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1 Delegations representing the Coordination Council for North Ame-rican Affairs (the "Council") and the American Institute in Tai-wan (the "Institute") met in Taipei October 12-15, 1981 for con-sultations relating to the Air Transport Agreement of March 5,1980 between the Council and the Institute. Delegation lists areattached. Specific attention was devoted to simplified remittan-ce procedures to be adopted in implementation of the Agreementand to the implementation of China Airlines' permanent trafficrights at New York. Both parties agreed that, effective November 1,1981, points 2 t-hrough 7 of paragraph 3 of Letter 1 dated March 31, 1981 will bereplaced by the following procedures and shall be applicable totransactions effected after November 1,1981: Airlines designated by the Institute will be allowed to remit r-evenues earned in Taiwan on the basis of information containedin Form 4 (or another mtually agreed document). Information cov-ering passenger revenues will be verified by the information pr-ovided to the Civil Aeronautics Administration regularly by thedesignated airlines in the Air Transportation Tax Collection Fo-rm. It was agreed that the title of this Form needs to be amend-ed to meet Central Bank requirements. Remittance applications c-overing cargo revenues will be submitted on Form 4 supplementedto reflect the total amount of air waybills under U.S. $1,000 t-ogether with an auditor's statement certifying the accuracy ofthe information according to generally accepted aduiting princi-ples. The auditor will be selected from among a large number ofprofessionally qualified firms licensed to do business in Taiwan, including those affiliated with United States accounting firms, that are acceptable to the airline(s) and the Central Bank. During the consultations the Council and the Institute reaffirm-ed that under the Air Transport Agreement of March 5,1980 eachairline designated by the Council and the Institute may performits own ground services ("self-handling") or, at its option, se-lect among competing agents for such services; the Council andthe Institute also reaffirmed that the first refusal requirementwith respect to charter flights does not apply to airlines desi-gnated by the Council and the Institute. With respect to the implementation of the Council-designated ai-rline's permanent traffic rights at New York, the Institute aff-irmed that the United States Civil Aeronautics Board will allowChina Airlines to continue cargo service to New York under exem-ption authority for one year from November 1,1981. Both parties will review the simplified remittance procedures d-escribed above and will advise each other of any problems thatmay exist. Each party will use its best efforts to resolve anydifferences expeditiously. At the conclusion of six months, a r-eview will be conducted and if both sides are satisfied with thenew procedures, the U.S. Civil Aeronautics Board shall initiateaction to issue an amended operating permit to China Airlines f-or permanent cargo and passenger rights at New York. For the Coordination Council for North American Affairs (Signed) Tsing-kang Chu, Chairman For the American Institute in Taiwan (Signed) Clarke N. Ellis, Chairman October 15,1981.