m e m o r a n d u m - fnav · m e m o r a n d u m pac/meet/237 to: ... po box 416 ch - 1215 geneva...

International Air Transport Association Route de l'Aeroport 33

PO Box 416 CH - 1215 Geneva 15 Airport

Switzerland Tel: +41 22 770 2731 Fax: +41 22 770 2896

M E M O R A N D U M

PAC/Meet/237 To: All Members, Passenger Agency Conference

Accredited Representatives From: Director, Financial & Distribution Services Operations

Date: 18 August 2016

Subject: PASSENGER AGENCY CONFERENCE

39th Meeting of the Passenger Agency Conference (PAConf/39) Marina Bay Sands Hotel, Singapore, 19-21 September 2016

2nd Transmittal of Agenda Documents

NOTICE OF MEETING PAConf/39 was convened by PAC/Meet/235 of 17 June 2016. The first transmittal of agenda papers was published under cover of PAC/Meet/236 dated 18 July 2016. This document contains the second transmittal of Agenda Documentation. The 39th Passenger Agency Conference (PAConf/39) will be held at the Marina Bay Sands Hotel, Singapore. The Conference will commence at 09.00 hours on Monday, 19 September 2016 and is expected to last through to 18.00 hours on Wednesday, 21 September 2016. The main focus of PAConf this year will be New Gen ISS (NGI), which if adopted will herald some of the most significant changes to the Passenger Agency Programme since the inception of the Passenger Agency Conference in 1979. Due to the importance of these major items on the agenda, PAConf is being held at the same venue as the World Financial Symposium (WFS) and related industry events including the IATA Financial Committee (FinCom) meeting on 21 September. Members of FinCom are also invited to join with their PAConf delegates when the NewGen ISS items are taken. A meeting of the Passenger Agency Conference Steering Group (PSG) will be held before and immediately after the close of Conference. In addition, a series of workshops will be held on Sunday, 18 September 09.00-18.00 hours. These sessions are open to all attendees and will cover the four streams of New Gen ISS. It is an opportunity to gain a thorough understanding of the changes to the Agency Programme New Gen ISS is bringing.




Below is the schedule of meetings:

Event Date

Participation Working hours

PSG/96

Sunday, 18 September

PSG members only

16.00-18.00

NewGen ISS Workshops

Sunday, 18 September

All IATA Members

09.00-18.00

PAConf/39

Monday through Wednesday, 19-21 September

All IATA Members

09.00-18.00

MEETING SITE All the above meetings will be held at: MARINA BAY SANDS HOTEL 10 Bayfront Ave, Singapore 018956 NEW We would like to introduce you to our website which is available on https://extranet2.iata.org/sites/distribution-management. On this website we are sharing the PAConf Call of Meeting, 1st and 2nd Transmittals, and other useful information, in one location that you can access from anywhere. Together with both the 1st and 2nd Transmittals you have received a guide on how to register and access the website. On this website you will also find the list of registered representatives and alternates including the accreditation forms. Also new for this year is that the 1st and 2nd Transmittals are consolidated in this document, and delegates will only need to refer to this one document to have all agenda items. We hope that this change will make it easier for delegates to follow the agenda at Conference.

ACCREDITATION OF REPRESENTATIVES AND ALTERNATES Your attention is drawn to Article V of the Provisions establishing procedures for the accreditation of representatives and alternates to the Passenger Agency Conference. Our list of registered representatives and alternates is shown at Attachment ‘A’ which is available on our website. In order to avoid confusion as to voting rights, please ensure that your accreditation is in order. If you wish to change your company’s accreditation particulars, kindly use the accreditation forms in Attachments ‘B’ and ‘C’ also available on our website and return them without delay to the IATA Geneva office at the address indicated on the form.

https://extranet2.iata.org/sites/distribution-management




IMPORTANT If any of the information shown is incorrect, please notify this office immediately. IATA has not received completed accreditation forms for those names highlighted in grey. Members are requested to complete the appropriate form and return it as soon as possible to Lina Pettersson ([email protected]). Please note that without an accreditation form you may NOT VOTE. AGENDA ITEMS Agenda items should be addressed to the Secretary of the Passenger Agency Conference, care of [email protected]. Members are invited to set out proposals in accordance with the model shown in Attachment ‘D’, also available on the website. Submissions in standard word format, in original copy and single spaced, would be appreciated since that simplifies the task of producing the agenda. Kindly ensure that submissions are in adequate detail including, where appropriate, suggested resolution amendments. All proposals will be assumed to be for normal effectiveness of 1 June 2017 unless otherwise requested. DEADLINES The timetable for the submission of agenda items is:

Papers required by: Publication date: 1st Transmittal 01 July 18 July 2nd Transmittal 04 August 18 August REGISTRATION AND HOTEL ACCOMODATION IATA has reserved hotel accommodation at the Marina Bay Sands Hotel at preferential rates, which can be accessed when confirming attendance through the online registration tool at PAConf Registration website . Due to other events taking place in Singapore the weekend of 17/18 September, Members are encouraged to secure their hotel reservation at the Marina Bay Sands Hotel as early as possible. Apart from hotel accommodation, attendance at PAConf or other industry meetings is free of charge for IATA Members. However, Members have been granted a discounted rate should they wish to attend the varied programme of events scheduled for the World Financial Symposium. Full programme details can be found on the WFS official website.

To register for PAConf only at no charge, please follow the steps below:

Step 1: Please visit the PAConf Registration website Step 2: Select the Attendee Type "IATA Member" Step 3: Please choose the Registration Type "PAConf" Step 4: Complete the online registration process as prompted.

mailto:[email protected]

mailto:[email protected]

https://ems.resrunner.com/paconf

http://www.iata.org/events/Pages/financial-symposium.aspx





Please note, if you reserved a hotel room, you need to enter your credit card details to guarantee your hotel booking, but your card will not be charged

To register for PAConf and WFS at a very discounted rate of USD500, please register following the steps below:

Step 1: Please visit the PAConf Registration website Step 2: Select the Attendee Type "IATA Member" Step 3: Please choose the Registration Type "PAConf & WFS" Step 4: Complete the online registration process as prompted.

VISAS Members are strongly advised to check visa requirements for entry into Singapore and, if necessary, obtain a visa at least two months before the date of the Conference. If required, a letter of invitation can be requested when registering for the event. I very much look forward to seeing you in Singapore for the 2016 Passenger Agency Conference.

Juan Antonio Rodriguez Director, Operations

Financial & Distribution Services


Agenda Item: A1 Revision No.: 1 Date: 18 Aug 16 Page: 1 of 6

___________________________________________________________________________

1stT = sent out in 1st transmittal 2ndT = sent out in 2nd transmittal

A1

PASSENGER AGENCY CONFERENCE AGENDA SUBJECT OUTLINE Submitted by the Secretary

A – ADMINISTRATIVE MATTERS

Item Subject Sent

A1 Passenger Agency Conference Agenda Outline 1stT

A2 Opening of Conference – Chairman’s Introduction No paper

A3 Examination of Credentials 1stT

A4 Competition Law Compliance 1stT

A5 Approval of Minutes of Previous Meeting 1stT

A6 Report from Senior Vice President, FDS 1stT

A7 Comments on the PAConf Agenda

G – GROUP REPORTS

Item Subject Sent

G1 Report of the Passenger Agency Conference Steering Group (PSG) 1stT + 2ndT

G1.1 Vacancies on the PSG No paper

G2 Report of the Passenger Agency Programme Global Joint Council (PAPGJC) 2ndT + file

G2.1 Vacancies on the PAPGJC No paper

R – REVISIONS TO THE AGENCY PROGRAMME

Item Subject Sent Summary of Content

R1 NewGen ISS Resolution – 8xx 1stT + 2ndT

Proposed Resolution text for NewGen ISS.

R2 NewGen ISS – Tie-In/Transition Resolution

1stT Proposal to develop a Resolution covering the transition from Resolution 818g to 8xx.

R3 NewGen ISS Global Insurance Solution

1stT + 2ndT

Proposal to include the NewGen ISS Global Insurance Solution in Resolution text.

R3.1 NewGen ISS – IATA EASYPAY

2ndT Update to PAConf regarding the areas of work for IATA EasyPay

R4 ECTAA/WTAAA/ETTSA proposals on NewGen ISS

1st T Submission from ECTAA /WTAAA/ETTSA with alternative proposals to the NewGen ISS programme framework.

R5 Airline Negative Settlement Tolerance

1stT Proposal to introduce a threshold in order to reduce the number of potential BSP Airline suspensions due to negative settlements.

R6 Treatment of Post Billing Disputes

1stT + 2ndT

Proposal to amend the Post Billing Disputes provisions in Resolution.


___________________________________________________________________________



R6.1 Treatment of Post Billing Disputes – Comments from ECTAA/WTAAA

2ndT Submission from ECTAA/WTAAA with comments on the Treatment of Post Billing Disputes paper.

R7 Extension of BSP China Risk Management Method

1stT Proposal to extend the Risk Management monitoring in China to weekends and to continue with it beyond the implementation of NewGen ISS.

R8 Composition of PAPGJC and PSG

1stT + 2ndT

Proposal aimed towards changing the PSG and PAPGJC composition.

R9 Changes to Passenger Agency Conference Resolution 850

1stT Proposal to update Resolution 850 with a simplified language to avoid misinterpretations.

R10 Debt Repayment Terms and Conditions Amendment

1stT + 2ndT

Proposal to amend the Resolution provisions related to entering into repayment agreement with an Agent following a Default.

R10.1 Debt Repayment Terms and Conditions Amendment – Comments from ECTAA/WTAAA

2ndT Submission from ECTAA/WTAAA with comments on the Debt Repayment Terms and Conditions amendments paper.

R11 Changes to Resolution 854

2ndT Paper in respect of changes to Resolution 854 to enable NewGen ISS.

R12 Replacement of Outdated Terms – Resolutions 800, 818g, 832 & 866

1stT Proposal to replace outdated terms in Resolutions with correct terms.

R13 Travel Agencies PCI DSS Compliance Assessment

1stT + 2ndT

Proposal to include a provision in Resolution 818g enabling IATA to ensure Travel Agents’ compliance with PCI DSS.

R14 Reporting Date to Remittance Date Period – APJC Annual Review Based on Best Practice

1stT + 2ndT

Proposal to include a provision in Resolution 818g Attachment ‘A’ that each APJC must review the period between the Reporting Date and Remittance Date per the best practices included in in Resolution 818g Attachment ‘A’ 1.6.2 at least once per year,

R15 Late Submission of Financial Securities - Change to Resolution 818g Section 2

1stT Proposal to remove the issuance of two Irregularities when an Agent fails to submit a Financial Security by the deadline. The electronic ticketing authority is removed and that is considered sufficient.

R16 Simplification of Changes to Application Procedure Notice Of Change (NOC) Form Enhancement

1stT + 2ndT

Proposal to simplify the Notice of Change form and enable it to be submitted electronically through the IATA Customer Portal.

R17 Modification of the Days for Submitting Guarantees by Travel Agents – Central America and Caribbean Region

1stT Proposal to allow 40 days for the submission of a Financial Security in countries in Central America and the Caribbean.

R18 Agency Collection for Suspended Airlines

1stT + 2ndT

Proposal about follow-up actions with Agents following the suspension of an Airline.

R19 E-Bulletin Enhancement

1stT Information item to the Conference about developments to the Bulletin.


___________________________________________________________________________



R20 Submissions For Changes In Remittance Frequency

R20.1 Change in Remittance Frequency And Changes to the Local Financial Criteria - The Netherlands

1stT Proposal from APJC Netherlands for changes to Local Financial Criteria and move from monthly to fortnightly remittance as standard Remittance Frequency including shortening the number of days from the Reporting Date to the Remittance Date from 15 to 10, effective 1 April 2017.

R20.2 Change in Remittance Frequency and Change to The Local Financial Criteria – Ireland

1stT Proposal from APJC Ireland for changes to Local Financial Criteria and move from monthly to fortnightly Remittance Frequency, effective 1 April 2017.

R20.3

Change to Remittance Frequency – Pakistan

1stT Holding paper in respect of the move to weekly Remittance Frequency approved by PAC/36 that has since been on hold. It is expected that the APJC will be concluding on this during July 2016 and the final recommendation will be included on 2nd Transmittal.

R20.4 Reduce the Length of China BSP Settlement Cycle

1stT + 2ndT

Proposal from APJC China to shorten the Settlement cycle in China, effective 1 January 2017.

R20.5 Change to Number of Days Between Reporting Date and Remittance Date – Indonesia

2ndT Proposal in respect of a possible change in the Remittance Frequency in Indonesia.

R20.6 Change in Number of Days Between Reporting Date and Remittance Date - Central America

1stT Proposal from APJC Central America to shorten the number of days between the Reporting Date and Remittance Date, effective 1 January 2017.

R20.7 Change in Number of Days Between Reporting Date and Remittance Date –Scandinavia

1stT Proposal from APJC Scandinavia to shorten the number of days between the Reporting Date and Remittance Date effective 1 October 2017 and 1 January 2019.

R20.8 Change to Number of Days Between Reporting Date and Remittance Date – Latvia

1stT Proposal from APJC Latvia to shorten the number of days between the Reporting Date and Remittance Date effective 1 January 2017.

R20.9 Change to Number of Days Between Reporting Date and Remittance Date – Estonia

1stT Proposal from APJC Estonia to shorten the number of days between the Reporting Date and Remittance Date effective 1 November 2016 and 1 March 2017.

R21 Management Information Reports

2ndT + file

This is an update on what has happened with the Management Information Report since last Conference.

R22 Agent Credit Risk Management Working Group

1stT This is an update to the Conference about the work that has progressed through the PSG about developing a think-tank amongst the advanced Agency Credit Risk Managers.

R23 Editorial Changes to Resolution 818g, Attachment ‘C’

1stT This proposal is a house-keeping exercise to clean up the content of Resolution 818g Attachment ‘C’ for some Asia Pacific countries.


___________________________________________________________________________



R24 Resolution 866 – Definitions of Agency Programme Joint Council and Remittance

1stT + 2ndT

This proposal is a house-keeping exercise to ensure that definitions in 866 are available and accurate.

R25 Resolution 890 – Card Sales Rules

1stT Submission from ECTAA/WTAAA in respect of changing the content of Resolution 890.

R26 Web Sales by Travel Agents

1stT Submission from ECTAA/WTAAA about not moving forward with any changes in Resolution relating to Web Sales by Travel Agents.

R27 Market Updates

1stT + 2ndT

Updates on different market situations and a further report will be provided on site to Conference.

R28 Update on Blocked Funds

2ndT Submission with a situation report on the blocked funds area and the work IATA is doing.

R29 Tunis Air Position on NGISS

2ndT Submission from Tunis Air relating to their position on NewGen ISS.

R30 Update on ADM Management & Reduction Project

2ndT Submission from the ADM Working Group project team with the most recent status update.

R31 Industry Trust Fund (ITF) – Hong Kong

2ndT Request from HK APJC relating to an extension in the timelines to streamline the ITF and the Local Financial Criteria.

R32 Changes to Resolution 850 Attachment F

2ndT Submission from HK APJC in relation to suspended BSP Airlines.

R33 Change to Card Sales Rules – Resolution 890 - India

2ndT Submission by APJC India in relation to change Resolution 890.

R34 Changes to Resolution 830d

2ndT Submission from a Member in relation to change Resolution 830d.

RZ – APJC SUBMISSIONS FOR CHANGES TO LOCAL FINANCIAL CRITERIA

Item Subject Sent

RZ1 THE AMERICAS

RZ1.1 Local Financial Criteria Argentina – Modification to Include An Exception for Government Departments Issuing Tickets as Travel Agents

1stT

RZ1.2 Changes to Local Financial Criteria – Bolivia 1stT

RZ1.3 Changes to Local Financial Criteria – Peru 1stT

RZ1.4 Changes to Local Financial Criteria – Chile 1stT

RZ1.5 Change To Local Financial Criteria – Venezuela 2ndT

RZ2 EUROPE

RZ2.1 Changes to Local Financial Criteria – France 1stT

RZ2.2 Changes to Local Financial Criteria – Russia 1stT

RZ2.3 Changes to Local Financial Criteria – Azerbaijan 2ndT

RZ3 ASIA PACIFIC

RZ3.1 Update – India Joint Bank Guarantee Implementation 1stT

RZ3.2 Changes to Local Financial Criteria – Nepal 1stT

RZ3.3 Changes to Local Financial Criteria - Vietnam 2ndT

RZ3.4 Amendment to Local Financial Criteria – Indonesia 2ndT


___________________________________________________________________________


RZ3.5 Change To Local Financial Criteria – Pakistan 2ndT

RZ4 NORTH ASIA

RZ4.1 Changes to Local Financial Criteria Amount At Risk Calculation For BSP Chinese Taipei

1stT

RZ5 AFRICA AND MIDDLE EAST

RZ5.1 Changes to Local Financial Criteria – Yemen 2ndT

T – TECHNICAL

Item Subject Sent

T1 Agency Accreditation Activities

T1.1 Middle East/Africa region 2ndT

T1.2 Europe region 2ndT

T1.3 The Americas region 2ndT

T1.4 Asia-Pacific region 2ndT

T1.5 North Asia region 2ndT

T2 Effectiveness Status of Resolutions Adopted at PAConf/38 and by Mail Vote

2ndT

T3 Status of New BSPs 2ndT

T4 Status of Agency Investigation Panels (AIPs) 2ndT

T5 Office of the Travel Agency Commissioner 2ndT

C – CLOSING ITEMS

Item Subject Comment

C1 Any Other Business

C2 Effectiveness Dates of Resolutions Adopted No paper

C3 Election of Conference Officers No paper

C4 Date and Place of Next Meeting No paper

Competition Law Compliance This meeting is being conducted in compliance with the Provisions for the Conduct of the IATA Traffic Conferences. Pursuant thereto, this meeting will not discuss or take action to develop fares or charges, nor will it discuss or take action on remuneration levels of any intermediaries engaged in the sale of passenger air transportation. This meeting also has no authority to discuss or reach agreement on the allocation of markets, the division or sharing of traffic or revenues, or the number of flights or capacity to be offered in any market. Delegates are cautioned that any discussion regarding such matters, or concerning any other competitively sensitive topics outside the scope of the agenda, either on the floor or off, is strictly prohibited. The foregoing applies equally to email discussions, instant messaging and social media discussions whether directed to announced participants or other parties not present in the meeting. Participants are reminded that live streaming of this meeting to parties not present in person is not permitted except as indicated by and with the express permission and knowledge of the Chairperson and IATA and only in the event that specific participation on a given item from a party not present in person is required. Unauthorized recording of the meeting is prohibited.


___________________________________________________________________________


Agenda Item: A3 Revision No.: 0 Date: 18 Jul 16 Page: 1 of 1

___________________________________________________________________________

A3

EXAMINATION OF CREDENTIALS Submitted by the Secretary Membership of PAConf is open to all Members. The current list of Accredited Representatives and Alternates to the Passenger Agency Conference on file with the Secretary is shown under Attachment 'A' of the 1st Transmittal – provided via our website. Any person wishing to vote at the Conference must have submitted to the Secretary a duly completed 'Accreditation' or 'Appointment of Alternate' form as shown at Attachments 'B' and 'C' of that Memorandum, also available on the website. The list was correct up to the date of issuance. If any of the information shown requires updating, please notify this office immediately. The names which are shaded in grey have notified accreditation but the relevant accreditation forms have not yet been received. In these instances, Members are asked to complete and return to the Secretariat the forms mentioned above as soon as possible. Proposed Action Delegates to ensure their credentials are in order.


___________________________________________________________________________

A4

COMPETITION LAW COMPLIANCE Submitted by the Secretary In order to ensure attendees at IATA meetings fully comply with applicable EU and US competition laws, the following message is always included in the agenda of all IATA meetings, whether airline only or joint with travel agents: "This meeting is being conducted in compliance with the Provisions for the Conduct of the IATA Traffic Conferences. Pursuant thereto, this meeting will not discuss or take action to develop fares or charges, not will it discuss or take action on remuneration levels of any intermediaries engaged in the sale of passenger air transportation. This meeting also has no authority to discuss or reach agreement on the allocation of markets, the division or sharing of traffic or revenues, or the number of flights or capacity to be offered in any market. Delegates are cautioned that any discussion regarding such matters, or concerning any other competitively sensitive topics outside the scope of the agenda, either on the floor or off, is strictly prohibited.

The foregoing applies equally to email discussions, instant messaging and social media discussions whether directed to announced participants or other parties not present in the meeting. Participants are reminded that live streaming of this meeting to parties not present in person is not permitted except as indicated by and with the express permission and knowledge of the Chairperson and IATA and only in the event that specific participation on a given item from a party not present in person is required. Unauthorized recording of the meeting is prohibited.” Proposed Action PAConf to note this item.


___________________________________________________________________________

A5

APPROVAL OF MINUTES OF PREVIOUS MEETING Submitted by the Secretary The Minutes of PAConf/38 (Geneva, Switzerland held on 16 and 17 October 2015) were published on 26 November 2015 under cover of Memorandum PAC/Meet/234. The Resolutions adopted at PAConf/38 were circulated on 29 October 2015 under cover of Memorandum PAC/Reso/614 (expedited) and on 26 November 2015 under cover of PAC/Reso/616 (normal effectiveness).

Proposed Action Conference is invited to approve the Minutes of PAConf/38.


___________________________________________________________________________

A6

REPORT FROM SENIOR VICE PRESIDENT FDS Submitted by the Secretary This report will be presented at Conference.

Agenda Item: G1 Revision No.: 0 Date: 18 Jul 16 Page: 1 of 2

____________________________________________________________________________

G1

REPORT OF THE PASSENGER AGENCY CONFERENCE STEERING GROUP (PSG)

Submitted by Secretary

Since PAConf/38 in October 2015, PSG has met twice in full session – PSG/93 held on 8-10 February 2016 and PSG/94 held on 20-21 June 2016. During the June meeting, there was a joint session with the Financial Services Development Group (FinDev) to review New Gen ISS Road Map. The major focus of PSG in the past year has been on NewGen ISS, with many PSG members taking an active role in participating in the NGI Task Forces which have shaped the proposals going forward to PAConf/39. Below is a summary of actions taken by PSG during 2016:

Reviewed and endorsed the following proposals onto the Conference agenda:

o R1 – NewGen ISS Resolution 8xx

o R4 – Airline Negative Settlement Tolerance

o R5 – Treatment of Post Billing Disputes

o R8 – Changes to Passenger Agency Conference Resolution 850

o R9 – Debt Repayment Terms and Conditions Agreement

o R11 – Replacement of Outdated Terms – Resolutions 800, 818g, 832 and 866

o R12 – Travel Agencies PCI DSS Compliance Assessment

o R13 – Reporting Date to Remittance Date Period – APJC Annual Review based

on Best Practices

o R14 – Late Submission of Financial Securities – Change to Resolution 818g,

Section 1

o R15 – Simplification of Changes to Application Procedure

o R17 – Agency Collection for Suspended Airlines

o R20.4 – Reduce the length of China BSP Settlement Cycle

Reviewed and provided input on the following agenda items:

o R2 – New Gen ISS Tie-In/Transition Resolution

o R3 – NewGen ISS Global Insurance Solution

o R7 – PSG and PAPGJC Membership

o R10 – Changes to Resolution 854

o R16 – Modification of the days for submitting Guarantees by Travel Agents –

Central America and Caribbean region

o R18 – E-bulletin Enhancement

Agenda Item: G1 Revision No.: 0 Date: 18 Jul 16 Page: 2 of 2

____________________________________________________________________________

o R21 – Management Information Reports

o R22 – Agent Credit Risk Management Working Group

PSG regularly reviewed the progress with the following:

o The work of the Agency Debit Memo Task Force and ADM Reduction Project o Strengthening of Local Financial Criteria o Financial Security Policies Updates o NDC Integration

PSG also reviewed in detail the TAC Report to Conference in order to provide feedback

on the issues raised therein.

Reviewed the agenda of the Passenger Agency Programme Global Joint Council (PAPGJC/25) held on 22-23 June 2016 and provided feedback on items at the meeting where necessary.

Monitored developments in individual markets of interest to PSG including Israel, Kenya, Pakistan, Cuba and Iran.

PSG also held a number of Conference Calls in between meetings to deal with urgent issues concerning the NewGen ISS and the introduction of Fortnightly Remittance Kenya. PSG reviewed a total of 9 Mail Votes prior to presentation for voting by PAConf Members. A full report on the mail votes conducted will be provided in the 2nd transmittal.

The next meeting (PSG/95) will be held on 5 September 2016.

Proposed Action

Conference to note.

Agenda Item: G2 Revision No.: 1 Date: 18 Aug 16 Page: 1 of 1

____________________________________________________________________________

G2

REPORT OF THE PASSENGER AGENCY PROGRAMME GLOBAL JOINT COUNCIL

(PAPGJC)

Submitted by the PAPGJC Chairman

Since the last PAConf, the PAPGJC has met on two occasions. The first meeting (PAPGJC/25)

was held in Montreal 22-23 June 2016 and the minutes of that meeting are enclosed separately

with this Agenda.

The second meeting will be held on 6 September 2016 in Geneva, mainly to review the 1st and

2nd Transmittal. Comments on any items will be advised to Conference when the individual

items are addressed.

In addition to the pure PAPGJC meetings, representatives from the group have been involved in

the following activities during 2016:

1. NewGen ISS Resolution drafting taskforce;

2. Remittance Holding Capacity Working Group;

3. Transparency in Payments Technical Advisory Group.

Proposed Action

Conference to note.

Agenda Item: R1 Revision No.: 1 Date: 18 Aug 16 Page: 1 of 3

____________________________________________________________________________ R1 NEWGEN ISS RESOLUTION – 8XX

Submitted by PSG Background

In October 2015, PAConf approved the NewGen ISS framework for each of the following program components:

Agency Accreditation Models

Risk Management including Remittance Holding Capacity, the monetary threshold to the

Agent’s outstanding cash sales

IATA EasyPay

Global Default Insurance Following PAConf’s approval of the NewGen ISS framework at PAC/38, Resolution text has been drafted incorporating:

The NewGen ISS concepts approved at PAC/38. Please refer to Attachment ‘C’

for further details.

Those NewGen ISS concepts recommended by the PSG airline taskforces and

endorsed by the PSG after PAC/38. A joint Agent and Airline Task Force was established to review the draft Resolution text prior to its consideration by PSG and PAPGJC, and ahead of its submission to PAConf.

Proposed Solution

A. Key Principles The following principles have been applied developing the proposed Resolution text:

The rules pertaining to NewGen ISS will be contained in a new Resolution 8xx.

Resolution 8xx will apply to current Resolution 818g countries where a BSP is in

operation.

As NewGen ISS will be implemented in waves, Resolution 818g will be in operation in

parallel to the Resolution 8xx until all countries are migrated.

Resolutions 800 and 832 will continue to apply as per the current programme for all

countries under Resolution 800, including Israel, and are out of scope of Resolution 8xx.

The Global Insurance Solution will be introduced in both BSP and non-BSP countries.

Accordingly, the required Resolution changes will be incorporated into Resolution 850p

and 866, and not in Resolution 8xx.

Global Insurance Solution will be introduced into countries where Resolution 8xx is

implemented.


____________________________________________________________________________

In drafting Resolution 8xx, those provisions not impacted by NewGen ISS have been

maintained as is in Resolution 818g. However, some edits were made to facilitate

clearer language and remove outdated terms.

Structure of Resolution 8xx

The proposed structure of Resolution 8xx is as follows and is effective on 1 January 2018, apart from the ones indicated below:

Section 1 – Agency Programme Joint Council

Section 2 – Accreditation: Requirements and Application Process

Section 3 – Accreditation: General Conditions and Administrative Non-Compliances

Section 4 – Risk Events

Section 5 – Risk Management and Remittance Holding Capacity

Section 6 – Reporting and Remitting (Sections 6.15-6.18 are effective from 1 January

2017)

Section 7 – Issue of Electronic Tickets

Section 8 – Protection and Proper Issuance of Electronic Tickets

Section 9 – Commission and Other Remuneration

Section 10 – Change to Scope or Nature of Accreditation

Section 11 – Reviews by the Travel Agency Commissioner

Section 12 – Arbitration

Section 13 – Removal of Accreditation

Section 14 – Agency Fees

Section 15 – Indemnities and Waiver

Attachment 'A' – Definitions

Attachment 'B' – Application Form

Attachment ‘C’ – Notice of Change form

Attachment ‘D’ – Annex to PSAA For Voluntary More Frequent Remittance

Attachment ‘E’ – Multi-Country Financial Criteria

Attachment ‘F’ – Multi-Country Financial Security Provider Criteria

Attachment ‘G’ – BSP Manual for Agents The Resolution text for the above sections have been included in Attachment ‘A’ for the Conference’s review and adoption, with the exception of sections 5 & 14.

B. Sections excluded from the Resolution draft Section 5 – Risk Management and Remittance Holding Capacity Given various concerns raised by the Agent community with respect to the introduction of a Remittance Holding Capacity, the PAPGJC has established a joint Agent and Airline working group with the purpose of reviewing the Remittance Holding Capacity formula and possibly come up with an alternative proposal.


____________________________________________________________________________ IATA is conducting trials using historical data to assess the effect of Remittance Holding Capacity on the Agent population using the current proposed calculation. Additionally, IATA will work with the joint working group to test the impact of Remittance Holding Capacity on specific agents and in specific markets. The results will be presented and reviewed by the working group to assist in the group’s discussions, and if available on-site to the Conference. The section as currently drafted is included in Attachment ‘B’ for PAConf’s discussion, review and comment. This section will not be presented for adoption at this year’s Conference. If the working group is unable to agree to an alternative proposal ahead of next year’s Conference, subject to any comments and amendments raised this year, the current text will be re-presented to Conference in 2017 for adoption. Section 14 – Agency fees In order to ensure that applicable Agency fees are fit for purpose given the introduction of the new accreditation models and other NewGen ISS changes, this section will be developed for PAConf’s review next year.

C. Resolution Effectiveness The proposed effectiveness of Resolution 8xx is 1 January 2018, apart from the sections covering IATA EasyPay, 6.15 to 6.18, which are proposed to be effective 1 January, 2017. Prior to becoming effective, the provisions of Resolution 8xx will be subject to reaffirmation at the next Conference taking place in 2017, apart from the above sections covering IEP. At the time of reaffirmation, the reaffirmation vote will include sections 5 and 14, currently pending adoption. Once the Resolution is effective, countries will begin to be migrated from Resolution 818g to 8xx, per the parameters identified in the Tie-in Resolution, as per Agenda item R2.

Proposed Action Conference to adopt Resolution 8xx, except Sections 6.15 to 6.18, as shown in Attachment ‘A’ with an effectiveness date of 1 January 2018 Conference to adopt Resolution 8xx Sections 6.15 to 6.18 as shown in Attachment ‘A’ with an effectiveness date of 1 January 2017. Conference to comment and provide input on Section 5 of Resolution 8xx, as shown in Attachment ‘B’.

Agenda Item: R1 Revision No.: 1 Date:

Attachment: 18 Aug 16 ‘A’

Page: 1 of 69 ____________________________________________________________________________

RESOLUTION 8xx

1. PASSENGER SALES AGENCY RULES

PAC1(XX)8xx(except USA) Expiry: Indefinite PAC2(XX)8xx Type: B PAC3(XX)8xx

This Resolution is applicable in the following countries:

Area 1: Anguilla, Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados, Belize, Bermuda, Bolivia, Bonaire,

Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, Colombia, Costa Rica, Curacao, Dominica, Dominican Republic, Ecuador, El Salvador, French Guyana, Grenada, Guadeloupe, Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique, Mexico, Montserrat, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, St. Eustatius, St. Maarten (Dutch part), Saba, Suriname, Trinidad and Tobago, Turks and Caicos Islands, Uruguay, Venezuela.

Area 2: Africa: Botswana, Central/West Africa1, Egypt, Ethiopia, Ghana, Kenya, Lesotho, Malawi, Mauritius, Mayotte,

Morocco, Mozambique, Namibia, Nigeria, Reunion Island, Rwanda, South Africa, Sudan, Swaziland, Tanzania, Tunisia, Uganda, Zambia, Zimbabwe.

Area 2: Europe: Albania, Andorra, Austria, Azerbaijan, Belgium, Bosnia & Herzegovina, Bulgaria, Channel Islands,

Croatia, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Gibraltar, Greece, Greenland, Hungary, Iceland, Isle of Man, Italy, Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia (FYROM), Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Republic of Cyprus, Romania, Russian Federation, San Marino, Serbia & Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom.

Area 2: Middle East: Gulf Area2, Jordan, Kuwait, Lebanon, Saudi Arabia, Syrian Arab Republic, Yemen.

Area 3: Bangladesh, Cambodia, Chinese Taipei, Hong Kong (SAR), India, Indonesia, Japan, Kazakhstan, Korea,

Kyrgyzstan, Macau (SAR, China), Malaysia, Mongolia, Nepal, Pakistan, People's Republic of China, Philippines, Singapore, South West Pacific, Sri Lanka, Thailand, Vietnam.

WHEREAS the Passenger Agency Conference (‘the Conference’), in consultation with the travel agency community, wishes to provide consumers with a network of reliable and professionally managed sales outlets for air transportation products in an efficient and cost effective manner responsive to evolving individual marketplace requirements with payments facilitated through the BSP, it is

RESOLVED that:

1. The provisions of this Resolution are adopted and become effective 1 January, 2018 except the provisions of sections 6.15 to 6.18, governing the IATA EasyPay Payment Method, which will be become effective 1 January, 2017.

2. The provisions of sections 5 and 14 to this Resolution will be presented for adoption by the Passenger Agency

Conference no later than PAC/40, taking place in 2017.

3. PAC/40 will reaffirm Resolution 8xx and other Resolution changes related to NewGen ISS prior to implementation

in any country. Such reaffirmation will take place through a vote at PAC/40.

Contents

Definitions

1 Central/West Africa comprises: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo (Brazzaville), Gabon, Ivory Coast, Mali, Mauritania, Niger, Senegal, Togo. 2 Gulf Area comprises: Bahrain, Oman, Qatar, United Arab Emirates.



Page: 2 of 69 ____________________________________________________________________________ The definitions of terms and expressions used in this Resolution are contained in Resolution 866, whereas those exclusive to this Resolution are contained in Attachment ‘A’ to this Resolution. The use of words and expressions in the singular shall, where the context so permits, be taken to include their use in the plural and vice versa. Paragraph headings are for ease of reference only and do not form part of this Resolution.

General Principles of Review

In the event that IATA, as represented by the Agency Administrator, notifies the Agent of any kind of failure to meet or continue to meet the criteria so here described or of any other irregularity or non-compliance with this Resolution, the Agent shall at all times be able to enter into discussion with IATA, to provide information to demonstrate its compliance and continued compliance with the terms of this Resolution within the prescribed deadlines. The Agent is also able to request a review by the Travel Agency Commissioner in accordance with Resolution 820e section 1.1.

SECTION 1 – AGENCY PROGRAMME JOINT COUNCIL

SECTION 2 – ACCREDITATION: REQUIREMENTS AND APPLICATION PROCESS

SECTION 3 – ACCREDITATION: GENERAL CONDITIONS AND ADMINISTRATIVE NON-COMPLIANCES

SECTION 4 – RISK EVENTS

SECTION 5 – RISK MANAGEMENT AND REMITTANCE HOLDING CAPACITY

SECTION 6 – REPORTING AND REMITTING

SECTION 7 – ISSUE OF ELECTRONIC TICKETS

SECTION 8 – PROTECTION AND PROPER ISSUANCE OF ELECTRONIC TICKETS

SECTION 9 – COMMISSION AND OTHER REMUNERATION

SECTION 10 – CHANGES TO SCOPE OR NATURE OF ACCREDITATION

SECTION 11 – REVIEWS BY THE TRAVEL AGENCY COMMISSIONER

SECTION 12 – ARBITRATION

SECTION 13 – REMOVAL OF ACCREDITATION

SECTION 14 – AGENCY FEES

SECTION 15 – INDEMNITIES AND WAIVER

ATTACHMENT 'A' – DEFINITIONS

ATTACHMENT 'B' – APPLICATION FORM FOR ACCREDITATION AS AN IATA PASSENGER SALES AGENT

ATTACHMENT ‘C’ – NOTICE OF CHANGE FORM

ATTACHMENT ‘D’ - ANNEX TO PSAA FOR VOLUNTARY MORE FREQUENT REMITTANCE

ATTACHMENT ‘E’ - MULTI-COUNTRY FINANCIAL CRITERIA

ATTACHMENT ‘F’ - MULTI-COUNTRY FINANCIAL SECURITY PROVIDER CRITERIA

ATTACHMENT ‘G’ - BSP MANUAL FOR AGENTS



Page: 3 of 69 ____________________________________________________________________________

Section 1 – Agency Programme Joint Council In each country or Area where this Resolution 8xx is implemented, an Agency Programme Joint Council (APJC) shall be established and shall continue to operate after implementation:

1.1 AGENCY PROGRAMME JOINT COUNCIL ('THE COUNCIL')

Every Member or BSP Airline may, by written notification to the Agency Administrator, nominate a person of senior management standing (the nominee) to serve as its representative on the Agency Programme Joint Council for that country or Area:

1.1.1 Composition

The Council shall consist of

1.1.1.1 Members and Airlines designated from time to time by the Agency Administrator, from those having designated a nominee, bearing in mind the local market conditions. Any Member and Airline representative may attend the APJC as an observer at the discretion of the Chairman, whose approval shall not be unreasonably withheld. Observers are allowed to participate with the permission of the Chairman and contribute in the discussions. Members/Airlines must not designate a General Sales Agent as their APJC representative. GSAs are also not permitted to attend APJC meetings as observers.

1.1.1.2 Representatives, who are Accredited Agents, selected from the agent community as coordinated by the agency association(s). Agent representation shall constitute half of the Council's membership. Executive officers of agent associations without a designated representative may attend the APJC as observers at the discretion of the Chairman, whose approval shall not be unreasonably withheld.

1.1.1.3 IATA as an ex officio member; provided that the number of Members, Airlines and Agents' representatives as provided in 1.1.1.1 and 1.1.1.2 above shall be determined by the Agency Administrator in proportion to their respective numbers in the country or area of the Council and shall be included in his recommendation to the Conference; provided further that the total voting membership of the Council shall not exceed 18;

1.1.2 APJC Authority and Terms of Reference

1.1.2.1 The Council may consider all aspects of the Agency Programme in the relevant country or Area and make recommendations in the form of agenda proposals to the Passenger Agency Conference which shall inform the Council of action taken, and the reason for the decision made. Conversely, the Agency Administrator shall refer to the Council for comments and recommendations all proposals submitted to the Passenger Agency Conference which fall within the Council's authority;

1.1.2.2 The Council shall make recommendations to the Passenger Agency Conference regarding accreditation criteria in respect of financial standing;

1.1.2.3 In the event that no recommendation on changes to Local Financial Criteria, Remittance Frequency under Standard Accreditation, or other matters within the terms of reference of an APJC can be achieved after consultation at an APJC within 24 months or 4 consecutive meetings (whichever represents the shorter period of time), any APJC member or group of members may make proposals directly to the Passenger Agency Conference.

1.1.2.4 The Council when it deems appropriate shall create a Financial Advisory Group to review and make recommendations to it on the Local Financial Criteria, which body shall function as per sub-paragraph 1.1.3 below.

1.1.3 Financial Advisory Group

1.1.3.1 The Council may establish a Financial Advisory Group to assist in the development of Local Financial Criteria for accreditation. The Financial Advisory Group (FAG) will be under the direct control of the Council and shall:

(a) be composed in equal numbers of qualified staff of both airline and agent members,

(b) consist at a minimum of two airline and two agent representatives as nominated by the APJC.

1.1.3.2 The FAG may seek the assistance of legal expertise and/or external financial expertise to advise on local accounting standards.



Page: 4 of 69 ____________________________________________________________________________ 1.1.3.3 The FAG will review any existing Local Financial Criteria against changing economic conditions in the market

and make recommendations for change to the Council.

1.1.3.4 Recommendations of the FAG will be subject to ratification of the Council as per sub-paragraph 1.1.4.

1.1.4 Procedures

The Council shall meet when required and shall elect its Chairman from its membership. A simple majority of the Council shall constitute a quorum and recommendations shall be adopted, for consideration by the Conference, when a majority of the air carriers and a majority of the Agents present vote in favour of the proposal. Except as provided herein, the Council shall establish its own procedures and submit a report of its activities to each meeting of the Conference.

1.1.4.1 The IATA Secretary shall formally call meetings of the Council and shall establish the date and venue in consultation with the Chairman. The Secretary shall compile and distribute the agenda in a timely manner.

1.1.4.2 Minutes of each meeting shall be compiled by the Secretary and presented to the Chairman for approval. Thereafter such minutes shall be circulated promptly to the membership who shall be free to provide comments to those minutes for consideration at the next formal meeting of the Council where such minutes shall also be tabled for approval of the Council.



Page: 5 of 69 ____________________________________________________________________________

Section 2 - Accreditation: requirements and application process 2.1 FRAMEWORK FOR OBTAINING ACCREDITATION

2.1.1 Types of Accreditation

2.1.1.1 There are three types of Accreditation:

(a) Standard Accreditation with no Cash Facility;

(b) Standard Accreditation with Cash Facility;

(c) Multi-Country Accreditation.

2.1.1.2 Both types of Standard Accreditation are for Applicants who wish to participate in the Agency Programme operating in a particular country in accordance with the local accreditation requirements.

2.1.1.3 Applications for Standard Accreditation with no Cash Facility are for Applicants who wish to utilise the Card Payment Method and/or IATA EasyPay Payment Method only.

2.1.1.4 Applications for Standard Accreditation with Cash Facility are for Applicants who wish to utilise all Authorised Payment Methods.

2.1.1.5 Multi-Country Accreditation is for Applicants who wish to participate in the Agency Programme by operating in more than one country in accordance with global accreditation requirements and utilise all Authorised Payment Methods.

2.1.2 Description of Authorised Payment Methods in the BSP

2.1.2.1 There are three types of Authorised Payment Methods:

(a) Cash Payment Method;

(b) Card Payment Method; and

(c) IATA EasyPay Payment Method.

2.1.2.2 The Card Payment Method refers to customer card transactions made against a BSP Airline's merchant agreement, as detailed in Resolution 890.

2.1.2.3 The IATA EasyPay Payment Method is detailed in section 6 of this Resolution.

2.1.2.4 Other payment methods may be authorised by the Conference for issuance of Electronic Tickets in the BSP.

2.1.3 Objective of Accreditation

2.1.3.1 Applications for Accreditation must be made in accordance with the processes and requirements contained in this section 2.

2.1.3.2 The processes and requirements contained, or referred to, in this Section 2 (including the Local Financial Criteria and Multi-Country Financial Criteria) are designed to assess on fair and neutral terms whether the Applicant has the necessary qualifications and financial standing to be granted the type of Accreditation sought.

2.1.4 Structure of Section 2

2.1.4.1 This section 2 is structured as follows:

(a) General requirements for Accreditation;

(b) Standard Accreditation requirements;

(c) Multi-Country Accreditation requirements;

(d) Authorisation requirements for Cash Payment Method;

(e) Authorisation requirements for Card Payment Method;

(f) Authorisation requirements for IATA EasyPay Payment Method (IEP);

(g) Application process;



Page: 6 of 69 ____________________________________________________________________________

(h) Appointment and removal of Agent by individual Members or BSP Airlines after Accreditation;

(i) BSP Airline separate requirements for Financial Security after Accreditation.

2.2 GENERAL REQUIREMENTS FOR ACCREDITATION

2.2.1 Application form requirements

2.2.1.1 The Applicant for Accreditation must provide IATA with all information required under Attachment ‘B’ to this Resolution.

2.2.2 Registration/Licence

2.2.2.1 The Applicant must be a resident of, incorporated in or registered in the country of the proposed Head Entity, in accordance with local law requirements.

2.2.2.2 The Applicant and/or its owners and managers must hold any official registration and/or licence to trade and offer travel agency services required by local law in the country of the proposed Head Entity.

2.2.3 Personnel

2.2.3.1 The Applicant must have in its employment competent and qualified personnel able to fulfil the obligations of participation in the Agency Programme, including in respect of:

(a) selling international air transportation; and

(b) fulfilling associated remitting and reporting obligations.

2.2.4 Head Entity & Associate Entity operations

2.2.4.1 The proposed Head Entity and each Associate Entity must not be identified, or represent itself, as an office of an airline or group of airlines, or have a name the same as that of a Member of IATA, or IATA.

2.2.4.2 The proposed Head Entity and each Associate Entity must not trade as a General Sales Agent for any air carrier in the country where the Applicant resides, is incorporated or registered.

2.2.4.3 The proposed Head Entity and each Associate Entity must not be in office space jointly occupied or operated with an airline or an airline's General Sales Agent.

2.2.4.4 Where a proposed Head Entity or Associate Entity’s location is to be jointly occupied with another Agent, each Agent shall be responsible to report its sales under its separate IATA Numeric Code.

2.2.5 Trading History

2.2.5.1 A person who is a director of the Applicant, or who holds a material financial interest or a position of management in the Applicant, must not currently or previously have been:

(a) involved in any fiduciary breach or crime;

(b) subject to bankruptcy proceedings; or

(c) subject to section 2.2.5.2, a director of, or had a financial interest or held a position of management in, an Agent which has been removed from the Agency List or is currently subject to review or default action by IATA for non-compliance with the conditions of its Accreditation.

2.2.5.2 An application for Accreditation may nevertheless be approved if IATA is satisfied that:

(a) such person was not responsible for the acts or omissions that caused such removal or default action; and

(b) the Applicant can be relied upon to comply with the terms of the Passenger Sales Agency Agreement, this Resolution and other Resolutions of the Conference if its application for Accreditation is accepted.

2.2.6 Anti-money Laundering

2.2.6.1 The Applicant must provide any documentation required by IATA in order to comply with anti-money laundering requirements.

2.2.7 Security



Page: 7 of 69 ____________________________________________________________________________ 2.2.7.1 The Applicant must undertake to provide sufficient protection for its business, premises and systems used for

the issuance of Electronic Tickets in accordance with the provisions detailed in section 7 of this Resolution.

2.2.7.2 The Applicant must have the facility to issue Electronic Tickets on behalf of BSP Airlines through the use of an approved Electronic Ticketing System, as defined in Resolution 854.

2.2.7.3 The Applicant must take all necessary precautions to protect its business and systems at the Head Entity and each proposed Associate Entity.

2.3 STANDARD ACCREDITATION REQUIREMENTS

2.3.1 Identity of Applicant

2.3.1.1 Subject to section 2.4.1.2, any Person may apply for:

(a) Standard Accreditation with no Cash Facility; or

(b) Standard Accreditation with Cash Facility,

on behalf of itself and any proposed Associate Entity, provided that such Person:

(c) is a resident of, incorporated in or registered in the country of the proposed Head Entity, in accordance with local law requirements; and

(d) holds any official registration and/or licence to trade and offer travel agency services required by local law in the country of the proposed Head Entity.

2.3.1.2 The Applicant accepts full legal and financial responsibility to IATA and BSP Airlines for each proposed Associate Entity upon Accreditation.

2.3.2 Head Entity & Associate Entity

2.3.2.1 An application for Standard Accreditation must specify:

(a) the proposed Head Entity’s physical address;

(b) each proposed Associate Entity, which must be situated in the country of the Head Entity;

(c) the Person responsible for the proposed Head Entity and each Associate Entity;

(d) each proposed Associate Entity’s ownership structure and relationship to the proposed Head Entity, including evidence of the proposed Associate Entity’s assent to be included under the application as provided in Attachment [‘B’].

2.4 MULTI-COUNTRY ACCREDITATION REQUIREMENTS

2.4.1 Identity of Applicant

2.4.1.1 A Person may apply as an Applicant for Multi-Country Accreditation as a Head Entity on behalf of itself together with any Associate Entities, provided that such Applicant:

(a) is incorporated or registered at the proposed Head Entity’s physical address, in accordance with local law requirements in the country where such physical address is situated; and

(b) holds any official registration and/or licence to trade and offer travel agency services required by local law in the country where the proposed Head Entity’s physical address is situated, also as may be required by local law for each proposed Associate Entity in its country of location.

2.4.1.2 The Head Entity must include in its Multi-Country Accreditation any Accredited Agent of which it owns more than 50%.

2.4.1.3 The Applicant accepts full legal and financial responsibility to IATA and BSP Airlines for each proposed Associate Entity upon Accreditation.

2.4.2 Head Entity & Associate Entity

2.4.2.1 An application for Multi-Country Accreditation must specify:

(a) the proposed Head Entity’s physical address;



Page: 8 of 69 ____________________________________________________________________________

(b) each proposed Associate Entity in each country applicable, together with the full address or web site address (URL) if no physical location;

(c) the Person responsible for the proposed Head Entity and each Associate Entity;

(d) each proposed Associate Entity’s ownership structure and relationship to the proposed Head Entity, including evidence of the proposed Associate Entity’s assent to be included under the application as provided in Attachment [‘X’].

2.5 AUTHORISATION REQUIREMENTS FOR CASH PAYMENT METHOD

2.5.1 Overview of process for authorisation to use Cash Payment Method

2.5.1.1 Applications for Standard Accreditation with Cash Facility and Multi-Country Accreditation will be assessed in accordance with:

(a) this Resolution; and

(b) applicable Local Financial Criteria and Multi-Country Financial Criteria respectively;

to determine the terms and conditions upon which the Cash Payment Method is approved for use.

2.5.1.2 All Agents authorized to use the Cash Payment Method will be granted a Remittance Holding Capacity.

2.5.1.3 The process for determining the terms and conditions applying to the Agent's initial use of the Cash Payment Method will require:

(a) the conduct of a financial assessment, as detailed in sections 2.5.2 and 2.5.3;

(b) the conduct of a Risk History assessment, as detailed in section 2.5.4;

(c) the assignment of an initial Risk Status based on the financial assessment and Risk History assessment, as detailed in section 2.5.5; and

(d) the determination of initial Cash Conditions, including:

(i) Financial Security requirements; and

(ii) Remittance Frequency requirements, as detailed in section 2.5.6.

2.5.1.4 The determination of the initial Remittance Holding Capacity applicable to the Applicant who wishes to hold Standard Accreditation with Cash Facility or Multi-Country Accreditation is detailed in section 2.5.7.

2.5.2 Financial assessment for applications for Standard Accreditation with Cash Facility

2.5.2.1 The Applicant must submit audited financial statements and accounts in accordance with the form, content, and other requirements specified in the applicable Local Financial Criteria for approval to use the Cash Payment Method. Subject to more specific requirements contained in the Local Financial Criteria, such audited financial statements and accounts must be prepared in accordance with locally accepted accounting principles.

2.5.2.2 The financial standing, stability, and solvency of the Applicant will be assessed by reference to the financial statements and accounts provided under section 2.5.2.1, in accordance with the applicable Local Financial Criteria.

2.5.2.3 At the conclusion of the financial assessment, IATA will determine whether the Applicant has passed or failed the financial assessment in accordance with the Local Financial Criteria.

2.5.3 Financial Assessment for applications for Multi-Country Accreditation

2.5.3.1 The Applicant must submit audited financial statements and accounts in accordance with the form, content, and other requirements specified in the Multi-Country Financial Criteria for approval to use the Cash Payment Method. Subject to more specific requirements contained in the Multi-Country Financial Criteria, such audited financial statements and accounts must be prepared in accordance with globally accepted accounting principles.



Page: 9 of 69 ____________________________________________________________________________ 2.5.3.2 The financial standing, stability, and solvency of the Applicant will be assessed by reference to the financial

statements and accounts provided under section 2.5.3.1, in accordance with the Multi-Country Financial Criteria.

2.5.3.3 At the conclusion of the financial assessment, IATA will determine whether the Applicant has passed or failed the financial assessment in accordance with the Multi-Country Financial Criteria.

2.5.4 Risk History

2.5.4.1 The Applicant which has been authorised to use the Cash Payment Method for less than 24 consecutive months will have a Risk Event registered. Consequently, the Applicant will fail its Risk History Assessment for the first 24 months of its Accreditation, during which time a Risk History as an Accredited Agent will be established.

2.5.4.2 The Agent holding Standard Accreditation with Cash Facility or Multi-Country Accreditation will be subject to Risk History assessments in accordance with the provisions of section 5.

2.5.5 Risk Status

2.5.5.1 The Applicant will be assigned an initial Risk Status based on:

(a) the outcome of the financial assessment under sections 2.5.2.3 and 2.5.3.3 respectively; and

(b) the automatic failure of the initial Risk History assessment under section 2.5.4.1,

(c) as follows:

(i) a Risk Status of "B" will apply where the Applicant has passed the financial assessment; and

(ii) a Risk Status of "C" will apply where the Applicant has failed the financial assessment.

2.5.6 Cash Conditions

2.5.6.1 The initial Cash Conditions for use of the Cash Payment Method will be determined based on:

(a) the Risk Status assigned to the Applicant in accordance with section 2.5.5; and

(b) this Resolution including, where applicable, the Local Financial Criteria and Multi-Country Financial Criteria.

Financial Security

2.5.6.2 The Applicant must provide a Financial Security for a minimum of two years from its effective date of Accreditation, in accordance with section 2.8.6.1, which will determine the Remittance Holding Capacity granted.

2.5.6.3 If the Applicant is owned by a Member, where the Member or Member's parent company holds greater than 50% of the equity of the Applicant or the Applicant's parent company, the Member's sales will not be included in the calculation of the Sales at Risk under the Local Financial Criteria or Multi-Country Financial Criteria for the Applicant (as applicable).

Remittance Frequency

2.5.6.4 The Remittance Frequency applied to the Applicant upon Accreditation is as follows:

(a) where the Applicant is assigned an initial Risk Status of "B", the standard Remittance Frequency in the applicable BSP; and

(b) where the Applicant is assigned an initial Risk Status of "C", the most frequent Remittance Frequency in the applicable BSP.

2.5.7 Remittance Holding Capacity

2.5.7.1 The initial Remittance Holding Capacity granted to the Applicant will equal the amount of the Financial Security provided by the Agent for a minimum of two years.

2.5.8 Local requirements



Page: 10 of 69 ____________________________________________________________________________ 2.5.8.1 Approval to use the Cash Payment Method is also subject to any applicable local requirements which do not

permit, or otherwise impose additional conditions, including any that may be set out in the Local Financial Criteria.

2.6 AUTHORISATION REQUIREMENTS FOR CARD PAYMENT METHOD

2.6.1 Standard Accreditation with no Cash Facility

2.6.1.1 For authorisation to use the Card Payment Method, the Applicant for Standard Accreditation with no Cash Facility must provide and maintain a Financial Security satisfactory to IATA to cover any cash remittances, resulting from ADMs, due by the Agent, in accordance with the provisions of section 5.10.1.

2.6.2 Other types of Accreditation

2.6.2.1 The Financial Security required from the Applicant for Standard Accreditation with Cash Facility or Multi-Country Accreditation, detailed in section 2.5.6.2, will include coverage for any cash remittances due by the Agent resulting from ADMs relating to the Card Payment Method.

2.6.3 Other requirements

2.6.3.1 Approval to use the Card Payment Method is subject to the Agent’s full compliance with the Payment Card Industry (PCI) Data Security Standards, as provided by the Card companies and made available to the Agent through the IATA Customer Portal.

2.6.3.2 The Agent must ensure that all sensitive card data obtained during the process of electronic ticketing is handled, stored, and transmitted with due regard to the security of such data.

2.6.3.3 Approval to use the Card Payment Method is subject to any applicable local requirements which do not permit, or otherwise impose additional conditions, or as may be set out in Resolution 890.

2.7 AUTHORISATION REQUIREMENTS FOR IATA EASYPAY PAYMENT METHOD (IEP)

2.7.1.1 IEP will be made available for all types of Accreditation, subject to any applicable local requirements which do not permit, or otherwise impose additional conditions. This may include requirements specified in section 6 of this Resolution or any applicable local laws.

2.7.1.2 Subject to the provisions of section 5.10 of this Resolution, no Financial Security is required for use of IEP.

2.8 APPLICATION PROCESS

2.8.1 Information to assist preparation of application

2.8.1.1 The Travel Agents Handbook and application form may be accessed through the IATA Customer Portal.

2.8.2 Submission of application

2.8.2.1 An application for Accreditation (as detailed in Attachment ‘B’) must be made to IATA through the IATA Customer Portal and accompanied by:

(a) financial and other information required by IATA, including as stated under this Section 2 and the Travel Agent's Handbook;

(b) the supporting documentary evidence referred to in Attachment ‘B’, this Section 2 and the Travel Agent's Handbook; and

(c) the following fees (as further detailed in section 14):

(i) application fee;

(ii) registration fee, and

(iii) the first annual Agency fee.

2.8.2.2 If an application for Accreditation is rejected, the fees referred to in section 2.8.2.1(c)(ii)-(iii) will be refunded. The application fee referred to in section 2.8.2.1(c)(i) is non-refundable.



Page: 11 of 69 ____________________________________________________________________________ 2.8.2.3 All material statements made in or in connection with an application for Accreditation must be accurate,

complete and not misleading in any respect. The Applicant must notify IATA if, after making such material statement, the material statement is no longer accurate, complete or misleading in any respect.

2.8.3 Preliminary assessment of application for completeness

2.8.3.1 IATA must consider within 30 days of receipt of an application for Accreditation whether the application is complete. IATA will inform the Applicant if it considers that any of the required documentation, information or fees have not been provided such that the application is incomplete.

2.8.3.2 Within 7 days of IATA being satisfied that an application for Accreditation is complete, IATA will publish details concerning the receipt of the application to BSP Airlines.

2.8.3.3 Nothing in this section 2.8.3 limits IATA's right to request any other information or documentation that IATA requires to assess an application for Accreditation.

2.8.4 Substantive assessment of application

2.8.4.1 Within 21 days of the publication of the application details to BSP Airlines, in accordance with section 2.8.3.2, IATA will assess the application and any other information obtained, in order to determine whether all applicable requirements for the type of Accreditation sought have been met.

2.8.4.2 IATA may:

(a) arrange an inspection of the proposed Head Entity and/or Associate Entity;

(b) request the Applicant to provide any further information or documentation;

to assist IATA to carry out the application and assessment process under section 2.8.

2.8.5 Notification of decision on application

2.8.5.1 Upon determining whether it is satisfied with the matters stated in section 2.8.4.1, IATA will promptly notify the Applicant in writing of the acceptance or rejection of the application.

2.8.5.2 If the application is accepted, the notification must set out:

(a) all approved entities that are to become the Head Entity and applicable Associate Entities;

(b) the approved Authorised Payment Method(s);

(c) any required Financial Security;

(d) any assigned Risk Status and granted Remittance Holding Capacity;

(e) any other conditions applicable to IATA’s acceptance of the application.

2.8.5.3 If the application is rejected, the notification will specify the reason(s) for the rejection.

2.8.5.4 The Applicant whose application is rejected may, within 30 days of the date of IATA's notification, invoke the procedures for review by the Travel Agency Commissioner.

2.8.6 Effective date of Applicant becoming an Accredited Agent

2.8.6.1 The Applicant whose application is accepted under section 2.8.5 will become an Accredited Agent once:

(a) the Passenger Sales Agency Agreement has been executed by the Applicant (acting on its own behalf and on behalf of each Associate Entity) and the Director General (acting on behalf of such Members as may appoint Agents); and

(b) any required Financial Security specified in the notification has been provided by the Agent and accepted by IATA. Failure by the Applicant to provide the required Financial Security within 40 days of the notification will cause the application to expire and IATA will inform the Applicant that no further action will be taken.

2.8.7 Entry of Applicant on Agency List and notification requirements

2.8.7.1 Upon the effective date of Accreditation, IATA will:



Page: 12 of 69 ____________________________________________________________________________

(a) enter the Applicant as an Accredited Agent on the Agency List in accordance with section 2.8.7.3; and

(b) within 7 days, notify BSP Airlines of the details of the Agent’s Accreditation.

2.8.7.2 The Accredited Agent’s name will be included on the Agency List from the effective date of Accreditation until the date the Passenger Sales Agency Agreement is terminated.

2.8.7.3 The Agency Administrator will publish, and update such publication at least twice a calendar year, the Agency List of all Accredited Agents, which will include, but not be limited to, the following information:

(a) name and postal address, and any website address(es);

(b) address and contact details of place of business;

(c) whether Head Entity or Associate Entity;

(d) effective date of Accreditation;

(e) IATA Numeric Codes for each entity;

(f) Accreditation type of the Applicant;

(g) Authorised Payment Methods available to the Applicant.

2.8.8 Timeframes

2.8.8.1 The timing set out in this section 2.8 is indicative only. Factors outside IATA's control may impact the specified timeframes, including the time taken by the Applicant to respond to any queries or requests for further information by IATA.

2.9 APPOINTMENT AND REMOVAL OF AGENT BY INDIVIDUAL MEMBERS OR BSP AIRLINES AFTER ACCREDITATION

2.9.1 Manner of Appointment

2.9.1.1 A Member may appoint the Accredited Agent by:

(a) depositing with the Agency Administrator a statement of General Concurrence for the appointment of all Accredited Agents. The Agency Administrator shall annually publish on IATA website a list of Members having deposited a statement of General Concurrence; or

(b) delivering to such Accredited Agent a Certificate of Appointment in the form prescribed by the Conference.

2.9.1.2 Other BSP Airlines that are not Members may appoint the Accredited Agent in accordance with section 2.9.1.1(b).

2.9.1.2.1 An appointment made under section 2.9.1.1 or 2.9.1.2 will, unless otherwise specified, cover the Head Entity and each Associate Entity of the Agent.

2.9.2 Effective date of Appointment

2.9.2.1 An appointment made in accordance with section 2.9.1 will be effective:

(a) for those Members who have deposited a statement of General Concurrence, on the date that is the later of:

(i) the date the Agent is included on the Agency List; or

(ii) the date the statement of General Concurrence is deposited,

(b) for other Members or BSP Airlines, on the date of the Certificate of Appointment.

2.9.3 Termination of Individual Appointment

2.9.3.1 Any BSP Airline having appointed the Accredited Agent to act for it may terminate such appointment by:

(a) in the case of appointment by General Concurrence, notifying the Agent in writing of the termination of the Agent, with copy to the Agency Administrator; or



Page: 13 of 69 ____________________________________________________________________________

(b) in other cases, delivering to the Agent a Termination Notice cancelling the Certificate of Appointment in respect of the Agent.

2.9.4 Capacity and Indemnity

2.9.4.1 BSP Airlines appointing Agents undertake to indemnify IATA, its officers, employees and other appointees against liability (including liability for legal costs) for any action taken or omitted in good faith in the performance of their functions under this Resolution (other than under section 6 of this Resolution and under other applicable Resolutions).

2.9.4.2 BSP Airlines participating in a Billing and Settlement Plan undertake to indemnify IATA, its officers, employees and other appointees against liability (including liability for legal costs) for any action taken or omitted in good faith in the performance of their functions with respect to such Billing and Settlement Plan under section 6 of this Resolution and under Resolution 850 and its Attachments.

2.10 BSP AIRLINE SEPARATE REQUIREMENTS FOR FINANCIAL SECURITY AFTER ACCREDITATION

2.10.1.1 Recognising that IATA is mandated to conduct financial assessments of Applicants for, and Agents who hold, Standard Accreditation with Cash Facility or Multi-Country Accreditation in accordance with sections 2.5 and 5, a BSP Airline may request a separate, independent and mutually exclusive Financial Security arrangement with the Agent on the grounds that current Local Financial Criteria or Multi-Country Financial Criteria in the relevant local or global market require strengthening, under which circumstances the following will apply:

(a) the BSP Airline must notify the Agency Administrator that the current Local Financial Criteria or Multi-Country Financial Criteria in the relevant local or global market require strengthening; and

(b) the Agency Administrator must:

(i) authorise the BSP Airline to request a separate Financial Security from the Agent for use of the Cash Payment Method and any such Financial Security obtained must be notified to IATA by both the BSP Airline and Agent;

(ii) call an APJC meeting to propose strengthening the Local Financial Criteria in accordance with the requirements of Resolution 8xx, section 1;

(iii) in the event that no recommendation on changes to Local Financial Criteria can be achieved, permit the provisions of Resolution 8xx, subparagraph 1.1.2.3 to be invoked; and

(iv) following the adoption by the Conference of the changes to the Local Financial Criteria or Multi-Country Financial Criteria (as applicable), and subsequent to a satisfactory financial assessment of the Agent in accordance with such revised criteria under section 5, require the BSP Airline to return the separate Financial Security to the Agent.

The only other circumstances where a separate BSP Airline Financial Security arrangement with the Agent permissible to IATA is where such arrangement is considered necessary by a BSP Airline for specific commercial reasons. In such circumstances the BSP Airline must notify IATA of the precise circumstances giving rise to the need for the separate Financial Security and IATA will review such separate Financial Security arrangements on a quarterly basis to determine whether the separate Financial Security should continue.



Page: 14 of 69 ____________________________________________________________________________

Section 3 - Accreditation: General conditions and Administrative Non-Compliances

3.1 FRAMEWORK FOR MAINTAINING ACCREDITATION

3.1.1 General conditions of Accreditation

3.1.1.1 The general conditions of Accreditation set out in section 3.2 apply to all Agents.

3.1.2 Administrative Non-Compliances

3.1.2.1 The general consequences applicable upon the occurrence of an Administrative Non-Compliance are set out in section 3.3.



(a) General conditions of Accreditation; and

(b) Administrative Non-Compliances.

3.2 GENERAL CONDITIONS OF ACCREDITATION

Passenger Sales Agency Agreement

3.2.1.1 Accredited Agents must comply with the terms and conditions of the Passenger Sales Agency Agreement, which incorporates the terms and conditions contained in the Travel Agent's Handbook, including the Passenger Sales Agency Rules.

3.2.1.2 The requirement for Accredited Agents to comply with the Passenger Sales Agency Rules includes an ongoing obligation to comply with all requirements which apply to Applicants for Standard Accreditation with no Cash Facility, Standard Accreditation with Cash Facility or Multi-Country Accreditation contained in section 2.

3.2.1.3 The Agent must continue to maintain any Financial Security provided under these Rules in accordance with the terms and conditions of the Passenger Sales Agency Agreement. This includes ensuring that:

(a) the Financial Security is and remains valid; and

(b) the Financial Security is renewed by the expiry date.

3.2.1.4 IATA has the right to review the amount and the validity of a Financial Security at any time in accordance with the requirements of this Resolution and the applicable Local Financial Criteria or Multi-Country Financial Criteria. Where applicable, IATA can require the Agent to effect the necessary changes within the timelines for the provision of a Financial Security under section 5 to ensure that the Financial Security continues to comply with those requirements.

3.2.2 Use of IATA logo

3.2.2.1 The Agent may only use the IATA logo on its letterhead and publicity materials:

(a) exactly as instructed on the IATA website; and

(b) in connection with those activities authorised under the Agent's Accreditation.

3.2.2.2 The IATA logo may not be used in any way to misrepresent an existing industry service such as the IATA Travel Agent Identity (ID) Card service.

3.2.3 General information requirements

3.2.3.1 IATA may by written notice require the Agent to provide any information or documentation, within 21 days of the date of such notice, necessary to assess the Agent’s continued compliance with any provision of the Passenger Sales Agency Agreement.

3.2.3.2 This section 3.2.3 does not limit any other information provision obligation imposed on the Agent elsewhere in this Resolution.

3.2.4 Annual agency revalidation process



Page: 15 of 69 ____________________________________________________________________________ 3.2.4.1 By no later than 01 December annually, the Agent must:

(a) pay IATA the applicable annual agency fees in respect of the upcoming period of 1 January to 31 December, in accordance with section 14; and

(b) complete the annual agency revalidation process, including confirmation of:

(i) Agent details as required by IATA;

(ii) Ownership and management details of the Head Entity and each Associate Entity;

(iii) details of the Agent’s IATA contact person(s);

(iv) Agent website address changes;

(v) warranty of continued compliance with all applicable section 2 requirements for Accreditation.

3.3 ADMINISTRATIVE NON-COMPLIANCES

3.3.1 Definition of Administrative Non-Compliances

3.3.1.1 Administrative Non-Compliances include, but are not limited to, a failure to:

(a) provide information required to comply with section 3.2.1.2;

(b) comply with section 3.2.3;

(c) comply with the requirements for authorisation to use the Card Payment Method, including Payment Card Industry (PCI) Data Security Standards, in accordance with section 2.6.3;

(d) pay the annual agency fee or complete the annual agency revalidation process in accordance with section 3.2.4;

(e) report a change with respect to the Agent which is required to be notified in accordance with section 10.2;

(f) report a change of Location in accordance with section 10.8;

(g) report a change with respect to an Associate Entity which is required to be notified in accordance with section 10;

(h) pay an administrative fee levied in accordance with this Resolution.

3.3.2 General consequences applicable to Administrative Non-Compliances

3.3.2.1 If IATA determines that an Administrative Non-Compliance has occurred, IATA will notify the Agent in writing and require the Agent to remedy the reason for the Administrative Non-Compliance within 30 days of the notice.

3.3.2.2 If the Agent has not demonstrated to IATA's satisfaction that the reason for the Administrative Non-Compliance has been remedied within 30 days of IATA's notice under section 3.3.2.1, IATA will:

(a) immediately remove the Electronic Ticketing Authority of the Agent; and

(b) issue a Termination Notice to remove the Agent from the Agency List and terminate the Passenger Sales Agency Agreement in accordance with the provisions of section 13 of this Agreement.

except where such Administrative Non-Compliance consists of a failure to comply with the requirements for authorisation to use the Card Payment Method.

3.3.2.3 If the Administrative Non-Compliance consists of a failure to comply with the requirements for authorisation to use the Card Payment Method and within 30 days of IATA’s notice under section 3.3.2.1, the Agent has not demonstrated to IATA's satisfaction that the reason for the Administrative Non-Compliance has been remedied, IATA will:

(a) immediately restrict the Agent’s use of the Card Payment Method; and



Page: 16 of 69 ____________________________________________________________________________ (b) such restriction will remain in place until the Agent has demonstrated to IATA’s satisfaction that the reason

for the Administrative Non-Compliance has been remedied and the Agent is compliant with all applicable requirements for authorisation to use the Card Payment Method.



Page: 17 of 69 ____________________________________________________________________________

Section 4 - Risk Events 4.1 RISK EVENTS FRAMEWORK

4.1.1 Risk Events

4.1.1.1 Risk Events refer to matters which impact on the Agent's creditworthiness and/or financial standing.

4.1.2 Consequences of Risk Events

4.1.2.1 An overview of the consequences which apply upon the occurrence of each Risk Event is set out in section 4.3.



(a) Definition of Risk Events;

(b) Overview of Risk Event consequences; and

(c) Record of Risk History for the Agent who holds Standard Accreditation with no Cash Facility.

4.2 DEFINITION OF RISK EVENTS

4.2.1.1

RISK EVENT

DESCRIPTION APPLICATION Payment-Related Events

1. Late or short payment An:

overdue remittance; or

dishonoured remittance;

in breach of, or not otherwise excused under, section 6 and for which a Notice of Adjusted Risk Event is issued.

Standard Accreditation with no Cash Facility

Standard Accreditation with Cash Facility

Multi-Country Accreditation

2. Payment in the wrong currency

Failure by the Agent to remit the amount due in the Billing currency in breach of, or not otherwise excused under, section 6 and for which a Notice of Adjusted Risk Event is issued.




3. Payment Default Failure by the Agent to make an immediate payment to the Clearing Bank by close of business the day following the demand from IATA, including on the occurrence of a payment-related Risk Event per 1 and 2 above.




4. Default due to common ownership

A Default of the Agent in accordance with the provisions of section 6.6.6.

Standard Accreditation with no Cash Facility (where ADMs are used)




Page: 18 of 69 ____________________________________________________________________________


RISK EVENT

DESCRIPTION APPLICATION Risk Management Related Events

5. Authorisation to use Cash Payment Method for less than 24 Months

The Agent which has had authorisation to use the Cash Payment Method for a consecutive period of less than 24 months in accordance with section 2.5.4.



6. Major change of ownership or change of legal status

A change with respect to the Agent which is required to be notified in accordance with section 10.3.1 or 10.3.2.




7. Unreported change of ownership, legal status or legal name

A change with respect to the Agent which is required to be notified in accordance with the provisions of section 10.3 but has not been reported by the Agent when it was required to do so.




8. Failure to provide financial statements

Failure to provide acceptable financial statements, documents or any other information required for the financial assessment of the Agent in accordance with the requirements of section 5.4 and the Local Financial Criteria or Multi-Country Financial Criteria (as applicable).



9. Failure to provide a Financial Security

Failure by the Agent to provide or maintain a Financial Security in accordance with any provision of this Resolution, including sections 3, 5, 6 and 10.




10. Prejudiced collection of funds

Confirmation by the Travel Agency Commissioner of IATA’s invocation of prejudiced collection of funds action, in accordance with section 6.7.1.4.1.



Multi Country Accreditation

11. Change of Head Entity’s location to another country

A change with respect to the Agent which is required to be notified in accordance with section 10.10.





Page: 19 of 69 ____________________________________________________________________________

4.3 OVERVIEW OF RISK EVENT CONSEQUENCES

4.3.1 General

4.3.1.1 Each Risk Event has defined consequences in this Resolution. For all Accreditation types, the consequences of applicable Risk Events are referenced in sections 4.3.5 to 4.3.11 below. As the consequences of Risk Events referenced under these sections are provided as an overview only, such sections cross-refer to other provisions of this Resolution.

4.3.1.2 Risk Events for the Agent holding Standard Accreditation with Cash Facility or Multi-Country Accreditation will be included in the Agent’s Risk History assessment.

Payment-related Risk Events

4.3.2 Late or short payment or payment in the wrong currency

4.3.2.1 If either of the following Risk Events occur:

(a) Late or short payment; or

(b) Payment in the wrong currency,

the provisions and consequences set out in sections 6.6.3 and 6.6.4 respectively will apply.

4.3.3 Payment Default

4.3.3.1 If the Risk Event of a Payment Default occurs, the provisions and consequences set out in sections 6.9, 6.11, 6.12 and 6.13 will apply.

4.3.4 Default due to common ownership

4.3.4.1 If the Risk Event of a Default due to a common ownership occurs, the provisions of section 6.6.6 will be applied and the Payment Default which caused the Risk Event will be recorded in the Agent’s Risk History.

Risk Management Related Risk Events

4.3.5 Authorisation to use Cash Payment Method for less than 24 months

4.3.5.1 The occurrence of the Risk Event where the Agent has been authorised to use Cash Payment Method for less than 24 Months will only impact on the Agent's Risk Status and applicable risk management conditions under section 5. There are no other consequences that apply upon the occurrence of this Risk Event.

4.3.6 Major change of ownership or legal status

4.3.6.1 If the Risk Event of a major change of ownership or legal status occurs, the provisions and consequences set out in section 10.3 will apply.

4.3.7 Unreported change of ownership, legal status or name

4.3.7.1 If the Risk Event of an unreported change occurs, where such change is required to be notified in accordance with section 10.3, the provisions and consequences set out in section 10.11 will apply.

4.3.8 Failure to provide financial statements

4.3.8.1 If the Risk Event of failure to provide financial statements occurs, the provisions and consequences set out in section 5.4.5 will apply.

4.3.9 Failure to Provide a Financial Security

4.3.9.1 If the Risk Event of a failure to provide a Financial Security occurs, the following will apply:

(a) in the case of the Agent who holds Standard Accreditation with Cash Facility or Multi-Country Accreditation, the Agent will be immediately restricted by IATA from using the Cash Payment Method and Card Payment Method;

(b) in the case of the Agent who holds Standard Accreditation with no Cash Facility, the Agent will be immediately restricted by IATA from using the Card Payment Method; and



Page: 20 of 69 ____________________________________________________________________________

(c) except where a Failure to Provide Financial Security occurs under section 5.5.4.1, IATA will issue a written notice to the Agent requiring the Agent to:

(i) provide the required Financial Security; or

(ii) in the case of an Agent who holds Standard Accreditation with Cash Facility, validly convert to Standard Accreditation with no Cash Facility in accordance with section 10.6;

within 60 days of the notice.

4.3.9.2 During the 60 day period under section 4.3.9.1(c), the Agent is permitted to use the EasyPay Payment Method only, except where such Financial Security is required in accordance with the provisions of section 5.10.2.

4.3.9.3 If the Agent who holds Standard Accreditation with Cash Facility or Multi-Country Accreditation fails to comply with section 4.3.9.1(c) within the 60 day period, IATA will issue a Termination Notice removing the Agent from the Agency List and terminating the Passenger Sales Agency Agreement in accordance with the process in section 13.

4.3.9.4 If the Agent who holds Standard Accreditation with no Cash Facility fails to comply with section 4.3.9.1(c)(i), within the 60 day period, the Agent is permitted to continue operations using IEP only, until such time as the Agent provides the required Financial Security, except where such Financial Security is required in accordance with the provisions of section 5.10.2.

4.3.9.5 If the Agent who holds Standard Accreditation with no Cash Facility is required to provide a Financial Security as a consequence of the provisions set out in section 5.10.2, IATA will remove the Agent’s Electronic Ticketing Authority during the 60 day period under section 4.3.9.1(c). If within the 60 day period, the Agent does not provide the required Financial Security, IATA will issue a Termination Notice removing the Agent from the Agency List and terminating the Passenger Sales Agency Agreement in accordance with the process in section 13.

4.3.10 Prejudiced Collection of Funds

4.3.10.1 If IATA invokes the Risk Event of prejudiced collection of funds, the provisions of section 6.7 will be applied.

4.3.11 Change of a Head Entity’s location to another country

4.3.11.1 If the Risk Event of a change of a Head Entity’s location to another country occurs, the provisions and consequences set out in section 10.10 will apply.

4.4 RECORD OF RISK HISTORY FOR THE AGENT WHO HOLDS STANDARD ACCREDITATION WITH NO CASH FACILITY

4.4.1 Although section 5.3 does not apply to the Agent who holds Standard Accreditation with no Cash Facility, a

record of the Risk History of the Agent will be maintained by IATA for the purposes of assessing a Notice of

Change by the Agent for a change of accreditation type in accordance with the provisions of section 10.6.



Page: 21 of 69 ____________________________________________________________________________

Section 5 - Risk Management and Remittance Holding Capacity

[PLACEHOLDER]



Page: 22 of 69 ____________________________________________________________________________

Section 6 - Framework for Reporting and Remitting

6.1 Application

6.1.1 This section 6 is applicable to sales made by the Agent on behalf of BSP Airlines. All Amounts Owing must be remitted to IATA in accordance with this section.

6.1.2 The following parts of this section 6 apply to the Agent when it is using:

(a) the Cash Payment Method – sections 6.2 to 6.14;

(b) the Card Payment Method where ADMs have been issued in accordance with Resolution 850m – sections 6.2 to 6.14; and

(c) the IATA EasyPay Payment Method (IEP) – sections 6.15 to 6.18.



(a) Monies due on issue of Electronic Tickets;

(b) Reporting;

(c) Billings;

(d) Remittance Date;

(e) Risk Events and payment Defaults;

(f) Prejudiced collection of funds;

(g) Procedures for issue of Notice of Adjusted Risk Event;

(h) Procedures upon issue of notice of Payment Default;

(i) Disputes and withdrawal of notices of adjusted Risk Events and Payment Defaults;

(j) Consequences of Default;

(k) Remittance of amounts due;

(l) Reinstatement of Agent following payment Default;

(m) Responsibility for remittance of transactions using IEP.

6.2 MONIES DUE ON ISSUE OF ELECTRONIC TICKETS

6.2.1 Preferred method of remittance

6.2.1.1 The preferred methods of remittance for Accountable Transactions are:

(a) electronic funds transfer; or

(b) business-to-business direct debit.

6.2.1.2 For the purpose of section 6.2.1.1(b), business-to-business direct debit means a direct debit system and jurisdiction which imposes strict conditions and time limits not exceeding 2 banking days for revocation of the transfer by the payer or the payer's bank.

6.2.1.3 Where the Agent uses business-to-business direct debit as the method of remittance, the Agent must provide IATA with:

(a) an authorisation form permitting the Clearing Bank to debit the Agent's trust account or other bank account in favour of IATA, for payment of All Amounts Owing in accordance with this section 6; and

(b) any other relevant information that IATA requires in order to effect the business-to-business direct debit.



Page: 23 of 69 ____________________________________________________________________________ 6.2.1.4 When the Agent intends to change its bank account(s), the Agent must give IATA 30 days' advance notice by

certified/registered mail, or certified letter with return receipt, as appropriate.

6.2.1.5 When either of the methods of remittance referred to in section 6.2.1.1 are available in a market and unless required by applicable local law, other methods of remittance are discouraged.

6.2.2 Reviewing methods of remittance

6.2.2.1 Each APJC must evaluate the methods of remittance available in their market at least once per annum taking into account the preferred methods of remittance in section 6.2.1 and any local conditions that may apply. This provision will not apply to markets where any of the preferred methods of remittance have been adopted.

6.2.3 When monies fall due for the Cash Payment Method

6.2.3.1 The Agent will issue an Electronic Ticket in accordance with this Resolution at the same time it collects payment for transportation in respect of which reservations have been made for the services of a BSP Airline.

6.2.3.2 The amount payable by the Agent to a BSP Airline for the issue of Electronic Tickets is deemed due by the Agent to the BSP Airline when the Electronic Ticket is issued, and must be remitted in accordance with the provisions of section 6.4.3.

6.2.3.3 The amount payable by the Agent to a BSP Airline for Electronic Tickets issued by the BSP Airline on behalf of the Agent and reported through the BSP will be due by the Agent to the BSP Airline when the Electronic Tickets are issued. The amount payable for such Electronic Tickets must be remitted in accordance with the provisions of section 6.4.3 in the same way as if the Agent had issued the Electronic Tickets.

6.2.3.4 In the event that the Agent is declared insolvent, bankrupt, is placed in receivership or judicial administration, goes into liquidation or becomes subject to any other similar legal process affecting its normal operation, then notwithstanding any other provision of this section 6 All Amounts Owing are immediately due and payable by the Agent.

6.2.3.5 In circumstances where a BSP Airline is suspended from the BSP, the amounts due to the BSP Airline under this section 6 must be treated in accordance with the provisions of Resolution 850.

6.2.4 Remittance currency

6.2.4.1 The Agent must remit in the currency reported on the Electronic Ticket and billed to the Agent in accordance with section 6.4.

6.3 REPORTING

6.3.1 Length of Reporting Period

6.3.1.1 For each country, the Conference will establish the length of the Reporting Period most suitable for the efficient operation of that country, taking into account the recommendation of the APJC.

6.4 BILLINGS

6.4.1 The Data Processing Centre will compute and prepare a Billing in respect of each Agent in accordance with the requirements of the Conference. Such Billings will incorporate all Accountable Transactions with respect to the Agent.

6.4.2 The Conference will establish the frequency at which Billings will be provided to the Agent.

6.4.3 Where a BSP allows for Electronic Tickets to be issued in more than one currency, a Billing will be produced for each currency used.

6.5 REMITTANCE DATE

6.5.1 The provisions of this section 6.4.3 govern the general remittance procedures and frequencies for the remittance of Billings by the Agent.

6.5.2 General remittance procedures

6.5.2.1 The Agent must remit all amounts due in respect of Accountable Transactions and any applicable local charges directly to the Clearing Bank.



Page: 24 of 69 ____________________________________________________________________________ 6.5.2.2 Where the Agent receives Billings in more than one currency the Agent must remit in the currency of each

relevant Billing.

6.5.2.3 Any transactions not processed in previous Reporting Periods will be included in the next Billing.

6.5.3 Frequency of remittance

6.5.3.1 The Conference will establish the standard Remittance Frequency and, if considered appropriate, any additional more frequent Remittance Frequencies for Agent remittances in each country. The relevant Remittance Date will be communicated to all Agents participating in each BSP.

6.5.3.2 IATA will publish the Remittance Frequencies applicable to each country on its website.

6.5.3.3 The standard Remittance Frequency will not be less than once each calendar month, and may be at such greater frequency as the Conference determines. Where applicable, the more frequent Remittance Frequency will not be the same or less than the standard Remittance Frequency of the relevant country, as determined by the Conference.

6.5.3.4 The Agent may remit at such greater frequency than the standard or more frequent Remittance Frequency which would otherwise be applicable to the Agent by a Notice of Change provided to IATA and the execution of a Voluntary More Frequent Remittance agreement in the form set out at Attachment ‘D’. IATA will notify all BSP Airlines when such greater Remittance Frequency takes effect.

