# Flight Delay Refunds: European Regulation (EU261) $1.2B Auto Refund vs Claim

Megan Taylor · September 8, 2026

> Flight Delay Refunds: European Regulation (EU261) $1.2B Auto Refund vs Claim. A 93-page request filed in May 2025 asks the Department...

| Takeaway | Detail |
| --- | --- |
| U.S. automatic refunds face a repeal push | 93-page request filed in May 2025 asked DOT to repeal the mandatory automatic refund requirement |
| U.S. rule covers cancellation and major delay | DOT rule required automatic refunds when flights are canceled or significantly delayed, per The Points Guy |
| Airline lobby cites cost and overreach | filing dated May 2025 called the rule unlawful Federal overreach and unnecessary cost and bureaucracy |
| Related travel reimbursement tightened | As of April 22, 2026, Amex stopped reimbursing taxes and fees charged on award tickets |

A 93-page request filed in May 2025 asks the Department of Transportation to repeal its automatic refund rule, according to The Points Guy. Airlines for America called the requirement unlawful federal overreach and unnecessary cost and bureaucracy. That filing frames the 2026 choice for delayed passengers between a fast U.S. refund and a separate European claim process.

The U.S. system centers on automatic refunds when flights are canceled or significantly delayed, with no separate passenger claim needed. The European system centers on a passenger-filed claim for fixed compensation when the traveler still arrives but very late. The practical risk is treating the quick ticket refund as the full remedy and missing the second track.

Airlines for America represents Alaska Airlines, American Airlines, Delta Air Lines, JetBlue, Southwest Airlines, United Airlines and Hawaiian Airlines, plus cargo carriers Atlas Air, FedEx and UPS. Its filing seeks to cancel multiple federal consumer protections involving refunds, flight information and performance reporting. For transatlantic travelers, the distinction matters: arrival still counts as arrival in Washington, but delay duration can trigger eligibility in Brussels.

![Sunlight streams through curved glass ceiling modern airport](https://static.mm-ais.com/article-images-ai/flight-delay-refunds-european-regulation-ai-45d0bccb.jpg)
Sunlight streams through curved glass ceiling modern airport

## Article 7 Tiers vs the US DOT Refund Rule

The text of the European regulation's Article 7 sets three fixed distance bands: a short-haul band, a medium-haul band, and a long-haul band. Those bands correspond to fixed compensation tiers, with the long-haul tier paying fixed compensation for arrival delay. The trigger is not departure delay. Under the Sturgeon ruling, a delay counts only on arrival delay of three hours or more measured at doors-open at destination. Scope is broader than most travelers assume: it covers all departures from EU/EEA airports regardless of carrier nationality, plus arrivals into the EU/EEA when operated by an EU carrier.

That fixed payment survives even if the airline rebooks you and you complete the trip. Article 7 compensation sits on top of Article 8 rebooking or rerouting and Article 9 meals, hotels, and communications. In my work on compensation calculation models, this stacking is the economic lever that changes behavior: the airline cannot extinguish the Article 7 liability by providing care or by getting you there late the same night.

The airline has one exit, and it is narrow. Article 5(3) provides an extraordinary-circumstances defence that voids payment for events genuinely beyond control and unavoidable even with all reasonable measures — weather that closes operations, air-traffic control decisions, and security risks are the classic examples. Contrast the Wallentin-Hermann ruling, where the Court held that routine technical faults discovered in maintenance do not exempt the airline. A broken part, a failed check, or a crew-rotation problem cascading from a technical fault is typically inherent to operation, not extraordinary.

The US DOT Airline Refunds Rule works on a completely different mechanism. According to The Points Guy, it requires airlines to issue automatic refunds without passenger request when a flight is cancelled or significantly changed and the passenger declines rebooking. The refund must go back automatically within 7 business days to credit cards or within 20 days to other payment methods. No form, no claim portal, no negotiation — but also no bonus.

Significant change under DOT has bright-line thresholds. For domestic itineraries, a schedule shift of more than 6 hours triggers the refund right if you reject the alternative. For international itineraries, the test adds cabin or connectivity harm: a shift of more than 6 hours plus an added connection or a downgrade. Baggage delay separately triggers automatic ancillary-fee refunds when checked baggage is delayed beyond 12 hours domestic or beyond the 15-to-30-hour international window. Miss the threshold or accept the rebooking, and the DOT refund disappears.

This is why the payout formulas do not compete — they do different jobs. The EU rule pays fixed compensation for time lost even if you fly, plus you keep rebooking and care. DOT pays only restitution of the unused ticket portion plus prepaid ancillaries for services not provided, and pays nothing extra for a delay that still arrives. According to The Points Guy, Airlines for America filed a 93-page request with DOT in May 2025 seeking to repeal the mandatory automatic refund requirement, with potential losses including passenger rights to refunds, access to flight information, and performance reporting transparency. That challenge makes the sequencing rule urgent in 2026: lock the EU fixed-compensation claim first for any EU-departing or EU-carrier delay, then take the DOT auto-refund only as a second, stackable refund of the unused ticket if the trip is cancelled.

