidance for States for the
adoption of domestic rules that should be harmonized at global level. Such
documents include in particular the Manual concerning Interception of Civil
Aircraft6 and the recent Manual on Civil-Military Cooperation in Air Traffic
Management.7
Interceptions are motivated by considerations related to the preservation of
States’ sovereign interests, including its domestic policy and military interests, and
to the enforcement of the laws of the State overflown. Most interceptions are

2
International Civil Aviation Organization (ICAO), Convention on Civil Aviation (‘Chicago Convention’)
(7 Dec. 1944) (1994) 15 U.N.T.S. 295 [hereinafter C.
3
Annex 2 – Rules of the Air, 10th edition, July 2005, respectively Annex 11 – Air Traffic Services, 15th
edition, incorporating Amendments 1–51 (July 2018).
4
Annex 11, foreword, at ix.
5
ATM – Air Traffic Management, Doc 4444, 16th edition, 2016.
6
Manual concerning Interception of Civil Aircraft (Consolidation of Current ICAO Provisions and
Special Recommendations), ICAO Doc 9433-AN/926, 2nd edition – 1990.
7
Manual on Civil-Military Cooperation in Air Traffic Management, First Edition, 2020, ICAO Doc
10088. That document supersedes the earlier Civil/Military Cooperation in Air Traffic Management
(ICAO Cir 330 2011).
 THE INTERCEPTION OF CIVIL AIRCRAFT 689

ordered on the ground of uncertainties regarding the status or identity of an

aircraft, the intentions of its crew or the purpose of a flight.
Since the interception of civil aircraft constitutes an act of expression of
sovereignty, such actions can only be undertaken by a State within its sovereign
airspace as defined under Article 2 Chicago Convention (CC). Consequently,
interceptions of civil aircraft over the high seas are forbidden. As stated by the
very terminology, the procedures for the interceptions of civil aircraft apply only
for civil aircraft. The interception of foreign State aircraft is subject to different
procedures that are adopted outside of the ICAO regulatory framework.
The interception of civil aircraft by military aircraft is a delicate and risky
procedure because it involves two or more aircraft flying in very close proximity of
each other, operating under nominally different sets of rules and under circum-
stances where communication between both aircraft might be difficult and subject
to confusion. Annex 2 insists on the fact that ‘interceptions of civil aircraft are, in
all cases, potentially hazardous’8 and the entire regulatory system that governs such
procedures is driven by the objective to reduce the safety risks involved.

3 SCOPE
The ICAO regulatory framework does not offer a comprehensive and detailed
enumeration of situations that justify the interception of a civil aircraft, but ICAO
Document 9433 presents a compiled, although non-exhaustive, list of possible
circumstances.9 These can be divided in three broad categories.

3.1 UNIDENTIFIED AIRCRAFT

Military, police and other State authorities are in charge of safeguarding a State’s
airspace sovereignty and compliance by aircraft operating within that airspace with
applicable regulations. In order for them to perform their tasks, it is essential that
they maintain a complete and permanent overview of all air traffic movements.
Before they cross the boundary into a State’s airspace, all aircraft need to be
identified. The identification purpose aims to clearly determine the identity and
status of each aircraft. The identification of civil aircraft is a key requirement for
the safety of civil air navigation since it avoids the risk for them being mistaken for

8
Annex 2, § 3.8.1. Note. The word ‘hazardous’ is to be understood in the sense of ‘activities potentially
hazardous to civil aircraft’ accordance with the meaning given by Annexes 2 and 11 and the Manual
Concerning Safety Measures Relating to Military Activities Potentially Hazardous to Civil Aircraft
Operations, ICAO Doc. Doc 9554, 1st edition 1990.
9
Doc 9433, § 1.2.
690 AIR AND SPACE LAW

a foreign State aircraft with potential hostile intentions and of a reaction by the
State overflown that might create a hazard for the aircraft and its occupants.10
Under normal circumstances, the identification of a civil aircraft begins
upstream from its entry in a foreign State’s airspace and will not require any
military intervention. Under the ICAO framework, flight plan data for each
aircraft engaged in international air navigation are collected by the ATS units at
the point of departure and distributed to all other units along the aircraft’s intended
flight path. Coordination between ATS units ensures any unit is informed of all
aircraft’s details before they enter the airspace sector under its responsibility. Where
radar or other surveillance services are available, civil ATS units will correlate the
data displayed on their screens with the flight plan information received. All
relevant data are shared with the competent military authorities. In the event an
aircraft in flight detected by the military authorities is unknown to the latter, they
will enquire with the competent civil ATS units.
It may however happen that an aircraft unknown to the civil and military ATS
authorities crosses the border into a State’s airspace and that the ATS units are
unable to establish the identity of the unidentified aircraft11 with the technical
means available. Under such circumstances, an interception may be warranted for
the purpose of identifying the concerned aircraft.

3.2 STRAYED AIRCRAFT

A second category relates to strayed aircraft12 who are deviating from their
authorized trajectory. Navigational errors may lead an aircraft in flight to drift
towards restricted or prohibited airspace sectors. In a broader sense, the notion of
strayed aircraft can also be extended to an aircraft who enters a State’s airspace at a
point other than those authorized for the purpose of crossing the boundary.13 In
the event such errors cannot be corrected with the navigational assistance from the
civil ATS, it might become necessary to intercept the strayed aircraft in order to
bring it back on a safe course.

10
Doc 9554, § 7.1.
11
An unidentified aircraft is defined as ‘[a]n aircraft which has been observed or reported to be operating
in a given area but whose identity has not been established’ (Annex 11, § 2.25.1).
12
A strayed aircraft is defined as ‘[a]n aircraft which has deviated significantly from its intended track or
which reports that it is lost’ (Annex 11, § 2.25.1).
13
Doc 9433, § 1.2.2.
 THE INTERCEPTION OF CIVIL AIRCRAFT 691

3.3 BREACHES OF REGULATIONS

The third category broadly includes various situations involving the (potential)
breach of the laws of the State overflown.
Article 3bis(b) CC establishes the right of States to require the landing of a
civil aircraft in flight or to give it alternative instructions in situations involving an
aircraft ‘flying above its territory without authority’ or where ‘there is reasonable
grounds to conclude that it is being used for any purpose inconsistent with the aims
of this Convention’. This description would cover for instance aircraft that are
used as a weapon with the intent to cause damages to other aircraft in flight or to
third parties on the surface. ICAO also foresees that an interception may be
justified in the event an aircraft ‘constitutes a hazard to other aircraft’,14 for instance
if it is deliberately flown in a reckless manner or with the intention to cause harm
to other aircraft.
When a State’s police or custom authorities believe that an aircraft is engaged
in a flight serving an unlawful purpose, such as the transportation of illicit goods or
people, these authorities are also entitled to order an interception. However, the
interception must target an aircraft that is actually engaged in an unlawful opera-
tion. The mere fact or suspicion that a criminal is present aboard an aircraft in flight
is not a sufficient reason to order an interception, although such reasons have been
given in the past to justify such interceptions.
In all circumstances that involve the suspected or actual breach of laws, the
purpose of the interception of a civil aircraft will be to instruct the intercepted
aircraft to leave a particular area or the airspace of the State overflown, or to land at
a suitable aerodrome.

3.4 INTERCEPT AND ESCORT SERVICES

The interception procedures described under Annexes 2 and 11 are not the only
type of situations where a military aircraft might operate in close proximity of a
civil aircraft in flight and might exert some control on the navigation of the latter.
An aircraft may face an emergency that warrants the assistance of another
aircraft to safeguard its safety and that of its occupants. Such a situation may occur,
for instance, when an aircraft loses its means to navigate or to communicate or
suffers a major damage in flight15 and needs guidance to an aerodrome where it can
make a safe landing.

14
Ibid.
15
Situations that may require the need of an escort include for instance circumstances where an aircraft is
unable to maintain altitude or is in fire, or when its remaining fuel is suspected to be insufficient. For
692 AIR AND SPACE LAW

The ICAO framework anticipates such situations and prescribes a set of

procedures described in the International Aeronautical and Maritime Search and
Rescue (IAMSAR) Manual published jointly by ICAO and the IMO. Such safety
motivated missions are known as ‘intercept and escort services’.16
The nature of intercept and escort services however differs from the procedure
for the interception of civil aircraft covered by Annexes 2 and 11. Intercept and
escort services are governed by Annex 1217 and formally fall under a State’s Search
and Rescue (SAR) responsibilities even when they are carried out by a military
aircraft. Annex 2 clearly states that the term ‘interception’ in the context of the
interception of civil aircraft ‘does not include intercept and escort service provided,
on request, to an aircraft in distress, in accordance with … the International
Aeronautical and Maritime Search and Rescue (IAMSAR) Manual … ’.18

4 STATES’ OBLIGATIONS UNDER THE CHICAGO CONVENTION

The interception of civil aircraft raises delicate issues arising from the overlapping
of two different legal regimes that govern civil, respectively military aircraft.
Civil aircraft engaged in international air navigation are subject to the terms of
the Chicago Convention and to the Standards and Recommended Practices
(SARPS) and PANS included in the various Annexes to the Convention and
other relevant ICAO documents. Most States have extended the scope of the
ICAO regulations to domestic flights operating over their territories.
The interception of civil aircraft falls under sovereign tasks entrusted to
military and police authorities and are normally carried out by military aircraft.
In accordance with Article 3(a) CC, military aircraft qualify as ‘State aircraft’,
which are excluded from the scope of the Chicago Convention.19 This means,
in particular, that military aircraft are not required to comply with the SARPS and
PANS enacted by ICAO.

further details see the International Aeronautical and Maritime Search and Rescue (IAMSAR) Manual,
ICAO Doc 9731, Volume II – Mission Coordination, 8th edition 2019, § 7.2.4.
16
‘Intercepts are needed when a distressed craft is still able to move toward a safe haven but there is
substantial concern as to whether it will be able to reach safety before it suffers a catastrophic incident’
(Doc 9731, Appendix J).
17
Annex 12 – Search and Rescue, 8th edition, July 2004.
18
Annex 2, § 3.8, note.
19
‘This Convention shall be applicable only to civil aircraft, and shall not be applicable to state aircraft’.
 THE INTERCEPTION OF CIVIL AIRCRAFT 693

4.1 THE OBLIGATION OF DUE REGARD

4.1[a] General

In order to mitigate the risks generated by military activities that may potentially be
hazardous to international civil air navigation, Article 3(d) of the Chicago
Convention provides that, ‘contracting States undertake, when issuing regulations
for their state aircraft, that they will have due regard for the safety of navigation of
civil aircraft’. Article 3(d) CC thus establishes a rare exception to the contracting
States freedom to regulate the operation of State aircraft outside of the
Convention.20
The notion of ‘due regard’ is not defined in the ICAO regulatory material but
various documents are helpful to understand its meaning.21 In general terms, the
duty of due regard requires that regulations adopted by States in respect of the
operation of State aircraft are designed in such a manner that the planning and
conduct of all State aircraft activities, will not create a hazard for civil aircraft.22
In practice, ICAO assumes that ‘[o]perating in compliance with international,
regional and State civil aviation legislation where practicable is an effective means
of complying with Article 3 d) of the Chicago Convention’. The simple imple-
mentation of that assumption would imply that, in order to comply with their
obligations of due regard under Article 3(d) CC, States should require their State
aircraft to abide by the regulations applicable to international civil air navigation
whenever they operate within a block of airspace that is also used for civil aviation
purposes.
ICAO however recognizes that such an ideal proposal often remains
impracticable and that ‘the nature of defence and security missions can create
unique situations that need special handling and considerations’. The due regard
obligation of States consequently consists in ensuring that ‘regulations, proce-
dures and safety management principles provide an adequate framework to

20
‘States have thus accepted an obligation to include a due regard content within their national legal
system when promulgating regulations affecting the flight of state, and therefore military aircraft’
(Michel Bourbonniere & Louis Haeck, Military Aircraft and International Law: Chicago Opus 3, 66(3)
J. Air L. & Commerce 916 (2001).
21
In particular, ICAO Doc 9554 (Manual Concerning Safety Measures Relating to Military Activities
Potentially Hazardous to Civil Aircraft Operations, 1st edition 1990) was developed as guidance for
the application of the notion of due regard.
22
Michel Bourbonniere and Louis Haeck observe that ‘[i]t is therefore, logical and reasonable to
conclude that the plain meaning of Article 3(d) creates an obligation on states to regulate state aircraft
in order to ensure that state aircraft exercise appropriate attention, as well as, heed and care for the
safety of the course and position of civil aircraft avoiding obstruction to the course of and collisions
with civil aircraft. Furthermore, as every obligation has a corresponding right, this interpretation
presupposes that civil aviation is legitimately entitled to receive this attention, heed, and care’ (op. cit.
n. 19, at 915).
694 AIR AND SPACE LAW

ensure the safety of civil aviation when state aircraft must operate outside of
civil rules’.23
ICAO expresses concerns that different individual regulatory approaches for
State aircraft might result in a large diversity of regulations that might be a source
of hazardous confusion for pilots engaged in international civil air navigation. It has
consequently observed that ‘especially in congested airspace, harmonized regula-
tion is a precondition for a safe, efficient and ecologically sustainable aviation
system’.24 The establishment of global or regional common harmonized rules
that apply to situations where deviations from civil regulations are necessary will
contribute to the fulfilment of States’ duty of due regard by reducing the risk of
confusion and securing a high level of operational predictability.

4.1[b] Due Regard in the Context of the Interception of Civil Aircraft

The obligation of ‘due regard’ applies specifically to ‘matters of interception of civil

aircraft by military aircraft, the possible use of force against civil aviation, the
execution of military operations, which can be dangerous to civil air navigation,
and the military/civil communicative interface’.25
The interception of civil aircraft is a domain where ICAO has been particu-
larly active in the promotion of harmonized regulations. ICAO Assembly
Resolution A25-3 recognizes ‘the importance of encouraging States to achieve
harmonization of procedures for the interception of civil aircraft when issuing
regulations for their state aircraft’. It further calls upon Contracting States ‘to seek
as far as practicable adherence to uniform navigational and flight operational
procedures by flight crew of civil aircraft’.26
In accordance with Annex 2, States are required to further detail the general
international regulations, by means of ‘appropriate regulations and administrative
directives issued by Contracting States in compliance with the Convention on
International Civil Aviation’.27 It is assumed that the contracting States obligation
of due regard is fulfilled when the regulations that apply to their State aircraft meet
two fundamental requirements:

23
Doc 10088, § 1.9.2.
24
ICAO Circ. 330, § 1.2.3.
25
Bourbonniere & Haeck, ‘Military Aircraft and International Law: Chicago Opus 3’, at 912.
26
Doc 9433, § 4.1.1.2.
27
Annex 2, 3.8.1.
 THE INTERCEPTION OF CIVIL AIRCRAFT 695

– First they should minimize the risk of situations where an interception

becomes necessary;
– Second, they should ensure that, in the event such an intervention must
ultimately be carried out, the interception procedure does not endanger
the safety of the intercepted aircraft or of any other civil aircraft.

4.2 PRINCIPLES FOR THE INTERCEPTION OF CIVIL AIRCRAFT

The undertaking of the interception of a civil aircraft, under the obligation of due
regard, is subject to a number of key principles.
First and foremost, Annex 2 states that interceptions of civil aircraft should be
avoided as a matter of principle.28 Such procedures should only be performed as a
last resort action,29 after all other reasonable means of maintaining safety and
security have been exhausted. The obligation of due regard also requires that an
interception must successfully meet a balance check that places the benefits in
terms of public interests above the safety of the intercepted aircraft and its
occupants. Because of the safety hazards associated with this type of interventions,
the test to determine whether a particular situation justifies the interception of a
civil aircraft places the bar very high.
Second, ICAO insists that ‘the interception should be limited to determining
the identity of the aircraft’.30 There are, however, situations where the simple
identification of an aircraft is not sufficient to satisfy the sovereign concerns of a
State. Only in the event the identification alone proves to be insufficient to resolve
the situation and ‘it is necessary to return the aircraft to its planned track, direct it
beyond the boundaries of national airspace, guide it away from a prohibited,
restricted or danger area or instruct it to effect a landing at a designated
aerodrome’,31 should the intercepting aircraft perform any additional action.
Thirdly, because of the safety risks involved ‘practice interception of civil
aircraft will not be undertaken’.32

28
‘Interception of civil aircraft should be avoided and should be undertaken only as a last resort’ (Annex
2, Attachment A, § 2.1).
29
See Doc 9433, § 2.9 and § 4.1.1.2.
30
Annex 2, Attachment A, § 2.1.
31
Ibid.
32
Annex 2, Appendix 2, § 1.1, Principles to be observed by States. Also see Doc 9433, § 2.5.
696 AIR AND SPACE LAW

5 SYSTEMIC MEASURES
ICAO Assembly Resolution A25-3 ‘calls upon Contracting States … to cooperate
to the fullest extent practicable in reducing the need for the interception of civil
aircraft’. Various measures can be taken to that effect and the reduction of the
potential need for the interception of a civil aircraft starts at a systemic level.

5.1 CIVIL-MILITARY COOPERATION

5.1[a] General
The cooperation between civil and military authorities is essential in the context of
interceptions. Poor or inadequate coordination between civil and military stake-
holders can negatively impact the safety of international civil air navigation in
general, and in the context of an interception in particular. For that reason, ICAO
Assembly Resolution A25-3 expresses ‘the desirability of improving coordination
between military and civil communications systems and air traffic control agencies
so as to enhance the safety of civil aviation during the identification and intercep-
tion of civil aircraft’.33 It further calls upon Contracting States ‘to cooperate to the
fullest extent practicable in improving coordination between military and civil
communications systems and air traffic control agencies so as to enhance the safety
of international civil aviation during the identification and interception of civil
aircraft’. Annex 11 formalizes this aspirational goal and requires that ‘[a]ir traffic
services authorities shall establish and maintain close cooperation with military
authorities responsible for activities that may affect flights of civil aircraft’.34
In the context of interceptions of civil aircraft, a primary goal of civil-military
cooperation is to dissipate as quickly as possible any uncertainty regarding the
status, identity or intention of a particular aircraft and to maximize the chances of
securing the early positive identification of each aircraft, thus limiting the risk of
situations that might require an interception.

5.1[b] Communication
Cooperation between civil and military authorities must begin at a very high level
and be embedded in a common culture shared by all the entities concerned. The

33
‘The objective sought within this close civil/military cooperation is the avoidance of hazards to civil
air navigation and a minimal of interference on the operations of civil flights from state
aircraft’(Bourbonniere & Haeck, supra n. 20, at 921).
34
Annex 11, 2.18.1.
 THE INTERCEPTION OF CIVIL AIRCRAFT 697

most fundamental pillar of cooperation is communication, described by ICAO as ‘a

basic, yet often overlooked requirement’.35
The word communication must be interpreted in the broadest possible man-
ner and covers cultural, operation and technical elements. The establishment of
any effective formalized cooperation framework requires regular meetings and
exchanges between the authorities involved. Under such premises, ‘[g]ood com-
munication and mutual understanding will create a solid foundation upon which
building cooperation can be enabled’.36

5.1[c] Exchange of Information

The necessary communication involves the transparent and systemic exchange of
the operational data that may be helpful to establish the identity of all relevant
aircraft.37
Such data comprise first flight plan data. Proper flight planning and the
dissemination of flight plan data across the civil and military air navigation frame-
work contribute greatly to the reduction of the number of situations that may
require an intervention. Annex 2 requires that for any flight intended to cross a
national boundary, a flight plan shall be deposited with the appropriate ATS
authority. As observed by various experts, ‘[o]ne of the stated reasons for deposit-
ing a flight plan is the requirement by the appropriate ATS authority in order to
facilitate co-ordination with military units, to avoid the possibility of
interception’.38 A formal flight plan may be also required for domestic flights
‘within or into designated areas, or along designated routes, when so required by
the appropriate ATS authority to facilitate coordination with appropriate military
units or with air traffic services units in adjacent States in order to avoid the
possible need for interception for the purpose of identification’.39
Relevant information will also include surveillance data. Annex 2 prescribes
that:
it is essential that contracting States take steps to ensure that … secondary surveillance radar
and/or ADS-B facilities be made available to the extent possible to permit intercept
control units to identify civil aircraft in areas where they might otherwise be intercepted.