6.5.3.5 If the Remittance Frequency is monthly, remittances must be made by the Agent so as to reach the Clearing Bank no later than its close of business on the date established by the Conference. This date must not be later than the 15th day of the calendar month following the calendar month covered by the Billing.

6.5.3.6 If the Remittance Frequency is twice monthly, remittances must be made by the Agent so as to reach the Clearing Bank no later than its close of business on the date which is:

(a) the last day of the calendar month, in respect of Billings covering the first 15 days of the month; and

(b) the 15th day of the following calendar month, in respect of Billings covering the period from the 16th to the last day of the calendar month.

6.5.3.7 If the Remittance Frequency is greater than twice monthly, remittances must be made by the Agent so as to reach the Clearing Bank no later than its close of business on:

(a) the date which is the fifth working day following the Reporting Date; or

(b) such date approved by the Conference for application in a specific country.

6.5.3.8 The Conference acknowledges that a BSP Airline may establish an individualised Remittance Frequency in accordance with:

(a) a bilateral agreement between the BSP Airline and the Agent; or

(b) applicable law;

which will:

(c) override the Remittance Frequency approved for a country; and

(d) be subject to all terms and conditions contained in this Resolution including sections 6.6 and 6.9. In the event of an overdue or dishonoured remittance under an individualised frequency, the Agent will be subject to a Notice of Adjusted Risk Event and, where applicable, Payment Default action.

6.5.3.9 The Agent must, in all cases, use a method of remittance which ensures that the funds are received in the Clearing Bank no later than its close of business on the Remittance Date established under the provisions of this section 6.5.3.

6.5.3.10 If the Clearing Bank is closed for business on the Remittance Date established under the provisions of this section 6.5.3, the remittance must be made by the Agent so as to reach the Clearing Bank no later than its close of business on the first day that the Clearing Bank is open for business.

6.5.4 Reviewing credit period



Page: 25 of 69 ____________________________________________________________________________ 6.5.4.1 Each APJC must evaluate the period between the Reporting Date and the Remittance Date in their market at

least once per annum taking into account the best practice for financial transactions in that market and any local conditions that may apply and using as a best practice guideline the periods set out in section 6.5.3 for the applicable Remittance Frequency. This provision will not apply to markets where a best practice has been adopted.

6.6 RISK EVENTS AND PAYMENT DEFAULTS

6.6.1 General procedures

6.6.1.1 This section sets out the provisions governing Adjusted Risk Events and Payment Defaults. The Agent will also be liable for any charges arising from Adjusted Risk Events and Payment Defaults.

6.6.1.2 The Conference may provide for variations from BSP to BSP in respect of charges applicable upon the occurrence of Adjusted Risk Events and Payment Defaults as set out in section 5.

6.6.1.3 For the purposes of this section 6, where IATA issues a demand for payment, including in the form of a Notice of Adjusted Risk Event, the Agent must remit monies due so that they are received by the Clearing Bank by the end of the next day on which it is open for business. A demand for payment arising from a Notice of Payment Default is due immediately.

6.6.1.4 A Notice of Adjusted Risk Event or Notice of Payment Default will be sent to the Agent in writing via the IATA Customer Portal and will set out the specific circumstances causing the Adjusted Risk Event or Payment Default.

6.6.2 Charges

6.6.2.1 The Conference will establish any cost recovery charges to be levied on the Agent, including:

(a) Administrative charges as set out in section 14 of this Resolution for:

(i) an excessive number of voided Electronic Tickets, as determined from time to time by IATA in consultation with the Local Customer Advisory Group—Passenger (LCAG-P); and/or

(ii) any other failures to comply with BSP procedures and instructions, which generate additional cost to IATA or BSP Airlines,

where the amount of these charges will be determined by the Conference and then notified by IATA to all Agents in the BSP; and

(b) Clearing Bank charges for the amount debited to IATA by the Clearing Bank as a result of the Agent's failure to remit in accordance with this Resolution and the BSP Manual for Agents.

6.6.2.2 All charges levied on the Agent in accordance with this section 6.6.2 must:

(a) except as otherwise specified, be included by IATA in its first subsequent Billing to the Agent and will be due by the Agent by the Remittance Date; and

(b) for the purpose of section 6.9.2.1(c), be deemed to be part of All Amounts Owing by the Agent.

6.6.2.3 IATA will notify the Agent of any of the above charges being included in its Billing.

6.6.3 Risk Event - late or short payment

6.6.3.1 If:

(a) the Clearing Bank does not receive the remittance due by the Remittance Date;

(b) [immediately on receipt by the Agent of a delayed Billing a remittance in respect of a shortage as provided for in Subparagraph 6.5.3]; or

(c) The remittance received by the Clearing Bank is dishonoured on or after the Remittance Date,

IATA will demand immediate payment from the Agent, including any Clearing Bank charges incurred, by sending the Agent a Notice of Adjusted Risk Event in accordance with section 6.8.



Page: 26 of 69 ____________________________________________________________________________ 6.6.3.2 If correct payment is not received by the Clearing Bank by the deadline referred to in section 6.6.1.3, IATA will

immediately issue a Notice of Payment Default with respect to the Agent in accordance with section 6.9.

6.6.3.3 In addition to any action prescribed in this section 6.6.3, IATA will debit the Agent for costs incurred as a consequence of the late or dishonoured remittance.

6.6.3.4 If it is established that such non-payment was due to a bona fide bank error, as provided for in section 6.6.5, and remittance of All Amounts Owing is received by the Clearing Bank by the deadline referred to in section 6.6.1.3, the Risk Event of late or short payment will be withdrawn.

6.6.3.5 If it is established that such non-payment was due to a bona fide bank error, as provided for in section 6.6.5, and remittance of All Amounts Owing is received by the Clearing Bank after the issue of a Notice of Payment Default, the Risk Events of late or short payment and of Payment Default will be withdrawn.

6.6.4 Risk Event of payment in the wrong currency

6.6.4.1 If the Clearing Bank does not receive the remittance, in the same currency as the Billing to the Agent in the correct amount by the Remittance Date, IATA will demand immediate payment from the Agent for the correct amount in the Billing currency, including any Clearing Bank charges incurred, by sending to the Agent a Notice of Adjusted Risk Event in accordance with section 6.8.

6.6.4.2 If the Clearing Bank does not receive the remittance for the correct amount in the Billing currency by the deadline referred to in section 6.6.1.3, IATA will immediately issue a Notice of Payment Default to the Agent in accordance with section 6.9.

6.6.4.3 In addition to any action prescribed in this section 6.6.4, IATA will debit the Agent for costs incurred as a consequence of the payment in the wrong currency.

6.6.4.4 If it is established that such payment in the wrong currency was due to a bona fide bank error, as provided for in section 6.6.5 and remittance of All Amounts Owing is received by the deadline referred to in section 6.6.1.3, the Risk Event of payment in the wrong currency will be withdrawn.

6.6.4.5 If it is established that such payment in the wrong currency was due to a bona fide bank error, as provided for in section 6.6.5, and remittance of All Amounts Owing is received by the Clearing Bank, but after the issue of a Notice of Payment Default, the Risk Events of payment in the wrong currency and of Payment Default will be withdrawn:

6.6.5 Bona fide bank error

6.6.5.1 A bona fide bank error is when the Agent’s bank fails to honour the availability of funds for remittance through a valid line of credit or other written arrangement, dated and executed between the bank and the Agent prior to the Remittance Date, or otherwise, fails to honour the availability of sufficient funds for immediate withdrawal in the Agent’s account on the Remittance Date.

6.6.5.2 The bona fide bank error must be substantiated by evidence acceptable to IATA for the purposes of section 6.6.5.1 in the form of a bank letter provided to IATA from the Agent’s bank meeting the following criteria:

(a) the bank letter must be sent to IATA within 10 working days of the dishonoured Remittance by registered post, courier, fax, or as a scanned copy via email stating the nature of the error and reason for the delay in remittance;

(b) the bank letter must be signed by a manager at the bank, including specification of name and job title or designation; and

(c) the bank letter must confirm that the Agent had sufficient available funds on the Remittance Date in the stipulated bank account(s), stating the account name and the account number(s).

6.6.5.3 If IATA is satisfied that the non-receipt by the Clearing Bank of a remittance by the Remittance Date is due to bona fide bank error, then IATA will not invoke the provisions of this section 6.6.

6.6.6 Default due to common ownership

6.6.6.1 The Risk Event of a Default due to common ownership will occur when:



Page: 27 of 69 ____________________________________________________________________________

(a) the Agent or any of its Associate Entities has an owner, director or person in a position of management in common with another Agent that has incurred a Payment Default in accordance with the provisions of this section 6.6; or

(b) the Agent is also accredited as an IATA Cargo Agent and has been declared in Default.

6.6.6.1.2 If the Risk Event of a default due to common ownership occurs, IATA will apply the provisions of section 6.9.

6.6.7 Disputed Agency Debit Memo

The provisions of this paragraph should be read in conjunction with the provisions concerning ADMs as provided in Resolution 850m.

6.6.7.1 an Agent may for reason dispute an ADM,

6.6.7.2 an Agent shall have a maximum of 15 days in which to review and dispute an ADM prior to its submission to BSP for inclusion in the Billing,

6.6.7.3 when an ADM is disputed prior to it being submitted to the BSP for processing, it will be recorded as disputed, and will not be included in the Billing,

6.6.7.4 if an Agent disputes an ADM within the minimum dispute period it shall be suspended from the BSP process and settlement of the dispute will be for resolution between the Agent and Airline concerned:

(a) in the event an Agent disputes an ADM and, after agreement between the Airline and the Agent, it is determined that the purpose of that ADM was correct, the Airline will advise the Agent and the BSP accordingly and the ADM as originally submitted will be processed,

(b) if as a result of an Agent dispute it is determined after agreement between the Airline and the Agent that the ADM needs adjustment, the Airline will submit to the Agent and the BSP the adjusted ADM, in the form of a new ADM, in which case only the new ADM shall be processed,

6.6.7.5 an ADM that has been included in the BSP Billing will be processed for payment,

6.6.7.6 If after 60 days of receipt of a disputed ADM by an Airline the dispute has not been resolved, despite consultation between the Airline and the Agent, such ADM will no longer be suspended and will be withdrawn from the BSP process,

6.6.7.7 Such ADM dispute is now for bilateral resolution between the Airline and the Agent.

6.7 PREJUDICED COLLECTION OF FUNDS

6.7.1 Where the Agency Administrator believes that the Agent's ability to pay is prejudiced

6.7.1.1 This section 6.7.1 governs the procedures for the protection of All Amounts Owing to all BSP Airlines by the Agent in situations where the Agency Administrator believes that the ability or intent of the Agent to remit All Amounts Owing to BSP Airlines is in doubt.

6.7.1.2 In the event that the Agency Administrator receives written information, which is substantiated to the satisfaction of the Agency Administrator, leading to the belief that the ability of any BSP Airline to collect All Amounts Owing from the Agent may be prejudiced, the Agency Administrator will notify the Agent that it has concluded that the ability to collect is prejudiced and remove Electronic Ticketing Authority.

6.7.1.3 Following the issue of a notice under section 6.7.1.2, the Agency Administrator will request an immediate review by the Travel Agency Commissioner.

6.7.1.4 If requested to undertake a review in accordance with section 6.7.1.3, the Travel Agency Commissioner will commence a review under the terms of review by Travel Agency Commissioner of the applicable Passenger Sales Agency Rules within three working days from receipt of such a request. Pending the results of this review, the Agent may within 30 days of the date on which Electronic Ticketing Authority was removed or the date when the review was commenced, whichever is the later, apply for interlocutory relief to stay the removal of Electronic Ticketing Authority in accordance with Resolution 820e. Before granting an interlocutory order under this section 6.7.1.4, the Travel Agency Commissioner will require the Agent to provide a Financial Security in accordance with Resolution 820e.



Page: 28 of 69 ____________________________________________________________________________ 6.7.1.5 If the review of the Travel Agency Commissioner confirms the basis of the prejudiced collection of funds, a

Risk Event will be registered against the Agent in its Risk History for 12 months following the date of IATA’s invocation of the prejudiced collection of funds action.

6.7.1.6 If at any time IATA finds that All Amounts Owing by the Agent are at risk and are not covered by a Financial Security, or that any Financial Security provided does not sufficiently cover those amounts taking into account reasonable variations in sales levels, IATA may review the circumstances of the Agent and demand an immediate accounting and remittance of monies due through the provision of an interim Billing to the Agent and/or restrict the Agent to the Card Payment Method and/or IEP only.

6.7.1.7 If payment under section 6.7.1.6 is not received on demand by the deadline referred to in section 6.6.1.3, the Agency Administrator will immediately notify the Agent and issue a Notice of Payment Default with respect to the Agent in accordance with the provisions of section 6.9.

6.7.2 Where an individual BSP Airline believes that the Agent's ability to pay is prejudiced

6.7.2.1 This section 6.7.2 governs the procedures for the protection of amounts owed to an individual BSP Airline by the Agent in situations where the BSP Airline believes that the ability or intent of the Agent to pay All Amounts Owing to that BSP Airline is in doubt.

6.7.2.2 In circumstances where a BSP Airline, acting independently, determines that its ability to collect All Amounts Owing from the Agent to the BSP Airline may be prejudiced (such as where a Head or an Associate Entity is declared insolvent, bankrupt, is placed in receivership or judicial administration, goes into liquidation or becomes subject to any other similar legal process affecting its normal operation), the BSP Airline may, by written notice to the Agent, notify the Agent that it has concluded that its ability to collect is prejudiced and demand immediate payment of all such amounts provided that the BSP Airline first advises IATA in writing of its intention to issue such a notice.

6.7.2.3 Upon the issue of a notice in accordance with section 6.7.2, all amounts specified in the demand notice are immediately due and payable by the Agent to the BSP Airline.

6.7.2.4 In the event that the Agent fails to remit to IATA for the same Billing, the BSP Airline is required to pay the amount collected from the Agent to IATA immediately, failing which IATA will deduct such amount from the next settlement due to the BSP Airline.

6.8 PROCEDURES FOR ISSUE OF NOTICE OF ADJUSTED RISK EVENT

6.8.1.1 This section 6.8 establishes the procedures when IATA issues a Notice of Adjusted Risk Event to the Agent following the Risk Event of a late or short payment or a payment in the wrong currency, in accordance with the provisions of section 6.6.3 or 6.6.4.

6.8.1.2 IATA will immediately send a Notice of Adjusted Risk Event to the Agent in accordance with section 16 of Resolution 824. In addition, a copy of the Notice of Adjusted Risk Event will be sent to the Agent via the IATA Customer Portal.

6.8.1.3 The Agent may within 30 days of the date of the Notice of Adjusted Risk Event invoke the procedures set out in Resolution 820e for review of IATA's action by the Travel Agency Commissioner. The Agent may also invoke such review procedures in any case where a charge is applied to the Agent under section 6.6.2. Where a review under this section 6.8.1.33 is pending and the Risk Event of a Payment Default occurs, the Agent may apply to the Travel Agency Commissioner for interlocutory relief pursuant to section 6.9.2.2 and subject to the conditions contained in that section.

6.9 PAYMENT DEFAULT PROCEDURES

6.9.1 Overview

6.9.1.1 This section 6.9 establishes the procedures following the Risk Event of a Payment Default, in accordance with any of the provisions of sections 6.6 or 6.7.

6.9.2 General procedures

6.9.2.1 Upon the occurrence of the Risk Event of a Payment Default, IATA will immediately take the following action:

(a) advise all BSP Airlines that the Agent has incurred a Payment Default;



Page: 29 of 69 ____________________________________________________________________________

(b) send a Notice of Payment Default, which will include Termination Notice of the Agent’s Passenger Sales Agency Agreement, via the IATA Customer Portal to the Agent, advising that the Agent has incurred a Payment Default;

(c) demand an immediate accounting and remittance of All Amounts Owing by the Agent. Should the Agent fail to remit the amounts due by the deadline referred to in the Notice of Payment Default, the provisions of section 6.11.3 will apply;

(d) establish an up-to-date statement of indebtedness for the Agent and bill the Agent for charges incurred in accordance with section 14 as a result of the Agent's failure to make complete remittance by the Remittance Date;

(e) notify the local representatives of BSP Airlines participating in the BSP concerned, and the Agent’s System Provider(s), of the Payment Default;

(f) provide the BSP Airlines with a maximum period of 30 days to submit any ADMs/ACMs to be included in the final accounting of amounts owing by the Agent declared in Payment Default;

(g) check any accounting and remittance obtained from the Agent and identify any discrepancies; and

(h) distribute any monies obtained from the Agent among the BSP Airlines concerned, subject to sections 6.9.3 to 6.9.5.

6.9.2.2 The Agent may within 30 days of the date of the Notice of Payment Default invoke Resolution 820e for review of the Agency Administrator's action by the Travel Agency Commissioner and may also apply for an interlocutory order staying the Notice of Payment Default and preserving the status quo pending the outcome of the review. Before granting an interlocutory order under this section 6.9.2.2, the Travel Agency Commissioner will require the Agent to provide a Financial Security in accordance with Resolution 820e and ensure that All Amounts Owing as determined under section 6.9.2.1(c) are settled at the time the interlocutory order takes effect.

6.9.3 Encashment of Financial Security (except India, Malaysia and Singapore)

6.9.3.1 If the Agent holding Standard Accreditation has provided a Financial Security and the Financial Security amount does not cover All Amounts Owing, each BSP Airline listed in the Billing will receive a prorated amount of the Financial Security in proportion to its percentage share of the related Billing.

6.9.3.2 If the Agent holding Multi-Country Accreditation has provided a Financial Security and the Financial Security does not cover All Amounts Owing:

(a) the Financial Security will be prorated between each BSP where there is a Billing which is the subject of the Default; and

(b) the amount allocated to each BSP in accordance with section 6.9.3.2(a) will in turn be prorated between each BSP Airline listed in the related Billing for that BSP so that each BSP Airline will receive its percentage share of the related Billing.

6.9.3.3 If the Agent has provided a separate bank guarantee, insurance bond or other form of guarantee in favour of a specific BSP Airline, that BSP Airline will not be entitled to any payment under the Agent's Financial Security until all outstanding debts of the Agent to other BSP Airlines have been discharged.

6.9.3.4 If the Agent is owned by a Member, where the Member or Member's parent company holds greater than 50% of the equity of the Agent or the Agent's parent company, is declared in Default, that Member will not be entitled to any payment under the Agent's Financial Security.

6.9.4 Encashment of Bank Guarantee, Insurance Bond or Other Form of Guarantee (India only)

6.9.4.1 In the event that the Agent's BSP bank guarantee, insurance bond or any other form of guarantee, if applicable is insufficient to provide a full settlement to each of the BSP participating Airlines concerned listed in the Billing which has been subject to the Agent's default, each such BSP Airline shall be provided with a prorated amount of the bank guarantee, insurance bond or other form of guarantee in proportion to its percentage share in Billing up to the date when the full amount of the bank guarantee, insurance bond or other form of guarantee was exceeded. In the event that the Agent has provided a separate bank guarantee, insurance bond or any other form of guarantee in favour of a specific BSP Airline for Accountable Transactions, such BSP Airline shall



Page: 30 of 69 ____________________________________________________________________________

not be entitled to any payment under the Agent’s BSP bank guarantee, insurance bond or other form of guarantee until all outstanding indebtedness of the Agent to other BSP Airlines shall be discharged. In the event that the Agent owned by a Member, where the Member or Member's parent company holds greater than 50% of the equity of the Agent or the Agent's parent company, is declared in Default, such member shall not be entitled to any payment under the Agent's BSP bank guarantee, insurance bond or other form of guarantee.

6.9.5 Encashment of Bank Guarantee, Insurance Bond or Other Form of Guarantee (Malaysia and Singapore only)

6.9.5.1 In the event that the Agent's BSP bank guarantee, insurance bond or any other form of guarantee, if applicable is insufficient to provide a full settlement to each of the BSP participating Airlines concerned listed in the Billing which has been subject to the Agent's default, each such BSP Airline shall be provided with a prorated amount of the bank guarantee, insurance bond or other form of guarantee in proportion to its percentage share in Billing up to the date when the full amount of the bank guarantee, insurance bond or other form of guarantee was exceeded; such calculation shall be without regard to specific Accountable Transactions. In the event that the Agent has provided a separate bank guarantee, insurance bond or any other form of guarantee in favour of a specific BSP Airline for Accountable Transactions, such BSP Airline shall not be entitled to any payment under the Agent's BSP bank guarantee, insurance bond or other form of guarantee until all outstanding indebtedness of the Agent to other BSP Airlines shall be discharged. In the event that the Agent owned by a Member, where the Member or Member's parent company holds greater than 50% of the equity of the Agent or the Agent's parent company, is declared in Default, such member shall not be entitled to any payment under the Agent's BSP bank guarantee, insurance bond or other form of guarantee.

6.10 DISPUTES AND WITHDRAWAL OF NOTICES OF ADJUSTED RISK EVENTS AND PAYMENT DEFAULTS

6.10.1 In order to be dealt with through BSP, disputes raised by the Agent must:

(a) be registered with IATA via BSPlink prior to the Remittance Date;

(b) relate to a specified amount as part of a Billing;

(c) state a substantive reason for the dispute supported by written evidence of that dispute;

(d) be raised by the Agent within 12 months of the ticket issuance date;

(e) be added to the daily dispute file.

6.10.2 All validly disputed amounts will continue to form part of the Billing and the Agent must remit the disputed amount to the BSP on the Remittance Date notwithstanding the existence of the dispute.

6.10.3 All disputed amounts remitted by the Agent will be held by IATA for a period of 30 days or until the dispute is resolved, whichever is earlier.

6.10.4 For Reported Sales markets, any disputed amount received from the Agent and paid to a BSP Airline will be deducted from the BSP settlement of that BSP Airline in the following Reporting Period and held for a period of 30 days or until the dispute is resolved, whichever is earlier.

6.10.5 All disputes must be resolved in BSPlink between the Airline and the Agent within 30 days with a maximum of two responses per party, otherwise the dispute will be for bilateral resolution between the Airline and the Agent outside of the BSP and IATA will pay the disputed amount held to the Agent or the Airline as applicable in accordance with section 6.10.7. If the Agent initiated a dispute on the 30th day, the Airline will have an additional 7 days to respond.

6.10.6 Each agreement or disagreement with the dispute must be registered by the Airline or the Agent, as applicable, in BSPlink, and each disagreement must be accompanied by a substantive reason for the disagreement supported by written evidence.

6.10.7 Disputed amounts held by IATA will be paid as follows:

(a) Where the Airline agrees with the dispute raised by the Agent, to the Agent.

(b) Where the Airline disagrees with the dispute, the Airline must state a substantive reason for the disagreement supported by written evidence. If the Agent agrees with this position, the disputed



Page: 31 of 69 ____________________________________________________________________________

amount will be settled to the Airline. Otherwise, the disputed amount will be paid to the Agent, without prejudice to the right of the Airline to claim the disputed amount from the Agent outside of the BSP.

(c) Where no response is received from the Airline within 30 days, the dispute is deemed resolved in favour of the Agent and the disputed amount will be paid to the Agent.

(d) Where no response is received from the Agent within 30 days, the dispute is deemed resolved in favour of the Airline and the disputed amount will be settled to the Airline.

6.11 CONSEQUENCES OF PAYMENT DEFAULT

6.11.1.1 This section 6.11 governs the procedures applicable when the Agent is in Payment Default.

6.11.2 When remittance has been made

6.11.2.1 If the Agent which has incurred the Risk Event of a Payment Default under any of the provisions of this Resolution, has remitted to IATA All Amounts Owing by the deadline referred to in section 6.9.2.1(c), the provisions of sections 6.12 and 6.13 will apply.

6.11.3 When remittance has not been made

6.11.3.1 If the Agent which has incurred the Risk Event of a Payment Default under any of the provisions of this Resolution fails to remit to IATA All Amounts Owing by the deadline referred to in section 6.9.2.1(c), IATA will terminate the Agent’s Passenger Sales Agency Agreement in accordance with section 13.

6.11.3.2 If after receiving the Notice of Payment Default in accordance with the provisions of section 6.9.2.1(b) and before the effective date of termination specified in that notice, the Agent remits All Amounts Owing or agrees to a repayment schedule in accordance with section 6.12, the termination specified in the Notice of Payment Default will not take place.

6.11.3.3 If the Agent does not honour the repayment schedule agreed in accordance with section 6.12, the termination date specified in the Notice of Payment Default will be valid. If the specified termination date has already passed, then the termination will take immediate effect.

6.12 REMITTANCE OF AMOUNTS DUE

6.12.1 This section 6.12 governs the remittance to IATA of All Amounts Owing by the Agent who is in Payment Default.

6.12.2 If the Agent who is in Payment Default is able to demonstrate to the satisfaction of IATA prior to the effective date of termination specified in the Notice of Payment Default issued in accordance with section 6.9.2.1(b) that:

(a) All Amounts Owing, if any, have been remitted to IATA, or

(b) at least 20% of All Amounts Owing have been remitted and a firm schedule for repayment by instalments within twelve months of the balance plus interest at the official (prime) bank rate plus one percent has been agreed between IATA and the Agent; or

(c) an alternative repayment schedule and conditions, initiated by the Agent, have been agreed between the Agent and IATA on the basis that:

(i) the Agent has remitted not less than 20% of All Amounts Owing and can demonstrate to IATA’s satisfaction that it has taken all steps possible to remit at least 50% of All Amounts Owing; and

(ii) a firm schedule for repayment by instalments over an agreed period of no more than twelve months; and

(iii) the repayments will cover the balance plus interest at the official (prime) bank rate plus one percent or, in any event, will provide for payment of interest at a rate similar to that set out in Subparagraph 6.12.2(b),

IATA will notify the BSP Airlines accordingly and section 6.11.3.2 will apply in respect of that Notice of Payment Default.

6.13 REINSTATEMENT OF AGENT FOLLOWING PAYMENT DEFAULT



Page: 32 of 69 ____________________________________________________________________________ 6.13.1.1 Provided that the below conditions are met prior to the effective date of termination referred to in sections

6.11.3.2 and 6.12, IATA will reinstate the Agent's access to Electronic Ticketing. The BSP Airlines may, in their individual discretion, provide the Agent with Electronic Ticketing Authority and IATA will advise all System Providers that the Agent may have access to Electronic Ticketing. The conditions for reinstatement are:

(a) the Agent has remitted All Amounts Owing; and

(b) the Agent has provided a Financial Security acceptable to IATA in accordance with the provisions of section 5.5 or 5.10 of this Resolution, as applicable.

6.13.1.2 Following reinstatement under section 6.13.1.1 IATA will conduct a financial assessment of the Agent for cause in accordance with section 5.4. Such financial assessment will only be conducted on the basis of the financial position and accounts of the Agent dated at least 6 months following the date of reinstatement under section 6.13.1.1. If such date occurs after the next annual financial assessment due to be undertaken in respect of the Agent under section 5.4, the for cause financial assessment referred to in this section 6.13.1.2 will not be carried out unless requested by the Agent.

6.14 REVIEW BY THE TRAVEL AGENCY COMMISSIONER

If the Agent has received a Notice of Payment Default in accordance with section 6.11.32 and the Agent's Passenger Sales Agency Agreement is to be terminated in accordance with section 6.11.3, the Agent may, within 30 days of the date of the Notice of Payment Default, invoke Resolution 820e for review of IATA’s action by the Travel Agency Commissioner. The Agent may also apply for an interlocutory order to stay the termination and preserve the status quo pending the outcome of the review. Before granting an interlocutory order under this section 6.14, the Travel Agency Commissioner must ensure that All Amounts Owing as determined under section 6.9.2.1(c) are remitted at the time the interlocutory order takes effect, and ]may require the Agent to provide a Financial Security in accordance with Resolution 820e.

6.15 FRAMEWORK FOR IEP PAYMENT METHOD

This section becomes effective on 1 January 2017.

6.15.1 Application

6.15.1.1 The IEP Payment Method is available to all Agents regardless of their type of Accreditation.

6.15.1.2 The provisions of sections 6.16 to 6.18 apply to all Agents who use IEP.

6.15.2 Structure of Sections 6 relating to IEP

6.15.2.1 Sections 6.16 to 6.18 are structured as follows:

(a) IEP Account:

(i) IEP Account required;

(ii) Funding an IEP Account;

(iii) Withdrawing funds from an IEP Account;

(iv) Closing an IEP Account;

(b) Transactions using the IEP Payment Method:

(i) Issue of Electronic Tickets;

(c) Billings and remittance of monies by the Agent using IEP

6.16 IEP ACCOUNT


6.16.1 IEP Account required

6.16.1.1 In order to access IEP, the Agent must open an IEP Account using the IEP System.

6.16.1.2 The Agent may have more than one IEP Account.

6.16.2 Funding an IEP Account



Page: 33 of 69 ____________________________________________________________________________ 6.16.2.1 Before the Agent can issue Electronic Tickets using IEP, the Agent must first ensure funds have been made

available on the IEP Account.

6.16.2.2 Once the Agent has opened an IEP Account and made funds available, the IEP System will generate an IATA EasyPay Number.

6.16.2.3 There is no maximum or minimum amount of funds required to be held in an IEP Account.

6.16.2.4 The Agent may transfer funds to its IEP Account at any time.

6.16.3 Withdrawing funds from an IEP Account

6.16.3.1 The Agent may withdraw any available funds in its IEP Account at any time, subject to the terms and conditions applicable to the IEP Account.

6.16.4 Closing an IEP Account

6.16.4.1 The Agent may close its IEP Account at any time using the IEP System, subject to the terms and conditions applicable to the IEP Account, provided that:

(a) there are no amounts in the IEP Account which have been blocked in accordance with section 6.17.1.1(a); and

(b) the Agent has first withdrawn all available funds in the IEP Account.

6.17 TRANSACTIONS USING IEP


6.17.1 Issue of Electronic Tickets

6.17.1.1 If there are sufficient available funds in the Agent’s IEP Account for the issuance of an Electronic Ticket, then:

(a) that amount will be blocked in the IEP Account pending remittance and will no longer be part of the available funds in the IEP Account;

(b) the IEP System will provide the GDS with an authorisation to proceed with the transaction; and

(c) the GDS will issue the Electronic Ticket upon receipt of the authorisation to proceed with the transaction from the IEP System.

6.17.1.2 If there are insufficient available funds in the Agent’s IEP Account, the IEP System will reject the transaction.

6.18 BILLINGS AND REMITTANCE OF MONIES BY AGENTS USING IEP


The Agent using IEP will receive Billings incorporating Accountable Transactions, for which the remittance

procedures and other provisions in sections 6.2 to 6.14 will apply.



Page: 34 of 69 ____________________________________________________________________________

Section 7 - Issue of Electronic Tickets 7.1 FRAMEWORK FOR ISSUE OF ELECTRONIC TICKETS

7.1.1 This section 7 establishes the processes for issuance of Electronic Tickets. Only Accredited Agents may issue Electronic Tickets by using the Electronic Ticketing Authority provided by a BSP Airline.

7.1.2 This section 7 is structured as follows:

(a) Electronic Ticket Authority granted by BSP Airlines;

(b) Members not participating in the BSP;

(c) Withdrawal of Electronic Ticketing Authority by IATA;

(d) Additional responsibilities of the Agent regarding Electronic Tickets;

(e) Review of a BSP Airline's individual decision;

(f) Review of a Conference decision.

7.2 ELECTRONIC TICKETING AUTHORITY GRANTED BY BSP AIRLINES

7.2.1 A BSP Airline may provide its Electronic Ticketing Authority to its appointed Agent.

7.2.2 Unless otherwise advised by the BSP Airline to the Agent in writing, the Electronic Ticketing Authority provided to the Agent will also authorise the Agent to issue Electronic Tickets on any additional IATA Numeric Codes assigned to the Agent.

7.2.3 A BSP Airline may withdraw the Electronic Ticketing Authority provided to the Agent at any time by notice to the Agent in writing.

7.3 MEMBERS NOT PARTICIPATING IN THE BSP

7.3.1 A Member which does not participate in the BSP and wishes to conduct business with Accredited Agents, will do so in accordance with the provisions of the Passenger Sales Agency Agreement, in which case that agreement and the Travel Agent's Handbook will govern the relationship between the Member and the Agent.

7.4 WITHDRAWAL OF ELECTRONIC TICKETING AUTHORITY BY IATA

7.4.1 In the event that a BSP Airline ceases all of its scheduled air service operations for reason of financial failure, IATA will, on instruction from the BSP Airline or the Agency Administrator, withdraw that BSP Airline's Electronic Ticketing Authorities.

7.5 ADDITIONAL RESPONSIBILITIES OF THE AGENT REGARDING ELECTRONIC TICKETS

7.5.1 In accordance with Resolution 852, the Agent must not sell, validate or issue an Electronic Ticket of, or in the name of, a BSP Airline for transportation solely on an air carrier other than that BSP Airline whose Electronic Ticketing Authority is being used, unless the Agent has been authorised to do so by that BSP Airline.

7.6 REVIEW OF A BSP AIRLINE'S INDIVIDUAL DECISION

7.6.1 Notwithstanding the provisions of section 2.9 or section 7.2, and subject to section 7.6.2, the Agent which considers itself aggrieved by the decision of a BSP Airline:

(a) to refuse to appoint the Agent; or

(b) to withdraw its Electronic Ticketing Authority provided to the Agent,

with the result of the decision being that the Agent's commercial interests are adversely affected to the point of placing its business in jeopardy, may request copies of the BSP Airline's criteria for appointing Agents and the BSP Airline's reasons for refusal or withdrawal ("Reasons"). If the Agent believes that the Reasons are

unreasonable then the Agent may notify the BSP Airline in writing that the Agent requires further clarification and seek to resolve the issue with the BSP Airline. If the issue is not resolved within 30 days of such a notice being issued, the Agent may invoke Resolution 820e for a review of the BSP Airline's decision by the Travel Agency Commissioner.

7.6.2 If a BSP Airline's decision to withdraw its Electronic Ticketing Authority provided to the Agent was made in application of the collective provisions of this Resolution, the Agent's right to invoke a review by the Travel



Page: 35 of 69 ____________________________________________________________________________

Agency Commissioner will not be exercised against the BSP Airline individually but as set forth in such collective provisions of this Resolution and pursuant to Resolution 820e.

7.7 REVIEW OF CONFERENCE DECISION

7.7.1 Notwithstanding the provisions of Paragraph 2.3 of the Passenger Sales Agency Agreement, the Agent which considers itself aggrieved by the incorporation into its Agreement of amendments made to IATA Resolutions by the Conference, may, within 30 days’ receipt of IATA's notification of such amendments, invoke Resolution 820e for a review of the Agent's grievance by the Travel Agency Commissioner pursuant to section 1.1.9 of Resolution 820e.



Page: 36 of 69 ____________________________________________________________________________

Section 8 - Protection and Proper Issuance of Electronic Tickets 8.1 FRAMEWORK FOR ISSUE OF ELECTRONIC TICKETS

8.1.1 The objective of this section 8 is to ensure the integrity of all Electronic Tickets.


(a) Duty of care;

(b) Liability;

(c) Agent to report irregular occurrences;

(d) Revenue losses attributable to alteration or falsification of Electronic Tickets.

8.2 DUTY OF CARE

8.2.1 The Agent has a duty of care to take all reasonable care and precautions to protect all Electronic Tickets issued by it from unauthorised or improper issuance, post-issuance tampering, or forgery. The Agent’s duty of care includes compliance with all GDS instructions regarding system security and best practice for password maintenance.

8.3 LIABILITY

8.3.1 The Agent has full liability for all damages, expenses or losses incurred or suffered by a BSP Airline, its officers, agents or employees arising from the unauthorised or improper issuance, post-issuance tampering or forgery of Electronic Tickets issued under the Agent’s IATA Numeric Code(s).

8.4 AGENT TO REPORT IRREGULAR OCCURRENCES

8.4.1 The Agent having reason to suspect any of the following must immediately report the matter, in writing via the IATA Customer Portal:

(a) unauthorized or improper issuance of Electronic Tickets;

(b) post-issuance tampering of Electronic Tickets; or

(c) forgery of Electronic Tickets.

8.4.2 Should any form of unlawful entry to the Agent's business premises occur, such as a forced entry or burglary, the Agent must immediately report the incident to the police authorities and provide a copy of the report via the IATA Customer Portal, irrespective of whether or not a material loss has been detected.

8.4.3 If upon receipt of a report in accordance with section 8.4.2, IATA determines that Electronic Tickets may have been compromised, IATA must immediately alert all BSP Airlines whose Electronic Ticketing Authority is held by the Agent and provide them with the serial numbers of any such tickets.

8.5 REVENUE LOSSES ATTRIBUTABLE TO ALTERATION OR FALSIFICATION OF ELECTRONIC TICKETS

8.5.1 A BSP Airline which has incurred a loss due to unauthorised or improper issuance, alteration of original entries or falsification of entries made in Electronic Ticket(s) issued in its name, where the issuance, alteration or falsification of entries may reasonably be attributed to the Agent, may request IATA to investigate the circumstances.

8.5.2 When such a request is received under section 8.5.1, IATA will immediately contact the Agent to investigate the circumstances.

8.5.3 If IATA, having carried out an investigation of the circumstances, including taking into account the Agent’s explanation, concludes that the circumstances may reasonably be attributed to the fault of the Agent, whether intentional, or negligent, or through the unauthorised act of an employee, or otherwise, the Agent will be accountable to the BSP Airline for the amount of the attributable loss.

8.5.4 If the Agent demonstrates to the satisfaction of IATA that the circumstances were attributable to an employee who acted without the knowledge or complicity of the Agent, IATA will require the Agent to make good the loss of revenue to the BSP Airline within a period prescribed by IATA. If the Agent fails to make good the loss of revenue to the BSP Airline within the prescribed period, IATA will refer the matter to the Travel Agency Commissioner with a request for review and action.



Page: 37 of 69 ____________________________________________________________________________

Section 9 - Commission and Other Remuneration 9.1 FRAMEWORK OF CONDITIONS FOR PAYMENT OF COMMISSION AND OTHER REMUNERATION

9.1.1 This section 9 sets out matters relating to the payment of commission and other remuneration to the Agent by a BSP Airline.


(a) Rate of commission or amount of other remuneration;

(b) Interline sales;

(c) Conditions for paying commission;

(d) Repayment of commission or other remuneration.

9.2 RATE OF COMMISSION OR AMOUNT OF OTHER REMUNERATION

9.2.1 Subject to the provisions of this section 9, any commission or other remuneration due to the Agent by a BSP Airline shall be

(a) determined by the BSP Airline;

(b) determined in advance of any applicable sales; and

(c) communicated in writing to the Agent by the BSP Airline.

9.2.2 Any changes in the amount of commission or other remuneration due by a BSP Airline to the Agent or the conditions for payment must be notified to the Agent in writing by the BSP Airline in advance of the change being implemented.

9.3 INTERLINE SALES

9.3.1 The commission or other remuneration may take into account interline passenger transportation over the services of other air carriers with which the BSP Airline whose Electronic Ticket is issued has an interline traffic agreement.

9.4 CONDITIONS FOR PAYING COMMISSION

9.4.1 Where commission is payable to the Agent by a BSP Airline the amount of the commission shall be calculated on the amount of the fares applicable to the air passenger transportation.

9.4.2 The ‘fares applicable’ are the fares (including fare surcharges) for the transportation in accordance with the BSP Airline's tariffs and will exclude any charges for excess baggage or excess valuation of baggage as well as all taxes, fees and charges collected by the Agent.

9.5 REPAYMENT OF COMMISSION OR OTHER REMUNERATION

9.5.1 If a refund is made of all or any part of the fare for any transportation by the Agent, the commission or other remuneration payable to the Agent by a BSP Airline will be recomputed with respect to that part of the fare which has not been refunded by the Agent.

9.5.2 If the commission or other remuneration with respect to the refunded fare has already been paid by the BSP Airline, any amount paid by the BSP Airline in excess of the recomputed commission or other remuneration must be repaid by the Agent to the BSP Airline within 30 days of the refund being made.

9.5.3 If there is an involuntary change of routing involving a substitution of surface transportation for confirmed air transportation, a repayment of commission or other remuneration by the Agent to the BSP Airline will not be required.

9.5.4 In the case of involuntary change of routing to other air services, nothing shall prevent the BSP Airline from passing on the relevant commission or other remuneration received from the new carrying air carrier.



Page: 38 of 69 ____________________________________________________________________________

Section 10 - Change to Scope or Nature of Accreditation 10.1 FRAMEWORK FOR NOTIFICATION OF CHANGES

10.1.1 This section 10 is applicable to all Agents.

10.1.2 This section 10 sets out the requirements for reporting and, if applicable, seeking approval for:

(a) changes to the Agent's accreditation type; and

(b) any changes to the Agent's ownership, legal status, name, location or other that may impact the Agent's accreditation.


(a) Changes not requiring a new Passenger Sales Agency Agreement;

(b) Changes requiring a new Passenger Sales Agency Agreement;

(c) Final approval by IATA;

(d) Effect of disapproval by IATA;

(e) Change of accreditation type;

(f) Death of a sole owner or member of a partnership, or other unincorporated firm;

(g) Change of location or legal name;

(h) Change of entity type;

(i) Change of Head Entity location to another country;

(j) Sale of Associate Entity to another Accredited Agent;

(k) Sale of Associate Entity to a person who is not an Agent;

(l) Late notifications or absence of notification of change.

10.2 CHANGES NOT REQUIRING A NEW PASSENGER SALES AGENCY AGREEMENT

10.2.1 Minor Change Of Shareholding For Corporations And Limited Liability Companies

10.2.1.1 The Agent structured as a corporation or limited liability company must notify IATA when any of the following changes occur to its ownership structure. These changes do not require execution of a new Passenger Sales Agency Agreement, provided that the changes do not alter the Agent’s legal nature with respect to its responsibilities and obligations under applicable law.

(a) a reduction of share capital;

(b) the disposal or acquisition of shares representing 30% or more of the total share capital of the Agent by any Person, whether by means of a single transaction or as the result of a series of transactions, over a period of not more than three years;

(c) the disposal or acquisition of shares representing less than 30% of the total issued share capital of the Agent by any Person, that has the effect of vesting the control, as defined in applicable local law, of the Agent in a Person in whom it was not previously vested. This change can be done through a single transaction or as the result of a series of transactions, over a period of not more than three years.

10.2.1.2 The Agent structured in a way other than as a corporation or a limited liability company must follow the provisions set out in section 10.3 for changes to their ownership structure.

10.2.2 Sale Of Associate Entity To Another Accredited Agent

10.2.2.1 If the Agent sells its Associate Entity to another Agent the latter is responsible for notifying IATA.

10.2.3 For each of the changes specified under sections 10.2.1 and 10.2.2, the Agent must within 7 days of the change occurring:



Page: 39 of 69 ____________________________________________________________________________

(a) provide a Notice of Change to IATA;

(b) provide the most recently available accounts in accordance with the applicable Local Financial Criteria or Multi-Country Financial Criteria;

The Agent will remain accredited after the Notice of Change has been provided to IATA unless, after reviewing the Notice of Change or completing the financial assessment of the Agent, it is determined that:

(i) the Agent does no longer satisfy the criteria for accreditation; or

(ii) the change specified in the Notice of Change alters the Agent’s legal nature, in which case IATA will initiate a review of the Agent with the Travel Agency Commissioner in accordance with Resolution 820e.

10.2.4 The Notice of Change, if executed by IATA, will take effect from the date when the change takes place.

10.3 CHANGES REQUIRING A NEW PASSENGER SALES AGENCY AGREEMENT

10.3.1 Major Change Of Ownership

(a) The following Major Changes of Ownership require the execution of a new Passenger Sales Agency Agreement: in the case of a sole owner, partnership or other unincorporated entity:

(i) the death of the sole owner or of a member of a partnership or other unincorporated firm;

(ii) the transfer of an interest in the Agent that has the effect of transferring control of the Agent to a Person who did not previously have control of the Agent;

(iii) the admission or withdrawal of a partner;

(b) in the case of a corporation or limited liability company:

(i) the acquisition of the Agent by a Person who is not an Agent;

(ii) any change which reduces the liability of any Person who was previously liable for the debts of the corporation, whether directly or indirectly; or

(iii) the disposal or acquisition of shares representing more than 30% of the total issued share capital of the Agent by any Person, that has the effect of vesting the control, as defined in applicable local law, of the Agent in a person in whom it was not previously vested.

and require the Agent to submit a Notice of Change before the change has taken place, and an application for accreditation in accordance with the provisions of section 2 as soon as practicable given the nature of the change.

10.3.2 Change Of Legal Status

10.3.2.1 The following changes to the Agent’s Legal Status require the execution of a new Passenger Sales Agency Agreement:

(a) in the case of a sole owner, partnership or other unincorporated entity:

(i) the incorporation of the Agent

(b) in the case of a corporation or limited liability company:

(i) the transformation of the Agent into a partnership or unincorporated firm

(ii) any change in the legal nature of the Agent;

and require the Agent to submit a Notice of Change before the change has taken place, and an application for accreditation in accordance with the provisions of section 2 as soon as practicable given the nature of the change.

10.3.3 Other Changes Requiring A New Passenger Sales Agency Agreement

10.3.3.1 The following changes require the execution of a new Passenger Sales Agency Agreement:

(a) a change of accreditation type permitted in accordance with the provisions of section 10.6;



Page: 40 of 69 ____________________________________________________________________________

(b) a change of legal name in accordance with the provisions of section 10.8.4;

(c) a change of location type where the Head and Associate Entity are different legal entities, in accordance with the provisions of section 10.9;

(d) the sale of an Associate Entity by the Agent (‘the transferor’) to another person who is not an Agent (‘the transferee’), where the Associate Entity will no longer be included under the accreditation of “the transferor”, both the transferor and the transferee must jointly give notice to IATA;

and require the Agent to submit a Notice of Change before the change has taken place. If applicable, the Agent must also submit an application for accreditation in accordance with the provisions of section 2 as soon as practicable given the nature of the change.

10.3.4 In accordance with the provisions of sections 10.3.1 to10.3.3, upon receipt of the Notice of Change, IATA will:

(a) countersign the Notice of Change which will have the same effect as a Passenger Sales Agency Agreement until the application for accreditation or change is approved or disapproved and actions are taken in accordance with section 10.4 or 10.5 as applicable;

(b) publish details promptly to all BSP Airlines that such a Notice of Change has been received.

10.3.5 When the Agent undergoes a change specified under sections 10.3.1 to 10.3.3, the Agent is only required to provide a Notice of Change in respect of the Head Entity and each Associate Entity impacted. The information previously submitted in connection to the Associate Entities not impacted by the change will be considered unchanged.

10.3.6 When the Agent undergoes a change specified under sections 10.3.1 to 10.3.3 that also includes a change of name or location, all changes must be notified by the Agent in a single Notice of Change and IATA will process all changes as one application.

10.3.7 A Notice of Change, if executed by IATA, will take effect from the date when the change takes place. The previous Passenger Sales Agency Agreement will then terminate as at the date when the change takes place, without prejudice to the fulfilment of all obligations accrued prior to the date of termination.

10.4 FINAL APPROVAL BY IATA

10.4.1 If the accreditation requirements in this Resolution are satisfied, IATA will:

(a) notify and sign a Passenger Sales Agency Agreement with the Agent. The Passenger Sales Agency Agreement will be effective 15 days from the date on which IATA notifies the BSP Airlines in accordance with the provisions of section 10.4.1(b); and

(b) notify all BSP Airlines accordingly and, when required, make any necessary amendment to the Agency List.

10.5 EFFECT OF DISAPPROVAL BY IATA

10.5.1 If:

(a) IATA is unable to approve a change in accordance with this section 10;

(b) IATA is unable to execute a Passenger Sales Agency Agreement with the Agent; and/or

(c) the Agent fails to provide a Notice of Change to IATA in accordance with the provisions of section 10.11 and subsequently fails to revert to its previous approved state or submit the required Notice of Change.

IATA will:

(a) in case of a change requiring a new Passenger Sales Agency Agreement, issue a Termination Notice to the Agent removing the Agent from the Agency List and terminating the Passenger Sales Agency Agreement in accordance with the provisions of section 13 and, if applicable, issue a notice to the new owner notifying that the Notice of Change will no longer have effect as a Passenger Sales Agency Agreement;



Page: 41 of 69 ____________________________________________________________________________

(b) in cases of a change not requiring a new Passenger Sales Agency Agreement, issue a Termination Notice to the Agent withdrawing any provisional approval that has been given, removing the Agent from the Agency List and terminating the Passenger Sales Agency Agreement in accordance with the provisions of section 13; and

(c) in all cases:

(i) give the specific reasons for IATA’s action in writing via the IATA Customer Portal;

(ii) notify all BSP Airlines accordingly; and

(iii) remove Electronic Ticketing Authority.

10.5.2 If the Agent receives a Termination Notice from IATA in accordance with section 10.5.1, the Agent may, within 30 days of the date of the Termination Notice, request that IATA reconsider the decision or invoke the procedures set out in Resolution 820e for review of IATA’s action by the Travel Agency Commissioner.

10.5.3 Upon a request in accordance with section 10.5.2 for reconsideration by IATA or for review by the Travel Agency Commissioner in accordance with the provisions of Resolution 820e, the disapproval action will be stayed and the status quo restored pending the result of the reconsideration or of the review. The Travel Agent Commissioner will require that a Financial Security be provided as a condition for the stay.

10.5.4 In the case of a change of ownership, if the Agent notifies IATA that the change has been revoked and the Agent is restored in all respects to its previous ownership, IATA will reinstate the Agent's Passenger Sales Agency Agreement and, when applicable, reinstate access to Electronic Ticketing and notify the Agent and all BSP Airlines accordingly.

10.6 CHANGE OF ACCREDITATION TYPE

10.6.1 The following changes to accreditation type are permitted in accordance with the provisions of this section 10.6:

(a) Standard Accreditation with Cash Facility to Standard Accreditation with no Cash Facility;

(b) Standard Accreditation with no Cash Facility to Standard Accreditation with Cash Facility;

(c) Multi-Country Accreditation to a Standard Accreditation with no Cash Facility;

(d) Multi-Country Accreditation to a Standard Accreditation with Cash Facility; and

(e) Standard Accreditation with or with no Cash Facility to a Multi-Country Accreditation.

10.6.2 In the event that the Agent wishes to change its accreditation type and the change is permitted under section 10.6.1, the Agent must provide IATA with a Notice of Change.

10.6.3 IATA will determine whether the change of accreditation type can be approved in accordance with the provisions of section 2 of this Resolution. The requirements for changes of accreditation are detailed as follows:

Change of accreditation type

From:

To: The Agent must:


Standard Accreditation with No Cash Facility

Comply with the requirements for authorisation to use the Card Payment Method in accordance with the provisions of section 2.6, if access to this form of payment is requested.



Comply with the requirements for authorisation to use the Cash Payment in accordance with the provisions of section 2.5.



Page: 42 of 69 ____________________________________________________________________________

Multi-Country Accreditation Standard Accreditation with no Cash Facility

Execute a new Passenger Sales Agency Agreement for each Head Entity by country, and the provisions of section 10.3 will apply;

Comply with the requirements for Standard Accreditation in accordance with the provisions of section 2.3

Comply with the requirements for authorisation to use the Card Payment Method in accordance with the provisions of section 2.6, if access to this form of payment is requested.

Multi-Country Accreditation Standard Accreditation with Cash Facility

Execute a new Passenger Sales Agency Agreement for each Head Entity by country, and the provisions of section 10.3 will apply;

Comply with the requirements for Standard Accreditation and authorisation to use the Cash Payment Method, in accordance with the provisions of section 2.3 and 2.5


or



Execute a new Passenger Sales Agency Agreement for the Head Entity covering all the Agent’s entities worldwide.

Comply with the requirements for a Multi-Country Accreditation and authorisation to use the Cash Payment Method in accordance with the provisions of sections 2.4 and 2.5.

10.6.4 A change of accreditation type permitted under section 10.6.1(a) or section 10.6.1(b) does not by itself require execution of a new Passenger Sales Agency Agreement.

10.6.5 On request from IATA, the Agent must pay the applicable fee for the change of accreditation type requested, in accordance with the provisions of section 14.

10.6.6 If IATA approves the change of accreditation type, IATA will:

(a) notify all BSP Airlines accordingly;

(b) record the change of accreditation type on the Agency List; and

(c) for a change in accreditation type permitted under section 10.6.1(a) and (c), if applicable, return any Financial Securities held by IATA to the Agent on a date which is the later of:

(i) the date on which All Amounts Owing have been remitted; and

(ii) 30 days after the date on which IATA approved the change of accreditation type

or at the request of the Agent, IATA may continue to hold the Financial Security to comply with the requirements for authorisation to use the Card Payment Method.

10.6.7 If the change of accreditation type cannot be approved, IATA will disapprove the application and the Agent will continue to be accredited under its current accreditation type.

10.7 DEATH OF A SOLE OWNER OR OF MEMBER OF A PARTNERSHIP OR OTHER UNINCORPORATED FIRM

10.7.1 in the event of the death of the sole owner of the Agent, or of a member of a partnership or other unincorporated firm which is the Agent, the person entitled to represent the decedent's estate (in the case of a sole ownership) or the remaining member(s) of the partnership or other unincorporated firm (in the case of a partnership or



Page: 43 of 69 ____________________________________________________________________________

other unincorporated firm) (Surviving Party), must promptly advise IATA using a Notice of Change at which

time IATA will either:

(a) remove the Agent’s Electronic Ticketing Authority; or

(b) execute a temporary Passenger Sales Agency Agreement in accordance with the provisions of section 10.7.2.

10.7.2 If the event involves the death of the sole owner of the Agent, or of a member of a partnership or other unincorporated firm which is the Agent, then in order to preserve the goodwill of the Agent as far as possible, IATA may, at the request of the Surviving Party, enter into a temporary Passenger Sales Agency Agreement with the Surviving Party, reinstate access to Electronic Ticketing if already removed, and advise the BSP Airlines accordingly. The temporary Passenger Sales Agency Agreement will be in the same form and have the same effect as a Passenger Sales Agency Agreement except that:

(a) if IATA at any time has reason to believe that the financial situation of the decedent's estate, the partnership or other unincorporated firm is unsatisfactory, IATA will remove Electronic Ticketing Authority, give the person entitled to represent the Surviving Party, a Termination Notice of the temporary Passenger Sales Agency Agreement and notify all BSP Airlines accordingly. The termination will take effect on a date that is not before the date specified in clause 13.2 of the Passenger Sales Agency Agreement. The estate, partnership or other unincorporated firm may within 30 days of the date of the Termination Notice invoke the procedures set out in Resolution 820e for review of the IATA's action by the Travel Agency Commissioner and may also apply for an interlocutory order staying the termination and restoring the status quo pending the outcome of the review. Before granting an interlocutory order under this Subparagraph, the Travel Agency Commissioner will require the estate, partnership or other unincorporated firm to provide a Financial Security in accordance with Resolution 820e;

(b) if prior to the date of termination of the temporary Passenger Sales Agency Agreement the decedent's estate or the partnership or other unincorporated firm submits evidence of a satisfactory financial situation in accordance with the applicable Local Financial Criteria or Multi-Country Financial Criteria, as applicable, the termination will not take effect and IATA will notify the Agent and all BSP Airlines that access to Electronic Ticketing has been reinstated;

(c) if the termination of the Passenger temporary Sales Agency Agreement takes effect, IATA will remove the Agent from the Agency List and notify the Surviving Party and all BSP Airlines accordingly. Upon receipt of such a notice, BSP Airlines will take the same action as required on removal of an Agent from the Agency List;

(d) if the person entitled to represent the decedent's estate proposes to transfer or to confirm the transfer of the decedent's interest in the Agent to an heir, legatee or other person, or notifies that the decedent's interest is withdrawn from the partnership or other unincorporated firm, such a transfer or withdrawal will be deemed to be a change of ownership for the purposes of this sSection 10 and the signatory of the temporary Passenger Sales Agency Agreement and the transferee must jointly give notice to IATA in accordance with section 10.3 and thereafter the provisions of section 10.3 will apply; and

(e) subject to earlier termination under the preceding provisions of this section 10.7.2, a temporary Passenger Sales Agency Agreement with the representative of the estate of a deceased sole owner will terminate if such a representative ceases to carry on the Agent's business at the Location covered by the temporary Sales Agency Agreement.

10.8 CHANGE OF LOCATION OR LEGAL NAME

10.8.1 If the Head Entity or an Associate Entity of the Agent moves to another location, the Agent must as far in advance as possible but in any case before effecting the move, provide IATA with a Notice of Change notifying the new address.

10.8.2 IATA may arrange for an inspection of the new location and will notify all BSP Airlines of the proposed new location. If the inspection report is favourable, the new location will be an approved location. If the investigation report is unfavourable, the new location will not be approved and IATA will give the Agent written Termination Notice of the Passenger Sales Agency Agreement or of removal from the Agency List in the case of an



Page: 44 of 69 ____________________________________________________________________________

Associate Entity, specifying the date on which termination will be effective. This date will not be before the date specified in clause 13.2 of the Passenger Sales Agency Agreement, and IATA will notify all BSP Airlines accordingly. Such termination or removal will not take effect if, prior to the date of termination or removal, IATA is able to approve the application for change of location;

10.8.3 A change of location does not by itself require the execution of a new Passenger Sales Agency Agreement.

10.8.4 If the Agent changes its legal name, the Agent must as far in advance as possible but in any case before effecting the change (if it can legally do so), provide IATA with a Notice of Change.

10.8.5 IATA will determine whether the new legal name can be approved in accordance with the provisions of section 2.2.4.1. If the new name can be approved, IATA will process the change of name in accordance with the provisions of section 10.4.1. If the new name cannot be approved, IATA will disapprove the application, remove the Agent’s Electronic Ticketing Authority and issue a Termination Notice in accordance with the provisions of section 10.5.1(b).

10.8.6 The Termination Notice will not take effect if, prior to the date of termination, the Agent reverts to its approved legal name or IATA is able to proceed with the application for change of legal name in accordance with the provisions of section 10.3.1.

10.8.7 A change of legal name requires the execution of a new Passenger Sales Agency Agreement.

10.8.8 If the Agent's application is disapproved, the Agent may, within 30 days of IATA’s notice, invoke the procedures set out in Resolution 820e for review of IATA’s action by the Travel Agency Commissioner. The Agent may also apply for interlocutory order staying termination or removal pending the outcome of the review; in such case IATA will remove Agent’s Electronic Ticketing Authority pending the outcome of the review, and notify the Agent and all BSP Airlines accordingly.

10.9 CHANGE OF ENTITY TYPE

10.9.1 In the event that the Agent wishes to change from Head Entity to Associate Entity, or vice versa, on the Agency List, the Agent must:

(a) provide IATA with a Notice of Change, giving full details of the proposed change, and

(b) on request from IATA, pay the appropriate fee, as provided for in accordance with the provisions of section 14.

10.9.2 IATA will determine if the change requested is of an administrative nature or one where the Head and Associate Entity are different legal entities;

10.9.3 If the former, IATA will record the change of location type in the Agency List and notify the Agent and all BSP Airlines accordingly;

10.9.4 If the latter, IATA will notify the Agent and proceed to process the change in accordance with the provisions in section 10.3.

10.10 CHANGE OF HEAD ENTITY LOCATION TO ANOTHER COUNTRY

10.10.1 When the Head Entity of the Agent moves to another country, the Agent must as far in advance as possible but in any case prior to effecting the move, submit a Notice of Change notifying IATA of the new address and other details including, but not limited to, new business number, new VAT or tax identification number, new telephone number, new email address.

10.10.2 For the Agent having Standard Accreditation with Cash Facility, IATA will undertake a financial review of the Agent to ensure that the Agent meets the requirements of the Local Financial Criteria applicable in the country of the Head Entity’s new location prior to approving the change.

10.10.3 IATA will determine whether the change of Head Entity location can be approved in accordance with the provisions of section 2, and if approved, IATA will:

(a) assign the Head Entity a new numeric code appropriate to the new country of location in accordance with Resolution 822;

(b) notify all BSP airlines accordingly;



Page: 45 of 69 ____________________________________________________________________________

(c) for the Agent holding Standard Accreditation with Cash Facility, a Risk Event will be recorded in the Agent’s Risk History in accordance with the provisions of section 4.2, and a new Passenger Sales Agency Agreement executed with the Head Entity in the new country.

10.10.4 If the change of Head Entity location cannot be approved, IATA will remove the Agent’s Electronic Ticketing Authority and issue a Termination Notice in accordance with the provisions of section 10.5.1. The Agent may, within 30 days of IATA’s notice, invoke the procedures set out in Resolution 820e for review of IATA’s action by the Travel Agency Commissioner. The Agent may also apply for an interlocutory order staying termination or removal pending the outcome of the review. Before any interlocutory order is granted, the Commissioner will require the Agent to provide a Financial Security

10.10.5 In the event that the Agent holding Standard Accreditation changes the location of its Head Entity from one country to another without prior notification to IATA, IATA will issue a Termination Notice and remove the Agent’s Electronic Ticketing Authority pending a review by IATA of the Agent's changed circumstances. IATA will determine if the Agent is in compliance with the Local Financial Criteria and any local legal requirements. The Agent will be required to submit a new application for accreditation and execute a new Passenger Sales Agency Agreement for its new country.

10.11 LATE NOTIFICATION OR ABSENCE OF NOTIFICATION OF CHANGE

10.11.1 If the Agent fails to provide a Notice of Change to IATA as required in accordance with the provisions of section 10.3, IATA will remove the Agent’s Electronic Ticketing Authority and notify the Agent that the required Notice of Change must be provided to IATA within 5 days.

10.11.2 If within 5 days the Agent provides the required Notice of Change, the removal of Electronic Ticketing Authority will no longer apply.

10.11.3 If within 5 days the Agent does not submit the required Notice of Change or, if applicable, revert to its previous ownership, then IATA will issue a Termination Notice to the Agent in accordance with the provisions of section 10.5.1. Any future application from the Agent shall be processed in accordance with the provisions of section 2.

10.11.4 The Agent may within 30 days of the notice of removal of Electronic Ticketing invoke the procedures set out in Resolution 820e for review of IATA’s action by the Travel Agency Commissioner, and may also apply for an interlocutory order staying termination or removal pending the outcome of the review. Before any interlocutory order is granted, the Commissioner will require the Agent to provide a Financial Security.

10.11.5 In the event of the Agent’s late or absence of notification of a change of ownership, shareholding, legal name, legal status or location, including change of Head Entity location to another country, IATA will charge the Agent a late notification fee.



Page: 46 of 69 ____________________________________________________________________________

Section 11 - Reviews by the Travel Agency Commissioner

The jurisdiction of the Travel Agency Commissioner is set out in Resolution 820e as are the procedures for conducting reviews.



Page: 47 of 69 ____________________________________________________________________________

Section 12 - Arbitration 12.1 FRAMEWORK FOR ARBITRATION

12.1.1 This section 12 sets out the requirements and procedure for the de novo review by arbitration of a Travel Agency Commissioner's decision pursuant to Resolution 820e.


(a) Right to arbitration;

(b) Agreement to arbitrate;

(c) Commencement of arbitration.

12.2 RIGHT TO ARBITRATION

12.2.1 Any party to a dispute settled in accordance with Resolution 820e shall have the right to submit the Travel Agency Commissioner's decision to de novo review by arbitration in accordance with this section 12.

12.2.2 Where the Travel Agency Commissioner has granted interlocutory relief, such relief and any Financial Security must remain in effect pending the award of the arbitrator(s). The arbitrator(s), however, will have the power to vary the terms of the Financial Security as they deem appropriate including requesting an increased amount of Financial Security from the party requesting a review by arbitration ("Appellant").

12.3 AGREEMENT TO ARBITRATE

12.3.1 All disputes arising out of, or in connection with, a decision of a Travel Agency Commissioner (a “Decision”) will be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules and judgment upon the award may be entered in any Court of competent jurisdiction.

12.3.2 Unless otherwise agreed by the parties, the language of the arbitration will be English, but at the request of a party, documents and testimony will be translated into the native language of the requesting party.

12.3.3 The place of arbitration will be in the country where the Agent is located or the location specified in the application submitting the decision to review by arbitration, as the case may be, unless otherwise agreed by the parties. Notwithstanding the foregoing, if the laws of that country are in conflict with the effect of section 12.3.5, then:

(a) in the case of a Decision rendered with respect to Area 1, the place of arbitration will be, at the election of the Appellant, either Montreal, Quebec, Canada or Miami, Florida, USA;

(b) in the case of a Decision rendered with respect to Area 2, the place of arbitration will be Geneva, Switzerland; and

(c) in the case of a Decision rendered with respect to Area 3, the place of arbitration will be, at the election of the Appellant, either Singapore or Sydney, Australia.

12.3.4 The award of the arbitrator(s) shall be accompanied by a statement of the reasons upon which the award is based.

12.3.5 The award will be final and conclusively binding on the parties and will be complied with in accordance with its terms.

12.4 COMMENCEMENT OF ARBITRATION

12.4.1 An arbitration pursuant to this Section 12 will be commenced no later than thirty (30) calendar days from the date of the Travel Agency Commissioner's decision.



Page: 48 of 69 ____________________________________________________________________________

Section 13 - Removal of Accreditation 13.1 FRAMEWORK FOR REMOVAL OF ACCREDITATION

13.1.1 Grounds for removal of Accreditation by IATA

13.1.1.1 IATA may remove the Agent's Accreditation and terminate the Passenger Sales Agency Agreement in the following circumstances:

(a) where the Agent has incurred a Risk Event(s) or Administrative Non-Compliance in circumstances where this Resolution requires IATA to terminate the Passenger Sales Agency Agreement;

(b) in the case of a continued Force Majeure, as described in section 13.2.3 below;

(c) in the event of the Agent's bankruptcy, insolvency or similar situation, as described in section 13.2.4 below;

(d) where the Agent uses its Accreditation in a manner detrimental to the good standing of IATA, as described in section 13.2.5 below;

(e) in the event of a material misstatement by the Agent as described in section 13.2.6 below; or

(f) in the case of a change with respect to the Agent where section 10.5.1 applies.

13.1.2 Process for removal of Accreditation

13.1.2.1 The general process for removal of Accreditation is set out in section 13.4 below. The general process is subject to any specific provisions for the removal of Accreditation.

13.1.3 Voluntary relinquishment of Accreditation by Agent

13.1.3.1 The Agent may request voluntary relinquishment of its Accreditation, as described in section 13.6.

13.1.4 Structure of this section


(a) Grounds for removal of Accreditation by IATA:

(i) Risk Events and Administrative Non-Compliances;

(ii) Force Majeure;

(iii) Bankruptcy, insolvency and similar situations;

(iv) Conduct detrimental to the good standing of IATA;

(v) Material misstatement by the Agent

(vi) Changes with respect to the Agent in circumstances where section 10.5.1 applies;

(b) Immediate removal of the Agent's Electronic Ticketing Authority;

(c) Process upon issue of a Termination Notice:

(i) Process of removal by IATA;

(ii) Effective date of Termination Notice;

(iii) Right of review;

(d) Remediation of grounds for issue of Termination Notice;

(e) Relinquishment of accreditation or BSP Airline appointment by the Agent:

(i) Relinquishment of Accreditation;

(ii) Relinquishment of BSP Airline appointment;

(f) Accrued rights and obligations continue;



Page: 49 of 69 ____________________________________________________________________________

(g) Changes to the Agent's official licence.

13.2 GROUNDS FOR REMOVAL OF ACCREDITATION BY IATA

13.2.1 Risk Events and Administrative Non-Compliances

13.2.1.1 Where the Agent has incurred a Risk Event or an Administrative Non-Compliance in circumstances where this Resolution requires IATA to terminate the Passenger Sales Agency Agreement, IATA will issue a Termination Notice to the Agent.

13.2.2 Non-payment of agency fees

13.2.2.1 Where the Agent fails to pay the annual agency fee by the due date in accordance with the provisions of

section 14 IATA will issue a Termination Notice to the Agent.

13.2.3 Force Majeure

13.2.3.1 The Agent will not be liable for delay or failure to comply with the terms of its Passenger Sales Agency Agreement to the extent that such delay or failure:

(a) is caused by any act of God, war, natural disaster, strike, lockout, labour dispute, work stoppage, fire, third-party criminal act, quarantine restriction, act of government, or any other cause, whether similar or dissimilar, beyond the reasonable control of the Agent; and

(b) is not the result of the Agent's lack of reasonable diligence,

13.2.3.2 Where a Force Majeure continues for at least seven consecutive days, IATA will issue a Termination Notice to the Agent.

13.2.4 Bankruptcy, insolvency and similar situations

13.2.4.1 When the Agent is declared bankrupt, insolvent, placed in receivership or judicial administration, goes into liquidation or becomes subject to any other similar legal procedure affecting its normal operation, IATA will, subject to any local law requirements in the country of the Head Entity and/or any Associate Entity, issue a Termination Notice to the Agent.

13.2.4.2 When an Associate Entity is declared bankrupt, insolvent, placed in receivership or judicial administration, goes into liquidation or becomes subject to any other similar legal procedure affecting its normal operation, IATA may, subject to any local law requirements in the country of that Associate Entity, issue a Termination Notice to the Agent.

13.2.5 Conduct detrimental to the good standing of IATA

13.2.5.1 Despite section 4 of Resolution 824, when IATA considers, on the basis of evidence received or obtained, that the Agent has or continues to use its Accreditation to engage in, and profit from activities which, if associated with IATA, may prove detrimental to the good standing of IATA, IATA will issue a Termination Notice to the Agent.

13.2.6 Material misstatement by the Agent

13.2.6.1 If at any time:

(a) IATA becomes aware that the Agent's application for Accreditation contained a material statement that was inaccurate, incomplete or misleading in respect of any requirements for Accreditation referred to in sections 2 and 3; or

(b) IATA becomes aware that the Agent has materially misrepresented its financial standing and has written evidence of the misrepresentation which can be verified,

IATA will issue a Termination Notice to the Agent.

13.2.7 Changes with respect to the Agent in circumstances where Section 10.5.1 applies

13.2.7.1 Where a change with respect to the Agent has occurred and either section 10.5.1 or 10.11 applies, IATA will issue a Termination Notice to the Agent.

13.3 IMMEDIATE REMOVAL OF ELECTRONIC TICKETING AUTHORITY



Page: 50 of 69 ____________________________________________________________________________ 13.3.1 Where IATA issues a Termination Notice to the Agent, IATA will immediately remove the Agent's Electronic

Ticketing Authority, unless otherwise specified under the provisions of this Resolution.

13.3.2 IATA will notify all BSP Airlines if IATA removes the Agent's Electronic Ticketing Authority or approval to use an Authorised Payment Method.

13.4 PROCESS UPON ISSUE OF A TERMINATION NOTICE

13.4.1 Process of removal by IATA

13.4.1.1 Unless expressly specified otherwise in this Resolution, once a Termination Notice has been issued by IATA to the Agent and subject to the grant of an interlocutory order referred to under section 13.4.3, the following process applies:

(a) IATA will immediately notify all BSP Airlines of the issue and details of the Termination Notice;

(b) IATA will remove the Agent’s Electronic Ticketing Authority; and

(c) IATA will remove the Agent (including any Associate Entities) from the Agency List on the effective date of the Termination Notice as set out in section 13.4.2.

13.4.2 Effective date of Termination Notice

13.4.2.1 The effective date of a Termination Notice is the later of:

(a) the date on which the Agent is to be removed from the Agency List in accordance with any applicable notice period under section 13.2: and

(b) the last day of the month following the month in which the Termination Notice is given.

13.4.3 Right of review

13.4.3.1 Unless expressly specified otherwise in this Resolution, the Agent may invoke the procedures set out in Resolution 820e to apply for a review of IATA's decision to issue a Termination Notice by the Travel Agency Commissioner within 30 days of the date of the Termination Notice.

13.4.3.2 Unless expressly specified otherwise in this Resolution, such application for review may also include an application for an interlocutory order staying the Termination Notice, provided that such application can be, and is, made prior to the effective date of the Termination Notice.

13.4.3.3 The Travel Agency Commissioner may require that a Financial Security in accordance with the provisions of Resolution 820e be provided to IATA as a condition for the stay related to any Termination Notice issued by IATA. Upon receipt of the Financial Security from the Agent, IATA will temporarily reinstate the Agent's the Agent's access to Electronic Ticketing and otherwise preserve the status quo pending the outcome of the Travel Agency Commissioner’s review.

13.5 REMEDIATION OF GROUNDS FOR ISSUE OF TERMINATION NOTICE

13.5.1.1 Unless expressly specified otherwise in this Resolution, if prior to the effective date of a Termination Notice:

(a) the Agent remedies the grounds for such removal to the satisfaction of IATA; and

(b) IATA is otherwise satisfied that the Agent can be relied upon to comply with the terms of the Passenger Sales Agency Agreement and this Resolution.

then:

(c) the removal of the Agent from the Agency List and termination of the Passenger Sales Agency Agreement will not take effect; and

(d) the Agent's access to Electronic Ticketing will be reinstated.

13.6 RELINQUISHMENT OF ACCREDITATION OR BSP AIRLINE APPOINTMENT BY THE AGENT

13.6.1 Relinquishment of Accreditation

13.6.1.1 The Agent may voluntarily relinquish its accreditation at any time by giving written notice to IATA.



Page: 51 of 69 ____________________________________________________________________________ 13.6.1.2 For the purposes of clause 13.2 of the Passenger Sales Agency Agreement, the relinquishment notice has the

effect of a Termination Notice. The effective date of the relinquishment notice must be a date that is not before the date specified in clause 13.2 of the Passenger Sales Agency Agreement.

13.6.1.3 Once a relinquishment notice has been received by IATA from the Agent, the following process applies:

(a) IATA will immediately remove the Agent's Electronic Ticketing Authority;

(b) IATA will immediately notify all BSP Airlines of the relinquishment including details of the relinquishment notice and removal of the Agent's Electronic Ticketing Authority;

(c) IATA will remove the Agent (including any Associate Entities) from the Agency List on the effective date of the relinquishment notice.

13.6.2 Relinquishment of BSP Airline appointment

13.6.2.1 If the Agent voluntarily relinquishes a BSP Airline's appointment, it must so notify the respective BSP Airline in writing.

13.7 ACCRUED RIGHTS AND OBLIGATIONS CONTINUE

13.7.1 Removal of the Agent from the Agency List and termination of its Passenger Sales Agency Agreement will be without prejudice to fulfilment by the Agent and each of the BSP Airlines having the Agent under appointment, of all obligations accrued up to and including the effective date of a Termination Notice or relinquishment notice.



Page: 52 of 69 ____________________________________________________________________________

Section 14 - AGENCY FEES

[PLACEHOLDER]



Page: 53 of 69 ____________________________________________________________________________

Section 15 - Indemnities and Waiver

15.1.1 Subject to 15.1.2, the Agent agrees to indemnify and hold harmless the BSP Airline, its officers and employees from all damages, expenses or losses incurred or suffered by any of them arising from the loss, robbery, theft, burglary, fraudulent issue or misuse, of Electronic Tickets assigned to the Agent pursuant to this Resolution 8xx.

15.1.2 The Agent will be relieved of liability under section 15.1.1 in respect of any damage, expense or loss incurred or suffered by the BSP Airline, its officers or employees resulting if the Agent can demonstrate that at the material time it met the minimum security standards prescribed in section 8, the loss, robbery, theft, burglary, fraudulent issue or misuse of Electronic Tickets was immediately reported in accordance with the requirements of section 8 and the fraudulent issue or misuse of such Electronic Tickets resulted solely from the action of persons other than the Agent, its officers or employees.

15.1.3 The Agent recognises that BSP Airlines (whether acting individually or collectively) and IATA are required to issue notices, give directions and take other action pursuant to this and other applicable Resolutions, including Notices of Adjusted Risk Events, Notices of Payment Default, notices of alleged violations and termination, and notices removing an Agent from the Agency List. The Agent waives any and all claims and causes of action against any BSP Airline, IATA and any of their officers and employees (including the Director General and the Agency Administrator) for any loss, injury or damage (including damages for libel, slander or defamation of character) arising from any notice issued, direction given or any other act done or omitted to be done in good faith in connection with the performance of any of their duties or functions under these and other applicable Resolutions and indemnifies each of them against such claims by the Agent, its officers, its employees and any other person acting on the Agent's behalf.



Page: 54 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘A’

Definitions

The definitions of terms and expressions used in this Resolution are contained in Resolution 866, whereas those exclusive to this Resolution are detailed below. The use of words and expressions in the singular shall, where the context so permits, be taken to include their use in the plural and vice versa. Paragraph headings are for ease of reference only and do not form part of this Resolution.

ACCREDITATION means the processes and requirements contained, or referred to, in section 2 of this Resolution

(including the Local Financial Criteria and Multi-Country Financial Criteria) to assess whether an Applicant or Agent has the necessary qualifications and financial standing to participate in the Agency Programme according to the type of Accreditation sought.

ADMINISTRATIVE NON-COMPLIANCE means any non-compliance with the Rules that is not recorded in an Agent’s

Risk History.

ADJUSTED RISK EVENT means either the Risk Event of a late or short payment or a payment in the wrong currency.

ALL AMOUNTS OWING means cash sales from Reporting Periods not yet included on a Billing plus all Outstanding

Billings

APPLICANT means the Person applying for Accreditation and each Person included as an Associate Entity under such

application.

ASSOCIATE ENTITY means a Person entered on the Agency List which is included under a Head Entity’s

Accreditation; such Head Entity may own or manage the business operated by each Associate Entity, with the Head Entity having full legal and financial responsibility for each Associate Entity’s obligations under the Sales Agency Rules. Each Associate Entity is subject to the Sales Agency Rules in effect in the country where its Head Entity is situated, and will be assigned an IATA Numeric Code.

AUTHORISED PAYMENT METHODS means the Cash Payment Method, the Card Payment Method and the IATA

EasyPay Payment Method.

BSP MANUAL FOR AGENTS (usually called the ‘BSP Manual’) for the purposes of this Resolution 8xx, means the

publication referenced in Attachment ‘G’ to this Resolution 8xx.

CARD PAYMENT METHOD (sometimes referred to as 'Card Sales') means credit and charge card transactions

made against a Member/BSP Airline's merchant agreement as detailed in Resolution 890.

CARD SALES See ‘Card Payment Method’.

CASH CONDITION means the conditions applicable to the use of the Cash Payment Method, including Financial

Security requirements, Remittance Holding Capacity granted and Remittance Frequency applicable.

CASH PAYMENT METHOD means a cash facility where the proceeds from sales made by the Agent are remitted to

BSP Airlines through the BSP, in accordance with the provisions of section 6 of this Resolution.

ELECTRONIC TICKET for the purposes of this Resolution 8xx, includes Electronic Miscellaneous Documents (EMDs)

and BSP Airlines’ own Traffic Documents.

GLOBAL DEFAULT INSURANCE means an insurance policy issued in the name of IATA to cover the liabilities of the

listed Agents as defined in the policy. For each Agent a maximum coverage amount will be specified.

HEAD ENTITY means an Accredited Agent’s principal business entity which signs the PSAA.

IATA CUSTOMER PORTAL means the customer portal made available by IATA at www.portal.iata.org.

IATA EASYPAY ACCOUNT (IEP ACCOUNT) means an account opened by the Agent in accordance with the BSP

Manual for Agents.



Page: 55 of 69 ____________________________________________________________________________ IATA EASYPAY NUMBER (IEP NUMBER) means a number generated by the EasyPay System for use by the Agent

for the issuance and processing of Electronic Tickets.

IATA EASYPAY PAYMENT METHOD (sometimes referred to as “IEP”) means a pay-as-you-go payment system

provided by IATA enabling Accredited Agents to issue Electronic Tickets on behalf of BSP Airlines.

IATA EASYPAY SYSTEM (IEP System) means the system operated by a provider on behalf of IATA for the processing

of Agents’ remittances and refunds using the IEP Payment Method.

IEP – see IATA EASYPAY PAYMENT METHOD.

IEP ACCOUNT – see IATA EASYPAY ACCOUNT.

IEP NUMBER – see IATA EASYPAY NUMBER.

IEP SYSTEM – see IATA EASYPAY SYSTEM.

LOCATION for the purposes of this Resolution 8xx includes Head Entity and Associate Entity.

MULTI-COUNTRY ACCREDITATION means the processes and requirements contained, or referred to, in sSection 2

of this Resolution (including Multi-Country Financial Criteria) to assess whether an Applicant or Agent has the necessary qualifications and financial standing to participate in the Agency Programme by operating in more than one country in accordance with global accreditation requirements and to utilise all Authorised Payment Methods.

MULTI-COUNTRY FINANCIAL CRITERIA means the global financial criteria applicable to Multi-Country Accredited

Agents adopted by the Passenger Agency Conference in relation to all countries or territories governed by Resolution 8xx and as set out in Attachment E of this Resolution.

NOTICE OF ADJUSTED RISK EVENT means a notification sent to the Agent to advise that some failure has been

detected on the Agent’s part with regard to the provisions of section 6 of this Resolution.

NOTICE OF PAYMENT DEFAULT means a notification sent to the Agent, which includes a Termination Notice of the

Agent’s Passenger Sales Agency Agreement, to advise that a Payment Default has occurred.

PAYMENT DEFAULT means a failure by the Agent to make an immediate payment to the Clearing Bank by close of

business the day following the demand from IATA.

REMITTANCE HOLDING CAPACITY means the maximum permitted amount of cash sales comprising All Amounts

Owing to IATA, granted to the Agent for monies held in trust, determined in accordance with this Resolution applicable to an Agent's use of the Cash Payment Method.

RISK EVENT means any Risk Event as defined under the Rules.

RISK HISTORY means the history of the Agent’s behaviour as reflected by any Risk Event(s) incurred by the Agent

under this Resolution.

RISK STATUS means a status assigned to the Agent based on the outcome of the Agent’s financial and Risk History

assessments.

STANDARD ACCREDITATION means the processes and requirements contained, or referred to, in sSection 2 of this

Resolution to assess whether an Applicant or Agent has the necessary qualifications and financial standing to participate in the Agency Programme operating in a particular country in accordance with local accreditation requirements.

TERMINATION NOTICE means a notice of termination of the Agent’s Passenger Sales Agency Agreement for the

purposes of clause 13.2 of the Passenger Sales Agency Agreement.



Page: 56 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘B’

APPLICATION FORM FOR ACCREDITATION AS AN IATA PASSENGER SALES AGENT RESOLVED that, the following standard form shall be used in connection with the Passenger Sales Agency Rules. The information requested below is required by IATA to assist in determining the eligibility of the Applicant for inclusion on the IATA Agency List. Type or print clearly the answers to all questions on this form. Where additional space is required, or where you wish to supplement your answer and there is insufficient space, attach to this form additional sheets containing the data. Retain a copy of this application for your permanent records at the agency location. Note: A separate form is required for each agency entity for which approval is sought. Section 1—Identification of Agency for which Approval Requested 1.1 Legal name: 1.2 Trade name, if different from 1.1 above: 1.3 Full address and telephone number of the office for which application for approval is made: 1.3.1 Web site address (URL) (if any): 1.4 If registration and/or licence is required by law in your country, give: 1.4.1 the trade registration or licence number of the agency; 1.4.2 the date this was granted; 1.4.3 please attach a copy of the official certificate of registration and/or licence. 1.4.4 Date on which the office for which approval is sought opened as a travel agency. 1.5 VAT or Tax Identification Number: Section 2—General Information 2.1 Is approval sought for:

2.1.1 a Head Entity with Standard Accreditation with no Cash Facility: Yes □ No □

2.1.2 a Head Entity with Standard Accreditation with Cash Facility: Yes □ No □

2.1.3. an Associate Entity: Yes □ No □

2.1.4 Multi-Country Accreditation: Yes □ No □

If Yes: 2.1.4.1 give name, address, telephone number, e-mail address and IATA Numeric Code of IATA Approved Head

Entity (if any)

2.1.5 an Associate Entity: Yes □ No □

If Yes: 2.1.6 give name, address, telephone number, e-mail address and IATA Numeric Code of IATA Approved Head

Entity (if any); 2.1.7 attach completed certificate as specified in Appendix ‘C’ for each proposed Associate Entity

2.2 Specify legal status:

sole proprietorship □ partnership □

limited liability company □ other (describe) □

2.3 If your travel agency is owned by an organisation other than the Head Entity mentioned above, answer the

following with respect to the parent organisation: 2.3.1 What is its legally registered name and address? 2.3.2 What is the principal business of this organisation? Section 3—Financial Information of Applicant For Applicants seeking Standard Accreditation with Cash Facility, or Multi-Country Accreditation, as applicable: 3.1 Attach a copy of your current financial statements, e.g. balance sheet and profit and loss account,

and other documentation as required by Local Financial Criteria or Multi-Country Financial Criteria. For Applicants seeking Standard Accreditation with no Cash Facility: 3.2. Attach a copy of your latest financial or tax statements.