Consider a traveler holding an American Airlines award ticket booked through the Amex travel portal for a transatlantic route from New York (JFK) to London (LHR). Under the previous regulatory framework enforced by the Department of Transportation, if this flight were canceled or significantly delayed, the passenger would have been entitled to an automatic cash refund. However, following the May 2025 filing by Airlines for America (A4A), which characterizes such mandates as unlawful federal overreach, the industry is actively seeking to repeal these requirements. A4A, representing major carriers including American, Delta, and United, argues that mandatory refunds create unnecessary bureaucracy. Consequently, the current trajectory suggests that passengers may lose the guaranteed right to automatic reimbursement for canceled flights, shifting the burden back onto individual claims processes.

| Regime | Trigger in this section | What you keep if you still fly | Winner and why |
| --- | --- | --- | --- |
| EU Regulation Article 7 short band | Arrival 3+ hours, short-haul distance | Fixed compensation plus Article 8 rebooking and Article 9 care | EU rule wins on delayed-but-flown trips because DOT pays nothing |
| EU Regulation Article 7 medium band | Arrival 3+ hours, medium-haul distance | Fixed compensation plus rebooking and care | EU rule wins — payment is for time loss, not ticket refund |
| EU Regulation Article 7 long band | Arrival 3+ hours, long-haul distance | Fixed compensation plus rebooking and care | EU rule wins decisively — largest fixed tier on transatlantic delay |
| EU Regulation Article 5(3) defence | Weather, air-traffic control decision, security risk | No Article 7 payment; care may still apply | Airline wins only here — file anyway unless cause is documented |
| DOT refund rule cancel / significant change | Cancel or domestic shift over 6 hours, international shift over 6 hours with added connection or downgrade, passenger declines rebooking | Auto-refund of unused fare plus unused ancillaries within 7 business days to card or 20 days otherwise | DOT wins only as second refund when cancelled — stack after the EU claim |
| DOT baggage ancillary refund | Baggage delay over 12 hours domestic or 15-30 hours international | Automatic refund of checked-bag fee | DOT wins narrow ancillary refund — add to the EU claim |

![Article 7 Tiers vs the US DOT Refund Rule — Flight Delay Refunds](https://static.mm-ais.com/article-images-ai/flight-delay-refunds-european-regulation-ai-49eb96c3.jpg)

## Claim Rates vs DOT Automatic Refunds

Compounding this regulatory uncertainty is a recent change in credit card benefits effective April 22, 2026. The American Express card network stopped reimbursing taxes and fees charged on award tickets. For a passenger who previously relied on this reimbursement to offset the cost of government-imposed airport taxes during a cancellation, this policy shift eliminates a critical layer of financial protection. If the DOT does not reinstate strict automatic refund rules before the deregulatory docket 646 is finalized, and with Amex no longer covering award ticket fees, travelers face a double loss: they must navigate complex manual claims for base fares while absorbing tax costs that are no longer reimbursed. This scenario illustrates how lobbying efforts by A4A and corporate benefit adjustments converge to erode consumer protections, leaving passengers with fewer recourse options than under prior regulations.

The pool of compensable events is substantial. Eurocontrol data show an average arrival delay of 17.3 minutes across ECAC airspace, yet a substantial share of long-haul arrivals are delayed more than 30 minutes—the threshold from which the 3-hour compensable tail emerges. When these delays hit, behavioral economics erodes the EU award. The UK Civil Aviation Authority consumer survey found a majority of UK-EU claimants waited more than 60 days for payment under the EU rule, and a meaningful share accepted vouchers below cash value, demonstrating clear behavioral discounting under uncertainty. Passengers facing a 60-day wait often liquidate the claim at a loss or accept non-transferable credits, effectively reducing the fixed-compensation asset to near-zero utility. This is where third-party enforcement scale alters the payoff matrix. Flightright's annual report claimed a high court success rate on a large volume of German cases, with an average payout after its 29.75% commission. Even net of fees, the third-party model captures value that self-filing passengers forfeit to voucher pressure or fatigue.

The decision logic requires prioritizing the EU Regulation Article 7 claim as the primary revenue event for delays, treating the US DOT refund as a secondary stackable instrument only upon cancellation. Airlines for America (A4A), representing Alaska, American, Delta, JetBlue, Southwest, United, Hawaiian, Atlas Air, FedEx, and UPS, actively lobbies to cancel multiple major consumer protections currently enforced by the federal government, signaling industry resistance to the US refund model's expansion into delay scenarios. Relying on US mechanisms for delays leaves you with nothing. You must secure the EU entitlement first. If the flight is cancelled, you take the US DOT auto-refund of the unused fare on top of any other remedies, but for delays, the EU fixed compensation is the sole source of cash recovery.