35
Doc 10088, § 1.4. Also ‘The main element of due regard in the Chicago system is one of commu-
nication among military aircraft, civil aircraft, and ATS authorities’ (Bourbonniere & Haeck, supra n.
20, at 975).
36
Doc 10088, § 1.4.1.
37
‘Transparent and real-time data exchanges between civil ATS units and appropriate military units
would facilitate this coordination’ (Doc 10088, § 1.1.4.2).
38
Bourbonniere & Haeck, supra n. 20, at 918.
39
Annex 2, 3.3.1.2. Also see Doc 4444, § 10.2.4 and § 11.4.2.2.2.4.
698 AIR AND SPACE LAW

Such facilities should permit recognition of aircraft identity and immediate recognition of
any emergency or urgency conditions.40

5.1[d] Infrastructure
The availability of interoperable technical equipment is essential to allow rapid,
reliable and continuous communication between civil and military units for the
timely exchange of all information pertaining to a particular aircraft during both
the phase that precedes an interception and the interception itself.41 Access to the
relevant infrastructure should be open to civil and military stakeholders. The
technical facilities available should not only allow the sharing of information at
the national level but also the exchange of information between adjacent ATS
units in different countries.42

5.2 AIRSPACE STRUCTURE AND NAVIGATIONAL INFRASTRUCTURE

The risk of an interception can be reduced by States by carefully designing the

structure of the airspace and deploying adequate navigational infrastructure over
their territory. For instance, the inclusion of appropriate buffers between airways
used for civil air navigation and restricted or prohibited areas, that account for the
accuracy of navigational facilities in the area, will decrease the risk of a civil aircraft
unintentionally drifting from the published airways into sectors closed to civil air
navigation.43
In the same way, improving the accuracy and reliability of the navigation
facilities over the territory of a State will also contribute to the reduction of the risk
of a strayed aircraft. Annex 2 prescribes in that respect that ‘[w]hen delineating
such areas in close proximity to promulgated ATS routes, or other frequently used
tracks, States should take into account the availability and overall systems accuracy
of the navigation systems to be used by civil aircraft and their ability to remain clear

40
Annex 2, Attachment A, § 2.3. Also see Annex 2, Appendix 2, § 1.3.
41
Doc 9433, § 2.8. Also Annex 2, § 2.2: ‘To this end, it is essential that means of rapid and reliable
communications between intercept control units and air traffic services units be established and that
agreements be formulated concerning exchanges of information between such units on the move-
ments of civil aircraft, in accordance with the provisions of Annex 11’ and Annex 11, § 2.18.3:
‘Arrangements shall be made to permit information relevant to the safe and expeditious conduct of
flights of civil aircraft to be promptly exchanged between air traffic services units and appropriate
military units’.
42
‘When so required by agreement between the States concerned in order to eliminate or reduce the
need for interceptions in the event of deviations from assigned track, facilities for communications
between adjacent flight information centres or area control centres … shall include provisions for
direct speech alone, or in combination with data link communications … ’ (Annex 11 § 6.2.3.1.3).
43
Doc 9433, § 2.8.
 THE INTERCEPTION OF CIVIL AIRCRAFT 699

of the delineated areas’.44 It further advises that ‘ the establishment of additional

navigation aids be considered where necessary to ensure that civil aircraft are able
safely to circumnavigate prohibited or, as required, restricted areas’.45

5.3 AWARENESS AND TRAINING

The interception of a civil aircraft usually involves several actors at the operational
level, including the pilot of the intercepted aircraft, the pilot of the intercepting
aircraft and civil and military air traffic controllers. The appropriate training of all
these actors is necessary to minimize the risks associated with an interception
procedure.
The civil pilots’ awareness regarding the procedures applicable to the inter-
ception of civil aircraft, globally as well as within the national airspace of all States
overflown constitutes another essential factor to minimize the risks arising from
such interventions. Appropriate knowledge of interception procedures will reduce
the risk of confusion between the various parties involved and the risk of an
inappropriate action by any of them.
Annex 2 prescribes in that respect that ‘ … it is essential that contracting States
take steps to ensure that … all pilots of civil aircraft be made fully aware of the
actions to be taken by them and the visual signals to be used … ’.46 The same
requirement is expressed with respect to civil air traffic controllers.47
The appropriate training of the military pilots conducting an interception
procedure is equally important. In particular, that training must raise the pilot’s
awareness regarding ‘the general performance limitations of civil aircraft and of the
possibility that intercepted civil aircraft may be in a state of emergency due to
technical difficulties or unlawful interference’.48 The flight behaviour and perfor-
mance of military jet fighters differs significantly from those of civil aircraft,
especially light piston aeroplanes or airliners. The pilots of intercepting aircraft
need to remain aware of such differences in order to avoid ordering manoeuvres
that are incompatible with the performance of the intercepted vehicle or to assume
a deliberate lack of compliance with the instructions given, should the latter aircraft
be unable to perform a particular manoeuvre.

44
Annex 2, Attachment A, § 2.2.
45
Ibid.
46
Ibid., § 2.3. Also see Doc 9433, § 4.1.1.2.
47
‘To eliminate or reduce the hazards inherent in interceptions undertaken as a last resort, all possible
efforts should be made to ensure coordinated actions by the pilots and ground units concerned. To this
end, it is essential that contracting States take steps to ensure that … all air traffic services personnel be
made fully aware of the actions to be taken by them in accordance with the provisions of Annex 11,
Ch. 2, and the PANS-ATM (Doc 4444)’ (Ibid.).
48
Ibid.
700 AIR AND SPACE LAW

5.4 PUBLICATION OF PROCEDURES

Achieving the appropriate level of awareness of the pilots engaged in international

civil air navigation requires that the procedures that apply to the interception of
aircraft and that airspace structures are duly published by the States.
For that reason, Article 3bis(b) of the Chicago Convention prescribes that ‘[e]
ach contracting State agrees to publish its regulations in force regarding the
interception of civil aircraft’. Annex 2 details that requirement and emphasizes that:
[t]o eliminate or reduce the need for interception of civil aircraft, it is important
that … areas prohibited to all civil flights and areas in which civil flight is not permitted
without special authorization by the State be clearly promulgated in Aeronautical
Information Publications (AIP) in accordance with the provisions of Annex 15, together
with the risk, if any, of interception in the event of penetration of such areas.49
Annex 1550 echoes the requirement laid down in Annex 2 and requires that
States shall publish in their Aeronautical Information Publications the ‘limits
(horizontal and vertical), regulations and procedures applicable to … permanent
areas or routes or portions thereof where the possibility of interception exists’.51
The publication of such procedures is considered as an integral component
of the duty of due regard imposed upon contracting States under Article 3(d)
CC.52

6 PROCEDURES FOR INTERCEPTIONS

The interception of a civil aircraft usually involves numerous parties including in
most cases the civil ATS unit in charge of managing air traffic within the airspace
concerned, an ‘intercept control unit’ in charge of providing instructions to the
intercepting aircraft, one or more intercepting military aircraft and the intercepted
aircraft itself.
The interception procedures established by ICAO follow the same logic as the
general policies adopted in that respect and aim, first, at avoiding the need for an
interception and secondly, to ensure that such interventions do not put the safety
of civil aircraft at risk, should they ultimately need to be conducted.

49
Ibid., § 2.2.
50
Annex 15 – Aeronautical Information Services, 16th edition, incorporating Amendments 1–40, July
2018.
51
Annex 15, § 6.2.1. Similar requirements are expressed in Annex 15 § 6.2.6 and § 6.3.2.3.
52
Bourbonniere & Haeck, supra n. 20, at 921.
 THE INTERCEPTION OF CIVIL AIRCRAFT 701

6.1 PREVENTIVE MEASURES

In the event they should face a situation that might require an interception, civil
ATS units are required to undertake ‘all possible efforts are made to confirm the
identity of the aircraft and to provide it with the navigational guidance necessary to
avoid the need for interception’.53 Annex 2 establishes a similar requirement for
intercept control units.54

6.1[a] Identification of Aircraft

When a civil ATS unit observes or is informed of the presence of an unidentified
aircraft, it shall undertake make use of all means available to establish the identity of
that aircraft.55 In practice, such efforts will include attempts to establish a radio
communication with the unidentified aircraft, either on the frequency assigned to
the concerned unit or on the universal emergency frequency.56 The ATS unit may
also ask other civil aircraft operating in the vicinity to try to determine the identity
of the aircraft by means of visual observations, while maintaining the statutory
separation between all aircraft at all times. It will also seek information from
adjacent ATS units that might have been previously in contact with the concerned
aircraft. In case any of these actions is successful ‘[t]he air traffic services unit
shall … inform the appropriate military unit as soon as the identity of the aircraft
has been established’,57 which will render an interception unnecessary.
It is only in the event that the identity and status of the unknown aircraft
cannot be secured by means of coordination or direct exchanges with the aircraft,
that the need for a visual identification arises. A visual identification requires the
dispatching of a military aircraft to the close vicinity of the unknown aircraft in
order to establish the identity of the latter and to attempt to obtain any other
relevant flight plan data.58 In the event of an unidentified aircraft, the status (civil
or State aircraft) of the aircraft is by definition unknown. The military authorities

53
Annex 11, § 2.18.3.2.
54
‘To eliminate or reduce the need for interception of civil aircraft, it is important that … all possible
efforts be made by intercept control units to secure identification of any aircraft which may be a civil
aircraft, and to issue any necessary instructions or advice to such aircraft, through the appropriate air
traffic services units’ (Annex 2, Attachment A, § 2.2).
55
Annex 11, § 2.18.3.2.
56
See below, Radio-communications.
57
Annex 11, § 2.25.1.2.1.
58
‘The identification process is based on the correlation by military units of information derived from
several sources which include:
a) air traffic services units;
b) airline flight schedules;
c) filed flight plans and related messages;
d) departure messages and flight progress reports;
702 AIR AND SPACE LAW

under their due regard obligation, should assume that the aircraft might be a civil
aircraft and act in accordance until it is verified that the concerned aircraft is not a
civil aircraft.

6.1[b] Navigational Assistance

Annex 11 requires air traffic controllers to offer immediate navigational assistance

to aircraft that are observed to be drifting away from their authorized trajectory, in
particular when they appear to be about to enter a restricted or prohibited airspace
sector, before the need to an interception arises.59 Annex 11 notes in that respect
that ‘[n]avigational assistance by an air traffic services unit is particularly important
if the unit becomes aware of an aircraft straying, or about to stray, into an area
where there is a risk of interception or other hazard to its safety’.60 In case it is the
military authorities who observe that a civil aircraft is on course to enter or has
already entered a prohibited or restricted area, these authorities should issue a
warning and navigational advice through the appropriate civil ATS unit,61 with a
request to pass it on to the concerned aircraft. Should it not be possible to contact
the latter, or in case of imminent danger, the military unit should attempt to
deliver a warning directly to the aircraft on the universal emergency radio
frequency.

6.2 CONDUCT OF INTERCEPTIONS

In the event all effort to identify an aircraft or to bring a strayed aircraft back on a
safe course should fail, the military authorities may decide that an interception is
necessary. An interception may also be ordered in the event of a suspected or actual
breach of the laws of the State overflown.62
The interception procedure requires that a military intercepting aircraft
approaches the intercepted aircraft and flies in very close proximity of the later
for the purpose of carrying out a visual identification or of issuing specific instruc-
tions to its crew.

e) electronic emissions from aircraft, including emissions from airborne weather radar and radio
altimeters, and SSR responses; and
f) visual observations’ (Doc 9554, § 7.2).
59
Annex 11, § 2.18.3.2. 1.
60
‘Navigational assistance by an air traffic services unit is particularly important if the unit becomes aware
of an aircraft straying, or about to stray, into an area where there is a risk of interception or other
hazard to its safety’ (Annex 11, § 2.25.1).
61
Annex 11, § 2.18.3.2.
62
See above Scope.
 THE INTERCEPTION OF CIVIL AIRCRAFT 703

Annex 11 requires ATS units, as soon as they are informed that an aircraft is
being intercepted, in or outside of its area of responsibility, to attempt to establish
communication with the concerned aircraft, to inform its crew of the imminent
intervention and to share any relevant information with other concerned stake-
holders that may be relevant to preserve the safety of the aircraft and possibly
remove the need for the intervention.63
One of the greatest sources of hazard in the context of an interception relates
to the risk of a confusion arising from the interaction of several actors who often
communicate with each other with different means (such as radio-exchanges or
visual signals) or on different channels and sometimes do not share a common
language.64 In order to reduce the risk of confusion and unexpected behaviours, it
is essential that ‘clear and unambiguous instructions be issued to intercept control
units and to pilots-in-command of potential intercepting aircraft, covering inter-
ception manoeuvres, guidance of intercepted aircraft, action by intercepted aircraft,
air-to-air visual signals, radiocommunication with intercepted aircraft … ’.65 It is
equally essential that all parties strictly adhered to the standard phraseologies
published in Annex 10.

6.2[a] Tactical Coordination

Once the interception of a civil aircraft has been ordered, ‘[t]o eliminate or reduce
the hazards inherent in interceptions undertaken as a last resort, all possible efforts
should be made to ensure co-ordinated actions by the pilots and ground units
concerned’.66
The coordination between intercept control units and civil ATS units is of
particular importance when the intercepted aircraft is, or might be, a civil aircraft.
It is important that these units be notified prior to the interception in order to
avoid confusion and to give them an opportunity to inform the concerned aircraft
of the imminent intervention, should the aircraft be in radio-communication with
the civil ATS.67 It is however accepted, that while ‘[t]he optimal manner of
executing [the due regard] obligation is in cooperation with civil authorities’
under some circumstances ‘mission accomplishment rules or other national security

63
Annex 11, § 2.25.2. Similar provisions appear in Doc 4444, §15.5.2.
64
Annex 2 contains a set of standard sentences to be used in the event communication cannot be
established in a common language.
65
Annex 2, Attachment A, § 2.3.
66
Doc 9433, § 2.9 and § 4.1.1.2.
67
‘It is essential that close coordination be maintained between an intercept control unit and the
appropriate air traffic services unit during all phases of an interception of an aircraft which is, or
might be, a civil aircraft, in order that the air traffic services unit is kept fully informed of the
developments and of the action required of the intercepted aircraft’ (Annex 2, Attachment A, § 9).
704 AIR AND SPACE LAW

imperatives prevent this from happening’.68 Such situation may for instance occur
in the event the safeguarding of a State’s sovereign interests against a serious and
imminent threat requires an immediate military intervention that offers no time or
possibility for the concerned military authorities to notify or coordinate with the
concerned ATS authorities.

6.2[b] Breach of Separation Minima

By the very nature of the circumstances, interceptions belong to the categories of

‘military aeronautical operations [that] necessitate non-compliance with certain air
traffic procedures’.69 The objective of ATS is to maintain a safe separation between
civil aircraft in order to avoid collisions. The intervention unavoidably requires the
breach of the applicable separation minima since the intercepting aircraft needs to
approach the intercepted one at close vicinity.
ICAO regulations advise that the breach of applicable civil aviation regulations
should not be executed unilaterally by military authorities. They require the
concerned authorities to ‘notify the proper air traffic control unit prior to under-
taking such manoeuvres’.70 These regulations also state that a reduction of the
separation between two aircraft below the statutory minima for reasons of military
necessity should be subject to the acceptation of the ATS authority in charge of the
intercepted aircraft.71 Such acceptation should only be granted ‘when a specific
request in some recorded form has been obtained from the authority having
jurisdiction over the aircraft concerned’ and ‘[s]ome recorded form of instruction
fully covering this reduction of separation minima must be issued by the air traffic
control unit concerned’.72 These specific regulations, which express an ideal
aspiration, are vested with a PANS status. PANS ranks lower than an ICAO
standard or recommended practices and ‘are applied in actual operations only
after, and in so far as, States have enforced them’.73

6.2[c] Visual Identification

ICAO regulations insist that the purpose of an interception should be limited to
the identification of a specific aircraft. Some interceptions, such as those that are
intended to confirm the identity or type of an aircraft, do not result in any action

68
Bourbonniere & Haeck, supra n. 20, at 930.
69
Doc 4444, § 16.1.1.
70
Ibid.
71
Ibid., § 16.1.2.
72
Ibid.
73
Ibid., foreword, §4.
 THE INTERCEPTION OF CIVIL AIRCRAFT 705

being required by the intercepted aircraft. Once the identity of the aircraft has
been established by means of a visual verification, the intercepting aircraft will
disappear and leave the area with no further action while the intercepted aircraft
will proceed along its intended flight path.

6.2[d] Instructions to the Intercepted Aircraft

In some circumstances a visual identification might not be sufficient to satisfy a
State’s sovereign interest and further action by the intercepting aircraft may then be
required. These situations will include in particular flights the purpose of which is
incompatible with the aims of the Chicago Convention in accordance with Article
3bis(b) CC, flights that involve a breach of the laws of the State overflown,
unauthorized flights and flights that are about to enter or have entered a restricted
or prohibited airspace.
In most cases, the purpose of the instructions will be to lead the intercepted
aircraft out of a restricted or prohibited airspace, or even out of the sovereign
airspace of the State conducting the interception. In some cases, the intervention
will involve a requirement for the intercepted aircraft to land in the territory
overflown, in accordance with Article 3bis(b)CC. Annex 2 insists that such
imposed landing constitutes an ‘exceptional case’, implying that such requirements
must rely on a compelling and robust imperative.74 It then emphasizes that the
chosen aerodrome must be ‘suitable for the safe landing of the aircraft type
concerned’ and that sufficient time must be given to the pilot of the intercepted
aircraft to prepare for the landing at an airport with which it may not be familiar.75

6.2[d][i] Interception Manoeuvres

In order to avoid exposing the intercepted aircraft to a safety hazard, ‘[a] standard
method should be established for the manoeuvring of aircraft intercepting a civil
aircraft’.76 That method should:
take due account of the performance limitations of civil aircraft, the need to avoid flying in
such proximity to the intercepted aircraft that a collision hazard may be created and the
need to avoid crossing the aircraft’s flight path or to perform any other manoeuvre in such
a manner that the wake turbulence may be hazardous, particularly if the intercepted aircraft
is a light aircraft.77

74
Annex 2, § 4.3.
75
Ibid.
76
Annex 2, Attachment A, § 3.1.
77
Ibid.
706 AIR AND SPACE LAW

Guidance for States to establish a standard interception procedure that meets the
requirements is offered in Annex 2, Attachment A.