Page: 57 of 69 ____________________________________________________________________________

Section 4—Business Entity of Agency 4.1 If SOLE OWNER: Name: Address, Telephone Number, Fax Number and E-mail Address: % of time devoted to the agency business: 4.2 If PARTNERSHIP: Name(s) and Title(s) of Partner(s): Address(es), Telephone Number(s), Fax Number(s) and E-mail Address(es): % of time devoted to the agency business: Financial Interest %: 4.3 If CORPORATION: 4.3.1 When and where incorporated: 4.3.2 Disclosure of full corporate structure. Section 5—Details of Owners and Managers of Agency 5.1 Attach a list setting forth the names of owners and managerial personnel giving details as follows: 5.1.1 Name 5.1.2 Position or title: 5.1.3 Date joined agency location for which approval is sought: 5.2 If any of the questions below are answered in the affirmative, give the name(s) of the agency or agencies

and location(s) involved, the relationship of the individual(s) with the agency or agencies, the date of the bankruptcy or default and all pertinent details: 5.2.1 Have you, or any person who is a director of, or who holds a material financial interest or a position of

management in the Applicant currently or previously been involved in any fiduciary breach or crime, or subject to bankruptcy proceedings, or been a director of or had a financial interest or held a position of management in an Agent which has been removed from the Agency List or is currently subject to review or default action by IATA for non-compliance with the conditions of its Accreditation?

Yes □ No □ Section 6—Security of Electronic Tickets In the event of an inspection, the Applicant will be required to provide evidence that it meets the security requirements for issuance of Electronic Tickets, in accordance with the provisions of section 8, and in particular the Payment Card Industry (PCI) Data Security Standards as referenced in section 2.1.6 of Resolution 890.

Section 7 —Other Information 7.1 Is the agency a General Sales Agent for any IATA or non-IATA airline?

Yes □ No □ If yes, specify:

7.1.1 Name(s) of airline(s): 7.1.2 Scope of operation: 7.1.3 GSA territory: 7.2 Provide the names of individuals authorised to sign, on behalf of the applicant, documents which relate to

the day-to-day operation of the travel agency:

7.5 Is your agency an IATA Registered Cargo Agent? Yes □ No □ If so, name under which it is registered: IATA Numeric Code: Is your agency an IATAN (International Airlines Travel Agent Network) Accredited Agent?

Yes □ No □ If so, name under which it is Accredited: IATAN Numeric Code: 7.6 Please indicate the GDS(s) with which you have signed a contract: I hereby certify that the foregoing statements (including statements made in any attachment hereto) are true and correct to the best of my knowledge and belief, and that I am authorised by the organisation identified in the answer to 1.1 above to make these statements and file this document. It is hereby agreed that this application shall become a part of every Passenger Sales Agency Agreement signed with Members of IATA for the sale of international air passenger transportation, and as such, all information contained herein will be treated as confidential (excluding the information contained in section 1).



Page: 58 of 69 ____________________________________________________________________________ Notwithstanding the foregoing, the applicant authorizes IATA to use and process the information contained in sections 2.1.2.2, 2.2, 4, 5.1.1 and 5.1.2, in order to produce and distribute databases among the airline industry participants. The Applicant hereby expressly waives any and all claims, causes of action or rights to recovery and agrees to indemnify and hold harmless IATA or any of its Members, their officers, employees, agents or servants, for any loss, injury or damage based upon libel, slander or defamation of character by reason of any action taken in good faith pursuant to this application, including but not limited to a notice of disapproval. The Applicant understands and agrees that if the application for Accreditation as an IATA Agent is disapproved, he will not claim any commission, remuneration or compensation for the sale of air transportation over the services of any IATA Member during the period the application was under consideration. The Applicant understands and agrees to pay the application, entry and annual fees, in the amounts determined by the Conference in consultation with the Director General, and as advised by the Agency Administrator, for inclusion and retention on the Agency List. If the application is rejected, the entry and initial annual agency fees shall be returned to the applicant.

............................................................................................ (Signature)

............................................................................................ (Name of Applicant)

............................................................................................ (Title)

............................................................................................ (Country)

............................................................................................ (Date)

GOVERNMENT RESERVATIONS UNITED STATES In Order 73-8-115 dated 23 August 1973, the Civil Aeronautics Board approved Resolution 810q (except USA) (now 800a) subject to the condition that such approval shall not extend to agencies located in the United States.



Page: 59 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘C’ NOTICE OF CHANGE

IATA NUMERIC CODE:

LEGAL NAME: TRADE NAME: AGENCY FULL ADDRESS: TELEPHONE NO.: TELEFAX NO.: EMAIL: ACCREDITATION TYPE: Standard Accreditation with/with no Cash Facility / Multi-Country Accreditation

Pursuant to the provisions of the Passenger Sales Agency Rules we hereby give notice of the following change(s) in

the legal status or ownership of the above-named IATA Agent as a consequence of contractual arrangements or

negotiations:

1. FOR CHANGES OF ACCREDITATION TYPE, PLEASE INDICATE THE APPLICABLE CHANGE BELOW

(a) Standard Accreditation with Cash Facility TO Standard Accreditation with no Cash Facility

(b) Standard Accreditation with no Cash Facility TO Standard Accreditation with Cash Facility

(c) Multi-Country Accreditation TO Standard Accreditation with no Cash Facility

(d) Multi-Country Accreditation TO Standard Accreditation with Cash Facility

(e) Standard Accreditation with or with no Cash Facility TO a Multi-Country Accreditation

2. SPECIFY TYPE OF ENTITY: (SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY COMPANY, OTHER)

PREVIOUS STATUS STATUS AFTER CHANGE

3. NAME(S) OF OWNER/ PARTNERS/SHAREHOLDERS, ADDRESS, TELEPHONE, FAX, & EMAIL, TIME DEVOTED TO THE AGENCY BUSINESS

AND % FINANCIAL INTEREST IN CASE OF CORPORATION, PARTNERSHIP OR OTHER:

NAME OF OWNER/

PARTNERS /

SHAREHOLDERS

ADDRESS,TELEPHONE,FAX & EMAIL

%TIME DEVOTED TO AGENCY

%FINANCIAL INTEREST

NAME OF OWNER/

PARTNERS /

SHAREHOLDERS

ADDRESS,TELEPHONE ,FAX & EMAIL


%FINANCIAL INTEREST

4. IF CORPORATION LIST:

a) ISSUED SHARED CAPITAL:

b) PAID-UP CAPITAL:

c) NAMES OF ALL OFFICERS AND DIRECTORS: (PLEASE UNDERLINE NAME OF LOCATION MANAGER)



Page: 60 of 69 ____________________________________________________________________________

5. IF REGISTRATION AND /OR LICENSE IS REQUIRED BY LAW IN YOUR COUNTRY GIVE THE BELOW INFORMATION AFTER THE CHANGE/ UNDER NEW OWNERSHIP.

a) THE TRADE REGISTRATION OR LICENSE NUMBER OF THE AGENCY:

b) THE DATE THIS WAS GRANTED:

6. IF YOUR TRAVEL AGENCY IS OWNED BY AN ORGANIZATION OTHER THAN THE HEAD OFFICE, ANSWER THE FOLLOWING WITH RESPECT TO THE PARENT ORGANIZATION (IF APPROPRIATE, INCLUDE IN AN ATTACHMENT THE FULL CORPORATE STRUCTURE):

a) WHAT IS ITS LEGALLY REGISTERED NAME AND ADDRESS?

b) WHAT IS THE PRINCIPAL BUSINESS OF THIS ORGANIZATION?

7. WILL THE COMPANY OPERATE AS AN ONLINE AGENT UNDER NEW STATUS? IF SO, PLEASE SPECIFY URL ADDRESS(ES) OF ALL WEBSITE(S) PROVIDING SALES OF ELECTRONIC TICKETS

8. IS YOUR AGENCY IATA REGISTERED CARGO AGENT? IF SO ,PLEASE STATE THE IATA CODE UNDER WHICH IT IS REGISTERED:

9. WILL THIS CHANGE AFFECT THE HEAD ENTITY AND/OR ASSOCIATE ENTITY(IES)? PLEASE PROVIDE DETAILED EXPLANATION.

10. WILL THIS CHANGE AFFECT THE MANAGERS AND STAFF AT THE APPROVED LOCATIONS UNDER THIS CHANGE? IF SO, GIVE DETAILS.

11. HAVE ANY OF THE NEW OWNERS, OFFICERS (DIRECTORS), MANAGERS OR ANY INDIVIDUAL HAVING AUTHORISATION TO ACT OR SIGN

BEHALF OF SUCH FIRM BEEN INVOLVED IN BANKRUPTCY OR DEFAULT PROCEEDINGS? IF SO, GIVE DETAILS.

12. WILL THE CHANGE OF OWNERSHIP CAUSE DIRECT OR INDIRECT RELATIONSHIP WITH AN ORGANISATION HOLDING GSA APPOINTMENT

FROM A MEMBER? IF SO, PLEASE PROVIDE FURTHER DETAILS.

13. LEGAL NAME, TRADING NAME AND FULL ADDRESS OF THE AGENT AFTER THE CHANGE / UNDER NEW OWNERSHIP.

LEGAL NAME:

TRADING NAME:

ADDRESS:

MAILING ADDRESS IF DIFFERENT

TEL:

E-MAIL:

VAT/TAX NUMBER:

WEBSITE:

14. PLEASE INDICATE IF THE ANSWER TO (13) ABOVE REPRESENTS A CHANGE OF NAME OR LOCATION OR BOTH.

15. WILL SUCH CHANGE AFFECT ALL APPROVED LOCATIONS? IF NOT, PLEASE PROVIDE DETAILED EXPLANATION.

16. EFFECTIVE DATE OF CHANGE.

17. PLEASE ADVISE WHICH GDS(s) USED.

The Transferor has informed the Transferee of the need to comply with the provision of the Passenger Sales Agency Rules if the Transferee wishes to be entered on the IATA Agency List as an Accredited Agent. Approval may be granted only if the Transferee complies in all respects with the requirements of the Passenger Sales Agency Rules.



Page: 61 of 69 ____________________________________________________________________________

In accordance with one of the requirements of the Passenger Sales Agency Rules, the Transferee hereby undertakes that it accepts joint and several liability with the Transferor for any outstanding obligation of the Transferor under its Sales Agency Agreement as at the date the transfer of ownership takes place.

Where the Transferor is employed by, or retains a financial or beneficial interest, directly or indirectly, in the agency following the change of ownership, the undersigned Transferee knows and hereby agrees to accept responsibility for any violation by the Transferor of his Sales Agency Agreement which may have occurred within a period of two years immediately prior to the change of ownership as if such violation were a violation of the Transferee’s Sales Agency Agreement.

……………………………………………………………. ……………………………………………………..

Authorised Signature of Agent (Transferor) Authorised signature of Transferee

……………………………………………………………. ……………………………………………………..

Print/Type Name Print/Type Name

……………………………………………………………. …………………………………………………………….

Title/Position Title/Position

…………………………………………………………... …………………………………………………………...

Signature of Witness & Date Signature of Witness & Date

RECEIVED AND ACKNOWLEGED:

……………………………………………………………………………..

IATA Agency Administrator

Dated: …………………………………………………………………….



Page: 62 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘D’

ANNEX TO PSAA FOR VOLUNTARY MORE FREQUENT REMITTANCE

ORIGINAL

Annex to PSAA for Voluntary More Frequent Remittance

An AGREEMENT made this ............................. day of .............................201.... between each IATA Member

and Airline participating in BSP as described in Paragraph (1) hereof represented by the Director General

acting for and on behalf of such IATA Members, and

........................................................................................................................... (hereinafter called the “Agent”).

WHEREAS the parties hereto have entered into a Passenger Sales Agency Agreement dated

..............................................................................................................................................................................

WHEREAS pursuant to the said Passenger Sales Agency Agreement the Agent has agreed to report all

accountable transactions and to settle all amounts due in respect of such transaction, in accordance with the

procedures laid down in IATA Resolutions Reporting and Remitting Procedures and the ‘Sales Agency

Rules' incorporated by reference in the said Passenger Sales Agency Agreement, and

WHEREAS the Agent is currently reporting accountable transactions and settling all amounts due in respect

thereof on a monthly basis and,

WHEREAS the Agent has previously been required to submit a bank guarantee in favour of IATA Members

in the amount of ...................................................................................................................................................

THE PARTIES HERETO HAVE AGREED AS FOLLOWS:

1. This Agreement shall take effect between the Agent and each IATA Member and Airline participating

in the Billing and Settlement Plan which has appointed the Agent pursuant to the Sales Agency Rules.

2. The Agent shall report all accountable transactions as per the Reporting Schedule and shall settle all

amounts due twice monthly; once on the last day of the month, for sales of the first two periods

for that month and again on the 15th of the following month for the sales of the last two

reporting periods of the previous month.

3. The adjusted risk event and default provisions of the applicable Resolution shall be applicable in the event the

Agent fails to comply with the provisions of paragraph (2) hereof.



Page: 63 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘E’ MULTI-COUNTRY FINANCIAL CRITERIA

1. GENERAL RULES

1.1 To be eligible for Multi-Country Accreditation, the Agent must apply for and maintain accredited locations in

multiple countries governed by Resolution 8xx.

1.2 The Agent may not include under its Multi-Country Accreditation locations in countries governed by

Resolution 800.

1.3 The Agent holding Multi-Country Accreditation must comply with the provisions of Resolution 8xx. In

addition, the Agent must comply with all applicable local accreditation and legal requirements in those

countries where it maintains accredited locations.

2. FINANCIAL EVALUATION Annual Assessment

2.1 The Agent must undergo at least one complete assessment annually under the Assessment Framework

(Appendix A).

2.2 To conduct this annual assessment, the Agent must, within six months of the Agent’s financial year-end,

provide to IATA, or the Global Financial Assessor (GFA) appointed by IATA:

a) Consolidated financial statements for the Head Entity. The financial statements must be audited,

and prepared in accordance with globally accepted accounting standards such as International

Accounting Standards (IAS) or International Financial Reporting Standards (IFRS);

b) Any internal documentation required to assess the criteria defined in the Assessment Framework,

including the operational review section of the framework.

2.3 The Global Financial Assessor (GFA) will assess the documentation provided to determine whether each

criterion on the Assessment Framework is met.

2.4 If a criterion is met, the Agent will be allocated the applicable number of points shown under Maximum

Score of the Assessment Framework. If a criterion is not met, no points will be scored.

2.5 If the Agent is unable to provide documentation or evidence of process for the GFA to sufficiently assess a

criterion, then no points will be scored for such criterion.

2.6 Where the Agent is a publicly traded company or is otherwise unable to disclose specific information to the

GFA, the GFA may propose an alternative measurement.

2.7 With the agreement of the Agent, the GFA may arrange an on-site visit to gather any additional information

or assess the documentation provided. Any costs incurred for the GFA to conduct such visit will be assumed

by the Agent.

2.8 To pass the annual assessment, the Agent must obtain a minimum Risk Score of 70 points.

2.9 If the Agents obtains a Risk Score lower than 70, the Agent will be determined to have failed the Financial

Assessment, and will be required to provide a Financial Security per section 3 below.

Quarterly Assessment

2.10 For the remaining three quarters of the year, the Agent’s Risk Score will be re-assessed by the GFA.

2.11 To undergo the quarterly assessment, the Agent must submit quarterly financial statements and any other

documentation required to conduct the assessment. The quarterly financial statements provided must be

audited and compliant with globally accepted accounting standards, or in an otherwise acceptable format to

the GFA.

2.12 The GFA will assess the finance statements under the Assessment Framework and recalculate the

Maximum Risk Score of the Agent.

2.13 The Agent must validate the assessment result by:



Page: 64 of 69 ____________________________________________________________________________

a) Verifying that the data on the Assessment Result is accurate and complete.

b) Providing written confirmation signed by Senior Management that there has been no change to the

Agent’s internal processes so as to materially impact any criteria under the Assessment Framework.

2.14 If the Result is inaccurate or there has been a change to the Agent’s internal processes, the Agent must

provide the necessary information and/or documentation for the GFA to review any criteria affected and re-

assess the Agent’s Risk Score.

2.15 To pass the quarterly assessment, the Agent must obtain a minimum Risk Score of 70 points.

2.16 If the Agents obtains a Risk Score lower than 70, the Agent will be determined to have failed the Quarterly

Financial Assessment, and will be required to provide a Financial Security per section 3 below.

Assessment of new Applicants and Changes of Accreditation Type from Standard to Multi-Country Accreditation

2.17 The Applicant for Multi-Country Accreditation must provide the necessary financial documentation,

including audited financial statements, to complete an annual assessment under the Assessment

Framework (Appendix A) as defined in section 2 prior to approval under the Multi-Country Accreditation.

2.18 The audited financial statements must cover a period ending not more than four months prior to the date of

submission of the statements by the Applicant.

3. FINANCIAL SECURITY

3.1 The Agent will not be accredited or will not continue to be accredited until a Financial Security required to be

provided to IATA has been:

(a) received by IATA; and

(b) confirmed to IATA by way of written confirmation received directly from the third party supporting the

Financial Security that the Financial Security was issued by that third party.

3.2 The Agent accredited for less than two consecutive years with a Cash Facility must provide a Financial

Security.

3.3 If the Agent fails its financial assessment or its Risk History assessment, the Agent must provide a Financial

Security. The Financial Security will be held by IATA until the Agent passes both Assessments.

3.4 The Agent must provide a Financial Security that covers the Sales at Risk of the Head Entity and all

Associate Entities.

3.5 The Financial Security will be calculated as follows:

“Days’ Sales At Risk” × BSP cash turnover in applicable 3 month period

90

3.6 The Financial Security calculation will take into account the BSP cash turnover of the Agent’s three months

highest net cash sales in the previous twelve months.

3.7 The amount will be calculated for each BSP operation of the Agent using the applicable “Days’ Sales at

Risk” of the BSP, and aggregated to determine the total Financial Security to cover all locations.

3.8 If the Agent is required to provide a financial security, such financial security may be provided in up to two

denominations of the following acceptable currencies:

US Dollar (USD);

Euro (EUR);

Pound Sterling (GBP);

Australian Dollar (AUD);

Singapore Dollar (SGD).

3.9 The Agent must provide a Financial Security issued by Financial Security Provider that complies with the

criteria in Resolution 8xx, Attachment ‘F’.

4. CHANGES OF OWNERSHIP



Page: 65 of 69 ____________________________________________________________________________ 4.1 In the event of a major change of ownership or legal status, requiring a new Passenger Agency Sales Agreement, the Agent must provide:

Audited Financial Statements, no later than 90 days after the change of ownership. The Financial

Statements must cover, at minimum, one month of operations following the date of change.

If Audited Statements cannot be provided, the Agent must provide Financial Statements accompanied by a

Compliance Certificate signed by a CEO, CFO or other equivalent executive.

A Transition Plan, including updates for two years following the change.

Any other documentation necessary for the GFA to conduct an assessment of the Agent post-change.

4.2 The GFA will assess the Financial Statements and conduct monitoring activities to assess the risks associated following:

Viability of the business, including evolution of EBITDA and EBT

Capital structure of the Agent, including levels of debt

Agent Liquidity

Credit Losses and Agent ability to collect receivables

Potential operational disruptions following restructuring

Cash levels and distributions to shareholders

Efficiency of the Business Model post transition

Occurrence of indemnified events

Aggressiveness of expansion

Restructuring of the organization’s governance

Risk Events with IATA

4.3 Based on the above, the GFA will assess the impact of the change on the financial standing of the Agent and assign a Risk Rating. If the GFA assesses a medium or high risk rating, the change will be recorded as a Risk Event in the Agent’s Risk History assessment and the Agent required to provide a Financial Security, subject to section 3.



Page: 66 of 69 ____________________________________________________________________________ Multi-Country Assessment Framework

Appendix ‘A’ to the Multi-Country Financial Criteria



Page: 67 of 69 ____________________________________________________________________________



Page: 68 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘F’

MULTI-COUNTRY FINANCIAL SECURITY PROVIDER CRITERIA 1. In the event that the Agent holding Multi-Country Accreditation is required to provide a Financial Security, the

Agent must obtain such Financial Security from a Financial Security Provider compliant with the following criteria:

The Provider is rated by an international credit rating agency such as Fitch, Moody’s, or S&P;

The Provider’s credit rating with the international rating agency is one rating above investment grade;

The Financial Security issued by the Provider is compliant with the Uniform Customs and Practice for

Documentary Credits (UCP) or equivalent international standard;

The Provider is not located in a market with capital controls or a history of capital controls in the past 10

years limiting the expatriation of funds;

The Provider is not based in a country under international economic sanctions.

2. The Financial Security Provider must remain compliant at all times with the above criteria for the Agent’s

Financial Security to be considered valid by IATA.

3. At minimum once per annum, IATA will review any previously approved Provider to ensure continued compliance

with the established criteria.



Page: 69 of 69 ____________________________________________________________________________

RESOLUTION 8xx

Attachment ‘G’

BSP MANUAL FOR AGENTS Contents of the BSP Manual for Agents

This manual is published separately to this Resolution. Whereas the Passenger Agency Conference wishes to provide Agents with operating rules and procedures relating to the BSP, and Whereas the Passenger Agency Conference wishes to provide updates to these in the most efficient manner, apart from Resolution text, the Agency Administrator may, under the delegated authority of the Conference, update the contents of the BSP Manual for Agents with those changes adopted by the Passenger Agency Conference. The contents of this Manual are deemed to be incorporated in the Passenger Sales Agency Agreement in accordance with Resolution 824 subparagraph 2.1(b).


Attachment: 18 Aug16 ‘B’

Page: 1 of 11 ____________________________________________________________________________

Section 5- Risk Management and Remittance Holding Capacity

5.1 FRAMEWORK FOR RISK MANAGEMENT AND OPERATION OF REMITTANCE HOLDING CAPACITY

5.1.1 Application of Section 5

5.1.1.1 This section 5 establishes the framework for risk management and operation of the Remittance Holding Capacity.

5.1.1.2 Sections 5.2 to 5.9 apply to the Agent holding Standard Accreditation with Cash Facility or Multi-Country Accreditation. Nothing in the provisions of section.2 to 5.9 will restrict the Agent's ability to use IEP.

5.1.1.3 Section 5.10 applies to the Agent holding Standard Accreditation with no Cash Facility.

5.1.2 Overview of Remittance Holding Capacity

5.1.2.1 A Remittance Holding Capacity will be granted to the Agent authorised to use the Cash Payment Method based on the following risk management components:

(a) the assignment of a Risk Status of "A", "B" or "C", as a result of:

(i) the financial assessment; and

(ii) the ongoing Risk History assessment of the Agent;

(b) the application of Cash Conditions for the Agent’s use of the Cash Payment Method, based on the Agent’s Risk Status, or the particular Risk Events that may have been incurred, in terms of:

(i) provision of a Financial Security; and

(ii) applicable Remittance Frequency



(a) Determination of Risk Status and Cash Conditions;

(b) Ongoing Risk History assessment;

(c) Financial assessment;

(d) Cash Conditions; and

(e) Operation of Remittance Holding Capacity;

(f) Risk Management for Standard Accreditation with no Cash Facility.

5.2 DETERMINATION OF RISK STATUS AND CASH CONDITIONS

5.2.1 Risk Status

5.2.1.1 The Risk Status assigned to the Agent is as follows:

(a) a Risk Status of "A" will apply where the Agent has passed both the ongoing Risk History assessment and its latest financial assessment;

(b) a Risk Status of "B" will apply where the Agent has failed either the ongoing Risk History assessment or its latest financial assessment; and

(c) a Risk Status of "C" will apply where the Agent has failed both the ongoing Risk History assessment and its latest financial assessment.



Page: 2 of 11 ____________________________________________________________________________ 5.2.1.2 Details of ongoing Risk History assessments and the conduct of financial assessments are set out in sections

5.3 and 5.4 respectively.

5.2.1.3 IATA will notify the Agent and BSP Airlines in writing of a change to the Agent's Risk Status and any applicable Cash Conditions.

5.2.2 Cash Conditions

5.2.2.1 Subject to section 5.8, the Risk Status assigned to the Agent will determine the Cash Conditions applied to the Agent as follows:

5.2.2.2 Details of the Cash Conditions applicable to the Agent's use of the Cash Payment Method based on Risk Status are set out in sections 5.5 to 5.7.

5.3 ONGOING RISK HISTORY ASSESSMENT

5.3.1 Risk History

5.3.1.1 Risk Events incurred by the Agent will be recorded on an aggregate basis in the Agent's Risk History.

5.3.1.2 Subject to section 5.3.1.3, Risk Events will be recorded in the Agent's Risk History on the date that the Risk Event is incurred.

5.3.1.3 The Risk Event of a Payment Default will be recorded in the Agent's Risk History on the date that the Agent is reinstated in accordance with section 6.

5.3.2 Ongoing Risk History assessment

5.3.2.1 The ongoing Risk History assessment of the Agent will be based on the number and type of Risk Events recorded in the Agent's Risk History.

Risk Status Cash Conditions

A If the Agent holds Standard Accreditation with Cash Facility, a Financial Security will be required only if applicable under the Local Financial Criteria.

If the Agent holds Multi-Country Accreditation, no Financial Security will be required.

A Remittance Holding Capacity will be granted in accordance with section 5.6.1.

The standard Remittance Frequency for each BSP will be applied.

B The Agent will be required to provide a Financial Security in accordance with section 5.5.2.


The standard Remittance Frequency for each BSP will be applied.

C The Agent will be required to provide a Financial Security in accordance with section 5.5.2.


If the BSP has multiple Remittance Frequencies, the most frequent Remittance Frequency applicable in the market will be applied.



Page: 3 of 11 ____________________________________________________________________________ 5.3.2.2 Risk Events will be recorded and remain in the Agent's Risk History for a period of 12 months, other than the

following Risk Events which will apply for a period of 24 months:

(a) Authorisation to use Cash Payment Method for less than 24 Months;

(b) Major change of ownership or legal status;

(c) Payment Default; and

(d) Default due to common ownership.

5.3.2.3 The Agent will fail the Risk History assessment at any point based on the following Risk Events, or combination of Risk Events recorded in the Agent’s Risk History:

(a) one recorded occurrence of any of the following Risk Events:

(i) Authorisation to use Cash Payment Method for less than 24 Months;

(ii) Major change of ownership or legal status;

(iii) Payment Default;

(iv) Default due to common ownership;

(b) two recorded occurrences of any of the following Risk Events:

(i) Failure to provide financial statements;

(ii) Failure to provide Financial Security;

(iii) Unreported change of ownership, legal status or name;

(iv) Change of Head Entity’s location to another country;

(v) Prejudiced Collection of Funds;

(c) the number of recorded occurrences of the following Adjusted Risk Events, will be determined on the basis of applicable Remittance Frequency in accordance with section 5.3.3:

(i) Late or short payment; and/or

(ii) Payment in the wrong currency,

(d) the number of recorded occurrences of those combinations of Risk Events as set out in section 5.3.4.

5.3.2.4 Should the Agent fail the Risk History assessment, such failure will apply for a minimum of 12 months from the date of the Risk Event which caused the failure.

5.3.3 Treatment of Adjusted Risk Events in the Risk History assessment

5.3.3.1 The number of recorded occurrences of Adjusted Risk Events, in accordance with section 5.3.2.3(c), that will cause the Agent holding Standard Accreditation to fail the Risk History assessment is based on the Remittance Frequency of the Agent and applies as follows:

Remittance Frequency Remittances per year in each BSP Number of occurrences required to fail Risk History assessment

Monthly 12 One occurrence

Fortnightly 24 Two occurrences

Every ten days 37 Three occurrences

Four times per month 48 Three occurrences

Weekly 52 Three occurrences



Page: 4 of 11 ____________________________________________________________________________

Every five days 73 Six occurrences

Every three days 122 Six occurrences

5.3.3.2 The number of recorded occurrences of Adjusted Risk Events, in accordance with section 5.3.2.3(c), that will cause the Agent holding Multi-Country Accreditation to fail the risk history assessment is aggregated across all BSPs in which the Agent participates. Failure of the Risk History assessment will occur when the aggregated Adjusted Risk Events equal the lower of:

(a) 0.75% of the aggregate number of remittances applicable to the Agent over the previous 12 months but no less than 3 Adjusted Risk Events; or

(b) 120 Adjusted Risk Events.

5.3.4 Treatment of combinations of Risk Events the Risk History assessment

5.3.4.1 The number of combined recorded occurrences of:

(a) a Risk Event in accordance with section 5.3.2.3(b) and

(b) one or more Adjusted Risk Events,

that will cause the Agent holding Standard Accreditation to fail its Risk History assessment for the purposes of section 5.3.2.3(d) is as follows:

Remittance Frequency

Remittances per year in each BSP

Number of occurrences required to fail the Risk History assessment

Risk Event per section 5.3.2.3(b)

Adjusted Risk Event

Monthly 12 One occurrence One occurrence

Fortnightly 24 One occurrence One occurrence

Every ten days 37 One occurrence Two occurrences

Four times per month 48 One occurrence Two occurrences

Weekly 52 One occurrence Two occurrences

Every five days 73 One occurrence Three occurrences

Every three days 122 One occurrence Three occurrences

5.3.4.2 For the Agent holding Multi-Country Accreditation, failure of the Risk History assessment will occur when the number of combined recorded occurrences of:

(a) a Risk Event per section 5.3.2.3(b); and

(b) one or more Adjusted Risk Events in aggregate across all BSPs,

is as follows:

Total number of Remittances per year across BSPs

Number of occurrences required to fail the Risk History assessment

Risk Event Adjusted Risk Event

< 500 One occurrence Three occurrences



Page: 5 of 11 ____________________________________________________________________________

501-750 One occurrence Four occurrences

751-1,000 One occurrence Six occurrences

1,001-2,000 One occurrence Eight occurrences

2,001-5,000 One occurrence Fifteen occurrences

> 5,000 One occurrence Thirty occurrences

5.3.5 Requirement for the Agent to utilise Electronic Ticketing

5.3.5.1 If the Agent does not use Electronic Ticketing for a period in excess of twelve months, the Agent’s Electronic Ticketing Authority will be removed.

5.3.5.2 If the Agent subsequently requests that its Electronic Ticketing is reinstated, a financial assessment for cause in respect of the Agent will be conducted, in accordance with section 5.4.3. If the review reveals that the Agent fulfils the Accreditation criteria, the Agent’s access to Electronic Ticketing will be reinstated. The BSP Airlines may, in their individual discretion, provide the Agent with Electronic Ticketing Authority.

5.3.5.3 A Termination Notice will be sent to the Agent in accordance with section 13 if after a period of three months from the date that:

(a) the Agent’s access to Electronic Ticketing is reinstated in accordance with section 5.3.5.2 and the Agent still does not use Electronic Ticketing; or

(b) the Agent’s Electronic Ticketing Authority under section 5.3.5.1 is removed and the Agent has not requested reinstatement of Electronic Ticketing.

5.3.5.4 If the Agent requests and IATA approves a change in the Agent’s Accreditation type to Standard Accreditation with no Cash Facility with authorisation only to use IEP, the Termination Notice sent to the Agent under section 5.3.5.3 will no longer be effective.

5.3.5.5 The Agent accredited under Standard Accreditation with no Cash Facility and only authorised to use IEP will not be subject to the above provisions.

5.4 FINANCIAL ASSESSMENTS

5.4.1 Introduction

5.4.1.1 Subject to the Agent opting-out under section 5.4.6, the Agent is required to undergo a financial assessment:

(a) in the case of the Agent holding Standard Accreditation with Cash Facility, annually or for cause at any time, in accordance with sections 5.4.2, 5.4.3 and the applicable Local Financial Criteria; and

(b) in the case of the Agent holding Multi-Country Accreditation, quarterly or for cause at any time, in accordance with sections 5.4.2, 5.4.4 and the Multi-Country Financial Criteria

5.4.2 Provision of information for the conduct of financial assessments

5.4.2.1 Subject to section 5.4.2.2, the Agent must provide acceptable financial statements, documents or any other information necessary to conduct a financial assessment under this section. Such statements, documents or other information must be provided within30 days of IATA's request.

5.4.2.2 If:

(a) the Agent has requested prior to the due date an extension to the date for the provision of documents for financial assessment under section 5.4.2.1; and

(b) IATA is satisfied that the Agent has made all reasonable efforts to meet the 30 day due date under section 5.4.2.1,

IATA, in its sole discretion, can agree to an extension of up to seven days by written notice to the Agent.

5.4.3 Annual financial assessment for the Agent holding Standard Accreditation with Cash Facility



Page: 6 of 11 ____________________________________________________________________________ 5.4.3.1 The financial standing of the Agent holding Standard Accreditation with Cash Facility will be assessed by IATA

annually or for cause at any time by analysis of the financial statements, documents and other information provided by the Agent in accordance with section 5.4.2, in accordance with the applicable Local Financial Criteria.

5.4.3.2 At the conclusion of each financial assessment conducted in accordance with section 5.4.3.1, IATA will determine whether the Agent has passed or failed the financial assessment in accordance with the Local Financial Criteria and notify the Agent in writing through the IATA Customer Portal.

5.4.4 Financial assessment for the Agent holding Multi-Country Accreditation

5.4.4.1 The financial standing of the Agent holding Multi-Country Accreditation will be assessed by IATA quarterly or for cause at any time by analysis of the financial statements, documents and other information provided by the Agent in accordance with section 5.4.2, in accordance with the Multi-Country Financial Criteria.

5.4.4.2 At the conclusion of each financial assessment in accordance with section 5.4.4.1, IATA will determine whether the Agent has passed or failed the financial assessment in accordance with the Multi-Country Financial Criteria and notify the Agent in writing through the IATA Customer Portal.

5.4.5 Failure to provide financial statements

Obligation to remedy

If the Risk Event of a failure to provide financial statements occurs, the Agent must remedy the Risk Event by providing the required information to IATA within 30 days of the original due date, in accordance with section 5.4.2.

Impact on Risk Status and applicable Cash Conditions

5.4.5.1 Failure to provide financial statements by the due date under section 0 will result in:

(a) the inability to conduct the financial assessment to determine whether the Agent passes or fails such financial assessment;

(b) the Agent's Risk Status continuing to be determined by reference to the outcome of the latest financial assessment that was conducted;

and:

(c) where IATA does not hold a Financial Security for the Agent, removal of the Cash Payment Method and the Card Payment Method unless and until such time that the Agent chooses to provide a Financial Security; or

(d) where IATA does hold a Financial Security, the Cash Conditions referred to in section 5.8.1 being applied to the Agent.

5.4.5.2 IATA will reassess the Agent’s Risk Status and applicable Cash Conditions upon receipt of the documents for financial assessment under section 5.4.2.1.

Termination action

5.4.5.3 Unless the Agent is approved to opt out of financial assessments under section 5.4.6, within 12 months following the date established in accordance with section 5.4.5.1, the Agent must provide the information required for the conduct of its next financial assessment otherwise IATA will issue a Termination Notice in accordance with the provisions of section 13.

Levy of administration charge

5.4.5.4 IATA may, if agreed by the Conference, use the procedures of the BSP to levy an administration charge on relevant Agents to cover additional workload caused by the failure to provide, or late provision of, required information or documentation for the conduct of any financial assessment under this section 5.4.

5.4.6 Opting out of financial assessments

5.4.6.1 The Agent holding Standard Accreditation with Cash Facility may apply to IATA in writing for approval not to be subject to annual financial assessments under section 5.4.1.



Page: 7 of 11 ____________________________________________________________________________ 5.4.6.2 Subject to section 5.4.6.3, IATA will approve the Agent's application by written notice to the Agent, and in

which case:

(a) the Agent will no longer be assigned a Risk Status;

(b) the Cash Conditions referred to in section 5.8.2 will apply to the Agent, including that the Remittance Holding Capacity will be equal to the amount of Financial Security provided; and

(c) IATA will notify the Agent and BSP Airlines in writing of the matters in sections 5.4.6.2(a) and (b) above.

5.4.6.3 IATA will not approve the Agent's application until such time as the Agent has provided a Financial Security as requested by IATA, in accordance with the applicable Local Financial Criteria.

5.4.6.4 If the Agent's application:

(a) has been approved prior to, or as at, the due date for provision of information for the conduct of the upcoming annual financial assessment under section 5.4.2, no Risk Event of a failure to provide financial statements will be recorded in the Agent's Risk History; or

(b) has not been approved at the due date for provision of information for the conduct of the upcoming annual financial assessment under section 5.4.2, the Risk Event of a failure to provide financial statements will be recorded in the Agent's Risk History.

5.4.6.5 The Agent may opt-in of annual financial assessments at any time by written notice to IATA, and in which case:

(a) subject to section 5.4.5:

(i) IATA will conduct a financial assessment for cause in respect of the Agent under section 5.4.3; and

(ii) the Agent will be assigned a Risk Status in accordance with section 5.2.1; and

(b) Cash Conditions will be applied to the Agent in accordance with section 5.2.2.

5.5 CASH CONDITION – FINANCIAL SECURITY

5.5.1 Agent with Risk Status "A"

5.5.1.1 The Agent holding Standard Accreditation with Cash Facility and having Risk Status "A", must provide a Financial Security in accordance with the applicable Local Financial Criteria, if such Local Financial Criteria requires the provision of a Financial Security.

5.5.1.2 The Agent holding Multi-Country Accreditation and having Risk Status "A" is not required to provide a Financial Security.

5.5.2 Agent with Risk Status "B" or "C"

5.5.2.1 The Agent holding Standard Accreditation and having Risk Status “B” or “C” must provide a Financial Security in accordance with the applicable Local Financial Criteria.

The Agent holding Multi-Country Accreditation and having Risk Status "B" or "C" must provide a Financial Security in accordance with the Multi-Country Financial Criteria.

5.5.3 Timing for provision of a Financial Security

5.5.3.1 If the Agent is required to provide or increase the amount of Financial Security in accordance with section 3 or this section 5.5, such Financial Security or increased Financial Security must be provided within 30 days (40 days in Argentina, Brazil, Canada, Colombia and Venezuela) of IATA’s request.

5.5.4 Failure to provide a Financial Security

Increase in Financial Security

5.5.4.1 Where the request relates to an increase in the amount of a Financial Security and IATA already holds a Financial Security for that Agent, failure to provide the increase in the amount of the Financial Security by the



Page: 8 of 11 ____________________________________________________________________________

deadline will result in the Agent’s Remittance Holding Capacity being decreased by the difference between the requested Financial Security amount and the Financial Security amount already held by IATA.

New Financial Security

5.5.4.2 Subject to section 5.5.4.3, where the request relates to the provision of a new Financial Security, failure to provide the Financial Security by the deadline will result in a Risk Event for failure to provide a Financial Security and IATA will remove the Cash Form of Payment and Card Form of Payment from the Agent until the Financial Security is received by IATA.

5.5.4.3 If the Agent fails to provide the Financial Security to IATA within a further 60 days of the original due date for provision of such information under section 5.5.3.1, IATA will send a Termination Notice to the Agent in accordance with the provisions of section 13.

5.6 RISK CONDITION – REMITTANCE HOLDING CAPACITY

5.6.1 Risk Status "A" and "B"

5.6.1.1 Subject to sections 5.6.1.4, the Remittance Holding Capacity granted to the Agent having Risk Status "A" or "B" will be determined by aggregating the amount calculated under the following formula in respect of the Agent in each applicable country:

𝑅𝑒𝑚𝑖𝑡𝑡𝑎𝑛𝑐𝑒 𝐻𝑜𝑙𝑑𝑖𝑛𝑔 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑎𝑦𝑠 × 𝑇𝑜𝑡𝑎𝑙 𝐵𝑆𝑃 𝐶𝑎𝑠ℎ 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟3 ℎ𝑖𝑔ℎ𝑒𝑠𝑡 𝑅𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑃𝑒𝑟𝑖𝑜𝑑𝑠

𝐷𝑎𝑦𝑠 𝑖𝑛 𝑅𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑃𝑒𝑟𝑖𝑜𝑑 × 3+ 15%

where:

“Total Days” means the number of days from the beginning of the Agent's Reporting Period to the Remittance

Date in respect of that Reporting Period(s) applicable to the Agent in the applicable country;

"Total BSP Cash Turnover3 highest Reporting Periods" means the total cash turnover of the Agent in the applicable

country over the three highest Reporting Periods of the 12 months prior to the date the Remittance Holding Capacity is calculated; and

5.6.1.2 For countries with individualised airline Reporting Periods, the Remittance Holding Capacity will be calculated by aggregating the amounts calculated under the formula in section 5.6.1.1 for each individualised frequency of Remittance, using the three highest Reporting Periods for each frequency.

5.6.1.3 Subject to the provisions of sections 5.8 and 5.9.3-5.9.5, or a change to the Agent’s Risk Status, the Remittance Holding Capacity calculated under section 5.6.1.1 will apply for a period of 12 months from the date of calculation.

5.6.1.4 Where the Agent holding Standard Accreditation with Cash Facility is required to provide, in accordance with applicable Local Financial Criteria, a Financial Security for an amount that is higher than the amount calculated under the formula in section 5.6.1.1 above, the Remittance Holding Capacity granted to the Agent will be equal to the amount of the Financial Security provided.

5.6.1.5 For the Agent holding Multi-Country Accreditation, the Remittance Holding Capacity determined under section 5.6.1.1 will be established, at the Agent's option, in one of the following currencies:

(a) United States Dollar (USD);

(b) Euro (EUR);

(c) Pound Sterling (GBP);

(d) Australian Dollar (AUD);

(e) Singapore Dollar (SGD),

by conversion of each amount to be aggregated under section 5.6.1.1 into the selected currency.

5.6.2 Agent with Risk Status "C"



Page: 9 of 11 ____________________________________________________________________________ 5.6.2.1 The Remittance Holding Capacity granted to the Agent having Risk Status "C" will be equal to the amount of

the Financial Security provided by the Agent.

5.6.2.2 For the Agent holding Multi-Country Accreditation, the Remittance Holding Capacity will be established, at the Agent’s option, in one of the currencies set out in section 5.6.1.5.

5.7 CASH CONDITION - REMITTANCE FREQUENCY

5.7.1 Agent with Risk Status "A" and "B"

5.7.1.1 For the Agent having Risk Status "A" or "B" the standard Remittance Frequency of each country will be applied to the Agent, unless the Agent has requested a more frequent Remittance Frequency in accordance with the provisions of section 6.

5.7.2 Agent with Risk Status "C"

5.7.2.1 For the Agent having Risk Status "C", the most frequent Remittance Frequency applicable in the country will be applied to the Agent.

5.7.3 Effective date of changes to Remittance Frequency

5.7.3.1 Where a change to the Agent's Risk Status results in a change to the applicable Remittance Frequency in accordance with the provisions of this section 5.7, being a change from Risk Status:

(a) "B" to "C"; or

(b) "C" to "B",

the new Remittance Frequency will take effect in the applicable country on the date of commencement of the next Remittance Period.

5.8 CASH CONDITIONS APPLICABLE IN RELATION TO SPECIFIC RISK EVENTS OR FINANCIAL ASSESSMENTS

5.8.1 Financial assessment cannot be conducted

5.8.1.1 Where a financial assessment cannot be conducted due to the Risk Event of a failure to provide financial statements which is not remedied in accordance with section 0 and IATA holds a Financial Security for that Agent, the Cash Conditions relevant to Risk Status "C" will be applied to the Agent, regardless of the Agent’s current Risk Status.

5.8.2 Agent has opted-out from the obligation to undergo financial assessment

5.8.2.1 Where IATA has approved the Agent’s application to opt out of its financial assessments in accordance with section 5.4.6, the Cash Conditions relevant to Risk Status "C" will be applied to the Agent regardless of the Agent's current Risk Status from the date of IATA's approval.

5.8.3 Authorisation to use Cash Payment Method for less than 24 Months

5.8.3.1 For the period during which the Risk Event of Authorisation to use Cash Payment Method for less than 24 Months remains in the Agent's Risk History, the Remittance Holding Capacity made available to the Agent will be equal to the amount of Financial Security provided.

5.8.4 Agent reinstatement following a Payment Default

5.8.4.1 Where the Agent’s access to Electronic Ticketing has been reinstated by IATA in accordance with section 6 following a Payment Default, the Cash Conditions relevant to Risk Status "C" will be applied to the Agent for 24 months, regardless of the Agent's current Risk Status, from the date on which IATA reinstates the Agent's access to Electronic Ticketing.

5.9 OPERATION OF REMITTANCE HOLDING CAPACITY

5.9.1 Application

5.9.1.1 To the extent of any inconsistency between the Cash Conditions established under sections 5.5 to 5.8 and this section, the provisions of this section will take precedence.



Page: 10 of 11 ____________________________________________________________________________ 5.9.2 Remittance Holding Capacity monitoring

5.9.2.1 IATA will continuously monitor the Agent’s sales and notify the Agent through the IATA Customer Portal when All Amounts Owing have reached:

(a) 50% of the Agent's Remittance Holding Capacity; and

(b) 75% of the Agent's Remittance Holding Capacity.

5.9.2.2 The notification will state the amount of the Remittance Holding Capacity already used and the amount remaining to be used, in the Billing currency.

5.9.3 Reaching or exceeding the Remittance Holding Capacity

5.9.3.1 If All Amounts Owing are, at any time, equal to or higher than the Remittance Holding Capacity, the Cash Payment Method will be removed from the Agent until the Agent has either:

(a) remitted in advance of, or on, the Remittance Date, to reduce All Amounts Owing below its Remittance Holding Capacity; or

(b) provided an additional Financial Security amount, in which case its Remittance Holding Capacity will be increased:

(i) subject to section 5.9.3.1(b)(ii), by the same amount as the additional Financial Security amount provided; or

(ii) in the case of the Agent holding Standard Accreditation with Cash Facility, by such other amount as determined in accordance with the applicable Local Financial Criteria.

5.9.3.2 During the period where the Agent is restricted from using the Cash Payment Method under section 5.9.3.1, the Agent may continue to use the Card Payment Method and IEP.

5.9.4 Management of Remittance Holding Capacity where All Amounts Owing are less than the Remittance Holding Capacity

5.9.4.1 If All Amounts Owing are, at any time, lower than the Remittance Holding Capacity, the Agent may, subject to any minimum amount established in the applicable Local Financial Criteria or Multi-Country Financial Criteria, reduce the amount of the Financial Security provided in accordance with sections 5.5, 5.9.3.1(b) or any other section of this Resolution. In such case the Remittance Holding Capacity will be decreased:

(a) subject to section 5.9.4.1(b), by the same amount as the reduction of the Financial Security amount; or

(b) in the case of the Agent holding Standard Accreditation with Cash Facility, by such other amount as determined in accordance with the applicable Local Financial Criteria;

provided that All Amounts Owing do not equal or exceed the new Remittance Holding Capacity.

5.9.4.2 Notwithstanding any other provision under this section 5, the Agent may at any time increase its Remittance Holding Capacity by providing IATA with a Financial Security for a higher amount. The Remittance Holding Capacity will be increased:

(a) subject to section 5.9.3.1(b), by the same amount as the additional Financial Security amount provided; or

(b) in the case of the Agent holding Standard Accreditation with Cash Facility, by such other amount as determined in accordance with the applicable Local Financial Criteria.

5.9.5 Recalculation of the Remittance Holding Capacity

5.9.5.1 At a minimum of once per annum, IATA will review and recalculate the Agent’s Remittance Holding Capacity

5.9.5.2 Notwithstanding any other provision in this section 5, IATA may at any time, for cause, recalculate the Remittance Holding Capacity of the Agent.

5.9.5.3 Notwithstanding any other provision in this section 5, the Agent may request, at any time, a recalculation of its Remittance Holding Capacity.



Page: 11 of 11 ____________________________________________________________________________ 5.9.5.4 The result of the recalculation and the new Remittance Holding Capacity amount will be communicated to the

Agent through the IATA Customer Portal.

5.9.6 Effective date of changes to the Remittance Holding Capacity

5.9.6.1 Changes to the Agent's Remittance Holding Capacity will take effect from the beginning of the following Reporting Period.

5.9.7 Exceptional adjustments to the Remittance Holding Capacity

5.9.7.1 Up to four occasions per annum, the Agent may request an exceptional Remittance Holding Capacity adjustment.

5.9.7.2 To qualify for an exceptional Remittance Holding Capacity adjustment, the Agent must:

(a) have Risk Status “A” or “B” for the duration of the adjustment.

(b) not have incurred a Risk Event in the previous six months from the date of request, or incur any Risk Event for the duration of the adjustment.

5.9.7.3 Conditions for granting exceptional adjustments to the Remittance Holding Capacity:

(a) The Remittance Holding Capacity will revert to the original amount following the Agent’s next Remittance Date.

(b) The current Remittance Holding Capacity amount will be increased by 20%, with a cap of USD 50,000.

On occurrence of the Agent’s third request for an exceptional adjustment during a calendar year, the most frequent Remittance Frequency applicable in the country will be applied to the Agent until the beginning of the next calendar year.

5.10 RISK MANAGEMENT FOR STANDARD ACCREDITATION WITH NO CASH FACILITY

5.10.1 Authorisation to use the Card Payment Method

5.10.1.1 For authorisation to use the Card Payment Method, the Agent holding Standard Accreditation with no Cash Facility must provide and maintain a Financial Security satisfactory to IATA to cover any cash remittances, resulting from ADMs or other accountable transactions, due by the Agent.

5.10.1.2 The minimum Financial Security amount provided by the Agent must not be less than the total BSP cash turnover, resulting from any accountable transactions, in the highest calendar quarter of the previous twelve consecutive months, or in the amount of USD 5,000, whichever amount is higher.

5.10.1.3 If at any time, the Agent’s existing Financial Security is insufficient to cover the total BSP cash turnover per the provisions of section 5.10.1.2, the amount of Financial Security required must be increased.

5.10.1.4 IATA may review the Financial Security amount provided by the Agent for cause at any time.

5.10.2 Authorisation to use IEP

5.10.2.1 For authorisation to use IEP, the Agent holding Standard Accreditation with no Cash Facility with only access to this payment method, is not required to provide a Financial Security unless the Agent’s total BSP cash turnover in a calendar quarter exceeds USD 5,000 at any time. In such case, the Agent must provide a Financial Security for an amount not less than the total BSP cash turnover of the applicable quarter or USD 10,000, whichever amount is greater.

5.10.2.2 Any Financial Security provided will be maintained for a minimum of twelve months.

5.10.2.3 If at any time, the Agent’s existing Financial Security is insufficient to cover the total BSP cash turnover per the provisions of section 5.10.2.1, the amount of Financial Security required must be increased.

5.10.2.4 IATA may review the Financial Security amount provided by the Agent for cause at any time.


Attachment: 18 Aug 16 ‘C’

Page: 1 of 6 ____________________________________________________________________________

Stream/Area NewGen ISS Concepts Approved at PAC/38

Agency Accreditation

Accreditation Models

Introduction of three models of accreditation: 1. Multi–Country Accreditation 2. Standard Accreditation with Cash Facility 3. Standard Accreditation without Cash Facility

Accreditation Model and available Forms of Payment captured as new attributes, visible and communicated to the carriers


Access to only IATA EasyPay & Customer CC as Forms of Payment for ticket issuance

Compliance with accreditation requirements including local requirements (Licenses, VAT)

No annual financial assessment

Minimal financial security required for access to CC as a form of payment

No financial security requirement if Agent only has access to IATA EasyPay as a form of payment


Based on current model of accreditation, and in one country only

Access to all Forms of Payment in the BSP

Remittance Holding Capacity applicable

Compliance with minimum accreditation requirements and Local Financial Criteria (LFC)

Financial security requirements defined in LFC

Annual financial assessments per LFC


Open to Agents operating in multiple BSPs

Access to all Forms of Payment

Remittance Holding Capacity applicable to entire group

Single accreditation process & risk management at parent

entity level, one PSAA covering entire group

Global accreditation requirements & compliance with local legal obligations

Distinct Multi-Country financial criteria: Quarterly financial assessment under Multi-Country

Assessment framework Financial Security required covering sales at risk of

entire group if Agent fails quarterly financial assessment or risk history (risk status B or C)

Financial Security calculation aligned with Resolution 800f, calculated per location and aggregated

Acceptable Financial Security currencies: USD, EUR, GBP, AUD, SGD



Page: 2 of 6 ____________________________________________________________________________

Specific criteria for MC Financial Securities and Financial Security Providers

If the Multi-Country Agent holds majority ownership of an accredited location, the location is required to fall under its MC Accreditation

New applicants directly into MC Accreditation must provide a Financial Security for two years

Changes of ownership will be assessed to determine if there is a Risk Event

Accreditation Requirements

Revised accreditation requirements for all models

Requirement to disclose common ownership, ultimate parent and corporate structure

Mandatory requirement to disclose any websites used for ticketing

Head Office/Branch Relationship

Redefinition of Head Office/Branch relationship A branch is any entity that the head office takes legal and financial responsibility for, and may be different legal entity

Agency Conversions

Agents may voluntarily convert across accreditation models if they meet applicable requirements

Agents retain their IATA code(s) when converting across models

Conversions between Standard Accreditation with Cash Facility and no Cash Facility entail a Notice of Change

Conversions between Multi-Country and Standard Accreditation will entail new PSAAs

Annual Agent Revalidation

On an annual basis, the Agent will be required to revalidate its agency details and warrant its continued compliance with accreditation requirements

Reporting of Changes

To encourage the reporting of agency changes, the current costs related to agency changes shall be incorporated into the annual agency fee and not charged at the time of the change

Administrative Non-Compliances vs. Risk Events

Move away from blanket concept of ‘irregularities’ today to distinguishing between administrative non-compliances and risk events

Administrative Non-Compliances

Administrative Non-Compliance consist of any failure to comply with accreditation requirements which do not impact the agent’s ability to pay such as:

o Failure to report a change of location o Failure to pay the annual fee by deadline/complete

annual revalidation process

Administrative Non-Compliances are not included in the Agent’s Risk History

Failure to rectify an administrative non-compliance is ground for termination



Page: 3 of 6 ____________________________________________________________________________

Risk Events

Incident related to the Agent’s ability to pay or financial risk

Immediate consequences for each Risk Event

Risk Events are also registered in the Agent’s Risk History

Agreed Risk Events: o Accredited with Cash Facility less than 24 months o Major Change of Ownership or Legal Status o Late/Short Payment or Payment in wrong currency o Unreported Change of Ownership/Legal Status or

Name o Failure to provide Financial Statements or required

documentation for Financial Assessment o Failure to provide Financial Security by deadline

Remittance Holding Capacity & Risk Management

Risk Management

Risk management activities based on applicable accreditation model

For Standard Agents with a Cash Facility, there is a financial assessment per LFC

For Multi-Country Agents, there are quarterly financial assessment per MC assessment framework

A Risk History will be maintained and assessed on an ongoing basis, taking into account the Agent’s Risk Events in the BSP

Risk History

The Agent’s Risk History Assessment is based on the number and type of Risk Events incurred by the Agent

The Agent’s Risk History is maintained on an ongoing basis

The following Risk Events will be registered for 24 months and result in the immediate failure of the Agent’s Risk History:

o Agents accredited with Cash facility for less than 24 months

o For Standard Agents, a major Change of Ownership or Legal Status

o Payment Default (Risk Event is registered at the time of the Agent’s reinstatement)

The following Risk Events will be registered for 12 months, and result in a risk history failure on the second occurrence:

o Unreported Change of Ownership/Legal Status or Name

o Failure to provide Financial Statements or required documentation for Financial Assessment

o Failure to provide Financial Security by deadline

The following Adjusted Risk Events are registered for 12 months, and the number incurred which result in the Agent’s Risk History failure depends on the Agent’s total number of remittances annually:

o Late or Short Payments o Payments in Wrong Currency



Page: 4 of 6 ____________________________________________________________________________

For Multi-Country Agents the number of Adjusted Risk Events resulting in the Agent’s Risk Assessment failure are based on the aggregate number of remittances made across all BSPs

Risk Status

For all agents with a Cash Facility, one of the Risk Status’ will be assigned (A, B, C)

Risk Status is based on the outcome of : o Financial Assessment o Risk History Assessment

The Risk Status is assigned as follows: o Status A – Agent passes both the Financial

Assessment and Risk History Assessment o Status B – Agent fails either the Financial Assessment

or the Risk History Assessment o Status C – Agent fails both the Financial Assessment

and the Risk History Assessment

For each risk status different risk management conditions will apply:

o Risk Status A A Financial Security is only mandatory if per LFC

o Risk Status B or C A Financial Security is required per applicable financial criteria

o Risk Status C Agent must remit per the most frequent remittance in the BSP

Remittance Holding Capacity (RHC)

A monetary threshold to the Agent’s outstanding cash sales (monies at risk) will be established for all Agents with a Cash Facility, concept previously referred to as “Credit Limits”

An Agent’s monies at risk will continuously be monitored against the established RHC amount

When the accumulated monies at risk are equal to or exceed the RHC, access to cash sales will be restricted:

o The Agent may continue selling using either the passenger’s card or IATA EasyPay as form of payment.

o The Agent may to choose at any point to voluntarily provide additional financial security

o The Agent may also choose to remit in advance outstanding monies, in total or partially

For Agents with a Risk Status A or B, the RHC will be established globally per an agreed calculation

For Agents with a Risk Status C, the RHC will equal the amount of Financial Security provided

For Agents accredited with a Cash Facility for less than 24 months, the RHC will equal the amount of Financial Security provided

For Multi-Country Agents, the RHC will be calculated by BSP, and then aggregated for the entire group



Page: 5 of 6 ____________________________________________________________________________

The Financial Security calculation is distinct from the RHC calculation and based in the applicable Financial Criteria

However, the Agent may adjust its RHC by providing more or less financial security, in which case the RHC will be raised or lowered by the same monetary amount as the financial security has been increased or decreased, unless the applicable Financial Criteria establishes a different relationship

If the Financial Security amount required per the Local Financial Criteria is higher than the RHC amount calculated, the RHC will be equal to the amount of Financial Security provided

Global Default Insurance

Global Default Insurance

Global Default Insurance will be an additional Financial Security type available to agents along with those Financial Security types currently acceptable under Resolution 850p

The solution will consist of a standardized global default insurance policy brokered to a top credit insurance company and made available for travel agents to be listed under on a voluntary basis

The Insurer will underwrite an approved amount of cover per Agent, and this will be the amount of Financial Security provided

PAConf approved that the brokers Aon and Marsh could engage the global credit insurers for Global Default Insurance

IATA EasyPay

IATA EasyPay (IEP)

IATA EasyPay is a new payment method for Agents to issue tickets through the BSP, and available to Agents under all Accreditation Models

IEP as a form of payment will be distinct from BSP Cash and BSP CC

IEP is risk free for airlines as it will be a private and closed loop industry payment method, based on a “pay-as-you-go system” and with no possibility of chargebacks

Funds must be available in the Agent’s IEP account prior to ticket issuance

At the time of ticket issuance, the related funds will be irrevocably blocked

If there are insufficient funds in the IEP account at the time of ticket issuance, the transaction will be rejected and the ticket will not be issued

IEP Settlements will take place daily and the Airlines will receive payments 48 to 72 hours after the ticket is issued

IEP Model The e-Wallet model will be prioritized for implementation in

most of the countries with BSP operations



Page: 6 of 6 ____________________________________________________________________________

The Banking model will remain as a backup plan for markets in which the eWallet model will not be feasible

There will be one IEP model per country

IEP Pricing Airlines will bear the IEP transactional costs, and then will

have the choice to incentivize, surcharge or bear the cost of IATA EasyPay, per their individual commercial strategy.

IEP Acceptance IEP will be accepted by all airlines by default with the ability for

airlines to opt out by individual BSP

Agenda Item: R2 Revision No.: 0 Date: 18 Jul 16 Page: 1 of 1

____________________________________________________________________________

R2 NEWGEN ISS – TIE-IN/TRANSITION RESOLUTION

Submitted by NewGen ISS Background

In order to introduce the components and related rules of NewGen ISS, Resolution 8xx has been put forward to the Conference for review and adoption (see agenda item R1). If adopted, Resolution 8xx will be introduced with an effectiveness date of 1 January, 2018. Once effective, the countries currently under Resolution 818g will progressively be migrated to Resolution 8xx. In a joint session with Financial Services Development Working Group (FinDev), PSG reviewed and endorsed the parameters which the Agency Administrator must consider prior to migrating a country to Resolution 8xx. These parameters along with the general conditions regarding effectiveness of Resolution 8xx in a country are included as a special Tie-in Resolution in Attachment ‘A’. At the time when all countries under Resolution 818g have been migrated to Resolution 8xx, the Tie-in Resolution will be rescinded. Proposed Action Conference to adopt the Tie-in Resolution shown in Attachment ‘A’ with a 1 January 2017 effectiveness.


Attachment: 18 Jul 16 ‘A’

Page: 1 of 2 ____________________________________________________________________________ Attachment ‘A’ Resolution [846]

Whereas IATA is developing a New Generation of IATA Settlement Systems (NewGen ISS) aimed at transforming the current ISS business model through the introduction of various new features including a range of accreditation models, an enhanced risk management process, global default insurance and IATA EasyPay, a new industry payment method; Whereas the NewGen ISS framework and rules have been incorporated into Resolution 8xx and other Resolutions; Whereas Resolution 8xx will be applicable in those countries currently under the 818g set of Sales Agency Rules; Whereas the Passenger Agency Conference recognises that specific parameters must be met before Resolution 8xx becomes effective in a market; it is

Resolved that,

1. The Agency Administrator will establish the date upon which a country is migrated to Resolution 8xx with consideration of the following parameters:

a) Readiness of the carriers participating in the BSP, representing a minimum of 65% of BSP volumes, for the NewGen ISS related changes;

b) Readiness of the Ticketing System Providers (TSPs) participating in the BSP, representing at least 65% of BSP volumes, with the necessary technical developments;

c) IATA’s internal operational readiness for the components of NewGen ISS;

d) Readiness and availability of the IATA EasyPay System;

e) Compliance with any local laws or other regulatory requirements.

2. Notwithstanding, where the above conditions cannot be met, the Agency Administrator may, in consultation with and with the approval of the PSG, establish the date upon which a country will be migrated to Resolution 8xx.

3. Prior to implementation of Resolution 8xx in a country:

Notification will be given to all Members and to all Accredited Agents of the implementation date in the respective country no later than 90 days before such date.

IATA will make available the BSP Manual for Agents via the IATA Customer Portal no later than 30 days before the implementation date.

IATA will distribute to all Agents in the country any relevant information in relation to their operation in the BSP under Resolution 8xx, including but not limited to applicable Financial Security requirements, Risk Status and Remittance Holding Capacity.

4. Upon implementation of Resolution 8xx, Resolution 818g will no longer apply in that particular country.



Page: 2 of 2 ____________________________________________________________________________ 5. In the event that the Local Financial Criteria of a country conflicts with the provisions of

Resolution 8xx once implemented in a country, Resolution 010 will be referenced and the Hierarchy of Sources applied.

6. Each APJC must, where Resolution 8xx has been implemented, preferably in advance but at minimum within twelve months following implementation of NewGen ISS in the applicable BSP(s), review its Local Financial Criteria.


____________________________________________________________________________ R3 NEWGEN ISS GLOBAL INSURANCE SOLUTION

Submitted by NGISS 1. Background Following PAConf approval in October 2015 to move forward with the Request for Proposal (RfP) exercise, IATA instructed insurance brokers AON and Marsh to approach qualified insurance companies and obtain proposals for the Global Default Insurance. Fundamentally, the solution consists of a Global Default Insurance policy that will be brokered to top credit insurance companies and made available for travel Agents to be listed on a voluntary basis. The Global Default Insurance will be an additional financial security type to those currently acceptable under Resolution 850p. A number of key aims have been laid out for the Global Default Insurance, specifically:

Member airlines are seeking to achieve the highest level of default recoveries worldwide

via an internationally A-rated security – thus improving current rates of default recovery

worldwide.

In order to ensure attractiveness for Agents, the Global Default Insurance is to provide

very competitive pricing with no requirements for an Agent to provide collateral, thereby

actively supporting global sales growth and lowering barriers to entry.

Greater level of global control, transparency and consistency together with significant

reductions in administration worldwide. Brokers AON and Marsh have been working collaboratively to obtain pricing, terms and conditions from qualified insurance companies. The brokers approached Atradius, Coface, Euler Hermes and a major general insurance provider AIG.

Atradius, Coface and Euler Hermes submitted their proposals which underwent assessment by the brokers. All three insurers presented their capabilities and intended solutions for the Global Default Insurance to IATA and the brokers. Updates on the development of the RfP exercise were presented to the PSG in February and April. In June, PSG endorsed moving forward with the Global Default Insurance on the basis of the proposed solution. 2. Proposed Solution


____________________________________________________________________________ The Global Default Insurance proposed is via the Global Credit Insurance Market. This Market covers in excess of USD 2,500 billion of receivables and is dominated by 3 credit insurers (Euler Hermes, Coface and Atradius) together with some general insurers such as AIG and Zurich. The requirements put forward for the Global Default Insurance have meant that a standard Global Credit Policy is inadequate, thus extensive negotiations have taken place with the market leaders via the brokers in order to achieve enhanced policy terms and conditions in the best interests of IATA and its Members. These negotiations have also contributed to bring in features to make the Global Default Insurance attractive to Agents. Euler Hermes, part of the Allianz Group and the largest global credit insurer, has met IATA and its Members’ requirements to a significantly greater extent than other potential insurers.

2.1 Key terms Whereas Agents are the risk, in the event of Agent default, settlement will be provided to BSP Airlines via IATA. This model is unlike those applicable to other credit policy holders. In addition, IATA and its Members set forth requirements that have needed the introduction of further significant and unique enhancements to the standard Global Credit Policy.

2.1.1 The following terms have been agreed by Euler Hermes and are uniquely tailored

for the Global Default Insurance:

a) 100% indemnity.

b) Premium is charged on the required limit to be insured. This enables the Agent to

compare the Global Default Insurance quote against other Financial Security

types on a level playing field.

c) Application fees are waived. While it is normal in this market to charge an

application fee of around USD 125 per quote, it has been agreed that travel

Agents can apply for quotes at zero cost.

d) There is no commitment to a minimum premium payable by IATA.

e) No aggregate sub-limits. This means that there is not a limit to the aggregate

indemnity amount to be paid out by the insurer other than the total of the

underwritten limits.

2.1.2 Additional key features of the Global Default Insurance:

a) Limit available globally except Congo, South Sudan, Zimbabwe and countries

under sanctions (e.g. enforced by the Office of Foreign Asset Control - U.S.

Department of the Treasury).

b) Limit provided in local currency.

c) Premium paid by Agent in local currency.

d) Policy threshold of USD 5,000. Agent defaults under USD 5,000 will not be

indemnified by the insurers since it is not economically viable, but defaults above

USD 5,000 will be settled in full.


____________________________________________________________________________

e) Adjustable limit: each individual Agent's agreed limit may be amended if required

via the Global Default Insurance, subject to no negative information.

The usual timeframe to amend an Agent’s limit ranges from 2 to 8 working days with most agreed within 2-3 working days.

f) Discretionary limit based on IATA accreditation process and no negative

information is likely to be confirmed.

A discretionary limit means that Agents requesting a limit at or below the agreed discretionary limit can be included in the scheme at global rates based on the Agent having been accepted by IATA’s accreditation criteria alone without additional checks performed by Euler Hermes, but subject to Euler Hermes having no negative information about an individual Agent. This facility allows increased cost efficiencies and thus contributes to lower overall premium rates for the Agents.

2.1.3 Premium rates

Premium rates will be quoted based on the Agent’s grade (i.e. low risk, average risk, above average risk…), the country’s grade (i.e. AA, B, C…) and as assessed by the insurer.

The brokers have confirmed Euler Hermes' premium rate indications are competitive relative to the Global Credit Market per se and relative to other indications tabled. As the Global Default Insurance will be an additional Financial Security type under 850p, an Agent may choose whether to obtain insurance under the Global Default Insurance or via any other type of acceptable Financial Security (e.g. Bank Guarantees, Insurance Bonds, Letters of Credit, Default Insurance Program etc.). The decision as to the competitiveness of the insurance premiums is thus left to

the market at the level of an individual Agent.

2.2 Application process

The application process for the Agent to request a limit under the Global Default Insurance is to be deployed in two phases.

Phase 1: Off-line process, documents to be electronically distributed (i.e. e-mail).

- Once IATA has performed the Financial Review and required the Agent to provide a Financial Security, the Agent will need to contact the broker and advise the security amount requested by IATA.


____________________________________________________________________________

- At this stage, the broker will enter the request into the insurer’s front end system and the insurer will inform the broker of the decision (i.e. to quote for the limit to be insured, seek extra information or reject the application).

- If the insurer quotes a limit for the Agent, the broker will then forward the acceptance document valid for 30 days to the Agent who may return it to the insurer through the broker.

This initial process allows gathering feedback for the insurer to develop an automated, on-line process.

Phase 2: travel Agents will apply through a dedicated insurer’s online portal.

- The travel Agent will enter the request for limit in a dedicated insurer’s portal and may be requested to upload financial statements for risk rating purposes.

- Agent obtains decision through the portal and may accept the offer online.

In both phases, the Agent will need to inform IATA that the insurer has provided an adequate limit under the Global Default Insurance.

2.3 Policy structure

The Global Default Insurance will be delivered via a structure of agreements and policies:

A Master Agreement which sets out the key conditions of the program including the general terms and conditions agreed centrally and the policy wording that will be implemented worldwide.

IATA will be issued with one or more policies at Hub level which mirror the Master Agreement.

Local policies will be issued where necessary.

This structure enables IATA to be the policyholder and beneficiary on behalf of the airlines and also to comply with the obligations of the policy, in particular paying the insurance premium.

The main policy(ies) will use a single currency (e.g. USD).

An individual Agent’s limit and premium under the main policy(ies) will remain in the local currency in line with all other acceptable securities.

Where local policies are required these will all be in the applicable local currency only.

Claims will be paid in the currency of the policy under the main policies and in local currency wherever local policies are issued.

2.4 Premium collection


____________________________________________________________________________ The outcome of the compliance reviews performed by both the insurers and brokers to determine whether it is possible for them to perform the premium collection is that they are legally unable to collect premiums from travel Agents for reasons as follows:

If brokers were to collect insurance premiums from travel Agents, under brokerage regulations travel Agents would become broker’s clients which is against the purpose and role that brokers play in the Global Default Insurance.

Insurers must legally collect the insurance premium from the policyholder which in this case is IATA. If the insurance company was to collect the insurance premium from travel agents, this would require each travel Agent to be the policyholder and beneficiary of any claim while the travel Agent has not suffered any loss.

Therefore, IATA will collect the insurance premium on the basis of Agents joining the Global Default Insurance. This will be articulated by collecting a fee from Agents through the BSP. This collection will be on a cost recovery basis as a facilitation of a pass through of these funds.

2.5 Deployment of the Global Default Insurance

The Global Default Insurance will be piloted in selected countries followed by a staggered roll-out following the implementation plan of NewGen ISS.

The initial pilots will contribute to refine all aspects of delivering the Global Default Insurance to IATA, its Members and the Agents worldwide. The Global Default Insurance will be offered at global premium rates for the pilot.

Key elements in determining the timeframe of this pilot are achieving a sufficient number of agents applying for a quote, given the rate of expiration of current Financial Securities, and claims to enable Euler Hermes to assess the effectiveness and efficiency of the processes to be deployed globally.

3 Proposed action

Conference to adopt the changes to Resolutions shown in Attachment ‘A’. The changes will become effective upon effectiveness of Resolution 8xx.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’

Changes to Resolution 866

GLOBAL DEFAULT INSURANCE means an insurance policy issued in the name of IATA to cover the liabilities of the listed Agents as defined in the policy. For each Agent a maximum coverage amount will be specified.

Changes to Resolution 850p

2.3 Default Insurance Programme

2.4 Global Default Insurance

2.5 Any Provider of the acceptable financial security types in 2.2-2.3 are required to meet the criteria as referred to in section 3 of Resolution 850p.

2.6 Any Provider of the acceptable financial security type under 2.4 is required to meet the criteria referred to in section 4 of Resolution 850p.

SECTION 4 EVALUATION OF THE GLOBAL DEFAULT INSURANCE AND PROVIDERS

4.1 IATA will establish criteria for the evaluation of the Global Default Insurance and Providers. The criteria will be subject to review and amendment by IATA annually or more frequently as may be necessary due to changes in the insurance market or the Providers.

4.2 IATA will assess the performance of the Global Default Insurance and Providers considering the annual renewal process.

4.3 The results of the annual evaluation will be reported to the Passenger Agency Conference Steering Group.

Agenda Item: R3.1 Revision No.: 0 Date: 18 Aug 16 Page: 1 of 3

____________________________________________________________________________ R3.1 NEWGEN ISS – IATA EASYPAY

Submitted by NGISS 1. Background At PAConf/38 in October 2015, the following areas on IATA EasyPay were presented: EasyPay characteristics and models, industry business case, preliminary costs, savings and benefits for the Airline Industry, as well as Airlines Task Force recommendations on pricing model and Airlines’ acceptance. PAConf was requested to review and approve the IATA EasyPay framework and Airline Task Force recommendations endorsed by PSG. Such approval was granted and recommendations served as the basis for drafting the required Resolution text submitted for PAConf’s adoption. This is to provide the PAConf with an update on areas of work.

2. Project Status IATA EasyPay will generate several benefits for the airlines (cash flow acceleration, safer collection of funds, additional payment option, wider distribution network) and for the travel agents (reduction or removal of financial securities and access to new accreditation models). To launch EasyPay, a number of stakeholders need to be ready:

2.2 Airline Readiness Airline readiness is a critical area as IATA EasyPay will be a new form of payment accepted by default by any airline participating in a BSP (with an option to opt out). To assist the airlines in this process, the EasyPay team has kicked-off an Airline EasyPay Early Adopters team with the following objectives:

Identify and support all airline departments impacted by the launch of IATA EasyPay (Revenue Accounting / Reconciliation, Finance / Treasury / Accountancy, Distribution, Electronic Payments, Ticketing)

Create an “IATA EasyPay Airline Readiness Guide” with operational and technical details. This Readiness Guide will be provided to any airline preparing to implement and operate EasyPay.

A total of 15 major Airlines representing all regions have confirmed their participation in the

EasyPay Airline Early Adopters Team.

The Team has been set-up and all of the kick-off calls have been conducted. In most of the cases, IATA and the Team members have set clarification calls and for few Early Adopters it is clear what needs to be done, in terms of internal developments and/or internal process changes. Some of the members have triggered actions in order to be ready for testing by the end of 2016.


____________________________________________________________________________

2.3 Providers’ Readiness 2.3.1 Revenue Accounting System providers

On 12th May 2016, DISH Revisions 22 & 22.1 standards which have been reflected in expedited Bulletins have been released as complete publications made effective as of 1 June 2016 (http://www.iata.org/publications/Pages/bspdish.aspx). Since then, IATA has proactively contacted the main Revenue Accounting System providers in order to support them along the implementation of the changes.

The following companies have been identified and most of them contacted: ACCA, Accelya Kale, Amadeus, Aviation Services Limited, ATPCO, Indra, ISO Software Systems, Hitit Computer Services, Lufthansa Systems, Mercator, Navitaire, NIIT, Sutherland Global Services and WNS Global Services Ltd. Most of the kick-off/clarification calls have been conducted.

2.3.2 GDSs Readiness

GDSs readiness is another key dimension to the implementation of NewGen ISS and EasyPay. The project team has been engaging with the GDSs via the Global GDS Group (GGG) since April 2015. The two main developments required from the GDSs are the capacity to restrict/reinstate specific forms of payment based on instructions sent via the Form of Payment Files, and readiness for the new EasyPay form of payment

Based on discussions held in 2015 and 2016, the IATA EasyPay Transactional Handbook was delivered to external stakeholders, including GDSs, which in combination with the previously mentioned DISH Bulletin, provides the necessary inputs to GDSs to trigger the needed configuration and/or developments and/or changes in processes. A proposal for the Ticketing Authority File changes was also submitted to the GGG representatives and was reviewed at the GGG meeting in April 2016. From a total of 9 GDSs, 1 will be ready by end 2016, 2 are working on finalizing timelines and 2 more are open for collaboration. The rest are work in progress. A series of converging facts and one-to-one meetings with IATA senior management and the GDSs are leading to the assessment that GDSs are at risk for a timely implementation. The risk of potential program delays has been escalated to FinCom and was brought to the attention and call for action at the Board at the AGM in June. A dialogue with GDSs on both technical and senior management level continues.

2.3.3 eWallet Supplier Readiness

Following an RFI in 2015, an RFP has been launched in January 2016 to select eWallet suppliers for EasyPay and is now in its final stage. More than 30 companies were identified and 3 final companies were selected.

http://www.iata.org/publications/Pages/bspdish.aspx


____________________________________________________________________________ 2.4 IATA Readiness IATA has initiated an IATA Internal Readiness work stream with objective of reviewing and adapting the processes, data and systems to implement NGISS. 2.5 IATA EasyPay Costs update The below cost range, based on the results of the RFI, were presented to the PAConf in October 2015:

Estimated global average cost between 0.70 to 0.95 USD per transaction (representing 0.14% to 0.19% for a Ticket Average Selling Price of 500 USD).

Following negotiations with Suppliers, the final EasyPay pricing will be as follows:

Average core cost of 0.48 USD per transaction (representing 0.1% for a Ticket Average Selling Price of 500 USD).

3. Proposed actions

PAConf to note the update


____________________________________________________________________________ R4 ECTAA/ WTAAA/ETTSA PROPOSALS ON NEW GEN ISS

Submitted by ECTAA/ WTAAA/ ETTSA

Background Information WHEREAS ECTAA/WTAAA/ ETTSA recognize the need to introduce changes in the Passenger

Agency Programme to adapt it to today’s current business environment.

WHEREAS ECTAA/WTAAA/ETTSA recognise that conceptual changes proposed by the New

Gen ISS Programme have a clear business rationale, at least for some industry stakeholders.

WHEREAS ECTAA/WTAAA/ETTSA understand the goals of New Gen ISS Programme are

important for IATA Members/Airlines (cash-flow acceleration, BSP unit fee reduction and

unrecovered debt reduction).

There are, however, several aspects of the New Gen ISS Programme requiring a different

approach, revised timeframes and an increased level of engagement with all players in the

Indirect Passenger Air Transport Distribution Value Chain. The objective of this proposal is to

suggest key changes to the existing Passenger Agency Programme that will maximize the

benefits for all the value chain stakeholders and consumers.

1. Risk Management

a) Besides the financial assessment of Agents, Member/Airline participation in the BSP

should also be subject to an ongoing financial evaluation based on a similar rationale

and framework used to evaluate the financial health of Agents.

Proposed solution: IATA to prepare a proposal.

b) The proposal of the Remittance Holding Capacity (RHC) concept requires further

refinement to avoid any potential increase in the financial burden placed upon Agents

resulting from stricter financial criteria compliance.

Proposed solution: IATA to provide a detailed impact analysis of the RHC concept using

historical and projected data and to investigate alternatives such as enhanced sales

activity monitoring. Furthermore, to engage Agents and GDSs to agree a final model


____________________________________________________________________________

whose main objective should be to avoid business disruption (such as eliminating revenue

leakage, protecting consumers and reducing Agents’ costs).

c) The Global Insurance concept has the potential to provide industry wide benefits but key

areas require clarification.

- Pricing: ECTAA/WTAAA and ETTSA wish to ensure costs to Agents are

based on the cost recovery principle;

- Rebates: ECTAA/WTAAA and ETTSA wish to ensure that where rebates

are offered by the Global Insurance operator, in the case where claims are

lower than anticipated, Agents receive the full benefit of the rebate;

- Transparency: ECTAA/WTAAA and ETTSA wish to ensure detailed

documentation of the insurance framework, providers, costs, market impact,

etc. is made available.

- The Global Insurance scheme should be strictly voluntary for Agents. IATA

should not adopt discriminatory criteria vis-à-vis other security providers.

Proposed solution: IATA to prepare the necessary documentation.

d) Required changes in the Ticketing Authority Functionality. Efficiency and effectiveness

should be a key underlying principle of the NGISS Programme. This principle requires

that the Programme’s roll-out schedule must be linked to the readiness of any and all IT

systems, particularly those of third party companies. IATA, with full engagement of

GDSs and Agents, should agree the enhancements required to meet the upgraded

operational business logic, the implementation timeframe and the financial cost model.

Proposed solution: IATA to engage with Agents and GDSs to prepare a business plan.

2. Accreditation

a) The Travel Agency market segmentation concept introduced by NGISS could be a

sound business approach but it must be validated and agreed with Agents and GDSs.

Proposed solution: IATA to engage with Travel Agents and GDS to validate the concept.

b) Accreditation Rules and Processes. IATA should use the opportunity offered by the

introduction of NGISS to simplify business logic, automate processes, remove paper-

based activities and reduce timeframes. None of these aspirational aspects are reflected

in the documentation presented so far; hence the value of the IATA accreditation

perceived by the agency community continues to diminish.


____________________________________________________________________________

Proposed solution: IATA to engage with Agents with the objective of achieving the above-

mentioned opportunities.

c) NGISS accreditation fees. The accreditation programme’s core governing principle

should be “Cost Recovery”. This is where fees charged to Agents are linked to actual

operational costs. Where efficiencies have been achieved over the last few years, for

example through the simplification of the processes, accreditation fees should reflect this

new reduced cost base.

Proposed solution: IATA to provide:

- A detailed analysis of the accreditation cost structure vs. accreditation

revenues.

- A detailed analysis of the new pricing and fee structure proposed within

NGISS as it impacts Agents.

3. BSP Processes and Resolutions (Business Rules)

a) ECTAA/ WTAAA/ ETTSA wish to reaffirm their position concerning a number of major

issues contained in the draft Resolution 8xx:

IATA EasyPay (Resolution 8xx, Section 2 and 5):

Agents have expressed serious reservations with respect to the EasyPay model of

accreditation. As far as Europe is concerned, it is unlikely that a scheme requiring Agents

to pre-finance their ticket sales will be achievable. However, it is recognized that the

EasyPay scheme may correspond to specific market needs in some emerging markets.

Eventually, the adoption of EasyPay will be a market place decision.

To ensure the adoption of EasyPay, it is particularly important to:

- Ensure that EasyPay is open to all forms of “E” payments in a fast changing

payment system environment and that a standard is established that provides best

practice and risk mitigation components that are mutually beneficial to both Airlines

and Agents.

- Guarantee sufficient airline acceptance at the time of introduction in the markets. An

EasyPay accreditation with poor or no access to airline ticketing is unlikely to get

any attention.

- Consider that the costs related to EasyPay will be non-negligible (need to pre-

finance sales). Any additional cost such as an additional bank guarantee, or cost per


____________________________________________________________________________

transaction passed onto the Agent would be unreasonable and not consistent with

the form of payment used within the travel industry for payment of other travel

products.

- Consideration must be given to ensure that EasyPay meets a minimum standard

that many agency markets currently have for settlement by this form of payment with

other travel products. This includes the cross cover of chargeback.

Risk Management (Resolution 8xx, Section 4 – Risk Events):

It is very important that risk management makes a clear distinction between Risk Events,

where there is airline money at risk and other events of a purely administrative nature. In

this respect, ECTAA/WTAAA/ETTSA have proposed amending the draft Resolution 8xx

accordingly and making two separate categories of Risk Events. Only these events where

there is money at risk for airlines should be considered as Risk Events.

Remittance Holding Capacity (Resolution 8xx, Section 5):

During the discussions within the New Gen ISS Task Force, ECTAA/ ETTSA and WTAAA

have repeatedly objected to any form of credit limit or Remittance Holding Capacity. The

proposed Remittance Holding Capacity will significantly affect the sales of Agents, which

will have a detrimental impact on the sales targets set and desired by airlines, in particular

for those having significant seasonal variations in their sales activities, or other commercial

arrangements that occur regularly within the agency environment (eg: Airline sales that

are advertised on short notice, particularly over a weekend).

For the above reasons, shifting to EasyPay if the sales limit is reached is not a viable

market option, particularly if the Agent has not had adequate notice or time to increase its

cash flow to accommodate the pre-funding, or they are unable to establish the pre-funding

due to banking controls including trading hours and transfer lags that occur in all banking

systems around the world.

The alternative requiring for additional bonding will increase Agents costs

disproportionately, particularly as the proposed formula will affect almost every second

agent. If implemented, the Remittance Holding Capacity will force Agents to reroute some

of their sales outside the BSP. Agents will have little choice but to seek out alternative

arrangements which will be detrimental to the BSP. We believe this is NOT the intention

of the airlines, IATA or indeed the agency community who all believe that a robust and

future-proof BSP is in the entire industries’ best interest.