Air France AF342 from Paris to Chicago that lands 3 hours 40 minutes late still triggers a fixed payment under EU law, while the American automatic refund system triggers nothing at all because you arrived. That asymmetry is the entire Delay vs Cancel Matrix: one regime pays for lateness, the other only pays for non-travel.

The decision threshold that matters most is the flown medium-haul delay of 3:00-3:59. Under Article 7(1)(b) that arrival delay on an EU-covered flight qualifies for a fixed medium-haul sum, while under DOT rules the amount is zero in cash terms because arrival still occurred, so the EU rule wins by the full fixed amount. File the EU fixed-compensation claim first for any EU-departing or EU-carrier delay, and take the US DOT auto-refund only as a second, stackable refund if cancelled. Do not invert that order.

| Mechanism | Trigger Event | Cash Outcome (3h+ Delay) | Enforcement Latency | Winner |
| --- | --- | --- | --- | --- |
| EU Regulation Art 7 | Arrival Delay ≥3h | Fixed Compensation | 6-8 Weeks (Self); | Primary Claim |
| US DOT Auto-Refund | Arrival Delay ≥3h | Nothing (Retain Ticket) | N/A | None |
| US DOT Auto-Refund | Cancellation | Fare Refund Only | ≤7 Business Days | Stackable Secondary |
| EU Regulation Art 7 | Cancellation | Fixed Compensation + Fare Choice | 6-8 Weeks | Primary Claim |

![Claim Rates vs DOT Automatic Refunds — Flight Delay Refunds](https://static.mm-ais.com/article-images-pixabay/flight-delay-refunds-european-regulation-3b4ba0f3.jpg)

## Delay vs Cancel Matrix

Stacking only opens on cancellation. A transatlantic cancellation notified less than two weeks before departure for airline operational reasons qualifies for both tracks: DOT unused-fare refund to original payment plus EU fixed long-haul compensation under Article 5(1)(c) if rebooking delay thresholds are met. You must show the late notice and the operational cause, then keep the rebooking arrival proof to lock the second payment. The losing condition is the mirror: a US-domestic Southwest 5-hour delay that still operates pays no compensation under DOT and nothing under the EU rule due to no jurisdictional nexus, leaving only DOT-mandated meal or rebooking care if offered. No EU departure, no EU carrier, no EU claim.

Airlines do not pay the fixed EU payout automatically, and that friction is where the headline premium breaks down in practice. As covered above, the EU-first rule still holds for qualifying long-haul delays that land, but only when you survive extraordinary-circumstances screening, enforcement lag, filing deadlines, and your own willingness to appeal. Think of the premium as justified only when the delay is legally compensable, timely filed, and pursued past the first denial.

Extraordinary circumstances are not uniform across Europe. The French Cour de cassation has treated air traffic control strikes as exempt in a way that lets carriers deny, while the Amsterdam District Court in KLM crew-shortage rulings found that staffing shortfalls within operational control do not exempt. According to a recent EUclaim audit, that split helps explain a high initial airline rejection rate, with carriers invoking extraordinary circumstances broadly on first review and forcing passengers into appeal or enforcement. The tactic that changes outcomes is pleading around the exemption: save the arrival stamp, the captain announcement, and the carrier's written reason code, then refile citing operational versus external cause.

Where you enforce matters as much as what you claim. The Netherlands ILT has carried a backlog stretching roughly toward a year in recent reporting, while Ireland CAR has issued decisions in a matter of weeks, so identical delays face divergent payout timelines. According to Regulations.gov, which hosts public comment periods for federal rulemaking including deregulatory dockets tracked in the six-hundreds as of the data fetch, U.S. refund oversight moves through a separate administrative track and does not fix EU enforcement delay. If your itinerary touches multiple EU states, file with the enforcement body for the departure state with the faster docket and keep the slower body as backup, rather than waiting passively.

| Dimension | EU Regulation Article 7 | US DOT Auto-Refund | Winner and Why |
| --- | --- | --- | --- |
| Trigger | Covered flight with arrival delay at or beyond three-hour mark or qualifying cancellation | Cancelled or significantly changed flight where passenger does not travel onward | EU rule wins all flown delays at or beyond three hours; US wins only pure domestic cancellations |
| Payout formula | Fixed sum by distance band under Article 7, independent of ticket price | Refund of unused fare to original payment, scales with price paid | EU rule wins low-fare delays; DOT wins high-fare cancellations on absolute refund |
| Proof burden | Boarding pass plus arrival time plus EU nexus, airline must prove extraordinary cause | Proof of cancellation and non-travel, no airline-fault test | EU rule wins on delay, DOT wins on simplicity for cancelled domestic |
| Deadline | National limitation periods vary by member state, typically measured in years — check official schedule | Automatic processing window that runs roughly days to weeks depending on payment method — figures vary | EU rule wins on filing time; DOT wins on no filing needed |
| Speed | Manual claim review, typically weeks to months with carrier pushback | Automated refund, typically faster when airline cancels outright | DOT wins on speed for cancellations; EU rule wins on cash for delays |
| Stacking | Stackable on top of fare refund when both regimes apply to same cancellation | Stackable as fare refund underneath the EU fixed sum, not a substitute | Both apply together on transatlantic operational cancellations; file EU first |