6.2[d][ii] The Issuance of Instructions

Instructions to an intercepted aircraft can be delivered by various means, including
radio-communication and visual signals. In order to avoid confusion arising from the
possibility that different actors involved might be using different communication
means, ICAO regulations establish a hierarchy between these means and prescribe
that ‘[n]avigational guidance and related information should be given to an inter-
cepted aircraft by radiotelephony, whenever radio contact can be established’.78
Radio-Communications
Instructions to the intercepted aircraft emanate from the competent military
authorities. Wherever possible, they should however be delivered through the
civil ATS unit, on behalf of the military authorities. This is the procedure that is
usually followed when the intercepted aircraft is known to the civil ATS system
and in radio-contact with the latter. It is considered as the safest procedure because
it does not involve changes of frequencies during which communication might by
lost and all exchanges occur in an environment and following protocols that are
familiar to civil pilots. When the routing of instructions through the competent
ATS unit is impracticable, the military authorities, and more specifically the
intercepting aircraft will transmit instructions directly to the intercepted aircraft.
Exchanges between the ATS unit and the intercepted aircraft usually occur
over the radio-frequency nominally assigned to that ATS unit. The international
civil air navigation framework however also includes a dedicated radio frequency
reserved for emergency purposes. The 121.5MhZ frequency is available to all
ground and airborne stations, to broadcast messages or to seek or offer assistance
in the event an aircraft should need external support. A radio device tuned to the
frequency is permanently switched on in all ATS units. Annex 2 further requires
that ‘intercept control units and intercepting aircraft be provided with radio-
telephony equipment compatible with the technical specifications of Annex 10,
Volume I, so as to enable them to communicate with intercepted aircraft on the
emergency frequency 121.5 MHz’.79 In accordance with Annex 6,80 the operators

78
Ibid., § 4.1.
79
Ibid., § 2.3. Also ‘State aircraft should be equipped with a means of communication and with
procedures to interact safely with civil aircraft and civil ATS authorities. State aircraft should comply
whenever possible with the standards of Annex 10 to the Chicago Convention’ (Bourbonniere &
Haeck, supra n. 20, at 975).
80
Annex 6 – Operation of Aircraft, Part I – International Commercial Air Transport – Aeroplanes, 11th
edition, incorporating Amendments 1–43, July 2018.
 THE INTERCEPTION OF CIVIL AIRCRAFT 707

of civil aircraft also have an obligation to ensure the capability of aircraft to

communicate on the universal emergency frequency and ‘the availability of inter-
ception procedures and visual signals on board aircraft’.81 Whereas the emergency
frequency is available for any type of critical situations, it is specifically to be used
in the event of an interception for communication between the intercepted civil
aircraft and the intercepting military aircraft.
Visual Signals
When, for any reason, it is not possible to establish a radio-contact with the
intercepted aircraft, it is necessary to recourse to visual signals as a substitute for
direct verbal exchanges. These visual instructions can take the form of light signals
or the performance of specific manoeuvres such as the rocking of the intercepting
aircraft.
These signals are described in Annex 2 and standardized to avoid any confu-
sion or ambiguity. The States’ obligation of ‘due regard’ requires a strict adherence
to these standardized visual signals.82 Further explanation and details can be found
in the ICAO Manual concerning Interception of Civil Aircraft.

6.2[e] Status of Instructions

Article 3bis(c) CC states that ‘[e]very civil aircraft shall comply with an order given
in conformity with paragraph (b) of this Article’. It further adds that ‘ … each
contracting State shall establish all necessary provisions in its national laws or
regulations to make such compliance mandatory’.
The instructions issued by an intercepting aircraft must consequently be
followed by the pilot-in-command of the intercepted aircraft. Annex 2 confirms
that interception instructions must be complied with immediately and provides
details regarding the actions to be taken by the pilot of the intercepted aircraft.83
Further, signals or radio instructions given by the intercepting aircraft override any
conflicting instruction received from any other source.84
The mandatory status of the instructions is not limited to the laws of the State
overflown or to aircraft registered in that State. Article 3bis(c) requires that ‘each

81
See Annex 2, Attachment A § 2.3.
82
‘ … the Council of the International Civil Aviation Organization, when adopting the visual signals in
Appendix 1 to this Annex, urged Contracting States to ensure that they be strictly adhered to by their
State aircraft’ (Annex 2, § 3.8.1, Note).
83
‘An aircraft which is intercepted by another aircraft shall immediately … follow the instructions given
by the intercepting aircraft, interpreting and responding to visual signals … ’ (Annex 2, Appendix 2, §
2.1).
84
‘If any instructions received by radio from any sources conflict with those given by the intercepting
aircraft by visual signals, the intercepted aircraft shall request immediate clarification while continuing
to comply with the visual instructions given by the intercepting aircraft’ (Annex 2, Appendix 2, § 2.2).
708 AIR AND SPACE LAW

contracting State shall establish all necessary provisions in its national laws or
regulations to make such compliance mandatory for any civil aircraft registered
in that State or operated by an operator who has his principal place of business or
permanent residence in that State’ which renders the unlawfulness of violations
virtually universal.
Finally, Article 3bis(c) prescribes that ‘[e]ach contracting State shall make any
violation of such applicable laws or regulations punishable by severe penalties and
shall submit the case to its competent authorities in accordance with its laws or
regulations’ which is meant to deter violations and to ensure that such violations
are effectively prosecuted even in the event an intercepted aircraft should flee from
the airspace of the State conducting the intervention.
One could be tempted to argue that the strongly established principle of the
final authority of the pilot-in-command should prevail. Annex 6 specifies that:
[t]he pilot-in-command shall be responsible for the safety of all crew members, passengers
and cargo on board when the doors are closed. The pilot-in-command shall also be
responsible for the operation and safety of the aeroplane from the moment the aeroplane
is ready to move for the purpose of taking off until the moment it finally comes to rest at
the end of the flight and the engine(s) used as primary propulsion units are shut down.85
Annex 2, for its part, prescribes that ‘[t]he pilot-in-command of an aircraft shall
have final authority as to the disposition of the aircraft while in command’.86 It also
states that ‘[t]he pilot-in-command of an aircraft shall, whether manipulating the
controls or not, be responsible for the operation of the aircraft in accordance with
the rules of the air, except that the pilot-in-command may depart from these rules
in circumstances that render such departure absolutely necessary in the interests of
safety’.87
The argument could be raised that since the prescriptions laid-down in Annex
2 in respect of the interception of civil aircraft from part of the ‘Rules of the Air’ in
the sense of Article 12 CC and of Annex 2, the pilot-in-command of a civil aircraft
should be entitled to deviate from the instructions issued by an intercepting
aircraft, if he believes he faces ‘circumstances that render such departure absolutely
necessary in the interests of safety’. However, the fact that the mandatory status of
the instructions from an intercepting aircraft is vested in the Chicago Convention
itself overrides the discretion granted to pilots to deviate from the rules of the air,
even if the pilot-in-command deems the instructions constitute a safety risk for the
aircraft. The mandatory status of the landing instructions and the right of
Contracting States to order such a landing was established as a counterpart for

85
Annex 6, § 4.5.1.
86
Annex 2, § 2.4 (Authority of pilot-in-command of an aircraft).
87
Ibid., § 2.3.1 (Responsibility of pilot-in-command).
 THE INTERCEPTION OF CIVIL AIRCRAFT 709

the States renunciation to the recourse to force against civil aircraft enshrined in
Article 3bis(a) CC.88

6.2[f] Enforcement of Instructions

Although the instructions issued by an intercepting aircraft are absolutely manda-
tory, States are equipped with virtually no means of ensuring their enforcement in
practice. In effect, because of the particular circumstances surrounding an inter-
ception, the only practical means available to States to force compliance with the
instructions given would be the recourse the use of weapons.
Article 3bis(a) CC however emphasizes that ‘[t]he contracting States recognize
that every State must refrain from resorting to the use of weapons against civil
aircraft in flight’ and that, specifically in the event of an interception ‘the lives of
persons on board and the safety of aircraft must not be endangered’. Therefore,
intercepting aircraft are not entitled to make use of force should the pilot-in-
command decide to ignore the summations given. ICAO even advises against the
use of tracer bullets to attract attention or to incite compliance by the intercepted
aircraft.89
In practice, the risk thus exists that an intercepted aircraft ordered to land on
the territory of the State overflown may decide to continue its flight regardless of
the orders given and leave that State’s airspace without any effective possibility for
the latter to enforce its decision. It is to mitigate that risk and to encourage
compliance that Article 3bis renders the violation of such instructions an offense
not only in the legal order of the State overflown but also under the legislation of
an aircraft’s State of registration. It was also for that reason that the violation of
interception instructions is ‘punishable with severe penalties’.
The civil aircraft’s immunity from recourse to force is however neither
absolute not unlimited. Article 3bis(a) prescribes that the principle of refraining
from resorting to the use of weapons ‘shall not be interpreted as modifying in any
way the rights and obligations of States set forth under Article 51 of the Charter of
the United Nations’90 that states that ‘[n]othing in the present Charter shall impair
the inherent right of individual or collective self-defence if an armed attack occurs
against a Member of the United Nations … ’. States thus retain their right of

88
Formal interceptions under Annexes 2 and 11 differ in that respect from ‘intercept and escort services’
under Annex 12 in that the assistance offered to civil aircraft in the context of Search and Rescue
operations is not mandatory and the pilot-in-command retains full authority to refuse the assistance
given if he believes that it may endanger the safety of the aircraft or its occupants.
89
‘The use of tracer bullets to attract attention is hazardous, and it is expected that measures will be taken
to avoid their use so that the lives of persons on board and the safety of aircraft will not be endangered’
(Annex 2, Attachment A, § 8).
90
United Nations, Charter of the United Nations, 24 Oct. 1945, 1 UNTS XVI.
710 AIR AND SPACE LAW

self-defence under the Charter of the United Nations, that entitles them to make
use of weapons against civil aircraft in the event such an aircraft constitutes an
imminent and serious threat to its sovereignty. The use of a civil aircraft as a
weapon of mass destruction could constitute such a situation. However, the
threshold above which the recourse to force would be justified is very high.

7 CONCLUSION
The precise facts surrounding the interception of Ryanair flight FR4978 on 23
May 2021 still need to be established and it remains premature at this point in time
to draw any firm conclusions regarding the legal implications of the incident. It is
however apparent that the case will raise a number of legal issues.
The ongoing investigation will first need to determine whether the reasons
offered by the Belarusian authorities to justify the interception of the civil aircraft
were factually genuine, and if proven so, whether the circumstances fall within the
remits of situations that render an interception acceptable.
Under the general principles of the law of international treaties, States that are
parties to an international Convention are entitled to assume that the other
Contracting States will discharge themselves of their obligations in good faith. In
the specific context of interceptions, the requirement of good faith can be
expressed in several ways. Although the Chicago Convention and its Annexes
do not define precisely the circumstances that justify the interception of a civil
aircraft and leave a significant discretion to the Contracting States, an interception
must always rely on a set of facts that point to an imminent and serious threat to
the sovereign interests of the State overflown. The threat must be genuine. The
fabrication of facts to justify an interception of a civil aircraft constitutes a breach of
Article 4 CC, that states that ‘[e]ach contracting State agrees not to use civil
aviation for any purpose inconsistent with the aims of this Convention’.91
Then, assuming that the factual elements raised to justify an interception are
genuine, Parties to the Chicago Convention may legitimately expect other Parties
not to recourse to the interception of a civil aircraft for a purpose other than those
for which that procedure was designed. Considering the fact that the interception
was decided in response to an alleged bomb threat that was, according to the
Belarusian authorities, putting the safety of the aircraft and of its occupants at risk,
the question will arise of whether the intervention actually fell within the remits of
the interception of a civil aircraft in the sense of Article 3bis CC and Annexes 2
and 11 to the Chicago Convention or whether the specific circumstances should
be treated as an ‘intercept and escort’ service within the SAR framework, that

91
Article 4CC, misuse of civil aviation.
 THE INTERCEPTION OF CIVIL AIRCRAFT 711

should be governed by fundamentally different rules. In particular, under an

intercept and escort service, the pilot-in-command retains full authority regarding
the course of action to be taken to safeguard the safety of the aircraft and of its
occupants. Under such circumstances, the pilot-in-command is entitled to decline
the assistance offered and to favour an alternative procedure.
The interception of a civil aircraft is a delicate procedure that, in ICAO’s
words is ‘in all cases, potentially hazardous’.92 In the event the interception should
pass the legal test of an acceptable interception, the question will arise of whether
the intervention was conducted in a manner that was consistent with the obliga-
tion of due regard imposed upon Belarus under Article 3(d)CC, and more
specifically whether the intervention was effectively undertaken as a last resort
measure, after all other reasonable measures to address the alleged threat were
exhausted. A particular attention should be given to determining whether, con-
sidering the position of the aircraft at the moment it was intercepted, imposing a
landing at Minsk airport was the most reasonable instruction to protect the aircraft
against the alleged bomb threat.
Finally, the precise information that was communicated to the pilots of the
civil aircraft is not publicly known at the moment, but their decision to comply
with the instructions of the intercepting aircraft reflects the substance of the
applicable regulations. The later clearly state that such instructions are mandatory
and must be followed immediately. It is not the responsibility of the crews to
validate the legitimacy of the arguments given to support an interception and the
rules offer no discretion to challenge such arguments. Pilots are entitled to and
must assume that States abide in good faith by their obligations under the Chicago
Convention.

92
Annex 2, § 3.8.1.
 ‘Extraterritoriality’ in European Law: Airfreight
and Beyond

Achim PUETZ*

Air carriers operate, almost by definition, in an international environment. Under air services
agreements (ASAs) concluded by European Union (EU) Member States with third countries,
with or without the involvement of European institutions, many non-EU airlines offer flights to
or from the Union. However, the correlative increase in competition has not only positive effects,
e.g., a wider offer and more advantageous flight rates. The fact that the obligations imposed
on – and, in general, the conditions applicable to – non-European carriers in their respective
countries of origin are different from those that weigh on European airlines leads to situations in
which EU and non-EU carriers do not compete on equivalent terms. Furthermore, antic-
ompetitive behaviour on the part of the airlines cannot be ruled out. The question then is
whether and to which extent European legislation is applicable to non-EU carriers, both in terms
of competition law and sector-specific regulations. The present article aims at reviewing the current
state of ‘extraterritorial’ application of European law, mainly from an antitrust perspective, and it
does so on the basis of a thorough analysis of a case currently pending before the General Court
(GC), where the jurisdiction of the Commission has been challenged precisely for sanctioning
non-EU carriers for acts performed outside the Common Market.
Keywords: Carriage by Air, Competition law, Jurisdiction, Extraterritorial Application of European
Law, Air Services Agreements

1 STATEMENT OF THE PROBLEM: CROSS-BORDER ISSUES

IN THE ‘AIRFREIGHT’ CARTEL CASE
On 9 November 2010, the European Union (EU) Commission (the Commission)
issued its decision in the Airfreight-case,1 the object of which was an alleged single

*
Associate Professor of Commercial Law at Jaume I-University, Castellon (Spain), and Academic
Secretary of the University’s Institute for Transport Law (IDT). The present study has been carried
out in the framework of the research project ‘Transport Faced with the Challenges of Technological
Development and Globalization: New Solutions in the Field of Liability and Competition’ (Ref.
PID2019-107204GB-C33/ AEI/10.13039/501100011033), funded by the Spanish State Research
Agency (main researchers: M.V. Petit-Lavall and A. Puetz). It is the result of a Visiting Researcher
Fellowship at the Department of Legal Sciences of the Alma Mater Studiorum – Università di
Bologna. The author wishes to thank Prof. Petit-Lavall and the editors for their helpful comments
and suggestions. Email: [email protected].
1
COMP/39258. However, the – still provisional – non-confidential version of the decision (C(2010)
7694 final) was not published until 2015. On the substantive issues of this and the subsequent decisions
see Solange Leandro, The Tale of the Airfreight Cartel Case, 45 Air & Space L. 201 (2020).

Puetz, Achim. ‘‘Extraterritoriality’ in European Law: Airfreight and Beyond’. Air & Space Law 46, no. 6
(2021): 763–784.
© 2021 Kluwer Law International BV, The Netherlands
764 AIR AND SPACE LAW

and continuous infringement of the cartel prohibition in Articles 101 of the Treaty
on the Functioning of the European Union (TFEU), fifty-three of the Agreement
on the European Economic Area (EEA Agreement),2 and eight of the Agreement
between the EU and the Swiss Confederation on Air Transport (the ‘Swiss
Agreement’)3 committed by different operators in the airfreight sector between
1999 and 2006. The cartel was discovered pursuant to a submission under the
Commission’s 2002 ‘Leniency Notice’4 and the decision addressed three different
behaviours which, according to the Commission, amounted to a forbidden cartel
agreement: the fixing of fuel and security surcharges, and the denial of certain
remunerations to freight forwarders. No fine was imposed with respect to routes
between the EEA and third countries for infringements before 1 May 2004,
because the Commission lacked powers to pursue them. For later infringements
on these same routes, a reduction of the fine of a 50% was granted, considering that
part of the harm was likely to fall outside the EEA.
The decision was appealed by most of the addressed air carriers and eventually
overturned by the General Court (GC).5 Although an inadequate extraterritorial
application of competition law had seemingly been alleged by some of the airlines,
the GC annulled the decision on procedural grounds. Consequently, the
Commission issued a second decision on 17 March 2017,6 which, unsurprisingly,
has once again been appealed before the GC,7 but the relevant judgments have not
been delivered yet. Apart from questions related to proof of participation in the
cartel, which will not be addressed herein, an issue that has been raised by all
appellants is that of the Commission’s (temporal and/or subject-matter related)
jurisdiction to apply the European rules on competition.

2
OJ L 1, 3 Jan. 1994, at 3 et seq., as amended. The EEA includes the EU Member States and a major
part of the countries belonging to the European Free Trade Association (Iceland, Liechtenstein, and
Norway), excluding Switzerland.
3
OJ L 114, 30 Apr. 2002, at 73 et seq.
4
‘Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases’, OJ C 45, 19
Feb. 2002, at 3 et seq. The notice has been replaced by a new one in 2006 (OJ C 298, 8 Dec. 2006, at
17 et seq.), which was not applicable to the case since the submission was received on 7 Dec. 2005, as
amended in 2015 (OJ C 256, 5 Aug. 2015, at 1 et seq.).
5
GC 16 Dec. 2015, Cases T-9/11 (Air Canada); T-28/11 (KLM); T-36/11 (Japan Airlines); T-38/11
(Cathay Pacific); T-39/11 (Cargolux); T-40/11 (Latam et al.); T-43/11 (Singapore Airlines); T-46/11
(Deutsche Lufthansa et al.); T-48/11 (British Airways); T-56/11 (SAS Cargo); T-62/11 (Air France-
KLM); T-63/11 (Air France); and T-67/11 (Martinair Holland). The judgments are unpublished, but
the court’s decision is outlined in its press release No. 147/15, of 16 Dec. 2015. Qantas Airways did
not appeal the decision.
6
For the time being, only a summary of the decision is available (OJ C 188, 14 June 2017, at 14 et seq.).
7
Cases T-323/17 (Martinair); T-324/17 (SAS Cargo); T-326/17 (Air Canada); T-334/17 (Cargolux);
T-337/17 (Air France-KLM); T-338/17 (Air France); T-340/17 (Japan Airlines); T-341/17 (British
Airways); T-342/17 (Deutsche Lufthansa); T-343/17 (Cathay Pacific); T-344/17 (Latam); T-350/17
(Singapore Airlines).
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 765

On the one hand, some carriers hold that the Commission lacked powers to
investigate the infringements and rely on evidence predating the moment on
which such powers were actually conferred on it, depending on the origin and
destination of the relevant routes.8 The Commission’s jurisdiction has been con-
tended e.g., in relation to EU-third country9 and intra-EEA routes before 1 May
2004,10 or routes between non-EU members of the EEA and third countries
before 19 May 2005.11 Albeit not the main topic of the present article, the issue
is briefly addressed in section 2. On the other hand, almost all appellants allege a
lack of power to investigate certain routes, irrespective of the dates. This is the
case, in particular, of agreements or concerted practices related to inbound cargo
shipments, i.e., shipments of which the origin is located in a third country and
their destination lies within the EEA,12 but also in relation to routes between
Switzerland and EU Member States13 or the three non-EU EEA States.14
Accordingly, the question of a possible ‘extraterritorial’ application of EU law
will be analysed in Sections 3 and 4.

