StateDeptcable1977-30090

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009 Message Text LIMITED OFFICIAL USE PAGE 01 STATE 028...

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Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Message Text LIMITED OFFICIAL USE PAGE 01 STATE 028509 ORIGIN L-03 INFO OCT-01 EUR-12 ISO-00 EB-08 CAB-02 CIAE-00 COME-00 DODE-00 DOTE-00 INR-07 NSAE-00 CIEP-01 FAA-00 H-01 SS-15 NSC-05 PA-01 PRS-01 USIA-06 /063 R DRAFTED BY L/EB:PMICKEY:0AS APPROVED BY L/EB:PRTRIMBLE L:DFVAGTS EB/TT/OA:MR. STYLES EUR/CE:JKORNBLUM ------------------090207Z 103480 /67 P R 082254Z FEB 77 FM SECSTATE WASHDC TO AMEMBASSY BONN PRIORITY INFO AMEMBASSY BERLIN AMEMBASSY PARIS AMEMBASSY LONDON

LIMITED OFFICIAL USE STATE 028509 E.O. 11652: N/A TAGS: PFOR, EAIR, WB, GW, US, UK, FR SUBJECT: PAN AM IGS CLAIM 1. DUE TO FRG AIR TRAFFIC CONTROL SLOWDOWN DURING LATTER HALF OF 1973, PAN AMERICAN SUFFERED LOSSES OF APPROXIMATELY 5.5 MILLION DOLLARS ON IGS BERLIN SERVICES. PAN AM OVERTURES CONCERNING ADMINISTRATIVE SETTLEMENT OF CLAIM HAVE TWICE BEEN REJECTED BY FEDERAL MINISTRY OF TRANSPORT, BY NAU IN APRIL 1974 AND FUCHS IN FEBRUARY 1975. TEXT SET FORTH BELOW HAS BEEN PREPARED FOR PRESENTATION AS AIDEMEMOIRE TO FRG GOVERNMENT IN HOPE OF USING US GOOD OFFICES TO ACHIEVE SETTLEMENT AND AVOID LENGTHY LITIGATION. LIMITED OFFICIAL USE LIMITED OFFICIAL USE PAGE 02

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2. ECON MINISTER SHOULD PRESENT AIDE-MEMOIRE AT A HIGH LEVEL IN THE FOREIGN MINISTRY. PRESENTATION SHOULD STRESS POLITICAL CONSIDERATIONS IN FAVOR OF ADMINISTRATIVE SETTLEMENT, SUCH AS PAN AM'S PRIMARY ROLE IN IGS SERVICES, RATHER THAN TREATY AND DOMESTIC LEGAL THEORIES SUPPORTING CLAIM.

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

3. PAN AM HAS VOLUNTEERED TO SUPPLY ADDITIONAL BACKGROUND INFORMATION TO ECON MINISTERS, THROUGH COMPANY'S GERMAN MANAGER C.W. RUNETTE AND INTERNATIONAL COUNSELOR NORMAN SEAGRAVE, THE LATTER PREPARED TO TRAVEL FROM NEW YORK TO BONN AT EMBASSY'S SUGGESTION. 4. FOLLOWING IS TEXT OF AIDE-MEMOIRE. -- PAN AMERICAN WORLD AIRWAYS, INC. HAS SOUGHT THE GOOD OFFICES OF THE UNITED STATES GOVERNMENT IN SUPPORT OF A CLAIM IT HAS PRESENTED TO THE GOVERNMENT OF THE FEDERAL GERMAN REPUBLIC FOR DAMAGES SUFFERED IN CONNECTION WITH ITS SERVICES BETWEEN THE FEDERAL REPUBLIC AND BERLIN AS A RESULT OF THE INADEQUATE PROVISION OF AIR TRAFFIC CONTROL SERVICES IN THE TERRITORY OF THE FEDERAL REPBULIC FOR A PERIOD OF SIX MONTHS IN 1973. A DESCRIPTION OF PAN AMERICAN'S LOSSES IS SUBMITTED AS AN ATTACHMENT. THIS MEMORANDUM SUMMARIZES THE CONSIDERATIONS WHICH HAVE LED THE U.S. GOVERNMENT TO CONCLUDE THAT PAN AMERICAN IS ENTITLED TO COMPENSATION. -- THE BASIC FACTS ARE NOT IN DISPUTE. AIR TRAFFIC CONTROL PERSONNEL, EMPLOYEES OF THE FEDERAL GOVERNMENT, HAD BEEN SEEKING PAY INCREASES AND OTHER BENEFITS WHICH THE GOVERNMENT WAS NOT PREPARED TO GRANT. BEGINNING ON MAY 31, 1973, AND EXTENDING CONTINUOUSLY TO NOVEMBER 30 OF THAT YEAR, THE GREAT MAJORITY OF THE CONTROLLERS TOOK ACTIONS DESIGNED TO BRING PRESSURE ON THE GOVERNMENT TO ACCEDE TO THEIR DEMANDS. NO STRIKE WAS CALLED, THE ACTIONS CONSISTED OF LIMITED OFFICIAL USE LIMITED OFFICIAL USE PAGE 03