As expressed on numerous occasions, ECTAA/ WTAAA/ ETTSA could support a solution

based on the HOT Daily Sales Reporting. Currently, Agents reported sales reach the BSP

DPC within 24 hours. ECTAA/ WTAAA/ ETTSA understand that it would be technically


____________________________________________________________________________

feasible to reduce the period of 24 hours combined with a warning mechanism of unusual

ticketing activity. Such mechanism would ensure an improved monitoring tool of Agents’

sales activities without imposing disproportionate costs on the entire ticketing distribution

value chain.

Further, ECTAA/WTAAA/ETTSA understand that an “Early Warning System” is already

functioning in many BSPs around the world. This EWS has been implemented as a

Standard Operating Procedure (SOP) and has not required protracted, complicated and

onerous resolutions.

Proposed solution: ECTAA/WTAAA/ETTSA would be very keen to further discuss this

concept as an alternative to a resolution based system as outlined in Resolution 8xx

“Remittance Holding Capacity”. ECTAA/WTAAA/ETTSA welcome IATA’s initiative to

organize a special Working Group which will focus on EasyPay and RHC.

The Global Agency Community categorically rejects the proposed “Remittance Holding

Capacity” as expressed in Resolution 8xx.

b) The proposed BSP business rules and logic will have a significant impact on all

distribution chain entities (Airlines, Agents and GDSs). As such, these changes should

be discussed to ensure that they meet the requirements of all stakeholders and that

business can continue to be smoothly conducted from the consumers´ perspective.

Proposed solution: IATA to engage with Agents and GDSs to review how changes to the

business rules framework and resolutions can be optimised to meet the objectives of

Airlines and other distribution chain stakeholders.

c) Automation, including a state of the art IT connectivity environment, should be an

integral aspect of the NGISS Programme. IATA should consult with all affected entities

(e.g. Airlines, Agents and GDSs) in the preparation of an impact analysis so as to agree

implementation time frames and a cost allocation framework.


4. BSP Payments

a) Enhancing the BSP’s existing method of payment (cash and card) with other payment

options is encouraged. IATA should consult with both Agents and GDSs to ensure

feasibility of any new forms of payments introduced. Once standards and business logic

have been approved, any payment service provider that meets the set of standards

should be able to be accredited and compete. For instance, China’s existing prepayment


____________________________________________________________________________

scheme (BOP) must also be open for competition. In order to avoid conflicts of interest,

IATA, as a trade association representing Airlines, should not act as a payment provider

in its own right therefore IATA’s EasyPay service should be limited to an open standard

accessible to all payment solutions providers.


b) Resolution 890 is an impediment to the growth of the current business environment. A

new framework should be agreed with Accredited Agents and GDSs.

Proposed solution: IATA to work together with Agents and GDSs to prepare a proposal.

5. Governance

a) The NGISS programme has been designed to satisfy the objectives of IATA Members

and Airlines. However the formal participation of Agents and GDSs in the decision

making process would greatly benefit the governance of the Passenger Agency

Programme and bring a cost reduction for all value chain stakeholders. This participation

includes inter alia the design of business rules and the day-to-day Programme

management. The evolution of the Conference model is one of the critical areas that

should be tackled. NGISS should add a governance “dimension” to the programme.

Governance of the Passenger Agency Programme must be revisited and redesigned to

address current business needs. The current review of the Cargo Agency Programme

could serve as a model.

Proposed solution: IATA to work with Agents and GDSs to prepare a proposal.

Proposed Action As the recommendations above require a high level of engagement, business knowledge and

focus, ECTAA/ WTAAA/ETTSA further recommend:

1. PACONF to defer the adoption of the NGISS proposals until a mutually agreed proposal

is ready with proposed solutions and recommendations.

2. Appoint a small group of consultants representing all stakeholders to carry out the

analysis and prepare a proposal. Half of the consultants should be nominated by IATA

and the other half by Agents and GDSs. The existing TAC fund could be used to cover

the costs of the consultancy services.

3. Request the consultants to deliver a proposal to the Conference within a period of six

months following their appointment.


____________________________________________________________________________ R5 AIRLINE NEGATIVE SETTLEMENT TOLERANCE

Submitted by PSG Background/Problem PAConf Resolution 850 establishes that in order for an airline to maintain its participation in the BSP it shall pay any amount due to the BSP by the Remittance Date. This may include amounts due for BSP fees and charges applicable for its participation in the BSP. Paragraph 15 of the same Resolution indicates that such failure is reason for terminating the airline’s participation from all BSPs. The principal objective of suspending BSP Airlines from the BSP is to protect the integrity of the settlement system and avoid other airlines from having to cover any shortfalls in the hinge account. However, in the majority of these cases the outstanding amounts are small amounts and are recovered within a few days after the Remittance Date when the airline is contacted by IATA for settlement of the amount. Many airlines participating in the BSP fall into this category. Although the responsibility is on the BSP Airline to review their billing statements prior to the Remittance Date and to ensure any negative balances are settled in a timely manner, in many cases the BSP Airline fails to do so and only reacts once IATA contacts them for payment to avoid suspension from the BSP. If IATA were to apply the rules strictly and take suspension action against many of these BSP Airlines, IATA could potentially affect an airline which in reality is not representing a risk to the settlement system. During the first 5 months of 2015, IATA experienced over 5,000 cases of airline negative settlements:

Range - Negative

Settlement Value

(USD)

Number of Cases %

Under 1,000 3,860 73%

1,000 - 2,500 565 11%

2,501 - 5,000 281 5%

Above 5,000 602 11%

Total 5,308 100%


____________________________________________________________________________ Proposed Solution Reduce the number of potential BSP Airline suspensions due to negative settlements, by introducing a threshold of USD 5,000. For negative settlement ≤ the equivalent of USD 5,000 a collection process would take place instead of an immediate suspension, as follows: For Reported Sales Model: If the airline does not pay a Negative Settlement ≤ equivalent to USD 5,000 by Remittance day and has not accumulated the equivalent of USD 5,000 in negative settlements from the previous period, the BSP operation will use the overdraft facility negotiated by the Clearing Bank to complete the BSP Settlement. The BSP affected will issue an adjustment transaction to recharge the negative settlement amount in the next available billing period. If the BSP is not able to recover the negative settlement in the following available billing period, ISS Management may suspend or terminate such BSP Airline from all BSP operations. In the event the negative settlement is above the equivalent to USD 5,000, and the airline does not pay the amount due by the remittance Date, ISS Management may suspend or terminate such BSP airline for all BSP operations, in accordance to the Passenger Agency Conference Resolution. For Funds Received Model: If the airline does not pay a Negative Settlement ≤ equivalent of USD 5,000 by the Remittance day and has not accumulated the equivalent of USD 5,000 in negative settlements from the previous period, the airline will be contacted providing an additional one day to settle the outstanding amount. In the event the negative settlement is not paid by the airline by the Remittance Date or the additional day allowed by ISS Management it will be subject to suspension or termination from all BSP operations, in accordance with the Passenger Agency Conference Resolution. In both settlement models, the airline will be subject to a minor fee, established by ISS Management, to cover the additional administrative costs and bank fees for the overdraft. Proposed Action PSG/93 reviewed this proposal and unanimously endorsed it to Conference. PAConf is requested to adopt the proposed policy for 1 June 2017 effectiveness.


____________________________________________________________________________ R6 TREATMENT OF POST BILLING DISPUTES

Submitted by PSG Background/Problem The current dispute process is viewed by Airlines as open to abuse because Agents are able to dispute any transaction without proper justification of the reason for the dispute. In addition, the current Resolutions do not include any time limit for an Agent to dispute a transaction. Following discussions at PAC/38 on agenda items R18 & R27 submitted by Members on post billing disputes and a PSG working paper submitted on the same topic, Conference requested IATA to develop the PSG working proposal further taking into account the legal and operational considerations. The revised proposal below attempts to address the following principles agreed by Conference:

1. The “Post Billing Dispute” button in BSPlink to remain in place.

2. An Agent must provide a substantive reason either electronically or in writing for disputing an ADM.

3. Where the agent disputed an ADM, the disputed amount to be paid but held in escrow by IATA.

4. The Agent and the Airline to have a further 30 days to resolve the dispute provided there was written evidence that an attempt had been made to resolve the dispute.

5. If the dispute was not resolved within 30 days the amount would be paid back to the agent, with the matter to be resolved bilaterally between the Agent and the Airline.

6. IATA would look at highlighting the provisions of Resolution 820e regarding an Agent’s persistent failure to remit amounts owing against ADMs.

During IATA’s review, some modifications to the above principles and additional considerations have been identified that need to be accommodated:

1. For BSPs operating under the Reported Sales model (please refer to the definition now proposed in Attachment ‘A’ to this paper), disputed amounts paid by Agents will be paid to Airlines for that period, but those amounts will be immediately deducted from the BSP settlement of that BSP Airline in the next Reporting Period.

2. The system will need to cater for any exceptional legal jurisdictions such as Israel where Agents need to continue to be allowed to deduct disputed amounts from their Billings.


____________________________________________________________________________

3. For a dispute to be deemed resolved, there should be a mechanism to record a clear agreement between the Airline and the Agent, and there should be a limit to the number of iterations on the dispute within the BSP on the understanding that any unresolved disputes will continue to be handled outside of the BSP process.

4. Certain cases have been identified where the Agent would not be able to remit the disputed transaction amount to IATA. This would be due to cases where the agent is being placed in a disadvantaged position.

For example, in a dual currency Operation such as Nigeria, the transaction was raised in the foreign currency (USD), instead of the local currency (NGN). This could be due to the Airline raising an incorrect ADM or the Agent issuing a ticket in the incorrect currency. Requesting the Agent to remit in such cases may negatively impact the agent’s financial position. It is proposed that these cases will be managed by IATA on a case by case basis having regard to the relevant facts provided by the Agent before accepting or rejecting the short payment. These exceptions would be reviewed on a periodic basis to ensure there is no abuse of this system by Agents and reported back to the PSG.

Proposed Solution The solution proposed is as follows:

Agents will have the ability to dispute any Accountable Transaction for a maximum period of 12 months after the date of ticket issuance.

BSPlink will be the only platform which permits agents to record their disputed transactions.

Agents can record the disputed transaction up until the day before Remittance Date i.e. if the Remittance Date is 15th January, the last date for the disputed transaction to be recorded for the period in BSPlink would be the 14th January.

Notwithstanding that the dispute has been recorded in the system, the Agent will need to remit the Billing in full to IATA including the amount of the disputed transaction.

IATA will hold the funds on behalf of the Agent through the deduction of the disputed amount through the Airlines Settlement process: o Funds Received: IATA will deduct the funds from the Airlines Settlement and hold on

behalf of the Airline. o Reported Sales: IATA will issue an adjustment transaction to deduct the disputed

amount from the Airlines settlement in the subsequent period.

After the dispute has been registered, the Agent and Airline will have a period of up to 45 days to resolve the post billing dispute transaction in BSPlink.

There will be a maximum of two responses per party in BSPlink failing which the dispute will be resolved outside of BSPlink, whereas the number of comments allowed would be unlimited.


____________________________________________________________________________

The proposed process anticipates the following possible outcomes:

a. The Airline agrees with the disputed transaction in favour of the Agent and the funds are returned to the Agent through an adjustment transaction.

b. The Agent agrees that the transaction should not have been disputed and the funds

will be settled to the Airline through an adjustment transaction in the next available period.

c. The Airline does not respond to the disputed transaction or there is no agreement

reached between the Airline and the Agent, and the funds are returned to the Agent through an adjustment transaction.

Timeframe required for implementation The timeframe required to enable implementation of the above solution is four months from the date of approval by the Conference. Proposed Action PSG/93 unanimously endorsed this proposal to Conference, with a strong recommendation for its adoption. PAConf to adopt the Resolution amendments as shown in Attachment ‘A’ for 1 April 2017 effectiveness.


Attachment 18 Aug 16 ‘A’


1. Amend Resolution 818g, Attachment ‘A’ as shown below: 1.7.9.2 an Agent shall have a maximum of 15 days in which to review and dispute an ADM prior to its submission to BSP for inclusion in the bBilling. 1.10.5 Disputes and Withdrawal of Defaults 1.10.5(a) an Agent may register the existence of a dispute with the Agency Administrator over a billing of a specified amount as part of its billing. Provided written evidence of such dispute is provided by the Agent to the Agency Administrator, the Agency Administrator will ensure that no irregularity or default action will be applied, except where notification is received that the Agent has failed to comply with the provisions of Resolution 890 and action as prescribed under paragraph 1.7.7 of these rules is being taken by the Agency Administrator; 1.10.5(b) if the Agency Administrator becomes aware, through any source, that there exists between a BSP Airline and the Agent any dispute arising solely from amounts due or claimed to be due to such Airline from the Agent, or vice versa, in respect of the Reporting/ Billing Periods for which the Agent was declared in Default he/she shall withdraw the declaration of Default. In the event that the BSP Airline does not admit the existence of such a dispute, the Agency Administrator shall require the Agent either, to submit documented evidence demonstrating the existence of the dispute or, to pay the amount of the short payment to the BSP. Provided that either of such conditions is met, the Agency Administrator shall withdraw the declaration of Default; 1.10.5(c) pending resolution of the dispute between the BSP Airline and Agent, and where the Agent has remitted the disputed amount to the BSP, the Agency Administrator shall hold such amount for 60 days. If after 60 days the dispute has not been resolved the Agency Administrator shall return the disputed amount to the Agent. 1.10.5.1 In order to be dealt with through the BSP, disputes raised by the Agent must:

(a) be registered with IATA via BSPlink prior to the Remittance Date; (b) relate to a specified amount as part of a Billing; (c) state a substantive reason for the dispute supported by written evidence of

that dispute; (d) be raised by the Agent within 12 months of the ticket issuance date; (e) be added to the daily dispute file.

1.10.5.2 All validly disputed amounts will continue to form part of the Billing and the Agent must remit the disputed amount to the BSP on the Remittance Date notwithstanding the existence of the dispute.

1.10.5.3 All disputed amounts paid by the Agent will be held by IATA for a period of 30 days or until the dispute is resolved, whichever is earlier.



Page: 2 of 2 ____________________________________________________________________________ 1.10.5.4 For Reported Sales markets, any disputed amount received from the Agent and

paid to a BSP Airline will be deducted from the BSP settlement of that BSP Airline in the following Reporting Period and held for a period of 30 days or until the dispute is resolved, whichever is earlier.

1.10.5.5 All disputes must be resolved in BSPlink between the Airline and the Agent within 30 days with a maximum of two responses per party, otherwise the dispute will be for bilateral resolution between the Airline and the Agent outside of the BSP and IATA will pay the disputed amount held to the Agent or the Airline as applicable in accordance with section 0. If the Agent initiated a dispute on the 30th day, the Airline will have an additional 7 days to respond.

1.10.5.6 Each agreement or disagreement with the dispute must be registered by the Airline or the Agent, as applicable, in BSPlink, and each disagreement must be accompanied by a substantive reason for the disagreement supported by written evidence.

1.10.5.7 Disputed amounts held by IATA will be paid as follows: (a) Where the Airline agrees with the dispute raised by the Agent, to the

Agent. (b) Where the Airline disagrees with the dispute, the Airline must state a

substantive reason for the disagreement supported by written evidence. If the Agent agrees with this position, the disputed amount will be paid to the Airline. Otherwise, the disputed amount will be remitted to the Agent, without prejudice to the right of the Airline to claim the disputed amount from the Agent outside of the BSP.

(c) Where no response is received from the Airline within 30 days, the dispute is deemed settled in favour of the Agent and the disputed amount will be paid to the Agent.

2. Amend Resolution 850 as shown below: 21. BSP SETTLEMENT MODELS 21.1 Reported Sales Model When used in connection with this model, the terms “BSP settlement” for a Member or BSP Airline will be the amount of the sales reported for any one period notwithstanding whether all amounts have been received by IATA from the Agent. 21.2 Funds Received Model When used in connection with this model, the terms “BSP settlement” for a Member or BSP Airline will be the amount actually received by IATA from the Agent for any one period.


____________________________________________________________________________ R6.1 TREATMENT OF POST BILLING DISPUTES OF AGENTS – COMMENTS FROM

ECTAA/WTAAA

Submitted by ECTAA/WTAAA

Background Information Following airlines’ allegations that the current ADM dispute mechanism could possibly lead to

abuses, IATA proposed the following set of measures:

1. Agents will have the ability to dispute any Accountable Transaction for a maximum

period of 12 months after the date of ticket issuance.

2. BSPlink will be the only platform which permits agents to record their disputed

transactions.

3. Agents can record the disputed transaction up until the day before Remittance Date i.e.

if the Remittance Date is 15th January, the last date for the disputed transaction to be

recorded for the period in BSPlink would be the 14th January.

4. Notwithstanding that the dispute has been recorded in the system, the agent will need to

remit the Billing in full to IATA including the amount of the disputed transaction.

5. IATA will hold the funds on behalf of the agent through the deduction of the disputed

amount through the Airlines Settlement process. IATA proposal offers 3 possible

outcomes:

a) Airline agrees with the disputed transaction in favour of the agent and the funds are

returned to the agent through adjustment transaction;

b) Agent agrees that the transaction should not have been disputed and the funds will

be settled to the airline through an adjustment transaction in the next available

period. Otherwise the disputed amount will be remitted to the agent, without

prejudice to the right of the airline to claim the disputed amount from the agent

outside of the BSP.

c) Airline does not respond to the disputed transaction or there is no agreement

reached between the airline and the agent, and the funds are returned to the agent

through an adjustment transaction.

6. Once the dispute registered, travel agent and airlines will have up to 45 days in total to

resolve the dispute.


____________________________________________________________________________ ECTAA/WTAAA Comments ECTAA/WTAAA welcome the proposal to introduce a clear time frame to settle post billing

disputes and register each dispute in the BSPlink. Indeed, there are still airlines which do not

activate the dispute functionality at their end in the BSPlink. ECTAA/WTAAA also welcome the

obligation for an airline to provide a substantive reason for the disagreement supported by a

written evidence. We believe it will bring more transparency to the procedure.

However, ECTAA/WTAAA are opposed to the proposed obligation to remit the full amount, the

disputed transaction included, at the time when the dispute is registered in the BSPlink.

ECTAA/WTAAA are also opposed to the fact that IATA would hold the disputed funds on behalf

of airlines and agents.

Firstly, from a legal perspective it is questionable whether IATA is legally entitled to hold funds on

behalf of agents and airlines and possess legal mandate to do so. This is particularly important,

in the situation where the agent and the airline will seek for the resolution of the dispute outside

the BSP.

Secondly, the current provision of Resolution 818g –Attachment A Section 1.10.5 (b) leaves the

agent the possibility to submit documented evidence demonstrating the existence of the dispute

or to pay the amount of the short payment to the BSP. If one of these conditions is satisfied, the

agent will not be put in the default. If the billing dispute is pending, there is no legal justification to

include the disputed amount on the billing and pay the amount upfront. In particular, given that

the outcome of dispute will very much depend on both parties’ willingness to settle the dispute.

Thirdly, the obligation to remit the disputed amount will also go against the agent’s right to invoke

Resolution 820e to seek an independent review of the IATA action by the Travel Agency

Commissioner and the right to apply for an interlocutory order. The competence of granting the

interlocutory relief belongs to Travel Agency Commissioner, who will take the decision according

to the documentation submitted. Only in situations, where Travel Agency Commissioner considers

that the agents satisfies the conditions to be granted an interlocutory relief, he shall require the

agent to provide a bank or other financial guarantee and ensure that all amounts due are settled,

at the time interlocutory relief takes effect.

In ECTAA/WTAAA’s opinion, the proposal submitted to the Paconf/39 Agenda will bypass Travel

Agency Commissioners’ competences, as before any Travel Agency Commissioner’s decision,

the agent will have to pay the contested amount, irrespectively of the TAC’s decision outcome.

Finally, the implementation of such system raises two important issues:

- The system will not be applicable in Israel.

- Case by case approach will have to be privileged. In some cases, the agent will not

be able to remit the amount, as it would place him in a disadvantaged position.

Both questions are not addressed within the proposal.


____________________________________________________________________________ Proposed Solution based on the initial PSG proposal 6.10.5.1 In order to be dealt with through the BSP, disputes raised by the Agent must:

(a) be registered with IATA via BSPlink prior to the Remittance Date;

(b) relate to a specified amount as part of a Billing (the specified amount being excluded from the

disputed Biling);

(c) state a substantive reason for the dispute supported by written evidence of that dispute;

(d) be raised by the Agent within 12 months of the ticket issuance date;

(e) be added to the daily dispute file.

6.10.5.2 All validly disputed amounts will continue to form part of the Billing and the Agent must

remit the disputed amount to the BSP on the Remittance Date notwithstanding the existence of

the dispute.

6.10.5.3 All disputed amounts paid by the Agent will be held by IATA for a period of 30 days or

until the dispute is resolved, whichever is earlier.

6.10.5.4 For Reported Sales markets, any disputed amount received from the Agent and paid to

a BSP Airline will be deducted from the BSP settlement of that BSP Airline in the following

Reporting Period and held for a period of 30 days or until the dispute is resolved, whichever is

earlier.

6.10.5.5 All disputes must be resolved in BSPlink between the Airline and the Agent within 30

days with a maximum of two responses per party, otherwise the dispute will be for bilateral

resolution between the Airline and the Agent outside of the BSP and IATA will pay the disputed

amount held to the Agent or the Airline as applicable in accordance with section 6.10.5.7. If the

Agent initiated a dispute on the 30th day, the Airline will have an additional 7 days to respond.

6.10.5.6 Each agreement or disagreement with the dispute must be registered by the Airline or

the Agent, as applicable, in BSPlink, and each disagreement must be accompanied by a

substantive reason for the disagreement supported by written evidence.

6.10.5.7 Disputed amounts held by IATA will be paid as follows:

(a) Where the Airline agrees with the dispute raised by the Agent, to the Agent.

(b) Where the Airline disagrees with the dispute, the Airline must state a substantive reason for

the disagreement supported by written evidence. If the Agent agrees with this position, the

disputed amount will be paid to the Airline. Otherwise, the disputed amount will be remitted to the

Agent, without prejudice to the right of the Airline to claim the disputed amount from the Agent

outside of the BSP.

(c) Where no response is received from the Airline within 30 days, the dispute is deemed settled

in favour of the Agent and the disputed amount will be paid to the Agent.


____________________________________________________________________________ The settlement of disputed billing amounts does not deprive the agent from the right to invoke

Resolution 820e.

Proposed Action ECTAA and WTAAA invite the Conference to adopt the revised wording, as proposed by ECTAA/WTAAA with an effectiveness date of 1 June 2017.


____________________________________________________________________________ R7 EXTENSION OF BSP CHINA RISK MANAGEMENT METHOD

Submitted by LCAG China

Background Information

BSP China participating airlines had for years requested daily risk management procedure for

BSP CN. IATA North Asia had developed a local risk management method that could achieve

daily monitoring of agent’s sale. The procedure had been submitted to PACONF in 2015 and was

passed as a temporary risk management process for BSP CN. The procedure had its trial run

during September 2015, and had officially taken off in December 2015 per required effectiveness

written in PACONF transmittal. It was conducted daily from Monday to Friday, except weekends

and other public holidays in China.

During the monitoring process, IATA would receive data from both GDS and DPC regarding the

unremitted sales amount of the agents, and compare such amount to the financial security of the

agent. The sales data would be refreshed hourly. When an Agent’s sales reach or exceed 90%

of the Financial Security amount, IATA will instruct the GDS to withdraw the agent’s ticketing

authority. The agent will not be placed in Default.

The agent’s ticketing authority will be reinstated upon:

I. Settlement by the Agent of all or part of the cash amounts due where the effect of

such settlement reduces the total unremitted cash sales to an amount that is below

the credit limit of that Agent, or

II. Receipt by IATA from the Agent of an additional Financial Security amount that has

the effect of sufficiently increasing the Agent’s credit limit, in light of the total

unremitted cash sales then outstanding

During the time that an Agent’s ticketing authority has been withdrawn, the agent may continue

to make BSP sales through:

I. China BSP Online Payment (BOP) Solution, or

II. Credit Card Sales

During the 33rd LCAGP which took place on March 3rd 2016, airline attendees had been

represented with data related to the risk management method. Since the trial run of the procedure

it had achieved:

I. 868,484.52 CNY of unrecovered amount from Sep.2015 to Dec. 2015 compared with

44,246,355.26 CNY of unrecovered amount from Jan. 2015 to Aug. 2015. (Avg.

Monthly unrecovered amount had reduced from 5,530,794.41 CNY to 217,121.13

CNY).

II. Please refer to chart 1.1 for a clear view of comparison between the two averages,

chart 1.2 displays the monthly uncovered amount of since January 2015. A sharp


____________________________________________________________________________

decrease in unrecovered amount could be seen since September 2015. In addition,

the most unrecovered amount (after Sep 2015) was caused by non-BSP ADM, which

was out of the guarantee coverage.

Chart 1.1

Chart 1.2

Monthly Default amount

Unrecovered Amount Rate in 2015

201501~08 201509~12

201501 201502 201503 201504 201505 201506 201507 201508 201509 201510 201511 201512 201601 201602

- 4,943,511 - 5,007,754 - 1,212,958 12,779,230 20,302,902 564,897 - - 303,590 1,059,851 1,476,391


____________________________________________________________________________ Currency: CNY

III. 14,913,427.96 CNY of advance payment from agents during Sep. 2015 to Dec. 2015

and 6,718,637.25 CNY of advance payment from agents during Jan. 2016 to Feb.

2016. Following chart is showing the each month pre-payment info.

Chart 1.3

Airlines are satisfied with the result of the risk management procedure. Airlines are aware that

currently IATA has been providing daily risk management procedures such as the Daily Sales

Monitoring (MIR report), however they believed the MIR report does not provide immediate

action against high risk agents and the data used in the report does not refresh on a satisfactory

frequency.

I. Currently, China BSP risk management procedure does not operate fully during

weekends and holidays. However, holidays signal increase in family visits and

vacation travel, during which ticket sales soars and possibility of large amount

defaults increase as well. Airlines would like to urge IATA to expand the China BSP

Risk Management Procedure to weekends and holidays, with the same monitoring

frequency as weekdays. Airlines are willing to work during weekends to receive

monitoring information from IATA and help convincing third parties such as DPC and

GDS to do the same as well.

II. Most of airlines that benefit from the China BSP Risk Management Procedure also

participated in BSPs in other operations. Businesses in other operations face the

same risk problem like those of BSP China, and some of the BSPs may have a

higher default risk than that of BSP China due to difference in law enforcement, etc.

Have seen the good result of the China BSP Risk Management Procedure, Airlines

would like to have similar risk management procedure to be conducted in other BSPs

so that money from those BSPs could be protected as well.

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

201509 201510 201511 201512 201601 201602

Advance Payment


____________________________________________________________________________

III. Airlines are aware that although China BSP Risk Management Procedure had been

approved by PACONF, it was approved under the condition of a temporary measure.

With the takeoff of NewGen ISS, Credit Limit management may replace the

procedure. However, since it currently provide better risk management service to

airlines and there is no convincing information that the new measures to be provided

after NewGen ISS would be more effective, Airlines urge IATA to expand the China

BSP Risk Management Procedure to a long term process. The procedure should not

be suspended unless a new risk management procedure with better monitoring

frequency and action speed could be provided.

Proposed Solution

It is proposed that the following extension of the current effective procedure of China BSP Risk

Management Method shall occur:

1. Extend the China BSP Risk Management Method to weekends and public holidays, with

same monitoring standards as weekdays.

2. Extend the China BSP Risk Management Method to a long term process until similar

procedure with better monitoring frequency and action speed had been effective.

Proposed Action:

Conference to endorse the proposed changes to Resolution shown at Attachment ‘A’ with 1

January 2017 effectiveness.


Attachment 18 Jul 16 ‘A’


Amend Resolution 818g, Attachment ‘A”, as shown below:

1.1.5 (China only) Each Agent shall have a credit limit for its Electronic Ticketing Authority equal

to 90% of the Financial Security amount that the Agent has provided to IATA at any time. The

Agency Administrator shall take action to withdraw an Agent’s Electronic Ticketing Authority

sales should the Agent’s total unremitted monies reach the credit limit for that Agent, at which

time IATA shall:

1.1.5 (a) notify the Agent in writing of the withdrawal of Electronic Ticketing Authority;

1.1.5 (b) notify the BSP Airlines participating in BSP China of the withdrawal of the Agent’s

Electronic Ticketing Authority.

1.1.6 Electronic Ticketing Authority shall be reinstated upon either:

1.1.6 (a) settlement by the Agent of all or part of the monies due where the effect of such

settlement reduces the total unremitted monies to an amount that is below the credit limit of that

Agent; or

1.1.6 (b) receipt by IATA from the Agent of an additional Financial Security amount that has the

effect of sufficiently increasing the Agent’s credit limit sales, in light of the total unremitted

monies then outstanding.

1.1.7 Agents may at all times continue to make sales through the BSP using the BSP China

Online Payment Solution, Credit Cards, or through direct bilateral arrangements as may be

agreed between an Agent and any BSP Airline(s).

1.1.8 The monitoring method shall be conducted during weekends and public holidays.

1.1.9 The effectiveness of Sections 1.1.5 through 1.1.78 of this Resolution shall expire when

similar procedure with better monitoring frequency and action speed had been effective

automatically upon the implementation of credit limit management in China as defined under

NewGen ISS.


____________________________________________________________________________ R8 COMPOSITION OF PAPGJC AND PSG

Submitted by the Secretary

At PAPGJC/25 held in Montreal in June 2016, ECTAA/WTAAA put forward a proposal to

increase the agent contingent to the Council from 9 to 11 agent representatives, to better reflect

the growing WTAAA/ECTAA membership over the last year. By increasing the agent

delegation, it was felt that this would better reflect the composition of each of the associations

and regions covered by the Agency Programme to ensure these had a say not only at APJC

level but also at a global level. This proposal was supported by UFTAA on the understanding

that their delegation to PAPGJC would also be increased by one member, to keep the current

balance between all 3 global agency associations.

In reviewing the PAPGJC/25 agenda at PSG/94, the PAConf Chairman had drawn attention to

this item and thought it would be appropriate to increase PSG membership by 4 carriers, with 2

members from the Financial Services Development Working Group (FinDev) whose airlines

were not currently members of the PSG. PSG unanimously endorsed this proposal.

In addition, it was agreed to amend Resolution 868 to clarify that chairmen of Conference working groups may be co-opted as members of the PSG and that this proposal would also go to Conference in September. Proposed Action PAConf is requested to:

1. Approve amendments to Resolution 860a to increase the Airline/Agent membership to

12 airlines/12 agent representatives;

2. Approve amendments to Resolution 868 in respect of the composition of PSG.

The respective resolution changes are shown at Attachment ‘A’, for 1 January 2017 effectiveness.



Page: 1 of 1 ____________________________________________________________________________ ATTACHMENT ‘A’ 1. Amend Resolution 860a as shown below:

2. COMPOSITION 2.1 The Council shall be composed of a maximum of 18 24 members and shall include equal representation of Member Airlines and Travel Agency representatives: 2.1(a) the Airline delegates shall be selected from Members serving on the Steering Group of the Passenger Agency Conference and to the extent possible shall represent the three IATA Conference areas, 2.1(b) Travel Agency representation shall be as designated by recognised agency associations, and to the extent possible shall represent the three IATA Conference areas,

2. Amend Resolution 868 as shown below:

2. COMPOSITION AND MEETINGS OF THE

PSG 2.1 The PSG is comprised of: the Chairman and Vice Chairman of the Conference; , plus the Chairman of the Joint A4A/IATA Passenger Services Conference (JPSC), as

well as four (4) f ive (5) members from each Conference Area wherever possible, including 2 members from the Financial Services Development Working Group (FinDev) whose airlines are not currently members of the PSG;

plus four one additional Members at large;

chairmen of Conference working groups may be co-opted as members of the PSG. 2.2 Members from each of the Conference Areas shall be elected for a term of three years. Additional Members may be elected by the Passenger Agency Conference to serve for a specific term. 3. Renumber subsequent paragraphs.


____________________________________________________________________________ R9 CHANGES TO PASSENGER AGENCY CONFERENCE RESOLUTION 850

Submitted by PSG Background Information Suspension of an Airline from a BSP has become a critical procedure involving disputes and complaints among airlines, agents, the public in general as well as bankruptcy administrators and legal experts when cases are brought to court. Solution In order to simplify the language of the Resolution for airlines, agents, bankruptcy administrators and courts, to interpret; IATA has reviewed Resolution 850 and suggested changes. Attachment ‘A’ contains suggested wording to consolidate topics within its own paragraph, simplifying the language of the Resolution. Attachment ‘B’ contains detailed explanation of the proposed changes. Proposed Action PSG/94 reviewed the proposal, suggested an amendment to Section 3.2 for review by IATA Legal and unanimously endorsed it to Conference. PAConf is requested to adopt the Resolution changes shown in Attachment ‘A’ for 1 June 2017 effectiveness.



Page: 1 of 29 ____________________________________________________________________________ Attachment ‘A’ RESOLUTION 850 BILLING AND SETTLEMENT PLANS PAC1(51)850(except USA) Expiry: Indefinite PAC2(51)850 Type: B PAC3(51)850

WHEREAS IATA Settlement Systems Management is a functional area of IATA Financial and Distribution Services (FDS) responsible to the IATA Board of Governors for the management and efficient operation of the IATA Settlement Systems (hereafter referred to as “ISS”), and

WHEREAS the Passenger Agency Conference (hereafter referred to as “the Conference”) exercises authority and responsibility over the IATA Passenger Agency Programme, including the relationship between BSP Airlines and Agents, and

WHEREAS Members have introduced Billing and Settlement Plans (BSP).

It is hereby RESOLVED that,

1. DEFINITIONS

The definitions of terms and expressions used in this Resolution are contained in Resolution 866.

2. ISS MANAGEMENTIATA RESPONSIBILITIES

ISS ManagementIATA is responsible for all ISS administration and operational functions, such as:

budgets (cost and revenues)

staffing

contracts (service agreements) to include signature authority

office management and administration, and

ISS ManagementIATA shall operate in accordance with the IATA Settlement Systems Service ProvisionsResolutions of the Conference, which describe the provision of services in the operating BSPs.

3. CONFERENCE RESPONSIBILITIES

3.1 the The Conference is responsible for setting operational standards, and for the rules and procedures for IATA Accredited Agents, as provided in the Sales Agency Rules and other Resolutions of the Conference.;

3.2 standard forms necessary for the operation of the BSP will be as jointly agreed between ISS Management and the Conference.The Conference is responsible for establishing, the standard forms necessary for the operation of the BSP.



Page: 2 of 29 ____________________________________________________________________________ 4. LOCAL CUSTOMER ADVISORY GROUPS-PASSENGER (LCAGP)

4.1 the The Conference has also authorised the establishment of Local Customer Advisory Groups—Passenger (LCAGPs) in countries wherever a BSP is in operation, to provide advice to ISS ManagementIATA on local customer service issues and to co-ordinate local needs.;

4.2 the The Conference determines the procedures for establishing the membership of the LCAGPs.;

4.3 the The Rules and Procedures for the LCAGPs, as agreed by the Conference from time to time, are contained in Attachment “B” to this Resolution and constitute part hereof.

5. BUSINESS CASE- IMPLEMENTATION OR EXTENSION OF A BSP

5.1 the The Head Office of any Member or group of Members that has an interest in a specific market, may request ISS ManagementIATA to initiate a study by identifying the circumstances that should warrant the implementation or extension of a BSP.;

5.2 in In the absence of a request for a study from a Member or group of Members, if ISS ManagementIATA considers that there are business opportunities in implementing a BSP in a market, it shall consult Members operating in that market prior to commencing a business case.;

5.3 ISS ManagementIATA shall be responsible for conducting a business case to finality, including consultation with Members operating in that market, to determine whether to implement a BSP or to extend an existing BSP to include another country(ies).;

5.4 before implementing or extending a BSP, ISS ManagementIATA shall conduct prior consultation with Members, locally.

6. PARTICIPATION BY MEMBERS

6.1 participation Participation by Members in any BSP is voluntary. Members may join at the inception of a BSP, or may join at a later date, by notifying ISS ManagementIATA and paying the joining fee.

6.2 participation Participation in any BSP shall be dependent on the Member paying any amount due, in a BSP settlement, to the BSP by the Remittance Date. This may include amounts due for BSP fees and charges applicable for its participation in the BSP. Payment of amounts outstanding by Members shall be due on the Remittance Date of the period in which they were included in the billing. IATA reserves shall have the right to deduct such fees and charges at any time prior to making a settlement to a Member.

6.3 when a BSP is extended, geographically, a Member participating in the original geographic area of the BSP may elect to stay out of such area of extension by notifying ISS Management, in writing, within 30 calendar days of the announcement of the extension. A Member not participating in the original geographic area of the BSP may elect to become a participant in either the original geographic area of the BSP or its extension, or in the entire extended BSP, by notifying ISS Management, in writing within 30 calendar days of the announcement of the extension;

6.4 in the event of a merger of two or more BSPs, a Member, being a participant in one or other original BSPs, may elect to stay out in respect of any area of the merged BSP in which it was not



Page: 3 of 29 ____________________________________________________________________________ a participant prior to the merger, by notifying ISS Management in writing within 30 calendar days of the announcement of the merger;

6.3 upon pPrior to joining a BSP, a Member must sign a Counterindemnity Agreement with IATA as prescribed in Attachment “C” to this Resolution;.

6.4 Participation by Members requires that at least ninety percent (by number) of ticketed transactions using that Member's validation worldwide involve air transportation;.

6.5 Members participating in any BSP are required to have and maintain a valid designator/prefix and accounting code assigned by IATA and have opened a valid bank account in the BSP or signed an ICCS agreement for settlement of funds.

7. PARTICIPATION BY AGENTS

7.1 where Where a BSP is implemented, the Agency AdministratorIATA shall so advise all Agents in the area and shall cause ISS ManagementIATA to inform the Agents of how their participation in the BSP affects their work methods.;

7.2 only Only IATA Accredited Agents normally participate in a BSP. However, IATA may allow domestic-only non-IATA Agents may be accepted into to use the accounting and other technical facilities of a BSP as discussed in subparagraph 12.1 of this Resolution, provided a business case has been conducted, as provided in Paragraph 0 above, and such business case supports the inclusion of domestic-only non-IATA Agentssuch use.

7.3 Accredited Agents operating under a BSP shall, in addition to the requirements of the relevant Resolutions, be bound by the forms and procedures set out in the Billing and Settlement Plan Manual for Agents which forms part of the Resolutions adopted by the Conference and applicable to Agents. Attachment “I” to this Resolution contains an outline of the subjects dealt with in that Manual.

8. PARTICIPATION BY NON-IATA AIR CARRIERS

8.1 a A non-IATA air carrierMember airline (“an AirlineApplicant”) may submit an application to ISS ManagementIATA in a the form prescribed in Attachment “D” to this Resolution, to participate in a given BSP.;

8.2 approval Approval of the application shall be subject to the condition that the Airline Applicant shall execute a Form of Concurrence as prescribed in Attachment “E” to this Resolution,. in which such Airline Applicant agrees:

8.3 to be bound by the requirements of this Resolution and the applicable Sales Agency Rules concerning security standards, sales reporting and remitting procedures, as well as those applicable to the suspension or removal of an Agent from the Agency List following review of violations and by the relevant attachments to this Resolution, as amended from time to time, as well as by such other Conference Resolutions as may from time to time be stipulated by the Conference,

8.4 to pay, upon joining, a fair contribution towards the general setting up costs of that BSP and to pay in advance an annual participation fee plus surcharge set by ISS ManagementIATA,

8.5 contribute to the management and other costs of such BSP as set by ISS ManagementIATA,



Page: 4 of 29 ____________________________________________________________________________ 8.2 to meet the Local Financial Criteria, if any;

8.3 participation Participation in any BSP shall be dependent on the Airline Applicant paying any amount due in a BSP settlement, to the BSP by the Remittance Date. This may include amounts due for BSP fees and charges applicable for its participation in the BSP. Payment of amounts outstanding by the Airline Applicant shall be due on the Remittance Date of the period in which they were included in the billing. IATA reserves shall have the right to deduct such fees and charges at any time prior to making a settlement to an AirlineApplicant.

8.4 upon pPrior to joining a BSP, a non-IATA carrierthe Applicant must sign a Counterindemnity Agreement with IATA as prescribed in Attachment “C” to this Resolution.

8.5 Participation by non-IATA air carriersa non-Member airline requires that at least ninety percent (by number) of ticketed transactions using that carrier's validation worldwide involve air transportation.

8.6 as As a condition for participation by non-IATA air carriersnon-Member airlines in any BSP it is required that they have a valid designator/prefix and accounting code assigned by IATA and have opened a valid bank account in the BSP or signed an ICCS agreement for settlement of funds.

9. PARTICIPATION BY GENERAL SALES AGENTS (GSAS)

Each Member or AirlineBSP Airline participating in a BSP shall have the facility to have its non-airline GSAs report its sales through the BSP and to remit either through the BSP or directly to the Principal, subject to the conclusion of an agreement for the provision of BSP services to an athe BSP Airline's GSA, between ISS ManagementIATA and the Member or AirlineBSP Airline, containing the conditions for such participation.

10. PARTICIPATION BY AIRPORT HANDLING AGENTS

10.1 ISS ManagementIATA may approve applications by Airair-port Handling handling Agents agents to be supplied with and issue Standard Traffic Documents (STDs) if the applicant:

10.1.1(a)(i) is not an air carrier or,

10.1.2(a)(ii) is a division of an air carrier operating independently of that air carrier, and is not in possession of, or authorised, to issue that carrier’s own tickets, and

10.1.3(b) acts as a passenger handling agent for one or more air carriers at an airport,

10.1.4(c) has secured sponsorship from an IATA Member participating in the BSP concerned,

10.1.5(d) undertakes to provide satisfactory security arrangements for premises and systems used for the issuance of STDs,

10.1.6(e) agrees to submit Agency Sales Data and effect remittances in respect of STDs issued in accordance with local ISS ManagementIATA instructions, and

10.1.7(f) executes an agreement with ISS ManagementIATA governing the terms of its authorization to be supplied with and issue STDs;



Page: 5 of 29 ____________________________________________________________________________ 10.1.82 upon approval, such Aairport Hhandling Aagents may receive be supplied with and issue STDs.

11. CLOSURE OF A BSP

Should it be necessary, for whatever reason, to consider closure of an operating BSP, ISS ManagementIATA will consult with the BSP Airlines. In the event of closure, ISS ManagementIATA will normally give notice of at least 12 months to all participants, including agents, GSAs, airport handling agents, and BSP Airlines. All costs relating to the closure incurred during the period of the notice and/or arising after closure, will be apportioned between the BSP Airlines in accordance with the ISS pricing formula.

12. EXTENSION OF BSP SERVICES

12.1 to To the extent compatible with the primary purpose of the BSP which is to provide and issue STDs and to serve as an accounting and settlement system between Agents and participating BSP Airlines, ISS ManagementIATA may consider any proposal to make available to third parties the accounting and other technical facilities of a BSP.;

12.2 such Such proposal shall be such as to render the BSP's operation more cost-effective and shall not be in conflict with IATA Resolutions;.

12.3 where Where a BSP Airline issues Electronic Tickets on behalf of agents Agents through their web site, such sales may be reported to BSP for processing. In such case, tThe BSP Airline shall report such sales to the BSP on a daily basis.

13. RISK COVERAGE FOR SELF-HANDLING OF PROCESSING FUNCTIONS

Where a processing centreDPC is operating under the management and supervision of ISS ManagementIATA (self-handled processing centre) for a BSP, BSP Airlines participating in that BSP undertake to indemnify IATA, its officers, employees and other appointees against liability (including liability for legal costs) for any action taken or omitted in good faith in the performance of their functions with respect to such operation. Where a separate legal entity has been established to carry a given BSP, such entity shall be deemed to be an “other appointee” in the sense of the preceding sentence, and shall be indemnified accordingly.

14. VOLUNTARY TERMINATION

14.1 a A BSP Airline may withdraw from a given BSP by serving written notice of not less than three months, and shall be liable for their share of all costs through to the end of the notice period.

15. OTHER TERMINATIONSUSPENSION OF BSP AIRLINE

Notwithstanding Paragraph 14 of this Resolution, IATA may immediately suspend (without a notification or other waiting period) a BSP Airline’s participation in some or all BSPs under any of the following circumstances:

15.1(a) notwithstanding Paragraph 0 of this Resolution, if ISS Management has reason to believe that a BSP Airline may be unable to satisfy its indebtedness to the BSP and



Page: 6 of 29 ____________________________________________________________________________ 15.1(a)(i) such BSP Airline owes in excess of USD 10,000 or equivalent for BSP related processing and management fees, and has been requested to pay the BSP on the applicable Settlement Date,

15.1(a)(ii) ISS Management has notified such BSP Airline of the amount owing,

15.1(a)(iii) the amount owing remains outstanding more than five working days after the date of notification and such Member or Airline has not disputed the debt,

or 15.1(b)(a) if athe BSP Airline fails to pay any amount due in relation to a BSP settlement, as provided for in subparagraphs 0 or 0 above; or;

15.1(b) the BSP Airline ceases all scheduled passenger operations, either temporarily (including where such operations are planned for future dates but are not currently being flown) or permanently, due to financial or other reasons, or otherwise no longer meets the requirements for participation in the BSP as described in Paragraphs 6 and 8 of this Resolution; or

15.1(c) then ISS Management may immediately suspend or terminate such BSP Airline's participation in all BSP.

15.1(c) the BSP Airline becomes subject to formal bankruptcy, moratorium of debt, reorganization, liquidation, or similar proceedings; or

15.1(d) the BSP Airline defaults on a material obligation to the BSP under the Resolutions or other agreements governing its participation in the BSP, or

15.1(e) if the BSP Airline does not have a valid designator/prefix and accounting code assigned by IATA; or

15.1(f)if the BSP Airline is suspended from any of the other settlement systems provided by IATA, including the IATA Clearing House and the Cargo Accounts Settlement System; or

15.1(g) if IATA otherwise determines that there are sufficient financial or legal grounds – including outstanding amounts owed to IATA in connection with its other settlement services or otherwise – to suspend the BSP Airline, in light of the financial or legal risk to the BSP.

15.2 Where a BSP Airline ceases all operations, no termination period shall apply.

15.2 At the discretion of IATA, IATA may elect to refrain from suspending a BSP Airline from some or all BSPs under this paragraph if there are alternatives available to protect the financial integrity of the BSP from the circumstances of the BSP Airline – including from the risk that refunds may exceed sales – and to obtain the immediate payment of outstanding debts of the BSP Airline to IATA. Such alternatives may include, at the discretion of IATA, the provision by the BSP Airline of a centrally held security deposit, or alternative security acceptable to IATA to be held centrally, and calculated so as to cover funds at risk for a minimum of one month.

15.3 In addition, ISS Management shall have the right to set off at any time any debt or claim owing by an Airline to the BSP in relation to a BSP settlement, including any amount owed by the Airline to IATA for the provision of BSP processing and management fees, against any monies held or owed by IATA or any of its divisions and which is payable to that airline.

15.3 IATA shall follow the procedures outlined in Attachment ‘F’ to this Resolution upon the suspension of a BSP Airline pursuant to this paragraph.



Page: 7 of 29 ____________________________________________________________________________ 15.4 Where an Airline has had no sales activity in the BSP for 3 months or more, that Airline owes the BSP monies for BSP related processing and management fees and the Airline has not responded to demand letters for payment of those outstanding, then IATA can take action to suspend the Airline from all BSPs.

15.4 If IATA determines that the financial integrity of the BSP is at risk as a result of the circumstances of a BSP Airline, IATA may withhold funds due from the BSP to such BSP Airline in order to secure the potential risk, in advance of any potential suspension of such BSP Airline.

16. SUSPENSION OF OPERATIONS BY A BSP AIRLINE AND/OR REINSTATEMENT OF A BSP AIRLINEOFFSETSET-OFF RIGHTS

Set-off applies, and may be invoked by IATA at any time, with respect to any debt or claim owing by a BSP Airline to the BSP in relation to a BSP settlement – including any amount owed by the BSP Airline to IATA for the provision of BSP processing and management fees – against any monies held or owed by IATA or any of its divisions or affiliated entities and which is payable to that BSP Airline.Where a BSP Airline participating in a BSP ceases all operations, either temporarily or permanently, due to financial or other reasons, or where the BSP Airline becomes subject to formal bankruptcy or reorganisation proceedings, or defaults on a material obligation under the BSP, thereby impairing the operation of the BSP, ISS Management shall take the action outlined in Attachment 'F' to this Resolution.

Where a BSP Airline participating in a BSP defaults on a material obligation to IATA in respect of the IATA Clearing House, or other financial arrangement for services provided by IATA, or the Agency AdministratorIATA determines the integrity of the BSP is at risk, it shall be grounds for IATA to withhold funds due from the BSP to such BSP Airline in order to settle the debt or potential risk. IATA may also require the BSP Airline to provide a centrally held security deposit, or alternative security acceptable to IATA to be held centrally, and calculated so as to cover funds at risk for a minimum of one month. In addition, set-off also applies, and may be invoked by IATA at any time, with respect to any debt or claim owing by a BSP Airline to IATA or any of its divisions or affiliated entities against any monies held or owed by IATA or any of its divisions or affiliated entities and which is payable to that BSP Airline.

17. CHANGE OF OWNERSHIP

17.1 Where a BSP Airline undergoes a change of ownership which has the effect of transferring ownership to another entity, and wishes to continue participation in one or more BSPs, the BSP Airline shall:

17.1 provide sufficient information to ISS ManagementIATA to allow for a review of the legal effect of the proposed change.; and

provide the agreement of the previous and future owners, jointly and severally, to meet any obligations of the previous owners to IATA.

17.2 IATA shall review the information provided by the BSP Airline and determine whether the proposed change poses a financial or legal risk to the BSP – including the risk that refunds may exceed sales. If such a risk is identified, IATA shall determine whether there are alternatives available to protect the financial integrity of the BSP from such risk. Such alternatives may include,



Page: 8 of 29 ____________________________________________________________________________ at the discretion of IATA, the provision by the BSP Airline of a centrally held security deposit, or alternative security acceptable to IATA to be held centrally, and calculated to as to cover funds at risk for a minimum of one month.

17.3 If the BSP Airline does not comply with the obligations under subparagraph 17.1 above, or if any risk to the BSP is identified by IATA and cannot be resolved pursuant to subparagraph 17.2 aboveshall facilitate such a change, provided the current and future owners agree jointly and severally to meet their fiduciary responsibilities to IATA. Where such an agreement is not provided,, the existing BSP Airline will be terminated from all BSPs in accordance with 0 above, and the new carrier shall be processed as a new applicant.

17.4 Where a BSP Airlines ceases or will cease operations and remains indebted financially to IATA, and where the owners of such BSP Airline have or will have an interest in a new applicant Airlineairline, IATA may reject such application.

18. FINANCIAL LOSSES INCURRED IN HONOURING STANDARD TRAFFIC DOCUMENTS

In the case of financial losses arising from honouring STDs where the issuing Agent may go into irredeemable default or where the STDs have been issued fraudulently, ISS ManagementIATA shall take the action outlined in Attachment “G” to this Resolution.

19. TICKETING AIRLINE SELECTION RULES

Members and AirlinesBSP Airlines shall follow the ticketing airline selection rules specified in Resolution 852.

20. ELECTRONIC TICKETING AUTHORITY

Where a BSP Airline deposits its Electronic Ticketing Authority with an Agent, it shall simultaneously inform local ISS ManagementIATA.

RESOLUTION 850

Attachment ’A’ (Intentionally left blank)



Page: 9 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘B’ RULES AND PROCEDURES OF THE LOCAL CUSTOMER ADVISORY GROUPS - PASSENGER (LCAGPs)

1. FUNCTION

Local Customer Advisory Groups Passenger (LCAGPs) are established by the Passenger Agency Conference in each BSP country/area. Each LCAGP has two functions:

on request by ISS ManagementIATA, provide advice to ISS ManagementIATA on local customer service issues;

on request by members, coordinate local needs and put forward recommendations to ISS ManagementIATA.

2. MEMBERSHIP

The LCAGP will normally consist of up to 18 persons. The Passenger Agency Conference may authorise a larger number, following a request from an area. LCAGP members and their designated alternates shall be elected biennially by all Participating AirlineBSP Airlines in the market concerned, from nominations received from these Participating AirlineBSP Airlines and sent to the local ISS ManagerIATA. Ideally, LCAGP members should be suitably qualified representatives at a senior level, providing expertise in the different fields of the BSP activity. LCAGP members attend LCAGP meetings as local industry representatives.

3. MEETINGS, QUORUM AND VOTING

The LCAGP will meet not less than twice annually. A quorum shall be a simple majority (one half plus one) of the membership. LCAGP will act in form of making recommendations. The level of support within the LCAGP for any recommendation, which requires at least a simple majority of the quorum, may be indicated. Each LCAGP will elect its Chairman. The local ISS ManagerIATA will act as Secretary of these meetings. Participating AirlineBSP Airlines in the BSP may attend meetings as observers, subject to advising the LCAGP Secretary. Representatives of non-airline entities participating in that BSP may attend certain parts of a LCAGP meeting, at the invitation of its Chairman and ISS ManagementIATA. Additionally, the local/regional ISS ManagerIATA will call a customer meeting at least once per year.

4. ACTIVITIES ISS MANAGEMENTIATA MAY TYPICALLY CONSULT A LCAGP FOR:

advice, as a user forum, on all local matters presented to it by ISS ManagementIATA, concerning the local operation of the BSP;

advice to the local ISS ManagerIATA on the establishment of local BSP business requirements and enhancements, especially where differences from worldwide policy and standards are sought;

guidance advice to the local ISS ManagerIATA, concerning :



Page: 10 of 29 ____________________________________________________________________________

Mmarketplace activities and development opportunities, and other local/area needs; and.

advice concerning other matters, as appropriate.

5. AGENDA AND REPORTS

The Agenda of each LCAGP meeting shall consist of customer service issues on which ISS ManagementIATA seeks the advice of the LCAGP, or proposals submitted by Participating AirlineBSP Airlines. It shall be circulated by the LCAGP Secretary not later than 10 days before the start of the meeting. The report of LCAGP meetings shall be circulated promptly, but no later than 30 days after the meeting, by the Secretary to LCAGP Mmembers, and all Participating AirlineBSP Airlines. The Secretary of the LCAGP will provide a regular update on action taken pursuant to recommendations from the LCAGP.



Page: 11 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘C’ COUNTERINDEMNITY AGREEMENT COUNTERINDEMNITY AGREEMENT Relating to the Operation of BSP Bank Accounts by IATA

(“Single Counterindemnity”)

An Agreement entered into

Between .............................................................................

having its registered office at ..............................................

(name of airline)

(full address)

hereinafter called “the Indemnifying Airline”,

and

the International Air Transport Association (IATA), a nonprofit corporation under Canadian law, having its registered office at 800 Place Victoria, Montreal, Quebec, hereinafter called “IATA”,

WHEREAS the AirlineIndemnifying Airline, jointly with other Aairlines participating in the same respective Billing and Settlement Plan (“BSP”), has considered it desirable that IATA operates and maintains certain BSP bank accounts (including a “Hinge Account” for clearing services) on its behalf, and

WHEREAS IATA has agreed to provide such services subject to the AirlineIndemnifying Airline and other such airlines providing a counterindemnity relating to the risks arising therefrom,

IT IS THEREFORE AGREED AS FOLLOWS:

1. DEFINITION AND APPLICABILITY

For the purposes of this Agreement, the term “Hinge Account” shall mean the bank account into which agents' remittances are paid and from which monies are distributed to Participating Airlines participating in the respective BSP.

This Agreement applies to all bank accounts established and operated in the name of IATA on behalf of an Billing and Settlement Plan (“BSP”) for the purpose of operating through the Settlement Clearing Bank clearing services or administrative or other associated services, for the benefit of the AirlineIndemnifying Airline and other airlines participating in the respective BSP.

All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in IATA’s Passenger Agency Conference Resolution 866.

2. INDEMNITY

The undersigned AirlineIndemnifying Airline will indemnify IATA, its officers and employees, against any liability and costs, for any action taken or omitted in good faith in the performance



Page: 12 of 29 ____________________________________________________________________________ operation of the Hinge Account or other accounts mentioned in paragraph 0 above, or arising in any other way from the operation of these accounts. Such liability may include, inter alia, shortfalls caused by under-remittance or non-remittance by Agents in cases where the Settlement Clearing Bank has credited the AirlineIndemnifying Airlines, in anticipation of full and timely remittance by the Agents. In case of such under-remittance or non-remittance, the undersigned Air-lineIndemnifying Airline, when so requested by the ISS ManagerIATA, undertakes to immediately refund the corresponding amount(s) remitted to it to the BSP Hinge Account, and herewith acknowledges and agrees that IATA and the ISS Manager may take all such action, including legal action, as deemed required or useful in this connection, both on behalf of IATA and the BSP and on behalf of the airlines participating in the BSP concernedParticipating Airlines concerned. In the event of a liability arising otherwise than by way of non-remittance or under-remittance, the undersigned AirlineIndemnifying Airline undertakes to pay the amount of the obligation under this Agreement within 15 days of it being called upon to do so.

3. PRELIMINARY JOINT INDEMNIFICATION

If it cannot be established immediately for which BSP-participating Airlineairline(s) a transaction not supported by a full Agent remittance was effected, the undersigned AirlineIndemnifying Airline, jointly with the other Participating Airlinesairlines participating in a BSP and having signed an identical indemndmenification agreement, shall forthwith reimburse and indemnify IATA for any shortfalls which shall be deemed to be operating costs and expenses of the BSP. Such cost of reimbursement shall be reapportioned as soon as it has been established for which BSP-Pparticipating Airlineairline(s) the respective remittance has been effected, in proportion to each of the undersigned Participating Asuch airline's share in the respective remittance.

4. COLLECTIVE BINDING AGREEMENT

Upon signature, the present document, in conjunction with identical documents signed by other Airlines airlines participating in a BSP and IATA, shall constitute a collective binding Agreement which shall continue in full force and effect for as long as IATA operates any bank accounts as referred to in paragraph 0 above, provided that if any Participating Airlineairline withdraws from or is terminated from participation in a BSP, it shall cease to be a party to the Agreement with respect to that BSP, . The under-signed Participating Indemnifying Airline shall nevertheless remain liable in respect of any of its liabilities arising prior to withdrawal or termination from the respective BSP or termination of IATA's operation of respective bank accounts as referred to in Paragraph 0 above.

AS WITNESS WHEREOF on behalf of the Parties hereto by their duly authorised officers in duplicate on the day and year following hereto,

For and on behalf of Airline Participating in the BSPthe Indemnifying Airline

..................................................................... (Full name of Airlineairline)

For and on behalf of International Air Transport Association

..................................................................... (Full name of Airline)



Page: 13 of 29 ____________________________________________________________________________ ..................................................................... Signature

..................................................................... Name, title of person signing

..................................................................... Place, date

..................................................................... Signature


..................................................................... Place, date

Note: This document must be signed at the Indemnifying Airline's Head Office, by the Chief Executive Officer, Chief Financial Officer or Director General.



Page: 14 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘D’ FORM OF APPLICATION TO BE COMPLETED BY A NON-IATA AIR CARRIER WISHING TO PARTICIPATE IN AN IATA BILLING AND SETTLEMENT PLAN FORM OF APPLICATION To: BSP Copy: International Air Transport Association

Financial and Distribution Services Route de l'Aéroport 33—P.O. Box 416 1215 Geneva 15 Airport Switzerland

1. Name of Applicant

........................................................................................... Name of Applicant (hereinafter called “the AirlineApplicant”)

........................................................................................... Address .............................................................................. ........................................................................................... 2. BSP in which participation is sought: .............................

3. The Airline Applicant operates scheduled air services or sells through IATA Approved Agent Locations within the country/area of the BSP.

4. The Airline Applicant hereby applies to participate in the BSP (“the BSP”) on the following terms and conditions:

(a) the Airline Applicant will upon acceptance of this application, forthwith sign, in duplicate, the IATA BSP FORM OF CONCURRENCE for Non-IATA Air Carriers wishing to Participate participate in an IATA Billing and Settlement Plan, under the terms of which the Airline Applicant shall observe and be bound by IATA Resolutions and other IATA provisions relating to IATA Billing and Settlement Plans as though the Airline Applicant were a Member of IATA and a party to the Resolutions or Sections of Resolutions set out in those documents; the signed Form shall be forthwith, submitted to IATA ISS ManagementIATA, Geneva, at the address indicated above, within three (3) months from acceptance of the application. Failing submission of the signed Form within three (3) months, the acceptance of the Application may be withdrawn with immediate effect. In case of such withdrawal, the Airline Applicant agrees to pay and compensate the BSP, IATA or any of the BSP Participating Airlines for any expenses, damage, losses or any other prejudice incurred in connection with or arising from the Airline's Applicant’s application, temporary de facto participation or withdrawal of the Airline's Applicant’s acceptance in the BSP, or all of these.

(b) the Airline Applicant authorises the ISS ManagementIATA to give notice to the Data Processing Centre and the BankClearing Bank that the name of the Airline Applicant is to be added to the list of BSP Airlines in the First Schedule of the respective Agreements with the Data Processing Centre and the BankClearing Bank;



Page: 15 of 29 ____________________________________________________________________________ (c) the Airline Applicant shall become a participating Airline BSP Airlinein the BSP upon

acceptance of this Application, upon becoming a party to the Agreements referred to in Subparagraph 0 above and in accordance with the terms of these Agreements, and upon submission of the signed Form of Concurrence to IATA;

(d) except as otherwise provided in Subparagraph 0 of the Form of Concurrence, the Airline Applicant shall be subject to the same conditions and obligations as other BSP Airlines;

(e) in consideration of the benefits of participation in the BSP, the Airline Applicant agrees to the costs of participation in the BSP in accordance with Subparagraph 0 of the Form of Concurrence;

(f) the conditions of the Airline's Applicant’s participation in the BSP may be amended by IATA from time to time upon serving reasonable notice in advance of such amendment to the AirlineApplicant.

5. This Application may be accepted, and will then become a binding contract, upon signature on behalf of the BSP/the BSP Airlines by ISS ManagementIATA of the enclosed duplicate copy and mailing it to the Airline Applicant at the address given above.

For and on behalf of Airline Applicant

..................................................................... (Full name of AirlineApplicant)

..................................................................... Signature


..................................................................... Place, date

For and on behalf of International Air Transport Association


..................................................................... Signature


..................................................................... Place, date

Note: This document must be signed at the Airline's Applicant’s Head Office, by the Chief Executive Officer, Chief Financial Officer or Director General.



Page: 16 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘E’ FORM OF CONCURRENCE TO BE COMPLETED BY A NON-IATA AIR CARRIER WISHING TO PARTICIPATE IN IATA BILLING AND SETTLEMENT PLANS FORM OF CONCURRENCE To: BSP Copy: International Air Transport Association

Financial and Distribution Services Route de l'Aéroport 33—P.O. Box 416 1215 Geneva 15 Airport Switzerland

Name of Applicant ........................................................................................... Name of Applicant (hereinafter called “the AirlineApplicant”)

........................................................................................... Address .............................................................................. ........................................................................................... 1. The AirlineApplicant operates scheduled air services or sells through IATA Approved Agent Locations within the country/area of the BSP. The AirlineApplicant has obtained all operating licenses or governmental authorisation required for such services or sales.

2. The AirlineApplicant has applied to the ISS Manager of BSP (country)IATA for participation in BSP (country).

3. The AirlineApplicant acknowledges that it has received copies of the following documents together with such explanation of their contents as it requires:

(a) Passenger Agency Conference Resolution 892 (Disclosing another Member's Position taken at an IATA Meeting);

(b) The applicable Resolution for the Passenger Sales Agency Rules appertaining to that BSP, i.e. Application of Minimum Security Standards for premises and systems; Suspension, Removal or Voluntary Relinquishment; Reviews under Authority of IATA Travel Agency Commissioner;

(c) Passenger Agency Conference Resolution 822¬IATA Numeric Code;

(d) Passenger Agency Conference Resolutions 832 and 818g—Reporting and Remitting Provisions, i.e. Sales Reports, Billings, Remittances and Collections—Defaults (under Billing and Settlement Plans); Reporting and Remitting through the Billing and Settlement Plan;

(e) Passenger Agency Conference Resolution 850—Billing and Settlement Plans;

(f) Local editions of the Billing and Settlement Plan Manual for Agents; or any other applicable manuals;.

(g) Passenger Agency Conference Resolution 854—Electronic Ticketing Systems in BSP Countries/Areas;



Page: 17 of 29 ____________________________________________________________________________ (h) All other Passenger Agency Conference Resolutions.

4. BSP (country)IATA will forward revisions to the foregoing documents to the AirlineApplicant as and when they are issued.

5. The AirlineApplicant hereby undertakes and agrees to observe and comply with the following terms and conditions:

(a) the The AirlineApplicant authorises ISS ManagementIATA to enter into agreements with the relevant electronic data pro-cessing centre (“Data Processing Centre”) and the relevant clearing bank (“Clearing Bank”) (“Bank”) on its behalf and to give notice to the Data Processing Centre and the BankClearing Bank that the name of the AirlineApplicant is to be added to the list of BSP Airlines in the Schedule schedule of the respective Aagreements with the Data Processing Centre and the BankClearing Bank.;

(b) except Except as otherwise provided in Subparagraph 0 of this paragraph, the AirlineApplicant shall be subject to the same conditions and obligations as other BSP Air-lines, of which the following are particularly brought to notice:

(i) the AirlineApplicant shall observe and be bound by the provisions of the documents set out in Paragraph 3 hereof, as well as subsequent additions, deletions or amendments thereto, as though the AirlineApplicant were a Member of IATA and a party to the Resolutions or the sections of Resolutions set out in those documents;

(ii) the AirlineApplicant shall execute a Sales Agency n Agreement with each IATA Accredited Agent subject to BSP (country) and appointed to act for the AirlineApplicant, by virtue of which Agreement agreement such Agents shall agree inter alia to:

comply with applicable Passenger Sales Agency Rules and BSP Procedures; such local standards as may be provided for under the Passenger Sales Agency Rules; applicable IATA Resolutions; and applicable government laws and regulations.

permit ISS ManagementIATA to have access to their books, vouchers and other records relating to its sales activities on the AirlineApplicant's behalf;

(c) in In consideration of the benefits of participation in BSP (country), the AirlineApplicant agrees to pay the following fees:

(i) the appropriate Joining joining Feefee, being contribution towards the setting-up and subsequent development costs of BSP (country). The Joining joining Fee fee will be payable in its entirety upon the grant by ISS ManagementIATA of the AirlineApplicant's Application;

(ii) Central and Regional management fees set by ISS ManagementIATA and billed and payable to ISS ManagementIATA in Geneva monthly in advance;

(iii) Local management fees as a contribution towards the management and other applicable costs in BSP (country) calculated annually in advance by ISS ManagementIATA and payable to the BSP (country).

(iv) costs payable through the IATA Clearing House, to ISS ManagementIATA in Geneva, based on total participation in BSPs worldwide and total SCU throughput where applicable. These extra charges take into account the fact that non-IATA carriers do not



Page: 18 of 29 ____________________________________________________________________________

otherwise contribute to the overall costs incurred by IATA in providing BSPs and administering the IATA distribution system.

(d) the The conditions of the AirlineApplicant's participation in BSP (country) may be amended from time to time upon serving reasonable advance notice of such amendment to the AirlineApplicant.

(e) the The Airline's Applicant’s participation in BSP (country) shall continue until either:

(i) the AirlineApplicant has, given three calendar months' advance notice in writing to the ISS ManagementIATA withdrawn from or been terminated from participation in the BSP pursuant to the provisions of Passenger Agency Conference Resolution 850, in which case IATA who will advise the Data Processing Centre and the BankClearing Bank of withdrawal of the Applicant from the Schedules schedules of these Agreements agreements with those entities, where applicable,

or

(ii) ISS ManagementIATA, has determined that there are sufficient other reasons for termination of the Applicant’s participation in BSP (country), and such decision has been validated by acting on the authority of at least two-thirds of those Members of IATA participating in BSP (country). Such termination shall require has given the Airline three calendar months' notice in writing of termination by IATA to the Applicant, of the AirlineApplicant's participation in BSP (country), citing reasons therefore. In the event ISS ManagementIATA gives such notice, it shall at the same time give three calendar months’ notice to the Data Processing Centre and the BankClearing Bank of withdrawal of the AirlineApplicant from the Schedules schedules of those the Agreements agreements with those entities, where applicable,

provided that, in both cases, rights and liabilities incurred before the date of termination shall survive termination.

6. The AirlineApplicant undertakes to indemnify IATA, its officers and employees against liability (including liability for legal costs) for any action taken or omitted in good faith in the performance of their functions with respect to BSP (country) under the Passenger Sales Agency Rules and under Resolution 850 and its Attachmentsattachments.

7. This Form of Concurrence is executed in two originals. It shall enter into force upon signature on behalf of the IATA BSP by ISS ManagementIATA Geneva. ISS ManagementIATA will mail one original to the AirlineApplicant at the address given above.

8. By signing this Form of Concurrence, and thereby undertaking to observe and comply with the terms and conditions described in the foregoing paragraphs, the AirlineApplicant also unconditionally undertakes that it will observe and comply with these and other terms and conditions described in other documents, as they apply to other BSPs that the AirlineApplicant applies to participate in due course, by submitting an application to ISS ManagementIATA. This Form of Concurrence shall enter into force with respect to such other BSPs on the dates that the AirlineApplicant receives written notification that ISS ManagementIATA has granted the AirlineApplicant's application to participate in the respective BSPs.



Page: 19 of 29 ____________________________________________________________________________ For and on behalf of AirlineApplicant :

..................................................................... (Full name of AirlineApplicant)

..................................................................... Signature


..................................................................... Place, date

Accepted for and on behalf of IATA Billing and Settlement Plans and their Participating AirlineBSP Airlines by ISS ManagementIATA:


..................................................................... Signature


..................................................................... Place, date

Note: This document must be signed at the AirlineApplicant's Head Office, by the Chief Executive Officer, Chief Financial Officer or Director General.



Page: 20 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘F’ PROCEDURES FOR SUSPENSION OF OPERATIONS BY A BSP AIRLINE

1. REASONS FOR SUSPENSION

(a) Where an airline participating in a BSP (“BSP Airline”) ceases all operations, either temporarily or permanently, due to financial or other reasons, or where the BSP Airline becomes subject to bankruptcy, moratorium of debt, re-organisation, or when the BSP Airline does not have a valid designator/prefix and accounting code assigned by IATA, or other similar proceedings, or when IATA otherwise determines that there are sufficient financial grounds to suspend the BSP Airline, IATA shall evaluate whether the BSP Airline should be suspended from all BSP operations and the action to be taken, based on the pertinent information available; or

(a) where an Airline defaults on a material obligation under the BSP, IATA shall determine the action to be taken in accordance with this Attachment.

2. 1. IMMEDIATE ACTION BY IATA IN THE EVENT OF FINANCIAL SUSPENSION

If IATA determines that the BSP Airline should be suspended from BSP operations, IATA shall immediately:

(a) Inform the BSP Airline concerned and all other BSP Airlines.;

(b) Instruct the Global Distribution Systems, Ticketing System Providers, and Data Processing Centres to suspend immediately the use of the BSP Airline’s name and numeric code as ticketing airline, to suspend immediately the use of any automated systems for the processing of refunds or other credit/debit transactions on behalf of the BSP Airline, and to continue to report as usual any outstanding sales, refunds, or other credit/debit transactions made by Agents on behalf of the BSP Airline up to the date of the suspension.

(c) Instruct all Agents:

(i) to To suspend immediately all ticketing activities on behalf of the BSP Airline concerned and to suspend immediately the use of the BSP Airline's name and numeric code as ticketing airline;.

(i) to suspend immediately the use of any auto-mated systems for processing of refunds or other credit/debit transactions on behalf of the BSP Airline;

(i) to continue to report as usual any outstanding sales, refunds or other credit/debit transactions made on behalf of the BSP Airline up to the date of the suspension;

(ii) to To settle all Outstanding Billings and pending sales attributable to that BSP Airline either:

(a) directly with IATA for control and reconciliation of the airline's funds as detailed in paragraph 0, or

(a) directly with the BSP Airline concerned, in which case Agents must exclude the total amount due to or from the suspended BSP Airline (such as ticket sales or any refunds



Page: 21 of 29 ____________________________________________________________________________

actually or potentially owing by that airline) from the total amount to be remitted to the Clearing Bank in respect of any Outstanding Billing. This exclusion should be made shall be adjusted before remittance of the Outstanding Billing to IATA. However, if , or after remittance if remittance has already occurred or if applicable law or billing procedure do not permit the necessary changes to remittance, then this exclusion may be made after remittance of the Outstanding Billing to IATA – thereby requiring a supplemental payment by or to the Agent of the amount excludedby excluding the total amount due to or from the BSP Airline; for greater certainty, the remittance of all Outstanding Billings should not take into account any refund actually or potentially owing by such BSP Airline;.

(a) to refrain from deducting or carrying out any refund from the BSP Airline's outstanding billings, pending sales, or from any future trans-action, if any;

(b) to continue to settle any and all credit trans-actions which may be made in future reporting periods directly with IATA or directly with the BSP Airline concerned as may be instructed by IATA;

(a) Instruct the Clearing Bank:

(i) to stop immediately all direct debit and clearing operations relating to sales, refunds or other credit/debit transactions made on behalf of the BSP Airline and await further instructions from IATA.

(i) for the benefit of the participants in the BSP, manage the airline's funds under the control of IATA and where appropriate open a separate special account, for the collection of monies due to the BSP Airline, to be administered and held at the disposition of the Administrator, Receiver, Liquidator, Monitor or Trustee, if any, once all refunds have been processed and once IATA has set off any outstanding amounts as provided for in Resolution 850, Subparagraph 0, subject to local law and sufficient funds being available; and

(d) Instruct the BSP Airline to Data Processing Centre to forward to the BSP Airlinedownload reporting copies of the billing analysis for the current period and any other periods affected by the suspension from BSPlink.

(e) Additionally, IATA may take any other actions reasonably necessary to implement the actions in this paragraph, including any actions necessary to comply with local law or local practice in a given BSP region.

3. 2. OTHER SUBSEQUENT ACTION BY IATA

Thereafter, IATA shall monitor the situation and shall take any other action, where appropriate, after having sought legal advice, in order to respond to any individual circumstances. This may, where appropriate, include the following:

(a) The opening of a special account, for the collection and management of monies due to the BSP Airline.

(b) The immediate withholding of all amounts due to the suspended BSP aAirline. Subject to applicable laws, the BSP Airline or its administrator, receiver, liquidator, monitor, trustee, or



Page: 22 of 29 ____________________________________________________________________________

similar representative or successor shall have no claim to such funds while retained in accordance with this paragraph.

(c) IATA may then enact the arrangements described in 0 below, in accordance where applicable with local bankruptcy laws. All remaining balances will then be held at the disposition of the Administrator, Receiver, Liquidator, Monitor or Trustee, if any.The satisfaction of all outstanding debts, after a sufficient time has passed to ensure that all claims from all IATA settlements systems and otherwise have been finalized. The funds withheld from the suspended aBSP Airline’s BSP participation, including any funds derived from BSP participation but held at the time of suspension within the IATA Currency Clearance Service, shall generally be used in the following priority:

(i) Firstly, for any refunds or other debts owed to the BSP in which such funds originate. Unless Agents were instructed to settle Outstanding Billings directly with IATA pursuant to subparagraph 1(iv)(a) above, or unless an agreement providing for the post-suspension submission of refunds has been agreed between IATA and the BSP Airline, such refunds shall not include any refunds submitted as part of any Outstanding Billings.

(ii) Secondly, for any remaining refunds or other debts owed to any other BSPs in which the BSP Airline participates. Again, unless Agents were instructed to settle Outstanding Billings directly with IATA pursuant to subparagraph 1(iv)(a) above, or unless an agreement providing for the post-suspension submission of refunds has been agreed between IATA and the BSP Airline, such refunds shall not include any refunds submitted as part of any Outstanding Billings.

(iii) Thirdly, for any other amounts that are due from the BSP Airline to IATA, including without limitations any amounts owing pursuant to the offsetset-off rights as more fully described in Resolution 850 Paragraph 15.

(iv) Finally, any remaining amounts shall be returned to the BSP Airline or its administrator, receiver, liquidator, monitor, trustee, or similar representative or successor, as more fully governed by applicable law.

(v) In all instances any sales incentives established by the BSP Airline shall be settled directly between the BSP Airline and each Agent.

4. ACTION WHEN AIRLINE IS NOT SUSPENDED, OR IS RE-INSTATED AFTER SUSPENSION AND RETENTION OF FUNDS AS SECURITY

In the case where the BSP Airline as referred to in Paragraph 0 above continues to operate, IATA may refrain from suspending the BSP Airline, or in the case where the BSP Airline is able to resume operations, after having been initially suspended, IATA may re-instate the BSP Airline, subject to taking further action, in accordance with applicable local bankruptcy laws, in order to respond to any individual circumstances.

(a) This shall where appropriate, include the opening of a special account, as described in Subparagraphs 0 and 0 above, controlled by IATA, for the collection of monies representing sales made on behalf of the Airline.

(a) To the extent required to cover the risk that refunds exceed sales during any given period following the filing under the bankruptcy laws, IATA shall;



Page: 23 of 29 ____________________________________________________________________________

(i) negotiate with the BSP Airline, a security deposit to be held centrally by IATA; or

(i) from the date of such filing, be entitled to retain the entire amount of the BSP Airline's funds collected, and, subject to applicable laws, the Airline or its Administrator, Receiver, Liquidator or Trustee, shall have no claim to such funds while retained in accordance with these rules.

(a) at an appropriate time to be determined by IATA, the funds retained in accordance with Subparagraph 0 shall, to the extent not re-funded, be released and paid over to the BSP Airline, or its Administrator, Receiver, Liquidator, or Trustee and the provisions of Paragraph 0 shall apply.

(a) Having satisfied the local BSP requirements any remaining balances may be transferred to a bank account established by IATA (any interest or charges on such account would be for the BSP Airline) which will be used to satisfy:

(i) firstly any remaining refunds in any other BSPs in which it participates;

(i) secondly, any outstanding fees and charges of the BSP Airline with any other BSPs in which it participates;

(i) and then towards any other amounts that are due from the BSP Airline to IATA. In all instances any sales incentives established by the BSP Airline shall be settled directly between the BSP Airline and the Travel Agent.

(a) Any funds of the BSP Airline collected on the special account other than those described in Subparagraphs 0, 0 and 0 shall be remitted in the ordinary fashion or as otherwise requested or agreed by the BSP Airline, its Administrator, Receiver, Liquidator, Monitor or Trustee.

3. LIFTING OF SUSPENSION

If the BSP Airline resumes its operations, or the reorganization proceedings terminate and the BSP Airline continues or resumes operations, or the BSP Airline has cured its default, or the BSP Airline protests the suspension in writing, if the suspension of the BSP Airline is otherwise lifted,resolves the circumstances giving rise to suspension (such as bey resuming scheduled operations, curing its defaults, or otherwise), or if the BSP Airline protests the suspension in writing, IATA shall evaluate whether and how the BSP Airline will be reinstated in BSP operations and under what conditions. The BSP Airline shall be given the opportunity to be heard.

Such conditions may in particular require that the BSP Airline compensate the BSPs for any losses incurred as a result of the BSP Airline's default, that the BSP Airline satisfy all outstanding debt to IATA arising under any of its settlement systems or otherwise, and that the BSP Airline place a centrally held security deposit, or alternative security acceptable to IATA to be held centrally, and calculated so as to cover funds at risk for a minimum of one month.



Page: 24 of 29 ____________________________________________________________________________ 6.4. DEFAULTING SUSPENDED BSP AIRLINE OWING MONEY TO THE CLEARING BANKBSP

1.

Where a defaulting suspended BSP airline Airline owes money to the Clearing Bank for any Remittance Period before the default or to the BSP on any grounds and for any period, and the debt is considered irrecoverable, the remaining BSP Airlines must bear the loss, excluding any sales incentive if anyremuneration, if any, owed pursuant to Resolution 824 Section 9, in proportion to their share of the total amount in that Remittance Period. Such sales incentiveremuneration shall be settled directly between the defaulting suspended BSP airline Airline and the Travel Agents.

5. TERMINATION

If, at the discretion of IATA, it does not appear likely that a suspended BSP aAirline will be able to meet the requirements for the lifting of its suspension, or as may otherwise be necessary in light of the potential financial or legal risk to the BSP, IATA may terminate the participation of a suspended BSP Airline. Such termination shall not affect the obligation of the BSP Airline to satisfy its obligations to IATA hereunder or under the Resolutions or other agreements governing its previous participation in the BSP.



Page: 25 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘G’ FINANCIAL LOSSES INCURRED IN HONOURING STANDARD TRAFFIC DOCUMENTS (STDs)

1. INTRODUCTION

Financial losses, as a result of honouring Standard Traffic Documents (STDs), may arise for two main reasons:

the issuing Agent may go into irredeemable default;

the STDs may have been issued fraudulently.

2. DEFAULT AND BANKRUPTCY

Where, following the honouring by an airline of a STD, it is found that revenue will not be paid over by the Agent because of irredeemable default, the loss shall be borne by the issuing BSP Airline (the airline whose ticketing authority was used by the Agent to issue the Traffic Document).

However, in the case of a defaulting Agent, unreported STDs subsequently blacklisted must be honoured by BSP Airlines.

If part or full settlement of monies outstanding is obtained from the defaulting Agent, the monies received will be shared out among the issuing BSP Airlines concerned in proportion to their share of the outstanding amounts.

Thereafter, if amounts are still outstanding, each such issuing BSP Airline will remain at liberty to initiate the usual debt recovery proceedings against the Agent.

3. INDEMNIFICATION OF HONOURING AIRLINE

Resolution 781 provides that:

Where a Traffic Document was listed in the Industry Tickets Service at the time of honouring, the loss will be entirely borne by the honouring carrier and no loss-sharing can then be requested.shall govern loss allocation as to STDs listed in the Industry Tickets Service at the time of honouring.

4. LOSSES ARISING FROM HONOURING FRAUDULENT ISSUES/LOSS-SHARING FORMULA

The honouring carrier is, in the circumstances described below, entitled to apply to ISS ManagementIATA to have the amount of the loss allocated to the general losses supported by BSP Airlines, according to the cost-sharing formula defined in this chaptersection.

The following loss sharing formula is to be applied where losses are incurred through interline billing as the result of fraudulent use of a STD. Fraudulent use of STDs is defined as any action which deprives a carrier of the normal revenue to which it is entitled, undertaken without the carrier's knowledge or consent.



Page: 26 of 29 ____________________________________________________________________________ This section applies to a STD which is not listed as described in Resolution 781, or which is listed as a “missing document” in the Industry Tickets Service at the time it is honoured, and the amount of loss is not recoverable from the Agent.

4.1 Where the STD honoured can be attributed to a specific Agent, the loss shall be shared among those BSP Airlines participating in the BSP in question which, at any time during the 12 calendar months preceding the month in which the fraudulently issued STD was reported by the honouring airline carrier to ISS ManagementIATA, have permitted that Agent to use their ticketing authority.

The loss in this case shall be shared in direct proportion to the Agent's monetary sales volume on behalf of such BSP Airlines during the 12 months period.

4.2 Where the STD honoured can be attributed to a specific BSP but not to a specific Agent, the loss shall be shared among all BSP Airlines participating in the BSP, in direct proportion to their monetary sales volume within the BSP in question during the 12 months preceding the month in which the fraudulently issued STD was reported to ISS ManagementIATA.

4.3 Where the STD honoured cannot be attributed to either a specific Agent or to a specific BSP, the loss shall be shared among all BSP Airlines participating in IATA BSPs in proportion to their monetary sales volume in all such BSPs during the 12 months preceding the month in which the fraudulently issued STD was reported to ISS ManagementIATA.

If the BSP has not been in operation for 12 months at the date the fraudulently issued STD is reported to ISS ManagementIATA, the reference period for calculating each BSP Airline's share of the loss will be the period the BSP has been in operation.

This loss-sharing formula is linked to Resolution 781, and is applicable only as described in this Section.

5. SUBSEQUENT RECOVERY OF LOSSES DUE TO FRAUD

Where a BSP Airline subsequently recovers any amounts due on a fraudulently issued STD, the amount recovered is to be distributed through the ISS ManagerIATA among the airlines BSP Airlines concerned in proportion to their share in the reimbursement previously made concerning that STD.