2 EU COMPETITION LAW AS APPLIED TO AIR TRANSPORT

Sea and air transport has been traditionally considered a special area to which the
common provisions of the then Treaty establishing the European Economic
Community (the ‘EEC Treaty’),15 did not apply automatically. This matter was
first brought before the European Court of Justice (ECJ or ‘the Court’) in relation
to the provisions on free movement of workers in Articles 48 to 51 of the EEC
Treaty,16 and it held that the exception established in Article 84(2) only referred to
the special rules on transport, but not to the common provisions in Titles I and III
of the Treaty. Since the Court did not rule on the submission of transport to the
remaining provisions, it had to declare, in a subsequent judgment,17 the

8
For reasons that will be analysed later in the text, a distinction must be made between intra-EU routes;
EU-EEA routes; EU-third country routes; EEA (non-EU Member States)-third country routes; and
EU-Switzerland routes.
9
See the Cargolux claim (Case T-334/17).
10
See the LATAM claim (Case T-344/17).
11
See the Cargolux and the Japan Airlines (Case T-340/17) claims.
12
The main arguments are best resumed in the notice of the Air France claim (Case T-338/17):
according to the appellants, ‘the rules delimiting the territorial jurisdiction of the Commission’ were
infringed ‘as a result of the inclusion of the EEA inbound traffic in the single and continuous
infringement (...), based on the fact that the practices relating to the EEA inbound traffic were not
implemented within the EEA’ and that ‘the Commission has not (...) established the existence of
qualified effects within the EEA connected with the practices relating to EEA inbound traffic’.
13
See the LATAM claim (Case T-344/17).
14
See the SAS Cargo claim (Case T-324/17).
15
Treaty establishing the European Economic Community, Rome, 25 Mar. 1957.
16
ECJ 4 Apr. 1974, Case 167/73, Commission v. French Republic (French Sailors), paras 17–33.
17
ECJ 30 Apr. 1986, Joined Cases 209–213/84, Ministère Public v. Lucas Asjes et al. (Nouvelles Frontières).
766 AIR AND SPACE LAW

applicability of the rules of Part Three – in particular, those on

competition – thereto.18 However, the Commission still lacked powers to directly
investigate cases of alleged antitrust infringement.19 This limitation was overcome
by EU Regulation 3975/87, but its scope of application only covered international
transports between Community airports (Article 1(2)).20 Thus, in relation to air
transport to and from non-Member States, the Commission could not act uni-
laterally under the cartel prohibition,21 but only on the basis of the transitional
provisions laid down in the Treaty itself.
EU Regulation 3975/87 was then superseded, in its major part, by EU
Regulation 1/2003, although the latter was not initially meant to apply to trans-
ports between Community airports and third countries either (Article 32(c)), due
to the conflict the enforcement of the antitrust provisions in the Treaty was liable
to create with Air Services Agreements (ASAs) entered into by the Member States
with third countries.22 Certainly, the limiting provision was almost immediately
deleted by EU Regulation 411/2004, even before EU Regulation 1/2003 became
applicable on 1 May 2004. But before that date the Commission lacked the power
to enforce the cartel prohibition, and it did not apply the provision to earlier
infringements concerning air transport between the EU and third countries, other
than the contracting States of the EEA Agreement.23
For similar reasons, the Commission did not consider infringements of Article
53 of the EEA Agreement that affected routes between EEA countries and third
States before 19 May 2005.24 Indeed, a reference to EU Regulation 1/2003 was
first introduced into the EEA legal regime by virtue of a Decision of the EEA Joint
Committee of 24 September 2004.25 Nonetheless, the deletion of Article 32(c) of
the Regulation, which excluded traffic between EU Member States and third
countries and which, by the time the Decision was adopted, had already been
applicable, was not reflected in the EEA Agreement until a further Decision was

18
Nonetheless, even today there are special rules for the application of Art. 101(3) TFEU: see Regulation
487/2009.
19
This is so because Regulation 141/1962 had declared the non-application to the transport sector of
Regulation 17/1962, on the implementation of Arts 85 and 86 of the Treaty (today, Arts 101 and 102
TFEU). Both Regulations have eventually been repealed by Council Regulation 1/2003.
20
See ECJ 11 Apr. 1989, Case 66/86, Ahmed Saeed, para. 21.
21
G. Porter Elliott, Learning to Fly: The European Commission Enters Unfamiliar Skies in Its Review of the
British Airways-American Airlines Alliance, 64 J. Air L. & Com. 157, 172 et seq., esp. 177 (1998).
22
John Milligan, European Union Competition Law in the Airline Industry (Wolters Kluwer 2017), para.
2.7.1.
23
Paragraphs 815–817 of the 2010 decision and para. 16 of the 2017 summary decision. See also María
Victoria Petit Lavall, El cártel de carga aérea en la Unión Europea, 19 Revista de Derecho del Transporte
367, 369 (2017).
24
See paras 818–821 of the 2010 decision and para. 17 of the 2017 summary decision.
25
Decision of the EEA Joint Committee No 130/2004, OJ L 64, 10 Mar. 2005, at 57 et seq.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 767

adopted by the Joint Committee on 11 March 2005.26 Both amendments finally

entered into force on the same day, on 19 May 2005.
Neither did the Commission investigate possible infringements on routes
between the EU and Switzerland before the entry into force of the Swiss
Agreement on 1 June 2002, nor purport to find any infringement whatsoever on
routes between Switzerland and third countries.27 This is so because, pursuant to
Article 11(1) of the Agreement, jurisdiction of the Commission is exercised in
accordance with the Community legislation as set out in the Annex, which initially
referred to EU Regulation 3975/87, while the competence with regard to infrin-
gements on routes between Switzerland and third countries is vested on the Swiss
authorities (Article 11(2)). It was not until some years later that Regulation 1/2003
became applicable in the framework of the Air Transport Agreement, and it did so
by virtue of a Decision of the joint Community/Switzerland Air Transport
Committee of 5 December 2007.28 However, the insertion of the Regulation
was not meant to ‘affect the division of tasks according to [the] Agreement’.

3 TERRITORIALITY AND EXTRATERRITORIALITY

IN THE APPLICATION OF EU COMPETITION LAW
3.1 TERRITORIALITY AND EXTRATERRITORIALITY: A QUESTION OF JURISDICTION

Extraterritorial application of competition law is fundamentally a question of

jurisdiction, specifically, the possibility to exercise jurisdiction over persons who
are not nationals of the relevant State for acts which have not been performed on
its territory. It is, thus, a matter of international public law, which must be
respected by the EU when exercising its powers,29 and the problem arises because
those criteria which doubtlessly provide jurisdiction are not fulfilled. There is little
doubt indeed that both the principle of territoriality and that of personality or
nationality may provide jurisdiction: while the latter gives a State jurisdiction over
its nationals although they find themselves abroad, the principle of territoriality
confers unlimited jurisdiction over the State’s territory, including those foreign
nationals who merely reside or even temporarily find themselves therein.30
Extraterritorial application, on the contrary, refers per definitionem to acts which
26
Decision of the EEA Joint Committee No 40/2005, OJ L 198, 28 July 2005, at 38 et seq.
27
Paragraphs 822–825 of the 2010 decision and para. 18 of the 2017 summary decision. See also Petit
Lavall, supra n. 23, at 369–370.
28
Decision No. 1/2007 of the joint Community/Switzerland Air Transport Committee, OJ L 34, 8 Feb.
2008, at 19 et seq.
29
ECJ 24 Nov. 1992, Case C-286/90, Poulsen and Diva Navigation, para. 9; and 21 Dec. 2011, Case
C-366/10, Air Transport Association of America, para. 123.
30
See Peter Behrens, The Extraterritorial Reach of EU Competition Law Revisited: The ‘Effects Doctrine’ Before
the ECJ, Discussion Paper No. 3/16, 4–5 (Europa-Kolleg Hamburg 2016).
768 AIR AND SPACE LAW

have been performed abroad by persons who are not nationals of the State
concerned.
However, depending on the definition of ‘territoriality’ – which in itself
is being questioned as a jurisdictional nexus under international law31 – , many
of the issues which have been included in the concept of ‘extraterritorial
application’ of European law do not necessarily belong to this category.
Territoriality has indeed given rise to two distinct principles of jurisdiction,
that of subjective or active territoriality, which refers to acts originated on the
State’s territory, even though they were completed abroad, and, especially,
that of objective or passive territoriality, which permits a State to address acts
which originated abroad but which were completed, at least in part, within its
own territory.32 The latter has been a decisive tool to extend national
jurisdiction, since it is the basis for the so-called ‘effects’-doctrine,33 which
allows a State to exercise jurisdiction over conduct that did not take place
within its territory but produced effects therein.
The problem of ‘territoriality’ arises in the Commission’s Airfreight deci-
sion because it includes inbound flights – i.e., flights from outside the EU
(and the EEA or Switzerland) to an airport within the Common
Market – performed by airlines who are not Community carriers. In these
cases, it is reasonable to assume that at least some of the cartelized transac-
tions, that is, contracts on the carriage of goods by air including the pre-
viously fixed fuel and security surcharges, have been made by parties who are
not nationals of an EU or EEA Member State outside the territory of the EU,
the EEA, or Switzerland.
In order to correctly assess the extent to which the EU has jurisdiction to
publicly enforce its competition law, a distinction has arguably to be drawn
between jurisdiction to legislate (prescriptive jurisdiction) and to adjudicate (curial
jurisdiction), on the one hand, and jurisdiction to enforce (enforcement
jurisdiction),34 on the other. This issue was addressed by the Permanent Court
of International Justice in a famous judgment delivered as early as 1927,35 where it

31
The current discussion on this point cannot be reproduced here. See e.g., Cedric Ryngaert, Territory in
the Law of Jurisdiction: Imagining Alternatives, 47 Neth. Y.B. Int’l L. 49 (2016); Péter D. Szigeti, In the
Middle of Nowhere. The Futile Quest to Distinguish Territoriality from Extraterritoriality, The
Extraterritoriality of Law 30 (Margolies, Özsu, Pal & Tzouvala eds, Routledge 2019).
32
Opinion delivered by Advocate General (AG) Darmon in the Woodpulp I-case, 25 May 1988, Joined
Cases 89, 104, 114, 116, 117 and 125 to 129/85, para. 20.
33
Pablo Mendes de Leon, Introduction to Air Law (10th ed., Wolters Kluwer 2017), Ch. 3, subs. 3.3.3.
The ‘effects’-test, which plays an essential role in modern competition law, will be analysed later in the
text. See infra, 3.3.
34
On these concepts see e.g., Richard Whish & David Bailey, Competition Law 496–497 (9th ed., OUP
2018); Behrens, supra n. 30, at 4.
35
12th (Ordinary) Session, 7 Sept. 1927, S.S. Lotus (France v. Turkey).
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 769

held that a State may consider a criminal offence36 to have taken place on its
territory ‘if one of the constituent elements, and more specifically its effects, has
taken place there’. The finding is based, albeit not expressly, on the above
distinction between prescriptive and curial jurisdiction, on the one hand, and
enforcement jurisdiction, on the other. While the latter is possible only where a
rule derived from international custom or a convention allows enforcement
abroad, States enjoy a wide discretion as regards law-making and curial
jurisdiction.37 However, if these findings were to apply without any restricting
principles, prescriptive and adjudicative jurisdiction would be virtually unlimited,
and extraterritorial application of a State’s or the EU’s competition law would
almost always be possible.38 Although enforcement may then still fail for the lack
of powers to do so, the peril of concurrent exercise of jurisdiction by different
States, albeit not necessarily undesirable in all cases,39 could not be ruled out.
This is why a more limited approach to jurisdiction is sometimes based on two
other judgments by the International Court of Justice which, however, have
nothing to do with either criminal or antitrust law – or jurisdiction, for that
matter – but rather with nationality and diplomatic protection: the Nottebohm40
and the Barcelona Traction41 cases. On both occasions, the International Court of
Justice asked for a ‘genuine connection’, an ‘effective’ or ‘genuine link’ between
the State and the individual in question. This requirement has over time become a
general criterion when assessing whether national law applies to – and courts of a
State have jurisdiction over – persons and conduct outside the territory of the

36
Since the application of competition law by the Commission is a part of punitive administrative law,
the findings should also operate in this context. See Directorate-General for External Policies, Policy
Department, The Extraterritorial Effects of Legislation and Policies in the EU and US 8 (2012).
37
See paras 45–46 of the judgment.
38
This is why some scholars have considered the findings not to be valid anymore. See e.g., Matthias
Herdegen, Principles of International Economic Law 86 (OUP 2013). See also Ryngaert, supra n. 31, at 55.
39
Paul Schiff Berman, Global Legal Pluralism, 80 South. Cal. L. Rev. 1155, 1210 (2007). On the positive
(and negative) effects of extraterritorial and even parallel enforcement of competition law, mainly on
deterrence, see Ariel Ezrachi & Jiri Kindl, Cartels as Criminal? The Long Road from Unilateral Enforcement
to International Consensus, Criminalising Cartels 419, 424–425 (Beaton-Wells & Ezrachi eds, Hart
2011). Although the aggregate fines imposed on a global level may still fall below the optimal
deterrence level (see Maurice E. Stucke, Morality and Antitrust, 3 Colum. Bus. L. Rev. 443, 480–481
(2006)), the concurrence of administrative, or even criminal, and civil procedures might lead to
underdeterrence if participants in a cartel refrain from participating in a leniency program in one
jurisdiction in order to avoid civil liability in the same or another jurisdiction, especially where these
allow for punitive damages (e.g., treble damages in the US). See Wolfgang Wurmnest, Foreign Private
Plaintiffs, Global Conspiracies and the Extraterritorial Application of U.S. Antitrust Law, 28(2) Hastings Int’l &
Comp. L. Rev. 205, 214–216 (2005); Max Huffman, A Standing Framework for Private Extraterritorial
Antitrust Enforcement, 60(1) SMU L. Rev. 103, 115–116 (2007) (‘inverse deterrence’); Thomas
Obersteiner, International Antitrust Litigation: How to Manage Multijurisdictional Leniency Applications, 4(1)
J. EU Comp. L. & Pract. 16, 18 (2013).
40
6 Apr. 1955, Liechtenstein v. Guatemala.
41
5 Feb. 1970, Belgium v. Spain.
770 AIR AND SPACE LAW

State.42 Accordingly, the implementation of the ‘genuine link’ test by the ECJ in
antitrust cases that came before it will be addressed in the next subsection.
But antitrust law is not the only field where ‘territoriality’ and ‘extraterritori-
ality’ play a crucial role when delineating the jurisdiction of the European institu-
tions. EU legislation imposing obligations on carriers does indeed apply to third
country airlines, too, if there is a ‘genuine link’ with the territory of the EU. This
is the case, for example, for the passenger rights Regulation,43 which applies ‘to
passengers departing from an airport located in the territory of a Member State’,
whatever the flag of the air carrier who operates the flight (Article 3(1)(a)).44 But
this is also true for the scheme for emission allowance trading.45 According to the
ECJ,46 non-EU carriers are bound to participate therein as regards the whole flight,
and not only the part that was performed over the territory of the EU. The
decision is based, precisely, on considerations of territoriality, and the ‘genuine
link’ between the EU, or the implementing Member State, and the flight per-
formed by non-EU carriers is seen in the fact that the aircraft departs from or
arrives at a European airport.

3.2 THE ‘SINGLE ECONOMIC ENTITY’ AND THE ‘IMPLEMENTATION’-DOCTRINE

The so-called ‘single economic entity’ and ‘implementation’-doctrines have

been developed in two landmark cases involving ‘extraterritorial’ application
of competition law: the Dyestuffs and Woodpulp I rulings.47 The former is
considered to be the first important occasion on which the tribunal was con-
fronted with the extraterritorial application of antitrust law. Among other issues,
the claimant, a parent company seated in the United Kingdom (UK), which was
not by then an EEC Member State, questioned the jurisdiction of the
Commission to investigate and sanction its alleged participation in the cartel.
Advocate General (AG) Mayras48 favoured the application of a test based on the
(direct, reasonably foreseeable, and substantial) effects of the parent’s behaviour

42
Behrens, supra n. 30, at 6–7. See also, albeit for extraterritorial jurisdiction in criminal matters, Chiara
Amalfitano, Conflitti di giurisdizione e riconoscimento delle decisioni penali nell’Unione Europea 9 (Giuffrè
2006); Kai Ambos, Los fundamentos del ius puniendi nacional; en particular, su aplicación extraterritorial, 119
Bol. Mex. Derecho Comp. 267, 270–271 (2007).
43
Regulation (EC) No. 261/2004.
44
Inbound flights, however, are not subject to the Regulation unless the carrier is a Community carrier
(Art. 3(1)(b)). Thus, the principles that underlie the EU’s (prescriptive) jurisdiction in this context are
clear: territoriality, for outbound flights, and nationality, for inbound flights.
45
See Directive 2003/87/EC, extended to air transport by Directive 2008/101/EC.
46
Case C-366/10, Air Transport Association of America.
47
ECJ 14 July 1972, Case 48/69, Dyestuffs; and 27 Sept. 1988, Joined Cases 89, 104, 114, 116, 117 and
125 to 129/85, Woodpulp I.
48
Opinion delivered on 2 May 1972.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 771

within the EEC, but the Court followed a different approach. Although it
ascertained the existence of effects within the Common Market as a necessary
substantive requirement for a concerted practice to be sanctioned, it based its
dismissal of the applicant’s claim on the fact that the formal separation between
companies could not outweigh the fact that it was the parent company who
‘brought the concerted practice into being within the Common Market’, due to
its decisive influence over its subsidiaries.49
However, the ‘single economic entity’-doctrine did not prove useful in
those cases in which the cartel members did not have subsidiaries within the
territory of the Community and only sold their products to the Common
Market, which was the factual background of the Woodpulp I case. Although
the ECJ took care not to discard the application of the ‘effects’-doctrine
entirely, the decision is finally based on yet another approach, which relies
on the finding that an infringement of the cartel prohibition implies a conduct
made up of two elements: ‘the formation of the agreement, decision or
concerted practice’ and ‘the implementation thereof’. While the place
where the agreement etc. is formed is irrelevant, the decisive factor is the
place where it is implemented.50 Since the cartelists had sold directly to
purchasers established in the EC, they competed among each other to win
orders from customers, so that concerted action referred to price restricted
such competition: the pricing agreement had been ‘implemented’ within the
Common Market.51

3.3 THE ‘QUALIFIED EFFECTS’-DOCTRINE

The latest stage of development of ‘extraterritorial’ application of competition law

in the EU is the so-called ‘(qualified) effects’-doctrine.52 Certainly, it had long
before been accepted in the United States (US) as a valid means to ‘extraterrito-
rially’ extend the application of the Sherman Act,53 although the initially quite