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ON-THE-JOB SLOWDOWNS AND ABSENCES WITH FEIGNED ILLNESSES (HEREIN COLLECTIVELY REFERRED TO AS THE "SLOWDOWN"). THE SLOWDOWN WAS HIGHLY EFFECTIVE, AND AS A DIRECT RESULT AIR TRANSPORT SERVICES TO, FROM, A'D WITHIN GERMANY WERE SERIOUSLY DISORGANIZED AND THE AIRLINES AND OTHERS SUFFERED VERY EXTENSIVE ECONOMIC LOSSES. -- SINCE AIRCRAFT CAN BE OPERATED ONLY UPON RECEIPT OF AIR TRAFFIC CONTROL CLEARANCES AND IN ACCORDANCE WITH THE INSTRUCTIONS OF ATC PERSONNEL, INJURED PARTIES COULD LOOK TO THE FEDERAL GOVERNMENT ALONE FOR A SOLUTION. THE FRG DID INSTITUTE LEGAL ACTION IN THE COURTS FOR INJUNCTIVE RELIEF AND DAMAGES AGAINST THE CONTROLLERS' UNION. ON NOVEMBER 16, 1973, THE 11TH CIVIL SENATE OF THE OBERLANDES;ERICHT OF CELLE REINSTATED AN INJUNCTION WHICH HAD BEEN ISSUED AND THEN DISSOLVED BY A LOWER COURT. WHILE THIS CASE ESTABLISHED THE ILLEGALITY OF THE SLOWDOWN AS A MATTER OF LAW, IT FAILED TO AVOID SERIOUS DAMAGE TO PARTIES SUCH AS PAN AMERICAN OVER A PERIOD OF SIX FULL

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009 MONTHS. -- THE FEDERAL GOVERNMENT'S OBLIGATION TO ASSUME THE BURDEN OF THE LOSSES RESULTING FROM THE SLOWDOWN CONDUCTED BY ITS SERVANTS WAS QUICKLY ESTABLISHED. IN EARLY 1975, IN A DECISION INVOLVING THE DOMESTIC SCHEDULED AIRLINE, CIMBER AIR, TBE LANDGERICHT KIEL DECLARED THE SLOWDOWN TO BE UNLAWFUL AND CONCLUDED THAT THE GOVERNMENT OF THE FEDERAL REPUBLIC BORE THE RESPONSIBILITY FOR THE ACTIONS OF THE AIR TRAFFIC CONTROLLERS AND WAS OBLIGED TO COMPENSATE PLAINTIFF CIMBER AIR FOR LOSSES IT HAD INCURRED. IN A SUIT BROUGHT BY AN AIR TRAVEL AGENT, NECKERMANN, THE OBERLANDESGERICHT IN KOELN SIMILARLY DETERMINED THAT THE PLAINTIFF WAS ENTITLED TO RECOVER FROM THE FEDERAL REPUBLIC. -- PAN AMERICAN HAS TWICE PRESENTED A CLAIM FOR COMPENSATION TO THE FEDERAL MINISTRY OF TRANSPORT, BUT HAS BEEN LIMITED OFFICIAL USE LIMITED OFFICIAL USE PAGE 04