6. DEBITING ACTION FOR LOSS-SHARING

The ISS ManagerIATA will carry out the necessary investigation where a BSP Airline presents a fraudulently issued STD for reimbursement.

Billing action will be taken by the ISS ManagerIATA to obtain the individual contributions from BSP Airlines where the loss is shared only by BSP Airlines in a given BSP.

In the event that a loss is to be shared by all BSP Airlines participating in BSPs, a co-ordinated billing will be sent out by ISS ManagementIATA.

Claims for reimbursement of losses through misuse of STDs must be settled twice yearly.



Page: 27 of 29 ____________________________________________________________________________ 7. ACTION IN CASE OF COUNTERFEIT TICKETS

Where a counterfeit STD is intercepted in the marketplace, the ISS ManagerIATA will, in consultation with the Member or MembersBSP Airline or BSP Airlines concerned, carry out the necessary prompt investigation and, where appropriate, file a formal complaint with the local law enforcement authorities. To the extent such counterfeit STD has already resulted in a loss, the preceding provisions of Subparagraphs 0 through 0, hereof, shall be applied.



Page: 28 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘H’ (Intentionally left blank)



Page: 29 of 29 ____________________________________________________________________________ RESOLUTION 850 Attachment ‘I’ OUTLINE OF CONTENTS OF THE BSP MANUAL FOR AGENTS This Manual is published separately to this Resolution.

Whereas the Passenger Agency Conference wishes to provide Agents with the operating rules and procedures relating to the BSP, and

Whereas the Passenger Agency Conference wishes to provide updates to these in the most efficient manner, the Agency AdministratorIATA may, under the delegated authority of the Conference and in accordance with the following outline table of contents, update the contents of the BSP Manual for Agents with those changes adopted by the Passenger Agency Conference.

Preface

Introduction

Section 1—General Information

Chapter 1—The Billing and Settlement Plan (BSP)

Chapter 2—BSP-Agent/Airline Relations

Chapter 3—Management of a BSP

Chapter 4—Participants and Service Suppliers in a BSP

Section 2—Operational Procedures

Chapter 5—Automation of Interfaces between Agents, BSP Airlines and the BSP (BSPlink)

Chapter 6—Provision of Standard Traffic Documents (STDs)

Chapter 7—Audit, Inventory and Security

Chapter 8—Refunds

Chapter 9—Honouring of Credit Cards

Chapter 10—Billings and Statements

Chapter 11—Agents' Remittance Procedures Chapter 12—Handling of Irregularities and Default

Chapter 13—Suspension of Operations by a BSP Airline

Chapter 14—Local Procedures/Information (to be issued by the local BSP Office)

Section 3—Useful Information

Appendix A—Acronyms

Appendix B—Glossary of Terms

Appendix C—Quick Reference

Appendix D—Country Listing


Attachment 18 Jul 16 ‘B’

Page: 1 of 7 ____________________________________________________________________________

Attachment ‘B’

Changes to Suspension, Offset, and Change in Ownership Provisions

These changes are contained in paragraphs 15, 16, 17, and Attachment F of Resolution 850.

Under the current draft of Resolution 850, the rules for suspension, set-off, and change in

ownership are spread across multiple paragraphs and Attachment F. One goal of this re-write is

to consolidate each topic in its own paragraph, to simplify the language of the Resolution and

make it easier for airlines, courts, and IATA to interpret and apply. Each of these topics is

discussed in further detail below.

1. Paragraph 15 – Grounds for (and Possible Delay of) Suspension of an Airline

Under the proposed draft, paragraph 15 deals solely with the grounds for suspension of an airline

from the BSP, including the process for refraining from suspension under certain circumstances

and for withholding funds from the BSP in advance of a potential suspension. Attachment F, in

turn, deals with the process of suspension once a decision to suspend under paragraph 15 has

taken place.

The opening sentence of Paragraph 15 now harmonizes all grounds for suspension, and provides

that no waiting or notification period is required for suspension under any of the grounds specified

in paragraph 15. Previous versions of the Resolution contained waiting periods for certain

grounds but not for others, giving rise to a risk to the BSP in the interim. IATA recommends

eliminating this risk (while retaining flexibility to work with each airline based on its specific

circumstances, as governed by proposed paragraph 15.4, as discussed below).

Paragraph 15.1 now contains all grounds for potential suspension. These grounds were compiled

from previous paragraph 15 and previous Attachment F. Under the previous version, there were

several potential scenarios in which suspension could result from failure to pay outstanding

amounts to IATA – old 15.1(a), 15.1(b), 15.4, and Attachment F.1(b). These have now been

consolidated as new 15(a).

Paragraph 15.1(b) governs cessation of operations, and specifies that this also covers temporary

or permanent cessation of scheduled passenger operations (previously a ground for suspension

by reason of no longer qualifying as an “Airline” as defined in Resolution 866, but now more

logically contained in paragraph 15).

Paragraphs 15.1(c)-(e) and (g) were previously contained in Attachment F.1(a) and (b), although

paragraph 15.1(g) has been expanded to clarify that failure to pay amounts due in other settlement

systems (such as ICH or CASS) or otherwise (such as E&F) shall also be grounds for suspension.

Paragraph 15.1(f) is new, and mirrors a similar provision found in the ICH Regulations and in

Resolution 851 allowing suspension if the airline has been suspended from other IATA settlement

systems. This proposal is made in order to harmonize treatment under each of the settlement

systems (ICH, BSP, and CASS).



Page: 2 of 7 ____________________________________________________________________________ Paragraph 15.2 provides the procedure for IATA to refrain from suspension. This was partially

contained in previous Attachment F.4, and is intended to codify IATA’s current policy of refraining

from suspension only where adequate protection is available for the BSP if the airline is to

continue participation. As with all provisions in the Resolutions, this may nevertheless be

overridden by local laws (such as bankruptcy laws), which may prohibit suspension in certain

circumstances even where the airline does not provide a security deposit.

Paragraph 15.3 refers to Attachment F for the procedure to be followed once a decision to

suspend is taken.

Paragraph 15.4 clarifies that IATA may withhold BSP funds in the case of financial risk to the

BSP, prior to making a determination of suspension. This provision allows IATA to protect the

BSP in the interim while exploring possible avenues for financial security with the airline in

question, thereby giving IATA more flexibility to potentially avoid suspension while not placing the

other BSP airlines at risk by releasing the related funds to the airline.

2. Attachment F – Suspension Procedure

The previous version of Attachment F listed several grounds for suspension. For the sake of

consistency, these have now been moved to paragraph 15, as discussed above, and Attachment

F now deals solely with the procedure to be followed once the decision to suspend an airline has

been taken.

New paragraph 1 is based on previous paragraph 2, with some modifications. The title of the

subpart has been amended to reflect the fact that it will apply in all suspensions, regardless of the

grounds.

New subpart 1(b) reflects the current practice of IATA informing the Global Distribution Systems,

Ticketing System Providers, and the Data Processing Centres – rather than the agents

themselves – to suspend ticketing and refund activities. The corresponding language has been

deleted from the section on instructions to agents.

New subpart 1(c)(ii) has also been edited, as this language has caused some confusion – and

litigation – with travel agents following suspension. The new language is intended to provide

greater clarity and detail as to how agents are to process the instruction to settle Outstanding

Billings of the suspended airline directly to the airline, as this requires adjustments to the agents’

billings. IATA has also implemented a process to provide an adjusted billing report (exceptional

remittance notice) to the agent, to provide the specific amounts necessary to be submitted under

this instruction.

Previous subpart 2(b)(vi), addressing credit transactions, was duplicative and has therefore been

removed.

Previous subpart 2(c), addressing instructions to the Clearing Bank, has been removed as these

actions are now handled through the Global Distribution Systems and Data Processing Centres

rather than through the Clearing Bank.



Page: 3 of 7 ____________________________________________________________________________ Previous subpart 2(d) has been revised to reflect the current practice of the suspended airline

downloading necessary billing analyses directly from BSPlink, rather than being sent them directly

by the Data Processing Centre.

A new subpart, 2(e), has been added as a catch-all to provide IATA with the authority to take any

other actions that may be reasonably necessary to implement the actions specifically listed.

New paragraph 2 is largely taken from previous paragraph 4. Previous paragraph 4 described

the use of the funds withheld by IATA after suspension, but only appeared to apply when the

airline was not suspended. In order to harmonize the treatment of all suspensions, this now

applies in every suspension case, to the extent justified by the individual circumstances and upon

advice from IATA Legal Services. This section has been expanded to provide further detail

regarding this process.

New paragraph 3 has been amended to provide greater clarity for the reasons for IATA to consider

reinstatement: either the airline resolves the conditions giving rise to suspension, or the airline

protests the suspension in writing. Previous versions of this paragraph did not include all possible

grounds for resolving the conditions giving rise to suspension, which has been clarified in the

proposed amendment. The amendment also provides that IATA may require the suspended

airline to satisfy all outstanding debts to IATA and to place a security deposit prior to

reinstatement. These conditions were permitted under the previous version of this paragraph,

and were consistently required by IATA of suspended airlines as a condition to reinstatement, but

IATA recommends explicitly listing them to avoid disputes with suspended airlines as to the

validity of these requirements.

New paragraph 4 has been slightly amended to clarify the obligation of other BSP Airlines to

satisfy any outstanding debts of the suspended airline to the BSP in the event that the debts are

considered irrecoverable, as is currently required and agreed pursuant to the Counterindemnity

Agreement.

New paragraph 5 has been added to provide a clearer distinction between suspension and

termination, which are used inconsistently in the current draft of Resolution 850 and Attachment

F. Suspension is a change in the status of the airline in the BSP, triggered under the grounds

given in Resolution 850 paragraph 15. Termination, by contrast, ends the contractual relationship

between the airline and IATA (other than the obligation to satisfy outstanding debts before

termination), and may be taken by IATA based on the individual circumstances of the suspended

airline. Voluntary termination remains an option for all BSP airlines pursuant to Resolution 850

paragraph 14, which is not being substantively amended by IATA’s proposal.

3. Paragraph 16 – Set-off Rights

Proposed paragraph 16 now deals solely with IATA’s set-off rights. These provisions were

previously contained in paragraph 15. The proposed placement of these provisions in a separate

paragraph 16 clarifies that the right of set-off exists at all times, whether or not an airline has been

suspended. New paragraph 16 also expands the rights of set-off to mirror the rights provided by

the ICH Regulations and Resolution 851. Under the previous draft, set-off was only permitted as

to the funds held by IATA outside of the BSP, to be used to satisfy the airline’s debts to the BSP.



Page: 4 of 7 ____________________________________________________________________________ Under the revised version, IATA shall have the right to set-off both positive and negative amounts

in the BSP against positive or negative amounts outside of the BSP. This right already exists

contractually for any airline participating in either ICH or CASS, and in most jurisdiction also exists

under common law or legal statues. For consistency’s sake, IATA recommends explicitly

including this right in Resolution 850 as well.

4. Paragraph 17 – Change in Ownership of an Airline

Proposed paragraph 17 continues to address the procedures for a change in ownership of an

airline. This paragraph has been revised, however, to reflect IATA’s current practice and to

provide greater detail regarding the review process to be undertaken by IATA in the event of a

change in ownership. The previous version of this paragraph required the new owners to agree

to meet any duties of the previous owners to IATA. In most instances the owners of an airline do

not directly owe any duties to IATA, and this provision therefore caused some confusion. This

provision has been removed, although IATA retains the discretion to take any duties of the owners

into consideration in evaluating the financial or legal risk to the BSP under paragraph 17.2.

Other Substantive Changes

In reviewing Resolution 850, IATA has identified several other substantive changes that are

recommended for adoption. These are detailed below.

1. “Reserves” vs. “Shall Have”

In two locations (new paragraphs 6.2 and 8.3) Resolution 850 states that IATA “reserves” the right

to deduct certain fees and charges from an airline’s settlements. This language is stronger if it

states that IATA “shall have” this right, as an airline could argue that a reservation of rights is

ineffective if IATA did not have that right from another source.

2. Geographical extension or merger of BSPs

Previous paragraphs 6.3 and 6.4 addressed the process for an airline to opt-out of a geographical

extension or merger of BSPs. This was intended to avoid liability to that airline for management

fees related to a BSP area in which it did not participate. Because management fees are now

calculated on a global basis, this language is no longer necessary and has been deleted.

3. Clarification of Percentage of Ticketed Transactions Involving Air Transport

New paragraphs 6.4 and 8.5 have been amended to clarify the obligation of BSP airlines to have

at least 90% of ticketed transactions involving air transportation. Under the current draft, it is not

clear whether the 90% requirement is calculated by number of tickets, monetary value of tickets,

or otherwise. The proposed amendment states that the calculation is by number of tickets. It was

also unclear whether this calculation was to be performed globally, only as to the market of the

BSP in question, or otherwise. The amendment clarifies that the calculation is to be made

globally.



Page: 5 of 7 ____________________________________________________________________________

4. Use of BSP by Domestic-Only Non-IATA Agents

Paragraph 7.2 governs the use of the accounting and other technical facilities of a BSP by

domestic-only non-IATA agents. The language in this paragraph was misleading, however, as it

referred instead to acceptance into the BSP of these agents. This issue has been clarified through

a specific reference to the use of accounting and other technical facilities of the BSP as provided

by subparagraph 12.1 of Resolution 850.

5. Duplicative Reference to the Billing and Settlement Plan Manual for Agents

Previous paragraph 7.3 stated that agents are bound both by the Resolution and by the BSP

Manual for Agents, which is itself part of the Resolutions. This is a duplicative reference, as this

is already governed by Resolution 824 (the Passenger Sales Agency Agreement) at paragraph

2, and has therefore been removed. Similarly, Attachment I – the table of contents for the BSP

Manual for Agents – has been removed as duplicative and unnecessary.

6. Duplicative Reference to Attachment E

Previous paragraph 8.2 contained a description of the contents of the Form of Concurrence

(Attachment E) for non-IATA Member applicants to the BSP. This gave rise to the possibility of

an inconsistency between the description and the attachment, and is unnecessary. The specific

details of Attachment E have therefore been removed from paragraph 8.2.

7. Re-ordering of Requirements of Participation for Airport Handling Agents

Paragraph 10.1 contains the requirements for airport handling agents to be supplied with and

issue STDs. The previous numbering of subparagraphs 10.1.1-10.1.8 was confusing, as

subparagraphs 10.1.1 and 10.1.2 were alternatives (unlike the remaining subparagraphs) and

subparagraph 10.8 was the result of a successful application rather than another condition for the

airport handling agent to meet. This has been corrected through renumbering these

subparagraphs. For consistency, the term “receive STDs” in former subparagraph 10.1.8 was

amended to read “be supplied with and issue STDs,” mirroring the language in subparagraph

10.1.

8. Notification upon Closure of a BSP

Paragraph 11 governs the procedure for closure of a BSP, and requires IATA to provide notice of

the closure to BSP airlines at least 12 months in advance (in a normal situation). IATA believes

it would be best practice to provide notice to all BSP participants, not just airlines, and this

paragraph has been amended accordingly.

9. Expansion of Actions of IATA Under Counterindemnity

The Counterindemnity Agreement, at Attachment C paragraph 2, currently provides that in the

case of agent under-remittance or non-remittance the indemnifying airline will refund the



Page: 6 of 7 ____________________________________________________________________________ corresponding amounts remitted to it to the Hinge Account. It also provides that IATA (and the

ISS Manager) may take such other steps as deemed required in relation to the refund. IATA

proposes expanding the language to “as deemed required or useful,” so as to provide the

necessarily flexibility to IATA and avoid a legalistic argument that a specific action was not strictly

required and therefore is not authorized.

10. Clarification Regarding Preliminary Joint Indemnification

Paragraph 3 of the Counterindemnity Agreement provides a procedure for applying the indemnity

in the event that it cannot be established for which airline a non-remitted or under-remitted

transaction was made. It provides that in such call all airlines in the BSP “having signed an

identical indemnification agreement” shall reimburse and indemnify IATA. IATA recommends

removing the word “identical,” as it may be possible that a re-executed counterindemnity

agreement is not obtained from each airline in cases where there are relatively minor changes

made to the form counterindemnity agreement. This would avoid any confusion as to whether

such airlines are still required to participate in such a reimbursement process.

11. Clarification Regarding Termination of Counterindemnity Agreement

Paragraph 4 of the Counterindemnity Agreement governs the termination of the Counterindemnity

Agreement in the event of an airline’s withdrawal from a BSP. This language should also cover

termination from a BSP, in the circumstances described in proposed Attachment F paragraph 5

and discussed above.

12. List of Documentation Provided to a Non-IATA Applicant to a BSP

Paragraph 3 of Attachment E, the Form of Concurrence, contains an acknowledgement that the

applicant has received copies of certain Resolutions. IATA recommends that this be expanded

to include all Passenger Agency Conference Resolutions, as well as those specifically listed as

of high importance.

13. Termination of Non-IATA Airline from a BSP

As with the change to the Counterindemnity Agreement, Paragraph 5(e)(i) of the Form of

Concurrence should be amended to include both withdrawal and termination from the BSP.

Paragraph 5(e)(2) currently provides that IATA may also terminate an airline’s participation upon

the direction of 2/3 of the IATA Members participating in that BSP. Such an action could raise

competition law concerns, and IATA therefore proposes an amendment to this paragraph to

provide that IATA must first independently determine that there are sufficient reasons for

termination of the non-IATA Member, and then have such decision validated by 2/3 of the IATA

Members. This removes the possibility that the IATA Members themselves could make the

unilateral decision to remove a non-IATA Member from BSP participation.



Page: 7 of 7 ____________________________________________________________________________

Definitional and Stylistic Changes

In reviewing Resolution 850, IATA has identified several changes that should be made in order to

harmonize the use of defined terms throughout the Resolutions, as well as other stylistic changes.

These changes are indicated in the redline provided, and the most significant of the changes are

described below.

1. ISS Management, ISS Manager, Agency Administrator, and IATA

Throughout Resolution 850 there are a number of terms used to refer to action to be taken by

IATA. These include ISS Management, the (local) ISS Manager, the Agency Administrator, and

IATA itself. Without a specific reason why a given action must be taken by a specific individual

such as the Agency Administrator, these terms should be replaced to refer simply to IATA, to

allow for flexibility in how they are staffed internally. This issue has also raised a legal risk, as we

have seen cases where an agent aggrieved by a decision argues that the decision is invalid if the

Agency Administrator him or herself (instead of a delegated employee within IATA) sends notice

of the decision. This uncertainty should be eliminated.

2. Consistent Use of the Term “Airline”

Resolution 866 defines “Airline” as a BSP participant who is not an IATA member. Nevertheless,

the term “Airline” is used throughout Resolution 850 in contexts which seem to be intended to

apply to all airlines participating in a BSP. This has been corrected by changing the references

to “Airline” to “BSP Airline,” a term that includes both IATA members and non-IATA members

participating in a BSP. Similarly, the term used for a non-IATA member applying to a BSP has

been changed to “Applicant,” and the term for the airline executing the Counterindemnity

Agreement has been changed to “Indemnifying Airline,” in both cases to avoid confusion.

3. Correction of Other Defined Terms

Certain terms defined in Resolution 866 are on occasion not used in the form included in that

Resolution, and other terms are capitalized in Resolution 850 as if they are defined terms

contained in Resolution 866 even though they are not. These terms have been corrected

throughout.

4. Capitalization of Paragraphs

Certain subparagraphs are styled as clauses rather than sentences (beginning with a lower case

letter and ending with a semi-colon). This can be hard to read, especially in cases where courts

are looking solely at one paragraph or sub-paragraph. IATA proposes changing this style so that

these subparagraphs are instead styled as complete sentences.


____________________________________________________________________________ R10 DEBT REPAYMENT TERMS AND CONDITIONS AMENDMENT

Submitted by PSG

Background Information The Travel Agency Commissioners submitted some proposals to the PSG in February 2016, in which the method and understanding related to Resolutions required some further review and consideration. The Commissioners are of the opinion that it is not clear who (IATA or the Agent) should present (not negotiate) an offer from an Agent who cannot pay the 50% of the outstanding amount as required when entering into a repayment agreement per the provisions in Resolution 818g Attachment ‘A’ section 2.2. According to resolution 818g Attachment ‘A’ Section 2 section 2.2.2 an Agent is eligible to enter into an alternative repayment agreement upon unanimous agreement of the BSP Airlines to whom the amount is due. The Commissioner are further of the opinion that the Agents want to repay if an agreement which is feasible for the Agent can be reached. In all instances Agents want their honor restored towards Airlines and the local market, and initiate business as soon as possible. Recommendation After reviewing the proposal from the Commissioners, the PSG has concluded that there is room for some level of further flexibility in cases where for mutual benefit Agents and IATA, on behalf of BSP Airlines agree to sign the repayment agreement. It is important to stress that this is not considered a default position, but rather a flexibility offered to Agents on a case by case basis after careful consideration based on Agent history and standing to ensure that such alternative repayment agreement does not place risks on collecting any amounts due. PSG has reviewed the current Resolution text and has established some baseline requirements that must be met in order for IATA to consider entering into alternative repayment agreement on behalf of the affected BSP Airlines without the Agent having to consult with the Airlines directly. The requirements being:

I. the Agent has remitted not less than 20% of all outstanding amounts and can demonstrate to IATA’s satisfaction that it has taken all steps possible to remit at least 50% of all outstanding amounts; and

II. a firm schedule for repayment by instalments has been agreed between IATA and the Agent over an agreed period of no more than 12 months; and

III. the instalments will cover the balance plus interest at the official (prime) bank rate plus one percent, or in any event will provide for payment of interest at a rate similar to that set out in the provisions of Resolution 818g.

It is believed that the above, more flexible approach will be beneficial for both BSP Airlines and Agents.


____________________________________________________________________________ Proposed Action Conference is requested to adopt the proposed changes to Resolution 818g Attachment ‘A’ as presented in Attachment ‘A’ to this paper.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Resolution 818g Attachment A Section 2

2.2. SETTLEMENT OF AMOUNTS DUE

The provisions of this Paragraph govern the settlement of monies due by an Agent declared in

Default.

2.2.1 when an Agent declared in Default is able to demonstrate to the Agency Administrator prior

to the termination date specified in his notice of termination that;

i. either all outstanding amounts, if any, have been settled, or

ii. at least 50% of the outstanding amount has been settled and a firm schedule for

repayment by instalments within six months of the balance plus interest at the official

(prime) ban rate plus one percent has been agreed between the Agency Administrator

and the Agent, or

iii. an alternative repayment schedule and conditions have been agreed between the Agent

and IATA on the basis that;

a. the Agent has remitted not less than 20% of All Amounts Owing and can demonstrate to IATA’s satisfaction that it has taken all steps possible to remit at least 50% of All Amounts Owing; and

b. a firm schedule for repayment by instalments has been agreed between IATA and the Agent over an agreed period of no more than 12 months; and

c. the repayments will cover the balance plus interest at the official (prime) bank rate plus one percent, or in any event will provide for payment of interest at a rate similar to that set out in the provisions of Resolution 818g

2.2.2 an alternative repayment schedule and conditions have been agreed between the Agent and either the Agency Administrator […]


____________________________________________________________________________ R10.1 DEBT REPAYMENT TERMS AND CONDITIONS AMENDMENT – COMMENT FROM

ECTAA/WTAAA



Following TAC’s recommendations, it is proposed to amend the Resolution provisions related to

entering into repayment agreement with an agent following a Default.

The Travel Agency Commissioners submitted some proposals to the PSG forum in February

2016, in which the method and understanding related to Resolutions required some further review

and consideration. The Commissioners are of the opinion that it is not clear who (IATA or the

agent) should present (not negotiate) an offer from an agent who cannot pay the 50% of the

outstanding amount as required when entering into a repayment agreement per the provisions in

Resolution 818g Attachment ‘A’ section 2.2.2.

According to Resolution 818g Attachment ‘A’ Section 2 section 2.2.2 an agent is eligible to enter

into an alternative repayment agreement upon unanimous agreement of the BSP Airlines to whom

the amount is due.

The Commissioner are further of the opinion that the agents would be willing to repay if an

agreement which is feasible for the agent can be reached.

It is proposed to create an alternative repayment agreement on behalf of the affected BSP Airlines

without the agent having to consult with the Airlines directly under three following conditions:

1. Agent has remitted not less than 20% of All Amounts Owing and can demonstrate to

IATA’s satisfaction that it has taken all steps possible to remit at least 50% of All

Amounts Owing; and

2. A firm schedule for repayment by instalments has been agreed between IATA and the

Agent over an agreed period of no more than 12 months; and

3. The instalments will cover the balance plus interest at the official (prime) bank rate plus

one percent, or in any event will provide for payment of interest at a rate similar to that

set out in the provisions of Resolution 818g.

ECTAA/WTAAA Comments

ECTAA/WTAAA welcome the proposal to introduce a repayment system, however we have strong

reservations concerning the application of a so called ‘official’ interest rate plus an unjustified

penalty 1 %.

Interests’ rates may vary from country to country and from one bank to another and it remains

unclear what interests’ rates will be applied. It remains as well unclear for what purpose the 1%


____________________________________________________________________________ would be added in the instalments. Therefore, given the costs imposed to agents wishing to

benefit from a repayment system, the proposed scheme does not meet Travel Agency

Commissioners’ recommendations and will not be of any interest to travel agents.

Proposed Solution based on the proposal submitted by PSG Resolution 818g Attachment A Section 2 2.2. SETTLEMENT OF AMOUNTS DUE The provisions of this Paragraph govern the settlement of monies due by an Agent declared in Default. 2.2.1 when an Agent declared in Default is able to demonstrate to the Agency Administrator prior to the termination date specified in his notice of termination that; i. either all outstanding amounts, if any, have been settled, or ii. at least 50% of the outstanding amount has been settled and a firm schedule for repayment by instalments within six months of the balance plus interest at the official (prime) ban rate plus one percent has been agreed between the Agency Administrator and the Agent, or iii. an alternative repayment schedule and conditions have been agreed between the Agent and IATA on the basis that; a. the Agent has remitted not less than 20% of All Amounts Owing and can demonstrate to IATA’s satisfaction that it has taken all steps possible to remit at least 50% of All Amounts Owing; and b. a firm schedule for repayment by instalments has been agreed between IATA and the Agent over an agreed period of no more than 12 months; and c. the repayments will cover the balance plus interest at the official (prime) bank rate plus one percent, or in any event will provide for payment of interest at a rate similar to that set out in the provisions of Resolution 818g 2.2.2 an alternative repayment schedule and conditions have been agreed between the Agent and either the Agency Administrator […] Proposed Action ECTAA and WTAAA invite the Conference to not adopt the proposed paragraph c, as explained above. Required Effectiveness [ ] Normal effectiveness of 1 June 2017


____________________________________________________________________________ R11 CHANGES TO RESOLUTION 854

Submitted by IATA DPC Management


• In order to implement NewGen ISS, new technical functionalities and developments are required from the Electronic Ticketing System Providers (ETSPs). To ensure that the ETSPs comply with the NewGen ISS requirements, it is proposed to amend Resolution 854.

• IATA DPC Management team has engaged the ETSPs through the Global GDS Group (GGG) forum to review and understand their positions for the proposed changes.

• Following preparation with IATA Legal, three changes to Resolution 854 were proposed and presented to the ETSP during the GGG on 14 April 2016. The GGG participants were asked to provide their individual written feedback after the GGG meeting.

• IATA Legal has also proceeded with editorial changes versus the current Resolution 854.

• Details of the proposed changes to Resolution 854 are included in Attachment ‘A’. Proposed Change #1: Administrative change for format of Reso 854

• The first proposal is to simplify the certification signing process under Resolution 854 by allowing each ETSP to sign one global Electronic Ticketing System Provider Agreement, Attachment ‘A’ of Resolution 854, and to include the list of BSPs that the ETSP participates in as an appendix to this Agreement.


____________________________________________________________________________ Proposed Change #2: To include a clause regarding the ETSP activation/restriction of Form of Payments by Agent

• The purpose of this change is to ensure that with the introduction of the new Accreditation Models and the Remittance Holding Capacity, each ETSP is able to activate or restrict an individual Agent’s ticketing on specific forms of payment.

Proposed Change #3: Adapt the number of hours in clause 2.3

• The proposed change is to reduce the maximum number of hours given to an ETSP to activate or restrict ticketing, once instructed by IATA, via the Ticketing Authority files, thereby reducing Airline exposure in case of defaults.

Proposed Change #4: Frequency of ETSP Sales Reporting In addition to the above changes, the recent bust-out case in France, has highlighted the risk posed by the 24-hour blind spot with daily sales reporting. The whole industry community needs the collaboration of the GDSs to access information of BSP agent’s ticket sales in real time, so that sudden abnormal increases can be detected much earlier, therefore reduce the time which fraudsters continue selling airline tickets which they don’t intend to remit. PSG airlines and IATA have been working on mitigating such a risk. Two approaches are considered in order to address this risk by early 2017:

1. IATA to work closely with GDS in order to collect real time sales data:

After some consultation with a number of airlines as well as GDSs, IATA has come to the conclusion that the most effective solution would be to create a small development on the GDS side, so that the event of booking a ticket triggers a request to a Web Service on the IATA side.

It is IATA’s understanding that the effort of development on the GDS side is small/moderate, as similar processes already exist, to provide different functionalities to agents and airlines. The new functionality would trigger the generation of a specific message to IATA Risk Management system with a minimum set of fields pushed to an IATA server on real time, every time a travel agent completes the ticketing process.

or

2. In case no such solution of real time ticketing sales monitoring could be agreed with GDS and implemented by early 2017, PSG members and IATA recommend to increase


____________________________________________________________________________

the frequency with which ETSPs report sales data to IATA’s DPCs though the Amendment of Resolution 854 paragraph 2.2.

In absence of solution 1 being implemented, this would allow IATA to monitor agency sales at more frequent intervals than the current 24 hours possible today. The frequency of reporting is proposed to be every two hours, moving to real time in the longer term.

Proposed Actions PSG has defined the terms of proposed change #3 (time within an ETSP shall update its system) and proposed change #4 (frequency of RET File submission). PSG has reviewed and unanimously endorsed the four changes as described above. It recommends the submission to PAConf for approval and implementation. Conference is requested to adopt the four proposed changes and editorial changes to resolution shown in Attachment ‘A’ as follows: With a 1 January 2017 effectiveness date to align with the effectiveness of IATA EasyPay:

1. Proposed change #1 (Administrative format change) 2. Proposed Change #2 (ETSP Activation/Restriction of Form of Payment by Agent) 3. Editorial changes 4. In case no sales data monitoring implemented with GDS, Proposed Change #4

(increase the Frequency of ETSPs sales reporting) With a 1 January 2018 effectiveness date to align with the implementation of Resolution 8XX and to enable ETSPs to implement progressively the proposed changes in their systems and procedures:

5. Proposed change #3 (Adapt the number of hours to activate/restrict an agent in the ETSP system)



Page: 1 of 4 ____________________________________________________________________________ Attachment ‘A’ Amend Resolution as shown below:

RESOLUTIONS 854 ELECTRONIC TICKETING SYSTEMS IN BILLING AND SETTLEMENT PLAN COUNTRIES/AREAS

PAC1(51)854(excepts USA) Expiry: Indefinite PAC2(51)854 Type: B PAC3(51)854

RESOLVED that,

(…/….)

5..3.4 the ability to activate or restrict the electronic issuance of Standard Traffic Documents at an Approved Location within 6 (six) 1 (one) hours of advice from IATA, including when:

5.3.4.1 Agency Administrator that an Approved Location is removed from the Agency List, declared in default, or is suspended has its Ticketing Authority removed in accordance with the Sales Agency Rules or,

5.3.4.2 an airline a BSP Airline, that it has withdrawn its authority from that Approved Location to issue Standard Traffic Documents on its behalf;

(…/…) 5.5 to ensure the ability of the System to activate or restrict a form of payment for any issuance of Standard Traffic Documents at an Approved Location to be advised by IATA for all participating airlines within 1 (one) hour of advice from IATA. Renumber subsequent paragraphs.

RESOLUTION 854 Attachment ‘A’ ELECTRONIC TICKETING SYSTEM PROVIDER AGREEMENT

This Agreement is between ................... (name of System Provider) with its principal place of business at ....................... [address] (the “System Provider”)

and

International Air Transport Association, incorporated under the laws of Canada by Special Act of the Parliament of Canada, with its principal place of business at 800 Place Victoria, PO Box 113, Montreal, Quebec H4Z 1M1, Canada

(“IATA”), and represented by the Coordinator. IATA represented by the Coordinator, with a place of business at



Page: 2 of 4 ____________________________________________________________________________ ................... (address), who has been lawfully mandated by IATA to represent it for such purpose.

WHEREAS the (Name of System Provider ) , hereinafter referred to as “System Provider” operates an electronic ticketing system (the “System”) and wishes to make the sSystem available to Approved Locations in (country) for the electronic issuance of Standard Traffic Documents, and

WHEREAS it is essential that the operation of the ( name of the System Provider) System is technically compatible with the each BSP operation of each BSP in which it has subscribers (country) and maintains such compatibility in all respects, and

WHEREAS the Coordinator has confirmed such compatibility, after appropriate checks and testing, by the issue of a Certificate of Technical Compatibility, subject to the System Provider's undertaking to maintain the compatibility of the system in all respects while this Agreement is in force, and

WHEREAS such Certificates of Technical Compatibility have been issued in the BSPs listed in Annex [ ] hereto,

NOW THEREFORE, IT IS AGREED AS FOLLOWS:

(…/…)

OBLIGATIONS OF SYSTEM PROVIDER

In consideration of the issue by the Coordinator to the System Provider of a Certificate of Technical Compatibility for each BSP listed in Annex [ ], the System Provider undertakes to observe the following provisions:

(…/…) 2.2 provide, on a daily basis every two hours, data of issued Standard Traffic Documents to the BSP Data

Processing Centre in accordance with the specifications set forth in the document containing details of local technical and ticketing requirements of the applicable BSPs, as supplied by the cCoordinator;

2.3 ensure the ability of the sSystem to activate or restrict the electronic issuance of Standard Traffic Documents at an

Approved Location within 6 (six) 1 (one) hours of receipt of advice from IATA, including when:

2.3.1 ISS Management that an Approved Location is removed from the Agency List, declared in default, or is

suspended has its Ticketing Authority removed in accordance with the Sales Agency Rules; or

2.3.2 Aan BSP Aairline, that it has withdrawn its ticketing authority and/or Electronic Ticketing Authority from the

Approved Location to issue electronic Standard Traffic Documents on its behalf;

2.4 ensure the ability of the System to restrict the number of Electronic Tickets an Approved Location can issue in a

period, to be advised by the BSP Airline;

2.5 ensure the ability of the System to activate or restrict a form of payment for any issuance of Standard Traffic

Documents at an Approved Location to be advised by IATA for all participating airlines within 1 (one) hour of receipt of advice from IATA. 2.5 2.6 ensure the ability of the System to assign to Approved Locations blocks of document numbers, for use in Electronic Ticketing Transactions;

2.6 2.7 not introduce any modifications or alterations to the sSystem likely to affect the smooth operation of the BSP

without prior consultation with the Coordinator and, as the case may be, with the BSP Data Processing Center;

2.7 2.8 give the Coordinator in a timely manner advance notice of each Approved Location to be connected to the

sSystem;



Page: 3 of 4 ____________________________________________________________________________

2.8 2.9 cooperate with the Coordinator, the BSP Aairlines and the BSP Processing Centre to the fullest possible extent

for the prevention of unauthorised issuance of electronic ticket transactions.

1.9 2.10 fully comply with the Payment Card Industry (PCI) Data Security Standards (DSS) as mandated by the

International Card Payment Schemes, to include adjusting its processes and procedures, at no expense to IATA, to reflect any amendments or modifications to the PCI DSS; and, if the System Provider becomes aware that it is no longer in full compliance with the PCI DSS, the System Provider must promptly provide written notice to the Coordinator of such non-compliance, and in no event should such notice be provided later than 72 hours after the System Provider becomes aware or should have become aware of such non-compliance.

Written notice shall be provided to IATA at the following address:

(name of Coordinator) at ----------- (address), [address]

[address]

[address]

To the attention of: [Title]

3. OBLIGATIONS OF THE COORDINATOR

3.1 the Coordinator shall facilitate the necessary flow of information between the System Provider and IATA ISS

Management and shall ensure all necessary coordination between the System Provider and the Data Processing Centre required for the operation of the System in the BSP concerned.

3.2 the Coordinator shall, subject to the observance of all Sales Agency Rules, the Billing and Settlement Plan Rules,

and other applicable IATA Resolutions, IATA BSP rules and regulations, facilitate the introduction of the System in the BSP concerned.

4. WITHDRAWAL OF CERTIFICATE OF TECHNICAL COMPATIBILITY

4.1 the System Provider agrees that if the requirements for technical compatibility with the BSP are no longer met, the

System Provider Coordinator shall review the situation with the Coordinator System Provider. If the problem cannot be resolved within a reasonable period of time, the matter shall be referred to the Agency Administrator ISS Management, in consultation with the Local Customer Advisory Group—Passenger, for further dialogue and resolution;

4.2 the System Provider further agrees that if following such dialogue the matter cannot be resolved, that the

Coordinator shall, on instruction of the Agency Administrator ISS Management, withdraw the Certificate of Technical Compatibility, which will terminate the application of the this Agreement to the affected and BSP listed in Annex [ ] this agreement shall thereupon be terminated.

5. COMPLIANCE WITH PCI DSS

The System Provider agrees that if it is unable to fully comply with the PCI DSS, the Coordinator shall review the situation with the System Provider, and the System Provider shall propose a remediation plan not to exceed 60 days in duration. If, following the implementation of such remediation plan, the System Provider is still unable to fully comply with the PCI DSS, the Coordinator may, at its discretion, terminate this application of the Agreement to the affected BSP listed in Annex [ ] agreement.

(…/…)

7. LIABILITY

the System Provider shall not be liable for any loss, including monetary loss, injury or damage, which airlines jointly or individually may suffer by reason of any failure or malfunction of the System or by reason of any incorrect or



Page: 4 of 4 ____________________________________________________________________________ unauthorised operation of the System by the Agents, including but not limited to loss sustained directly or indirectly by BSP Aairlines jointly or individually in consequence of any claim against airlines jointly or individually by the Agents or by the travelling public or by any airline or person, except where such loss, injury or damage results directly from wilful misconduct or negligence of the System Provider or its employees.

(…/…)

9. EFFECTIVENESS TERM OF AGREEMENT

This Agreement shall become effective on the day of signature and shall continue in full force and effect indefinitely thereafter for each BSP listed in Annex [ ], as the Annex may be revised from time to time (i) in accordance with Paragraph 4 until terminated either pursuant to Paragraph 4 of this Agreement, or (ii) upon not less than sixty (60) days' prior written notice from one party to the other party.

10. AMENDMENTS AND GOVERNINGMENT LAW

This Agreement and its Annex [ ] may be modified only by a further written agreement signed by the parties hereto. This Agreement and any amendments thereto shall be governed in its interpretation and performance by the laws of Quebec, Canada (country).


____________________________________________________________________________ R12 REPLACEMENT OF OUTDATED TERMS – RESOLUTIONS 800, 818g, 832 & 866

Submitted by PSG Background/Problem In February 2016, PSG/93 reviewed a paper proposing a number of amendments to Passenger Agency Conference resolutions to replace outdated references to ‘Agency Services Officer’ and ‘Agency Services Manager’ with ‘IATA’/ The paper also proposed changing references to ‘Agency Administrator’ to ‘IATA’ except for those cases that actually required the intervention of Mr. Popovich himself. The consensus at PSG was that the term “Agency Administrator” should not be replaced with “IATA”, since this was too generic. Also, the terms “BSP Manager” and “ISS Manager” would also need updating, since there are no longer any IATA officials with these roles. The paper was revised and represented to PSG in June 2016. It included insertion of text in Resolution 818g to explain the term ‘ISS Management’ in addition to the definitions in resolutions 866 and 868. Proposed Action PSG/94 unanimously endorsed the revised paper to Conference. PAConf is requested to adopt the changes shown at Attachment ‘A’ for 1 June 2017 effectiveness.



Page: 1 of 5 ____________________________________________________________________________ Attachment ‘A’ Amend Resolutions 800, 818g, 832 and 866 as shown below: RESOLUTION 800 3.5.1. Granting and Termination Of Electronic Ticketing Authority 3.5.1.3 if the update is not performed electronically on BSPlink, the Member or Airline shall simultaneously advise the BSP of the removal of the Electronic Ticketing Authority and the BSP Manager IATA shall instruct the System to inhibit Electronic Ticketing issuance on behalf of that Member or Airline. 6.2 REPORT BY AGENT OF BREACHES OF SECURITY

6.2.1 in the event that the premises of an Accredited Agent suffer any form of unlawful entry irrespective of whether any material loss is incurred, the Agent shall immediately notify the local police authorities, and the Agency Services Manager IATA; 6.3 VERIFICATION ACTION

Upon receipt of advice from an Agent, IATA or a BSP Airline that an Agent has suffered loss as the consequence of robbery, theft, burglary, fraud or any other unlawful means, the Agency Services Manager IATA shall immediately notify all BSP Airlines in the country with copy to the Agency Administrator. RESOLUTION 818g AGENCY SERVICES OFFICE

The Agency Services Office shall be headed by the Agency Services Manager appointed by the Agency Administrator to operate and manage the accreditation programme in the country or Area, including the administrative actions and reviews associated therewith and also, when so decided by the Agency Administrator, to act as the local representative of IATA. The Agency Services Manager shall propose to the Agency Administrator recommendations for the annual budget of the accreditation activities of the Agency Services Office. The Director General, in consultation with the Agency Administrator shall review the recommendations and determine and approve the final budget.



Page: 2 of 5 ____________________________________________________________________________ 1.2 ISS MANAGEMENT

The Agency Administrator, as determined by Resolutions 868 & 866, is the IATA official designated by the Director General as the holder of that office, or his authorised representative, and is responsible for the management of the Agency Programmes in accordance with the Rules and Resolutions of the Passenger Agency Conference, and has the authority to act in extraordinary circumstances. ISS Management (IATA Settlement Systems Management) holds delegated responsibility from the 1998 IATA Annual General Meeting for the management and efficient operation of this business activity, as determined by Resolution 850e. As defined in Resolution 866, ISS Management means the functional areas of the Financial and Distribution Services division of IATA (FDS), responsible for the management and operation of the IATA Settlement Systems, including central and regional ISS Management with overall responsibility for the operation of the BSPs. 1.1 AGENCY PROGRAMME JOINT COUNCIL (‘THE COUNCIL’) 1.1.1.3 the Agency Services Manager IATA as an ex officio member; provided that the number of Members, Airlines and Agents' representatives as provided in 1.1.1.1 and 1.1.1.2 above shall be determined by the Agency Administrator in proportion to their respective numbers in the country or area of the Council and shall be included in his recommendation to the Conference; provided further that the total voting membership of the Council shall not exceed 18; 2.1.9 The applicant may nevertheless be approved if the Agency Services Manager IATA is satisfied that such person was not responsible for the acts or omissions that caused such removal or default and is satisfied that the applicant can be relied upon to comply with the terms of the Sales Agency Agreement, these Rules and other Resolutions of the Conference; Section 3—Procedures

Upon request, the Agency Services Manager IATA shall supply each prospective applicant with an application form and a copy of the IATA Travel Agent's Handbook containing these Rules and other relevant information and guidance. 3.1 APPLICATION FOR ACCREDITATION

an applicant which wishes to be included on the Agency List and have a place of business entered as an Approved Location on the Agency List, or an Agent which wishes to have an additional place of business entered as an Approved Location on the Agency List, shall apply to the Agency Services Manager IATA who is empowered to accredit the applicant or to reject such applications 3.2.2 upon receipt, the Agency Services Manager IATA shall, within one month subject to



Page: 3 of 5 ____________________________________________________________________________ external influences, consider whether such application is complete. If any of the required information or fees have not been included with the application the Agency Services Manager shall so inform the applicant; 3.2.3 if the Agency Services Manager IATA finds the application is complete, he shall publish, within one month subject to external influences, to Members and BSP Airlines in a listing that such application has been received. Such listing shall be published as required; 3.2.4 IATA may arrange an inspection to assist in deter-mining whether the applicant meets the qualifications necessary to become an Accredited Agent or for a Branch Office Location, as applicable; 3.2.5 the Agency Services Manager IATA shall consider each application and supporting information and any other information brought to his attention and decide within 15 working days of the application listing if the applicant meets the qualifications to become an Accredited Agent or Approved Location; 3.2.6 the applicant shall be notified promptly in writing of the Agency Services Manager's IATA’s action and in the event of rejection shall be given clear reasons why the application failed; 3.2.7 a rejected applicant or an Agent whose application for an additional location has been rejected may, within 30 calendar days of the date of the Agency Services Manager's IATA’s notice, request reconsideration of the decision by the Agency Services Manager IATA or may invoke the procedures for review of the Agency Services Manager's IATA’s action by the Travel Agency Commissioner; 3.2.8 subsequent to approval and addition to the Agency List any Member or BSP Airline may register with the Agency Services Manager IATA information concerning the Accredited Agent, where it feels that approval justifies further review. 3.3.1 if the Agency Services Manager IATA determines that the applicant or location has shown that it meets the qualifications, he shall request the Agency Administrator to enter the a Applicant or l Location on the Agency List; 3.3.5(a)(i) the Agent shall apply in writing to the Agency Services Manager IATA, describing the specific sales activity referred to in Subparagraph 3.3.5(a) above and requesting the allocation of an additional IATA Numeric Code to identify such sales activity, 3.3.5(a)(ii) on receipt of such application, the Agency Services Manager IATA shall verify that the specific sales activity for which the additional numeric code is required is conducted solely at the Location concerned and in compliance with the minimum security provisions set forth in Section 5 of these Rules, 3.3.5(a)(iii) if satisfied that the foregoing conditions are met, the Agency Services Manager IATA shall request the Agency Administrator to allocate the additional IATA Numeric



Page: 4 of 5 ____________________________________________________________________________ Code accordingly, 10.11 CHANGE OF LOCATION TYPE

10.11.1.1 apply to the Agency Services Manager IATA, giving full details of the proposed change, and

10.11.1.2 on request from the Agency Services Manager IATA, shall remit the appropriate administration fee or such other fee, appropriate to the change, as provided for in these Rules; 10.11.2 the Agency Services Manager IATA shall determine if the change of Location type requested by the Agent is of an administrative nature or one requiring further investigation and processing under another provision of these Rules; 10.11.3 if the former, the Agency Services Manager IATA shall record the change of Location type in the Agency List and notify the Agent and all BSP Airlines accordingly; 10.11.4 if the latter, he IATA shall so notify the Agent and proceed to process the change as provided for elsewhere under these Rules; RESOLUTION 818g – Attachment ‘A’ 2.2 SETTLEMENT OF AMOUNTS DUE

2.2.2 an alternative repayment schedule and conditions have been agreed between the Agent and either the Agency Administrator or the Agency Services Managers IATA, upon unanimous agreement of the BSP Airlines to whom the outstanding amount is due, a fraction of such amount has been settled and a firm schedule for repayment by instalments over an agreed period of the balance plus interest at the official (prime) bank rate plus one percent has been agreed between the Agency Administrator and the Agent; such alternative repayment schedule shall extend over no more than 12 months and, in any event, shall provide for payment of interest at a rate similar to that set out in Subparagraph 2.2.1(ii) RESOLUTION 820e 1.3 REVIEW INITIATED BY AGENCY ADMINISTRATOR

The Agency Administrator, on his own initiative or at the request of any Member, a group of Members, or of the Agency Services Manager, shall initiate a review to determine whether the Agent or Location has breached its Passenger Sales Agency Agreement, including IATA Resolutions incorporated into it, when the Agency Administrator has determined that a credible case has been made, in particular, in respect of any of the following: 4.3 where a decision of or an action by the Agency Administrator or the Agency Services Manager IATA has been the object of an Agent's action before the Commissioner taken under



Page: 5 of 5 ____________________________________________________________________________ the provisions of this Resolution and the Agency Administrator, or the Agency Services Manager IATA, contest the Commissioner's decision, the Agency Administrator or the Agency Services Manager IATA shall have the right to have such decision reviewed by arbitration, in accordance with the procedures set out in the Passenger Sales Agency Rules. RESOLUTION 832 3.2 SETTLEMENT OF AMOUNTS DUE

(iii) an alternative repayment schedule and conditions have been agreed between the Agent and either the Agency Administrator or the Agency Services Manager IATA, or, in the case of Canada & Bermuda upon unanimous agreement of the BSP Airlines to whom the outstanding amount is due, a fraction of such amount has been settled and a firm schedule for repayment by instalments over an agreed period of the balance plus interest at the official (prime) bank rate plus one percent has been agreed between the Agency Administrator and the Agent; such alternative repayment schedule shall extend over no more than 12 months;

3.2.3 ISS Management or the Agency Services Manager, as the case may be, shall immediately advise the Agency Administrator of any failure of the Agent to honour the repayment schedule; he/she shall also immediately advise the Agency Administrator when total settlement of the balance due (including interest) has been completed. RESOLUTION 866 ELECTRONIC TICKETING AUTHORITY (sometimes referred to as ‘ET Authority’) means a written authority provided to an Agent by a Member or Airline participating in a BSP, which authorises one or more Locations of the Agent to issue Electronic Tickets. A copy or parallel advice must be sent to the BSP Manager IATA.


____________________________________________________________________________ R13 TRAVEL AGENTS’ PCI DSS COMPLIANCE ASSESSMENT

Submitted by PSG

Background Information In order to develop and establish a baseline of PCI DSS compliance it was agreed at PSG/93 that IATA will conduct a survey comprising of the “top 100” Agents and “bottom 100” Agents, based on their card sales levels, to perform an initial assessment of the compliance across these two types of Agent groups. Rationale of how the survey has been conducted It was initially requested for IATA to obtain evidences from the Agents in relation to their compliance. However during the development of the survey and identifying that the survey is to be anonymous through our legal guidance the following risks were identified;

1. The questions developed for the survey directly asks the Agents to disclose PCI DSS compliance, and if not compliant IATA would be forced to take non-compliance action, but as yet the type or level of non-compliance have not been divined.

2. Agent associations could instruct members not to respond, in case they admit not to be in compliance;

– This would leave them open to sanctions from IATA, which could include termination, and

– Provide a legal admission of liability for non-compliance with PCI DSS rules and therefore open to damages in the event of any Card related security failure.

3. Similarly, IATA may incur liabilities if Agents respond and demonstrate a lack of compliance with the PCI DSS rules, unless IATA takes action against such Agent(s)

4. Having to take action against Agents responding to a survey would be unintended consequences of the action requested by PSG.

IATA deployed an anonymous survey in April 2016, in line with the following survey framework;

Anonymous Survey – no calls. The survey will be conducted on two Agent segments; top 100 Agents bottom 100 Agents

The top 100 Agents survey Single language – English

The bottom 100 Agent survey 21 languages

The survey consisted of 4 core questions, each with a Yes/No response Q1. Do you have your own card acceptance merchant agreement with an

acquirer, through which you accept card payment from your clients?


____________________________________________________________________________

Q2. If you do, are you PCI DSS compliant for those card-paid sales where you

are the ‘merchant of record’?

Q3. If NO, do you have a remediation plan?

Q4. If you do not have your own card acceptance merchant agreement with an

acquirer, are you PCI DSS compliant for the BSP card sales you initiate on

behalf of airlines?

Recommendation Considering the survey results, we would like the following process to be applied under Resolution 818g with appropriate supported wording captured in Attachment ‘A’ to this paper:

1. Compliance assessment a) Prior to the acceptance and launch of NGISS

IATA developed a suitable process to ensure compliance of Agents captured as;

Accreditation (new Agents) where an Agent will not be approved for accreditation unless they have provided proof of their compliance to PCI DSS and,

As part of the Annual revalidation process for existing Agents or as part of the Annual Financial Review of the Agent

In the instance of a non-compliance the following action will be applied on the Agent as set out within current Resolution 818g. The agent will be issued with double irregularity with a set timeline to comply. The timeline will be in line with the size of the Agent and type of compliance required. Once the Agent confirmed their compliance the irregularity applied will be withdrawn from the Agents records.

2. Implementation considerations

a) In anticipation of this new process, the changes to Resolution 818g and the delivery of NewGen ISS; it is advised that a communication is sent to Agents with an appropriate timeline to become compliant prior to applying any compliance action.

Proposed Action PSG/94 unanimously supported the actions presented. Conference is requested to adopt the proposed Resolution changes for 1 June 2017 effectiveness.




Resolution 818g section 2 Qualifications of Accreditation

PCI DSS Compliance

2.1.18 The Agent must ensure its full compliance with the Payment Card Industry (PCI) Data Security Standards, as provided by the Card companies and made available to agents through IATA, and that all sensitive card data obtained during the process of completing a card sales transaction is handled, stored, and transmitted with due regards to the security of the data. Failure to comply with these requirements either as part of the Accreditation process or at any time per IATA’s request will result in a Notice of Irregularity being issued to the Agent. The notice will include a set timeline for the Agent to comply with the stated requirements and the Agent will be required to provide proof of compliance. When the Agent provides proof of compliance IATA will withdraw the Notice of Irregularity. General Requirement 2.1.189 All material statements made in the application shall be accurate and complete.


____________________________________________________________________________ R14 REPORTING DATE TO REMITTANCE DATE PERIOD – APJC ANNUAL REVIEW BASED ON

BEST PRACTICE

Submitted by PSG

Background Information One of the actions resulting from the PSG/90 was for IATA to provide APJCs with guidelines on how to accelerate the settlement of funds to the BSP airlines (Board Monitored Activity: Faster Cash) and consequently to reduce their risk exposure (Board Monitored Activity: Safer Funds). IATA identified different enablers for faster cash, one of them being:

Period between the Reporting Date and the Remittance Date: As per Resolution 818g, Attachment ‘A’, Section 1.6.2 Frequency of Remittance, the date when the Agent needs to remit the funds to the Clearing Bank is defined in accordance with the Remittance Frequency of the market.

IATA has performed an analysis to identify which BSP market calendars are currently not aligned with the Resolution in terms of Remittance to the Clearing Bank by the end of the Billing Period. The results are shown in Attachment ‘B’.

Proposed Solution It was discussed and unanimously agreed at PSG/93 that each APJC should evaluate the period between the Reporting Date and the Remittance Date in their market at least once per annum per the best practices in Resolution 818g Attachment ‘A’ section 1.6.2. This provision will only apply to markets which have not already adopted one of the best practices presented. Proposed Action PSG/93 reviewed the proposal and unanimously endorsed the changes to Conference. Conference is requested to adopt the Resolution changes as presented in Attachment ‘A’, with effectiveness date 1 June 2017.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Amend Resolution 818g – Attachment ‘A’ – as shown below: 1.6.2.1(e) […] 1.6.2.1 (f) Each APJC must evaluate the period between the Reporting Date and the Remittance Date in their market at least once per annum taking into account the best practice for financial transactions in that market and any local conditions that may apply and using as a best practice guideline the periods set out in Resolution 818g – Attachment ‘A’ – Section 1.6.2 for the applicable Remittance Frequency. This provision will not apply to markets where a best practice has been adopted. 1.6.2.1(fg) if the Clearing Bank is closed for business […] 1.6.2.1(gh) an Agent having more than one Approved Location […] 1.6.2.1(hi) The Conference acknowledges that a BSP Airline […]


Attachment 18 Aug 16 ‘B’

Page: 1 of 4 ____________________________________________________________________________ Attachment ‘B’ Frequency – Monthly “If the Remittance Frequency so established is monthly, Remittances shall reach the Clearing Bank not later than its close of business on the date established by the Conference. This date shall not be later than the fifteenth day of the month following the month covered by the Billing” The following markets are not aligned with the current Resolution:

Region Operation Frequency

Reporting date to

Remittance date

Africa and Middle East Kenya 30 17

Africa and Middle East Morocco 30 16

Africa and Middle East Rwanda 30 17

Europe Ireland 30 16

Frequency – Twice Monthly “if the Remittance Frequency so established is twice monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the last day of the month in respect of Billings covering the first 15 days of the month and the 15th day of the following month, in respect of Billings covering the period from the 16th to the last day of the month. The Conference may adjust the period within which Remittances are required to reach the Clearing Bank by not more than five calendar days to meet the special requirements which shall be demonstrated of a particular BSP or BSP Airline” The following markets are not aligned with the current Resolution:

Region Operation Frequency

Reporting date to

Remittance date

Africa and Middle East Benin 15 17

Africa and Middle East Burkina Faso 15 17

Africa and Middle East Cameroon 15 17



Page: 2 of 4 ____________________________________________________________________________

Africa and Middle East Chad 15 17

Africa and Middle East Congo 15 17

Africa and Middle East Gabon 15 17

Africa and Middle East Ivory Cost 15 17

Africa and Middle East Mali 15 17

Africa and Middle East Mauritania 15 17

Africa and Middle East Mauritius 15 16

Africa and Middle East Niger 15 17

Africa and Middle East Senegal 15 17

Africa and Middle East Tanzania 15 18

Africa and Middle East Togo 15 17

Europe Greece 15 16

Europe Turkey 15 16

Europe United Kingdom 15 16

Frequency – Greater than twice per month. “if the Remittance Frequency so established or so elected pursuant to Subparagraph 1.6.2.1(a) is greater than twice monthly, Remittances shall be made by the Agent so as to reach the Clearing Bank not later than its close of business on the fifth day following the Reporting Dates so determined or by such date where agreed by the Conference for application in a specific market; any transactions not processed in previous Reporting Periods will be included in the final billing” The following markets are not aligned with the current Resolution:

Region

Operation Frequency

Reporting date to

Remittance date

Africa and Middle East Kuwait 7 7



Page: 3 of 4 ____________________________________________________________________________

Africa and Middle East Saudi Arabia 7 14

Africa and Middle East Sudan 7 7

North Asia Mongolia 7 8

North Asia Taiwan 7 8

North Asia Hong Kong 7 8

North Asia Macau 7 8

Asia Pacific Australia 7 12

Asia Pacific French Polynesia 7 15

Asia Pacific Guam 7 15

Asia Pacific Micronesia 7 15

Asia Pacific New Caledonia 7 15

Asia Pacific Papua New Guinea 7 15

Asia Pacific New Zealand 7 6

Asia Pacific Japan 7 8

Asia Pacific Vietnam 7 7

Asia Pacific Indonesia 7 7

Asia Pacific Indonesia 7 15

Asia Pacific Malaysia 7 10

Asia Pacific Singapore 7 7

Asia Pacific Thailand 7 7

Asia Pacific Tonga 7 15

Asia Pacific Sri Lanka 7 7

Asia Pacific Fiji 7 15

Asia Pacific Samoa 7 15

Asia Pacific Nepal 7 15

Asia Pacific India 7 9

Asia Pacific Philippines 7 7

Europe Albania 7 15

Europe Azerbaijan 7 8

Europe Bosnia Herzegovina 7 15

Europe Bulgaria 7 10

Europe Croatia 7 15

Europe Czech Republic 7 10

Europe Denmark 7 15

Europe Estonia 7 15

Europe Finland 7 15



Page: 4 of 4 ____________________________________________________________________________

Europe Georgia 7 7

Europe Hungary 7 15

Europe Iceland 7 15

Europe Kazakhstan 7 6

Europe Kosovo 7 15

Europe Latvia 7 15

Europe Lithuania 7 10

Europe Macedonia 7 15

Europe Serbia & Montenegro 7 15

Europe Norway 7 15

Europe Poland 7 15

Europe Portugal 7 15

Europe Romania & Moldova 7 15

Europe Russia 7 7

Europe Slovakia 7 10

Europe Slovenia 7 15

Europe Sweden 7 15

Europe Ukraine 7 7


____________________________________________________________________________ R15 LATE SUBMISSION OF FINANCIAL SECURITIES – CHANGE TO RESOLUTION 818g

SECTION 2

Submitted by PSG Background/Problem The proposal below is to allow for a more reasonable approach when it comes to the late submission of Financial Securities. In the operations it has been identified together with the Travel Agency Commissioner that the penalty assigned to an Agent for the late submission of a Financial Security especially in instances where matters are out of the Agents control is very onerous. As it is practiced today, the Agent is assigned two instances of Irregularity and Standard Traffic Documents are withdrawn. The reasons the operations have identified contributing to late submissions of an Agent’s Financial Security are considered to be as follow:

It can take more than 30 days for a Financial Security provider to issue the Financial Security due to internal administrative procedures.

Delays by courier / post to deliver the original copy to the hub.

Communication did not reach the person in charge in due course (due to exceptional circumstances on the Agent’s or IATA side).

Proposal It is proposed that the Resolution provision of issuing two instances of Irregularity when failing to provide a Financial Security per deadline is removed. The rational for this is that IATA has withdrawn all Standard Traffic Documents (STDs) at the same time so the risk is covered. The proposed Resolution amendment in this regard is outlined in Attachment ‘A’ of this paper. Proposed Action PSG/93 reviewed and unanimously endorsed the changes to Conference. Conference is requested to adopt the Resolution amendments shown in Attachment ‘A’ with normal effectiveness of 1 June 2017.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Amend Resolution 818g as shown below: Reviews and Consequences of Non Compliance […] 2.2.1.3 In all cases where a Financial Security needs to be provided, it shall be provided by a specified date to be determined by IATA, which shall be 30 days from the date of such written notification. On finding that the Agent failed to comply with a requirement to provide a Financial Security or an increase thereof, such failure shall be grounds for IATA to apply two instances of irregularity and IATA shall withdraw all Standard Traffic Documents (STDs) and require the Agent to comply with the conditions within 30 days. […]


____________________________________________________________________________ R16 SIMPLIFICATION OF CHANGES TO APPLICATION PROCEDURE NOTICE OF CHANGE

(NOC) FORM ENHANCEMENT

Submitted by PSG


In the event of any major changes which requires the need for execution of new Passenger Sales Agency Agreement a new application form together with a notice of change as stated under Resolution 800 section 11.3.1 and Resolution 818g section 10.3.2 must be submitted to IATA. It is considered that this is a duplication in effort and data, especially since the most critical data covered in the application form is already contained in the Notice of Change which is considered legally binding document and serves as a temporary Passenger Sales Agency Agreement.

Proposed Solution

To amend the Notice of Change form to include the critical fields that can be found in the

Application form but not mentioned in the Notice of Change.

To amend Resolutions 800 and 818g to omit the need to submit an application form in case

of Major Changes as seen in attachments ‘A’& ‘B’.

Proposed Action

PSG/94 reviewed the proposal and unanimously endorsed it to Conference.

Conference is requested to adopt the amendments to Resolution 818g as shown in Attachments

‘A’ & ‘B’ for 1 June 2017 effectiveness.




Resolution 800 section 11.3.1

11.3.1 the Agent (‘the transferor’) and the proposed new owner (‘the transferee’) shall jointly give the Agency Administrator notice of the proposed change in the form as provided in Attachment ‘A’ to these Rules at least 60 days before the change is to be effected. At the same time the transferee shall submit an application for approval and inclusion in the Agency List in accordance with Paragraph 2.1 of Section 2 of these Rules, and the application shall be considered and dealt with in accordance with the provisions of Section 4 of these Rules; provided that. The notice of change of ownership may be accepted and acted upon by the Agency Administrator at less than 60 days’ notice but not after change is effected, where he is satisfied with the transferor's and transferee's joint written statement of explanation for failure to give due notice;

Resolution 818g section 10.3

10.3.2 in the event of a change to an Agent, as set forth in Subparagraphs 10.3.1 (a) or 10.3.1(b), notice shall be submitted to the Agency Administrator by the Agent and if applicable, the new owner, using the Notice of Change set forth at Attachment ‘B’ at least seven days before the change is to be effected. As soon as practicable given the nature of the change, the Agent and/or, if applicable the new owner, shall submit an application for accreditation in accordance with Section 3 of these Rules;


Attachment: 18 Aug 16 ‘B’

Page: 1 of 5 ____________________________________________________________________________ Attachment ‘B’

TO: Agency Administrator AGENCY NAME, ADDRESS & INTERNATIONAL AIR TRANSPORT ASSOCIATION NUMERIC CODE NOTICE OF CHANGE Pursuant to the provisions of Section 10 of the Passenger Sales Agency Rules we hereby give notice of the following change(s) in the legal status or ownership of the above-named IATA Agent (Transferor) as a consequence of contractual arrangements or negotiations: PRESENT APPROVED STATUS FUTURE STATUS

1.Sole Proprietorship/Partnership /Corporation/other (specify one) ……………………………………………………….. 2. Name(s) of owner/partners in case of unincorporated firms ……………………………………………………….. 3. If corporation list: (a) Issued share capital ……………………………………………………….. name/amount of shares % name/amount of shares %

(b) Names and address of owners of stock/shares and amount of stock owned by each ……………………………………………………….. (c) names of all officers and directors ……………………………………………………….. 4. Effective date of future status as shown above. 5. Legal name, trading name and full address under new ownership. 6. If the answer to (5) above represents a change of name or location or both, please give details. 7. Will such change affect all Approved Locations? If not, please provide detailed explanation. 8. Will such change affect the managers and staff at the Approved Locations under this change? If so, give details. 9. Have any of the new owners, officer (directors), managers or any individual having authorisation to act or sign on behalf of such firm been involved in bankruptcy or default proceedings? If so, give details. 10. Will the change of ownership cause direct or indirect relationship with an organization holding General Sales Agency appointment from a BSP Airline? If so, give details. The Transferor has informed the Transferee of the need to comply with the Sales Agency Rules if the Transferee wishes to be entered on the IATA Agency List as an Accredited Agent. In accordance with one of the requirements of the Sales Agency Rules, the Transferee hereby undertakes that it accepts joint and several liability with the Transferor for any outstanding obligations of the Transferor under its Sales Agency Agreement as at the date the transfer of ownership takes place. Where the Transferor is employed by, or retains a financial or beneficial interest, directly or indirectly, in the agency following the change of ownership, the undersigned Transferee knows and hereby agrees to accept responsibility for any violation by the Transferor of his Sales Agency Agreement which may have occurred within a period of two years immediately prior to the change of ownership as if such violation were a violation of the Transferee’s Sales Agency Agreement. ……………………………………………………………. ……………………………………………… Authorised Signature of Agent (Transferor) Witness ……………………………………………………………. ………………………………………………



Page: 2 of 5 ____________________________________________________________________________ Authorised Signature of Transferee Witness Dated:…………………………………………………….

NOTICE OF CHANGE

IATA NUMERIC CODE: LEGAL NAME: TRADE NAME: AGENCY FULL ADDRESS: TELEPHONE NO.: TELEFAX NO.: EMAIL:

Pursuant to the provisions of the Passenger Sales Agency Rules we hereby give notice of the following change(s) in the legal status or

ownership or name or location of the above-named IATA Agent as a consequence of contractual arrangements or negotiations:

PREVIOUS STATUS STATUS AFTER CHANGE

1. SPECIFY TYPE OF ENTITY : (SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY COMPANY, OTHER)

2. NAME(S) OF OWNER/ PARTNERS/SHAREHOLDERS, ADDRESS, TELEPHONE, FAX, & EMAIL, TIME DEVOTED TO THE AGENCY BUSINESS AND

% FINANCIAL INTEREST IN CASE OF CORPORATION, PARTNERSHIP OR OTHER:

NAME OF OWNER/ PARTNERS / SHAREHOLDES



%FINANCIAL INTEREST

NAME OF OWNER/ PARTNERS / SHAREHOLDES



%FINANCIAL INTEREST

3. IF CORPORATION LIST,

a) ISSUED SHARED CAPITAL:

b) PAID-UP CAPITAL:

c) NAMES OF ALL OFFICERS AND DIRECTORS: (PLEASE UNDERLINE NAME OF LOCATION MANAGER)

4. IF REGISTRATION AND /OR LICENSE IS REQUIRED BY LAW IN YOUR COUNTRY GIVE THE BELOW INFORMATION AFTER THE CHANGE/

UNDER NEW OWNERSHIP.

a) THE TRADE REGISTRATION OR LICENSE NUMBER OF THE AGENCY :

b) THE DATE THIS WAS GRANTED

5. IF YOUR TRAVEL AGENCY IS OWNED BY AN ORGANIZATION OTHER THAN THE HEAD OFFICE, ANSWER THE FOLLOWING WITH RESPECT

TO THE PARENT ORGANIZATION:



Page: 3 of 5 ____________________________________________________________________________

a) WHAT IS ITS LEGALLY REGISTERED NAME AND ADDRESS?

b) WHAT IS THE PRINCIPAL BUSINESS OF THIS ORGANIZATION?

6. WILL THE COMPANY OPERATE AS AN ON-LINE AGENCY UNDER NEW STATUS? IF SO, PLEASE SPECIFY URL ADDRESS:

7. IS YOUR AGENCY IATA REGISTERED CARGO AGENT? IF SO ,PLEASE STATE THE IATA CODE UNDER WHICH IT IS REGISTERED:

IF THE NEW OWNER IS A NON IATA ACCREDITED COMPANY, PLEASE:

a) SUBMIT IN ACCORDANCE WITH THE ATTACHED FORMAT, A STATEMENT OF YOUR CURRENT INTERNATIONAL AIR PASSENGER

TRANSPORTATION SALES.

b) SPECIFY ESTIMATED GROSS AMOUNT OF INTERNATIONAL AIR TRANSPORTATION SALES OF IATA CARRIERS:

o IN YOUR FIRST YEAR?

o IN YOUR SECOND YEAR?

8. WILL THIS CHANGE AFFECT ALL APPROVED LOCATIONS? IF NOT, PLEASE PROVIDE DETAILED EXPLANATION.

9. WILL THIS CHANGE AFFECT THE MANAGERS AND STAFF AT THE APPROVED LOCATIONS UNDER THIS CHANGE? IF SO, GIVE DETAILS.

10. HAVE ANY OF THE NEW OWNERS, OFFICERS (DIRECTORS), MANAGERS OR ANY INDIVIDUAL HAVING AUTHORISATION TO ACT OR SIGN

BEHALF OF SUCH FIRM BEEN INVOLVED IN BANKRUPTCY OR FOUND GUILTY OF WILLFUL VIOLATIONS OF FIDUCIARY OBLIGATIONS IN THE

COURSE OF BUSINESS OR DEFAULT PROCEEDINGS? IF SO, GIVE DETAILS.

11. WILL THE CHANGE OF OWNERSHIP CAUSE DIRECT OR INDIRECT RELATIONSHIP WITH AN ORGANISATION HOLDING GSA APPOINTMENT

FROM A MEMBER? IF SO, PLEASE PROVIDE FURTHER DETAILS.

12. LEGAL NAME, TRADING NAME AND FULL ADDRESS OF THE AGENT AFTER THE CHANGE / UNDER NEW OWNERSHIP.

LEGAL NAME:

TRADING NAME:

ADDRESS:

MAILING ADDRESS IF DIFFERENT

TEL:

E-MAIL:

VAT/TAX NUMBER:

WEBSITE:

13. PLEASE INDICATE IF THE ANSWER TO (13) ABOVE REPRESENTS A CHANGE OF NAME OR LOCATION OR BOTH.

14. WILL SUCH CHANGE AFFECT ALL APPROVED LOCATIONS? IF NOT, PLEASE PROVIDE DETAILED EXPLANATION.

16. EFFECTIVE DATE OF CHANGE

The Transferor has informed the Transferee of the need to comply with the provision of the Passenger Sales Agency Rules if the Transferee wishes to be entered on the IATA Agency List as an Accredited Agent. Approval may be granted only if the Transferee complies in all respects with the requirements of the Passenger Sales Agency Rules. In accordance with one of the requirements of the Passenger Sales Agency Rules, the Transferee hereby undertakes that it accepts joint and several liability with the Transferor for any outstanding obligation of the Transferor under its Sales Agency Agreement as at the date the transfer of ownership takes place.



Page: 4 of 5 ____________________________________________________________________________ Where the Transferor is employed by, or retains a financial or beneficial interest, directly or indirectly, in the agency following the change of ownership, the undersigned Transferee knows and hereby agrees to accept responsibility for any violation by the Transferor of his Sales Agency Agreement which may have occurred within a period of two years immediately prior to the change of ownership as if such violation were a violation of the Transferee’s Sales Agency Agreement.

……………………………………………………………. …………………………………………………….. Authorised Signature of Agent (Transferor) Authorised signature of Transferee ……………………………………………………………. …………………………………………………….. Print/Type Name Print/Type Name ……………………………………………………………. ……………………………………………………………. Title/Position Title/Position …………………………………………………………... …………………………………………………………... Signature of Witness & Date Signature of Witness & Date

RECEIVED AND ACKNOWLEGED: …………………………………………………………………………….. IATA Agency Administrator Dated: …………………………………………………………………….



Page: 5 of 5 ____________________________________________________________________________

STATEMENT OF INTERNATIONAL SALES (to be filled in only in cases where a non

IATA Accredited Entity takes a full ownership of an existing IATA Accredited Agency)

Please provide details of international air passenger transportation generated at: Name and address of agency:

………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………… …………………………………………………………………………………………………………………………………

Period covered: From: ................................................... to: ...................................................………

Name of ticket issuing carrier

Amount of sales for IATA Member Airlines (in local currency)

Scheduled traffic

Charters Air Portion of Its TOTAL

Own Others

TOTAL IATA In local

currency

In US dollars:

Rate of exchange used: USD1=

Signature:…………. Date:…………….


____________________________________________________________________________ R17 MODIFICATION OF THE DAYS FOR SUBMITTING GUARANTEES BY TRAVEL AGENTS –

CENTRAL AMERICA AND CARIBBEAN REGION

Submitted by APJC Central Americas and Caribbean

Background

PAConf/36 (2013) agreed to shorten the number of days allowed for Agents to submit Financial Securities to IATA from 60 to 30 calendar days. The decision became effective 1 June 2014.

Due to the intervention of local financial institutions, regulated by the banking system under government control, in the country of the Agent it is complicated for Agents to meet the new provision on time and the reduction of 30 calendar days impact negatively the processing and issuing of a Financial Security in IATA’s name.

The procedure for buying and issuing a Financial Security by an Agent at a financial institution

requires specific documentation and in some cases a real property free of liens for qualification

and authorization.

The time involved in this process takes approximately 20 working days for the banking system for

regulatory oversight, and the subsequent registration with the government entity, which implies 15

additional working days, totaling approximately 35 working days that translate up to 60 calendar

days.

Problem

There is a conflict with the fundamental freedom rights of giving and receiving as the 30 calendar days established by PAConf cannot be met in the countries of the Central American Region and the Caribbean because the financial system requires up to 60 calendar days approximately to process a guarantee.

There is no chance of a sustained commercial activity when the contractual rules are altered and the legal framework of the Central American Region and the Caribbean remain the same.

Based on statistical data of the Central American Region and the Caribbean found by our associations, also reflected in IATA reports, between the period of June 2014 and May 2015, 14% and 27% of Agents who have been affected by this regulation have not had the capacity to deliver the Financial Security within the regulated 30 calendar days.


____________________________________________________________________________ Below you will find comparative tables that reflect the number of Agents who have not been able to submit the Financial Security on time, depending on the region.

1. CENTRAL AMERICAN REGION (CENAM)

CENAM

Less Than 30 Days 18

More Than 30 Days 3

Total 21

Less Than 30 Days 86%

30 ‐ 60 Days 14%

Submission of FS within 30 days as

per Resolution: 18 86%

Submission of FS over 30 days: 3 14%

2. THE CARIBBEAN REGION

CARIBBEAN

Less Than 30 Days 22

More Than 30 Days 8

Total 30

Less Than 30 Days 73%

30 ‐ 60 Days 27%

Submission of FS within 30 days as

per Resolution: 22 73%


____________________________________________________________________________

Submission of FS over

30 days: 8 27%

When variations are above 10%, attention should be paid as it is not a small or simple variation. If we add that it affects both regions, we can conclude that in CENAM and CAR combined, 11 Agents out of a total of 51 Agents were unable to submit the Financial Security within 30 calendar days, which makes 21.5%. Based on these percentages, it is necessary to evaluate the negative effect caused by the conflict of law derived from the incompatibility of IATA’s regulation and the existing legal framework of the banking system in each country.

It is important to note that Agents have never stopped submitting the Financial Securities and consequently the problem does not lie in their presentation but on incompatibility of times.

This situation has resulted in dissatisfaction on the part of all Agents affected or not affected by the Resolution provision, who fear that at any time their right can be restricted by a mere technicality that does not depend on their willingness and goodwill, but on the government bureaucracy affecting the financial system of the countries involved.

Proposed Solution

The APJC met on 8 April with a quorum and they unanimously agreed the following.

There should be a common legal framework that does not conflict and violate the fundamental freedom rights of giving and receiving of the Agents as this reduction of time affects all authorized Agents regardless of their size and location in the Central American Region or the Caribbean. We therefore propose a solution based on the common good and supremacy of the law of the countries and find a balance.

Proposed Action

PSG/94 endorsed the proposal to Conference. PAConf is requested to adopt the Resolution amendments in Attachment ‘A’, with a 01 January 2017 effectiveness.




Resolution 818g

Reviews and Consequences of Non Compliance

2.2.1.3 In all cases where a Financial Security needs to be provided, it shall be provided by specified date to be determined by IATA, which shall be 30 days (40 days in Argentina, Brazil, Canada, Colombia, and Venezuela, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Belize, Trinidad & Tobago, Antigua & Barbuda, Aruba, Barbados, Bonaire, Curacao, Dominica, Grenada, Guyana, Montserrat, St Kitts & Nevis, St Lucia, St Maarten, St Vincent & the Grenadines, Suriname, Bahamas, British Virgin Islands, Cayman Islands, Turks & Caicos, Dominican Republic, Haiti and Jamaica) from the date of such written notification. On finding that the agent failed to comply with a requirement to provide a Financial or in an increase thereof, such failure shall be grounds for IATA to apply two instances of irregularity and IATA shall withdraw all Standard Traffic Documents (STDs) and require the agent to comply with the conditions within 30 days (40 days in Argentina, Brazil, Canada, Colombia, and Venezuela, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Belize, Trinidad & Tobago, Antigua & Barbuda, Aruba, Barbados, Bonaire, Curacao, Dominica, Grenada, Guyana, Montserrat, St Kitts & Nevis, St Lucia, St Maarten, St Vincent & the Grenadines, Suriname, Bahamas, British Virgin Islands, Cayman Islands, Turks & Caicos, Dominican Republic, Haiti and Jamaica). Failure by the agent to comply within the required days shall be grounds to give the Agent notice of removal from the Agency list, which removal shall take effect on a date that is not before the date specified in clause 13.2 of the Passenger Sales Agency Agreement, and to notify all BSP Airlines accordingly;


____________________________________________________________________________ R18 AGENCY COLLECTION FOR SUSPENDED AIRLINES

Submitted by PSG


Resolution 850 Attachment F, paragraph 2(b)(iv) provides two options to IATA upon the

suspension of an airline – either (a) to instruct agents to continue settling with IATA, or (b) to

instruct agents to settle directly with the suspended airline. While IATA’s default is to apply option

(b), it is important that both options remain available to IATA, as each case must be examined on

a case-by-case basis to determine which of the two options poses less legal and financial risk to

the BSP (this analysis will often turn on whether a refund agreement can be entered into with the

suspended airline).

In the event that option (a) is selected, it is clear that agents who fail to settle to IATA their

outstanding billings with respect to the suspended airline will be issued irregularities and

potentially defaulted, as per standard practice with non-suspended airlines. Under option (b),

however, it is not fully clear under the Resolutions whether IATA should issue irregularities to

agents who fail to settle outstanding billings directly with the suspended airline.

Issue

Recently, several suspended airlines have approached IATA and requested assistance in the

recovery of the amounts not settled by agents which were to have been settled directly with that

suspended airline. Specifically, the airlines requested that IATA take non-compliance action

against those agents, based on Resolution 818g Attachment A paragraph 1.7. In order to assist

these airlines, IATA contacted the agents in question and informed them that they had outstanding

balances which were required to be settled with the suspended airline. Although IATA did not

take the further step of issuing irregularities or defaulting the agents, several of the agents

complained to IATA and one Travel Agent Association issued a formal written complaint on its

members’ behalf, through a law firm.

Solution

In order to provide clarity to the actions to be taken by IATA regarding agents who fail to settle

directly with the airline pursuant to Resolution 850 Attachment F paragraph 2(b)(iv)(b), IATA

proposes to add to the current wording in Resolution 818g, Attachment ‘A’, paragraph 1.1.2 and

to Resolution 832, paragraph 1.1.2, per Attachment ‘A’ of this agenda item.

This amendment would reduce the risk that a suspended airline challenges IATA for a perceived

failure to issue irregularities to or to default an agent who has not paid the suspended airline


____________________________________________________________________________ directly. While IATA has not seen any formal legal challenges on this issue yet, the increased

interest in this issue makes such a challenge more likely without the proposed clarification.

The amendment would also eliminate the need for IATA to get involved in the bilateral discussions

between the suspended airline and the agents. Such involvement is problematic, as when agents

are instructed to settle directly with the suspended airline IATA no longer has the visibility needed

to confirm whether the agents have complied. Also, the agents may have defenses to payment

under local law (such as offsetting claims for refunds), which IATA is not well-placed to decide

once payments are removed from the regular BSP remittance and settlement process.

Proposed Action

PSG/94 endorsed the above proposal to Conference. PAConf is requested to adopt the

Resolution changes shown in Attachment ‘A’ for 1 January 2017 effectiveness.




Changes to Resolution 818g, Attachment A

1.1.2 in circumstances where a BSP Airline is suspended from the BSP, the monies due to the

BSP Airline are handled according to the provisions contained within Resolution 850. While

IATA’s instruction to Agents under Resolution 850 Attachment F paragraph 2(b)(iv)(b) to settle

directly with the suspended BSP airline does not relieve Agents of any payment obligations to the

suspended BSP Airline, the irregularity and default action provisions of paragraph 1.7 of this

Attachment do not apply while such instruction is in place.

Changes to Resolution 832

1.1.2 in circumstances where a BSP Airline is suspended from the BSP, the monies due to the

BSP Airline are handled according to the provisions contained within Resolution 850. While

IATA’s instruction to Agents under Resolution 850 Attachment F paragraph 2(b)(iv)(b) to settle

directly with the suspended BSP Airline does not relieve Agents of any payment obligations to the

suspended BSP Airline, the irregularity and default action provisions of paragraph 1.7 of this

Attachment do not apply while such instruction is in place.


____________________________________________________________________________ R19 E-BULLETIN ENHANCEMENT

Submitted by Agency Management Background IATA has initiated a project (Agency Management Solution) to streamline the Agency Management processes and improve the customer journey through the implementation of a new IT solution. The objective of the project is to design, deliver and implement an integrated solution to effectively support the mandates and business objectives of IATA’s Agency Programme and its customers worldwide. As a part of the project’s scope, it is a good opportunity to search for global alignment and solution to enhance the following aspects of the ebulletin, that have as implementation date January 2017:

Communication channel

Central repository

Bulletin layout and format

Frequency Seven early adopting airlines volunteered to provide feedback on developments and subsequently to pilot the solution. A presentation with the proposed solution and main updates has been given to the early adopting airlines and overall positive feedback was received. IATA used this opportunity to also gather some business requirements/proposals that will be analysed for further development. Proposed Solution The main benefits of the new e-bulletin solution are:

Self management ease of use solution, where Airlines will be able to customize their alerts and recipients of the e-bulletin

Single repository for Agency data and Agency changes data. The e-bulletin will be posted in the ISS Customer Portal, being accessible from everywhere around globe

System will be updated in real time making the date immediately available to subscribers

The E-bulletin will be available for download at any time with no limitation on historical data: at any poin in future users can retrieve information up to the day the enhanced E-bulletin has been launched

Action items PAConf to note

Agenda Item: R20.1 Revision No.: 0 Date: 18 Jul 16 Page: 2 of 2

____________________________________________________________________________ R20.1 CHANGE IN REMITTANCE FREQUENCY AND CHANGES TO THE LOCAL FINANCIAL

CRITERIA – THE NETHERLANDS

Submitted by APJC – Netherlands Background Information A study prepared by a group of F.A.G. members throughout six meetings which took place between the 3rd of February 2016 and the 2nd of June 2016, its conclusions were presented to the APJC NL on the meeting on the 22nd of June 2016, in which quorum was met. Considering its results, the APJC NL reached the decision to propose the following set of actions, which were unanimously agreed upon in a vote. 1. Implement new Local Financial Criteria and change of definitions in line with the current

800F, eg. change of definition and criterion of profitability. 2. Set bi-monthly payment as standard default setting in The Netherlands. 3. Reduce the remittance scheme from 15 to 10 days after reporting date. Proposed Action Conference is requested to adopt the proposed change in Remittance Frequency and Local Financial Criteria for Netherlands, as shown in Attachment ‘A’, for 1 April 2017 effectiveness.