49
Paragraphs 137, 140 and 141. See also ECJ 21 Feb. 1973, Case 6/72, Continental Can, as regards the
abuse of a dominant position.
50
See para. 16 of the decision. Due to the fact that the ‘implementation’-doctrine relies on considerations
of territoriality, it has on occasions been referred to as ‘pseudo-territoriality’. See Jürgen Basedow,
International Antitrust: From Extraterritorial Application to Harmonisation, Derecho europeo de la compe-
tencia 393, 396 (Calvo & Blanco-Morales eds, Colex 2000).
51
Paragraphs 12, 13 and 17.
52
Note that in some European countries the ‘effects’-test forms an integral part of the cartel regulation.
See e.g., § 185(2) of the German Gesetz gegen Wettbewerbsbeschränkungen, or Art. 2(2) of the Swiss
Kartellgesetz.
53
See in particular the 1945 Alcoa ruling, 148 F.2d 416 (2d Cir.).
772 AIR AND SPACE LAW

extensive approach has on occasions been limited to take into account interna-
tional comity,54 i.e., the consideration of legitimate interests of other States (also
referred to as jurisdictional interest-balancing or ‘reasonableness’55) or, in a more
recent definition, the ‘deference to foreign states that international law does not
mandate’.56 But it was not until its recent judgment in the Intel case57 that the ECJ
eventually embraced it as well,58 and it did so on rather wide terms. The decision
was handed down on appeal against a prior judgment of the GC59 which, on its
turn, had endorsed a decision by the Commission60 sanctioning the applicant, Intel
Corp., for implementing a strategy aimed at foreclosing a competitor from the
market for a specific type of microprocessors. Although the GC’s judgment was
eventually quashed by the ECJ for substantive reasons, the EU Court of Justice did
accept the reasoning regarding jurisdiction.
The question of jurisdiction had not been addressed by the EU Commission
in the contested decision, and the issue was first raised before the GC. The main
argument brought forward by Intel was the fact that the allegedly anticompetitive
behaviour had neither been performed nor implemented in the Common
Market,61 which was dismissed by the GC. It first established that, pursuant to
existing case law, the Commission’s jurisdiction can either be based on the theory
54
See the 1976 decision in Timberlane Lumber, 549 F.2d 597 (9th Cir.). The question as to whether
comity then excludes jurisdiction or merely precludes existing jurisdiction from being exercised (see
the US Supreme Court’s decision in Hartford Fire, 509 U.S. 764 (1993)) would lead too far and cannot
be analysed here.
55
This ‘jurisdictional rule of reason’ was first developed by Kingman Brewster, Antitrust and American
Business Abroad 446 (McGraw-Hill 1958). See also Harold G. Maier, Interest Balancing and Extraterritorial
Jurisdiction, 31(4) Am. J. Comp. L. 579, 588 et seq. (1983); Bradley Jay Gans, Reasonableness as a Limit to
Extraterritorial Jurisdiction, 62(4) Wash. U. L. Rev. 681, 691 et seq. (1985).
56
American Law Institute, Restatement (Fourth) of the Foreign Relations Law of the United States § 401,
comment a (2018). In contrast to previous versions of the Restatement, the definition now makes it
clear that such deference is not mandatory under (customary) international law. There does, indeed,
seem to lack international consensus on this issue. See e.g., the ECJ’s Woodpulp I decision, where the
Court rejected a separate analysis under comity considerations (para. 22); similar, GC 18 June 2013,
Case T-406/08, ICF, paras 215–216.
57
ECJ 6 Sept. 2017, Case C-413/14 P.
58
However, it had previously been accepted by the then Court of First Instance in Gencor, 15 Mar. 1999,
Case T-102/96 (control of economic concentrations) and in the Commission’s Guidelines on the effect
on trade concept contained in Articles 81 and 82 of the Treaty (OJ C 101, 27 Apr. 2004, para. 100). See also
Francesco Munari, Sui limiti internazionali all’applicazione extraterritoriale del diritto europeo della concor-
renza, 1 Riv. Dir. Int’l 32, 48 (2016); Patrizia De Pasquale, L’Applicazione extraterritoriale delle regole
antitrust, Dizionario sistematico del diritto della concorrenza 144, 145 (Pace ed., Jovene 2013).
59
GC 12 June 2014, Case T-286/09.
60
13 May 2009 (COMP/C-3/37.990 – Intel), D(2009) 3726final.
61
See para. 226 of the GC’s judgment. Intel held that the manufacturing facilities of two of its clients
(original equipment manufacturers or OEMs), among which Lenovo, were outside the EEA; they did
not purchase central processing units (CPUs) in the EEA from either Intel or its competitor AMD; the
conduct concerned sales of CPUs to customers in Asia, namely, Taiwan and China; and the conduct was
implemented in Asia. The applicant also alleged that, if some of the computers had subsequently been
sold within the EEA, that would be irrelevant in order to establish whether the conduct had been
implemented within the EU.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 773

of implementation (Woodpulp I) or on the ‘qualified effects’-doctrine (Gencor), and

that these are alternative and not cumulative approaches.62
The GC then examined the Commission’s jurisdiction under the ‘qualified
effects’-test. It reminded that, in order for the effects on competition to be qualified,
and thus fulfil the requirements posed by public international law, they have to be
‘substantial’, ‘direct’ and ‘foreseeable’. These conditions match those applied by the US
federal courts, which have eventually been incorporated into the Sherman Act by the
1982 Foreign Trade Antitrust Improvement Act (FTAIA).63 However, such effects
need not be ‘actual’, in the sense that the abuse has achieved the intended result, so that
the Commission can also act when such a threat has not (yet) materialized.64 As regards
the existence of ‘direct’ and ‘substantial’ effects,65 the Court held that the fact that the
relevant sales were not made to clients in the EEA did not mean that there were no
immediate effects, that is, the conditions imposed by Intel directly concerned sales made
by the manufacturers,66 and, in any case, the potential elimination of a competitor was
deemed to have repercussions for the competitive structure in the Common Market. It
also established that the disputed conducts formed part of a single and continuous
infringement, so that the effects were substantial, although, if viewed in isolation, each
conduct might not be liable to produce such substantial effect. Foreseeability, on the
other hand, was hardly addressed by the Court, since the effects within the Common
Market were not only foreseeable, but even intended by the applicant.
The GC went on to analyse the possible ‘implementation’ of the agreement
within the Common Market, but it did so for the sake of completeness only. It
held that, although Intel did not sell central processing units (CPUs) to under-
takings located in the EEA, the requirement was allegedly fulfilled because the
prohibited conduct was intended to be implemented by Intel’s direct customers.67
However, it has been pointed out in literature that even the ‘implementation’ by
Intel’s customers took place outside the Common Market, and to consider the
effects therein, that is, a restriction of the competition for CPUs, or computers
containing such CPUs as an ‘implementation’ of the abuse would imply to over-
stretch this concept.68 This is probably why even the ECJ ended up accepting the
‘qualified effects’-approach, especially because certain types of conduct, such as

62
Paragraphs 231–244.
63
Now 15 U.S.C. § 6a, which applies to trade or commerce different from import trade or import
commerce, i.e., export trade and commerce and wholly foreign issues. See G. Porter Elliott, Antitrust at
35,000 Feet: The Extraterritorial Application of United States and European Community Competition Law in
the Air Transport Sector, 31 GW J. Int’l L. & Econ. 185, 197 (1997/98).
64
Paragraphs 250 to 258.
65
Paragraphs 259–280 and 285–296.
66
But see the US District Court (D. Delaware), In re: Intel Corp. Microprocessor Antitrust Litigation, 452 F.
Supp. 2d 555 (2006).
67
Paragraphs 301 to 314.
68
Behrens, supra n. 30, at 13.
774 AIR AND SPACE LAW

refusals or prohibitions to sell in the EEA, have frequently been thought to fall
outside the implementation doctrine.69 In fact, the ECJ’s adhesion to the ‘effects’-
test when faced with a refusal to sell into the EEA had long before been anticipated
in literature.70
On appeal, the Court of Justice upheld all and every single one of the
arguments purported by the GC, at least with respect to the ‘qualified effects’-
doctrine. In view of the lengths to which the ECJ had gone up to that point to
avoid applying this approach, the ease with which it accepted, in only eight short
paragraphs,71 the alternative application of either the ‘implementation’ or the
‘effects’-test is surprising.72 If there were any doubt as to whether the ‘qualified
effects’-test is on its own enough to serve as a basis for the EU Commission’s
jurisdiction, suffice it to say that the ECJ dismissed the arguments relating to the
GC’s application of the ‘implementation’-doctrine by indicating that such grounds
were examined for the sake of completeness only, so that the complaint could not
lead to the judgment’s being set aside and was therefore ineffective.

4 IMPLICATIONS FOR THE AIRFREIGHT CASE

4.1 THE QUESTION OF JURISDICTION

Although the ECJ has eventually embraced the full validity of the ‘qualified
effects’-doctrine, it is not altogether clear if in the Airfreight case all requirements
are met, that is, whether the effects in the Common Market are direct, substantial
and foreseeable. At a first glance, the situation is not so different from that in the
Intel case, at least as regards those conducts where the Commission’s jurisdiction
was contested. These (Lenovo) agreements had been concluded by a US and a

69
See Luca Prete, On Implementation and Effects: The Recent Case-law on the Territorial (or Extraterritorial?)
Application of EU Competition Rules, 9(8) J. EU Comp. L. & Pract. 487, 491 (2018); Alison Jones,
Brenda Sufrin & Niamh Dunne, Jones & Sufrin’s EU Competition Law 1201 (7th ed., OUP 2019).
Contra, Florian Wagner-von Papp, Competition Law and Extraterritoriality, Research Handbook on
International Competition Law, 21, 45 (Ezrachi ed., Elgar 2012), who considers an agreement not
to deal to be implemented where the action should have taken place.
70
See Philip Marsden & Peter Whelan, Re-Examining Trans-Atlantic Similarities and Divergences in
Substantive and Procedural Competition Law, 10 Sedona Conf. J. 23, 32–33 (2009).
71
Paragraphs 40 to 47.
72
The UK’s strong opposition may have been the cause of the ECJ’s reluctance to accept the test; a
consideration which, in the light of its recent disconnection from the EU, does not seem to be relevant
anymore. See Behrens, supra n. 30, at 14. Even the Brexit Competition Law Working Group now
seems to recommend embracing the ‘qualified effects’-doctrine (see Whish & Bailey, supra n. 34, at
497, 508). Significantly enough, the Court of Appeal recognized in iiyama ([2018] EWCA Civ 220)
that the ‘effects’-test, as established by the ECJ in Intel, is a sufficient basis for a claim for damages in the
UK. See Scott Campbell & Luke Grimes, Extraterritoriality – The Court of Appeal Takes an Expansive
View of Article 101 TFEU’s Scope, 39(6) E.C.L.R. 266 (2018).
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 775

Chinese company, and they referred to CPUs that had been manufactured and sold
outside the EEA and were to be incorporated into computers produced in China.
In Airfreight, the routes for which the Commission’s sanctioning jurisdiction is
discussed are inbound routes, mainly those served by non-EU companies. This is so
because, on the one hand, a company that is not registered within the EU is not
subject to the nationality principle of jurisdiction, and if the cartelized sales of airfreight
services are not made through a subsidiary of the carrier in the EU, the doctrine of the
‘single economic entity’ is also excluded from the outset. On the other hand, the
sanctioned airlines contended that inbound flights are not liable to affect competition
within the EU, because the cartelized contracts of carriage seem to be concluded more
often than not at the place of dispatch, which for inbound flights originating in a third
country lies per definitionem outside the Common Market. If the customer is also
established in the country of departure, the sales of airfreight services are then not
made into the EU, which greatly hinders the application of the ‘implementation’-test.
This aspect will be addressed in the next subsection.

4.2 THE ‘IMPLEMENTATION’-TEST

According to Woodpulp I, an agreement is ‘implemented’ in the EU when the
cartel sales are made directly with buyers established in the Common Market. This
is arguably not the case here, at least not always. In this sense, one of the applicants
contended that the place of ‘implementation’ is not the EEA but the country of
departure, for the following reasons73:
(1) customers that purchase air freight transport services from air cargo
carriers are, in general, established within the country of departure;
(2) all sales of these air freight transport services are made by local person-
nel or a local general sales agent within the country of departure;
(3) prices for air freight transport services are, in general, expressed in the
currency of the country of departure; and
(4) sales of air freight transport services, including surcharges, are, in
general, regulated by the authorities in the country of departure in
accordance with the applicable ASAs.74
Certainly, EU Regulation 411/2004 does not make distinctions between inbound
and outbound flights,75 but this does not seem to be a decisive argument: since the

73
Paragraph 1031 of the 2010 decision.
74
See e.g., Art. 21 of the ICAO Bilateral Template Air Services Agreement, pursuant to which each
party to the agreement shall accord airlines of the other party the right to sell and market international
air services in its territory, either directly or through agents or other intermediaries.
75
Paragraph 1034 of the 2010 decision. See also recitals 2 and 3 of Regulation No. 411/2004.
776 AIR AND SPACE LAW

Regulation merely deletes the former limitation in Article 32(c) of EU Regulation

1/2003, which excluded transport by air between airports in the EU and third
countries, now the general rules apply. But then again, where the transport services
have been marketed directly in the EU, that is, where the carrier’s client is
domiciled therein, there should arguably be no impediment to consider that the
cartel has, indeed, been implemented there.
Apart from that, the only arguments which have been brought forward by the
Commission to prove the ‘implementation’ of the agreement in the Common
Market are that:
(1) the services affected by the agreement are partly provided within the
territory of the EEA; and
(2) many of the contacts between the addressees of the decision to coor-
dinate their conduct had taken place in the EEA or involved partici-
pants established therein.
This second contention is not necessarily decisive, either, because the place where
an agreement is made and, arguably, the nationality of the parties, while possibly
conferring jurisdiction under the ‘subjective territoriality’ principle, or that of
‘personality’,76 is irrelevant when determining whether the agreement etc. has
been implemented in the EEA (Woodpulp I).
In view of the ruling of the GC in the Intel case, one might also consider that it
is sufficient for the ‘implementation’-test to be satisfied if the conduct was imple-
mented by the cartelists’ clients. However, for this to be true, one would also have to
accept that, in the Airfreight case, the ‘implementation’ of the agreement in the EEA
consisted of the passing-on of the surcharges derived from fuel and security supple-
ments to the final buyers established in the Common Market. And this, arguably,
involves extending the concept of ‘implementation’ well beyond any reasonable
limit.77 In his opinion in the Intel case, AG Wahl78 emphasized that the agreements
between Intel and Lenovo had not been implemented in the EEA because what was
being investigated was a unilateral conduct on the part of Intel, and the sales in the
Common Market had been made by Lenovo. Although he also stressed that such
sales would be relevant if the infringement had consisted of a collusive agreement
between Intel and Lenovo, this is not the case for the inbound flights in Airfreight,
either: the ‘sales’ in the Common Market are mostly made, not by the participants in

76
Even in this case enforcement may still fail under substantive law if the agreement has no effects on
competition in the Common Market (Art. 101(1) TFEU).
77
Similar, for the purchase of goods from an innocent third party, Wagner-von Papp, supra n. 69, at 46.
78
Opinion delivered on 20 Oct. 2016, paras 308–313.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 777

the cartel themselves, but rather by a client of theirs, namely, the shipper,79 or even
by a customer of the latter if he or she is a freight forwarder.80 The relevant ‘sales’ in
the EEA are then indeed made by the seller in the contract of sale that originated the
conclusion of the contract of carriage. In relation to inbound routes, this seller will
probably have his or her establishment outside the territory of the EEA and will try
to pass on the surcharge paid for the conveyance of the goods to his or her own
client, namely, the buyer.
It becomes clear from the above that, unless the transport services have been
marketed directly within the EU, the basis for an application of the ‘implementa-
tion’-doctrine in relation to inbound flights is rather thin. In particular, although the
implementation by incorporating the cartelized products into finished merchandise
which is then sold in the EEA has been considered to fulfil the conditions for the
application of this doctrine in InnoLux,81 it is unclear whether transport services are
‘incorporated’ into the product which is then sold in the Common Market.
Furthermore, unlike what had happened in the InnoLux case, such services would
have been ‘incorporated’ into the product sold in the EU by a completely unrelated
(or ‘innocent’) party, the seller of the products which are then carried.82 The next
subsection shall therefore address the question as to whether the ‘effects’-doctrine,
which is also mentioned by the Commission in its 2010 decision,83 is a viable
alternative.

4.3 THE ‘QUALIFIED EFFECTS’-TEST

4.3[a] The Impact of the ‘Effects’ Doctrine on Trade Transactions in the Air Sector

Since the ECJ’s judgment in the Intel case, there is no doubt that the ‘effects’-
doctrine is capable of providing a valid justification for the Commission’s jurisdic-
tion. However, for this to be possible, it must be foreseeable for the undertaking(s)
that the conduct in question will have an immediate and substantial effect in the
EU. As noted above,84 the equivalent FTAIA standard does not apply to import
trade or commerce. Consequently, it has been discussed in literature whether

79
The opposite would be true, e.g., for an ex works sale where it is the buyer who organizes the carriage
between the seller’s installations and the place of destination of the goods.
80
See para. 66 of the Commission’s 2010 decision.
81
GC 27 Feb. 2014, case T-91/11, paras 56–75. The decision has been confirmed by ECJ 9 July 2015,
Case C-231/14 P, in which the applicant’s arguments concerning territorial jurisdiction were con-
sidered to be ‘irrelevant’ (para. 71).
82
See AG Wathelet’s Opinion on the case, delivered on 30 Apr. 2015 (para. 46).
83
Paragraph 1038.
84
Supra, n. 63.
778 AIR AND SPACE LAW

inbound flights are equivalent to import trade or commerce, so that any effect
would suffice to vest jurisdiction in US courts.85
The issue has been addressed by the US Department of Justice and the Federal
Trade Commission, albeit in relation to maritime transport, and the answer is
unambiguous: a conspiracy between two foreign shipping companies ‘to fix the
price of shipping services, which are closely connected to the importation of goods
into the United States, is conduct involving import commerce’, so that the special
requirements in the FTAIA do not apply (‘import commerce exclusion’).86
Nonetheless, this does not seem to be the case for EU competition law, where
no express distinction is made between import and export trade, however much it
is at least implicit in both the ‘implementation’, where import is essential, and the
‘effects’-test.