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DENIED RECOVERY, ONCE ON THE BASIS THAT THE FRG OWED A DUTY ONLY TO THE GENERAL PUBLIC AND NOT TO THE AIRLINES, AND BOTH TIMES ON THE GROUND THAT RECIPROCITY REQUIRED BY THE 1910 STATUTE ON LIABILITY OF THE REICH FOR ITS CIVIL SERVANTS DOES NOT EXIST. -- THE U.S. BELIEVES THERE ARE TWO INDEPENDENT BASES SUPPORTING COMPENSATION FOR PAN AMERICAN. PAN AMERICAN'S ROLE IN PROVIDING A MAJOR SHARE OF THE IMPORTANT CIVIL AIR CONNECTIONS BETWEEN BERLIN AND THE FRG PROVIDES AN IMPORTANT ADDED DIMENSION TO ITS CLAIM. UNDER WARTIME AND POSTWAR AGREEMENTS CONCLUDED AMONG THE FOUR POWERS, THE UNITED STATES SHARES WITH FRANCE AND GREAT BRITIAN RESPONSIBILITY FOR MAINTAINING AIR CONNECTIONS BETWEEN BERLIN AND THE FRG. OPERATING ON AUTHORIZATION FROM THE CIVIL AIR ATTACHES OF THE THREE POWERS, PAN AMERICAN, ALONG WITH BRITISH AIRWAYS AND AIR FRANCE, OPERATES THE VITAL CIVIL AVIATION COMPONENT OF THESE AIR CONNECTIONS. THE FACT THAT THE FEDERAL GOVERNMENT HAS SEEN FIT TO PROVIDE SUBSIDIES FOR THESE ALLIED AIR SERVICES DEMONSTRATES THEIR IMPORTANCE TO THE VIABILITY OF BERLIN. -- THE NEED TO TAKE ALL NECESSARY STEPS TO MAINTAIN THESE IMPORTANT AIR SERVICES BETWEEN THE FRG AND BERLIN WAS RECOGNIZED IN THE BONN/PARIS CONVENTIONS OF 1952/54. IN PARTICULAR, CHAPTER TWELVE OF THE CONVENTION ON THE SETTLEMENT OF MATTERS ARISING OUT OF THE WAR AND THE OCCUPATION OBLIGATES THE FEDERAL REPUBLIC TO SUPPORT AIR TRAFFIC IN THE BERLIN AIR CORRIDORS. IN THE BONN/PARIS CONVENTIONS, THE PARTIES PLAINLY INTENDED THAT THE BERLIN AIR SERVICES WERE TO BE SAFEGUARDED 0Y THE FEDERAL

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009 AUTHORITIES AGAINST THE POSSIBILITY OF INTERFERENCE OR DELAY. THE STANDARD OF RESPONSIBILITY UNDER THE TREATY FOR INSURING THE UNIMPEDED PASSAGE OF US FLAG AIRCRAFT TO AND FROM THE.CORRIDORS COULD NOT BE LESS THAN THAT WHICH THE GERMAN COURTS HAVE FOUND TO BE OWED TO GERMAN NATIONALS LIMITED OFFICIAL USE LIMITED OFFICIAL USE PAGE 05

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UNDER GENERAL GERMAN LAW. -- A BASIS FOR LIABILITY TO PAN AMERICAN ARISES DIRECTLY FROM THOSE JUDICIAL DECISIONS WHICH HAVE NOW ESTABLISHED LIMITED OFFICIAL USE THAT THE FEDERAL REPUBLIC IS IN FACT LIABLE TO PRIVATE COMMERCIAL INTERESTS INJURED BY THE SLOWDOWN. THE VIEW OF THE MINISTRY OF TRANSPORT CONCERNING RECIPROCITY SEEMS UNFOUNDED IN LIGHT OF THE FACT THAT UNDER THE FEDERAL TORT CLAIMS ACT, 28 U.S.C. SECTIONS 2671-80, WHICH PROVIDES A CAUSE OF ACTION FOR PRIVATE INJURY CAUSED BY WRONGFUL ACTS OF THE UNITED STATES GOVERNMENT, GERMAN NATIONALS ENJOY ACCESS TO UNITED STATES COURTS ON AN EQUAL BASIS WITH UNITED STATES CITIZENS. IN VIEW OF THESE CONSIDERATIONS WE TRUST THAT THE REQUISITE DECLARATION OF RECIPROCITY COULD READILY BE ISSUED. -- WHILE IT THEREFORE APPEARS THAT PAN AMERICAN HAS A CLAIM FOR RECOVERY OF ITS LOSSES THAT WOULD HAVE BEEN COGNIZABLE IN THE GERMAN COURTS HAD SUCH A DECLARATION BEEN ISSUED, THE UNITED STATES GOVERNMENT HOPES THAT THE GERMAN GOVERNMENT WILL NOT EXPECT PAN AMERICAN TO ACCEPT ADDITIONAL BURDENS OF EXPENSE AND DELAY PURSUING THE MATTER THROUGH THE COURTS. PAN AMERICAN, WHICH WAS OPERATING THE BERLIN AIR SERVICES ON 0EHALF OF THE UNITED STATES, HAS ALREADY SUFFERED SEVERE ECONOMIC LOSSES FROM THE SERIOUS AND PROTRACTED DISORGANIZATION OF THE BERLIN AIR SERVICES ARISING FROM THE SLOWDOWN WITHIN THE FEDERAL REPUBLIC OF GERMANY. IT WOULD APPEAR MORE REASONABLE, AND IN THE INTEREST OF GOOD RELATIONS BETWEEN OUR TWO COUNTRIES, FOR THE FRG TO EFFECT AN ADMINISTRATIVE SETTLEMENT. MOREOVER, SUCH ACTIONS BY THE FEDERAL GERMAN REPUBLIC WOULD APPEAR CONSISTENT WITH THE RESPONSIBILITY ASSUMED BY IT UNDER THE BONN CONVENTIONS. LIMITED OFFICIAL USE LIMITED OFFICIAL USE PAGE 06