____________________________________________________________________________ Attachment ‘A’ Replace current Local Financial Criteria with the below.

NETHERLANDS (Effective 01 April 2017 – PAC/39) 1. GENERAL “All Agents are required to remit not less frequently than twice per month:

o For sales made 1st to 15th of the month, the Remittance Date is the 25th day the same

month; and

o For sales made 16th until the end of the month, the Remittance Date is the 10th day the

following month.”

2. CRITERIA FOR EVALUATION OF AGENTS' ACCOUNTS

2.1 Audited Accounts must be provided not later than 6 months following the financial year end of the Agent

2.2 The following financial tests apply to the evaluation of an Agent's Audited Accounts:

2.2.1 Solvency = Net Equity / Total Assets > 20 % (Subordinated loans will be added to the capital when subordinated to IATA) 2.2.2 Liquidity = Adjusted Current Assets / Current Liabilities > 1 2.2.3 Profitability = Profit before tax > 0 2.2.4 Cash Flow (Profit after taxes + depreciation) must be positive

3. ANNUAL FINANCIAL REVIEWS Agents accredited for two years or less 3.1 All Agents must provide Audited Accounts not more than 6 months old at the time of submission to become an Agent for the purposes of evaluation against the financial tests in Section 1 of this Resolution. If an Agent has been in business for less than 12 months at the time of application, an opening balance sheet must be provided instead. 3.2 All Agents must provide Audited Accounts no later than 6 months after each financial year end, or as required by legislation, during the first two years of accreditation for the purposes of evaluation against the financial tests in Section 1 of this Resolution. 3.3 All Agents must provide a Financial Security during the first two years as an Agent in accordance with Section 4 of these criteria.


____________________________________________________________________________ Agents accredited for more than two years 3.4 All Agents must provide Audited Accounts no later than 6 months after each financial year end, or as required by legislation, of that Agent for the purposes of evaluation against the financial tests in Section 1 of these criteria. 3.5 If an Agent passes all the financial tests and satisfies all the points below, the Agent will not be required to provide IATA with a Financial Security:

3.5.1 The Agent has not had the following in the last 12 months: A default (including defaults resulting from an accumulation of irregularities) and removal from the Agency List.

3.5.2 The Agent also passed all of the financial tests under Section 1 of this Resolution

based on the Audited Accounts provided for the previous two years. 3.6 If an Agent fails to pass any of the financial tests, the Agent must provide a Financial Security in accordance with Section 4 of this Resolution. 4. INTERIM FINANCIAL REVIEWS 4.1 For any Financial Review conducted for cause at a time other than in respect of an Agent's financial year end, IATA may conduct a Financial Review in accordance with Section 2 of this Resolution, as applicable to that Agent by reviewing the internal monthly management accounts of the Agent showing the results for each month since the last accounting date, the cumulative results to date and the latest balance sheet. 5. FINANCIAL SECURITY 5.1 An Agent will not be accredited or will not continue to be accredited until any Financial Security required to be provided to IATA has been received by IATA and confirmed to IATA by way of written confirmation received directly from the third party supporting the Financial Security that the Financial Security was issued by that third party and is valid. 5.2 Financial Securities will be subject to a minimum notice of termination period on the part of the Financial Security Provider of ninety (90) days and ideally be valid for an unlimited period but will be expected to be valid for a minimum of at least one year.

5.2.1 If an Agent is granted an additional IATA numeric code(s) then any Financial Security already provided by the Agent will be re-calculated based on the gross BSP sales 60 days after the date that the additional IATA numeric code(s) is granted based on the Amount at Risk applicable to that Agent.

5.3 For the purposes of calculating the amount of a Financial Security the following definitions apply:


____________________________________________________________________________

5.3.1 “Days' Sales at Risk” means the number of days from the beginning of the Agent's

Reporting Period to the Remittance Date in respect of that Reporting Period or Periods,

plus a margin of up to five days. An additional margin of 2 days will be added for SEPA

transaction.

5.3.2 “Amount at Risk” is calculated by dividing the Days' Sales at Risk by 90 days, and applying that percentage to the BSP cash turnover, or cash turnover as applicable, amount the Agent made in the three-month period referred to in Section 4.5 or 4.7 of this Resolution, as applicable: Amount of risk =“Days’ Sales at Risk”× BSP cash turnover in applicable 3 months period /90

5.3.4 Notwithstanding the actual number of ‘Days’ Sales at Risk, the number of ‘Days’ Sales at Risk’ for sole proprietors will always be 45

Agents accredited for two years or less 5.4 All Agents must provide a Financial Security with a minimum amount of EUR 75,000 to be accredited. 5.5 After the first three months of accreditation and after the first 12 months of accreditation, the amount of the Financial Security required must cover at a minimum the higher of:

5.5.1 the Amount at Risk calculated as per Section 5.3 using the cash turnover amount equal to the average net monthly cash sales of the Agent during the previous three-month period; or 5.5.2 EUR 75,000. If the existing Financial Security is insufficient to cover the Amount at Risk, the amount of the Financial Security required will be increased to cover the Amount at Risk.

5.6 Except for the amount of the initial Financial Security, all calculations of the amount of Financial Security required under this Resolution or the Passenger Sales Agency Rules for Agents accredited for two years or less will be reviewed and calculated under Section 5.5 of these criteria. Agents accredited for more than two years 5.7 The amount of the Financial Security required must cover at a minimum the Amount at Risk calculated as per Section 5.3 using the BSP cash turnover, or cash turnover as applicable, amount equal to the average of the 3 months highest net cash sales in the previous 12 months. If the existing Financial Security is insufficient to cover the Amount at Risk, the amount of the Financial Security required will be increased to cover the Amount at Risk.


____________________________________________________________________________ 5.8 All calculations of the amount of Financial Security required under this Resolution or the Passenger Sales Agency Rules for Agents accredited for more than two years will be calculated under Section 5.7 of this Resolution; 6. CHANGES IN OWNERSHIP 6.1 This section applies to all changes in ownership or control or any other Review resulting from a change of ownership or control of the Agent in accordance with the Passenger Sales Agency Rules. 6.2 The Agent must provide Audited Accounts, no later than 90 days after the change of ownership or control is effected. The Accounts must cover a period of 12 months including, at a minimum, the first month after the change of ownership or control takes effect and IATA will use these Accounts to conduct the Financial Review applicable to the Agent under this Resolution; 6.4 License: Travel Agents can be requested to provide a VOG (Certification of good conduct for Legal entities) 7. CHANGES IN FINANCIAL YEAR END 7.1 All Agents must notify IATA immediately of a change in its financial year-end. 7.2 The Agent must provide both:

7.2.1 Audited Accounts within 60 days after the change is made and IATA will conduct the Financial Review applicable to the Agent under this Resolution. 7.2.2 Audited Accounts for the financial year end that would have applied to the Agent before the Agent changed its financial year end. These must be provided to IATA within 60 days of the former financial year end.

8. SIGNIFICANT CHANGE IN GROSS BSP SALES 8.1 For Agents that have a change in ownership or control that necessitates a new Passenger Sales Agency Agreement, consideration will be given by the local APJC as to whether a Financial Security is required. 8.2 An Agent must notify IATA of any significant change as soon as the Agent becomes aware of it. 8.3 An interim Financial Review may also be initiated by IATA where IATA becomes aware of a significant change in gross BSP sales in accordance with Section 3. DEFINITIONS OF TERMS USED IN THESE GUIDELINES Adjusted Current Assets–are defined as Current Assets as in the Balance Sheet of the Accounts after deducting:


____________________________________________________________________________

– Stocks and work in progress, – Deposits given to third parties other than IATA, – Loans to Directors, Associate Companies, (including any subsidiary, associate or company under common ownership), – Doubtful debtors, – Blocked funds, except for funds held in favor of IATA.

Audited Accounts means the Agent's financial and accounting records and procedures that have been reviewed and certified by an auditor recognized as competent by the regulatory authority in that country to perform an audit that are provided to IATA and which includes the auditor's opinion of those accounts. Certified accounts will be applicable in those countries where APJCs accept certified accounts according to local law. In all instances the established accounting rules in a country will apply. Current Liabilities – are defined as Current Liabilities as in the Balance Sheet of the Accounts. Profit before Tax – Earnings Before Interest, Taxation, Depreciation and Amortization. Financial Review means a review of an Agent's financial position or the calculation of the

amount of Financial Security required in accordance with this Resolution, or both. Irregularity means any irregularity applied under the Passenger Sales Agency Rules for non-

compliance with those Rules including but not limited to Financial Irregularities. Net Equity or Shareholders'/Owners' Funds – consists of:

– Share capital – Share premium – Retained earnings – Other distributable reserves – Shareholder's loans if subordinated less declared dividends.

Total Assets are defined as Total Assets in the Balance Sheet of the Annual Accounts Review means any assessment or evaluation of an Agent's continuing compliance with the Passenger Sales Agency Rules.


____________________________________________________________________________ R20.2 CHANGE IN REMITTANCE FREQUENCY AND CHANGE TO THE LOCAL FINANCIAL

CRITERIA – IRELAND

Submitted by APJC IE


The APJC Ireland met on 31st of May 2016 and a quorum of members was present: 11 out of 12 in total (6 Airlines and 5 Agents)

On the Agenda there were a number of items related to changes to Local Financial Criteria for Accreditation and Retention of Agents, in order to reduce the risk of non- payment and default.

After a lengthy discussion, members agreed to recommend a change to the standard remittance frequency from monthly to twice monthly, with Remittance Dates on the 1st and the 15th of the month following the month of sale (the Remittance Date for the second period of the month changes from 16th of the month to 15th of the month to align to the provision of R818g.

They also agreed to recommend a change in the Profitability requirement, from one year out of three to one year out of two; liquidity ratios were recalculated accordingly, to reflect these changes.

A proposal to change the calculation of Financial Security levels based on provisions of R800f was deferred for further discussions.

Changes recommended are effective as from 01April 2017

The vote was unanimous. Proposed Action Conference is requested to endorse the proposed change in Remittance Frequency and Local

Financial Criteria for Ireland, as shown in Attachment ‘A’, for 1 April 2017 effectiveness.


____________________________________________________________________________ Attachment ‘A’

IRELAND (Effective 1 January April 2016 7– PAC/389)

1. GENERAL RULE

The financial standing of IATA New Applicants and of IATA Accredited Agents is evaluated by IATA. It is important that only Agents that demonstrate their ability to settle their liabilities will be accepted and the financial criteria have been set with the objective of ensuring that only financially sound applicants are accredited. The Settlement dates in Ireland are:

The 1st and 16th 15th of the month following the month of sales, for Agents settling their

BSP liabilities once twice per calendar month

8 days after each reporting period for Agents settling their BSP liabilities four times per

calendar month. The reporting periods are: 7th, 8-15th, 16-23rd and 24th to the end of the

calendar month.

2. CRITERIA FOR THE EVALUATION OF AGENTS’ ACCOUNTS

A financial review is conducted each year by IATA. The review is based on the examination of the full set of the most recent audited annual accounts and is based on the following key financial criteria: (a) Equity/Capital Account (b) Liquidity (c) Profitability (a) Equity (for limited companies) or Capital account (for partnerships & sole traders) This is based on the projected annual turnover of the Agent for airlines sales including revenue to non-IATA airlines participating in the BSP and less substantiated credit card sales. The levels of equity required are shown below and must be met without exception. The total equity must not fall below the levels stated hereunder. Equity for this purpose is capital paid up, reserves, and profit and/or loss carried forward. There are two levels set – the normal minimum for companies that have traded for less than 2 years as an Accredited Agent, and the traded minimum for companies that are able to submit 2 consecutive years’ accounts.

Less than 2 years trading 2 years’ Accounts

BSP Cash Sales Normal Minimum (EUR) Traded Minimum (EUR)


____________________________________________________________________________

1 million 40,000 40,000

2 million 50,000 40,000

3 million 60,000 40,000

4 million 80,000 40,000

5 million 100,000 50,000

6 million 120,000 60,000

7 million 140,000 70,000

8 million 160,000 80,000

9 million 180,000 90,000

10 million and over 200,000 100,000

(b) Liquidity The accounts must show a positive liquidity ratio i.e. current assets must exceed current liabilities at the end of an accounting period. (c) Profitability Agents’ accounts must show a profit before tax in at least one of the last two accounting periods. This requirement will be applicable to annual accounts falling due for review as from 01 April 2017 onwards. If an Agent Accounts do not show a profit in at least one of the last two accounting periods, the Agent is required to meet one of the following: cb1) If an Agent’s Net Current Assets meet or exceed 8% of cash sales of their annual BSP turnover (net to be paid), the Agent can remit on a monthly basis.twice monthly. cb2) If an Agent does not meet bc1) above and their Net Current Assets meet or exceed 4% of cash sales of their annual BSP turnover (net to be paid), the Agent must remit on a weekly basis, unless the Agent provides a Financial Security (bank guarantee/ insurance bond) of 128% of yearly BSP cash sales turnover (net to be paid) to continue to remit on a monthly basistwice monthly. b3) If an Agent does not meet bc1) or bc2) above, the Agent must remit weekly and must provide a Financial Security (bank guarantee/ insurance bond) of 4% of the yearly BSP Cash Sales turnover (net to be paid)., unless the Agent provides a Financial Security (bank guarantee/ insurance bond) of 12% of yearly BSP cash sales turnover (net to be paid) to continue to remit on a monthly basis. For the purpose of calculating the liquidity ratios, the BSP cash sales turnover (net to be paid) used will be for the same 12 month period as the financial year under assessment.


____________________________________________________________________________ For the purpose of the liquidity tests above, the Current Assets will be adjusted to include the value of freehold properties provided that audited accounts are submitted for the annual review and:

The value of the total charges and indebtedness secured on the property is disclosed by

the Agent in the audited accounts.

The value of the property must be stated in the audited accounts and must be certified by

a qualified and independent valuer, i.e. a professional auctioneer or real estate agent.

The valuation of the property must not be older than three years with the date of the

valuation stated in the audited accounts. For newly accredited Agents or when an Agent

presents audited accounts for the first time, the valuation must not be older than 3 months.

(c) Profitability Agents’ accounts must show a profit before tax in at least 1 year within the last 3 financial years. This requirement will be applicable to annual accounts falling due for review as from 01 June 2014 onwards.

3. ANNUAL FINANCIAL REVIEWS

New Applicants New Applicants must submit with their application a full set of audited accounts for their company for the most recent financial year and a copy of their government license. New Applicants for a Head Office IATA License and for Branches of Head Office Licenses based overseas will be required to put in place a Financial Security (insurance bond or bank guarantee) and settle their BSP liabilities on a weekly basis, for a minimum period of 2 years – see “Financial Security (Bank guarantee/ Insurance bond) requirements” below. These conditions will stay in place until two annual reviews of company accounts have taken place and if found satisfactory the Agent will follow the requirements applicable, in accordance with the Local Financial Criteria. Newly formed companies that have traded for less than 12 months at the time of application may submit an opening balance sheet, prepared by their statutory auditor. Accredited Agents - Annual Financial Reviews Accredited Agents must submit a full set of audited accounts within 4 months of the end of their financial year. Sole Traders and Partnerships may submit a full set of Certified Accounts. Exemption from Audit


____________________________________________________________________________ Notwithstanding the provisions above, sole traders, partnerships and Irish registered limited companies, that meet the conditions for exemption from audit as a small company as defined by the Irish Company Law, may submit certified accounts for financial review, provided that (i) the certification is issued by an independent Reporting Accountant and (ii) the Agent settles its BSP liabilities four times monthly, according to the published BSP Reporting Calendar. Reporting Accountant is defined on Note 1 below.


For New Applicants A Financial Security (bank guarantee/ insurance bond) will be required for the first 2 years of trading as an IATA accredited Agent. For accredited IATA Agents a Financial Security (bank guarantee / insurance bond) will be required if their annual accounts show that:

(a) They do not meet either of the requirements in a, b or c above (b) The Agent undergoes a significant change of ownership (see below).

The Financial Security levels will be as follows:

Calculation of Financial Security requirement for New Applicants or Accredited Agents

Twice-Mmonthly Payment

Financial Security will be at a level of 128% of BSP Cash Sales Turnover (net to be paid)*

Weekly Payment Financial Security will be at the level of 4% of annual BSP Cash Sales Turnover (net to be paid)*

*Or projected annual BSP Cash Turnover for new applicants. For the purpose of calculating the level of Financial Security required the BSP cash sales turnover (net to be paid) is calculated using the sales figures for the most recent 12 month period available (being 12 full calendar months) at the time of the assessment.

The Financial Security levels are calculated to the nearest multiple of EUR500 and are subject to a minimum of EUR40,000 for New Applicants and of EUR20,000 for Travel Agents trading for 2 or more years as an accredited IATA Agent.

A Financial Security may be arranged through a bank registered in the Republic of Ireland or through an Insurance Company approved by IATA (a list will be provided upon request).


____________________________________________________________________________

OTHER

Effect of changes of ownership on Financial Security requirements A Financial Security (bank guarantee/ insurance bond) will also be required if your Agency undergoes a complete or significant change of ownership after approval. This is defined as a total acquisition, or a transfer exceeding 49% of the paid-up share capital, representing a change in control. Cumulative changes will be taken into account. The Financial Security will continue (and may be adjusted in line with turnover) until at least three years' accounts under the new ownership have been submitted and assessed. Notwithstanding the above and for the purposes of this section only, the credit rating of an Agent obtained from a Credit Information company appointed by IATA, may be taken into account to form a complete evaluation of the financial status and creditworthiness of an Agent. Provided that the credit rating of an Agent is at a level of “good credit worthiness” (or the equivalent) an Agent will not be required to provide a Financial Security. The Credit Rating will be monitored by IATA for the full period of 3 yearly financial reviews under the new ownership and if it falls below “good credit worthiness” a Financial Security will be required for the remaining period of the 3 years. License issued by the Commission for Aviation Regulation (CAR)

Required Note 1 - Reporting Accountant The Reporting Accountant shall be either a statutory auditor, which in Ireland means a person eligible for appointment as a statutory auditor as set out in Part 42 Statutory Auditors of the Companies Act 2006 or an independent qualified accountant holding a current practising certificate with a recognised accountancy body. We list below the accepted recognised accountancy bodies:

- Institute of Chartered Accountants of England & Wales

- Institute of Chartered Accountants of Scotland

- Institute of Chartered Accountants of Ireland

- Association Chartered Certified Accountants

- Association of Authorised Public Accountants

- Chartered Institute of Management Accountants

- Association of International Accountants

- Institute of Chartered Secretaries and Administrators

- Institute of Financial Accountants

- Association of Certified Public Accountants in Ireland - Institute of Chartered Accountants Ireland


____________________________________________________________________________ R20.3 CHANGE TO REMITTANCE FREQUENCY – PAKISTAN

Submitted by APJC Pakistan

Background Information: The Remittance frequency adopted by the 36th Passenger Agency Conference for Pakistan has not been implemented due to local legal and other concerns that the PSG has been kept apprised of. This submission to the 39th Passenger Agency Conference is to pre-advise that an impending change in Remittance frequency for Pakistan for 2017 is under discussion at APJC Pakistan and expected to be concluded in July 2016. When concluded an Agenda proposal will be forwarded to Conference through the 2nd Transmittal for approval.


____________________________________________________________________________ R20.4 REDUCE THE LENGTH OF CHINA BSP SETTLEMENT CYCLE

Submitted by APJC China


Since the birth of China BSP on July 31th 1995, the business volume of the operation has been

growing rapidly, as well as big changes in payment method and settlement cycle. Since the year

2008, with the development of electronic tickets and the internet enterprises, the settlement

frequency of China BSP had been set to twice a week, with settlement day on each Monday and

Thursday.

Currently, China BSP is regarded as important sales method for airlines in China. There are three

major payment method for CN BSP: cash, BOP and corporate card. The first two sales methods

have two settlement for their weekly sales, usually consist of the last day of one reporting period

(3-4 days) with additional 8 natural days, a cycle of T+8 to 11 days.

In recent years, Airlines in China has strengthen their sales focus on group customers and UATP

sales has increased rapidly. Long capital return period for BSP cannot satisfy airlines’ requirement

on sales capital management. Airlines feared that the lengthier the time period between them

issuing the ticket and receiving the money, the more likely a default from the agent may occur.

Proposed Solution

A new settlement calendar would be set up for China BSP. The logic that used to set up reporting

period would remain the same as what is currently used, but both remittance day and settlement

day for each settlement period would be moved forward. The whole settlement cycle will be

reduced from 8-11 days to 4-8 days.

Local Financial Criteria would also be changed due to reduced settlement cycle.

Proposed Action

PSG/94 unanimously endorsed this item to Conference. PAConf to adopt the new China BSP calendar, per Attachment ‘A’, and the changes in the Local Financial Criteria, per Attachment ‘B’, with a 1 January 2017 effectiveness.

Agenda Item: R20.4 Revision No.: 1 Date:



1. IATA BSP-CHINA REPORTING & REMITTANCE CALENDAR 2016 (Draft)

2. 3. Period NO.

4. Reporting Period

5. Dispatch Sales Transmittal Ex. Agent / Lodge ADM/ACM For Processing Ex. DPC

6. Airline Billing And H.O.T. Dispatch Ex.DPC and ASD/Agent download billling report from ASD

7. Agent Remittance Due Date

8. Airline Settlement Date

9. JAN

10. 0101

11. 04 Jan

12. - 13. 06 Jan

14. 07 Jan Thu

15. 08 Jan Fri

16. 11 Jan Mon

17. 12 Jan Tue

18. 0102

19. 07 Jan

20. - 21. 10 Jan

22. 11 Jan Mon

23. 12 Jan Tue

24. 13 Jan Wed

25. 14 Jan Thu

26. 0103

27. 11 Jan

28. - 29. 13 Jan

30. 14 Jan Thu

31. 15 Jan Fri

32. 18 Jan Mon

33. 19 Jan Tue

34. 0104

35. 14 Jan

36. - 37. 17 Jan

38. 18 Jan Mon

39. 19 Jan Tue

40. 20 Jan Wed

41. 21 Jan Thu

42. 0105

43. 18 Jan

44. - 45. 20 Jan

46. 21 Jan Thu

47. 22 Jan Fri

48. 25 Jan Mon

49. 26 Jan Tue

50. 0106

51. 21 Jan

52. - 53. 24 Jan

54. 25 Jan Mon

55. 26 Jan Tue

56. 27 Jan Wed

57. 28 Jan Thu

58. 0107

59. 25 Jan

60. - 61. 27 Jan

62. 28 Jan Thu

63. 29 Jan Fri

64. 01 Feb Mon

65. 02 Feb Tue

66. 0108

67. 28 Jan

68. - 69. 31 Jan

70. 01 Feb Mon

71. 02 Feb Tue

72. 03 Feb Wed

73. 04 Feb Thu

74. FEB

75. 0201

76. 01 Feb

77. - 78. 03 Feb

79. 04 Feb Thu

80. 05 Feb Fri

81. 06 Feb Sat

82. 14 Feb Sun

83. 0202

84. 04 Feb

85. - 86. 07 Feb

87. 08 Feb Mon

88. 09 Feb Tue

89. 15 Feb Mon

90. 16 Feb Tue



Page: 2 of 2 ____________________________________________________________________________

91. 0203

92. 08 Feb

93. - 94. 10 Feb

95. 11 Feb Thu

96. 12 Feb Fri

97. 17 Feb Wed

98. 18 Feb Thu

99. 0204

100. 11 Feb

101. - 102. 14 Feb

103. 15 Feb Mon

104. 16 Feb Tue

105. 19 Feb Fri

106. 22 Feb Mon

107. 0205

108. 15 Feb

109. - 110. 17 Feb

111. 18 Feb Thu

112. 19 Feb Fri

113. 23 Feb Tue

114. 24 Feb Wed

115. 0206

116. 18 Feb

117. - 118. 21 Feb

119. 22 Feb Mon

120. 23 Feb Tue

121. 25 Feb Thu

122. 26 Feb Fri

123. 0207

124. 22 Feb

125. - 126. 24 Feb

127. 25 Feb Thu

128. 26 Feb Fri

129. 29 Feb Mon

130. 01 Mar Tue

131. 0208

132. 25 Feb

133. - 134. 28 Feb

135. 29 Feb Mon

136. 01 Mar Tue

137. 02 Mar Wed

138. 03 Mar Thu

139. 0209

140. 29 Feb

141. - 142. 02 Mar

143. 03 Mar Thu

144. 04 Mar Fri

145. 07 Mar Mon

146. 08 Mar Tue

147. MAR

148. 0301

149. 03 Mar

150. - 151. 06 Mar

152. 07 Mar Mon

153. 08 Mar Tue

154. 09 Mar Wed

155. 10 Mar Thu

156. 0302

157. 07 Mar

158. - 159. 09 Mar

160. 10 Mar Thu

161. 11 Mar Fri

162. 14 Mar Mon

163. 15 Mar Tue

164. 0303

165. 10 Mar

166. - 167. 13 Mar

168. 14 Mar Mon

169. 15 Mar Tue

170. 16 Mar Wed

171. 17 Mar Thu

172. 0304

173. 14 Mar

174. - 175. 16 Mar

176. 17 Mar Thu

177. 18 Mar Fri

178. 21 Mar Mon

179. 22 Mar Tue

180. 0305

181. 17 Mar

182. - 183. 20 Mar

184. 21 Mar Mon

185. 22 Mar Tue

186. 23 Mar Wed

187. 24 Mar Thu

188. 0306

189. 21 Mar

190. - 191. 23 Mar

192. 24 Mar Thu

193. 25 Mar Fri

194. 28 Mar Mon

195. 29 Mar Tue

196. 0307

197. 24 Mar

198. - 199. 27 Mar

200. 28 Mar Mon

201. 29 Mar Tue

202. 30 Mar Wed

203. 31 Mar Thu

204. 0308

205. 28 Mar

206. - 207. 30 Mar

208. 31 Mar Thu

209. 01 Apr Fri

210. 05 Apr Tue

211. 06 Apr Wed



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘B’

Add the below section to the Local Financial Criteria for China:

1.1.6 Guarantee

All agents must provide a financial security. It should be equivalent to 37% of the average monthly

cash sales on behalf of BSP-CN participating airlines during the previous 12 month period, with

a minimum amount of CNY 1.5 million for international agents.


____________________________________________________________________________ R20.5 CHANGE TO NUMBER OF DAYS BETWEEN REPORTING DATE AND REMITTANCE DATE

– INDONESIA

Submitted by APJC Airlines Indonesia

BACKGROUND: Currently the Remittance Date is 14 days after Reporting Date. APJC/ Indonesia have been discussing the prospect of changing the Remittance Date to advance it by seven days which would result in the Remittance Date being seven days after the Reporting Date. These discussions have not had any convergence of views between the Airlines and the Agency members of the APJC during the period of discussions. At the APJC meeting held on 20 June 2016, this matter was again discussed, and the airlines expressed that adequate discussions had taken place during the past meetings, and if there was no agreement amongst the members of the APJC, that they would opt to invoke the provisions in the Resolution to make a unanimous proposal. Agency members requested for a Working group meeting to finalize this, as agreed in the previous APJC. At the Working Group meeting held on 27th June, different implementation dates were discussed. Subsequently it was agreed among the Airlines that the commencement date for the change of Remittance Date would be 1st January 2017. Since there was no final consensus that emanated from the Joint Council, the APJC Airline members of the Council have decided to invoke the provisions of paragraph 1.1.2.3 of Resolution 818g, and submit a proposal to Conference recommending a change in Remittance Date. The decision was unanimous amongst the Airlines. Excerpts of the minutes of meetings of the Joint Council specific to this Agenda proposal are documented in Appendix ‘A’ that accompanies this paper. PROPOSED SOLUTION: It is proposed to advance the Remittance Date to seven days from Reporting Date with effect from 01 January 2017 as unanimously recommended by the Airline members of the Joint Council. Accordingly, it is proposed that paragraph 1.6 in Attachment C to Resolution 818g be amended to add Indonesia as one of the countries that will adopt a four times monthly remittance calendar where the Remittance Date is seven days from the Reporting Date.

Section 1.6 SETTLEMENT – THE REMITTANCE DATE


____________________________________________________________________________

PAKISTAN, THAILAND, VIETNAM, SINGAPORE, MALAYSIA, SRI LANKA and PHILIPPINES and INDONESIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th day from the Reporting Date.

PROPOSED ACTION: Conference is requested to adopt the changes to the Remittance Date with a 1 January 2017 effectiveness date and the related changes to Resolution 818g, Attachment C.



Page: 1 of 4 ____________________________________________________________________________ Attachment ‘A’ Excerpts of APJC Meeting minutes over the past 33 months since September 2013. APJC Meeting dated 20 June 2016: 1. Proposal for New BSP Indonesia Calendar

Airlines wanted to proceed for the new BSP Indonesia calendar as discussed in the previous meetings. The third proposal suggested by airlines in the last APJC meeting on 5 May 2015 was to change BSP International calendar to have express weekly billing and remittance cycle e.g. 1-8 of the month, remittance on 15th of the same month etc. The 1st Proposal was proposed on APJC meeting on 19 September 2013, 2nd Proposal was on APJC meeting on 21 August 2014.

Airlines also proposed 01 January 2017 as the start of the new BSP calendar.

One of the main concerns expressed by airlines was the ratio of DIP and BG agents had changed from 89% DIP vs 11% BG in 2015 to 50% DIP vs 50% BG at the moment. Airlines also worried that with the increasing amount of agent default, the risk of unrecovered funds is also expected to increase. Hence, airlines were in opinion that reduction of BSP credit period was necessary to minimize the risk.

Agents stated their questions on the necessity of the plan for new BSP Indonesia calendar as there are no problem with the current scheme from technology side. And airlines also received the funds on timely manners.

Agents also shared that the unrecovered amount due to agent defaults will be reduced as DIP providers will take the risks and therefore no risk is placed to the airlines.

Airlines explained that previously BSP Domestic and BSP International environments were using 2 different currencies. However, the government had issued a regulation of single currency in Indonesia, thus maintaining 2 different calendars is no longer necessary. IATA was also asked to share the common practice in other BSPs in Asia where only one BSP is applied with average credit period of 1-2 weeks.

Agents mentioned that current corporate agreements is valid for 1 year and therefore any changes have to be discussed with the corporate customers.

Agents proposed to have a working group to discuss the plan of new BSP Indonesia calendar after the APJC meeting.

Airlines and agents then agreed to establish a working group on 27 June 2016. Airlines mentioned that if no consensus from the working group or if the outcome of the working group is not satisfactory, then APJC airlines only proposal will be submitted to the PAConf in September 2016, for implementation of the express weekly calendar for BSP Indonesia



Page: 2 of 4 ____________________________________________________________________________

international, effective 01 January 2017. This one sided submission is due to absence of conclusion after previous discussions which have lasted almost 3 years and 4 consecutives meeting.

APJC meeting dated 05 May 2015 1. Proposal for new BSP Indonesia calendar

Proposal proposed by airlines in the previous APJC meeting on 21 August 2014 was to change the BSP International calendar to have express weekly billing and remittance cycle e.g. 1-8 of the month, remittance on 15th of the same month etc. The proposal is raised again by the airlines to reduce the risk exposure.

Airlines shared benefits of the new BSP Indonesia calendar as the financial security could be reduced (i.e. reduced Bank Guarantee’s amount and reduced DIP premium) if the proposal is agreed.

Agents shared the current market situation where competition is getting harder and change of BSP Indonesia calendar does not solve the problems for risk exposure. Agents refused to accept the proposal as their corporate customers usually demand for longer credit facility.

Agents suggested for a win-win solution where airlines will offer NRCC in BSP Indonesia so agents’ corporate customers may use them.

As airlines and agents still could not agree on the proposal during the meeting due to different views and opinions, one of the recommendations is for a working group to discuss the subject again in more details (win-win solutions for both parties).

APJC meeting dated 21 August 2014 2. Proposal for new BSP Indonesia calendar

Proposal proposed by airlines in the previous APJC meeting on 19 September 2013 was to change to the BSP International calendar to have express weekly billing and remittance cycle e.g. 1-8 of the month, remittance on 15th of the same month etc. The proposal is raised again by the airlines as it is also happening in other BSPs.

An airline shared the benefits of the new BSP Indonesia calendar as the financial security could be reduced (i.e. reduced Bank Guarantee’s amount and reduced DIP premium) if the proposal is agreed.

An agent shared the current situation where they usually provide longer credit period to the corporate customers.



Page: 3 of 4 ____________________________________________________________________________

An agent suggested for a win-win solution where airlines will offer NRCC and normal credit card payments in BSP Indonesia so agents’ corporate customers may use them. Another suggestion given is to wait until IDR currency implementation is completed.

An airline requested for the agents to approach again their corporate customers to explore ways to meet the proposed BSP Indonesia calendar and to also consider the timeline of implementation in relation to this matter.

As the airlines and agents could not agree on the proposal during the meeting due to different views and opinions, the recommendation from the APJC members is to form a financial advisory working group to discuss the subject again in more details and to come up with common objective with win-win solutions. The working group will make the recommendation for the next APJC meeting.

APJC meeting dated 19 September 2013 5.a. Proposal for a change in BSP International Calendar

Airlines proposed for a change in BSP International calendar as follow: Period 1-8 of the month, remittance on the 15th of the same month, and so on.

Agents proposed to implement NRCC (Net Remit Credit Card) if the BSP International calendar is be changed. If NRCC is implemented, Agent Association will send recommendation to the members to reduce credit terms to corporate clients.

Airlines asked on the direct correlation between NRCC and payment schedule. Agents explained that with shorter credit period meant that agents have to cover the payment first to airlines while payment from their customers are not yet received by them. Some of agents’ corporate accounts have been paying with credit cards.

Agents queried whether APJC needs to create an NRCC working group to pick up where it was left off before. However, airlines commented that from the last NRCC testing around 4 years a go, there were two issues being identified :

o The tickets are in USD while the banks’ settlement are in IDR. o Not every airline has merchant bank in Indonesia.

And the main issue is the currency difference, as credit card merchants/banks are not allowed to charge passengers in USD.

IATA clarified the meeting that in order to implement NRCC, no approval from APJC is needed. An airline commented that every airline have their own considerations.

Agents shared that agent association had sent a recommendation letter to Ministry of Finance to make all transactions in Indonesia to use IDR currency. An airline shared the update from BAR Indonesia that DGCA cannot impose the usage of IDR in international tickets yet until the other state owned enterprises agree to charge fuel and airport fees in IDR.



Page: 4 of 4 ____________________________________________________________________________

APJC members agreed to explore further on this point (i.e. change in BSP International calendar) in the next meeting which will provide a win-win solution.

Airlines advised agents to start in checking with their corporate clients in terms of shorter credit facility in relation to this matter.

Agenda Item: 20.6 Revision No.: 0 Date: 18 Jul 16 Page: 1 of 2

____________________________________________________________________________ 20.6 CHANGE IN NUMBER OF DAYS BETWEEN REPORTING DATE AND REMITTANCE DATE –

CENTRAL AMERICA

Submitted by APJC – El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, Panamá, Belize Background Information Every year airlines have to deal with the economic impact of defaults. During the last couple of years, airlines had lost thousands of dollars due to defaults in the Latin American market. Also, airlines are facing an increase in risk due to local currencies devaluation. The macroeconomic environment is affecting the travel industry and the businesses of travel agencies. In addition, during 2014 and 2015, BSP calendars were modified to match with calendar months. This caused the increase of the days included in each period from seven (7) to eight (8) or even (9) days, and therefore, the days for agents to submit payments increased. The Resolution 818g - Attachment A, Section 1, Paragraph 1.6.2.1 (e)) establishes that “Remittances shall be made by the Agent so as to reach the Clearing Bank not later than its close of business on the fifth day following the Reporting Dates so determined or by such date where agreed by the Conference for application in a specific market”. Thanks to improvements in processing times by IATA’s Data Processing Center, the current billings are being made available to Agents in BSPlink two days after the Calendar Period ends. Current Scenario: All Central American BSP Calendars for 2016 considers a remittance period of 10 days after the end of the Calendar Period, having an average of eight days after billing presentment, which is not anymore in compliance with this section of the Resolution. Proposed Solution Based on IATA regulations and procedures, specifically related to Resolution 824, states in its section 7.1 that “a Traffic Document shall be issued immediately money is received by the Agent” and section 7.2 that “all monies collected by the Agent for transportation and Ancillary Services sold under this Agreement, including applicable remuneration which the Agent is entitled to claim thereunder, are the property of the Carrier and must be held by the Agent in trust for the Carrier or on behalf of the Carrier until satisfactorily accounted for to the Carrier and settlement made”. Being this the case, Airlines should be able to minimize the economic impact of defaults by reducing the period between the Billing and the Remittance dates established in the BSP calendar to 5 days after the end of the Calendar Period. This action will also have a positive impact to the Agents as it will reduce the amount of days at risk that are used in the formula to calculate financial securities requested to travel agencies.


____________________________________________________________________________ Please find an illustration of 7+5 Calendar for 2017 as a reference in Attachment ‘A’ below. A majority of the Airlines and the Agents in the APJC voted in favour of this proposal.

Proposed Action:

Conference is requested to endorse the change in number of days between the Reporting Date

and the Remittance Date, per the calendar shown in Attachment ‘A’, for 1 January 2017

effectiveness.

Agenda Item: 20.6 Revision No.: 0 Date:


Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ 7+5 Calendar sample for Central American countries

First Day of

Period

Last Day of

PeriodPeriod

Outputs Market

D+2 or Next Available

Working Day

Agent Remittance

(Weekly)

7+5 Calendar Days

Airline Settlement

(Weekly)

Sun 01-Jan-17 Sat 07-Jan-17 2017011 Mon 09-Jan-17 Thu 12-Jan-17 Fri 13-Jan-17

Sun 08-Jan-17 Sun 15-Jan-17 2017012 Tue 17-Jan-17 Fri 20-Jan-17 Mon 23-Jan-17

Mon 16-Jan-17 Sun 22-Jan-17 2017013 Tue 24-Jan-17 Fri 27-Jan-17 Mon 30-Jan-17

Mon 23-Jan-17 Tue 31-Jan-17 2017014 Thu 02-Feb-17 Mon 06-Feb-17 Tue 07-Feb-17

Wed 01-Feb-17 Tue 07-Feb-17 2017021 Thu 09-Feb-17 Mon 13-Feb-17 Tue 14-Feb-17

Wed 08-Feb-17 Wed 15-Feb-17 2017022 Fri 17-Feb-17 Mon 20-Feb-17 Tue 21-Feb-17

Thu 16-Feb-17 Wed 22-Feb-17 2017023 Fri 24-Feb-17 Mon 27-Feb-17 Tue 28-Feb-17

Thu 23-Feb-17 Tue 28-Feb-17 2017024 Thu 02-Mar-17 Tue 07-Mar-17 Wed 08-Mar-17

Wed 01-Mar-17 Tue 07-Mar-17 2017031 Thu 09-Mar-17 Mon 13-Mar-17 Tue 14-Mar-17

Wed 08-Mar-17 Wed 15-Mar-17 2017032 Fri 17-Mar-17 Mon 20-Mar-17 Tue 21-Mar-17

Thu 16-Mar-17 Wed 22-Mar-17 2017033 Fri 24-Mar-17 Mon 27-Mar-17 Tue 28-Mar-17

Thu 23-Mar-17 Fri 31-Mar-17 2017034 Mon 03-Apr-17 Wed 05-Apr-17 Thu 06-Apr-17

Sat 01-Apr-17 Fri 07-Apr-17 2017041 Mon 10-Apr-17 Wed 12-Apr-17 Thu 13-Apr-17

Sat 08-Apr-17 Sat 15-Apr-17 2017042 Tue 18-Apr-17 Thu 20-Apr-17 Fri 21-Apr-17

Sun 16-Apr-17 Sat 22-Apr-17 2017043 Mon 24-Apr-17 Thu 27-Apr-17 Fri 28-Apr-17

Sun 23-Apr-17 Sun 30-Apr-17 2017044 Tue 02-May-17 Fri 05-May-17 Mon 08-May-17

Mon 01-May-17 Sun 07-May-17 2017051 Tue 09-May-17 Fri 12-May-17 Mon 15-May-17

Mon 08-May-17 Mon 15-May-17 2017052 Wed 17-May-17 Tue 23-May-17 Wed 24-May-17

Tue 16-May-17 Mon 22-May-17 2017053 Wed 24-May-17 Mon 29-May-17 Tue 30-May-17

Tue 23-May-17 Wed 31-May-17 2017054 Fri 02-Jun-17 Mon 05-Jun-17 Tue 06-Jun-17

Thu 01-Jun-17 Wed 07-Jun-17 2017061 Fri 09-Jun-17 Mon 12-Jun-17 Tue 13-Jun-17

Thu 08-Jun-17 Thu 15-Jun-17 2017062 Mon 19-Jun-17 Tue 20-Jun-17 Wed 21-Jun-17

Fri 16-Jun-17 Thu 22-Jun-17 2017063 Mon 26-Jun-17 Tue 27-Jun-17 Wed 28-Jun-17

Fri 23-Jun-17 Fri 30-Jun-17 2017064 Mon 03-Jul-17 Wed 05-Jul-17 Thu 06-Jul-17

Sat 01-Jul-17 Fri 07-Jul-17 2017071 Mon 10-Jul-17 Wed 12-Jul-17 Thu 13-Jul-17

Sat 08-Jul-17 Sat 15-Jul-17 2017072 Mon 17-Jul-17 Thu 20-Jul-17 Fri 21-Jul-17

Sun 16-Jul-17 Sat 22-Jul-17 2017073 Mon 24-Jul-17 Thu 27-Jul-17 Fri 28-Jul-17

Sun 23-Jul-17 Mon 31-Jul-17 2017074 Wed 02-Aug-17 Mon 07-Aug-17 Tue 08-Aug-17

Tue 01-Aug-17 Mon 07-Aug-17 2017081 Wed 09-Aug-17 Mon 14-Aug-17 Tue 15-Aug-17

Tue 08-Aug-17 Tue 15-Aug-17 2017082 Thu 17-Aug-17 Mon 21-Aug-17 Tue 22-Aug-17

Wed 16-Aug-17 Tue 22-Aug-17 2017083 Thu 24-Aug-17 Mon 28-Aug-17 Tue 29-Aug-17

Wed 23-Aug-17 Thu 31-Aug-17 2017084 Mon 04-Sep-17 Tue 05-Sep-17 Wed 06-Sep-17

Fri 01-Sep-17 Thu 07-Sep-17 2017091 Tue 12-Sep-17 Tue 12-Sep-17 Wed 13-Sep-17

Fri 08-Sep-17 Fri 15-Sep-17 2017092 Mon 18-Sep-17 Wed 20-Sep-17 Fri 22-Sep-17

Sat 16-Sep-17 Fri 22-Sep-17 2017093 Mon 25-Sep-17 Wed 27-Sep-17 Thu 28-Sep-17

Sat 23-Sep-17 Sat 30-Sep-17 2017094 Mon 02-Oct-17 Thu 05-Oct-17 Fri 06-Oct-17

Sun 01-Oct-17 Sat 07-Oct-17 2017101 Tue 10-Oct-17 Thu 12-Oct-17 Fri 13-Oct-17

Sun 08-Oct-17 Sun 15-Oct-17 2017102 Tue 17-Oct-17 Fri 20-Oct-17 Mon 23-Oct-17

Mon 16-Oct-17 Sun 22-Oct-17 2017103 Tue 24-Oct-17 Fri 27-Oct-17 Mon 30-Oct-17

Mon 23-Oct-17 Tue 31-Oct-17 2017104 Thu 02-Nov-17 Mon 06-Nov-17 Tue 07-Nov-17

Wed 01-Nov-17 Tue 07-Nov-17 2017111 Thu 09-Nov-17 Mon 13-Nov-17 Tue 14-Nov-17

Wed 08-Nov-17 Wed 15-Nov-17 2017112 Fri 17-Nov-17 Tue 21-Nov-17 Wed 22-Nov-17

Thu 16-Nov-17 Wed 22-Nov-17 2017113 Fri 24-Nov-17 Mon 27-Nov-17 Tue 28-Nov-17

Thu 23-Nov-17 Thu 30-Nov-17 2017114 Mon 04-Dec-17 Tue 05-Dec-17 Wed 06-Dec-17

Fri 01-Dec-17 Thu 07-Dec-17 2017121 Mon 11-Dec-17 Tue 12-Dec-17 Wed 13-Dec-17

Fri 08-Dec-17 Fri 15-Dec-17 2017122 Mon 18-Dec-17 Wed 20-Dec-17 Thu 21-Dec-17

Sat 16-Dec-17 Fri 22-Dec-17 2017123 Wed 27-Dec-17 Wed 27-Dec-17 Thu 28-Dec-17

Sat 23-Dec-17 Sun 31-Dec-17 2017124 Tue 02-Jan-18 Fri 05-Jan-18 Mon 08-Jan-18


____________________________________________________________________________ R20.7 CHANGE IN NUMBER OF DAYS BETWEEN REPORTING DATE AND REMITTANCE DATE –

SCANDINAVIA

Submitted by APJC Scandinavia

Background Information The Remittance Frequency as approved by Conference for BSP Scandinavia is weekly remittance with the Remittance date being fifteen days following the end of the Reporting period. However, it was observed that this credit period conflicts with the covenants of Resolution 818g, Attachment A, paragraph 1.6.2.1 (d), which stipulates that the Remittance date must be five days following the end of the Reporting period when the remittance frequency is greater than twice monthly. Discussions were held at the 50th APJC-Scandinavia meeting on 11th of April 2016 about closing the gap between the credit period in Scandinavia and the provisions in Resolution 818g Attachment A. After three consecutive APJC meetings where the subject was tabled, the delegates finally agreed on a staggered approach in reducing the credit period. At the 51th APJC-Scandinavia (mail-vote) meeting on 22 April 2016 the Council proposed by a majority to adopt a staggered approach in closing the gap between the credit period in Scandinavia and the Resolution provisions, where the 15 days are reduced to 10 days with effect 1 October 2017 and then further reduced to 5 days on 1 January 2019. A proposal to exempt Government-owned entities from providing a Financial Security and in lieu of a Financial Security to provide a Letter of Guarantee and Undertaking was also adopted by the Council and was sent via mail vote to PAConf in June 2016. As a result of this the APJC-Scandinavia also proposes to add the following text to Resolution 818g Attachment C under “Reporting & Remittance Exceptions”: SCANDINAVIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 10th calendar day from the Reporting Date. SCANDINAVIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 5th calendar day from the Reporting Date. Proposed Action

1. PAConf to adopt the changes to Resolution 818g, Attachment C as shown in Attachment ‘A’ for 1 October 2017 and 1 January 2019 effectiveness.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Resolution 818g Attachment C under “Reporting & Remittance Exceptions”: *Effective 01 October 2017 SCANDINAVIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 10th calendar day from the Reporting Date. *Effective 01 January 2019 SCANDINAVIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 5th calendar day from the Reporting Date.


____________________________________________________________________________ R20.8 CHANGE TO NUMBER OF DAYS BETWEEN REPORTING DATE AND REMITTANCE DATE – LATVIA

Submitted by APJC Latvia

Background Information The Remittance Frequency as approved by Conference for BSP Latvia is weekly remittance with the Remittance date being fifteen days following the end of the Reporting period. However, it was observed that this credit period conflicts with the covenants of Resolution 818g, Attachment A, paragraph 1.6.2.1 (d), which stipulates that the Remittance date must be five days following the end of the Reporting period when the remittance frequency is greater than twice monthly. Discussion were held at the 15th APJC Latvia meeting on December 7th 2015 about closing the gap between the credit period in Latvia and the provisions in Resolution 818g Attachment ‘A’. After three consecutive APJC meetings where the subject was tabled, the delegates finally agreed on reducing the credit period. At the 16th APJC-Latvia (mail-vote) meeting of 29th January 2016, the Council unanimously proposed to close the gap between the credit period in Latvia and the Resolution provisions, where the 15 days are reduced to 7 with effect 01 January 2017. As a result of this the APJC-Latvia also proposes to add the following text to Resolution 818g Attachment ‘C’ under “Reporting & Remittance Exceptions”: LATVIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th calendar day from the Reporting Date. As a result of the proposal to reduce the credit period there is a need to also make adjustments to the Financial Security percentages in the Local Financial Criteria to comply with the proposed payment terms in Resolution 818g Attachment ‘C’, under “Reporting & Remittance Exceptions”. The council is in addition also proposing few clarifications to the Local Financial Criteria. Proposed Action

Conference is requested to adopt the changes to the Resolution 818g Attachment ‘C’ a shown in Attachment ‘A’ to this paper and the changes to the Local Financial Criteria for Latvia as shown in Attachment ‘B’ to this paper for 1 January 2017 effectiveness and implementation.



Page: 1 of 1 ____________________________________________________________________________

Attachment ‘A’

Amend Resolution 818g, Attachment ‘C’ as shown below. *Effective 01 January 2017 LATVIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th calendar day from the Reporting Date.



Page: 1 of 3 ____________________________________________________________________________ Attachment ‘B’ Amend Local Financial Criteria for Latvia as shown below.

LATVIA (Effective 1 January 2016 2017)

1. GENERAL RULES

All IATA Accredited Agents must remit four (4) times monthly (weekly). 2. CRITERIA FOR EVALUATION OF AGENTS’ ACCOUNTS

New Applicants

1. Financial statements must show a positive balance of current assets over current

liabilities.

Existing Agents

1. Profitability

An Agent is required to show profit before tax at the end of the financial year.

However, a loss in a particular year will not result in negative financial standing for established IATA agents with at least three full years as accredited agent and if this ratio was positive in the previous year.

However, a loss in a particular year will not result in negative financial standing for established IATA agents with at least three full years as accredited agent and if the outcome of the previous financial review was satisfactory.

2. Equity Capital

Rate of solidity = Equity capital = min 6% Total capital

3. Solvency

Rate of liquidity = Current assets_ = min 1.0 Current liabilities

3. FINANCIAL REVIEWS

New Applicants



Page: 2 of 3 ____________________________________________________________________________ 3.1 New Applicants must submit independently audited balance sheet and profit and loss accounts. 3.2 The financial statements must be produced by a nationally approved Public Auditor in accordance with International Accounting Standards. 3.3 The financial statements must be translated into English and must not be older than 6 months at the time of submission to IATA. 3.4 IATA has the right to request the annual report including balance sheet and profit and loss

accounts in original.

3.5 New Applicants which have been established as a company for less than one year must

submit a copy of a certified opening balance sheet.

Existing Agents

3.7 Accredited Agents must provide IATA with a copy of their audited balance sheet and profit and loss Accounts in accordance with the time frame for filling reports required by the local authorities (currently 6 months after financial year end).

3.8 The financial statements must be produced by a nationally approved Public Auditor in accordance with International Accounting Standards. 3.9 The financial statements must be translated into English. 3.10 If an Agent passes all the financial tests in section 2 of these criteria or based on the criteria in place at the time of the assessment during two (2) consecutive years and satisfies all the points below, the Agent will not be required to provide IATA with a Financial Security:

3.10.1 The Agent has not been placed in Default in the last 12 months.

3.10.2 A change of ownership has not taken place in the last 12 months.


4.1 Bank Guarantees and Insurance Bonds must be drafted in the English language, using a

standard text provided by IATA.

4.2 Accepted Financial Security types are the following:

a. Bank Guarantee

b. Insurance Bond

New Applicants and Agents accredited for less than two years

4.2 New Applicants must provide a Bank Guarantee or Insurance Bond of minimum EUR

35,000 for the first two (2) consecutive years as IATA accredited.

4.3 All new Applicants and Agents accredited for less than 2 years must provide a Bank Guarantee or Insurance Bond of minimum EUR 35,000 in order to become or to remain accredited.



Page: 3 of 3 ____________________________________________________________________________ 4.4 Newly IATA accredited Agents will continuously be reviewed in relation to their BSP net cash sales generated during the previous 12 months’ to adjust the amount of Financial Security to be provided as follows:

a. 7.5 5.3% of the previous 12 months’ net cash sales

Existing Agents (Agents accredited for more than two years)

4.5 All IATA Accredited Agents must submit a Bank guarantee or Insurance Bond of 7.5 5.3% based on their calculated or actual annual sales processed through the BSP on all their approved locations.

Upon three (3) full years of trading in the BSP, when an IATA Accredited Agent passes the financial tests in section 2 of these criteria, the Financial Security amount will be adjusted as follows:

a. 4.5 % of the Agent´s previous 12 months’ net cash sales of all their approved locations.


____________________________________________________________________________ 20.9 CHANGE TO NUMBER OF DAYS BETWEEN REPORTING DATE AND REMITTANCE DATE – ESTONIA

Submitted by APJC Estonia

Background Information The Remittance Frequency as approved by Conference for BSP Estonia is weekly remittance with the Remittance date being fifteen days following the end of the Reporting period. However, it was observed that this credit period conflicts with the covenants of Resolution 818g, Attachment ‘A’, paragraph 1.6.2.1 (d), which stipulates that the Remittance date must be five days following the end of the Reporting period when the remittance frequency is greater than twice monthly. Discussions were held at the 10th APJC-Estonia meeting on 28 October 2015 about closing the gap between the credit period in Estonia and the provisions in Resolution 818g Attachment ‘A’. After three consecutive APJC meetings where the subject was tabled, the delegates finally agreed on a staggered approach in reducing the credit period. At the 11th APJC-Estonia (mail-vote) meeting of 12th January 2016 the Council unanimously proposed to adopt a staggered approach in closing the gap between the credit period in Estonia and the Resolution provisions, where the 15 days are reduced to 10 days with effect 1 November 2016 and then further reduced to 7 days on 1 March 2017. As a result of this the APJC-Estonia also proposes to add the following text to Resolution 818g Attachment ‘C’ under “Reporting & Remittance Exceptions”: ESTONIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 10th calendar day from the Reporting Date. ESTONIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th calendar day from the Reporting Date. As a result of the proposal to reduce the credit period there is a need to also make adjustments to the Financial Security percentages in the Local Financial Criteria to comply with the proposed payment terms in Resolution 818g Attachment C, under “Reporting & Remittance Exceptions”. Proposed Action

Conference is invited to adopt the changes to the Resolution 818, Attachment ‘C’ and the Local Financial Criteria for Estonia as follows:


____________________________________________________________________________

2. Changes to Resolution 818g, Attachment ‘C’ as shown in Attachment ‘A’ for 1 November

2016 and 1 March 2017 effectiveness.

3. Changes to the Estonia Local Financial Criteria as shown in Attachment ‘B’ for 1

November 2016 effectiveness.

4. Changes to the Estonia Local Financial Criteria as shown in Attachment ‘C’ for 1 March

2017 effectiveness.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Amend Resolution 818g, Attachment ‘C’ as shown below: *Effective 01 November 2016 ESTONIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 10th calendar day from the Reporting Date. *Effective 01 March 2017 ESTONIA ONLY: If the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th calendar day from the Reporting Date.



Page: 1 of 2 ____________________________________________________________________________ Attachment ‘B’ Amend Estonia Local Financial Criteria as shown below for 1 November 2016 effectiveness:

ESTONIA

(Effective 1 October November 2015 2016) 1. GENERAL RULES

All IATA Accredited Agents must remit four (4) times monthly (weekly).

2. CRITERIA FOR EVALUATION OF AGENTS’ ACCOUNTS

New Applicants


liabilities.

Existing Agents

1. Profitability An Agent is required to show profit before tax at the end of the financial year.

2. Equity Capital Rate of solidity = Equity capital = min 6% Total capital

3. Solvency Rate of liquidity = Current assets_ = min 1.0 Current liabilities


New Applicants

3.1 New Applicants which have been established as a company more than one year must submit independently audited balance sheet and profit and loss accounts.

The financial statements must be produced by a nationally approved Public Auditor in accordance with International Accounting Standards.

3.2 New Applicants which have been established as a company for less than one year must submit a copy of the most recent accounts or opening balance sheet, certified by an accountant.

3.3 The financial statements must be translated into English and must not be older than 6 months at the time of submission to IATA.



Page: 2 of 2 ____________________________________________________________________________

Existing Agents


3.5 The financial statements must be produced by a nationally approved Public Auditor in accordance with International Accounting Standards. 3.6 The financial statements must be translated into English. 4. FINANCIAL SECURITY

4.1 Bank Guarantees and Insurance Bonds must be drafted in the English language, using a standard text provided by IATA.


a. Bank Guarantee

b. Insurance Bond

New Applicants and Agents accredited for less than three years

4.3 New Applicants must provide a Financial Security for the first three (3) consecutive years as

IATA accredited agent.

4.4 The financial security will be initially calculated based on the estimation of sales, but with a

minimum of EUR 28,760 and will be periodically reviewed in accordance with 4.6 and 4.7.

Existing Agents (Agents accredited for more than three years)

4.5 If an Agent passes all the financial tests in section 2 of these criteria or based on the criteria in place at the time of the assessment during 2 consecutive years and satisfies the point below, the Agent will not be required to provide IATA with a Financial Security:


4.6 The amount of Financial Security is calculated as 7.5 6.1% of their estimated or actual annual sales processed through the BSP on all their approved locations.

4.7 All Agents will continuously be reviewed in relation to their BSP net cash sales generated during the previous 12 months’ to adjust the amount of Financial Security.



Page: 1 of 2 ____________________________________________________________________________ Attachment ‘C’ Amend the Estonia Local Financial Criteria as shown below for 1 March 2017 effectiveness.

ESTONIA (Effective 1 November March 2016 2017)

1. GENERAL RULES

All IATA Accredited Agents must remit four (4) times monthly (weekly).


New Applicants


liabilities.

Existing Agents

1. Profitability An Agent is required to show profit before tax at the end of the financial year.

2. Equity Capital Rate of solidity = Equity capital = min 6% Total capital

3. Solvency Rate of liquidity = Current assets_ = min 1.0 Current liabilities


New Applicants

3.1 New Applicants which have been established as a company more than one year must submit independently audited balance sheet and profit and loss accounts.

The financial statements must be produced by a nationally approved Public Auditor in accordance with International Accounting Standards.

3.2 New Applicants which have been established as a company for less than one year must submit a copy of the most recent accounts or opening balance sheet, certified by an accountant.



Page: 2 of 2 ____________________________________________________________________________ 3.3 The financial statements must be translated into English and must not be older than 6 months at the time of submission to IATA.

Existing Agents


3.5 The financial statements must be produced by a nationally approved Public Auditor in accordance with International Accounting Standards. 3.6 The financial statements must be translated into English.


4.1 Bank Guarantees and Insurance Bonds must be drafted in the English language, using a standard text provided by IATA.


a. Bank Guarantee

b. Insurance Bond

New Applicants and Agents accredited for less than three years

4.3 New Applicants must provide a Financial Security for the first three (3) consecutive years as

IATA accredited agent.

4.4 The financial security will be initially calculated based on the estimation of sales, but with a

minimum of EUR 28,760 and will be periodically reviewed in accordance with 4.6 and 4.7.

Existing Agents (Agents accredited for more than three years)

4.5 If an Agent passes all the financial tests in section 2 of these criteria or based on the criteria in place at the time of the assessment during 2 consecutive years and satisfies the point below, the Agent will not be required to provide IATA with a Financial Security:


4.6 The amount of Financial Security is calculated as 6.1 5.3% of their estimated or actual annual sales processed through the BSP on all their approved locations.

4.7 All Agents will continuously be reviewed in relation to their BSP net cash sales generated during the previous 12 months’ to adjust the amount of Financial Security


____________________________________________________________________________ R21 MANAGEMENT INFORMATION REPORTS

Submitted by Agency Management

Background

In response to the defaults of Air Fast Tickets (UK, Greece & Germany) and Enterprise Travel

(Ukraine) back in March 2015, IATA was requested to develop a sales monitoring report to be

available to airlines and IATA teams. IATA took the following actions:

1. Developed a Management Information Report (MIR)

2. Requested all Airlines to appoint a Credit Risk Manager, who receive the MIR on a

weekly basis

3. Implemented the enhanced Agency Administrator powers under Resolution 818g,

Attachment A.

The primary purpose of the MIR is for IATA to be able to identify Agents in each BSP with

significant deviations in their sales amounts and take action where appropriate. This may

include actions under the enhanced Agency Administrator powers.

The production and distribution of the MIR was launched at the beginning of March 2015 and

there are two sets of reports being shared with Airlines:

1. Global report shared with the PAConf reps and the appointed CRM every week (or

CFO/CEO where applicable) through IATA Customer Portal

2. Country-by-country report uploaded to BSPlink (communication section) every week.

Use of the Management information Report

1. Global report on the IATA Customer portal

Users accessing the Global Report through the IATA Customer Portal:

7,56% have downloaded all of the MIRs

17,30% have downloaded some of the MIRs

52,15% have not downloaded any of the MIRs from the launch day

onwards

2. Country-by-country report in BSPlink

Users accessing the Country-by-Country Report through BSPlink by July 2016:

19,66% of Airline Users are currently assessing the Management

Information report on regular basis through BSPlink


____________________________________________________________________________ Appointment and Training of Credit Risk Managers (CRM)

100% of BSP participants Airlines have appointed a CRM.

Following the successful appointment of CRMs, IATA has developed a Training webinar

covering the following aspects:

- Risk Management Program Overview

- Generic MIR concepts and principles

- How to access and read the reports

- Roles and Responsibilities of CRM

As of March 2016, IATA regional hubs have initiated trainings to CRMs, through either face to

face sessions or online interactive webinars. The webinar content is provided in a separate file.

To date 137 out of 302 CRMs have participated in training sessions which are planned to be

completed in 2016.

Management information reports going forward

1. MIR thresholds.

At the PSG meeting in September 2015 and subsequently PAC/38 IATA presented the four tier

threshold options to better suit the market needs:

500,000 USD Threshold




It was agreed that the new thresholds are to be put into production. The report with these

adopted thresholds was put in production in October 2015

IATA and airlines continue to monitor the countries to ensure that appropriate thresholds are

assigned. A full list of countries and thresholds is provided in Attachment A.

2. MIR for Domestic Agents

IATA is currently developing a separate report for Domestic Agents in Indonesia and China (the

only markets where Domestic Program is currently in place) as with prior consultation with IATA

Local Offices and Regional teams the generic threshold that is currently applied is too high and

not appropriate for Domestic Agents. System developments are currently in process for BSP

China and BSP Indonesia and these are expected to finalized by end of September 2016

3. MIR Format Enhancement


____________________________________________________________________________ Following request from several carriers, as of July 2016, the global report is being delivered in

.csv format to customer portal, in addition to pdf version, for easier incorporation into carrier’s

internal systems.

4. Extended MIR monitoring

As of late 2015, IATA initiated an extension, beyond the normal work week, of monitoring the

MIR. This was initiated due to an increase in fraudulent activity over the weekends in European

markets. This initiative was initially kicked off between European and Africa and Middle East

regional hubs to ensure coverage over weekends. Weekend monitoring will be extended to the

other hubs during the second half of 2016.

5. MIR missing countries update

- China: Report released and is live for BSP China as of 23 May 2016

- Germany: Report is released and is live for BSP Germany as of 23 May 2016

- South Korea: Technical development pending with external system providers

(DPC).

- Netherlands: Technical development pending with external system providers

(DPC) in order to cater for the various remittance frequencies in the market.

The reports for South Korea and Netherlands are expected to be finalised by the end of Q4

2016.

Estimated savings after introduction of MIR report

IATA introduced a tool to recognize estimated savings in alert cases triggered by the MIR. This

concept is currently used for cases where actions for prejudiced collection of funds are applied

as per Resolution 818g Attachment ‘A’ due to exceptional increase of sales and evidence

received from at least one of the top 5 affected carriers.

The calculation is based on actual unremitted sales until the day of suspension compared to the

sales that would occur until the next scheduled remittance date, considering that agent would

maintain the daily sales at the same level.

Estimated savings for 2016 to date: US$17,2mln

The aggregated amount of immediate settlement requests which were satisfied by agents from

01 January 2016 to date: US$49,1mln

Proposed Action

Conference to note this update.



Page: 1 of 6 ____________________________________________________________________________

Attachment ‘A’

Country by Country Thresholds

Country Threshold Amount

United Arab Emirates $350,000

Albania $100,000

Argentina $500,000

Austria $500,000

Australia $500,000

Azerbaijan $200,000

Bosnia Herzegovina $100,000

Bangladesh $350,000

Belgium $500,000

Burkina Faso $350,000

Bulgaria $350,000

Bahrain $200,000

Benin $350,000

Bermuda $200,000

Bolivia $200,000

Brazil $500,000

Bahamas $200,000

Botswana $200,000

Belize $200,000

Canada $500,000



Page: 2 of 6 ____________________________________________________________________________

Congo $350,000

Switzerland $350,000

Ivory Coast $350,000

Chile $500,000

Cameroon $200,000

China $500,000

Colombia $500,000

Costa Rica $200,000

Cyprus $200,000

Czech Republic $200,000

Germany $500,000

Denmark $500,000

Dominican Republic $200,000

Ecuador $500,000

Estonia $200,000

Egypt $350,000

Spain $350,000

Ethiopia $200,000

Finland $350,000

Fiji $100,000

Micronesia $100,000

France $500,000

Gabon $350,000

Great Britain $500,000

Georgia $100,000

Ghana $200,000



Page: 3 of 6 ____________________________________________________________________________

Greece $350,000

Guatemala $200,000

Guam $100,000

Hong Kong $500,000

Honduras $200,000

Croatia $100,000

Haiti $200,000

Hungary $350,000

Indonesia $500,000

Ireland $500,000

Israel $500,000

India $350,000

Iceland $200,000

Italy $500,000

Jamaica $200,000

Jordan $350,000

Japan $350,000

Kenya $350,000

Cambodia $350,000

Korea, South $500,000

Kuwait $350,000

Cayman Islands $200,000

Kazakhstan $500,000

Lebanon $350,000

Sri Lanka $200,000

Lithuania $200,000



Page: 4 of 6 ____________________________________________________________________________

Latvia $200,000

Morocco $100,000

Macedonia $100,000

Mali $350,000

Mongolia $200,000

Macau $500,000

Mauritania $350,000

Malta $200,000

Mauritius $200,000

Malawi $100,000

Mexico $500,000

Malaysia $350,000

Mozambique $500,000

New Caledonia $200,000

Niger $350,000

Nigeria $200,000

Nicaragua $200,000

Netherlands $500,000

Norway $350,000

Nepal $200,000

New Zealand $350,000

Oman $200,000

Panama $200,000

Peru $500,000

French Polynesia $100,000

Papua New Guinea $350,000



Page: 5 of 6 ____________________________________________________________________________

Philippines $500,000

Pakistan $100,000

Poland $350,000

Portugal $200,000

Paraguay $200,000

Qatar $350,000

Romania $100,000

Serbia $200,000

Russia $200,000

Rwanda $200,000

Saudi Arabia $350,000

Sudan $350,000

Sweden $350,000

Singapore $350,000

Slovenia $100,000

Slovakia $200,000

Senegal $350,000

El Salvador $200,000

Syria $500,000

Turks and Caicos

Islands

$200,000

Chad $350,000

Togo $350,000

Thailand $350,000

Tunisia $200,000

Tonga $100,000

Turkey $500,000



Page: 6 of 6 ____________________________________________________________________________

Trinidad and Tobago $200,000

Taiwan $500,000

Tanzania $200,000

Ukraine $200,000

Uganda $200,000

Uruguay $500,000

Venezuela $500,000

Vietnam $200,000

Samoa $100,000

Kosovo $100,000

Yemen $500,000

South Africa $350,000

Zambia $200,000

Zimbabwe $200,000


____________________________________________________________________________ R22 AGENT CREDIT RISK MANAGEMENT WORKING GROUP

Submitted by Secretary Background At PSG/93 it was discussed that IATA would set up a think tank of early adopters, or advanced Agent Credit Risk Managers. This work has since progressed and a group will be created as a Working Group under the Financial Committee and act as an advisor to the Financial Committee, the Passenger Agency Conference Steering Group, other relevant bodies, and IATA Management, on matters relating to anticipating and responding to issues relating to agent credit risk management. The full Terms and Conditions for the Agent Credit Risk Management Working Group have been developed and are available in Attachment ‘A’ of this paper. Proposed Action Conference to note.




Financial Committee Agent Credit Risk Management (ACRM) Working Group

Role and Mandate

The Agent Credit Risk Management (ACRM) Working Group shall act as advisor to the Financial Committee, the Steering Group of the Passenger Agency Conference, other relevant bodies, and IATA Management on all matters relating to anticipating and responding to agent credit risk management issues.

It will be a Financial Committee working group under the “Financial Services and Settlement Systems” stream. The ACRM Working Group will also report status on a regular basis for consideration by the Steering Group of the Passenger Agency Conference (PSG).

Key Activities

Insight from case studies, and monitoring of current / future trends in agent credit risk.

Advice / monitoring of industry action in anticipating / responding to agent credit risk.

Monitoring credit risk industry practices to ensure the Agency program remains current and

relevant and is the best available to reduce Travel Agency fraud and default.

Developing proposals, when thought necessary, to improve the industry framework to provide

for safer selling using agent credit risk management.

Development and mobilization of the airline community of agent credit risk champions via awareness, education, and training, building a powerful network of market intelligence.

Continuous improvement in industry policies, standards, and tools needed for anticipating and responding to current and future agent credit risk.

Advice on implementation of innovative industry best practices that can be implemented globally in support of airline industry financial safety of funds.

Membership

Standard Financial Committee Working Groups Membership rules should apply. In addition: o Members should be qualified representatives at Senior Director level within their

airlines, and appointed directly by the airline CFO as the airline’s network accountable agent credit risk champion. They will preferably be Direct Reports to the Head of Commercial or to the CFO.

o Members will be selected by the Financial Committee on the basis of their advanced expertise and knowledge of Agent Credit Risk Management issues and trends, and commitment to actively participate in the Working Group.

IATA Secretary

Director Financial and Distribution Services (FDS) Operations.


____________________________________________________________________________ R23 EDITORIAL CHANGES TO RESOLUTION 818G, ATTACHMENT ‘C’

Submitted by IATA Regional office for Asia Pacific Background Information The Passenger Agency Conference has in previous years adopted changes to Remittance Frequency in various countries in Asia & Pacific. The approved Remittance Frequencies and the corresponding periods between the Reporting Date and Remittance Date have not been captured in Resolution 818g Attachment ‘C’ but only in respective submissions of those individual items at various Conferences. This situation sometimes raises questions of what has been approved and in order to eliminate the need to go back to Conference minutes it is desired to incorporate those changes in Attachment ‘C’ to Resolution 818g. Remittance Frequencies and period between the Reporting Date and Remittance Date that have been previously approved and duly implemented but not reflected in Resolution 818g Attachment ‘C’ are shown in Attachment ‘A’ of this paper. Furthermore, there are few countries currently incorrectly reflected in Resolution 818g, Attachment ‘C’ as further changes have since been adopted by the Conference and implemented in the country. Unfortunately at the time no changes were made to Resolution 818g Attachment ‘C’. We are hence taking this opportunity to clean up this part to ensure that the information reflected in the Resolution is correct and up to date. Attachment ‘B’ of this paper includes the items to be removed or updated. Proposed Action Conference to note and approve proposed changes shown in Attachment ‘A’ and Attachment ‘B’ for effectiveness 1 June 2017. The Conference is reminded that this is simply a due diligence process and no changes in the markets will take place.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Changes to Resolution 818g Attachment ‘C’ Section 1.6 SETTLEMENT – THE REMITTANCE DATE

PAKISTAN, THAILAND, VIETNAM, SINGAPORE, SRI LANKA and PHILIPPINES ONLY: If the remittance frequency so established is four times monthly, Remittances must be made so as to reach the Clearing Bank not later than its close of business on the 7th day from the Reporting Date. MALAYSIA ONLY: If the Remittance Frequency so established is four times monthly, Remittances must be made so as to reach the Clearing Bank not later than its close of business on the 10th day from the Reporting Date.

SOUTH WEST PACIFIC (EXCLUDING AUSTRALIA & NEW ZEALAND) ONLY: If the remittance frequency so established is four times monthly, Remittances must be made so as to reach the Clearing Bank not later than its close of business on the 15th day from the Reporting Date.


Attachment: 18 Jul 16 ‘B’

Page: 1 of 1 ____________________________________________________________________________ Attachment ‘B’ Changes to Resolution 818g Attachment ‘C’ Section 1.6 SETTLEMENT – THE REMITTANCE DATE

*Effective 1 January 2015

JAPAN ONLY if the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 13th calendar day from the Reporting Date.

NEW ZEALAND ONLY: if the remittance frequency so established is four times monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th day from the Billing Distribution date (6th day from the Billing Distribution dateeffective 1st July 2014). If the remittance frequency so established is twice monthly, Remittances shall be made so as to reach the Clearing Bank not later than its close of business on the 7th day from the Billing Distribution date of the later sales period (6th day from the Billing Distribution date effective 1st July 2014) of the later sales period.


____________________________________________________________________________ R24 RESOLUTION 866 – DEFINITIONS OF AGENCY PROGRAMME JOINT COUNCIL AND

REMITTANCE

Submitted by Secretary Background/Problem The current definition of Agency Programme Joint Council in Resolution 866 does not establish that IATA will perform the role of Secretary in all cases. For the avoidance of doubt, this needs to be made clear in the Resolution text. It has also been noticed that the term Remittance is used frequently in Resolution 818g Attachment ‘A’ but there is no definition for it in Resolution 866 and it is hence proposed to add one. Proposed Solution Please see proposed amended Resolution text shown at Attachment ‘A’. Proposed Action Conference to adopt the Resolution amendments as shown in Attachment ‘A’.



Page: 1 of 1 ____________________________________________________________________________ Attachment ‘A’ Amend Resolution as shown below: Resolution 866 AGENCY PROGRAMME JOINT COUNCIL (sometimes known as ‘APJC’) means a Council consisting of an equal number of representatives of air carriers and Agents, with IATA as Secretary, established to assist the Conference in the performance of its functions by making recommendations on any aspect of the Agency Programme in the country or area concerned. Include in Resolution as shown below: Resolution 866 REMITTANCE is the payment of monies due by an Agent, for sales issued with Standard Traffic Documents to the BSP Airline. The Agent's Remittance shall reach the Clearing Bank on the date established by the Conference.


____________________________________________________________________________ R25 RESOLUTION 890 - CARD SALES RULES


Background Information In the light of the growing importance of e-commerce in Europe and globally, the provisions of Resolution 890, § 1.4 imposing a restriction on the use of credit cards seriously affects Agents’ business transaction management. Furthermore, the provision is not in line with the overall objectives of the European Union concerning the development of e-commerce and does not fit into the current online business environment.

Credit card transactions offer numerous advantages, in particular in terms of security of commercial transactions. It further reduces the credit risk for airlines, while linking transactions between Agents and Airlines in a more efficient and secure environment, ultimately to the benefit of both Agents and Airlines.

ECTAA/ WTAAA have conducted an internal legal assessment of §1.4 of Resolution 890. Given the legislation in force in all major markets, and in particular in the light of the EU and other jurisdictions’ competition rules, it is considered that Airlines should have the freedom to receive payment from an Agent using all accepted forms of payment, including the Agent’s own credit card.

Based on this assessment, ECTAA/WTAAA believe that Resolution 890, §1.4 must be revised as proposed below or be the paragraph repealed in its entirety.

Proposed Solution SUGGESTED Resolution, 890, § 1.4 AMENDMENT

Card Acceptance

1.1 The Agent may accept Cards as payment for ticket sales on behalf of the Member/Airline whose ticket is being issued, subject to the Rules and Procedures outlined in this Resolution and in Chapters 9 and/or 14 of the Billing and Settlement Plan Manual for Agents (hereinafter collectively referred to as “Rules and Procedure”).

1.2 The Agent shall ensure that the type of Card being processed during the sale is accepted for payment by the Member/Airline whose Traffic Document is being issued. If necessary, the Agent may wish to seek clarification by contacting the Member/ Airline concerned directly.

1.3 In the event of an Agent accepting a Card which is not accepted by the Member/ Airline whose Traffic Document is being issued, the Member/Airline shall charge the non-payment from the Card Company to the Agent by means of an Agency Debit Memo, or, in non-BSP


____________________________________________________________________________

countries, a subsequent adjustment will be made by the Member whose Traffic Document was issued.

1.4 ”

In order to secure the transaction, the use of Cards issued in the name of the Agent, or in the name of any person permitted to act on behalf of the Agent in the framework of the Agent’s commercial activities, may be authorized under the following conditions:

- The Card is issued by an authorised bank institution;

- The use of the Card is excluded from any form of associated loyalty reward programme;

- The use of the Card issued in the name of the Agent complies with the provisions of Resolution 890.”

Proposed Action ECTAA and WTAAA invite the Conference to adopt the proposed changes to Resolution 890, §1.4 or to repeal §1.4 of Resolution 890.


____________________________________________________________________________ R26 WEB SALES BY TRAVEL AGENTS



The proposal was submitted to the PaConf/38 Agenda as a regular Item Agenda (R3). The item

was then deferred by the Conference with the comment that this would allow time for discussion

to take place with IATA and travel agents’ industry representatives.

- The proposal was not supported either by the PAPGJC or APJCs and there was no

effective consultation with the industry. ECTAA/WTAAA underline that the proposed

changes concern the remittance frequency. As a reminder, changes to the financial criteria

or the remittance frequency are to be submitted to the competent APJC for consultation

(Resolution 818 g, Section 1, 1.1.2).

- The proposal, as presented to PaConf/38 did not provide any clarification as to how the

distinction between online web-sales and other sales would be made. ECTAA/ WTAAA

believe that the proposed changes will affect any Agent selling online regardless of

whether online sales constitute 100% or only a small proportion of their sales. In addition,

the proposal did not take into consideration the distinction between ‘Online Travel Agent’

and ‘Accredited Agent’ in Resolution 866.

- The proposal did not take into consideration the numerous changes, which are the result

of consultations at the APJC level and have been introduced in recent years concerning

the financial criteria and accreditation and more frequent remittance in many markets.

- The proposal did not take into account bonding and other commercial arrangements in

place, based on the applicable local criteria. Furthermore, the proposal would impose 2

different cycles of remittance, which would likely considerably add to the number of Agents

put into default.

Despite the PSG recommendations, ECTAA and WTAAA’s position remains the same, as none

of the concerns expressed by ECTAA/ WTAAA in 2015 have been properly addressed so far.

Proposed Action

ECTAA and WTAAA invite the Conference to reject any proposed changes to Resolution 818g

Attachment ‘A’, 1.1.3 and invite the Conference to mandate IATA to implement proper monitoring

of local market activities.


____________________________________________________________________________ R27 MARKET UPDATES

Submitted by Secretary ISRAEL: The BSP continues to operate under an authorization from the Israel Antitrust Authority, but Agents are governed under Resolution 800. There does not appear to be a viable date by which the Agents will transition over to Resolution 818g. IRAN: Discussions are progressing with the Government of the Islamic Republic of Iran. A further update will be provided on-site. CUBA: Discussions are progressing with the Government of the Republic of Cuba for the establishment of a BSP on the island. A further update will be provided on-site. Proposed Action Conference to note these updates.


____________________________________________________________________________ R28 UPDATE ON BLOCKED FUNDS

Submitted by Secretary

Background

The issue of blocked funds is growing and is a source of increasing concern for airlines around

the globe. The total amount of funds blocked worldwide as of 31 December 2015 is estimated

at USD 4.885 billion.

In the past 12 months, IATA, with the assistance of the Treasury Working Group, has

developed a strategy to address the issue. The strategy is based on 3 main pillars:

Collection of information

Communication

Action plans

Collection of information

Every year, IATA publishes a Survey of Remittances of Foreign Balances (RFB). The survey is

a summary of the information provided by member airlines on their blocked funds situation.

The results of the 2016 Edition of the RFB indicate that the reported total industry amount

outstanding as at 31 December 2015 was USD 4.885 billion. This represents an increase of

USD 848 million (i.e. 21%) over the 2015 year-end figure of USD 4.036 billion.

Thirteen countries were reported to have funds blocked in 2015 against 12 in 2014 with the

following difference: Ghana, Iran, Morocco and Ukraine were no longer reported. However

Eritrea, Ethiopia, Mozambique, Nigeria and South Sudan were added.

It is important to note that the situation in specific countries can change quite suddenly. The

RFB, being published once a year, might not always reflect the latest developments. This is

mitigated by the Currency Repatriation Monthly Report (see below). It is important to note that

the quality of the RFB is only as good as the information provided by the airlines.

Communication

Communication is a key part of the IATA strategy on blocked funds. Information is shared

mainly with the member airlines’ treasurers, but other recipients can be added at the request of

the airline.

The main communication tools are the following:


____________________________________________________________________________

Currency Repatriation Monthly Report: this report has been enhanced in 2016 and now

includes:

o A list of the top countries where funds are already blocked, with indication of the

amounts blocked, the reasons that led to the block, the actions taken and the

plans for future actions, as well as a list of relevant economic indicators.

o A watch list of countries where funds are not blocked yet, but where indicators

point to a potential issue in the near future.

Each indicator is clearly defined including the reason for its importance and the

thresholds established for monitoring purposes. IATA is also suggesting

immediate actions for airlines to take in mitigating risks.

A copy of the latest Currency Repatriation Monthly Report is shown at Attachment ‘A’.

Stakeholders’ Forum

For the first time in February 2016, IATA organized a stakeholder forum in Nairobi, Kenya, with

a cross section of representatives of the Airline Industry (Airlines), AFRAA and the Financial

Services Sector (Banks). The purpose of the forum was to address the issue of Airlines’ blocked

funds in Africa. In preparation for this forum, an extensive exercise was done to assess the

difficulties of repatriation faced by IATA members in Africa.

An overview of Currency Repatriation & Blocked Funds was presented followed by workshops

on each of the countries reported, defining a clear action plan according to the issues faced.

Countries addressed in the workshops were: Sudan, Nigeria, Egypt, Angola, Eritrea, Libya,

Algeria, South Sudan, Ethiopia, Mozambique, Ghana, Senegal, Malawi, Ivory Coast, Burundi,

Congo-Brazzaville, Guinea Conakry, Morocco, and Madagascar.

Proposed Action

Conference to note.



Page: 2 of 6 ____________________________________________________________________________



Page: 3 of 6 ____________________________________________________________________________



Page: 4 of 6 ____________________________________________________________________________



Page: 5 of 6 ____________________________________________________________________________



Page: 6 of 6 ____________________________________________________________________________


____________________________________________________________________________ R29 TUNISAIR POSITION ON NGISS

Submitted by a Member

Background We have being following with keen interest the progress made by the NEW GEN ISS through PSG's, PAPGJC's and PAConf’s minutes since last years, and now we are able to make the following comments: It is true that the "NewGen ISS is a strategic program aimed at transforming IATA’s settlement systems and renewing the passenger agency program". Nevertheless, because of such importance, and the far reaching deep negative impact of the Program on the agents community, the survey made by IATA should have covered areas other than Europe, i.e. Northern Africa and other parts in Africa, where (i) the legal framework of distribution and travel agencies, (ii) business drivers and (iii) financials risks especially the bad debts levels are quite different. Regretfully, and to the best of our knowledge, neither the National Carrier Tunisair, nor the Agents' National Association have been involved, in such Survey - at least as far as Tunisia is concerned TU Position/ Solution 1. Now that the Program is being completed, and Resolution 8xx shall be voted, Tunisair,

following its consultation process with the Tunisian Government bodies

and National Travel Agents Association, is hereby strongly against the New System,

except if Tunisia is excluded from this new Resolution, and maintained under the current

818g

2. We expect this compromise from PAConf 39, to avoid any rejection of any outcome or

opposition to the whole Package.

3. Our position is pragmatic, and stems from the fact that this New Model is not adapted nor

economically suitable to Tunisia, "offering no choice, no option, and no flexibility to the

Agents Community :

a. No Cash: is quasi nil

b. International Network does not exist in Tunisian legal framework Agents License

categories

c. which means that we found ourselves with one Standard Accreditation, coupled

with the stringent conditions of sales capping and Remittance Holding Capacity


____________________________________________________________________________

d. The new IATA Global Insurance cannot be introduced, because the Code of

Insurance in Tunisia, prohibit Insurance Coverage by foreign providers

4. Finally, it would be worthwhile to remind, that the Tunisian Civil Aviation Authorities have

anticipated (November 2015) the introduction of New Gen ISS to Tunisia since PAC 38,

when issuing an order to disapprove the new model, which has been filed with IATA.

TU proposed action As explained above, the “NEW GEN ISS PROGRAM” is not suitable to the context of Tunisia and could have a huge negative impact to Tunisair and travel agencies. For this purpose, we strongly recommend to exclude Tunisia from the application of this new resolution 8xx.