4.3[b] Direct or Immediate Effects

There can be no doubt that the pricing agreement in the Airfreight case did
produce, or was capable of producing, effects on European territory. Even
where the contracts of carriage had been concluded abroad, it is more than likely
that the agreement would end up affecting consumers in the EU, at least through
an increase in the end-consumer prices of the goods to be transported or manu-
factured using the products affected by the cartel. However, it is not so clear
whether such effects are ‘direct’ or ‘immediate’.
In the Intel case, the GC asserted the existence of direct effects in the EEA
primarily because, in return for payments or rebates received from Intel, the
affected original equipment manufacturers (OEMs) postponed or cancelled the
sale of computers containing other processors around the world, including in
Europe, with the consequent effect on the structure of competition in the
Common Market. And this approach was not questioned by the Court of
Justice. Nonetheless, this is not the case here. At least in those situations in
which the carriage by air is hired by a freight forwarder established outside the
EEA who, furthermore, acts on behalf of a non-EU vendor, the effect in the EU, if
85
See Barbara A. Bell, The Extraterritorial Application of United States Antitrust Law and International
Aviation: A Comity of Errors, 54 J. Air L. & Com. 533, 557, 574 (1988), who nonetheless advocates
for requiring substantial and direct effects on US consumers or competitors, regardless of whether the
conduct affects import or export trade or commerce. Conversely, for the US Department of Justice
(DoJ) and the Federal Trade Commission (FTC), Antitrust Guidelines for International Enforcement and
Cooperation 19–20 (2017), import commerce is always subject to the general test of effects on
commerce, and not to the FTAIA standard. For an apparently similar approach in Switzerland see
Pranvera Këllezi, Switzerland: Prohibition of Parallel Imports and Market Integration – The Role of the ‘Effects
Doctrine’ and the Development of the Substantive Laws, 3 Concurrences 185 (2017), in relation to recent
case-law of the Federal Court.
86
DoJ and FTC, supra n. 85, at 20–21.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 779

any, would be indirect: it would arguably be a ‘knock-on effect’, which according

to the GC (a contrario) does not seem to trigger the application of EU law.87 The
logical question then is whether domestic effects have to be ‘direct’ in the sense
that there are no intermediary or intervening factors at all, or rather – which seems
more reasonable – that they are not so far removed from the anticompetitive
conduct that the ‘directness’-requirement is clearly overstretched.88
Be that as it may, the foregoing does not necessarily exclude the existence of
immediate effects, e.g., where the freight forwarder is established in the EU. Under
such circumstances, a direct effect can certainly not be denied, at least, with respect
to the refusal to satisfy the commission due for the collection of fuel and security
surcharges, but neither, arguably, when the freight forwarder acts on behalf of a
buyer of the goods established in the EEA.89 And this is so because the agreements
on fuel and security surcharges prevent airlines from competing among each other
by establishing different amounts of surcharges. The agreement thus produces, even
in relation to inbound flights, at least some effects directly in the EEA. Accordingly,
if it is apparent from the evidence at hand that inbound airfreight services were also
sold to customers (freight forwarders and shippers) in the EEA, and in the absence of
any indicia to the contrary, it would be up to the applying airlines to prove that this
was not the case and no direct effects of this kind existed.90

4.3[c] Substantial Effects

The question as to whether the conduct was liable to have substantial effects in the
Common Market is intimately linked to the question as to whether the effects are
immediate or direct. Indeed, it does not seem that the effects produced directly
outside the EU can be taken into account to determine whether the effects of the
agreement are substantial, since both requirements have to be present cumula-
tively. Nonetheless, the GC held in its judgment in the Intel case that, since the
addressee’s conducts formed part of a ‘single and continuous infringement’, the
various instances of conduct forming part thereof must not be considered in
isolation. It would, on the contrary, be sufficient if the single and continuous
infringement as a whole had substantial effects. And this view has been expressly
endorsed by the ECJ,91 in order to avoid ‘an artificial fragmentation of

87
See para. 278 of the Intel judgment.
88
Wagner-von Papp, supra n. 69, at 29–30.
89
See para. 66 of the 2010 decision, where the Commission points out that ‘Freight forwarders generally
organise the integrated transportation of goods on behalf of shippers. In doing so they purchase
airfreight services inter alia from the carriers. Shippers may be the purchasers or sellers of traded
goods or the owners of goods that need to be moved rapidly over relatively long distances’.
90
See the GC’s judgment in the Intel case, paras 286 to 289, and paras 59 and 60 of the ECJ’s judgment.
91
Paragraphs 54 to 57.
780 AIR AND SPACE LAW

comprehensive anticompetitive conduct, capable of affecting the market structure

within the EEA, into a collection of separate forms of conduct which might escape
the European Union’s jurisdiction’.
Apart from the fact that this approach has been questioned, not only in
literature,92 but also by AG Wahl in his Opinion,93 the Commission’s first
Airfreight decision was annulled precisely because it failed to establish whether
there was one single and continuous infringement or four different infringements.
The 2017 decision now makes it clear that there is actually only one single and
continuous infringement, although three legal bases had been violated.94 But then
again, the Commission does make a distinction between routes, and only one of
the items includes inbound traffic from States outside the EEA, and different from
Switzerland. Thus, even applying the criterion established by the GC, and
endorsed by the ECJ, it remains unclear whether the cartel agreement as a
whole or, on the contrary, the part thereof referred to routes, both outbound
and inbound, between airports within the EEA and airports in third countries,
excluding Switzerland, would have to have a substantial effect within the
Common Market to assert the Commission’s jurisdiction.

4.3[d] Foreseeability
The requirements imposed by the GC and the Court of Justice for the effects to be
considered foreseeable are not very demanding. It has nonetheless been argued in
literature that the ‘foreseeability’ requirement is more operative than the above
‘directness’ criterion, which is a very good point, and that both should be inter-
preted as being coextensive since the underlying policy reason is the same: not to
surprise actors applying foreign laws the application of which they could not
reasonably foresee, because the number of intermediary factors is too large.95 In
the Airfreight-case, even with regard to inbound flights, it cannot seriously be
doubted that the presumed cartelists knew that their conduct would produce at
least some effects, not only in the country of departure, but also within the EEA.
They could indeed not be unaware that most of the goods they carried were to be
marketed at or near the place of destination of the flights, at a price influenced by
the surcharges agreed upon by the carriers.

92
In this context, Prete, supra n. 69, at 493, raises the question as to whether a procedural rule (like that
on ‘single and continuous infringements’) can be used as a ‘jurisdictional rule to identify conduct
which may have an effect on the European market’.
93
See paras 319–320.
94
Paragraphs 9 and 14.
95
Wagner-von Papp, supra n. 69, at 32.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 781

In conclusion, it seems rather improbable in the view of the established case-

law that the European Courts would deny the jurisdiction of the Commission,
since there are some links or connections in this case that seem even more
‘genuine’ than those in the Intel case, although they are perhaps not on their
own sufficient to assert the Commission’s jurisdiction. On the one hand, all
observed routes necessarily imply landing at or taking-off from an airport within
the EEA, so at least part of the services which are subject to the price fixing
agreement were performed within the Common Market, and the airlines could
not be unaware that the goods carried on inbound flights were to be marketed in
the EEA. On the other hand, many of the contacts held between the addressees of
the Commission’s decision took place in the EEA or involved participants of the
EEA. Finally, albeit not related to jurisdiction, the Commission itself considered
the fact that, as regards inbound flights, part of the harm is caused abroad96 and,
consequentially, reduced the fine related thereto by 50%.

5 ANTITRUST, FAIR COMPETITION, AND ASAs

Since antitrust law mainly aims at enhancing consumer welfare rather than the
protection of competitors, especially since the Commission’s decision practice has
started shifting from the traditional principle of autonomy to a more economic
approach, and only addresses collusive behaviour or the abuse of a dominant
position, it is not an adequate tool to face other circumstances which are liable
to tilt the playing field.97 This last problem cannot be addressed here, but it should
nonetheless be borne in mind that issues related to both antitrust and unfair
competition can also be channelled, where the case may be, through the corre-
sponding provisions of the applicable ASA. Many ASAs do indeed include a ‘fair
competition’-clause, the meaning of which, however, depends on the type of
agreement. Thus, while under a traditional regulated agreement98 the ‘fair

96
On (administrative, criminal and civil) proceedings related to this same cartel in other jurisdictions see
Leandro, supra n. 1, at 220–223; Pablo Mendes de Leon, Airlines as Allies: How to Manage the Market?
and Paul S. Dempsey, Regulatory Schizophrenia: Mergers, Alliances, Metal-Neutral Joint Ventures and the
Emergence of a Global Aviation Cartel, Harmonising Regulatory and Antitrust Regimes for International
Air Transport 23, 35–36, 41, 52 (Walulik ed., Routledge 2019); Petit Lavall, supra n. 23, at 376–378.
97
This is the case, e.g., of subsidies or discrimination by third countries in favour of their flag carriers, or the
fact that some airlines based abroad simply face lower costs and are not subject to the same obligations as
EU carriers (e.g., passenger rights). See Dario Klasic,́ Towards Fair Competition in European and International
Aviation: A Proposal for a New European Aviation Strategy, Current Issues in Maritime and Transport Law
337, 343 et seq. (Zunarelli & Musi eds, Bonomo 2016). The problem was initially addressed by Regulation
(CE) 868/2004, which has more recently been replaced by Regulation (EU) 2019/712 to overcome the
important shortcomings of the former provisions.
98
A ‘regulated’ agreement contains restrictions, e.g., with regard to capacity, frequency, routing and
pricing. Such ASAs are thus not designed to promote competition. See Mendes de Leon, supra n. 96, at
32.
782 AIR AND SPACE LAW

competition’-clause mainly requires the airlines of the contracting States to be

awarded equal opportunities (e.g., an equal number of frequencies per week), the
clause arguably acquires a different meaning under an ‘open skies’-agreement,
where no restrictions are imposed on airlines, who act according to commercial
considerations. In this latter case, the focus has moved from ‘equal opportunities’
to ‘equal circumstances’, which would allow the contracting parties to act in order
to ensure fair and unrestricted competition.99
A recent example of how such a clause may look like is the ‘fair competition’
clause recommended by the EU to be incorporated into bilateral ASAs,100 which
addresses both unfair competition (discrimination or unfair practices), public sub-
sidies and support, and antitrust. Paragraph 10 compels the State parties to effec-
tively apply antitrust laws and prohibit both collusive behaviour and the abuse of a
dominant position in terms similar to those of Articles 101 and 102 TFEU.101
Although enforcement of the antitrust rules is entrusted to the competition
authorities and courts (paragraph 11), no carte blanche is given to them to prosecute
any antitrust violation; the latter must rather fall within the jurisdiction of the
respective contracting party (paragraph 2). Accordingly, since the authority and
powers of competition authorities and courts are neither to be affected, nor to be
limited or jeopardised in any way (paragraph 3),102 the above considerations on the
extent of the Commission’s jurisdiction, especially those regarding the ‘qualified
effects’-test, arguably also apply in the framework of the recommended ‘fair
competition clause’.
Be that as it may, enforcement of the competition rules can also be achieved
through the mechanism to solve controversies envisaged by the agreement itself,
whereby any contracting party may approach responsible government entities of the
other contracting party to discuss issues related to the alleged antitrust infringement,
or request consultations on this matter to solve the problem (paragraph 12).103 In this
latter case, the failure to reach a resolution within a certain deadline gives the

99
See Sean McGonigle, Fair Competition, Subsidy, and State Aid Clauses in International Air Services
Agreements, 37 Ann. Air & Space L. 199, 201 et seq. (2012). Model clauses under different environ-
ments are envisaged by Art. 15 of the ICAO Template Air Services Agreements. For an overview of
competition provisions in existing ASAs see ICAO, ATRP/13-IP/2, 24 Aug. 2015.
100
https://www.icao.int/sustainability/Compendium/Documents/Practices/EU-ECAC%20expert%
20Fair-Competition_Comments-on-WG2%20-WorkPlan.pdf (accessed 4 Oct. 2021). The clause has
been incorporated almost verbatim in Art. 8 of the 2019 ASA between the Netherlands and Brazil
(124 Tractatenblad van het Koninkrijk der Nederlanden 2 Aug. 2019). See also the ‘Fair competition’
clause in Art. 7 of the Agreement on Air Transport between Qatar and the EU and its Member States,
yet to be signed, included as an Annex to the Proposal for a Council Decision on the signing of the
Agreement of 8 Apr. 2021, COM(2021) 157 final, which is arguably based upon the recommended
clause, although its wording is different.
101
See also para. 6 of the EU-Qatar Agreement.
102
See also para. 13 of the EU-Qatar Agreement.
103
See also para. 8 of the EU-Qatar Agreement.
 ‘EXTRATERRITORIALITY’ IN EUROPEAN LAW 783

contracting party who requested the consultation the right to take the remedies
envisaged in paragraph 13 (suspension of the exercise of the rights specified in the
agreement, imposition of conditions or duties, or other actions), provided that the
competent authority or court has indeed found an antitrust violation.

6 CONCLUDING REMARKS
The proliferation of ASAs, especially those that are based on an ‘open skies’ policy, has
entailed a spectacular increase of competition in air transport to and from the EU, and
there are different ways of ensuring that such competition is fair and unrestricted. The
competition rules in the Treaty and in the EEA-Agreement play a very important role
in this regard. Where non-EU carriers are affected, this might require a further
assessment of the Commission’s jurisdiction to enforce the cartel and abuse prohibi-
tions, since considerations regarding the possibility to ‘extraterritorially’ apply EU
legislation must be taken into account whenever acts performed outside the
Common Market are concerned. Following the relevant decisions of the Court of
Justice, such jurisdiction can be based on three alternative tests: the ‘single economic
entity’, the ‘implementation’, and the ‘qualified effects’-test. Although there still is very
little case-law on the ‘effects’-approach, and it remains to be seen how it will
eventually be implemented in practice, it will arguably be decisive when assessing
whether the Commission was entitled to prosecute some of the conducts involved in
the Airfreight-case, namely inbound shipments, especially those performed by non-EU
carriers. Regarding the latter, part of the harm surely fell outside the Common
Market, but it seems difficult to rebut that at least some effects were also produced
therein. It will thus be up to the GC to decide whether such effects were direct,
foreseeable, and substantial enough, but in view of some of its previous decisions it
appears rather improbable that it will eventually deny the Commission’s jurisdiction.
On the other hand, the conclusion of new ASAs, or the renegotiation of
existing ones, to include a ‘fair competition clause’ similar to that recommended by
the EU, should remove any possible conflict between competition law and the
relevant agreement, and allow to monitor more closely the alleged infringements
of the EU competition rules. The clause does not give, however, carte blanche to the
Commission or the national authorities to investigate any anticompetitive conduct
abroad, since their authority and powers remain untouched. Nonetheless, potential
antitrust violations may also be addressed through the mechanisms to solve con-
troversies envisaged by the relevant agreement itself, which might prove effective
to curb anticompetitive behaviour at an early stage.
 The EU–UK Competition and State Aid
Regulatory Environment for Airlines: Post-Brexit,
Post-Transition

Steven TRUXAL*

Following the United Kingdom’s departure from the European Union and the transition period
that followed, the UK and EU have embarked upon a journey to form a new relationship. With
the entry into force of the EU–UK Trade and Cooperation Agreement (TCA) in May 2021,
now is an opportune moment to consider what has been achieved and what is yet to come in the
areas of competition (antitrust rules and merger control) and State aid. This article examines the
current state of play in these important areas for ongoing and future international cross-border
activity, in which international airlines play a central role. It identifies and reflects on the key
‘moving parts’ in this unchartered EU–UK regulatory environment: law reform, the competition
authority’s role and future regulatory cooperation.
Keywords: Antitrust, Merger, State aid, Subsidy, Brexit

1 INTRODUCTION
The United Kingdom’s final day as a Member State of the European Union was on
31 January 2020.1 Since 1 February 2020, the UK has been a ‘third country’.
Under the terms of the Withdrawal Agreement (WA),2 a transition period was
provided during which the entirety of EU law, including EU antitrust and merger
control, and the State aid rules, applied to and within the UK for the period that
ended on 31 December 2020 (‘the Transition Period’).3 Since 1 January 2021, the
UK no longer applies EU law and its main competition authority, the Consumer
and Markets Authority (CMA), is no longer a member of the European

*
Professor of Air and Space Law, Leiden University. Email: [email protected].
1
Unless otherwise indicated, when mentioned in this article, the UK refers to the United Kingdom of
Great Britain (England, Wales and Scotland) and Northern Ireland.
2
Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European
Union and the European Atomic Energy Community, [2020] OJ L 29/7 (31 Jan. 2020).
3
At precisely 11:00pm London/midnight Brussels. The most relevant provisions for matters within the
scope of this paper may be found in Ch. 2 of the WA, specifically: Art. 92 relating to ongoing
procedures for antitrust investigation, merger control (‘control of concentrations’) and State aid; Art.
93 on new State aid procedures; Art. 94 procedural rules; and Art. 95 on the binding force and
enforceability of decisions.

Truxal, Steven. ‘The EU–UK Competition and State Aid Regulatory Environment for Airlines: Post-
Brexit, Post-Transition’. Air & Space Law 46, Special Issue (2021): 29–44.
© 2021 Kluwer Law International BV, The Netherlands
30 AIR AND SPACE LAW

Competition Network (ECN).4 While the Transition Period has expired, it

remains an important reference point for the purposes of determining the applic-
able law(s) and jurisdiction(s) in competition cases, merger reviews and with
respect to State aid measures.
The EU and UK agreed on a comprehensive Trade and Cooperation
Agreement (TCA) that applied provisionally from 1 January 2021, and entered
into force on 1 May 2021.5 The TCA provides for preferential arrangements in
selected areas of trade, and in addition to this, cooperation in number of other
areas. Competition policy is set out in Chapter 2 of the TCA, which covers
competition law, enforcement, dispute settlement, subsidy control, public service
obligations (PSOs) and certain exceptions. In terms of competition, the TCA
provides a foundation for the EU and UK that is built on the principles and
‘importance of free and undistorted competition in their trade and investment
relations. The Parties acknowledge that anticompetitive business practices may
distort the proper functioning of markets and undermine the benefits of trade
liberalisation’.6 This principled approach is supported by provisions that aim to
ensure a level playing-field between the EU and UK; these will in turn be touched
upon in this article.
With the new EU-UK economic and social partnership in place, the present is
a useful moment to discuss the current state of law and policy within the realms of
antitrust, merger control and State aid rules, and enforcement and jurisdiction, all
in the context of airlines and groups of airlines as undertakings engaged in
providing services on numerous markets. The aim of this article is to consider
what has been achieved and what is yet to come in the areas of competition and
State aid. It proceeds in three parts, by examining firstly, the antitrust rules;
secondly, merger control; and thirdly, State aid. In each section, this article
examines the current state of play for ongoing and future international cross-border
activity, in which international airlines play a central role. It identifies key ‘moving
parts’ in the, in many respects, unchartered EU–UK regulatory environment and
offers reflections on each, in the conclusion.