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-- THE UNITED STATES GOVERNMENT IS AWARE THAT THE GOVERN-

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009 MENT OF THE FEDERAL GERMAN REPUBLIC HAS BEEN DEEPLY DISTRESSED BY THE CONSEQUENCES OF THE SLOWDOWN AND IN PARTICULAR BY ITS IMPACT ON THE INTEGRITY AND EFFICIENCY OF THE BERLIN SERVICES, TO WHICH BOTH GOVERNMENTS HAVE AMPLY DEMONSTRATED THEIR TOTAL COMMITMENT AT CRITICAL PERIODS IN THE PAST. IN SUPPORTING COMPENSATION FOR PAN AMERICAN BY INFORMAL SETTLEMENT, THE UNITED STATES IS SUGGESTING THE COURSE IT BELIEVES BEST DESIGNED TO SECURE A PROMPT AND AMICABLE SOLUTION OF THIS DISPUTE. VANCE

LIMITED OFFICIAL USE

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Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Message Attributes Automatic Decaptioning: X Capture Date: 01-Jan-1994 12:00:00 am Channel Indicators: n/a Current Classification: UNCLASSIFIED Concepts: CLAIMS, DISPUTE SETTLEMENT, AIR TRAFFIC CONTROL Control Number: n/a Copy: SINGLE Sent Date: 08-Feb-1977 12:00:00 am Decaption Date: 01-Jan-1960 12:00:00 am Decaption Note: Disposition Action: RELEASED Disposition Approved on Date: Disposition Case Number: n/a Disposition Comment: 25 YEAR REVIEW Disposition Date: 22 May 2009 Disposition Event: Disposition History: n/a Disposition Reason: Disposition Remarks: Document Number: 1977STATE028509 Document Source: CORE Document Unique ID: 00 Drafter: PMICKEY:0AS Enclosure: n/a Executive Order: N/A Errors: N/A Expiration: Film Number: D770045-0696 Format: TEL From: STATE Handling Restrictions: n/a Image Path: ISecure: 1 Legacy Key: link1977/newtext/t19770261/aaaacbyq.tel Line Count: 234 Litigation Code IDs: Litigation Codes: Litigation History: Locator: TEXT ON-LINE, ON MICROFILM Message ID: 15adacc9-c288-dd11-92da-001cc4696bcc Office: ORIGIN L Original Classification: LIMITED OFFICIAL USE Original Handling Restrictions: n/a Original Previous Classification: n/a Original Previous Handling Restrictions: n/a Page Count: 5 Previous Channel Indicators: n/a Previous Classification: LIMITED OFFICIAL USE Previous Handling Restrictions: n/a Reference: n/a Retention: 0 Review Action: RELEASED, APPROVED Review Content Flags: Review Date: 04-Feb-2005 12:00:00 am Review Event: Review Exemptions: n/a Review Media Identifier: Review Release Date: n/a Review Release Event: n/a Review Transfer Date: Review Withdrawn Fields: n/a SAS ID: 3375996 Secure: OPEN Status: NATIVE Subject: PAN AM IGS CLAIM TAGS: PFOR, EAIR, WB, GE, US, UK, FR, PANAM To: BONN Type: TE vdkvgwkey: odbc://SAS/SAS.dbo.SAS_Docs/15adacc9-c288-dd11-92da-001cc4696bcc Review Markings: Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009 Markings: Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

Margaret P. Grafeld Declassified/Released US Department of State EO Systematic Review 22 May 2009

1977
English

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