____________________________________________________________________________ R30 UPDATE ON ADM MANAGEMENT & REDUCTION PROJECT

Submitted by the Project Manager

Background Information The ADM Management & Reduction Project has been endorsed by the PSG in order to work with the industry on a Root Cause Analysis to identify inefficiencies in the current distribution chain, and to propose solutions that would result in the reduction in the need for post-billing revenue recovery via ADMs. Two streams of work are in scope for the project during 2016:

o Conducting internal analysis of ADM root causes, with recommended solutions and best practices;

o Using results from the Root Cause Analysis to facilitate the ADM Working Group which comprises Airlines, Agents, Travel Agent Associations, GDSs, ATPCO and ARC. The group aims at building an action plan to identify solutions to improve inefficiencies and to reduce the number of ADMs raised.

By the end of 2016, following its November workshop, the ADM Working Group is aiming to propose a yearly target for ADM reduction or other areas of improvement, to be endorsed by the PSG.

Status Overview An internal analysis of ADM root causes has been conducted in 7 categories and presented to the ADMWG over the course of various conference calls to complete a DMAIC process (a data driven methodology to improve business processed by Defining, Measuring, and Analyzing root causes, and hence identifying Improvement and Control measures). Participation has increased as the project has progressed. The ADMWG has now formed a more mature shape with a strong, balanced, core base of participants which provides unbiased and constructive feedback as well as strong support by providing insight into local practices that may indicate geographical trends and local needs. Current registrants on the ADMWG extranet: 113 Participation to the calls:


____________________________________________________________________________

Call Topics: Booking Credit Card Chargeback

Charges Fees & Taxes

Fares Exchanges & Refunds *

Miscellaneous & Commission (Recap) **

Call Date: 19/05/16 24/05/16 03/06/16 28/06/16 12/07/16

Airlines 10 9 17 16 7

Agents 2 5 3 6 2

Others (ARC, ATPCO, GDSs, IATA)

7 9 15 10 7

Total number of Participants

19 23 35 32 16

*52 participants registered. Some registered participants could not join as it clashed with other IATA meetings. ** Short Recap call that was not expected to have large participation. In order to better facilitate the Root Cause Analysis, there has been ongoing collaboration with ARC in order to maintain one standardized list of Reason Codes, enabling the categorization of ADMs using the same logic. This collaboration will be a continuous effort to maintain and improve the list. IATA and ARC are meeting monthly to ensure that any best practices that could be applied globally are shared. Synergies are discussed wherever possible in order to reduce manpower and effort required from Airlines and Agents to engage in two separate initiatives. For example, in year 2016 IATA has been collaborating with ARC on Fare Filing issues, conducting Airline Mappings and identifying training needs and opportunities There has been considerable effort to work with Airlines on a one-on-one basis to map their individual reason codes to the above standard, which has been a key achievement this year. The project team has finalized the mapping of reason codes for 6 Airlines, and 9 Airlines are in the midst of this process, expected to be completed by year-end. Through this process the project team will also initiate airline pairing with 3 airlines to various providers and major ADM recipients, in order to facilitate one-on-one problem solving possibilities. Next Steps Between now and end of October 2016, the project will focus on the documentation of Root Cause Analysis, draft of Proposed Solutions and Best Practices guide, as well as the development of a new Airline Reporting Manual, to provide instructions to BSP Airlines on how to report ADMs, including their categorization. In November, the ADMWG will be meeting face-to-face to validate all the best practices and solutions to be implemented in 2017. The group will also establish the target mentioned above, a roadmap and how results should be measured.


____________________________________________________________________________ The initial proposal would be to agree on a target relating:

- Reduction in global ADM volumes (with a condition that the value per ADM does not increase as a result of consolidation of ADMs, see forecast below)

- Reduction in the “Time to ADM”. This represents the time between ticket issuance and the issuance of an ADM. (More efficient post-billing collection, easing reconciliation efforts)

- Improvement in business relationship between business partners (Measuring ADM disputes as well as qualitative survey)

Forecast on Reduction in ADM volume (Based on 2015 data) Stream 1 – Other IATA Initiatives (where synergies with ADM Project have been identified with Project Manager and ADM Project is supporting and/or collaborating)

Complex Taxes Project covering 75 Complex Taxes. Potential Impact: One tax alone has the impact of 81K ADMs per annum. As some of the taxes do not attract ADMs, estimation of immediate impact is only based on the above known tax, in-depth analysis on all 75 taxes pending. Assuming 20% decrease in 1 single tax code. (0.7% of global ADM volume)

Industry Fraud Prevention Project covering various streams including credit card fraud. Potential Impact: More information required from Project Manager to identify potential impact. Stream 2 – Application Change Requests (ACR) to improve efficiency in current processes (by IATA)

Automation of AIT tax in BSP BD & TDS tax in BSP IN Potential Impact: Elimination of approximately 287K ADMs per annum for Airlines’ manual collection of such taxes. (12.3% in global volume)

Credit Card Acceptance Chart Potential Impact: Reduction of 0.2% of the global value of ADMs (in USD) in 2015 related to airline recovering for a card brand or form of payment that is not accepted in certain markets (0.03% in global volume)

Standard Commission Control Setup Query & Maintenance Potential Impact: Estimation of 10% reduction in sub reasons: “Incorrect Commissions”, “Non-Commissionable” and “Commission- Others” by 10%. (0.5% of global ADM volume) Stream 3 – Training Opportunities

Scope and potential impact to be identified with support of training sub-committee in ADMWG and ITDI team (Analysis pending)

Stream 4 – Industry Enhancements (by GDSs, ATPCO, Airlines or Agents) with recommendation and support from ADM Project team


____________________________________________________________________________

Update in Commission Control setups in BSP systems Potential Impact: Estimation of 20% reduction in few top markets for sub reasons: “Incorrect Commissions”, “Non-Commissionable” and “Commission- Others” (3.9% of global ADM volume)

Internal communication within Airlines between Sales/ Marketing and Revenue Accounting divisions in order to ensure internal alignment between new commercial initiatives and the subsequent sales auditing.

Potential Impact: To be identified, expected to impact mainly areas of Commission, Fare, Exchanges and Refunds, and improvement in business relationships.

Increased usage of Category 31 & 33, for Voluntary Changes and Refunds in order to automate the filing of such rules and reduce usage in text field Category 16.

Potential Impact: Substantial improvement in the automation of reissuing and refunds, impacted ADM areas are Exchanges and Refunds. Accurate data for Refunds are not yet available, however assuming a 20% decrease in ADMs relating to manually constructed Exchanges the reduction is estimated at 29K (1.3% of global volume) Total projected reduction: approximately 18.73% of global ADM volume if all actions are realized, effective reduction of USD95M of deferred collection via ADM. (to be determined in November ADMWG Workshop) Based on input from ADMWG participants, the effective saving in operating cost for Airlines are approximately USD25M, and USD11M for Agents; USD36M for the industry. Note: The implementation of items from Stream 2 are directly controlled by the ADM project team. The outcome of Streams 1, 3 & 4 are dependent on the engagement of the various stakeholders involved. The project team is providing support wherever possible to identify issues to focus on, and recommendation of best practices. For stream 3 & 4, any target on reduction will be finally determined by the ADM Working Group. The exhaustive list of potential solutions and timelines for implementation are yet to be finalized, the above are ad hoc findings and assumptions. Proposed Action ADM Project team would like to continue facilitating ADMWG and move forward with implementation of the solutions above, and establish concrete targets for:

o Reduction in global ADM volume o Reduction in the time to ADM o Improvement in business relationship between business partners

Conference is requested to note this report and to endorse the continuation of the ADM Project with the targets above.


____________________________________________________________________________ R31 INDUSTRY TRUST FUND (ITF) – HONG KONG

Submitted by APJC HK Background Information

Reference is made to Agenda R23 under 38th PAConf. The proposal to request 1 year’s lead-time

for the APJC HK to strengthen the LFC and enhance the Industry Trust Fund was adopted. The

APJC HK was required to submit a proposal on how to strengthen the LFC and enhancing the

Industry Trust Fund in the 39th PAConf.

However, in view of the below factors, the proposal to this PAConf would be delayed:

- The APJC agent members advised that it was necessary for them to appoint an

independent third party e.g. an Actuary to assist in the review of the enhanced Industry

Trust Fund program. In order to appoint such a third party, they had to go through a

stringent process to seek budget approval from the Board of the HK Travel Industry

Council. Therefore, the earliest the appointment could take place would be August.

- The APJC was earlier informed that the PAConf meeting would be advanced to June

2016 and the group felt that it was impossible to meet the new deadline. Although that

the PAConf was now not being advanced to June 2016, the group had already decided

that a deferral would be required.

- The New Gen ISS was a project which had enormous impact to the way of doing

business in BSP HK as it would have an impact on the bank guarantee and ticket

capping system in Hong Kong. The APJC felt that it would be more appropriate to see

the adopted resolutions for New Gen ISS in the upcoming PAConf first and to take into

consideration to the changes as a result of New Gen ISS before submitting the proposal

on enhanced ITF.

The APJC had agreed on the revised timeline as below:

Apr-Dec 2016 FAG to review the LFC under a central bank guarantee system

APJC to review the FAG findings on LFC. APJC to discuss and agree the key principles under an enhanced ITF scheme as part of the LFC. IATA to also provide upfront advice on operational and legal requirements in order for IATA to administer the ITF

APJC agents to appoint an independent 3rd party to assist agents to review the enhanced ITF program

3rd party to assist the FAG (agents side) to review the enhanced ITF program in the context of LFC/New Gen ISS


____________________________________________________________________________

Jan-Mar 2017 APJC to review the study from FAG with input from the 3rd party. APJC to agree on the LFC/enhanced ITF program

Apr-Jun 2017 Communicate and lobby airlines/agents support on LFC/enhanced ITF program

Jul 2017 APJC to prepare proposal to PAConf

Proposed Solution

The APJC has unanimously voted to ask the conference to provide 1 more year for the APJC to

strengthen the risk protection in BSP HK through enhancing the Industry Trust Fund and revised

LFC, with the objective to discourage bilateral bank guarantee in the market. During this time,

the Industry Trust Fund will be maintained in its current form.

This proposal has been voted at the APJC and details as below:

No of APJC meeting: 29th APJC meeting

Date of APJC meeting: 21st July 2016

Quorum: APJC HK has 14 members. 7 airlines and 6 agents were present

Proposed Action:

Conference is requested to approve the timeline extension as proposed.


____________________________________________________________________________ R32 CHANGES TO RESOLUTION 850 ATTACHMENT ‘F’

Submitted by APJC Hong Kong

Background Information Orient Thai had been recently suspended from BSP HK. There had been refunds pending for

travel agents with an outstanding amount of HK$461,463.00. The instruction from IATA would be

for travel agents to seek for the refund directly with the suspended airline but this had been very

difficult when the airline was not willing to respond. In the end, the passenger would be unable

to get their monies back when the suspended airline ceased to operate.

The travel agents felt that whilst IATA would collect a financial security from the travel agents,

there would be insufficient protection for the travel agents when an airline would be suspended.

As an answer to this situation, APJC HK wishes to stipulate the obligations of the suspended

airline and to allow the right of the travel agents to offset the payment of any funds with the refund

request of the suspended airline. For this, APJC HK has unanimously voted a proposal towards

clearly stating the obligation of the suspended airline for refund payment in the Resolution.

This proposal has been voted at the APJC and reconfirmed via email as detailed below:

No of APJC meeting: 29th APJC meeting

Date of APJC meeting: 21st July 2016

Quorum: APJC HK has 14 members. 7 airlines and 6 agents were present

Proposed Action Conference is requested to make the changes to Resolution 850, Attachment F as outlined in

Attachment ‘A’ to this paper with an effectiveness date of 1 June 2017.




Change Resolution 850 Attachment F, section: Immediate Action by IATA in the event of Financial

Suspension.

(f) Instruct the Suspended Airline

In circumstances where a BSP Airline is suspended from the BSP, there will normally be monies

to be refunded to the travel agents. While IATA’s instruction under Resolution 850 Attachment F

paragraph 2(b)(iv)(b) to settle directly with the suspended airline, the suspended airline is

obligated to respond to the refund request from the travel agent in a timely manner. In the event

that there is unsettled billing to the suspended airline in the BSP, the travel agent shall be able to

offset the refund payment with the billing.


____________________________________________________________________________ R33 CHANGE TO CARD SALES RULES – RESOLUTION 890 – INDIA

Submitted by APJC India


The shortening of Remittance frequency in India for the last two years has had an impact on

liquidity of Accredited Agents in the country. There has been a heavy burden on their cash flow.

They have been seeking solutions that are “win-win” for participating airlines and agents whereby

carriers have the comfort of lower cash sales exposure while at the same time Agents can secure

credit with no risk to airlines. This proposal was submitted to Conference previously but because

of several submissions in the same context, was not considered.

Proposed Solution

One of the methods by which it is proposed to mitigate the cash flow issues for Agents has been

the expedient of using the Agent’s own Credit Card for issuance of BSP tickets. Some major

airlines in India are generally supportive of this form of payment. However, of late, Airlines have

been pressured by their head offices to prohibit usage of an Agent’s own credit card merely for

compliance with paragraph 1.4 of Resolution 890. It is not perceived by Airlines that it is their

own sovereign right whether or not to allow such form of payment and therefore it is essential that

the language of Resolution 890.1.4 elucidates this fact.

Accordingly, it is proposed by unanimous vote of the Council that the language of paragraph 1.4

of Resolution 890 be altered as foreshadowed above and outlined below. This will sustain the

restriction that is intended by insertion of this paragraph while clarifying that a participating carrier

may so authorize. Carriers may then exercise their discretion in granting or withdrawing such

authorization. The 46th APJC Meeting unanimously recommended to resubmit this Agenda

proposal.

Proposed Action

Conference is requested to adopt the changes detailed below for expedited effectiveness of 01

January 2017.

Resolution 890

1.4 No Card issued in the name of the Agent, or in the name of a person permitted to act

on behalf of the Agent, or in the name of the Agent's officer, partner or employee shall be

used in connection with the sale of Members' or Airlines' Traffic Documents to any customer

of the Agent, unless authorized by the Carrier.


____________________________________________________________________________ R34 CHANGES TO RESOLUTION 830d

Submitted by a Member


Due to many airlines already have made it mandatory for Agents to insert the passenger contact details into the PNR, it should be feasible to make the Resolution 830d instead of the word should to change it to be shall.

Proposed Action Conference to adopt the changes to resolution shown at Attachment ‘A’.




RESOLUTION 830d

Paragraph 4.

To be able to advise passengers of irregular flight operations and disruptions Members and

BSP Airlines need to have sufficient contact details available to proactively contact the

passengers. Consequently the Agent should shall provide contact details on behalf of the

passenger by entering in the Passenger Name Record (PNR) the passenger’s mobile phone

number and email address, while maintaining compliance with all applicable data protection

directives and regulations. Contact details should shall be entered in the PNR in compliance

with the Resolutions governing reservations procedures. Members and BSP Airlines shall use

these contact details exclusively for the purpose of operational notifications, e.g. flights

cancellation, schedule change, etc. and shall not use the contact details for sales & marketing

purposes.

In the event the passenger exercises his or her right not to provide contact details it is incumbent on the Agent to indicate that the passenger has declined to provide such details, and to enter the refusal in the PNR to limit any statutory liability. In such a case, the passenger shall not be provided information relating to flight cancellation or schedule changes (including delay in departure).

Agenda Item: RZ1.1 Revision No.: 0 Date: 18 Jul 16 Page: 1 of 1

____________________________________________________________________________

RZ1.1

LOCAL FINANCIAL CRITERIA ARGENTINA – MODIFICATION TO INCLUDE AN EXCEPTION FOR GOVERNMENT DEPARTMENTS ISSUING TICKETS AS TRAVEL AGENTS

Submitted by APJC Argentina

Background Resolution 818g requires that all Agents must present financial statements for review each year. Agents who fail to submit financial statements will be terminated as per Resolution 818g. Problem/Issues Since the migration of operations from AR to the Hub, exceptions have been raised that allow government departments issuing tickets as travel agents in Argentina not to present financial statements and directly present a financial security. Proposed Solution Since exceptions are only temporary (maximum a year) they will not continue to be approved. The way forward would be to have the APJC proposal to PAConf that Agents who are government departments issuing tickets as travel agent (and because the government does not release financial statements), to be exempt from submitting such statements but, subject to present and maintain financial securities permanently according to the present LFC. APJC #7 unanimously approved Argentina’s Local Financial Criteria to be modified as it is shown in attachment A. Proposed Action Conference is requested to endorse the changes to the Argentina Local Financial Criteria, as presented in Attachment ‘A’, with an expedited effectiveness of 1 January 2017.

Agenda Item: RZ1.1 Revision No.: 0 Date:


Page: 1 of 8 ____________________________________________________________________________

Attachment ‘A’

LOCAL FINANCIAL CRITERIA

Country/Area ARGENTINA

Region AMERICA

Remittance Frequency WEEKLY

Remittance Period WEEKLY

Date the criteria last changed 01 JAN 2015

Criteria approved by PConf 37

1. GENERAL RULE – (Accounts / Documents to be provided)

1.1 Existing Agents (more than two years of accreditation)

Accredited agents must comply with financial assessment criteria approved for the

corresponding country. These criteria will be revised by local APJC on an annual basis.

In order to be evaluated, every accredited agent must present the documentation

described below. The agent must also fulfill the Minimum Tangible Net Worth (MTNW)

requirements through the ownership of real estate or the provision of financial guarantees

(bank guarantees or insurance bonds), as defined in Section 4.

1.2 New Agents

In case of initial accreditation and during a two-year term, the only accepted mechanism for the fulfillment of the MTNW requisites will be the provision of financial guarantee (bank guarantees or insurance bonds). After the second year of accreditation, the agent will have the option either to maintain its financial guarantee or to present real estate of its ownership at the aim of fulfilling the MTNW requisites, under the terms defined in Section 4.

Documentation to be submitted according to society type

1.1. Partnership and sole proprietorship

Agencies presenting real estate registered under the name of the agency’s owner or

owners:

Agency owner or owners’ assets declaration, certified by a Public Accountant.

Accountant’s signature must be certified by the College or Council in which he/she is

registered.



Page: 2 of 8 ____________________________________________________________________________

Ownership certificate of each real estate presented by the agency’s owner or owners.

Validity of the certificate will be 30 days. Each real estate submitted must be free of any

encumbrance (garnishment, mortgage, usufruct, etc.) and fully available by its owner.

Agency owner or owners’ certificate of non-encumbrance. Validity of the certificate will be

30 days.

Two assessments done by nearby real estate agencies or public auctioneer, showing the

estimated market value of the real estate presented as guarantee.

In case of conjugal shared possessions, where the spouse is not a partner to the agency

society, a “Fianza Solidaria” granting the agency’s operations must be submitted. This

document must be signed by the spouse and certified by Public Notary. A model of “Fianza

Solidaria” must be requested.

Agencies not owning real estate registered under the name of the agency’s owner:

Agency owner or owners’ assets declaration, certified by a Public Accountant.

Accountant’s signature must be certified by the College or Council in which he/she is

registered.

1.2. Corporations and Limited Companies

Agencies presenting real estate registered under company name:

Complete audited up-to-date Financial Statements (Balance Sheet, Profit & Loss

Statement, Notes and Annexes). Accountant’s signature must be certified by the College

or Council in which he/she is registered.

Ownership certificate of each real estate owned by the agency. Validity of the certificate

will be 30 days. Each real estate submitted must be free of any encumbrance

(garnishment, mortgage, usufruct, etc.) and fully available by its owner.

Agency owner or owners’ certificate of non-encumbrance. Validity of the certificate will be

30 days.

Two assessments done by nearby real estate agencies or public auctioneer, showing the

estimated market value of the real estate presented as guarantee.

Agencies not owning registered real estate:

Complete audited up-to-date Financial Statements (Balance Sheet, Profit & Loss

Statement, Notes and Annexes). Accountant’s signature must be certified by the College

or Council in which he/she is registered.

1.3. Government departments accredited as travel agents

Government departments accredited as travel agents whom, per constitution, do not

release financial statements, will be exempt from submitting such statements but will have

to present and maintain financial securities permanently. The amount of such financial will

be calculated based on the last 12 months cash sales average.



Page: 3 of 8 ____________________________________________________________________________


The Financial Statement assessment will be based on the calculation of the Financial Indicators

and the achievement of the score described below:

Formula and score applicable to Financial Indicators:

Liquidity = Current Assets / Current Liabilities

Above 1.99 14 points

1.50 – 1.99 12 points

1.25 – 1.49 10 points

1.00 – 1.24 8 points

0.96 – 0.99 6 points

0.91 – 0.95 4 points

0.86 – 0.90 2 points

Below 0.85 0 points

Collection Term Average = (Receivables / Sales) * 365

Below 15 days 7 points

15 - 16 days 6 points

17 – 18 days 5 points





Above 30 days 0 points

Debt = Total Liabilities / Total Assets

Below 0.4 14 points

0.4 – 0.59 12 points



Page: 4 of 8 ____________________________________________________________________________

0.6 – 0.89 10 points

0.9 – 0.99 8 points

1.0 – 1.19 6 points

1.2 – 1.34 4 points

1.35 – 1.49 2 points

Above 1.5 0 points

Cash Flow = After-tax earnings / Long-term Debt

0.20 5 points

0.18 4 points

0.15 3 points

0.13 2 points

0.10 1 points

0.09 0 points

Definitions:

Current Assets: Receivables from related companies, shareholders, employees, directors,

partners as well as cash and fix-term deposits in escrow must be excluded.

Current Liabilities: It must include the current portion of long-term debt.

Total Sales: The amount must appear specifically in the Financial Statements. And correspond

to gross sales obtained in the period including (but not limited to) ticket sales, packages, hotels,

car rental, insurances, miscellaneous, etc.

Long-term Liabilities: It comprises all third parties long-term debt. Loans to shareholders or

proprietors must be excluded.

Receivables: It must be shown as a breakdown of commercial receivables, fees, commissions,

related companies receivables and advances granted to suppliers. Bad debt must be excluded.

Earnings after taxes: Extraordinary earnings must be excluded.

Total Assets: Intangible assets must be included.

Total Liabilities: It includes current liabilities and third parties loans. Loans granted to

shareholders or owners must be excluded. It must include related companies liabilities less the

corresponding subordinated tranche (receivable).



Page: 5 of 8 ____________________________________________________________________________


Conditions for the analysis of Financial Statements presented by the Agent

Maximum validity of Financial Statements presented by agents will be 8 months as from

closing date. Presentation Calendar is shown in the table below:

The Calendar above contains dates which will be adjusted subject to week-ends and local holiday. The agent must follow these deadlines in order to comply with the Financial Statements presentation and evaluation requisites within the 8-month term mentioned above.

Satisfactory result in the financial evaluation

The maximum score to be obtained as a result of the application of the 4 financial indicators will be 40 points. In order to achieve a satisfactory evaluation, the minimum acceptable score will be 22 points.

Unsatisfactory result in the financial evaluation

In case of obtaining an unsatisfactory result in the evaluation performed to the Financial Statements presented (score below 22 points), the USD 1.000.000 cap established in the MTNW table shown in the following section will not apply and the agent will have to provide a financial guarantee (bank guarantee or insurance bond) for the corresponding total 3-week cash sales average.



Page: 6 of 8 ____________________________________________________________________________


Financial requirements: Minimum Tangible Net Worth

Minimum Tangible Net worth (MTNW) for Accredited Agents will be the amount stated in column

“MTNW” on the table presented below. In order to determine the applicable MTNW, it is

necessary to estimate the Agent’s 3-week cash sales amount, which are calculated based on

the last 12 months cash sales average. In order to guarantee the MTNW determined, the Agent

must be owner of:

(i) In case of sole proprietorship or partnership: real estate for an equivalent amount,

registered under the name of the partner or partners;

(ii) In case of legal entity (SRL or SA): real estate for an equivalent amount, registered

under the name of that legal entity (SRL or SA).

In case of not being owner of real estate, a bank guarantee or an insurance bond for an

amount equivalent to the MTNW value must be submitted. The list of accepted providers for

these guarantees will be delivered by IATA.

3 weeks cash sales average (USD) MTNW

From Up to

0 19.999 10.000

20.000 39.999 20.000

40.000 59.999 40.000

60.000 79.999 60.000

80.000 99.999 80.000

100.000 119.999 100.000

120.000 139.999 120.000

140.000 159.999 140.000

160.000 179.999 160.000

180.000 199.999 180.000

200.000 219.999 200.000

220.000 239.999 220.000

240.000 259.999 240.000

260.000 279.999 260.000

280.000 299.999 280.000

300.000 319.999 300.000

320.000 339.999 320.000

340.000 359.999 340.000

360.000 379.999 360.000

380.000 399.999 380.000

400.000 419.999 400.000



Page: 7 of 8 ____________________________________________________________________________

420.000 439.999 420.000

440.000 459.999 440.000

460.000 479.999 460.000

480.000 499.999 480.000

500.000 519.999 500.000

520.000 539.999 520.000

540.000 559.999 540.000

560.000 579.999 560.000

580.000 599.999 580.000

600.000 619.999 600.000

620.000 639.999 620.000

640.000 659.999 640.000

660.000 679.999 660.000

680.000 699.999 680.000

700.000 719.999 700.000

720.000 739.999 720.000

740.000 759.999 740.000

760.000 779.999 760.000

780.000 799.999 780.000

800.000 849.999 800.000

850.000 899.999 850.000

900.000 949.999 900.000

950.000 999.999 950.000

1.000.000 1.049.999 1.000.000

1.050.000 1.099.999 1.050.000

1.100.000 1.149.999 1.100.000

1.150.000 1.199.999 1.150.000

1.200.000 and higher amounts 1.200.000

Agent accreditation and initial 2-year period

Upon accreditation, every agent must present a financial guarantee (bank guarantee or

insurance bond) for an amount equivalent to USD 30.000, in order to constitute its initial MTNW.

As from then and on a four-month basis, IATA will recalculate the 3-week cash sales average

done by the agent and, in case an increase is registered, a guarantee increment equal to or

higher than USD 10.000 will be requested.

Agents presenting real estate assets as a guarantee will have the option, when an increase in

their sales average is registered, to present a Stand By Letter of Credit to cover for the guarantee

increment requested, provided that their financial statements assessment result continues to be

satisfactory.



Page: 8 of 8 ____________________________________________________________________________

During the first 2 years of accreditation, the provision of a financial guarantee according to the

terms described above will be mandatory for the agent.

In the case of a new agency constituted as a branch of a previously accredited one, the sales

average of the new branch will be added to those of its headquarters at the aim of calculating

the financial guarantee requested.

Agents with more than 2 year of accreditation

Upon 2 years of accreditation and in case of having achieved a satisfactory result in the financial

evaluation performed on the Financial Statements presented, the agent must decide whether to

continue to provide a financial guarantee under the terms above described or to constitute its

MTNW through the presentation of real estate of its ownership, as established above.

The MTNW amount will continue to be revised on a four-month basis through the recalculation

of the 3-week cash sales average done by the agent during the previous 12-month period. In

case an increase is detected, an increment in the corresponding guarantee equal to or higher

than USD 10.000 will be requested.

OTHER

None.


____________________________________________________________________________

RZ1.2

CHANGES TO LOCAL FINANCIAL CRITERIA – BOLIVIA

Submitted by APJC BO/-CL/-PE

Background Information APJC11 BO - CL - PE met in 17MAR16 in Santiago de Chile. The statutory quorum was reached. Bolivian Agents presented its proposal in which they requested to extend the Minor Error Rule up to two times per year as in other markets like Argentina, Paraguay and Colombia. The Council voted unanimously in favor of the proposal as written. Proposed Solution Changes to LFC (set out in an attachment ‘A’),

Proposed Action Conference to adopt the changes to the Bolivia Local Financial Criteria, as shown in Attachment ‘A’, for 1 January 2018 effectiveness.



Page: 1 of 2 ____________________________________________________________________________

Attachment ‘A’

LOCAL FINANCIAL CRITERIA BOLIVIA

Country/Area Bolivia

Region The Americas

Remittance Frequency Weekly

Remittance Period 01-08, 09-15, 16-23, 24-end of month

Date the criteria last changed 01JAN14

Criteria approved by PAConf


The Agents presents the Financial Statements with an Audit report only when required by law or when the Travel Agent is applying to qualify and operate under no guarantee scheme. A copy of the Financial Statement in electronic form submitted to the Tax Authority shall be included.


Local Financial Criteria adopts the tests of Resolution 800f, subject to annual reviews by APJC to confirm or change and propose new tests New applicant requirements The Financial Statements are required with an Audit report performed by external audit firm. Minimum capital requirement Registered capital paid in full by shareholders and duly registered at government registration entity. Minimum capital expressed in local currency

USD 25,000 for La Paz, Cochabamba and Santa Cruz

Rest of cities in Bolivia: USD 20,000

Any variances over 10% in local currency, due to devaluation of BOB/USD will be adjusted annually when presenting financial documentation for financial reviews. Minimum registered capital is expressed in accounting books in Bolivian currency and accreditation requirements for the amounts are fixed in US dollars. If devaluation affects Bolivia, The Agent will adjust the registered capital at year-end when presenting annual balance sheet to government and to IATA for the Annual Financial Review.


The presentation of Financial Statements for the annual financial review will be 30 days after the legal presentation date with a maximum of 8 months after the closing date.



Page: 2 of 2 ____________________________________________________________________________


Adopts Resolution 800f 5 tests evaluation with the following modifications in the financial criteria:

a. For the purposes of the calculation of a guarantee, the amount at risk shall be calculated by considering the sale of 360 days to give average sales of 22 days (total net sales / 360 x 22)

b. The minimum guarantee for new accredited agents in Bolivia will be USD 20,000 when required Security is not required when the Agent passes the 5 tests subject to:

No irregularity received in the last 12 months

No change of ownership in the last 12 months

Minimum 2 years affiliation

Presents an Audit report from an audit firm, when required by legislation

Security is required when the Agent fails one or more of the 5 tests subject to:

Calculation of risk of 22 days based on net cash sales of last 12 months

5. MINOR ERROR RULE

Minor Error: An Agent shall be subject to two instances of Irregularity following a short payment or/and late payment (pursuant to Resolution 818g), however the financial criteria requirement to submit a Financial Security will be waived twice, in a twelve month period whenever the Agent demonstrates satisfactory evidence from the bank, that the total amount due was available in the Agent’s bank account on the date of remittance and the amount due was paid within demand period.

OTHER

No changes


____________________________________________________________________________

RZ1.3

CHANGES TO LOCAL FINANCIAL CRITERIA – PERU

Submitted by APJC BO/CL/PE


APJC12 BO - CL - PE met in 02JUN16 in Lima - Peru. The statutory quorum was reached.

Peruvian Travel Agents Association presented its proposal in which they requested to extend

the Minor Error Rule up to two times per year as in other markets like Argentina, Paraguay and

Colombia. The Council voted unanimously in favor of the proposal as written.

Proposed Solution Changes to LFC (set out in an attachment ‘A’),

Proposed Action Conference to adopt the changes to the Peru Local Financial Criteria, as shown in Attachment ‘A’, for 1 January 2018 effectiveness.



Page: 1 of 3 ____________________________________________________________________________

Attachment ‘A’ LOCAL FINANCIAL CRITERIA PERU

Country/Area Peru

Region Americas


Remittance Period 01-08, 09-15, 16-23, 24-end of month

Date the criteria last changed 15 Aug 14

Criteria approved by PAConf/37 - 1st Transmittal


Agents will present the Formal Annual Tax Declaration with all its annexes that support the amounts declared, submitted to SUNAT the Government Tax Regulator, in the government official template. All accounting documents and SUNAT declaration must be duly signed by a chartered accountant sending copy of the proof of habilitation of Accountant. The Agents presents the Financial Statements with an Audit report only when required by law.


Local Financial Criteria adopts the tests of Resolution 800f, subject to annual reviews by APJC to confirm or change and propose new tests. Evaluations will be performed with the 5 financial tests set out in sections 2.3.1-2.3.5 of Criteria for Evaluation of Agents Accounts. The following financial tests apply to the evaluation of an Agent's Audited Accounts:

1. There must be positive Net Equity. 2. Net Equity divided by long-term debt and other long-term liabilities must be greater than

0.5 3. EBITDA (Earnings before Interest, Taxation, Depreciation, Amortization and extraordinary

items) must be positive save in exceptional circumstances. 4. The EBITDA must exceed the interest payable by a factor of a minimum of two and ideally

three. 5. Adjusted Current Assets must exceed Current Liabilities.

Test 2: Net equity divided by long term liabilities debt and other long term liabilities to approve

test must be equal to or greater than 0.5. When the agent has a positive Net Equity (test 1) and

has no long-term liabilities the test is positive.




Page: 2 of 3 ____________________________________________________________________________

The presentation of Financial Statements for the annual financial review will be 30 days after the legal presentation date. New Agents: Present the formal documentation submitted to Sunat with annexes as detailed in Annual Reviews requirements, with annual information presented to Sunat, of the previous year to application, when the applicant has operations from a previous year and in addition Statement of Assets and Liabilities, Profit and Loss of the months of the unclosed current year, signed by a chartered accountant sending copy of the proof of habilitation of the accountant. Existing Agents Agents will present the Formal Annual Tax Declaration with all its annexes that support the amounts declared, submitted to SUNAT the Government Tax Regulator, in the government official template, in addition Statement of Assets and Liabilities, Profit and Loss as of 31 de December. All accounting documents and SUNAT declaration must be duly signed by a chartered accountant sending copy of the proof of habilitation of Accountant. Minimum capital of new applicants: Agent must comply with USD 5,000 or equivalent in local currency. At annual review, check and if required, will have to comply with an annual adjustment to minimum required. Registered capital is defined as registered capital paid in full by shareholders and duly registered at government registration entity. Last presentation date for documentation (Financial Statements) is May 15 for each year (or the next business day) Audit report: Will be presented with documentation only when the law mandates this requirement.


Adopts Resolution 800f 5 tests evaluation with the following modifications in the financial criteria:

For new and annual financial reviews or any periodic reviews, when a calculation is required to cover the risk of 22 days, the formula must be based on the average of last 12 months net cash sales, (net cash sales/360 x 22), using accumulated sales information to the previous month of the calculation.

Minimum guarantee level: for a new or accredited Agent USD 10,000.

Security is not required when the Agent passes the 5 tests subject to:

No irregularity received in the last 12 months

No change of ownership in the last 12 months

Minimum 2 years affiliation

Presents an Audit report from an audit firm, when required by legislation



Page: 3 of 3 ____________________________________________________________________________

Security is required when the Agent fails one or more of the 5 tests subject to:

Calculation of risk of 22 days based on net cash sales of last 12 months

5. UPON SHORT OR NON-PAYMENT, ISSUE IRREGULARITY LETTER

a) Request the 12 month guarantee to the IATA Agents that do not operate with a

guarantee. b) When an Irregularity Letter is issued to an Agent that is operating under a guarantee, the

Agent can continue to use the existing guarantee through its expiration and proceed to have a new one issued upon its expiration. The new guarantee must meet the minimum requirement of 12 months from the date in which the Irregularity Letter was issued.

6. MINOR ERROR RULE

Minor Error: An Agent shall be subject to two instances of Irregularity following a short payment

or/and late payment (pursuant to Resolution 818g), however the financial criteria requirement to

submit a Financial Security will be waived twice, in a twelve month period whenever the Agent

demonstrates satisfactory evidence from the bank, that the total amount due was available in

the Agent’s bank account on the date of remittance and the amount due was paid within

demand period.


____________________________________________________________________________

RZ1.4

CHANGES TO LOCAL FINANCIAL CRITERIA – CHILE

Submitted by APJC BO/CL/PE


APJC12 BO - CL - PE met in 02JUN16 in Lima - Peru. The statutory quorum was reached.

Chilean Travel Agents Association presented its proposal in which they requested to extend the

Minor Error Rule up to two times per year as in other markets like Colombia. The Council voted

unanimously in favor of the proposal as written.

Proposed Solution

The APJC unanimously proposes to extend the minor error rule up to two times per year in Chile,

as per text below:

Minor Error: An Agent shall be subject to two instances of irregularity following a short payment

or/and late payment (pursuant to Resolution 818g), however the financial criteria requirement to

submit a financial guarantee will be waived twice, in a twelve month period whenever the Agent

demonstrates satisfactory evidence from the bank, that the total amount due was available in

Agent’s bank account on the date of remittance and the amount due was paid within demand

period.

The text shall be reflected on the end of Resolution’s 818g Latin America and Caribbean chapter

- “ALL COUNTRIES: FINANCIAL GUARANTEE REQUIREMENT”.

Proposed Action

Conference to adopt the changes to the Latin America and Caribbean Local Financial Criteria

applicable to Chile, as shown in Attachment ‘A’, with a 1 January 2017 effectiveness.



Page: 1 of 1 ____________________________________________________________________________

Attachment ‘A’

Amend the Local Financial Criteria for Latin America and Caribbean as shown below

Minor Error Rule Chile and Colombia only – An Agent shall be subject to two instances of

irregularity following a short payment and/or late payment (pursuant to Resolution 818g),

however, the financial criteria requirement to submit a Ffinancial Securityguarantee will be

waived twice, in a twelve month period, whenever the Agent demonstrates satisfactory evidence

from the bank, that total amount due was available in Agent’s bank account on the date of

remittance and the amount due was paid within the demand period.


____________________________________________________________________________

RZ1.5

CHANGE TO LOCAL FINANCIAL CRITERIA – VENEZUELA

Submitted by APJC CO/EC/VE


Due to the hyperinflation and steep devaluation situation in Venezuela, it was proposed to reduce the amounts required for Paid up Capital and guarantee requirement for new accreditations, otherwise the Passenger Agency Program in Venezuela would be in jeopardy, as travel agencies would be unable to comply with the minimum paid up capital, and new accreditation would be unattainable

Mail Vote to modify the Financial Criteria for Venezuela was circulated to the APJC membership on June 20th 2016

The CO/EC/VE APJC has 18 members, quorum is achieved with 10 members

The Mail Vote resulted in a majority vote of 11 approvals, and 7 abstentions. Proposed Action Conference to adopt changes to LFC Venezuela set out in Attachment ‘A’ with effectiveness of 1 January 2017.



Page: 1 of 1 ____________________________________________________________________________

Attachment ‘A’ Venezuela

Each Agent shall file annually with the Agency Administrator, within 90 days of the end of the Agent´s fiscal year a financial statement prepared in accordance with generally accepted accounting principles for evaluation. The Agent´s total paid-up capital shall be in accordance with the following:

Caracas and Metropolitan Area USD 20.000 10.000

Maracaibo and Valencia USD 20.000 10.000

Rest of the Country USD 20.000 10.000

Guarantee for new applicants: USD 30.000 10.000

Agent´s Home Office Locations situated in other cities listed and opening a branch location in Caracas, must consolidate its paid-up capital to the equivalent of USD 38.000 10.000


____________________________________________________________________________

RZ2.1

CHANGES TO LOCAL FINANCIAL CRITERIA – FRANCE

Submitted by APJC France


The APJC France met on the 30 of June 2016, quorum was met with representatives from 8

Airlines and 6 Agents. APJC FR members agreed to review the Local Financial criteria voted

during PAConf /38 and asked to define the exceptional circumstances regarding the Ebitda.

One FAG meeting was held on 20 June 2016. The conclusion of the study was then presented

to the APJC FR (30th Jun. 2016) being followed by a vote which unanimously decided to

endorse the changes detailed below to the Local Financial Criteria.

Proposed Solution

It is proposed to amend the below parameters in the Local Financial Criteria for France:

Define the exceptional circumstances regarding the Ebitda

Adjust 3 specifics items of the LFC to the local market conditions: o Interim Financial review o Change of Ownership o Change in Financial Year End.

Proposed Action

Conference is invited to adopt the changes to the Local Financial Criteria for France as detailed

in Attachment ‘A’ for effectiveness of 1 January 2017.



Page: 1 of 7 ____________________________________________________________________________

FRANCE (including French Guyana, Guadeloupe, Martinique, Mayotte, Monaco, Reunion Island, St. Barthelemy, St. Martin)

(Effective 1 Jan 2017 – PAC/39)


1.1 All financial information used in the financial criteria will be extracted from the Agent's Audited Accounts.

1.2 The following financial tests apply to the evaluation of an Agent's Audited Accounts:

1.2.1 There must be positive Net Equity.

1.2.2 Net Equity divided by long-term debt and other long-term liabilities must be greater than 0.5.

1.2.3 EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortisation and extraordinary items)

must be positive save in exceptional circumstances.

1.2.3 EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortization and extraordinary items)

(i) EBITDA must exceed the interest payable Interest Expense by a factor of a minimum

of two.

Except in cases listed in 1.2.3 (iii) below

(ii) EBITDA must be positive except in cases listed in 1.2.3 (iii) below

(iii) Exceptional circumstances:

Provision of letter from the Auditor(s) confirming that the company is in a position to fulfill its financial commitments.

In case of negative EBITDA for two consecutive Financial years, the Agent shall provide a Financial Security or increase its’ frequency of remittance to weekly. Any subsequent



Page: 2 of 7 ____________________________________________________________________________

positive financial review as defined in these criteria will automatically induce return to previous remittance scheme for the Agent.

1.2.4 The EBITDA must exceed the interest payable Interest Expense by a factor of a minimum of two.

1.2.5 1.2.4 Adjusted Current Assets must exceed Current Liabilities or Adjusted Current Assets less pre-payments must exceed Current Liabilities less revenues received in advance.

1.2.6 1.2.5 The Audited Accounts must not have a qualified audit opinion or local regulatory equivalent.


Agents accredited for two years or less 2.1 All Agents must provide Audited Accounts not more than 12 months old at the time of submission to become an Agent for the purposes of evaluation against the financial tests in Section 1 of these criteria. If an Agent has been in business for less than 12 months at the time of application, an opening balance sheet must be provided instead. 2.2 All Agents must provide Audited Accounts no later than 4 months 6 months after each financial year end, or as required by legislation, during the first two years of accreditation for the purposes of evaluation against the financial tests in Section 1 of these criteria. 2.3 All Agents must provide a Financial Security during the first two years as an Agent in accordance with Section 4 of these criteria.

Agents accredited for more than two years 2.4 All Agents must provide Audited Accounts no later than 4 months 6 months after each financial year end, or as required by legislation, of that Agent for the purposes of evaluation against the financial tests in Section 1 of these criteria. 2.5 If an Agent passes all the financial tests and satisfies all the points below, the Agent will not be required to provide IATA with a Financial Security: 2.5.1 The Agent has not had any of the following in the last 12 months: (i) a default (including defaults resulting from an accumulation of irregularities) and removal from the Agency List. (ii) a change of ownership subject to the conditions in Section 5. 2.5.2 The Agent also passed all of the financial tests under Section 1 of these criteria based on the Audited Accounts provided for the previous year.



Page: 3 of 7 ____________________________________________________________________________

2.5.2.1 In the first financial review following the effectiveness date of these criteria, 2.5.2 is not applicable. The result of the financial review will be exclusively determined on the accounts of the most recent financial year.

2.6 If an Agent fails to pass any of the financial tests, the Agent must provide a Financial Security in accordance with Section 4 of these criteria.

3. INTERIM FINANCIAL REVIEW

3.1 For any Financial Review conducted for cause at a time other than in respect of an Agent's financial year end, IATA may conduct a Financial Review in accordance with Section 2 of these criteria, as applicable to that Agent by reviewing the intermediate audited financial statements internal monthly management accounts of the Agent showing the results for each month since the last accounting date, the cumulative results to date and the latest balance sheet. The Accounts must cover the period from the end of the previous annual financial statements and up to at least 60 days before the Interim Financial Review date and covering for a period of 6 months at a minimum.


4.1 An Agent will not be accredited or will not continue to be accredited until any Financial Security required to be provided to IATA has been received by IATA and confirmed to IATA by way of written confirmation received directly from the third party supporting the Financial Security that the Financial Security was issued by that third party and is valid. 4.2 Financial Securities will be subject to a minimum notice period of ninety (90) days and ideally be valid for an unlimited period but will be expected to be valid for a minimum of at least one year. 4.2.1 When an Agent is granted any additional IATA Numeric Code(s) then any Financial Security amount already provided by the Agent will be recalculated 60 days after the date that the additional IATA Numeric Code(s) is granted based on the Amount at Risk applicable to that Agent. 4.3 For the purposes of calculating the amount of a Financial Security the following definitions apply: 4.3.1 “Days' Sales at Risk”

Remittance frequency

Number of days covered



Page: 4 of 7 ____________________________________________________________________________

Payment by bank transfer

Payment by direct debit

Monthly 47 55

Fortnightly 32 39

Weekly 24 31

4.3.2 “Amount at Risk” is calculated by dividing the Days' Sales at Risk by 90 days, and applying that percentage to the BSP cash turnover, or cash turnover as applicable, amount the Agent made in the three months period referred to in Section 4.5 or 4.7 of these criteria, as applicable:

‘Amount at Risk’ = “Days’ Sales At Risk” × BSP cash turnover in applicable 3 month period

90

Agents accredited for two years or less 4.4 All Agents must provide a Financial Security with a minimum amount per Section 4.5.2 to be accredited. 4.5 After the first three months of accreditation and after the first 12 months of accreditation, the amount of the Financial Security required must cover at a minimum the higher of: 4.5.1 the Amount at Risk calculated as per Section 4.3 using the cash turnover amount equal to the average net monthly cash sales of the Agent during the previous three-month period; or 4.5.2 A minimum fixed amount based on the remittance frequency of the Agent: (i) Agents on monthly remittance: EUR 30,000. (ii) Agents on fortnightly remittance: EUR 20,000. (iii) Agents on weekly remittance: EUR 15,000. If the existing Financial Security is insufficient to cover the Amount at Risk, the amount of the Financial Security required will be increased to cover the Amount at Risk.

4.6 Except for the amount of the initial Financial Security, all calculations of the amount of Financial Security required under these criteria or the Passenger Sales Agency Rules for Agents accredited for two years or less will be reviewed and calculated under Section 4.5 of these criteria. Agents accredited for more than two years 4.7 The amount of the Financial Security required must cover at a minimum the Amount at Risk calculated as per Section 4.3 using the BSP cash turnover, or cash turnover as applicable, amount equal to the average of the 3 months highest net cash sales in the previous 12 months. If the existing Financial Security is insufficient to cover the Amount at Risk, the amount of the Financial Security required will be increased to cover the Amount at Risk.



Page: 5 of 7 ____________________________________________________________________________

4.8 All calculations of the amount of Financial Security required under this these criteria or the Passenger Sales Agency Rules for Agents accredited for more than two years will be calculated under Section 4.7 of these criteria.

5. CHANGES IN OWNERSHIP

5.1 This section applies to all changes in ownership or control or any other Review resulting from a change of ownership or control of the Agent in accordance with the Passenger Sales Agency Rules. 5.2 The Agent must provide Audited Accounts, no later than 90 days after the change of ownership or control is effected. The Accounts must to cover a period of 12 months including, at a minimum, the first month after the change of ownership or control takes effect and IATA will use these Accounts to conduct the Financial Review applicable to the Agent under these criteria. the intermediate audited financial statements of the Agent from the end of the previous annual financial statements and up to at least 60 days before the declaration of change in ownership.

5.3 For Agents that have a change in ownership or control (Including a new intra-European VAT code) that necessitates a new Passenger Sales Agency agreement the Agent will be considered as a new applicant (Reso 818g par. 10.3)

6. CHANGES IN FINANCIAL YEAR END

6.1 All Agents must notify IATA immediately of a change in its financial year-end.

6.2 The Agent must provide both:

6.2.1 Audited Accounts within 60 days after the change is made and IATA will conduct the Financial Review applicable to the Agent under these criteria. The confirmation from the Trade Registry (K-Bis) mentioning the new financial year end, as soon

as this is available after the change is published.

6.2.2 Audited Accounts for the financial year end that would have applied to the Agent before the

Agent changed its financial year end. These must be provided to IATA within 60 days of the former

no later than 4 months 6 months after the new financial year end.



Page: 6 of 7 ____________________________________________________________________________

7. SIGNIFICANT CHANGE IN GROSS BSP SALES

7.1 A significant change means any change in the business of the Agent which results in a change in gross BSP sales of more than 20% as compared to the previous 12 months. A change can be an increase or a decrease in gross BSP sales. 7.2 An Agent must notify IATA of any significant change as soon as the Agent becomes aware of it.

7.3 An interim Financial Review may also be initiated by IATA where IATA becomes aware of a

significant change in gross BSP sales in accordance with Section 3

DEFINITIONS OF TERMS USED IN THESE CRITERIA

DEFINITIONS OF TERMS USED IN THESE GUIDELINES Adjusted Current Assets–are defined as A balance sheet item which equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that could be converted to cash in less than one year. Audited Accounts - accounts prepared by an auditor recognized as competent by the regulatory authority in that country to perform an audit that are provided to IATA. For limited companies Audited account is required including and Audit report. For other agencies accounts certified by a chartered accountant or the yearly tax return format (liasse fiscale) is accepted. EBITDA–Earnings Before Interest, Taxation, Depreciation and Amortization Financial Irregularity means an irregularity applied as a result of any failure to adhere to the reporting and remittance procedures described in Resolution 818g Attachment “A” including but not limited to those irregularities described in Resolution 818g Attachment “A”. Financial Review means a review of an Agent's financial position or the calculation of the amount of Financial Security required in accordance with this Resolution 800f, or both.

Interest Expense means an income statement account which is used to report the amount of

interest incurred on debt during a period of time.

Irregularity means any irregularity applied under the Passenger Sales Agency Rules for non-compliance with those Rules including but not limited to Financial Irregularities.



Page: 7 of 7 ____________________________________________________________________________

Net Equity or Shareholders'/Owners' Funds–consists of: – Share capital – Share premium – Retained earnings – Other distributable reserves – Shareholder's loans if subordinated less declared dividends. Long Term Debt – All debt liabilities where repayment is due more than twelve months after the end of the financial period. Long Term Liabilities – all liabilities where repayment is due more than twelve months after the end of the financial period. Review means any assessment or evaluation of an Agent's continuing compliance with the Passenger Sales Agency Rules.


____________________________________________________________________________

RZ2.2

CHANGES TO LOCAL FINANCIAL CRITERIA – RUSSIA

Submitted by APJC Russia


The APJC meeting was held on 20 May 2016 with the participation of 7 airlines out of 8 and 7

agents out of 8. In it changes in the LFC were proposed in order to:

Set one additional criteria for Financial Assessment to be considered as “satisfied”.

Introduce more clarifications in Change of ownership, which require 100% of risk coverage

Add one more rating agency to the list of rating providers for BG acceptance.

Proposed Action

Conference is invited to adopt the changes in the Local Financial Criteria for Russia as detailed

in Attachment ‘A’ for 01 January 2017 effectiveness.



Page: 1 of 6 ____________________________________________________________________________

Attachment ‘A’

Locally established financial criteria for Approval and Retention of IATA Accreditation for Passenger Agencies valid for Russia

Country/Area Russia

Region Europe

Remittance Frequency 4 times per month

Remittance Period 7 or 8 days

Date the criteria last changed 1 January 2016

Criteria approved by PAConf

1. GENERAL RULE

1.1. This rule is applicable to both new and existing Agents. 1.2. New applicants must have been in operation for 12 months as an Air Travel Agent

before applying for IATA Accreditation. 1.3. For the Financial Review the new applicant or Agent regardless of the form of taxation

must submit Audited Accounts which must consist of:

- Balance Sheet (Форма по ОКУД 0710001), - Report on Financial Results (Форма по ОКУД 0710002), - Auditor’s Conclusion, - And Any other documents related to the finances of the Agent required to calculate the financial ratios used in the Financial Review of the Agent.

1.4. Audited Accounts must be for a period of at least 12 months:

(i) Covering previous financial year already closed - for annual review or new applicants; (ii) Covering previous 12 months of operations - for all other types of review.


2.1. In order for the Financial Review to be found considered as satisfactory the following criteria (financial tests) must be met:

- Net Equity must be positive, - The Net Equity must be greater than the sum of Long Term Debt and other Long Term

Liabilities, - Adjusted Current Assets must exceed Current Liabilities, - The accounts must indicate that there is a net profit, at least in one of the two last financial

years.




Page: 2 of 6 ____________________________________________________________________________

Agents accredited for two years or less

3.1. New applicants must have been in operation for 12 months as an Air Travel Agent before applying for IATA accreditation. 3.1. All agents must provide Audited Accounts not more than 12 months old at the time of submission to become an Agent according to the Section 1 of these criteria for the purposes of evaluation against the financial tests in Section 2 of these criteria. 3.23. All Agents must provide Audited Accounts no later than 4 months after each financial year end., during the first two years of accreditation for the purposes of evaluation against the financial tests in Section 2 of these criteria. 3.4. All Agents must provide a Financial Security during the first two years as an Agent in accordance with Section 4.3 of these criteria.

Agents accredited for more than two years

3.35. All Agents must provide Audited Accounts no later than 4 months after each financial year end for the purposes of evaluation against the financial tests in Section 2 of these criteria.

3.46. If an Agent passes all the financial tests in Section 2 and satisfies all the points below, the Agent will must provide IATA with a Financial Security according to Section 4.4 of these criteria.

3.46.1 The Agent has not had any of the following in the last 12 months:

(i) A default (including defaults resulting from an accumulation of irregularities) and

removal from the Agency List in the last 12 months; (ii) A Change of Ownership subject to the conditions in Section 6.

3.57. If an Agent fails to pass any of the financial tests, the Agent must provide a Financial Security in accordance with Section 4.5 of these criteria.


4.1. An Agent will not be accredited or will not continue to be accredited until Bank Guarantee required to be provided to IATA has been received by IATA and confirmed to IATA by way of written confirmation received through the SWIFT channel directly from the Bank issued this Bank Guarantee that the Bank Guarantee was issued by the Bank and is valid.

4.2. For the purposes of calculating the amount of a financial Security Bank Guarantee the following definitions apply:



Page: 3 of 6 ____________________________________________________________________________

4.2.1. ‘Days’ Sales at Risk’ means the number of days from the beginning of the Agent’s Reporting Period to the Remittance Date in respect of that Reporting Period, plus a margin of up to five 5 days.

4.2.2. ‘Amount at Risk’ is calculated by dividing the Days’ Sales at Risk by 365 days, and applying that percentage portion to the amount of cash turnover the Agent made in the previous twelve 12 months’ period as applicable:

12 months’ BSP cash turnover x Days’ Sales at Risk

Amount at Risk = ------------------------------------------------------------------------------- 365 x Average RUB/USD Central Bank RF rate of exchange

4.2.3. If the Agent is in operations less than 365 days, actual number of calendar days in operations and appropriate cash turnover will be taken into consideration for calculation of Amount at Risk.

Agents accredited for two years or less

4.3. A Bank Guarantee is required to cover 100% of Amount at Risk, generated by the Agent but cannot be less than USD 50,000.

Agents accredited for more than two years

4.4. All Agents who have completed two 2 years of trading as an Agent without a default in the previous twelve 12 months, change of ownership subject to the conditions in Section 6.3 and whose annual Financial Review is found established as satisfactory must submit a Bank Guarantee according to the following sliding scale:

Agent’s 19 days’ amount at risk turnover (USD)

Required BG coverage (USD)

Below or equal to $75100,000 100% but not less than $50,000

More than $75100,000, below or equal to $500,000

85% but not less than $785,000

More than $500,000, below or equal to $1,000,000


More than $1,000,000, below or equal to $2,000,000


More than $2,000,000, below or equal to $5,000,000


More than $5,000,000 30% but not less than $2,000,000



Page: 4 of 6 ____________________________________________________________________________

.4.5. A Bank Guarantee which covers 100% of Amount at Risk must be submitted by the following Agents:

- Agents whose annual Financial Review was not satisfactory, - Agents reinstated after default – for the following 12 months, - Agents that have a change in ownership or control that necessitates a new Passenger

Sales Agency Agreement as per p. 10.3 of Resolution 818g – for the following 24 months. Agent who was subject to a change of ownership, involving more than 30% of the shares movement within 12-month period which resulted in change of control. 100% coverage of Amount at Risk should be maintained during 24 months following change registration in IATA.

4.6. Agents must provide Bank Guarantees issued by a bank holding a license of the Central Bank RFof Russian Federation with an international credit rating that is equal or higher than B- or B3 or Russian credit rating from agencies Expert RA or/and National Rating Agency equal or higher than A+. In case of significant reducing of the country's sovereign rating, or for any other reasons, due to which international rating agencies dramatically revise the ratings of are not applicable for Russian banks, Russian rating agencies Expert RA ratings will be taken as the basis.

4.7. The form of wording used for the Bank Guarantee provided must comply with IATA requirements.

4.8. If Bank Guarantee review results in increase of the Bank Guarantee for the sum above or equal to 5% from existing Guarantee but not less than USD 5,000, an amendment to the Bank Guarantee must be provided financial security in place will be required by the Agency Services Manager to must be provided by a specified date determined by to IATA.

4.9. In the event that the Financial Institution that has provided the Bank Guarantee on behalf of the Accredited Agent, have a change in status whereby they either have their its license suspended by the Central Bank of Russian Federation, or have their its credit rating downgraded below the established for acceptance, the Accredited Agent shall provide IATA with a new Bank Guarantee from a Financial Institution which holds a valid license and required credit rating. The new Bank Guarantee must be provided by a specified date to be determined by IATA. For the transitional period, the agent must provide alternative security covering the applicable to Agent amount at risk.

4.10. In case of renewal of Bank Guarantee its original hard copy and confirmation from the issuing bank must be provided to IATA office no later than 19 days before expiry date of the previous Guarantee.

5. INTERIM FINANCIAL REVIEWS

5.1. For any Financial Review conducted for cause at a time other than in respect of an Agent’s financial year end, IATA may conduct a Financial Review in accordance with Section 3 of these criteria, as applicable to that Agent by reviewing the internal quarterly management accounts of the Agent showing the results for each quarter since the last annual review, the cumulative results to date and the latest balance sheet.

6. CHANGES IN OWNERSHIP



Page: 5 of 6 ____________________________________________________________________________

6.1. If any agent is subject to a change of ownership, involving more than 30% of the shares movement within 12-month period, which resulted in change of control, the Agent’s Bank Guarantee level will be recalculated in accordance with Paragraph 4.3 of these Criteria. The Agent must provide Audited Accounts, no later than 90 days after the change of ownership or control is affected. The Accounts must cover a period of 12 months including, at a minimum, the first month after the change of ownership or control takes effect and IATA will use these Accounts to conduct the Financial Review.

6.2. Failure by the Agent to provide Audited Accounts, within the due date, will result in the Agent being required to provide a Bank Guarantee for the following 24 months which covers 100% of Amount at Risk by a specified date to be determined by IATA.

6.3. For Agents that have a change in ownership or control that necessitates a new Passenger Sales Agency Agreement, as per p. 10.3 of Resolution 818g, the Bank Guarantee, which covers 100% of Amount at Risk, must be submitted for the following 24 months.

7. SIGNIFICANT CHANGE IN GROSSNET BSP SALES

7.1. A significant change means any change in the business of the Agent which results in a change in its gross net BSP sales of more than 20% as compared to the previous 12 months. A change can be an increase or a decrease in gross net BSP sales.

7.2. An Agent must notify IATA of any significant change as soon as the Agent becomes aware of it.

7.3. An interim Financial Review may also be initiated by IATA where IATA becomes aware of a significant change in gross net BSP sales in accordance with Section 5.

DEFINITIONS OF TERMS USED IN THESE CRITERIA

Adjusted Current Assets – are defined as Current Assets as in the Balance Sheet of the Accounts after deducting:

- Stocks and work in progress, - Deposits given to third parties other than IATA, - Loans to Directors, Associate Companies, (including any subsidiary, associate or

company under common ownership), - Doubtful debtors, - Blocked funds, except for funds held in favor of IATA.

Current Liabilities - are defined as Current Liabilities as in the Balance Sheet of the Accounts.

Net Equity consists of:

- Share capital, - Share premium, - Retained earnings, - Other distributable reserves,



Page: 6 of 6 ____________________________________________________________________________

- Shareholder’s loans if subordinated less declared dividends.

Long Term Debt – all debt liabilities where repayment is due more than twelve months after the end of the financial period.

Long Term Liabilities – all liabilities where repayment is due more than twelve months after the end of the financial period.

Net profit – profit after all costs and taxes are deducted.

Agenda Item: RZ2.3 Revision No.: 0 Date: 18 Aug 16 Page: 1 of 1

____________________________________________________________________________

RZ2.3

CHANGES TO LOCAL FINANCIAL CRITERIA – AZERBAIJAN

Submitted by APJC Azerbaijan

Background Information The last APJC meeting was held on 09 March and changes agreed during this meeting were submitted to PAConf through Mail Vote A274. The Mail Vote was adopted and the changes were effective 01 August 2016. Following the APJC meeting in March it was also highlighted that some outdated provisions from the Local Financial Criteria should be removed. In order to do this and to include the changes on the agenda for PAConf, a Mail Vote amongst APJC members were arranged to get their endorsement for the minor changes/removals in the Local Financial Criteria. It would not have been possible to schedule a physical APJC in Baku before August. Brief summary of discussions and changes considered to LFC Removals due to automation of application process, align wording through criteria (financial guarantee instead of bank guarantee) and a few editorial changes. Decisions reached and voting (i.e. unanimous or majority vote) As per the result of mail vote, minor changes/removals in Azerbaijan’s Local Criteria was endorsed by receiving 4 positive votes from airline members out of 5 and 4 positive votes from agent members out of 5 (no negative or abstain vote was received). Proposed Action Conference to approve the changes to the Azerbaijan Local Financial Criteria as set out in Attachment ‘A’ for a 1 January 2017 effectiveness.


____________________________________________________________________________

Attachment ‘A’

Country/Area Azerbaijan

Region Europe


Remittance Period

Date the criteria last changed

Criteria approved by (e.g. PAConf, Mail Vote)

1. GENERAL RULE – (Accounts / Documents to be provided) 1.1 New applicants

New applicants must have been in operation for 12 months as an Air Travel Agent before applying to be an IATA Accredited Agent. Documents required

The complete file to be sent to IATA, consisting of the following:

certified copies of the certificate of state registration, tax payer certificate and

statistical card, certified by independent auditor: Balance Sheet, Profit & Loss account, Credit

and Debt Statement and Cash Flow Account for the last financial year, list of owners, managers and staff in the format of Part V(A) of the application, photographs of the interior and the exterior of the agency, copies of certificates of courses and work experience of the staff, statement of international sales volumes. The applicant must provide proof of

sales through other accredited Agents or Airlines. There is no minimum level that an applicant must reach before submitting the application.

a sample of the Agent's letterhead.

Completeness of Applications Submission of all application forms and financial documents must be done electronically in PDF format. Paper files can only be submitted upon request by IATA.


2.1. New Applicants

The financial assessment of a new applicant is considered “Satisfactory” given that the following requirements are satisfied:


____________________________________________________________________________

1. Net profit (profit less all expenses and less 10% withholding tax) in the accounting period (= 0 or higher) is 0 or higher 2. Short term liquidity coefficient: Current assets - long term business claims (cash, accounts receivable, inventory, (all losses occurring during the year, marketable securities, prepaid expenses whether reported or not, related handling costs and other liquid assets that can be readily and any adjustments to claims outstanding converted to cash) from previous years)

…………………………………………………………………………………………………… ≥1 Short term financial and business liabilities {financial liabilities “at FVTPL” (FVTPL - fair value through profit and loss) or “other financial liabilities”}

2.2. Accredited Agents The assessment of an existing Agent is considered “Satisfactory” if the following requirements are satisfied:

Net profit (profit less all expenses and less 10% withholding tax) in the accounting

period (= 0 or higher) is 0 or higher

Short term liquidity coefficient: Current assets - long term business claims (cash, accounts receivable, inventory, (all losses occurring during the year, marketable securities, prepaid expenses whether reported or not, related handling costs and other liquid assets that can be readily and any adjustments to claims outstanding converted to cash) from previous years)

…………………………………………………………………………………………………… ≥1 Short term financial and business liabilities {financial liabilities “at FVTPL” (FVTPL - fair value through profit and loss) or “other financial liabilities”}

Cases of Irregularity according to provisions of Resolution 818g – not more than 1

case of late payment during last 12 months


All Agents are required to submit the following documentation for the last financial year

according, prepared in accordance with the international accounting standards and certified by

an independent auditor:

Certified Balance Sheet,

Profit & Loss account,


____________________________________________________________________________

Credit and Debt Statement and

Cash Flow Account


The bank financial guarantee presented must adhere to the provisions of section 4.3 below.

4.1. New Applicants New applicants will be required to submit a bank financial guarantee for an amount corresponding to the average 22 days’ net BSP cash sales at risk, calculated over the last 12 months, but cannot be less than 50,000 USD. The estimation of the initial level of bank financial guarantee is done based on a statement of International Sales.

4.2. Accredited Agents

If an existing Agent receives a “Satisfactory” result in the financial evaluation, and has been accredited for two years or more as an Agent, the Agent must provide a Financial Guarantee covering 70% of the Agent’s average 22 days net BSP cash sales over the previous 12 months. If an existing Agent receives an “Unsatisfactory” result in the financial evaluation, the Agent must provide a Financial Guarantee covering 100% of the Agent’s average 22 days net BSP cash sales over the previous 12 months.

4.3. Bank Financial guarantee requirements

a) All Agents are required to present a Bank Guarantee, issued by recognized bank

(“Financial Guarantee”).

a) The Financial Guarantee must comply with the following conditions:

i. The Financial Guarantee must be issued by a recognized bank, being a financial institution authorized to issue bank financial guarantees for Agents in Azerbaijan and which is duly registered and licensed to operate without limitations in the Republic of Azerbaijan.

ii. The Financial Guarantee must be issued strictly according to IATA templates.

b) In the event that the financial institution, that has provided the bank financial guarantee on behalf of the Agent, has a change in status resulting in their license to issue bank financial guarantees being suspended by the Central Bank of Azerbaijan, the Agent must provide IATA a new bank financial guarantee from a financial institution who does have a current license to issue bank financial guarantees.


____________________________________________________________________________

c) In the event that a financial institution breaches the terms and conditions of the bank financial guarantee issued on behalf of an Accredited Agent, IATA may suspend its acceptance of bank financial guarantees from that financial institution and require the affected Accredited Agents to submit a bank financial guarantee from another recognized financial institution in Azerbaijan within 30 days of prior written notice from IATA.

OTHER

Significant change in the business of the Agent

a) An Agent must notify IATA of any significant change as soon as the Agent becomes aware of it.

b) A significant change means any change in the business of the Agent which results in

a change in its 22 days’ net BSP cash sales of more than 30% or AZN 50,000 as compared to the previous 12 months. A change can be an increase or a decrease in gross BSP sales.

c) Where there is a significant change in the business of the Agent, IATA will conduct a

financial review and calculate the amount of the financial security required in accordance with these local criteria.

A financial review can also be initiated by IATA as soon as IATA becomes aware of a

significant change in the Agent’s 22 days’ net BSP cash sales


____________________________________________________________________________

RZ3.1

UPDATE – INDIA JOINT BANK GUARANTEE IMPLEMENTATION

Submitted by APJC India


The Joint Bank Guarantee was approved by the 37th PAConf as an exception to Resolution

850p and later in 2015 at the 38th PAConf and the ensuing Mail Vote post Conference some

proposed amendments were approved.

This submission is to update Conference on the implementation of the JBG in India. Two

Associations (TAAI & TAFI) have implemented the JBG effective from 01 July 2016 to align with

financial security renewal dates. The two JBGs collectively cover 237 Agents in the country for

a term of one year.

Proposed Action

Conference to note this update.


____________________________________________________________________________

RZ3.2

CHANGES TO LOCAL FINANCIAL CRITERIA – NEPAL

Submitted by APJC Nepal

BACKGROUND / PROBLEM Pursuant to adoption by the 38th Passenger Agency Conference, BSP Nepal changed the Remittance Frequency to weekly effective 01 January 2015, with Remittance Dates being scheduled for 15 days after the Reporting Date. Consequently, the number of days at risk has been shortened from the 35 days that were applicable for twice monthly remittance. The Local Financial Criteria as written and documented in the Travel Agents Handbook specifies the number of days at risk as 35 when in fact the actual number of days at risk is 25, with the move to weekly remittance. At the request of APJC Members the Secretary of the Council initiated a Mail Vote proposing amendment of the LFC to incorporate this change which was unanimously approved for recommendation to Conference. The Mail Vote was conducted in May 2016. PROPOSED ACTION Amendment of Local Financial Criteria for Nepal to specify only number of “Days Sales at Risk”, replacing a specific number of days. PROPOSED SOLUTION Conference to adopt the changes to the Local Financial Criteria as shown in Attachment ‘A’ for effectiveness as of 1 January 2017.



Page: 1 of 5 ____________________________________________________________________________

Attachment ‘A’ LOCAL FINANCIAL CRITERIA - NEPAL the applicant must be established and in business as a Travel Agent of international ticketing for not less than 12 months prior to the date of application. FINANCIAL EVALUATION General The Applicant / Agent shall provide the latest independently audited financial statements prepared in accordance with standard accounting practices. A. PREPARATION 1) Prepared by a Chartered Accountant and signed by one director or the proprietor(s). The accounts must be audited. 2) Change of Ownership If the business is continuing, the applicant must submit the latest year ending statements of audited accounts reflecting the position of the Agency in operation and a certified opening balance sheet reflecting the position of the new entity taking over the business. B. FINANCIAL STATEMENTS 1) Minimum Capital

i) Minimum paid up share capital for both Applicant and existing Agent in the sum of NPR100,000/-

ii) Level of share capital should be increased if required based on the following scale:

Total Revenue (NPR)

SHARE CAPITAL (NPR)

Up to 10 million 100,000

10 to 20 million 120,000

20 to 30 million 140,000

30 to 40 million 160,000

40 to 50 million 180,000

Over 50 million 200,000

Applicants who do not meet the above criteria shall be given a period of 1 month in which to meet the minimum requirement.



Page: 2 of 5 ____________________________________________________________________________

Approved agents who do not meet the above criteria shall be given a period of 6 months in which to meet the minimum requirement. 2) Financial Assessment Based on 5 tests and the allocation of applicable points per each test, maximum applicable points are 30. The total of 15 points or more is considered a satisfactory result providing the Applicant maintains the minimum level of share capital/owners capital. The maximum number of points obtainable is made up as follows:

(i) Integrity of Accounting system 2 points (ii) Current Ratio 8 points (iii) Debt Ratio 8 points (iv) Profitability Ratio 4 points (v) Tangible net worth to turnover 8 points

TOTAL 30 points (i) Integrity of Accounting System

The accuracy and integrity of internal accounting system is considered to be critical to the Agents ability to manage the system. (ii) Current Ratio Current Assets divided by Current Liabilities Current Assets are defined as Current Assets as in the Balance sheet deducting receivables from Shareho Current Liabilities are defined as Current Liabilities as in the Balance Sheet deducting loans provided by Shareholders or proprietor/ partner

Over 1.50 8 points 1.25 – 1.49 7 points 1.00 – 1.24 6 points 0.95 – 0.99 5 points 0.90 – 0.94 4 points 0.85 – 0.89 3 points 0.80– 0.84 2 points 0.75 – 0.79 1 point Under 0.75 0 points

(iii) Debt Ratio

Total Debt divided by Tangible Assets



Page: 3 of 5 ____________________________________________________________________________

Total Debt includes Current Liabilities and all loans from 3rd parties Tangible Assets are defined as Total Assets in the Balance Sheet at market value (including receivables from shareholders) less intangible assets such as goodwill, franchise fees, client lists and preliminary expenses. Goodwill attaching to premises for this purpose will be considered as intangible asset unless supported by a written valuation from an independent registered valuer.

Under 0.5 8 points 0.50 – 0.59 7 points 0.60 – 0.69 6 points 0.70 – 0.79 5 points 0.80 – 0.89 4 points 0.90 – 0.99 3 points 1.00 – 1.19 2 points 1.20 – 1.29 1 point Over 1.29 0 points

(iv) Profitability Ratio

Net Profit before Tax x 100 --------------------------- ------- Shareholders Funds 1 Net profit before tax is defined as profit before tax and before extra-ordinary items. Shareholders funds are defined as the paid up share capital/owners capital plus retained earnings or minus deficit in case of loss plus other recourses.

Over 19.99% 4 points 15%-19.99% 3 points 10%-14.99% 2 points 0%-09.99% 1 point Under 0 0 points

(v) Tangible Net Worth to Turnover Ratio

Tangible Net Worth x 100 ------------------------- Total Turnover 1 Tangible Net Worth is defined as Shareholders fund as in ratio 4 above less intangibles as in ration 3 above minus loans to shareholders/proprietors. Total turnover is BSP net to be paid figure for the latest 12 months.



Page: 4 of 5 ____________________________________________________________________________

Over 2 8 points 1.50 – 2.00 7 points 1.25 – 1.49 6 points 1.00 – 1.24 5 points 0.75 – 0.99 4 points 0.50 – 0.74 3 points 0.25 – 0.49 2 points Under 0.25 1 point

3. In all cases financial evaluation conducted by the financial assessor appointed by IATA will be final and binding. 4. Solutions Accredited Agents who are unable to meet the financial criteria will be provided with a detailed feedback on their financial standing and the review conducted.. Such Agents shall be given a minimum of 6 months after receipt of their assessment results findings to meet the criteria as defined in Paragraph 2 above. If the agent is unable to meet the criteria by using the stated options within 6 months, non-compliance action in accordance with Section 2.2.2 of Resolution 818g will be initiated by IATA. Minimum Guarantee Amounts All applicants are required to provide a Financial Security in NPR equivalent of USD 10,000. Daily Bankers Selling Rate (BSR) as on the date of issuance of the Financial Security would be used. Subsequently and after completion of 6 months of trading in BSP, the agency would be evaluated on the basis of their audited financial documents and productivity as per BSP records. Accredited Passenger Sales Agents in Nepal Agent shall furnish a Financial Security for an amount equal to his 35 days’ “Amount at Risk”. “Amount at Risk” is calculated as the total BSP net cash sales of Agent for the previous twelve months, applied to the number of days at risk per the remittance calendar plus a margin of up to 5 days. BSP net cash sales is value appearing in the “Amount Payable” column of BSP Billing Statements for cash sales in NPR + cash sales in USD converted to NPR at the Bankers Selling Rate (BSR) on the date the Bank Guarantee demand is issued. Review of Financial Guarantee The Agency Administrator or any person acting on behalf of the Agency Administrator may on his own initiative or at the request of a member/ BSP participating airline review the financial standing of an agent based on the stated criteria and direct the agent to submit additional



Page: 5 of 5 ____________________________________________________________________________

guarantee pursuant to such review. A review resulting in assessment of a lower value of guarantee will not result in return of the guarantee held except at the time of renewal thereof. Notwithstanding the outcome of a review the amount of Bank Guarantee held shall not fall below USD 10,000 in equivalent NPR as stated.


____________________________________________________________________________

RZ3.3

CHANGES TO LOCAL FINANCIAL CRITERIA – VIETNAM Submitted by APJC Vietnam

BACKGROUND INFORMATION:

Vietnam Local Financial Criteria was in the process of regular review by the APJC in Vietnam.

There were three elements in the criteria that the Council wished to alter: (a) Aligning the

Criteria layout in the PAConf approved template, (b) Changing the minimum financial security

amounts to be commensurate with US dollar values in view of devaluation of VND and (c)

reducing the maximum Financial Security to be submitted to 110% of the Amount at Risk

instead of 115%.

PROPOSED SOLUTION:

The Council at their meeting on 24 June 2016 unanimously recommended the Criteria as

documented in Attachment ‘A’.

PROPOSED ACTION:

Conference is requested to please adopt the changes as shown in Attachment ‘A’ with an

effectiveness date of 1 January 2017.



Page: 1 of 3 ____________________________________________________________________________

ATTACHMENT “A”

Country/Area VIETNAM

Region ASPAC

Remittance Frequency Four times monthly

Remittance Period 14 days

Date the criteria last changed 01 April 2015

Criteria approved by PAConf MV 1Q 2015

1. GENERAL RULE

The applicant must be established and in business as a Travel Agent and/or Airline ticketing agent for not less than 12 months prior to the date of application.

1 2 CRITERIA FOR THE EVALUATION OF AGENTS’ ACCOUNTS 1.1 Net Equity must be positive In computing the Net Equity, adjustments must be made to write down to zero the following: i. The balance of all intangible assets, including goodwill; ii. All unamortized research and development costs; iii. The value of all unquoted investments; iv. All encumbered Assets; v. All trading losses for the current financial period 2.1 All financial information used in the financial criteria will be extracted from the Agent's Financial

Statement. 2.2 The following financial tests apply to the evaluation of an Agent's Financial Statement: 2.2.1 There must be positive Net Equity. 2.2.2 Net Equity divided by long-term debt and other long-term liabilities must be greater than 0.5. 2.2.3 EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortisation and extraordinary items)

must be positive. 2.2.4 The EBITDA must exceed the Interest Expense by a factor of a minimum of two. 2.2.5 Adjusted Current Assets must exceed Current Liabilities.

2 3 ANNUAL FINANCIAL REVIEWS

New Applicants a. New applicants must provide audited financial statements not older than 12 months from

the Agent’s last financial year end, for evaluation against the financial criteria tests set forth in Section 1 2.

Existing Agents

b. All existing Agents must provide audited or unaudited financial statements not older than 6 months from the Agent’s financial year end for evaluation against the financial criteria tests set forth in Section 1 2.

3 4 FINANCIAL SECURITY

Notwithstanding the financial review results, all Agents must provide IATA with a Financial Security in the form of a Bank Guarantee, as per the calculation set forth as follows:



Page: 2 of 3 ____________________________________________________________________________

New Applicants 3.1 4.1 New applicants must provide IATA with a Financial Security in the form of a Bank Guarantee for

a minimum validity of 3 months with a minimum amount of VND 630,000,000 670,000,000 prior to being accredited.

Existing Agents 3.2.1 4.2.1 All Agents must provide a Financial Security in the form of a Bank Guarantee that covers at

a minimum of VND 630,000,000 670,000,000 or the Amount at Risk whichever is higher.

3.2.2 4,2,2 However if an existing Agent fails any of the financial criteria tests set forth in Section 2, and/or has provided unaudited financial statements, then the Agent must provide a Financial Security in the form of a Bank Guarantee that covers at a minimum of VND 724,000,000 737,000,000 or 115% 110% of the Amount at Risk whichever is higher.

3.2.3 The Agent’s Amount at Risk is to be calculated by the following formula: Agent’s actual net cash sales in BSP over the last 12 months x 2 periods (48 Periods*) (*) If the Agent was accredited for less than 12 months (48 periods), then the number of actual periods since accredited date will be used in this formula

4.2.3 For the purposes of calculating the amount of a Financial Security the following definitions apply:

i. “Days' Sales at Risk” means the number of days from the beginning of the Agent’s Reporting Period to the Remittance Date in respect of that Reporting Period, plus a margin of two days.

ii. “Amount at Risk” is calculated by dividing the Days' Sales at Risk by 365 days, and applying that percentage to the BSP net cash turnover amount the Agent made in previous 12 month period

“Amount at Risk” = “Days’ Sales at Risk” × BSP cash turnover in previous 12 month period/365 (*) If the Agent was accredited for less than 12 months (365 days), then the number of days since accredited date will be used instead of 365 in this formula.

5. OTHER

Definitions of Terms used in these criteria

Adjusted Current Assets–are defined as Current Assets as in the Balance Sheet of the Accounts after deducting: – Stocks and work in progress, – Deposits given to third parties other than IATA, – Loans to Directors, Associate Companies, (including any subsidiary, associate or company under

common ownership), – Doubtful debtors, – Blocked funds, except for funds held in favour of IATA. These generic descriptions may be modified to terms specifically defined under the applicable local Generally Accepted Accounting Principles (GAAP) and disclosed in the financial statements. Current Liabilities–are defined as Current Liabilities as in the Balance Sheet of the Accounts.



Page: 3 of 3 ____________________________________________________________________________

EBITDA–Earnings Before Interest, Taxation, Depreciation and Amortisation. Interest Expense means an income statement account which is used to report the amount of interest incurred on debt during a period of time. Net Equity or Shareholders'/Owners' Funds–consists of: – Share capital – Share premium – Retained earnings – Other distributable reserves – Shareholder's loans if subordinated less declared dividends. Long Term Debt–All debt liabilities where repayment is due more than twelve months after the end of the financial period. Long Term Liabilities–all liabilities where repayment is due more than twelve months after the end of the financial period.


____________________________________________________________________________

RZ3.4

AMENDMENT TO LOCAL FINANCIAL CRITERIA – INDONESIA Submitted by APJC Indonesia BACKGROUND INFORMATION: The APJC Indonesia proposed to strengthen the IATA Agency programme by ensuring the legitimacy of an Agent’s identity as a business entity. The local tax authorities also notified IATA to include the requirement of a “Fiscal Certificate” issued by the local tax office as a prerequisite for accreditation. Accordingly, at the APJC Meeting in June 2016 it was proposed that where required Accredited Agents must be in possession of and submit a proof of fiscal certificate issued by Local Tax Service Office. This must apply to all Agents, new and existing. PROPOSED ACTION: It is proposed that the Local Financial Criteria for Indonesia be amended as shown in Attachment ‘A’ to this paper. Simultaneously the Local Financial Criteria have been drafted in the PAConf approved format without changing any of the content except for what is proposed above. REQUIRED EFFECTIVENESS: Conference to adopt the changes to the Local Financial Criteria for Indonesia as shown in Attachment ‘A’ with a 1 January 2017 effectiveness.



Page: 1 of 3 ____________________________________________________________________________

Attachment ‘A’ INDONESIA

(Local Financial Criteria - Passenger)

1. GENERAL RULE

Finances 1.1 the applicant must provide a certified or properly audited balance sheet and Profit and

Loss account statement not older than six months at time of submission. This statement has to be audited by a Registered Public Accountant who is a member of the Association of Indonesian Public Accountants.

2. CRITERIA FOR EVALUATION OF AGENTS’ ACCOUNTS.

2.1 applicants must: 2.2(a) have as a minimum paid up capital of IDR 500,000,000 or as required by the Directorate

General of Tourism regulations; 2.2(b) submit a satisfactory banker's report; 2.2(c) submit a minimum financial guarantee of not less than the average of the respective

BSP credit term period's turnover or USD 15,000, whichever is higher, in the form of bank guarantee or insurance as established from time to time;

2.2(d) be in airline trading business as a travel agent not less than six months prior to the date of application. 2.3(a) when assessing whether the applicant meets the financial standing described in

Subparagraph 1.1 of this Paragraph the following shall be taken into account: 2.3(a)(i) Working Capital

Current year>Previous year 10 Current year=Previous year 7.5 Current year<Previous year 5

2.3(a)(ii) Current Ratio

Greater than 2 15 1.5 to 2 11.25 1 to less than 1.5 7.5 Lesser than 1 3.75



Page: 2 of 3 ____________________________________________________________________________

2.3(a)(iii) Quick Ratio Greater than or equals 1 35 Lesser than 1 17.5

2.3(a)(iv) Account Receivable Turnover

Greater than or equals 18 times 15 9 times to 17 times 1 1.25 Lesser than 9 times 7.5

2.3(a)(v) Average Age of Receivables

Lesser than or equals 14 days 15 15 days to 30 days 11.25 31 days to 90 days 7.5 Greater than 90 days 3.75

2.3(a)(vi) Debts to Total Assets Ratio

Lesser than 35% 10 35% to 50% 7.5 Greater than 50% 5

2.3(a)(vii) Based on the above 6 tests and the allocation of applicable points to each test, a total of 60 points or more is considered satisfactory providing that the Applicant maintain the minimum level of paid up capital. 2.3(a)(viii) It is recognized that different interpretations of financial accounts are possible and do occur. Accordingly, the Financial Assessor shall have discretion as to the most appropriate classification in accordance with standard accounting practices for all items included in the statements. It is in the applicant’s best interest to supply any additional information that has a bearing on the review.


3.1 To be conducted in accordance with financial criteria assessment detailed in Section 2 above.


4.1 A financial guarantee equivalent to the sales at risk amount is required for any existing accredited IATA agents who fail the criteria as set forth in 1.3(a)(i)-(vii). The number of “Days’



Page: 3 of 3 ____________________________________________________________________________

Sales at Risk” is to be counted from the beginning of the reporting period to the remittance date in respect of that reporting period or periods, plus a margin of five days. The result is to be divided by 360 days and then applied to the annual cash turnover estimation to calculate the estimated Amount at Risk and the amount of guarantee required.