4
The ECN, which was introduced by Council Regulation (EC) No 1/2003 of 16 Dec. 2002 on the
implementation of rules on competition laid down in Arts 81 and 82 of the Treaty, [2003] OJ L 1/1 (4
Jan. 2003), brings together the European Commission and National Competition Authorities (NCAs)
in close cooperation on consistent enforcement of the EU antitrust rules and collaboration on various
matters relating to competition policy. See European Competition Network, https://ec.europa.eu/compe
tition-policy/european-competition-network_en (accessed 15 July 2021).
5
Trade and Cooperation Agreement Between the European Union and the European Atomic Energy Community,
of the One Part, and the United Kingdom of Great Britain and Northern Ireland, of the Other Part, [2021] OJ
L 149/10 (30 Apr. 2021), 2530 pp.
6
Article 351(1) of the TCA.
 STATE AID REGULATORY ENVIRONMENT 31

2 KEY SOURCES AND DEVELOPMENTS

The key sources of law referred to in this article can be separated into two groups.
In the one group are the Treaty on the Functioning of the European Union
(TFEU),7 the EU Merger Control Regulation (EUMR)8 as implemented, the WA
and the TCA. In the other group are relevant pieces of UK legislation including
the Competition Act 1998 as amended9 (‘Competition Act’), the Enterprise Act
2002 as amended10 (‘Enterprise Act’) and the draft Subsidy Control Bill.11 Selected
UK documents that provide legal guidance on competition, procedure and jur-
isdiction shall also be consulted.
The principal institutions and bodies referred to in this article will be the
European Commission, the Court of Justice of the European Union (CJEU), the
UK’s CMA and its Merger Control Unit, Subsidy Control Unit and Subsidy
Advice Unit; the UK Competition Appeal Tribunal; and the UK courts, that is,
the courts of England and Wales, Scotland and Northern Ireland, and the UK
Supreme Court. Up to and including 31 December 2020, the CMA was the UK’s
primary National Competition Authority (NCA),12 obligated alongside the
European Commission, EU Member States’ NCAs and their national courts
under Council Regulation (EC) No 1/2003 to ensure consistent application across
the EU of the antitrust rules in Articles 101 and 102 of the TFEU.13
While EU competition law ceased to apply to the UK and its enforcement
bodies at the end of the Transition Period, an important amendment to the
Competition Act requires the UK courts, the CMA and those acting on behalf
of the CMA (the so-called ‘concurrent regulators’) to continue to interpret UK

7
Treaty on the Functioning of the European Union (TFEU), [2012] OJ C 326/47 (26 Oct. 2012).
8
Council Regulation (EC) 139/2004 of 20 Jan. 2004 on the control of concentrations between
undertakings, OJ L 24/1 (29 Jan. 2004). See Commission Regulation (EC) 802/2004 of 21 Apr.
2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between
undertakings and its annexes, OJ L 133/1 (30 Apr. 2004), as amended by Commission Regulation
(EC) 1033/2008, OJ L 279/3 (22 Oct. 2008), and Commission Implementing Regulation (EU) 1269/
2013, OJ L 336/1 (14 Dec. 2013).
9
The Competition Act 1998, 1998 Ch. 41 (9 Nov. 1998), as amended.
10
The Enterprise Act 2002, 2002 Ch. 40 (7 Nov. 2002), as amended.
11
The Subsidy Control Bill (Bill 135-EN, 58/2), as introduced on 30 June 2021.
12
This is in addition to sectoral bodies regulating and enforcing competition law. In the EU, the
European Commission is both sector-specific regulator and competition enforcer. In the UK, the
Civil Aviation Authority works in cooperation with the CMA by way of the UK Competition
Network.
13
Article 1 of Council Regulation (EC) No 1/2003. See Recitals 14 and 17 of Council Regulation (EC)
No 1/2003 and Directive (EU) 2019/1 of the European Parliament and of the Council of 11 Dec.
2018 to empower the competition authorities of the Member States to be more effective enforcers and
to ensure the proper functioning of the internal market, [2019] OJ L11/3 (14 Jan. 2019), which all EU
Member States should have implemented by Feb. 2021.
32 AIR AND SPACE LAW

competition law in line with EU law in force as well as case law decided by that
moment in time.14 Specifically, the UK courts and authorities must act:
[…] with a view to securing that there is no inconsistency between (a) the principles it
applies, and the decision it reaches … and (b) the principles laid down by the Treaty on the
Functioning of the European Union and the European Court before [31 December 2020],
and any relevant decision made by that Court before [31 December 2020], so far as
applicable immediately before [31 December 2020] in determining any corresponding
question arising in EU law.15
There is no requirement to secure that there is no inconsistency with a principle or
decision if that principle or decision is excluded from UK law.16 The UK courts
and authorities must, however, ‘have regard to any relevant decision or statement
of the European Commission made before [31 December 2020] and not
withdrawn’.17 Therefore, UK courts and authorities are not bound by future EU
law and may, where appropriate, deviate from pre-2021 EU rules and case law.
The UK Parliament, by way of The Competition (Amendment etc.) (EU Exit)
Regulations 2020, gave effect to the WA provisions relating to competition law. On
the one hand, the European Commission has ‘continued competence over competi-
tion cases that were initiated but not concluded before the end of the Transition
Period’.18 On the other hand, the CMA and the concurrent regulators19 are
empowered to ‘enforce EU commitments or remedies that relate to the UK in
cases where, after 31 December 2020, it is agreed between the EU and the UK that
responsibility for these functions in respect of such commitments or remedies should
be “transferred” to the CMA or a concurrent regulator’.20
Through an earlier statutory instrument,21 the UK Parliament amended the
Competition Act and Enterprise Act and in turn ‘separated UK and EU antitrust
enforcement and merger control systems’ with a view to transitioning to a ‘standalone
UK competition regime’.22 The same instrument also revoked ‘EU competition reg-
ulations, certain European Commission decisions made under EU regulations and treaty
rights that will be incorporated into UK law at the end of the Transition Period’.23

14
This is by way of a new provision: s. 60A of the Competition Act, which was brought in by
Regulation 23 of The Competition (Amendment etc.) (EU Exit) Regulations 2019 No. 93.
15
Section 60A(2) of the Competition Act.
16
Section 60A(4) of the Competition Act. In this context, ‘UK law’ means the laws of England and
Wales, Scotland and Northern Ireland.
17
Section 60A(3) of the Competition Act.
18
In line with Art. 92 of the WA; CMA, Guidance on the Functions of the CMA After the End of the
Transition Period, CMA125 (1 Dec. 2020), at 2.17.
19
Such as the UK Civil Aviation Authority (CAA).
20
CMA, supra n. 18, at 2.17.
21
The Competition (Amendment etc.) (EU Exit) Regulations 2019 No. 93.
22
CMA, supra n. 18, at 2.16.
23
Ibid.
 STATE AID REGULATORY ENVIRONMENT 33

3 ANTITRUST
While sector inquiries carried out by the European Commission tend to be ex ante
in nature, EU antitrust is ex post competition law.24 The antitrust rules laid down
in Articles 101 and 102 of the TFEU prohibit, respectively, anticompetitive
agreements between and decisions by two or more undertakings25 and abusive
behaviour by a dominant undertaking on a relevant market.26 EU antitrust policy
is derived from these two treaty provisions. Airlines and groups of airlines have
formed a range of tactical and strategic alliances over the years.27 The alliances are
based on cooperative agreements between airlines, which have been assessed under
the EU antitrust rules.28 Close cooperation between airlines has not been prohib-
ited. Indeed, the three major international airline alliances are able to operate
because the agreements underpinning the cooperation have been assessed and
found to enhance consumer welfare, thus ‘immunised’, subject to certain ‘carve
outs’ and other commitments by the parties.29
The fact that the United Kingdom is now a third country does not auto-
matically mean that the EU antitrust rules in Articles 101 and 102 of the TFEU do
not apply to UK undertakings. If the anticompetitive conduct of an undertaking or
group of undertakings has as its ‘object or effect the prevention, restriction or
distortion of competition within the internal market’, the undertaking will be

24
See for a detailed examination of the evolution of EU antitrust law and policy, Pablo Ibáñez Colomo
& Andriani Kalintiri, The Evolution of EU Antitrust Policy: 1966–2017, 83(2) MLR 321–372 (2020).
25
In short, Art. 101(1) of the TFEU sets out that such agreements or decisions are incompatible with the
internal market. These agreements or decisions are automatically void in accordance with Art. 101(2)
of the TFEU. The term undertaking includes public and private entities; legal status is not decisive. See
Case C-41/90 – Klaus Höfner and Fritz Elser v. Macrotron GmbH, [1991] ECR I-01979, para. 21.
26
Article 102 of the TFEU. See on relevant market, Commission Notice on the Definition of Relevant
Market for the Purposes of Community Competition Law, [1997] C 372/03 (9 Dec. 1997); Case 85/
76 – Hoffmann-La Roche v. Commission, [1979] ECR 461, para. 21 et seq.
27
See Steven Truxal, The Development of Tactical and Strategic Alliances, in Competition and Regulation in the
Airline Industry: Puppets in Chaos (Routledge 2012), Ch. 4.
28
Historically, agreements to pool revenue, limit capacities and agree tariffs, for instance, were covered
by block exemptions. See for a review on this evolution, Ibid., Ch 2, 4. The European Commission
may exempt certain categories of agreements in air transport. See Council Regulation (EC) No 487/
2009 of 25 May 2009 on the Application of Art. 81(3) of the Treaty to Certain Categories of
Agreements and Concerted Practices in the Air Transport Sector, [2009] OJ L 148/1 (11 June
2006). See for a review of current developments in this area, Matthew Levitt, Competition Law
Developments in the Transport Sector, 12(6) J.E.C.L. & Pract. 479–489 (2021).
29
See Summary of Commission Decision of 12 May 2015 Relating to a Proceeding under Art. 101 of
the Treaty on the Functioning of the European Union (Case AT.39964 – Air France/KLM/Alitalia/
Delta), [2015] OJ 212/5 (27 June 2015); Summary of Commission Decision of 23 May 2013 Relating
to a Proceeding under Art. 101 of the Treaty on the Functioning of the European Union (Case
AT.39595 – Continental/United/Lufthansa/Air Canada), [2013] OJ C 201/8 (13 July 2013); Summary
of Commission Decision of 14 July 2010 Relating to a Proceeding under Art. 101 of the Treaty on the
Functioning of the European Union and Art. 53 of the EEA Agreement (Case COMP/39.596 –
British Airways/American Airlines/Iberia (BA/AA/IB)), [2010] OJ C278/14 (15 Oct. 2010).
34 AIR AND SPACE LAW

subject to the EU antitrust rules30 and the agreement in question prohibited.31 The
same holds true for undertakings in the UK as for those located in any other third
country.32
The European Commission continues to exercise jurisdiction over such
agreements and conduct. The UK authorities, that is principally the CMA, may
apply its own antitrust rules. Those rules are set out in the Competition Act in the
main, including Article 2 on anticompetitive agreements between undertakings
and Article 18 on abuse of dominant position. In substance, these two provisions
very closely resemble their counterparts, Articles 101 and 102 of the TFEU
respectively, though the words ‘within the internal market’ have now been
replaced in the UK legislation with ‘within the United Kingdom’. Thus, the
antitrust rules in the EU and UK remained essentially unchanged at the end of
the Transition Period. Now, the European Commission and CMA may exercise
jurisdiction in parallel. However, EU law applies exclusively to any proceedings
that began before the Transition Period had ended.
As regards investigations, the European Commission is still able to obtain
information from UK undertakings under Article 18 of Council Regulation (EC)
No 1/2003. For any investigation that was launched prior to the conclusion of the
Transition Period, EU law will apply. In turn, the European Commission may
carry out inspections in connection with those investigations under Articles 20 and
21 of Council Regulation (EC) No 1/2003. However, the European Commission
may no longer carry out inspections for any new investigation initiated on 1
January 2021 or later.
The EU antitrust rules continue to apply therefore to agreements and conduct
of undertakings that are ‘caught’ by EU law. The new situation is that, in a similar
fashion, UK antitrust rules will also apply to undertakings that are ‘caught’ by UK
law. This leads to concurrent regulation and jurisdiction, and will certainly be
relevant for airlines that operate their own aircraft or engage in cooperative
agreements, such as codeshare agreements, with other airlines engaged in air
services between the UK and EU.
The UK antitrust rules in their current form do not, for the moment, depart
much from the EU rules. With that said, while both UK and EU law refer to the
concept of ‘undertaking’, as interpreted broadly by the CJEU as ‘every entity
engaged in an economic activity, regardless of the legal status of the entity and the
way in which it is financed’,33 the TCA adopts a new term: ‘economic

30
Article 101(1) of the TFEU.
31
Article 101(2) of the TFEU, subject to exceptions in Art. 101(3) of the TFEU.
32
See e.g., on the jurisdiction point, Case C-413/14 P – Intel Corp. v. European Commission, [2017]
ECLI:EU:C:2017:632, paras 40 et seq.
33
Case C-41/90 Klaus Höfner and Fritz Elser v. Macratron GmbH [1991] ECR I-1979, para. 21.
 STATE AID REGULATORY ENVIRONMENT 35

operators’.34 The TCA defines an economic operator as ‘an entity or a group of

entities constituting a single economic entity, regardless of its legal status, that is
engaged in an economic activity by offering goods or services on a market’.35 The
effect, if any, of such a change is subject to debate.36
Although the ECN Model Leniency Programme37 no longer applies to the
UK and applications for immunity will now be assessed by the CMA on a case-by-
case basis, the UK has retained in law those block exemption regulations that were
already in force at the end of the Transition Period.38 The WA provides that the
European Commission will retain its competence to monitor and enforce antitrust
commitments or remedies imposed in relation to the UK in connection with EU
antitrust cases.39 The CJEU has exclusive jurisdiction to review the legality of such
decisions.40 The European Commission may transfer the responsibility to the
CMA and concurrent regulators by mutual agreement.
Consider the alliance agreements between American Airlines, British Airways
plc and Iberia Líneas Aéreas de España, to establish a revenue-sharing joint venture
and other forms of extensive cooperation, including pricing, capacity and schedul-
ing coordination on the routes between North America and Europe.41 On the face
of it, the agreements may be prohibited under Article 101(1) of the TFEU.
However, the parties argued to the European Commission in 2010 that the
agreements would result in benefits for consumers within the meaning of Article
101(3) of the TFEU, and that Article 101(1) of the TFEU should therefore be
declared inapplicable.42 So as to address possible distortion of competition, the
parties therefore agreed to a number of legally binding commitments in relation to
six routes: between London and Dallas, Boston, Miami, Chicago and New York;

34
Articles 358(2) and 363(1)(a) of the TCA.
35
Ibid.
36
Some scholars argue that the concept of ‘single economic entity’ is already a doctrine of EU
competition law. See Okeoghene Odudu & David Bailey, The Single Economic Entity Doctrine in EU
Competition Law, 51(6) CML Rev. 1721–1758 (2014).
37
Commission Notice on Cooperation Within the Network of Competition Authorities, [2004] OJ C 101/43 (27
Apr. 2004). See for more information, European Competition Network, ECN Model Leniency
Programme, https://ec.europa.eu/competition/ecn/model_leniency_en.pdf (accessed 15 July 2021).
38
Section 10 of the Competition Act. Note the language change from ‘parallel exemption’ to ‘retained
exemption’. See as a relevant example, for instance, Commission Regulation 330/2010 of 20 Apr.
2010 on the application of Art. 101(3) TFEU to categories of vertical agreements and concerted
practices, [2010] OJ L 102/1 (23 Apr. 2010). See for a detailed overview, Practical Law Competition,
Co-operation Between the European Commission and National Competition Authorities, Thomson Reuters
(2021), https://uk.practicallaw.thomsonreuters.com (accessed 15 July 2021).
39
CMA, supra n. 18, 4.13; Art. 95(2) of the WA.
40
Article 95(3) of the WA, and in accordance with Art. 263 of the TFEU.
41
Commission Decision of 14 July 2010 Relating to a Proceeding under Art. 101 of the Treaty on the
Functioning of the European Union and Art. 53 of the EEA Agreement, Case COMP/39.596 – BA/
AA/IB, para. 1(2).
42
Ibid., para. 77.
36 AIR AND SPACE LAW

and between Madrid and Miami.43 There were also commitments to make airport
slots available at London’s Heathrow and Gatwick airports. All of the commit-
ments were binding under EU law for ten years, and were set to expire in 2020.44
In the meantime, British Airways merged with Iberia in 2011, and in turn
created the International Airlines Group (IAG), which has its registered office in
Madrid and its global headquarters in London. IAG acquired Aer Lingus in 2015.
The Brexit referendum was held in 2016.
Already in 2018, the UK’s CMA launched an investigation into the Atlantic
Joint Business Agreement between American Airlines, IAG members (British
Airways, Iberia and Aer Lingus) and Finnair under Chapter I of the Competition
Act. According to the CMA:
On expiry of the parties’ commitments, in 2020, the European Commission may have re-
assessed the agreement, but there was no requirement for it to do so. As 5 of the 6 routes
subject to commitments are from the UK, and to prepare for the time when the European
Commission will no longer have responsibility for competition in the UK, the CMA
decided to review afresh the competitive impact of the agreement in anticipation of the
expiry of the commitments.45
This demonstrates that, already in 2018, two years before the UK left the EU, the
CMA was already well underway in carrying out an investigation that had been
previously initiated by the European Commission, clearly owing to the UK scope
of the cooperation. In 2021, the matter is now within the CMA’s jurisdiction. The
CMA’s investigation is ongoing, but it has issued interim measures which will
expire in March 2024.46
However, the agreements may also affect competition on the EU internal
market, given the scale of the alliance and the geographic scope, not to mention
that the Finnish flag carrier, Finnair, is now also a party to the agreements. Is it
probable that the European Commission will review these agreements, given that
there is likely to be an effect on the EU internal market?
Parallel investigations of alleged anticompetitive agreements or conduct is
nothing new. For the airline industry, cooperative agreements and collusion
between two or more airlines have been the subject of assessments and infringe-
ment proceedings, respectively, by multiple other competition authorities applying
domestic rules, e.g., the US Department of Transportation, in addition to the

43
Truxal, supra n. 27, at 35.
44
Ibid., Art. 1. The commitments were binding on the parties in accordance with Art. 9 of Council
Regulation (EC) No 1/2003.
45
CMA, Investigation of the Atlantic Joint Business Agreement (22 Feb. 2021), https://www.gov.uk/cma-
cases/investigation-of-the-atlantic-joint-business-agreement (accessed 5 July 2021).
46
CMA, Case Number 50616 – Decision to Issue Interim Measures Directions Under s. 35 of the Competition
Act 1998 (17 Sept. 2020), https://assets.publishing.service.gov.uk/media/5f621a70e90e072b
c1a7533e/AJBA_Decision_to_issue_interim_measures_170920.pdf (accessed 5 July 2021).
 STATE AID REGULATORY ENVIRONMENT 37

European Commission. It is safe to say that, for the time being, the EU and UK
antitrust rules are at least comparatively more aligned than EU and US antitrust
rules and enforcement.47

4 MERGER CONTROL
EU merger control may be ex ante or ex post. In an ex post regime, notification to
the relevant competition authority is not compulsory. The competition authority
may decide to investigate the merger ex post. A concentration is formed when two
or more companies combine through a merger or acquisition.48 Under the
EUMR, notification is mandatory if a concentration has an EU dimension; thus,
an ex ante regime.49 Large mergers with an EU dimension that pass certain
thresholds of annual turnover are dealt with by the European Commission,
while smaller mergers will fall within the charge of NCAs of the Member States.
The thresholds for a concentration that has an EU dimension are detailed in the
EUMR 50 A series of mergers and acquisitions in the airline industry over the years
has given way to market consolidation. In Europe, three large groups have
emerged: Lufthansa Group (1995), Air France–Koninklijke Luchtvaart
Maatschappij (KLM) Group (2004) and International Airlines Group (2011).
Under the EUMR, the European Commission has also assessed mergers not
involving EU carriers.51
The company that will acquire control once the concentration is formed is the
one required to notify the European Commission prior to implementation of the
merger or acquisition. If the agreement to combine requires coordination with
other jurisdictions, it is possible to give a pre-notification before any agreement to
combine becomes legally binding. Under EU law, following the principle of
subsidiarity, it is only necessary to provide notification of a proposed merger to

47
This is subject to academic debate on divergence or convergence of EU and US antitrust. See for
instance, James C Cooper & William E. Kovacic, US Convergence with International Competition Norms:
Antitrust Law and Public Restraints on Competition, 90(4) B.U. L. Rev. 1555–1610 (2010); Ioannis
Kokkoris, Introduction: EU and US Competition Enforcement – Convergence or Divergence?, 59(1) Antitrust
Bull 1–8 (2014). See for a comparison on EU competition law and US antitrust and EU-US regulatory
cooperation, Truxal, supra n. 27.
48
Noting that a ‘full-function’ joint venture will also fall under the EUMR if it creates a concertation
and an EU dimension exists. If the joint venture includes cooperative arrangements, Art. 101 TFEU
applies (to the cooperation) under EUMR procedures. See on the concept of the full-function joint
venture, European Commission, Commission Notice on the Concept of Full-Function Joint Ventures Under
Council Regulation (EEC) No 4064/89 on the Control of Concentrations Between Undertakings, [1998] OJ C
66/1 (2 Mar. 1998).
49
Article 4 of the EUMR.
50
See for the relevant thresholds, Arts 1(2) and 1(3) of the EUMR.
51
Under Art. 6(1)(b) in conjunction with Art. 6(2) of the EUMR See e.g., the merger between two US
airlines, Case No COMP/M.6607 – US Airways/American Airlines, C(2013) 5232 final (5 Aug. 2013).
38 AIR AND SPACE LAW

one competition authority: a national authority or the European Commission,

whichever is best placed to examine the merger.52
Concentrations continue to be controlled by the European Commission
under the EUMR The fact that the United Kingdom is a third country does not
affect the applicability of EU merger control to concentrations involving UK
undertakings, subject to the EUMR jurisdictional criteria.53 Where an EU dimen-
sion exists in a potential concentration, the EU merger control rules will apply
irrespective of nationality, state of incorporation or location of a company’s head-
quarters. However, since the end of the Transition Period, the European
Commission’s review of mergers does not cover the merger’s effects on UK
markets as it no longer has jurisdiction to include the UK (as a part of the EU
dimension) in the concentrations it reviews.
In the UK, merger control is governed by the 624-page Enterprise Act
2002 as amended.54 Since 1 April 2014, the CMA handles the competition
functions of two UK bodies abolished on the same day: the Office of Fair
Trading and the Competition Commission. The jurisdictional thresholds for a
‘relevant merger situation’ under the Enterprise Act relate to UK turnover and
proportion of sales or purchases, and are set out at different levels from those in
the EUMR 55 In addition, UK law established special, lower threshold levels
for so-called ‘relevant enterprises’ in specific sectors, for instance, artificial
intelligence.56
In the UK, pre-notifications may be made to the CMA’s Mergers Unit, just as
the case in the EU to the European Commission. However, there is no require-
ment to notify the CMA of concentrations under UK law. While notification is
voluntary, the CMA has a ‘duty to track merger activity to determine whether any
unnotified merger may give rise to a substantial lessening of competition … [and]
therefore has mergers intelligence staff who scan sources of information on mergers
and present potential candidates for investigation’.57 The CMA publishes merger

52
The referral process is set out in Art. 9 of the EUMR The rationale behind the process is to ‘ensure
that mergers are examined by the best placed authority’. (European Commission, New Merger
Regulation Frequently Asked Questions, MEMO/04/9 (20 Jan. 2004), at 2).
53
Article 22 of the EUMR; Communication from the Commission, Commission Guidance on the
Application of the Referral Mechanism Set Out in Art. 22 of the Merger Regulation to Certain Categories of
Cases, C(2021) 1959 final (26 Mar. 2021).
54
Timothy McIver & Anne-Mette Heemsoth, Merger Control in the UK (England and Wales): Overview,
Thomson Reuters (2021), https://uk.practicallaw.thomsonreuters.com; The Enterprise Act 2002 was
amended by the Enterprise and Regulatory Reform Act 2013, which entered into force in Apr. 2014.
55
Article 23 of the Enterprise Act 2002, as amended.
56
Article 23A of the Enterprise Act 2002 as amended by the Enterprise Act 2002 (Turnover Test)
(Amendment) Ord. 2020 and the Enterprise Act 2002 (Share of Supply) (Amendment) Ord. 2020.
57
CMA, Guidance on the CMA’s Mergers Intelligence Function, CMA56revised 1.2 (Dec. 2020), https://
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/947380/
CMA56_dec_2020.pdf (accessed 16 July 2021).
 STATE AID REGULATORY ENVIRONMENT 39

control guidance, such as on its mergers intelligence function58 as well as on its

jurisdiction and procedure.59 Parties to a merger are encouraged to engage with
the CMA at an early stage and to update the CMA on any proceedings in other
jurisdictions.60 If remedies in other jurisdictions, ‘do not fully eliminate any
competition concerns relating to the UK, the CMA [will open] a formal investiga-
tion at a later stage’.61 As mergers and acquisitions in air transport sector are likely
to ‘touch’ the UK, it will be essential for the relevant parties to determine whether
the merger will fall within the CMA’s jurisdiction. If UK merger control remedies
differ from EU remedies, this could create a difficult environment for the parties.
When assessing future mergers, coordination between competition authorities will
be key to avoid imposing conflicting remedies.
Consider, for example, the proposed acquisition of Air Europa by the Anglo-
Spanish IAG, the third and first largest providers of air transport services in Spain,
respectively. IAG notified the proposed transaction to the European Commission,
which in turn launched an investigation into the proposed acquisition in June
2021; the investigation is ongoing at the time of writing.62 While it is reported that
the Chief Executive Officer (CEO) of Ryanair, a major competitor of IAG, has
said that he will ask the CMA ‘to force the firm to make divestments to get the
deal through’, it is unclear if IAG will also notify the CMA of the proposed
acquisition or if the CMA will launch its own investigation.63
For commitments accepted by the European Commission before the end of the
Transition Period, the WA ‘provides an option to transfer responsibility for mon-
itoring and enforcing the UK elements of the commitments to the CMA by mutual
agreement between the European Commission and the CMA’.64 As seen in the
antitrust case discussed earlier, as commitments set to expire, the CMA will launch
new or ‘sunset’ reviews. In the meantime, responsibility may be transferred to the
CMA for monitoring and enforcing existing commitments on a case-by-case basis.65
58
CMA, Guidance on the CMA’s Mergers Intelligence Function, CMA56revised (Dec. 2020).
59
CMA, Mergers: Guidance on the CMA’s Jurisdiction and Procedure, CMA2revised (Dec. 2020), https://
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/987640/
Guidance_on_the_CMA_s_jurisdiction_and_procedure_2020.pdf (accessed 16 July 2021).
60
Ibid., at 4.3.
61
Ibid., at 4.4.
62
European Commission, Mergers: Commission Opens In-depth Investigation Into Proposed Acquisition of Air
Europa by IAG, Press release IP/21/3328 (29 June 2021), https://ec.europa.eu/commission/presscor
ner/detail/en/IP_21_3328 (accessed 16 July 2021).
63
Joe Curtis, Ryanair Will Ask for IAG Divestments in €1bn Air Europa Deal, CityA.M. (4 No. 2019), https://
www.cityam.com/ryanair-cuts-profit-guidance-as-737-max-planes-face-delay/ (accessed 16 July 2021).
64
CMA, supra n. 18, at 3.33. The legal basis is found in Art. 95(2) of the WA, and implementation is
achieved via Reg. 8 of The Competition (Amendment etc.) (EU Exit) Regulations 2020, which
inserted s. 95A in the Enterprise Act 2002.
65
Peter Willis & Ariane Le Strat, The Functions of the CMA Post Brexit, Bird&Bird (Nov. 2020), https://
www.twobirds.com/en/news/articles/2020/uk/the-functions-of-the-cma-post-brexit (accessed 16
July 2021).
40 AIR AND SPACE LAW

The European Commission had exclusive competence to review mergers with

an EU dimension prior to 1 February 2020, when the UK was still a Member State
of the EU, and again during the Transition Period.66 During those times, the CMA
did not conduct its own competition assessment unless the case was transferred to it
under the EUMR 67 The European Commission is responsible for EUMR merger
proceedings that already began before the end of the Transition Period.68 This will
include notifications of mergers,69 pre-notification requests70 or NCA references to
examine a merger that was accepted by the European Commission.71 For mergers
initiated after the end of the Transition Period, the CMA now has jurisdiction to
review the mergers and their effects on UK markets, applying UK merger control
rules.72
A significant change, as seen from the perspective of undertakings, is the
exclusive jurisdiction of the European Commission in merger control under the
so-called ‘one-stop shop’ principle.73 Going forward, there are likely to be parallel,
concurrent merger reviews in the EU and UK, and therefore an increased number
of merger filings with the associated required levels of engagement by business
with EU and UK merger control rules and competition authorities. There is also a
new risk of different outcomes for a single concentration in the two jurisdictions.

5 UK ‘SUBSIDY CONTROL’
Save for a derogation on UK measures ‘to support the production of and trade in
agricultural products in Northern Ireland’, the EU state aid rules applied to the UK
until the end of the Transition Period.74 The EU rules no longer apply to State aid
measures from 1 January 2021, as it is now the TCA that obligates the UK to set
66
Article 21(3) of the EUMR.
67
Under the referral request procedures in Art. 9 of the EUMR.
68
Article 92(1) of the WA.
69
Articles 1, 3 and 4 of the EUMR It is possible to include mergers referred to Member States under Art.
9 of the EUMR.
70
See on the rules for pre- and post-notification referrals, Arts 4(4) and 4(5) of the EUMR.
71
Article. 22 of the EUMR.
72
CMA, Jurisdictional and Relevant Merger Control Situations’, in Mergers: Guidance on the CMA’s Jurisdiction
and Procedure, CMA2revised (Dec. 2020), s. 4; see also.
73
See Ulrich Soltész et al., Brexit and Competition Law – Saying Goodbye to the ‘One-Stop Shop’ and the
European Competition Network, Gleiss Lutz (6 Nov. 2020), https://www.gleisslutz.com/en/Brexit_and_
competition_law.html (accessed 16 July 2021).
74
Articles 10(1) and 10(2) of the Protocol on Ireland/Northern Ireland, [2020] OJ L 29/102 (31 Jan. 2020).
The relevant State aid rules are found in the TFEU: Arts 107, 108 and 109; Art. 106 so far as it
concerns State aid; and Art. 93. Also included are acts referring to the notion of aid: Commission
Notice on the Notion of State Aid, [2016] OJ C 262/1 (19 July 2016); Communication from the
Commission on the Application of the European Union State Aid Rules to Compensation Granted for
the Provision of Services of General Economic Interest, [2012] OJ C 8/4 (11 Jan. 2012); and
Commission Notice on the Application of Arts 87 and 88 of the EC Treaty to State Aid in the
Form of Guarantees, [2008] OJ C 155/10 (20 June 2008).
 STATE AID REGULATORY ENVIRONMENT 41

up its own system of ‘subsidy control’.75 The TCA clarifies that subsidies granted
by public authorities to economic actors who are assigned to carry out tasks in the
public interest, such as PSOs related to air transport services,76 fall outside the
scope of the subsidy control principles that the EU and UK agree to respect.77
The UK Government presented a Subsidy Control Bill in the House of
Commons on 30 June 2021.78 The bill was given its first reading, which is a
formal stage without debate. At the time of writing, a date for the second reading
has yet to be scheduled. The purpose of the Subsidy Control Bill is to create and
implement a bespoke subsidy control regime in the UK ‘that reflects the UK’s
strategic interests and particular national circumstances, providing a legal frame-
work within which public authorities make subsidy decisions’.79 According to the
UK Department for Business, Energy and Industrial Strategy, the new regime ‘has
been designed to empower public authorities to award subsidies at pace, with
minimal red tape. The framework will ensure that the UK remains compliant with
its international commitments and will also manage any impacts on competition in
the UK’.80
With this approach, the UK government advocates that it is taking a ‘propor-
tionate approach to risk’:
The [proposed] process for granting subsidies is quicker and simpler for those subsidies
which are most easily demonstrated as being compliant with the subsidy control principles.
More extensive self-assessment and scrutiny will take place for those subsidies which have a
higher likelihood of having distortive effects on UK investment and competition and
international trade.81
The Subsidy Control Bill proposes four categories of subsidies; each category has
specific thresholds and requirements. The subsidy categories are: baseline,

75
Article 366(1) of the TCA. The entirety of obligations on both the EU and the UK as regards subsidy
control are covered in Arts 363–374 of the TCA. EU and UK airlines and airports have been the
beneficiaries of unprecedented levels of State aid offered in response to the impact of the Coronavirus
Disease-2019 (COVID-19) pandemic on the industry. See Steven Truxal, State Aid and Air Transport in
the Shadow of COVID-19, 45(Special Issue 5) Air & Space L. 61–82 (2020).
76
Air transport service PSOs within the EU are assigned in accordance with Regulation (EC) No 1008/
2008 of the European Parliament and of the Council of 24 Sept. 2008 on common rules for the
operation of air services in the Community, [2008] OJ L 293/3 (31 Oct. 2008).
77
Article 365(1) of the TCA. The principles are set out in Art. 366 of the TCA. In accordance with Arts
365(2) and 369 of the TCA, if the compensation paid per task is below 15 million Special Drawing
Rights, there is no requirement to make public the details of the subsidy. At this stage, it therefore
appears that air transport PSOs will continue to be permitted also in the future UK subsidy regime.
78
A Bill to Make Provision Regulating the Giving of Subsidies Out of Public Resources; and for Connected
Purposes (Bill 135 2021–22, as introduced).
79
Explanatory Notes to the Subsidy Control Bill (Bill 135-EN, 58/2), as introduced on 30 June 2021, at 1.
80
UK Government, Subsidy Control Bill 2021 Policy Paper: Process for Granting Subsidies (30 June 2021),
https://www.gov.uk/government/publications/subsidy-control-bill-policy-papers/process-for-grant
ing-subsidies (accessed 15 July 2021).
81
Ibid.
42 AIR AND SPACE LAW

streamlined, subsides of interest, and subsidies of particular interest.82 It is also

proposed to create a new Subsidy Advice Unit to sit within the CMA; its tasks
would be reporting on assessments by public authorities that grant subsidies and
monitoring and overseeing the UK system of subsidy control.83 Based on the text
of the Subsidy Control Bill and other available government information sources,
however, it is evident that the CMA will not have an enforcement role. Instead,
subsidies may only be challenged through the courts, should a party find that its
‘interests may be affected’ and be therefore willing to pursue such a challenge.84
The Competition Appeals Tribunal would ‘be the court of first instance for legal
challenges to subsidies [provided] by public authorities, [and would provide]
judicial review rather than a review on the merits’.85 That, plus the lack of direct
enforcement and the fact that there is no definition of ‘subsidies of interest’ would
appear to be the most significant features of the Bill.86
If and when the Subsidy Control Bill is passed and the Subsidy Control and
Advice Units are established, it will remain to be seen how the UK subsidy control
regime will function in practice and whether it will discharge the UK’s obligation
under the TCA. As the State aid regime in the EU takes a different form and
approach to subsidy control, questions may be raised in time about the extent to
which the two systems are compatible and complementary. At the same time, the
EU is developing its law and policy on foreign subsidies. To that end, the
European Commission adopted a Proposal for a Regulation on foreign subsidies
distorting the internal market in May 2021.87 The UK may be seriously impacted
by the proposed Regulation. If a UK authority grants a subsidy to a UK company,
like an airline or an airport that has EU operations or a subsidiary located in the
EU, this could trigger an action by the European Commission in future.

6 CONCLUSION
After the Brexit referendum on 23 June 2016, and the several years of difficult
negotiations between the EU and the UK that followed, in many respects the dust
around the EU-UK relations has begun to settle. This article has offered some

82
Section. 11 of the Subsidy Control Bill.
83
Section 68 of the Subsidy Control Bill.
84
Section 70(7) of the Subsidy Control Bill.
85
See Tim Briggs et al., State Aid’s Coming Home? Government Publishes Details of New UK Subsidy Control
Regime, Herbert Smith Freehills (6 July 2021), https://hsfnotes.com/brexit/2021/07/06/state-aids-com
ing-home-government-publishes-details-of-new-uk-subsidy-control-regime/ (accessed 10 July 2021).
86
See Thomas Pope, The Subsidy Control Bill Does Not Guarantee Post-Brexit State Aid Success, Institute for
Government (1 July 2021), https://www.instituteforgovernment.org.uk/blog/subsidy-control-bill
(accessed 5 July 2021).
87
European Commission, Proposal for a Regulation of the European Parliament and of the Council on Foreign
Subsidies Distorting the Internal Market, COM(2021) 223 final, 2021/0114 (COD), (5 May 2021).
 STATE AID REGULATORY ENVIRONMENT 43

reflections on the current state of play in the EU and UK from the perspective of
EU-UK activity in the areas of competition and State aid. As discussed in this
article, these areas are under development and subject to change. Four ‘moving
parts’ are singled out and considered below.
The first moving part is law reform. UK law is still in the process of being
amended and updated; reforms on the application of competition rules is
underway.88 In the process of writing this article, the online versions of the
Competition Act and Enterprise Act, for example, contained disclaimers that
outstanding changes had not yet been made by the editorial team of the
National Archives, which publishes legislation on behalf of the UK
government.
In July 2021, the UK Government published an open consultation on
Reforming Competition and Consumer Policy.89 The proposal is to change competition
and consumer laws, as well as to expand the powers of the CMA.90 For now,
however, the law on antitrust remains relatively untouched. While the geographic
scope of markets has changed – with the UK markets now firmly outside the
internal market – the implications for airlines, already accustomed to operating in
multiple markets and thus subject to different competition regimes, will not be too
unfamiliar. The biggest changes that are likely to be felt in the immediate future are
for matters concerning concentrations and subsidies, both in terms of dual proce-
dures and separate rules. The UK and EU are developing laws on subsidy control;
for the UK it’s about creating a national regime while the EU’s focus is on foreign
subsidies. The question is: how will this new space for regulatory competition
develop?
The second moving part – linked to the first – is the CMA, which under-
standably is, firstly, finding its feet as an independent, national competition author-
ity applying ‘its own’ national rules, and secondly, receiving expanded powers to do

88
See Bill Batchelor, Ingrid Vandenborre & Aurora Luoma, Post-Brexit, a More Demanding UK Merger
Review Process, Skadden (26 Jan. 2021), https://www.skadden.com/insights/publications/2021/01/
2021-insights/regulatory/post-brexit-a-more-demanding-uk-merger (accessed 10 July 2021).
89
UK Government, Reforming Competition and Consumer Policy, Open Consultation (20 July 2021),
https://www.gov.uk/government/consultations/reforming-competition-and-consumer-policy
(accessed 22 July 2021). The consultation closed on 1 Oct. 2021.
90
See Stephen Wisking, Veronica Roberts & Kristien Geeurickx, The UK Government Launches a
Consultation on a Wide Range of Far-Reaching Changes It Is Proposing to the UK Competition and
Consumer Protection Regimes, Concurrences No 101798 (20 July 2021), https://www.concurrences.
com/en/bulletin/news-issues/august-2021-en/the-uk-government-launches-a-consultation-on-a-
wide-range-of-far-reaching (accessed 22 July 2021); Bill Batchelor et al., The UK Government Publishes
Consultations on Far-Reaching Reforms to Competition and Consumer Laws Which Would Substantially
Expand the Powers of the Competition Authority and Reduce Procedural Protections, Concurrences No
101810 (20 July 2021), https://www.concurrences.com/en/bulletin/news-issues/august-2021-en/
the-uk-government-publishes-consultations-on-far-reaching-reforms-to (accessed 22 July 2021).
44 AIR AND SPACE LAW

so. The CMA webpages are in the process of being updated. On 1 July 2021, the
CMA announced that it had expanded its senior legal team.91 To what extent will
the law reform and connected expansion of the CMA’s power deliver the UK’s
interest in reducing regulatory hurdles and ‘cutting red tape’. Is such an aim
realistic?
The third moving part is the future commercial activity on the one hand, and
subsidies on the other hand. The EU and UK regimes will soon be tested by
activity in these areas and that will reveal what works well – and what are the gaps
or shortcomings. Cross-border activity will likely trigger the first noticeable reac-
tions and frictions in the new EU-UK relationship; some examples have been
provided in this article.
Finally, the new era of EU-UK cooperation in the areas of competition and
subsidy control has yet to take shape. The basis for cooperation is a new
Partnership Council, established by the TCA, that is comprised of ‘representatives
of the Union and of the United Kingdom’92 and is ‘co-chaired by a Member of the
European Commission and a representative of the Government of the United
Kingdom at ministerial level’.93 The EU and UK ‘recognise the importance of
cooperation between their respective competition authorities with regard to devel-
opments in competition policy and enforcement activities’.94 To achieve this, the
EU and UK have agreed that, on their respective sides, the European Commission
and NCAs of the EU Member States, and the UK’s competition authorities ‘shall
endeavour to cooperate and coordinate, with respect to their enforcement activ-
ities concerning the same or related conduct or transactions, where doing so is
possible and appropriate’.95 The EU and US competition authorities, by compar-
ison, arguably have attained a successful level of regulatory cooperation to date, if
this is something to go by in this otherwise new EU-UK regulatory environment.

91
CMA, CMA Expands Its Senior Legal Team (1 July 2021), https://www.gov.uk/government/news/
cma-expands-senior-legal-team (accessed 6 July 2021).
92
Article 7(1) of the TCA.
93
Article 7(2) of the TCA.
94
Article 361(1) of the TCA.
95
Article 361(2) of the TCA.