5. OTHER

5.1. Premises If located on the premises of an organization, plant or commercial firm and dedicated substantially to the travel requirements of that organization, plant or commercial firm, be a Branch of an existing Accredited Agent and meet all the qualifications of this Section, except that it need not be freely accessible to the general public. 5.2. Licence The applicant must be in possession of a valid license from the Directorate General of Tourism

and the respective local government authority including fiscal certificate issued by Local Tax

Service Office, whenever required.


____________________________________________________________________________

RZ3.5

CHANGE TO LOCAL FINANCIAL CRITERIA – PAKISTAN

Submitted by APJC (Pakistan)


The APJC Pakistan met on 16th February 2016 at the 8th meeting of the Council. The requisite

quorum was present and among other subjects, change to Local Financial Criteria was on the

Agenda for discussion. There was unanimous consent by all members of the Council (Airlines

and Agents) to making changes to LFC as documented in “Attachment A” to this paper.

Note: The Council was advised of the limitations the LFC has. The two elements commented

upon were (a) 36 Months in business and (b) higher minimum financial security for new

applicants, both of which can be construed as entry barriers. However, the APJC PK still wish

to forward the Criteria to Conference.

Proposed Action

Conference to adopt changes to LFC as set out in Attachment ‘A’ for expedited effectiveness of

01 January 2017.



Page: 1 of 3 ____________________________________________________________________________

Attachment ‘A’

Proposed Local Financial Criteria

1. GENERAL RULE

The applicant must have conducted travel agent business for at least twelve (12) thirty six (36)

months having a Government License issued by Department of Tourist Services, Ministry of

Tourism, Government of Pakistan.


2.1 All financial information used in the financial criteria will be extracted from the Agent’s

Audited Accounts.

2.2 The following financial tests apply to the evaluation of an Agent’s Audited Accounts:

2.2.1 There must be positive Net Equity.

2.2.2 Net Equity divided by long-term debt and other long-term liabilities must be greater than

0.5.

2.2.3 EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortization and

extraordinary items) must be positive save in exceptional circumstances

2.2.4 The EBITDA must exceed the Interest Payable by a factor of a minimum of two;

2.2.5 Adjusted Current Assets must exceed Current Liabilities.

2.2.6 Minimum paid-up Capital/Investment of PKR 510 million for Head Office and PKR 1

million for each Branch Office. The minimum paid-up Capital/Investment criteria will be

applicable to existing and new IATA approved agents from 01 January 2014. applicants [and not

the existing Agents]


All Agents must provide Audited Accounts no later than 12 months after each financial year end,

of that agent for the purposes of evaluation against the financial tests in section 2.

4. INTERIM FINANCIAL REVIEWS

For any Financial Review conducted for cause at a time other than in respect of an Agent’s

financial year end, IATA may conduct a Financial Review in accordance with section 3 as

applicable to that Agent by reviewing the internal monthly management accounts of the Agent

showing the results for each month since the last accounting date, the cumulative results to date

and the latest balance sheet.




Page: 2 of 3 ____________________________________________________________________________

5.1 An Agent will not be accredited or will not continue to be accredited until any Financial

Security required to be provided to IATA has been received by IATA and confirmed to IATA by

way of written confirmation received directly from the third party supporting the Financial

Security that the Financial Security was issued by that third party and is valid.

5.2 Financial Securities will be subject to a minimum notice period of ninety (90) days and

be valid for a minimum of at least one year.

5.3 All Agents must provide a Financial Security with a minimum amount of PKR 7,000,000

to be accredited or to remain accredited or

5.4 Furnish a Financial Security for the with a minimum amount at risk calculated as per 35

days average over last 12 months, whichever is higher computed as the average cash sales

during the latest 12 month period for the number of days at risk, subject to a minimum financial

security as defined in paragraph 5.3 above.

5.5 For Agents effective from 1st January 2014 who are accredited for less than 12 months,

the minimum Financial Security / Bank Guarantee will be PKR 10 million. or 35 days average

cash sales calculated over last 12 months, whichever is higher.

5.6 At any point in time, if the existing Financial Security is insufficient to cover the amount

at risk, the amount of the Financial Security required will be increased to cover the Amount at

Risk.

6. STAFF QUALIFICATIONS

Minimum 2 staff to have valid IATA/UFTAA Introductory Diploma Course certificate for

qualification of new applicants.

67. DEFINITIONS OF TERMS USED IN THESE GUIDELINES

67.1 Adjusted Current Assets – are defined as Current Assets as in the Balance Sheet of the

Accounts after deducting:

- Stocks and work in progress.

- Deposits given to third parties other than IATA,

- Loans to Directors, Associate Companies, (including any subsidiary, associate or

company

under common ownership)

- Doubtful debtors,

- Blocked funds, except for funds held in favour of IATA.



Page: 3 of 3 ____________________________________________________________________________

These generic descriptions may be modified to terms specifically defined under the applicable

local Generally Accepted Accounting Principles (GAAP) and disclosed in the financial

statements.

67.2 Current Liabilities - are defined as Current Liabilities as in the Balance Sheet of the

Accounts

67.3 EBITDA – Earnings Before Interest, Taxation, Depreciation and Amortisation

67.4 Financial Irregularity means an irregularity applied as a result of any failure to adhere to

the reporting and remittance procedures described in Resolution 818g Attachment “A” including

but not limited to those irregularities described in Resolution 818g Attachment “A”.

67.5 Financial Review means a review of an Agent’s financial position or the calculation of the

amount of Financial Security required in accordance with this Resolution 800f, or both.

67.6 Irregularity means any irregularity applied under the Passenger Sales Agency Rules for

non-compliance with those Rules including but not limited to Financial Irregularities.

67.7 Net Equity or Shareholders’/Owners’ Funds – consists of:

- Share capital

- Share premium

- Retained earnings

- Other distributable reserves

- Shareholder’s loans if subordinated less declared dividends:

67.8 Long Term Debt – All debt liabilities where repayment is due more than twelve months

after the end of the financial period.

67.9 Long Term Liabilities – all liabilities where repayment is due more than twelve months

after the end of the financial period.

67.10 Review means any assessment or evaluation of an Agent’s continuing compliance with

the Passenger Sales Agency Rules.


____________________________________________________________________________

RZ4.1

CHANGES TO LOCAL FINANCIAL CRITERIA AMOUNT AT RISK CALCULATION FOR BSP CHINESE TAIPEI

Submitted by APJC Chinese Taipei


Under Resolution 818g, 2.2 & 2.2.1, IATA will conduct annual financial assessment of the

financial standing of agents and request financial security for the agents per Local Financial

Criteria of Chinese Taipei.

However, the Local Financial Criteria of Chinese Taipei has been deemed as out of date, not

reflecting current status and character of BSP remittance and settlement, and not appropriately

address the risk during the BSP running process. Local Financial Criteria does not clearly

instruct the sales periods (e.g., 12 months) that need to be used in averaging for monthly sales

calculation. Local Financial Criteria, also, does not reflect the change of “frequency of

remittance” from once every two weeks to once per week, which would double the restriction of

agents’ running by the application of doubled amount of Bank Guarantee.

For LCAGP and APJC held on Jan 29, 2015 Taipei, the AAR has been agreed to be 25 Days

sales at risk. However, opposed ideas from local agency association was raised and the

proposal was not submitted to PACONF in 2015.

Before the APJC that was held on May 24th, 2016 Taipei, IATA has visited TATA (Taipei

Association of Travel Agents) and received agreement that the Days sales at risk could be set

as 25 days.

Proposed Solution

Due to changes in remittance frequency from fortnightly to weekly, the number of days for sales

at risk used in local financial criteria would be changed from one month (30 days) to 25 days to

reflect this change.

Proposed Action

Conference to adopt the changes to the Local Financial Criteria for Chinese Taipei as shown at

Attachment ‘A’ for 1 January 2017 effectiveness.



Page: 1 of 1 ____________________________________________________________________________

Attachment ‘A’

Amend Local Financial Criteria for BSP Chinese Taipei as shown below:


Notwithstanding whether a New Agent or Existing Agent has satisfactory accounts after

assessment under the criteria in section 2, all New Agents and Existing Agents must provide a

financial security.

Bank Guarantee and Time Deposit Pledge are currently acceptable by BSP Chinese Taipei.

The amount must be TWD 500,000.00 or the equivalent of one hundred per cent of one month’s

BSP net cash sales 25 days sales at risk whichever is higher.


____________________________________________________________________________

RZ5.1

CHANGE TO LOCAL FINANCIAL CRITERIA – YEMEN

Submitted by APJC – Yemen

Background Information As part of the Local Financial Criteria review engagements undertaken, the APJC Yemen members, in a consultative meeting, have unanimously agreed to update the criteria with alignment to Resolution 800f, global best practices and reflecting specific prevailing market conditions. This included amendments to ensure clarity and alignment to current Resolutions. APJC members took into account recommendations for criteria review and alignment which included:

1. Increase of remittance frequency – market moving to fortnightly remittance from monthly remittance.

2. Introduction of Annual financial review of agents. 3. Introduction of a uniform minimum financial security level for all agents.. 4. Review of financial ratios and tests using Resolution 800f as a guideline ensuring the

criteria are fit for purpose for the review of all type of agents in YE market. Proposed Action Conference to endorse replacement of the Local Financial Criteria for Yemen with the criteria as shown in Attachment ‘A’, as proposed by the members of APJC Yemen, to be effective from the date of reinstatement of the Yemen BSP.

Agenda Item: T1.1 Revision No.: 0 Date: 18 Aug 16 Page: 1 of 6

______________________________________________________________________________

T1.1

REPORT OF AGENCY ACCREDITATION ACTIVITIES – AFRICA AND MIDDLE EAST


General Aspects of the Program

There are twenty two APJCs covering the AME region, covering the market from Southern

Africa through Tunisia.

Country list:

Country APJC held in 2015 Y/N


1. APJC Central & West Africa

N 2. APJC Egypt Y

3. APJC Eastern Africa

Y 4. APJC Ethiopia Y

5. APJC Ghana Y 6. APJC Gulf Area Y

7. APJC Jordan N 8. APJC Lebanon Y

9. APJC Kuwait N 10. APJC Mauritius Y

11. APJC Malawi Y 12. APJC Morocco N

13. APJC Mozambique

Y 14. APJC Nigeria Y

15. APJC Rwanda Y 16. APJC Saudi Arabia N

17. APJC South Africa Y 18. APJC Syria N

19. APJC Tunisia Y 20. APJC Yemen N

21. APJC Zambia Y 22. APJC Zimbabwe Y

23. APJC Sudan Y

Approved Locations-there is no significant growth in the number of accredited

locations due to the political and economic instability in some of the major markets in

AME such as Egypt and Nigeria where the recent security threats have profoundly

impacted the travel and tourism industry.

New Agency Approvals - during Jan-Jul 2016 period, 294 new applications were

approved.


______________________________________________________________________________

Agency Changes – during Jan-Jul 2016 period, 275 changes of ownership,

Shareholding, Name and Location have been processed, most of these changes were

initiated from returned mails [ change of locations] and completion of Agency Status

Form.

Terminations – a total of 292 IATA Accredited locations were terminated in the first

seven months of 2016.

Defaults –1,036 defaults were reported during the period Jan-Jul 2016.

Reinstatements – 372 reinstatements were processed during the period Jan – Jul 2016

Voluntary relinquishments –111 voluntary relinquishment requests have been

received as of 31 Jul 2016.

Statistics (BSP and Non BSP Locations):

Activity As at

31.12.2015 As at 31.7.2016

% increase/decrease

Total Approved Locations 10,331 10,348 0.2%

New Agency Approvals 783 294 -

Changes of Ownership 233 79 -

Terminations 303 292 -

Defaults 1575 1036 -

Voluntary relinquishments 193 111 -

IATA Travel Agent ID Card Program

For the AME Region, the total amount of cards in circulation as of 31 December 2015 was

1,041 whilst there is 1,045 as of Jul 2016 showing no significant change in comparison to

2015.

Travel Industry Designator Service (TIDS)

As of December 2015 there were 392 TIDS locations and 403 as of 31 Jul 2016 representing

an increase of 3%.

Travel Agency Commissioner

From Jan - Jul 2016 a total of 107 cases were raised to the Travel Agency Commissioner.

Note that a number of these case where related to purely to administrative issues, which

were solved without an official decision by the Agency Commissioner. In all instances 35

cases received an official Agency Commissioner decision.


_________________________________________________________________________________________________________

2015 Report for Africa & Middle East

AME Total 2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 YTD_2015

NEW APPROVALS

Administrative Office (AO) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Head Office (HO) 850 66 87 91 41 62 48 53 26 50 36 77 78 715

Branch Office (BR) 117 9 5 3 4 9 4 4 3 4 9 7 7 68

Specific Sales Activity (SA) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Sub-total 967 75 92 94 45 71 52 57 29 54 45 84 85 783

CHANGES (APPROVED)

Ch.Of Ownership Finalised (CHF ) 148 46 12 18 10 11 24 25 13 15 24 23 12 233

Ch.In Shareholding Finalised (CCF ) 53 12 5 11 6 6 4 8 2 6 12 11 14 97

Ch. Of Name Finalised (CNF ) 52 3 1 7 7 1 1 0 5 6 1 3 7 42

Ch. Of Location Finalised (CLF ) 237 21 23 33 14 14 10 12 22 16 26 31 22 244

Reinstatement (REI ) 95 1 4 2 3 1 10 21 14 13 84 28 16 197

Review Terminated (RTR ) 609 92 179 36 30 49 63 46 70 49 127 59 51 851

Sub-total 1194 175 224 107 70 82 112 112 126 105 274 155 122 1664

TERMINATIONS

Vol. rel/Closure 96 2 8 11 6 10 3 43 7 54 6 17 26 193

Default/Standards not met 308 6 11 27 22 12 24 29 18 33 29 28 28 267

Non-payment annual fees 74 0 0 0 0 0 4 0 19 9 1 0 3 36

Sub-total 478 8 19 38 28 22 31 72 44 96 36 45 57 496

FINANCIAL STANDING

Review (RVW ) 719 80 121 46 33 45 44 28 95 86 138 40 97 853

Irregularity (IRR ) 4206 317 285 493 395 330 232 710 418 338 435 288 440 4681

Default (DEF ) 1330 108 100 129 179 103 86 228 105 122 138 125 152 1575

ELECTRONIC RESERVATION

SERVICE PROVIDERS

Ersp Linked To An Agent (EB) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Ersp(Principal) No Link To Agt (EP) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Ersp Linked To An Agent (EB)

Terminated 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Ersp(Principal) No Link To Agt (EP)

Terminated 0 0 0 0 0 0 0 0 0 0 0 0 0 0

TRAVEL INDUSTRY

DESIGNATORS

TIDS new assignments 97 6 7 5 7 5 5 7 4 13 7 9 4 79

TIDS deletions 220 1 2 48 0 0 0 0 0 0 131 2 0 184

GENERAL SALES AGENTS

New Assignments 74 46 4 17 11 6 2 5 4 0 3 7 8 113

Changes 22 12 0 25 1 2 0 2 0 0 2 3 6 53

Deletions 53 8 2 1 11 1 1 6 5 24 7 6 16 88

MEMBERS SALES OFFICES

New Assignments 466 28 24 48 119 54 24 86 66 60 99 20 20 648

Changes 125 77 71 2 5 13 61 6 14 15 10 85 66 425

Deletions 47 3 0 1 0 1 1 3 2 25 8 5 5 54

TOTALS


_________________________________________________________________________________________________________

2016 Report for Africa & Middle East

AME Total 2015 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 YTD_2016

NEW APPROVALS

Head Office (HO) 715 64 26 43 36 31 46 25 0 0 0 0 0 271

Branch Office (BR) 68 2 3 5 0 4 2 3 0 0 0 0 0 19

Specific Sales Activity (SA) 0 0 0 0 0 3 1 0 0 0 0 0 0 4

Sub-total 783 66 29 48 36 38 49 28 0 0 0 0 0 294

CHANGES (APPROVED)

Ch.Of Ownership Finalised (CHF ) 233 19 11 9 7 12 13 8 0 0 0 0 0 79

Ch.In Shareholding Finalised (CCF ) 97 5 9 9 5 7 3 5 0 0 0 0 0 43





Sub-total 1664 134 104 91 102 113 96 80 0 0 0 0 0 720

TERMINATIONS

Vol. rel/Closure 193 22 21 21 2 27 16 2 0 0 0 0 0 111



Sub-total 496 54 65 39 76 91 58 20 0 0 0 0 0 403

FINANCIAL STANDING

Review (RVW ) 853 52 43 51 45 60 62 36 0 0 0 0 0 349


Default (DEF ) 1575 111 199 121 96 154 115 240 0 0 0 0 0 1036

ELECTRONIC RESERVATION

SERVICE PROVIDERS

Ersp Branch (EB) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Ersp Parent (EP) 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Ersp Branch (EB) Terminated 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Ersp Parent (EP) Terminated 0 0 0 0 0 0 0 0 0 0 0 0 0 0

TRAVEL INDUSTRY DESIGNATORS

New Assignments 79 5 5 7 3 10 6 11 0 0 0 0 0 47

TIDS Deletions 184 0 69 9 0 2 0 0 0 0 0 0 0 80


New Assignments 113 4 2 5 3 5 8 4 0 0 0 0 0 31

Changes 53 2 0 13 1 1 0 0 0 0 0 0 0 17

Deletions 88 2 6 3 8 1 0 1 0 0 0 0 0 21


New Assignments 648 39 88 33 40 43 48 15 0 0 0 0 0 306

Changes 425 19 2 6 10 4 3 5 0 0 0 0 0 49

Deletions 54 4 9 3 2 3 6 5 0 0 0 0 0 32


_________________________________________________________________________________________________________

BREAKDOWN OF AGENTS BY COUNTRY – AREA 2 (AME) BSP Locations only

Country Name AO (Admin Office) BR (Branch) HO (Head Office) SA ( Special

Activity) Total

BAHRAIN 23 76 99 BENIN 31 31 BOTSWANA 2 18 20 BURKINA FASO 1 14 1 16 CAMEROON 11 22 33 CHAD 12 12 CONGO 4 11 15 COTE D'IVOIRE 2 49 51 EGYPT 206 1311 1517 ETHIOPIA 13 76 89 GABON 12 12 GHANA 1 77 78 JORDAN 10 305 2 317 KENYA 17 162 179 KUWAIT 134 266 3 403 LEBANON 10 203 213 LESOTHO 8 8 MALAWI 4 19 23 MALI 1 20 1 22 MAURITANIA 2 49 51 MAURITIUS 2 49 51 MOROCCO 53 339 392 MOZAMBIQUE 1 23 24 NAMIBIA 3 11 14 NIGER 12 1 13 NIGERIA 12 793 805 OMAN 64 63 1 128 QATAR 39 121 160


_________________________________________________________________________________________________________

RWANDA 9 9 SAUDI ARABIA 1 1145 435 1581 SENEGAL 1 42 43 SOUTH AFRICA 1 164 345 6 516 SUDAN 4 240 244 SWAZILAND 1 1 TANZANIA 16 47 63 TOGO 1 9 10 TUNISIA 6 240 246 UNITED ARAB EMIRATES

234 392 4 630

UGANDA 7 38 45 ZAMBIA 2 51 53 ZIMBABWE 3 41 44

Total 2198 6042 19 8261


__________________________________________________________________________________

T1.2

REPORT OF AGENCY ACCREDITATION ACTIVITIES - EUROPE


General Aspects of the Programme

In 2015 compared to 2014, there has been:

o A 3.46% decrease in approved locations totals o A 25.88% decrease in new agency approvals. o A 27.67% decrease in the number of Travel Agents that were removed from the

Agency List due to voluntary relinquishments. o Regarding risk related matters, there has been a 29.90% decrease in the number

of defaults compared to 2014

Statistics

Activity As at 31.12.2014

As at 31.12.2015

% increase/ decrease

Total Approved Locations 21,214* 20,480 -3.46%

New Agency Approvals 452 335 -25.88%

Changes of Ownership 783 206 -73.69%

Changes of Shareholding 1078 1250 15.96%

Terminations 1,587 1,135 -28.48%

Defaults 1,428 1,001 -29.90%

Voluntary relinquishments 983 711 -27.67%

* Revised data Travel Industry Designator Service (TIDS) Currently the total number of TIDS codes is 4,026 which represents a decrease of 3.20% compared with previous year. Travel Agency Commissioner Details can be found on the “Annual Report of the Travel Agency Commissioners” submitted by the Travel Agency Commissioners.

Agenda Item: T1.2 Revision No.: 0 Date:


Page: 1 of 1 _______________________________________________________________________________________________________________

Attachment ‘A’ – Cases processed in 2015


_________________________________________________________________________________

T1.3

REPORT OF AGENCY ACCREDITATION ACTIVITIES – THE AMERICAS



The Agency Program in Area 1 is under the purview of seven APJCs:

1) Argentina-Paraguay-Uruguay 2) Bolivia-Chile-Peru, 3) Brazil, 4) Canada-Bermuda, 5) Colombia-Venezuela, 6) Mexico, and 7) Central America-Caribbean

All APJCs met in 2016 at least once and financial criteria was reviewed to ensure it continue to be fit for purpose for the respective markets. Several changes to local financial criteria are being submitted to PAConf39 for its consideration and approval in addition to changes to BSP reporting and remitting calendars. Please refer to voting items for details.

New Agency Approvals – from Jan-Jul 2016 there has been consistent influx of applications when compared to 2015 volumes (please refer to statistics below). Deployment of Agency Accreditation Application Form online at IATA’s Customer Service Portal this past May will facilitate the accreditation process and will attract new prospect customers.

Changes of Ownership – also a consistent influx of changes of ownership and shareholding have been processed Jan-Jul 2016 while 324 were processed in 2015. A project to detect and process unreported changes is underway in 2016 to address all non-compliant absence of notifications.

Terminations – a total of 367 IATA Accredited locations were terminated in the first seven months of 2016 mostly attributed to non-payment of IATA’s annual agency fees and Agent’s inability to obtain a financial security on time.

Defaults – during the Jan-Jul 2016 period 87 defaults were due to non-payment while an additional 52 were the result of technical default or accumulation of irregularities.

Voluntary relinquishments – a minimum number of voluntary relinquishments continues to be experienced in 2016, very similar to volumes in 2015.


_________________________________________________________________________________

Statistics


As at 31.7.2016


Total Approved Locations 11,070 11,050 2%


Changes of Ownership 324 175 -


Defaults 372 168 -


IATA Travel Agent ID Card Program For the Americas Region, the total number of IATA ID Cards in circulation as of 31 July 2016 was 19,930 compared to 20,257 as of December 2015. Travel Industry Designator Service (TIDS) As of July 2016 there were 3,335 TIDS locations while there were 3,607 as of 31 December 2015 representing a decrease of (8%). Travel Agency Commissioner As of 31 July 2016 a total of 15 cases were raised by Accredited Agents to the Travel Agency Commissioner, Area 1. For details, please refer to the TAC Report for Area1. ATTACHMENT Attachment ‘A’ – Breakdown of Accreditation Activity full year 2015. Attachment ‘B’ – Breakdown of Accredited Agents by country as of July 2016.



Page: 1 of 1 __________________________________________________________________________________

Attachment ‘A’

BREAKDOWN OF ACCREDITATION ACTIVITY YEAR 2015

AmericasTotal

2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 YTD_2015

NEW APPROVALS

Home Office (HO) 204 10 13 4 8 7 15 12 15 12 11 12 14 133

Branch (BR) 37 5 1 1 2 10 6 1 2 2 0 0 2 32

Specif ic Sales Activity (SA) 339 28 12 17 31 77 157 55 31 33 26 30 17 514

Sub-total 580 43 26 22 41 94 178 68 48 47 37 42 33 679

CHANGES (APPROVED)

Ch.Of Ow nership Finalised (CHF ) 681 19 9 36 7 7 18 14 40 32 19 6 31 238

Ch.In Shareholding Finalised (CCF) 6 2 1 0 1 1 0 0 0 1 0 0 0 6





Sub-total 1412 125 61 92 86 95 92 116 98 70 47 70 86 1038

TERMINATIONS

Vol. rel/Closure 241 14 22 60 8 6 14 26 31 16 9 23 28 257



Sub-total 528 34 51 72 25 52 23 59 71 41 16 47 39 530

FINANCIAL STANDING

Review (RVW ) 424 42 17 24 28 60 60 42 29 15 8 23 22 370


Default (DEF ) 522 35 22 17 33 40 30 24 22 24 42 45 38 372

TRAVEL INDUSTRY

DESIGNATORS

New Assignments 308 22 26 20 30 25 31 23 29 31 25 31 26 319

TIDS Deletions 427 5 377 10 5 27 2 3 2 11 8 36 19 505


New Assignments 46 0 5 1 31 22 1 2 1 0 6 3 0 72

Changes 8 4 3 2 4 1 0 1 1 2 2 1 4 25

Deletions 40 16 2 5 2 9 0 6 2 7 1 1 1 52


New Assignments 751 26 20 60 74 16 37 25 33 22 31 49 34 427

Changes 172 1 1 2 7 0 11 29 1 0 6 1 2 61

Deletions 89 1 1 3 33 0 15 17 11 3 5 3 0 92

TOTALS

Approve d Loc a tions 10889 10875 10853 10812 10833 10946 11036 11042 11040 11046 11068 11059 11046 1.44%

GSAs 1205 1200 1202 1200 1230 1247 1247 1242 1243 1239 1243 1246 1245 3.32%

MSOs 4718 4743 4762 4819 4860 4876 4898 4906 4928 4947 4974 5020 5054 7.12%

TIDS 3691 3708 3447 3457 3483 3488 3517 3537 3564 3587 3606 3604 3612 -2.14%

Tota l c ode s P / F / G / M / T 20503 20526 20264 20288 20406 20557 20698 20727 20775 20819 20891 20929 20957 2.21%



Page: 1 of 3 __________________________________________________________________________________

Attachment ‘B’ BREAKDOWN OF AGENTS BY COUNTRY – REGION Area 1

Country Code

Country Name AO BR HO SA EB (

ERSP) Total

AI97 ANGUILLA -

AG97 ANTIGUA

1

4

5

AR55 ARGENTINA

85

526

99

710

AW87 ARUBA

3

6

9

BS58 BAHAMAS

7

13

20

BB98 BARBADOS

4

7

11

BZ72 BELIZE

4

4

BM58 BERMUDA

5

5

BO56 BOLIVIA

18

133

151

BQ02 BONAIRE, SABA, ST.

EUSTATIUS

1

1

2

BR57 BRAZIL

267

986

3,907

5,160

VG97 BRITISH VIRGIN

1

3

4

CA 60-72 CANADA 3

550

1,063

120

1,736

PM81 ST. PIERRE ET MIQUELON

2

2

KY98 CAYMAN ISL.

5

5

CL75 CHILE

40

139

13

192

CO76 COLOMBIA

197

356

8

561

CR77 COSTA RICA

4

28

6

38

CU78 CUBA -

CW03 CURACAO

2

12

2

16

DM58 DOMINICA

2

3

5



Page: 2 of 3 __________________________________________________________________________________

DO92 Dominican Republic

5

87

92

EC79 ECUADOR

22

131

3

156

SV80 EL SALVADOR

3

34

37

FK73 FALKLAND

1

1

GF81 FRENCH GUIANA

3

7

10

GD98 GRENADA

1

4

5

GP81 GUADELOUPE

10

12

22

GT82 GUATEMALA

12

60

72

GY59 GUYANA

12

1

13

HT83 HAITI

13

13

HN84 HONDURAS

8

37

1

46

JM85 JAMAICA

8

20

28

MQ81 MARTINIQUE

11

9

1

21

MX86 MEXICO

175

533

17

725

MS97 MONTSERRAT

4

4

NI88 NICARAGUA

15

15

PA89 PANAMA

2

68

5

75

PY90 PARAGUAY

2

89

91

PE91 PERU

33

144

10

187

LC58 SAINT LUCIA

1

6

7

BL02 ST BARTHELEMY

2

2

MF01 ST. MARTIN

2

2

KN97 ST.KITTS & NEVIS

1

4

5

AX04 ST. MAARTEN

4

4

VC98 ST.VINCENT /Grenadines

1

3

4



Page: 3 of 3 __________________________________________________________________________________

SR87 SURINAME

24

24

TT93 TRINIDAD AND TO

4

44

48

TC58 TURKS & CAICOS

2

2

UY94 URUGUAY

10

46

56

VE95 VENEZUELA

193

438

16

647

Area 1 Totals 3

1,689

5,149

4,209

11,050

AO Administrative Office

BR Branch Location HO Head Office Location

SA Special Activity Location

Agenda Item: T1.4 Revision No.: 0 Date: 25 Apr 16 Page: 1 of 3

__________________________________________________________________________________

T1.4

REPORT OF AGENCY ACCREDITATION ACTIVITIES – ASIA PACIFIC


General Aspects of the Programme During the period of January to July 2016:

The net growth [new Agents less Terminated and Voluntary Closures] in the number of accredited locations was 0.43%, with growth recorded in India, Pakistan, Bangladesh and Indonesia. Other markets remained stagnant or recorded a slight decrease.

Number of new applications approved was 365.

Number of agent locations that were Terminated was 182 [122 due to noncompliance, 56 due to payment related and 4 due to nonpayment of annual fee]. Most significant termination increase was in Indonesia, where the Insurance provider made the qualification criteria more stringent. As a result, 40 Agents who could not furnish Financial Securities, had to be terminated. There were 123 Agents terminated during the same period last year.

There were 144 Agents who had voluntarily relinquished [112 for same period last year], out of which 33 were from India.

There were 228 Change of locations and 208 Major changes [ownership / shareholding] completed during this period. Most of these changes were initiated from activities such as returned mails [change of locations] and completion of Agency Status Form [from which the major changes were detected].

The total defaulted amount for the period January – June 2016 was USD 12,663,727.34 [Same period last year was USD 15,610,371]. The unrecovered amount had increased this year to USD 5,256,134 compared to the same period last year (USD 1,133,014), due to a few pending large claims of defaulted agents who were terminated recently. Many of the claims which are pending are expected to be settled soon, which will reduce the unrecovered debt further. Unrecovered debt to Gross Sales ratio for Asia Pacific region is 0.004%.


__________________________________________________________________________________

Statistics


As at 30.6.2016


Total Approved Locations 11,121 11,168 0.43%


Changes of Ownership/ Shareholdings/Name/Locations/Legal Status

880 436 -


Defaults 685 220 -


IATA Travel Agent ID Card Program The total number of cards in circulation as of 30th June 2016 was 5,024 compared to 5,079 as of December 2015. Travel Industry Designator Service (TIDS) TIDS locations as of 30th June 2016 were 3802, compared to 3,812 as of December 2015. Travel Agency Commissioner As of 30 June 2016, a total of 47 cases were raised to the Travel Agency Commissioner for Asia Pacific. Agency Risk Actions During the period January to June 2016, the following risk actions were taken: Prejudiced Collection of Funds:

Demand for immediate payments – USD 35,105,729/- (117 request letters)

Demand for top up of Financial Security – USD 6,945,445 (26 request letters)

Periodical Review of the Financial Security –

Demand for top up of Financial Securities – from 257 Agents, totaling USD 81.97 Million Review of Local Financial Criteria – Indonesia, Nepal and Vietnam APJCs had proposed changes to strengthen the Local Financial Criteria. All these proposals are included in the Agenda items for this year’s Conference to adopt. Reduction of Credit Period –


__________________________________________________________________________________

APJC airlines of Indonesia have proposed to reduce credit period from 21 to 15 days effective 1st January 2017. This agenda item is included in this year’s Conference to adopt.


Attachment: 25 Apr 16 ‘A’

Page: 1 of 1 __________________________________________________________________________________

Attachment ‘A’

BREAKDOWN OF AGENTS BY COUNTRY – REGION ASIA PACIFIC As of 30th July 2016

COUNTRY AO BR HO SA TOTAL

AUSTRALIA 147 581 340 1068

BANGLADESH 7 691 698

BHUTAN 5 5

BRUNEI 6 6

CAMBODIA 10 21 31

COOK ISLANDS 3 3

FIJI ISLANDS 4 15 19

FRENCH POLYNESIA 4 9 13

INDIA 4 490 2598 3092

INDONESIA 120 527 3 650

JAPAN 255 236 491

KIRIBATI 2 2

LAOS 2 2

MALAYSIA 84 611 1 696

MALDIVES, REP. OF 4 4

MARSHALL ISLANDS-REPUBLIC 1 1

MICRONESIA-FEDERATED STATE 1 2 3

MYANMAR 11 11

NEPAL 166 166

NEW CALEDONIA 11 11

NEW ZEALAND 35 276 112 423

PAKISTAN 38 1744 1782

PAPUA NEW GUINEA 19 19

PHILIPPINES 20 199 7 226

REPUBLIC OF KOREA 73 572 200 845

REPUBLIC OF PALAU 3 3

SAMOA 8 8

SINGAPORE 14 203 82 299

SRI LANKA 3 150 153

THAILAND 45 280 1 326

TONGA 1 5 6

VANUATU 1 3 4

VIET NAM 8 93 101

WALLIS & FUTUNA ISLANDS 1 1

Total 4 1360 9058 746 11168

EB (ERSP) Electronic Reservations System Provider - Branch


_____________________________________________________________________________

T1.5

REPORT OF AGENCY ACCREDITATION ACTIVITIES - NORTH ASIA



There are 4 APJCs covering the North Asia region, covering the market of P.R China, Hong

Kong, Marco, Chinese Taipei and Mongolia.

Country list:



24. APJC P.R China

Y 25. APJC Hong Kong/Macao Y

26. APJC Chinese Taipei

Y 27. APJC Mongolia Y

New Agency Approvals - During the Jan-July 2016 period, 168 new applications where

approved.

A growth in the region is expected for Q4 2016.

Changes of Ownership – during the Jan-Jul 2016 period 123 changes of ownership have been processed while 207 were processed in 2015.

Terminations – a total of 263 IATA Accredited locations were terminated in the first seven months of 2016 while a total of 95 were terminated in 2015.

Defaults – during the Jan-Jul 2016 period 58 defaults were reported while 142 were experienced in 2015.

Voluntary relinquishments – an increase in the number of voluntary relinquishments have been received in Jan-Jul 2016 (272) compared to same period of 2015 (225)

Statistics (BSP and Non BSP Locations):

Activity As at

31.12.2015 As at 31.7.2016

% increase/decrease

Total Approved Locations 5,021 4,646 -0.75%

New Agency Approvals 485 168 -65.3%


_____________________________________________________________________________

Changes of Ownership 207 123 -40.6%

Terminations 95 263 176%

Defaults 142 58 -59%

Voluntary relinquishments 426 272 -36.2%

IATA Travel Agent ID Card Program

For the North Asia Region, the total amount of cards in circulation as of 31 December 2015

was 48 whilst there is 49 as of Jul 2016 showing an increase of 2.08 % as compared to

December 2015.

Travel Industry Designator Service (TIDS)

As of December 2015 there were 25 new TIDS locations and 17 as of 31 Jul 2016

representing a decrease of 32% compared to December 2015.

Travel Agency Commissioner

From Jan - Jul 2016 a total of 1cases were raised to the Travel Agency Commissioner. In all

instances 1 case received an official Agency Commissioner decision.


__________________________________________________________________________________________________________

2015 Report for North Asia

REGION Jan-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

YTD

NEW APPROVALS

Head Offices 61 48 69 41 42 46 45 20 26 13 0

25 25 448

Branches/SA’s 2 10 3 0 1 1 1 3 1 1 1 0 24 SA's 0 0 0 0 0 0 0 0 0 0 0 0

CHANGES (APPROVED)

Ownership 38 21 18 15 19 8 31 18 15 2 12 9 206

Shareholding 1 2 3 5 3 4 3 1 2 0 0 0 24

Name 2 3 4 2 1 8 8 2 1 0 11 3 45

Location 12 9 8 10 5 1 19 11 13 5 13 12 118

Reinstatement 4 5 3 3 3 2 9 3 9 10 3 8 62

TERMINATIONS (by loc)

Vol. Relinq/Closure 43 36 14 42 37 31 36 29 50 40 43 37 438 Default/Standards not met 7 1 5 7 3 6 12 7 10 3 9 9 79 Non-payment annual fees 0 0 30 0 0 0 0 0 0 0 0 0 30

FINANCIAL STANDING Suspensions 58 43 22 17 22 82 83 5 60 1 2 118 513 Irregularities (by loc) 61 52 29 17 22 98 83 229 125 1 2 126 845 Defaults 3 0 0 1 0 0 2 0 0 4 0 9 19

ELECTRONIC RESERVATION PROVIDERS

New Assignments 0 0 0 0 0 0 0 0 0 0 0 0 0 Deletions 0 0 0 0 0 0 0 0 0 0 0 0 0

TRAVEL INDUSTRY DESIGNATORS

New Assignments 3 1 1 2 2 2 1 6 2 2 3 0 25 Deletions 31 0 0 0 0 0 0 0 0 0 0 0 31


New Assignments 2 2 0 5 6 0 3 1 3 6 0 1 29 Changes 0 0 0 3 0 0 0 0 2 1 0 0 6 Deletions 2 1 0 0 0 0 0 0 2 0 1 2 8


__________________________________________________________________________________________________________

MEMBER SALES OFFICES New Assignments 0 30 17 11 1 8 4 14 8 1 96 8 198 Changes 0 0 0 0 0 0 2 0 1 0 0 0 3 Deletions 0 0 0 4 0 0 0 0 0 0 0 0 4

2016 Report for North Asia

REGION Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

YTD

NEW APPROVALS Head Offices 21 28 23 13 26 28 16 155

Branches/ SA's 1 1 1 1 0 2 4 10

SA's 0 0 0 0 0 0 0 0

CHANGES (APPROVED) Ownership 16 19 15 30 12 13 18 123

Shareholding 5 3 3 4 0 5 3 23

Name 7 5 6 7 0 4 12 41

Location 23 36 29 22 17 10 26 163

Reinstatement 3 6 5 1 3 2 3 23

TERMINATIONS (by loc) Vol. Relinq/Closure 48 58 53 34 14 37 28 272

Default/Standards not met 9 3 6 2 3 0 0 23 Non-payment annual fees 0 0 0 80 0 0 0 80

FINANCIAL STANDING Suspensions 110 129 194 39 47 42 3 564

Irregularities (by loc) 110 129 194 39 47 45 3 567 Defaults 1 1 4 0 1 0 0 7

ELECTRONIC RESERVATION PROVIDERS New Assignments 0 0 0 0 0 0 0 0

Deletions 0 0 0 0 0 0 0 0

TRAVEL INDUSTRY DESIGNATORS New Assignments 5 4 3 1 2 1 1 17


__________________________________________________________________________________________________________

Deletions 31 0 0 0 0 0 0 31

GENERAL SALES AGENTS New Assignments 0 1 1 3 2 0 3 10

Changes 0 0 1 0 0 1 0 2 Deletions 0 0 0 0 1 0 0 1

MEMBER SALES OFFICES New Assignments 10 11 145 39 3 24 14 246

Changes 0 0 1 0 0 4 0 5 Deletions 0 1 0 0 1 4 0 6

BREAKDOWN OF AGENTS BY COUNTRY – AREA 3 (North Asia) BSP Locations only

Country Name HO(Head Office)

BR (Branch Office)

SA (Special Activity)

Total

P.R China 3,691 203 0 3,894 Hong Kong 244 43 43 330 Macau 19 1 0 20 Chinese Taipei 214 124 29 367 Mongolia 12 0 0 12 DPRK 1 0 0 1

Total 4,181 571 72 4,824

Agenda Item: T2 Revision No.: 0 Date: 18 Aug 16 Page: 1 of 1

__________________________________________________________________________________

T2

EFFECTIVENESS STATUS OF RESOLUTIONS ADOPTED AT PACONF/38 AND BY MAIL

VOTE


Action Resolution Implementation & Effectiveness Date

PAC(52) Expedited Implementation 818g,844

01 January 2016 (except where indicated otherwise)

PAC(52) Finally Adopted 800, 800a, 800f, 818g, 820e, 880

01 June 2016

Mail Vote A266 Joint Bank Guarantee – India 01 January 2016

Mail Vote A267 Change in Local Financial Criteria – BSP Italy

01 April 2016

Mail Vote A268 Change in Local Financial Criteria – BSP Saudi Arabia

01 April 2016

Mail Vote A269 Change in Local Financial Criteria – BSP Scandinavia

01 April 2016

Mail Vote A270 Change in Remittance Frequency and Local Financial Criteria – BSP Zimbabwe

01 September 2016

Mail Vote A271 Change in Local Financial Criteria – BSP Poland

01 August 2016

Mail Vote A272 Change in Local Financial Criteria – BSP Scandinavia

01 August 2016

Mail Vote A273 Change in Local Financial Criteria – BSP Ireland

01 August 2016

Mail Vote A274 Change in Local Financial Criteria – BSP Azerbaijan

01 August 2016


__________________________________________________________________________________

T3

STATUS OF NEW BSPS

Submitted by IATA Airline Participation Management

Feasibility Studies for BSP implementation are in progress for the following countries:

Africa & Middle East: Algeria, Angola, Cape Verde, Democratic Republic of Congo, Iran and Madagascar

ASPAC: Myanmar

Americas: Cuba

Update on potential implementation date to be provided during the meeting.

Proposed Action

Conference to note.


__________________________________________________________________________________

T4

STATUS OF AGENCY INVESTIGATION PANELS (AIPS)

Submitted by the Secretary A report is provided at Attachment ‘A’ showing the status of AIPs in Area 2. All AIPs in Areas 1 and 3 have been disbanded. Proposed Action Conference is requested to review status and recommend if any action is required.

Agenda Item: T4 Revision No.: 0 Date:

Attachment. 18 Aug 16 ‘A’

Page: 1 of 2 ______________________________________________________________________________________________________________

Attachment ‘A’

Middle East & North Africa Region – 3 AIPs

Resolution Countries Region

Current Status Programme

Market Data (Number of Agents )

BSP Implementation Planned

Potential Solutions

800 Algeria MENA AIP ALGERIA 563 BSP planned Ongoing engagement with Algerian authorities in regards to the memorandum of understanding between IATA and the government in preparation for BSP implementation

800 Iran MENA AIP IRAN 696 BSP planned Feasibility Study Report for BSP Iran Completed and Submitted for Internal Approvals

800 Libya MENA AIP LIBYA 266 No – Political instability in the country

Political Situation to be reviewed during Q1 2017 to assess the feasibility of introducing BSP operations in the country

800 Iraq MENA Agency Programme suspended Situation under review

78 agents with non-operational status

No RO-MENA reviewing the possibility of introducing BSP operation with the civil aviation in terms of Agents’ ability to pay on time and the credibility of the banking infrastructure to support BSP.

800 Eritrea

Palestine

Djibouti

Somalia

MENA Direct Accreditation for other 800 countries

Total 53 No Continue with direct accreditation via IATA AME in Amman


Attachment. 18 Aug 16 ‘A’

Page: 2 of 2 ______________________________________________________________________________________________________________

800 Afghanistan MENA Agency Programme suspended

0 No – Political instability in the country and concerns over security and the ability of the banking infrastructure to support BSP

Political situation to be reviewed during Q1 2017 to assess the feasibility of introducing BSP operations in the country

Region Africa - No longer AIPs

Resolution Countries Region

Current Programme Market Data (Number of Agents)

BSP Implementation Planned

Potential Solutions

800

African Islands:

Cape Verde

Sao Tome & Principe

Seychelles

Comores

Madagascar

Mayotte

AFR Direct Accreditation for other 800 countries

Total 71 Ongoing work on the feasibility study for Madagascar & Cape Verde

BSP Madagascar: Business Case Approved – implementation only pending government sign off on Memorandum of Understanding BSP Cape Verde: Ongoing engagements with the national carrier to start the work on the feasibility Study Report.

800 Other African countries:

Angola

Burundi

Guinea

Equatorial Guinea

Gambia

Guinea Bissau

Central African Rep.

Dem. Rep of Congo

Liberia

Sierra Leone

AFR Direct Accreditation for other 800 countries

Total 68 Ongoing work on the Government endorsement for DRC and the business case for Angola

BSP DRC: Business Case Approved – implementation only pending government sign off on Memorandum of Understanding BSP Angola: Feasibility Study Report Approved and ongoing work on the business case for the operation.


__________________________________________________________________________________

T5

OFFICE OF THE TRAVEL AGENCY COMMISSIONER

Submitted by the Travel Agency Commissioners

PART ONE I. Introduction

The Travel Agency Commissioners (“TACs”) are:

o Mrs. Verónica Pacheco-Sanfuentes TAC 1 o Mr. Andreas Körösi TAC 2 o Mr. Jo Foged TAC 3

This year the Commissioners held their annual meeting in May in Newport Beach, Los

Angeles, California.

Using the same structure as in previous years, the following pages detail TACs’ observations and the cases that have been dealt with since the last Annual Report. This time is covering from September 2015 until July 2016.

The TACs were served with a notice by IATA shortening up the second transmittal time frame by one month; this is why this year our Report will not cover the month of August 2016, as has been the norm for the last 8 years.

In light of the number of cases reviewed during this period, and in order to ensure an accurate

method of recording the result of our work, this Report has been divided into two parts: Part ONE covers an overview of the matters dealt with, as well as some observations derived

from them; and, Part TWO covers the summary of cases reviewed by the Commissioners, whether they led to

formal Decisions or not, and, whether or not a full review was necessary in order to resolve the matter at hand. II. Work Handled

The total number of cases (including posted formal decisions and reviews finalised without formal decisions) dealt with during this period were: Area 1 – 47 (not including the cases handled as Deputy TAC 2) Area 2 – 362 (including 14 cases handled by TAC 1 as Deputy)

Area 3 – 109 (including 1 case handled by TAC 2 as Deputy)

This number is categorised in each Commissioner’s Report.


__________________________________________________________________________________

During this reporting period only one oral hearing was held in New Delhi, India. In the remaining cases, when sufficient written evidence was available, sometimes including scheduled conference calls with the Parties, and when both Parties had agreed that a Decision could be rendered without the need for oral hearings, or it was decided so by the Commissioner, no oral hearings were held.

The Commissioners’ website has been updated with a change of domain being considered more cost effective. The new web address is www.tacommissioner.com. This change had no consequences for users during its implementation; it remained accessible at all times.

As always, formal decisions are, once posted in the secured part of the website, available

only to PAPGJC Members. Decisions are posted in both English and Spanish, in addition to some decisions in French when that has been the language used during those procedures. III. Observations

Before bringing any matter to the Conference’s attention, the Commissioners recognize the laudable efforts made in transforming and updating the Agency Programme with the NewGen ISS Resolution. We look forward to see its completion and implementation, as well as having an opportunity to be educated about the novelties of the Programme. 1. - Issues pertaining to bona fide Bank error letters: The proposed version of the NewGen Resolution has basically the same elements as currently in place in Resolution 818g, hence, we invite the Stakeholders to consider the following experienced situations, which are fairly common in requests for TAC review. Cases show that not all banks worldwide are either willing to issue the letters as per the Resolution requirement, nor are they willing to recognise and state in writing (potentially even incriminating themselves) that a mistake has occurred within their organization (cases involving DB and HSBC are proof of this behaviour)

a. When the letter is NOT provided by the Bank as requested by the Agent, we propose that if the Agent submits evidence showing that:

i. It had enough funds available on Remittance Date in its bank account; and, ii. It had authorised a payment order sent to the Bank on time, allowing the bank

enough notice to execute the payment by the due date; The Agent’s evidence will be accepted as proof of bona fide Bank Error.

b. When the letter is provided past the 10 working days, the maximum time allowed in

Resolution 818g “A” 1.7.4.3(i): This provision should not be read as an impediment to granting the exemption when:

i. Actually the bank has provided the letter past the 10 days required “due to internal work load”, or,

http://www.tacommissioner.com/


__________________________________________________________________________________

ii. The Agent has provided evidence as described in a.) but only after not having received the “exonerating” bona fide Bank error letter by the bank within the 10-day span allowed.

Based on this line of thoughts, accepting the opposite would run afoul of the General Principles for Review, stated in Resolution 818g; therefore, the TACs do accept that the Agent has done what is in its powers to prove a “bona fide Bank Error”. 2. - Resolution 824 – Notices: The TACs acknowledge the lack of enough diligence shown by some Agents when it comes to monitor messages, other than billings, done through BSPlink. Lack of awareness of “administrative issues’ notifications” (at no point affecting the Agents’ ability to pay or its credit worthiness) is still the most common reason for noncompliance. We would like to see a pragmatic solution to this issue; since reality has shown the deleterious effects that these unnoticed communications have on Agents. NO Agent would risk its business for these types of “non-compliances” (e.g. annual fee, incomplete Financial Statements not affecting the actual financial standings of an Agent, etc.). It is necessary for IATA to comply with Resolution 824 s. 16 with regard to “proof of dispatch or receipt addressed” to the Agent. Conclusive “acknowledged receipt” is the ultimate proof of dispatch – and the only one acceptable in EU law and in some countries in Latin America. In order to address this issue, we propose the following procedure:

i. That emails to Agents are flagged so that the sender can see if the message was opened; ii. Make it a requirement to have an acknowledgement of receipt on messages sent to

Agents.

Bottom line: BSPlink messages only do not meet that standard.

3. - Default due to suspension of BSP Participating Airline: Resolution 850 s.16, Resolution 850 Attachment “F” and BSP Manual for Agents (Chapter 13): Time is of the essence in these critical situations, where Agents have to deal with several issues involving stranded passengers (such as rebooking, repayment when the ticket is part of a package-tour, etc.), and, at the same time they also have to manually alter the BSP Report and pay according to the extraordinary instructions given by IATA, including not to deduct approved refunds, amongst others. In these situations where an Agent does not comply with IATA’s instructions, at no point affecting the Agent’s ability to pay or its credit worthiness, the norm should not be to invoke default action against the Agent, but rather to allow it reasonable time to comply with this extraordinary method of settlement (often quite difficult for Agents to fully understand) by allowing the Agent to amend the settlement in the next remittance period instead of penalising it by suspending its ticketing authority.


__________________________________________________________________________________

The consequences of these -almost always- very small amounts of “administrative non-compliances” are today treated as credit incidents, which are seriously detrimental to Agents. It is essential to keep in mind that this is, by definition, a NO-risk-situation to Member Airlines, since the Member Airline has been SUSPENDED already, so Agents should be treated more fairly instead of ending up bearing the consequences of a situation over which they had no control (id est, an Airline’s non-compliance with its BSP obligations). NOTE: We acknowledge that IATA is sending an “Exceptional Remittance Notice” to each Agent with the exact amount to deduct or to add, which certainly helps to mitigate some of the uncertainty; but the issue is that Agents often have very little time to act, especially when close to Remittance Date or when remitting weekly or even in shorter periods. 4. - Ticketing Authorities restored in full after reinstatement: We would like to pursue this issue once more, as it is a constant struggle for Agents, IATA staff at the hubs and TACs alike. Once ticketing authority is restored, even after it is proven that the default action was NOT caused by the Agent’s negligence, the Agent has to contact each Airline who had it under appointment for authority to issue that Airline's tickets again. This is a protracted and frustrating process, which hinders sales for those Airlines. Recommendation: IATA shall suspend as today but to DELAY the communication to the “market”: allow at least 24H-48H window before notifying BSP Airlines in order to avoid major damage to the Agent’s reputation once reinstated – especially when it has been the result of an administrative issue or a mistake outside the control of the Agent. As the cases have revealed, the <<main damage is the immediate notification to Airlines and not the suspension from TA itself>>. Resolution 818g Attachment “A” s. 2.3.1(b) should be amended so that Airlines are only notified after IATA has had time to “investigate” the true cause of the noncompliance. 5. - Method of dispatch: Resolution 818g "A" s.1.7.4 (i) refers to the Agency Administrator’s “acceptable method of dispatch” for bona fide Bank error letters, which is: "fax or a scanned copy via email...”. This option should be available for the dispatch of any form of document to IATA (e.g. Change of Ownership, Financial Statements, Financial Securities, etc.). Proposal: as a matter of practicality, we submit for your consideration that ALL documents required by IATA be accepted as scanned copies or fax together with details of air waybill number of the dispatched original document, while the originals are ultimately received by IATA. 6. - Change of Ownership where parties are already Accredited Agents. The TACs observe that the issue where 2 Accredited Agents, both meeting all requirements set out in the Local Financial Criteria for not having to submit a bank guarantee (BG) and get involved in trading shares of 30% or more, are considered as “New Applicants” by IATA.


__________________________________________________________________________________

Since this situation is common, and, in one specific case the request amounted to 1.7 million USD in BG for 3 years, we suggest this issue to be clarified in Resolution 800f Appendix “A” or in Resolution 818g § 10. 7. - IATA Accredited Agents only for Hajj and Umrah license purpose It is the TACs’ understanding that this is a service to accommodate the Saudi’s authorities as a mandatory requirement for licensing these Agents. Most of them, however, do not seem to use STDs nor are part of the BSP; hence, often times they become aware of noncompliance (mostly annual fees not paid on time) only when terminated. The “life or death” plea from these Agents to be reinstated is understandable, but it entails time consuming work for IATA staff and TACs alike. We suggest that, if IATA wants to keep the accreditations for Agents who do not sell tickets for political reasons, that these Agents would be under a “new category” of Agents, where IATA staff can develop more adequate routines for debiting fees, financial evaluations, and, costs for other services, which can be included in the annual fee. This would take in to account the extra work for IATA staff involved when BSPlink is NOT the main source for communication.



Page: 1 of 17 __________________________________________________________________________________

Attachment ‘A’

Annual Report of the Travel Agency Commissioners

PART TWO Sections A to C: Individual TACs’ cases Below will be found each Commissioner’s activity, starting with a summary of the Commissioners’ various types of interventions aimed at solving cases in an affective and expeditious manner, without having to necessarily render a formal decision. This section will then be followed by the reviews that were concluded with a formal decision. Section A:

TRAVEL AGENCY COMMISSIONER AREA 1

REVIEWS AND DECISIONS: SEPTEMBER 2015 – JULY 2016 It must be noted from the outset an important decrease of cases reaching the TAC1 office; most of them were solved diligently by IATA-Miami hub directly or after a very little TAC intervention. A more customer friendly approach from IATA’s side seems to have been bearing fruits. Highlights:

During 2015 I was, for a short period of time, Deputy of TAC2. In that period, 2 formal decisions were rendered and are summarised in the TAC2 section;

During 2016 I did not serve as Deputy of any of my colleagues;

Only in a couple of occasions where French speakers Agents needed some assistance (in Area 2), I have briefly intervened and once issues were somewhat addressed the cases were transferred back to TAC2 for the completion of the review when needed;

No formal decisions were rendered during this time in Area 1. All the decisions were served to the Parties by way of emails addressing the punctual matter and solving it as expeditiously as possible: both Parties (Agents and IATA alike) were satisfied with this new way of dealing with pressing issues. These decisions are not yet published in the TAC website nor individually described in this Report;

As stated in previous years, some issues were resolved with a few clarifying contacts, others took longer. Almost all of the reviews could be closed, with consent from both Parties, often after IATA’s own initiative to revisit its initial actions after having had access to more facts and information disclosed during the TAC review. Cases were also closed



Page: 2 of 17 __________________________________________________________________________________

when this Commissioner, after conducting a full review, found that IATA had followed proper procedures and Agents had recognised that a formal TAC decision would not have changed the outcome of the case.

The total number of cases dealt with during this period was: 68 Detailed as follows:

(a) Formal Decisions = 2 In Area 1: 0 In Area 2: 2

(b) Matters solved without requiring a formal decision = 60 In Area 1: 47 In Area 2: 13

(c) On going matters in Area 1: 6

Section B

TRAVEL AGENCY COMMISSIONER AREA 2 REVIEWS AND DECISIONS – SEPTEMBER 2015 TO JULY 2016

Included in this part of the Report are statistics for all cases reviewed.

The majority of cases were requests for review where IATA, according to Resolutions, is required to “take action through default”. An overwhelming amount of the issues were not “payment related” but rather administrative issues where Agents simply have not been aware of their wrong doings. The consequences of these defaults, suspension and, maybe even more importantly, the immediate notification to Airlines, are by Agents constantly perceived with very strong “anti IATA” emotions. Claiming to be “unjust, unfair, etc., etc.”, and, not uncommonly, accusing IATA to “deliberately being oppressive”.

This undeserved and very unfair sentiment towards IATA staff could be avoided should the Stakeholders agree to allow IATA a 24 to 48 hours’ moratorium to notify Member Airlines after suspension;

As the TACs in more depth describe in Part 1 of this Report, the suspension itself should be done immediately when there is a payment related situation. It is the notification and the “need to contact each Airline” to get the ticketing authority back that largely triggers the sentiments described above.

There was no need to travel for oral hearings in Area 2 during this period. I have presided an oral hearing in New Delhi as Deputy TAC 3.



Page: 3 of 17 __________________________________________________________________________________

As in 2014-2015 the majority of reviews in Area 2 have been swiftly and cost effectively concluded without formal Decisions and are not published nor individually described in this Report.

Some issues were resolved with a few clarifying contacts, others needed full review. Few Agents had multiple requests for reviews. Most of the reviews were closed, with both Parties’ consent.

In a majority of cases this Commissioner had found that IATA had followed proper procedures and Agents “simply wanted to be heard”, and had recognised that a formal TAC Decision would not change the outcome of IATA’s actions.

Following last year’s “positive trend” the amount of time spent to resolve each issue has decreased. Amount of reviews in Area 2 have been fairly constant compared to last reporting period.

An average of 2-3 cases per month are related to “commercial issues” where Agents (mostly) and sometimes Member Airlines directly have approached this Office without the need to involve IATA.

An increasing number of National Travel Agents’ Associations have either represented Agents directly or being copied in the review as per the Applicants’ requests.

Fully understanding that cases that have been brought to my attention constitute a very small portion of the total amount handled by IATA, TAC 2 wants to acknowledge the efficiency and the good spirit of cooperation demonstrated by IATA staff in Madrid, Amman and Singapore. (I have not had until now any interaction with Miami).

In numbers, a total of 362 cases for these 11 months in AREA 2 can be summarised as follows:

295 cases closed without formal Decision (13 handled by TAC 1);

39 cases with formal Decisions: 4 (2 handled by TAC1) published as previously done on the secured part of the TACs’ website and 35 as “formal email decisions” where the format how to publish is still under consideration;

28 on-going cases, amongst them 1 case initiated by IATA SIN concerning an Agent in

Lebanon allegedly involved in having assisted an Australian Agent to commit fraud. Oral hearing was held in Amman.



Page: 4 of 17 __________________________________________________________________________________

Posted Decision No. Summary Decision

A2/June 2015 Hungary

IATA sought review after suspending Agent on the grounds of Prejudice Collection of Funds (“PCoF”). Reasons behind those actions were the fact the Agent’s mother company had been declared bankrupt and the news were covered by major Hungarian newspapers. The majority of Member Airlines had withdrawn ticketing authorities even before Agent’s suspension by IATA. Agent claims a ”mix-up” with another legal entity and having fulfilled all their obligations, including remitting in full.

PCoF is a very serious action entailing a grave restriction to Agents’ capability to conduct business. This “right” allowed to IATA, when PCoF is invoked, has to be used with great caution to minimize the often irreparable consequences should the alleged reasons behind the suspension do not stand. In this case IATA had good reasons to invoke PCoF. The review was mainly focused on the ownership ties with XYYY Group are putting XXYtour in jeopardy or not. Agent could not substantiate that there was a ”water proof” barrier between the companies, hence, IATA’s actions were confirmed and suspension remained.

A2/Sept. 2015 Zambia

Review of IATA's Notice of Default (”NoD”), served due to an accumulation of irregularities. Default actions were triggered by a second Notice of Irregularity ("NoI"), caused by an alleged short payment of US$ 205, which the Agent claimed as being the result of a processed refund when US$ were not available. Agent informed IATA about the situation. Agent sought interim relief (“IR”) and it was granted.

Considering that the ADM, which had been raised (US$ 204. 64), was not equivalent to the disputed US$ 205 and not reflected in the BSP billing; Considering that IATA, acknowledging the banking system in Zambia, in previous occasions has accepted the process of settlement in US$, this Commissioner has come to the conclusion that the ”short payment” cannot be attributed to the Applicant´s ”lack of diligence”. It has to be accepted as an ”extraneous factor” as stated in Resolution 818g ”A” § 1.7(a). NOTE: Even though the first NoI shall stay (unnoticed bona fide bank error), as per the current stage of Resolutions considering the passage of time, IATA has the right to motu propio accept the bank letter and expunge the NoI.



Page: 5 of 17 __________________________________________________________________________________

A2/Sept. 2015 Cameroon (TAC1)

Due to an email address’s malfunction, Applicant did not receive on time the request to upload its financial statements (“FS”), hence, it failed to submit it with the given time frame. The Applicant claims having registered with the Respondent several email addresses that could have been used by IATA, as it has done in other occasions. IR was requested and granted by this Office.

Considering the evidence on file, the NoI was rightfully issued and in accordance with the applicable Resolutions. The fact that one of the email addresses provided was not working properly cannot be attributable to the Respondent. On the contrary, it is an Accredited Agent's responsibility to notify the Respondent of any change or alteration in the email options submitted. A note was sent to the Respondent encouraging it to use all the email addresses provided by Agents (particularly to the ones of the management level), in order to maximize the chances for them of getting the notices on time.

A2/Sept. 2015 South Africa (TAC1)

Review of a NoD, served due to an Accumulation of Irregularities during the last 12 consecutive months. The Applicant claims and proves having been unable to make the payment on time, due to a power outage. It also argues and proves that the previous NoI, was caused by a belated payment as a result of a bona fide bank error, where payment instructions were done on time and sufficient funds were available, but due to technical error with the electronic banking system, the payment was delayed for one day.

As per the first NoI: As per the current stage of Resolutions, past the time for review this Commissioner cannot order the Respondent to expunge the referred NoI in light of the internal error from the bank, nonetheless the Respondent could certainly do it motu propio (as it actually did in this case). As per the NoD: based on the evidence on file, this Commissioner deems that the referred delay must be treated as <<an Excusable Delay>>, as stated in Resolution 818g, Section 13.9, since it was beyond the reasonable control of the Applicant and in no fashion attributable to its own negligence. NoD to be expunged from its records.



Page: 6 of 17 __________________________________________________________________________________

Section C

TRAVEL AGENCY COMMISSIONER AREA 3 REVIEW DECISIONS – AUGUST 2015 TO JULY 2016

General Due to the number of decisions rendered, 54, this report condenses these into categories as follows: A. Additional time granted in order to submit financial statements = 12 These emanated from the following countries: Australia 6 India 3 Malaysia 1 Pakistan 1 Vanuatu 1

B. Additional time granted in order to submit a financial security = 20 These emanated from the following countries: Australia 13 India 2 Malaysia 1 Pakistan 1 Philippines 1 Singapore 1 Sri Lanka 1

C. This leaves 22 decisions to be summarised as follows: Note that all reviews in Area 3 were conducted based on the documentary evidence alone.

Time & Place

Summary Decision

6 August 2015 New Delhi, India.

IATA sought a review of the Agent's accreditation on behalf of a Member as a result of the Agent's persistent failure to settle ADMs. The dispute involved the cancellation of a group due to travel in June 2010. The ADMs were for a 10% deposit and a 25% cancellation fee. The Agent had consistently used Billing Discrepancy

The Agent's arguments were unsustainable and it was required to settle all fees and charges within 14 business days with the exception of the 18% interest amount over which this office had no authority to apply. Failure to comply would see removal of its ticketing authority.



Page: 7 of 17 __________________________________________________________________________________

Reports (BDR) to void the ADMs from its BSP billings. The Member had introduced a charge for improper use of BDRs and this had accumulated. The Member also sought 18% interest on the ADMed amounts for the period during which settlement was outstanding.

A subsequent request by the Agent for an "interpretation" under sub paragraph 2.10 of Resolution 820e did not alter the outcome.

23 September 2015 Rawalpindi, Pakistan.

A decision on this case had been rendered on 9 December 2014 and involved the Agent settling all debts after being terminated without recourse to its financial security and as a consequence was granted re-instatement subject to paying the fees associated therewith. Considerable time went by and the fees remained unpaid due to a variety of reasons given by the Agent.

The Agent proffered credible reasons for the delays but continued to question the variety and amount of the fees involved. This office was satisfied that IATA had applied the correct number and level of fees and acquainted the Agent with that advice.

6 November 2015 Mumbai, India.

IATA sought a review of the Agent's accreditation on behalf of a Member as a result of the Agent's persistent failure to settle ADMs. The Agent had issued 5 tickets on the Member's stock in August 2008 on another Member's services thus breaching the complainant Member's rule of requiring at least 50% percent of the revenue and having the tickets issued in conjunction with the Member's stock. The Agent pleaded ignorance of that rule and questioned the manner of its distribution. It considered that the GDS should not have allowed the subject tickets to be issued. The Agent resorted to the use of BDRs to stave off settling the ADMs. The Member applied its improper use of BDRs fee in each instance. The Member also sought 18% interest on the ADMed amounts

The Agent had not been granted written authority by the Member to ticket other carriers on its stock. It was clear from the evidence submitted that the Member's rule had been circulated and ignorance thereof was not a defence. The Agent was required to settle the accumulated amount within 14 business days. This excluded the 18% interest amount over which this office had no authority to apply. Failure to comply would see removal of its ticketing authority.



Page: 8 of 17 __________________________________________________________________________________

for the period during which settlement was outstanding.

2 October 2015 Jaipur, India.

IATA sought a review of the Agent's accreditation on behalf of a Member as a result of the Agent's persistent failure to settle ADMs. These involved tickets issued in September 2011 where special fare conditions had been breached. The Agent resorted to the use of BDRs to stave off settling the ADMs. The Member applied its improper use of BDRs fee in each instance. The Member also sought 18% interest on the ADMed amounts for the period during which settlement was outstanding. The Agent considered that it had been given insufficient information on the reason for the ADMs hence the use of BDRs.

The evidence provided by the Member confirmed that the Agent's assertions were not founded and the Agent was given 14 business days to settle the accumulated amount. This excluded the 18% interest amount over which this office had no authority to apply. Failure to comply would see removal of its ticketing authority.

30 November 2015 Mumbai, India.

The Agent approached this office with a request to be allowed a further week to pay 50% of outstandings due under a repayment plan agreement. Twenty eight percent had been settled. The Agent was expecting refunds from Airlines which would resolve the situation. It had been accredited since 1995 and this was its first default.

As the Agent did not represent further risk having had its ticketing authority removed and based on its record, the request was granted.

18 December 2015 Auckland, New Zealand.

IATA sought a review of the Agent's accreditation as a result of a Member's complaint that the Agent was using the owner's credit card for the payment of tickets issued by a Consolidator to the Agency's customers, a breach of sub paragraph 1.4 of Resolution 890. The Agent admitted the offence but pleaded ignorance of the clause. It

Based on its admission of guilt and undertaking the Agent was issued with a Notice of Irregularity and charged a USD150.00 administrative recovery fee.



Page: 9 of 17 __________________________________________________________________________________

undertook to cease the practice immediately.

13 January 2016 Hong Kong, SAR.

As a consequence of the annual financial review the Agent was required to submit a substantial financial security by 12 January 2016. On being advised of that situation the Agent requested its Auditors to review the financial statements submitted and an error was discovered which initiated a revised set being submitted which negated the need for a security. IATA declined to accept this second set as the original set had been certified as being an accurate record of the Agency's affairs. It was determined that the Agent had several bilateral financial security arrangements with a number of Airlines which in total almost equated to the HKD amount sought by IATA. Hence the Agent was being asked to cover the same sale twice.

This office agreed with IATA in connection with the non-acceptance of the second set of financial statements. The level of financial security was to remain however further time to submit same was granted. IATA was requested to contact each Airline that had a bilateral bank guarantee with the Agent to ensure compliance with sub paragraphs 2.1.4.2 and 2.1.4.3 of Resolution 818g. Where there was a lack of conformity with those provisions IATA was to require the Airline to return the bilateral bank guarantee to the Agent immediately.

19 February 2016 Islamabad, Pakistan.

IATA required the Agent to settle a substantial "spike" in its sales by 19 February 2016 as sales had exceeded the amount of financial security in place. The Agent sought deferment of that date to 23 February 2016 as the weekend was imminent and Banks would be closed. The sales increase was due to a large one-off group and it had not defaulted in the 50 years of its accreditation. The Agent proposed that it be allowed to immediately pay the difference between the full amount required and the level of financial security held by IATA. This offer was declined by IATA.

In evaluating the Agent's proposal IATA referred to the Agent's earlier request for deferment of payment of the full amount due until 23 February 2016 and advised that it would allow such additional time should the Commissioner so decide. Based on IATA's knowledge of the Agent and its risk assessment expertise this office granted interlocutory relief to the date requested by the Agent.



Page: 10 of 17 __________________________________________________________________________________

7 January 2016 Chennai, India.

The Agent was terminated for failing to honour a repayment plan agreement and for not submitting a financial security by the Notice of Termination date. The Agent explained that its offices had been flooded and could not function for 4 weeks. It had made full settlement on the termination date but due to connectivity issues had missed being able to confirm same to IATA by 20 minutes. The Agent sought a reduction in the amount of the additional financial security required in light of the poor trading conditions caused by the flooding. This request was declined by IATA as the Rules were clear that the security must be based on the average amount at risk during the previous 12 months.

The Agent's situation was covered by the "Force Majeure" provision in paragraph 13.9 of Resolution 818g and its accreditation was to be re-instated and in light of the unusual circumstances involved the additional financial security was to be in place within 75 business days of the date of the decision. The financial security was put in place and the Agent was re-instated on 3 February 2016.

15 January 2016 Taht Bhai, Pakistan.

The Agent was terminated for failing to renew its financial security. The Agent stated that it had lost its password and was not receiving e-mails hence the lack of response. The region was prone to terrorist activity and flooding leading to a difficult business environment. On reflection, IATA recognised the difficulties experienced by the Agent and proposed that it could be re-instated subject to paying all fees and charges including that for a new application.

The decision formalised the proposal made by IATA.

15 February 2016 Hyderabad, India.

The Agent was terminated for failing to settle an ADM for INR10407 (USD152.00) by 31 December 2015. The payment was made on 6 January 2016. The Agent advised that it handed a cheque for the amount to a local IATA staff member on 31 December 2015 and received a receipt for same. It could not be

IATA acted in compliance with the Rules. However the low value of the debt that caused the termination influenced the decision for the Agent to be re-instated subject to paying all fees and charges related thereto. A repetition of such an incident would not receive the same benign treatment.



Page: 11 of 17 __________________________________________________________________________________

held responsible for the fact that payment had not been realised until 6 January 2016. It was remorseful and assured IATA that no repetition would occur.

PS - the Agent failed to pay any fees and the case was closed.

29 February 2016 New Delhi, India.

The Agent was issued with a Notice of Irregularity (NOI) for failing to include an Auditor's Report in its financial statements by the due date. The missing report was submitted after the due date however the NOI had been issued. The Agency Manager sought removal of the NOI as he had been caring for his ill Father at the time the Minor Error Policy (MEP) fee of USD150.00 notice was issued. IATA had empathy with the Agent's situation and would not take exception to the NOI being expunged should that be decided.

The MEP fee was paid and the decision made for IATA to expunge the NOI using the "Force Majeure" provision under section 13.9 of Resolution 818g "an Excusable Delay".

1 March 2016 Karachi, Pakistan.

The Agent received an NOI for failing to pay its Annual Fee. The Agent stated that it had paid by credit card and had received an "auto confirmation". IATA could not locate the payment for a variety of system reasons and proposed that the Agent should cancel the payment and make it again. The Agent's ticketing authority was removed on the day of the NOI issuance. IATA advised that this should not have occurred and the problem may have been a wrong login or password "or other technical issue". The Agent was caused considerable inconvenience in acquiring ticketing authority from Airlines as this took between " 2 weeks and 3 months" and it required IATA to "make amends".

The Agent's ticketing authority was removed unnecessarily but this office had no authority to require IATA to "make amends". IATA could have been clearer in its instructions to the Agent. The NOI was to be expunged with immediate effect and all parties alerted to its issuance should be made aware of that action.



Page: 12 of 17 __________________________________________________________________________________

11 December 2015 Kolhapur City, India.

The Agent was placed in default on 15 October 2015 and 5 days later asked to submit an additional financial security due to increased sales. The Agent sought inclusion in a repayment plan and was asked to settle 50% of the debt by 30 November 2015. That did not occur and the Agent was terminated on 7 December 2015. The Agent sought a review stating that it had had a faultless record for 20 years and promising to settle all dues by 25 January 2016.

As the Agent did not represent a credit risk it was decided to re-instate the Agent subject to it submitting the additional financial security by 27 December 2015 and settling all dues by 25 January 2016. PS- the Agent continued to argue about a variety of issues and ultimately did not comply with the decision conditions.

29 September 2015 Hyderabad, India.

IATA sought a review of the Agent's accreditation on behalf of a Member as a result of the Agent's persistent failure to settle ADMs. The ADMs concerned tickets issued at lower fares than those generated by a GDS and not charging applicable taxes. These tickets were issued variously between 2005 and 2010. The Agent had used Billing Discrepancy Reports (BDR) to remove these from the BSP billing thus incurring improper BDR usage charges from the Airline. The Airline also wanted to charge 18% interest during the time the ADMs remained unpaid. The Agent claimed that it had not been provided with detailed reasons for the ADM issuance and the improper BDR usage charge the latter being a significant accumulated amount. Evidence produced showed that sufficient information had been disseminated by the Airline on both matters.

The Agent was given 14 business days to settle the accumulated amount. This excluded the 18% interest amount over which this office had no authority to apply. Failure to comply would see removal of its ticketing authority. The Agent continued to argue its case and introduced an international travel trade organisation to act as a "party" in the context of paragraph 2.10 of Resolution 820e. That organisation cited "fundamental and principal areas where established rules and practices have not been followed and adhered to". When asked to identify those shortcomings a response was not received and the Agent settled the debt on 23 March 2016.

24 March 2016 Lahore,

The Agent was terminated on 21 March 2016 for failing to submit a signed repayment plan agreement by the due date. The Agent had

The timing of the Owner's absence was unfortunate and therefore it was decided that the Agency should be allowed to participate in the



Page: 13 of 17 __________________________________________________________________________________

Pakistan. settled 50% of the debt on 29 February 2016. The Agency's owner was overseas at the crucial time but signed and sent back the agreement immediately on his return.

repayment plan and once all debts, fees and charges had been settled it was to be re-instated.

22 April 2016 Queensland, Australia.

IATA sought a review of the Agent's accreditation under the "Prejudiced Collection of Funds" provisions recorded in section 1.8 of Attch A to Resolution 818g.Their grounds were that the Agent had been removed from Australian Federation of Travel Agents (AFTA) membership and was no longer ATAS accredited. Attached was a newspaper article stating that the AFTA action was taken as a result of its concern that the Agency's owner was influenced by her husband who had been the head of an airline that had failed financially. The Agent's Solicitors refuted this argument citing that AFTA membership was not a criteria for IATA accreditation and the lack of specific concerns in connection with the husband's role in the running of the Agency. The husband was shown as a "Fares and Ticketing Consultant" at the Agency. IATA contended that AFTA's actions were of sufficient concern to initiate a TAC review. The Agent's Solicitors provided lengthy argument that the provisions of section 1.8 had not been engaged.

TACs are bound to rule in compliance with the Resolutions " and may only make findings of fact and conclusions in accordance with those Resolutions." There is no provision in the Resolutions that disqualifies an Agent for employing a person who was managerially involved in a failed business other than if that business was an IATA Accredited Passenger Sales Agent that had been removed from the Agency List. IATA had the option of examining the Agent's financial standing "for cause" at any time and seeking a financial security if so called for. Furthermore Airlines could remove their appointment of the Agent if they had concerns. The Agent continued to qualify for accreditation under section 2 of Resolution 818g.

27 April 2016 Karachi, Pakistan.

The Applicant was disapproved for accreditation as it fell short of paying the minimum paid up capital by 0.05%. The Applicant offered to remedy the situation but this was declined by IATA and the suggestion was made to refer the matter to this office.

IATA had no discretion in the matter but common sense should be applied and the Applicant was allowed to inject the additional amount into its paid up capital and IATA was requested to progress the application.



Page: 14 of 17 __________________________________________________________________________________

27 April 2016 Rawalpindi, Pakistan.

The Agent was terminated for failing to honour a repayment plan agreement. The Agent advised that it had been unable to make the 3rd instalment payment due to civil unrest in its vicinity which had closed businesses for nearly 2 weeks. The Agent had asked for a further week to arrange payment but this was declined by IATA and therefore it sought relief from this office as the situation was outside its control.

The circumstances fell under the provisions of section 13.9 of Resolution 818g "Force Majeure" and the Agent was to be re-instated subject to the terms and conditions required by IATA.



Page: 15 of 17 __________________________________________________________________________________

10 June 2016 Hyderabad, Pakistan.

The Agent was declared in default as a consequence of receiving a 2nd NOI within a 12 month period. They related to 2 settlement dates in May. In the first instance the Agent advised that their Bank did not transfer the funds to IATA's Bank until the day after the due date. A verbal admission from the former's local Manager indicated that the Bank's systems were down causing a delay but this situation would not be acknowledged formally by the Bank. The Agent provided evidence that there was in excess of the BSP billing amount in its account on settlement day. The second incident involved the Agent 's remittance missing the funds transfer deadline on the settlement date and IATA did not receive value until the day after. IATA highlighted the fact that had the Agent used the proscribed process for making settlements the delays would not have occurred and the NOIs avoided.

The first NOI was to be expunged as it was common policy for Banks not to issue letters in conformity with paragraph 1.7.4 of Attch A to Resolution 818g. Funds sufficient to cover the debit were in place at the correct time. The second incident could have been avoided by the Agent using the correct process and it was encouraged to do so. Having removed one NOI the way was clear for the Agent's ticketing authority to be re-instated.

20 June 2016 Coimbatore, India

The Agent's accreditation was terminated as a result of initially not submitting its financial statements by the due date. After submission the Agent was asked to complete an Agency Status Form which revealed that a change of ownership had taken place the previous year. A reinstatement recovery charge invoice was also issued. The Agent

As the change of ownership involved one of the 3 shareholders withdrawing and leaving the Agency in the hands of the remaining 2 shareholders there was ownership continuity and no new influences which might have caused concern. With the Agent's fervent declaration of observance of all IATA requirements it was decided to re-



Page: 16 of 17 __________________________________________________________________________________

was asked to complete a Change of Ownership Form and to pay the fee. After a period, with neither being sighted by IATA the Agent remained terminated. The Agent explained that its Accountant had been absent overseas since March 2016 and had just returned. He was the only individual with knowledge of the confidential ownership change hence the delay. The C of O form was uploaded and the invoice settled. IATA advised that termination could have taken much earlier in light of the unauthorised ownership change.

instate the Agent subject to it settling all fees and charges.

12 July 2016 Sydney, Australia.

The Applicant was disapproved for accreditation by IATA due to a breach of sub paragraph 2.1.8 of Resolution 818g "Trading History". IATA considered that a loan to the Applicant from a company headed by an individual who was in a position of management with an Agent that had been removed from the Agency List was cause for rejection. Additionally an individual who was a shareholder in the Applicant was the owner of an investment company that had granted a loan to the failed Agent which constituted a "financial interest". The Applicant contended that the latter loan did not give any rights to the lender in the running of the defunct Agency and the lender was an unsecured creditor in the same class as many Airlines. The first loan described above would be replaced by one from the Applicant's shareholder's investment company.

There is no definition of "financial interest" in any Resolution. The investment company owner was not a shareholder or on the board of the failed Agency and had no influence over its demise. The transfer of the first loan to the investment company removed the first connection. A breach of sub paragraph 2.1.8 had not occurred and the application was to be moved forward.



Page: 17 of 17 __________________________________________________________________________________

TRAVEL AGENCY COMMISSIONER AREA 3 MATTERS THAT DID NOT GIVE RISE TO REVIEW

AUGUST 2015 TO JULY 2016

General Due to the number of cases handled, 54, this report condenses these into categories as follows: A. IATA decisions upheld = 27 B. Intervention of TAC produced satisfactory outcome without need for a decision = 21 C. Dismissed as application for review made outside 30 day time limit = 4 D. ADM issues where Airline did not agree to TAC involvement = 2



Page: 1 of 3 ____________________________________________________________________________

Attachment ‘A’

Country/Area Yemen

Region Africa and Middle East

Remittance Frequency Fortnightly

Remittance Period Fortnightly

Date the criteria last changed March 2009

Criteria approved by


1.1. New applicants should provide the following:

1.1.1 A License issued by the Ministry of Tourism 1.1.2 A license issued by the Ministry of Civil Aviation 1.1.3 A valid Commercial Registration License showing the category/type of trading 1.1.4 Membership of the Yemen Union for Tourism


2.1. The Accounts will reflect a satisfactory financial standing by meeting the following

Financial Tests: 2.1.1 There must be positive Net Equity. 2.1.2 Net Equity divided by long-term debt and other long-term liabilities must be greater

than 0.5. 2.1.3 EBITDA (Earnings before Interest, Taxation, Depreciation, Amortization and

extraordinary items) must be positive 2.1.4 The EBITDA must exceed the Interest Payable by a factor of a minimum of two. 2.1.5 Adjusted Current Assets must exceed Current Liabilities.


3.1. All Agents must provide Audited Accounts no later than 6 months after each

Financial Year End (FYE) 3.2. All new Applicants that had commenced trading over 12 months must provide

Audited Accounts of not more than six (6) months old and covering at least 12 consecutive months, at the time of application.

3.3. All new applicants that did not commence trading yet or commenced trading for less than 12 months should submit certified opening balance sheet.




Page: 2 of 3 ____________________________________________________________________________

4.1 New Agents

4.1.1. All new applicants are required to provide a Financial Security that covers at a minimum the higher of minimum financial security level of USD 70,000 or the required Financial Security according to section 4.2 of these criteria

4.2 Existing Agents

An Agent will not be accredited or will not continue to be accredited unless all the following criteria are met in relation to the Financial Security required by IATA:

4.2.1 The original Financial Security document has been received by IATA; and 4.2.2 Financial Security will be subject to a minimum notice of termination period on the

part of the Financial Security Provider of nighty (90) days and will be valid for a minimum of at least one year.

4.2.3 For the purposes of calculating the amount of a Financial Security the following

definitions apply: 4.2.3.1 “Days’ Sales at Risk” means the number of days from the beginning of the

Agent’s reporting period to the remittance date in respect of that reporting period or periods, plus a margin of five days.

Fortnightly remittance: Days at Risk: 35 days

4.2.3.2 The amount of Financial Security required must cover at a minimum the Days Sales at Risk calculated as below using BSP Days at Risk, multiply 12 months sales over 365 days. If the existing Financial Security is insufficient to cover Amount at Risk, the amount of Financial Security will be increased to cover the Amount at Risk

“Days Sales at Risk” X (12 months Sales / 365) for Existing Agents “Days Sales at Risk” X (Estimated Annual Sales / 365) for New Applicants

4.2.3.2.1 Subject to a minimum of USD 70,000.00 (Seventy Thousand United States Dollars)

5. DEFINITIONS OF TERMINS USED IN THESE GUIDELINES

Adjusted Current Assets - are defined as Current Assets as in the balance sheet of the

accountants after deducting:

- Stocks and work in progress - Deposits given to third parties other than IATA - Loans to Directors, Associate Companies, (including any subsidiary, associate

or company under common ownership) - Doubtful debtors - Blocked funds except for funds held in favour of IATA.



Page: 3 of 3 ____________________________________________________________________________

Current Liabilities – are defined as current liabilities in the balance sheet of the accounts EBITDA - Earnings before Interest, Taxation, Depreciation and Amortisation. Financial Irregularity means an irregularity applied as a result of any failure to adhere to the reporting and remittance procedures described in resolution 818g Attachment “A” including but not limited to those irregularities described in resolution 818g Attachment “A” Financial Review means a review of an Agent’s financial position or the calculation of the amount of Financial Security required in accordance with this local Financial Criteria. Irregularity means any irregularity applied under the Passenger Sales Agency Rules for non-compliance with those rules including but not limited to Financial Irregularities. Net Equity or Shareholders’/owners’ Funds-Consists of:

- Share capital

- Share Premium

- Retained earnings

- Other distributive reserves

- Shareholder’s loans if subordinated less declared dividends

Long Term Debt - All debt liabilities where repayment is due more than twelve months after the end of the financial period Long Term Liabilities - all liabilities where repayment is due more than twelve months after the end of the financial period Review means any assessment or evaluation of an agent’s continuing compliance with the Passenger Sales Agency Rules