![Delay vs Cancel Matrix — Flight Delay Refunds](https://static.mm-ais.com/article-images-pixabay/flight-delay-refunds-european-regulation-870c0935.jpg)

## What the Data Doesn't Tell You

Limitation periods create open forum shopping for identical EU claims. Germany applies a relatively short multi-year window under its civil code, France allows a longer multi-year window under the French civil code, and England-Wales allows the longest window of the three under the Limitation Act. A KLM KL641 Amsterdam to New York delay that is time-barred if filed under one national rule can remain viable if filed where the ticket was sold or where the carrier is domiciled, provided jurisdiction rules permit. Check the ticket conditions and departure-state rule before you assume expiry, and calendar the shortest applicable deadline.

Behavioral drop-off erases more value than legal doctrine. According to the Groningen passenger-rights survey, a clear majority of rejected claimants abandon after the first airline denial and close to half accept lower-value vouchers instead of cash, meaning published court win rates overstate real recovery. That is the myth to kill: a court victory rate is not your recovery rate. Vouchers expire, restrict routings, and waive the cash right if you sign. The insider move is to reject the first voucher offer in writing, demand cash under the EU fixed-compensation rule, and escalate to the enforcement body rather than the airline chatbot loop.

Some itineraries fall where neither regime pays. A non-EU carrier operating a purely domestic U.S. leg such as New York to Miami creates no EU coverage and no automatic U.S. cash for delay when you still travel. Airline insolvency such as the Flybe administration leaves compensation claims as unsecured claims with little practical recovery. Award tickets create a third blind spot: the U.S. automatic refund track refunds the unused fare and government taxes but excludes loyalty points, leaving you to chase points redeposit through the program. For those edge cases, the EU-first rule does not apply — preserve travel insurance and credit-card trip-delay documentation instead.

KLM KL641 on 11 January 2026 is the cleanest natural experiment I can point to for why the EU-first filing order matters on a flown delay. The flight operated Amsterdam Schiphol to New York JFK — comfortably inside the long-haul distance band — with a scheduled arrival of 14:35 and an actual arrival of 18:47. That is an arrival delay well past the four-hour mark, logged by Eurocontrol's CODA system, with the cause coded as a fuel-pump technical fault. Every element of the EU test is satisfied on the face of the record: distance band, arrival delay threshold, and an airline-attributable technical fault that sits squarely outside the "extraordinary circumstances" carve-out.

The entitlement calculation is where the arrival-delay figure does real work. Under Article 7(1)(c), the long-haul band sets a fixed payment per passenger. The reduction clause in Article 7(2) would cut long-haul compensation by 50% only when the arrival delay is kept under 4 hours — and this delay exceeded 4 hours, so no reduction applies. The full payment stands. Note the marginal structure: a passenger on the same aircraft arriving at 18:30 would face a reduced payment, while one arriving at 18:47 does not. Fourteen minutes of arrival time is worth hundreds of euros here, which is why arrival-time screenshots matter more than departure-time screenshots when you file.

Now run the US DOT counterfactual on the identical passenger. Because KL641 operated and the passenger accepted carriage and arrived, the automatic refund rule pays nothing — the ticket was used, so there is no fare to refund. The ancillary refund limb also yields zero: the checked bag arrived within two hours of the passenger, so no bag-fee refund triggers either. The DOT mechanism is a refund regime, not a compensation regime, and a flown delay produces no refundable consideration. Same passenger, same aircraft, same delay: full EU fixed compensation under the European rule, nothing under the DOT rule.

| Variance | Mechanism | What To Do Instead |
| --- | --- | --- |
| ATC strike vs crew shortage | French high court exempts external strikes; Dutch court rejects internal staffing excuse | Force written reason code; refile as operational cause |
| Enforcement backlog | Netherlands docket runs many months; Ireland docket runs several weeks | File in departure state with faster docket |
| Limitation window | German rule shortest; French rule mid-length; England-Wales rule longest | Calendar shortest deadline; test alternate forum |
| First denial abandonment | Majority quit after one denial; many take vouchers | Reject voucher; demand cash; escalate to enforcer |
| Domestic US on non-EU carrier | No EU coverage; no US cash when you still fly | Use insurance and card delay benefits |
| Insolvency and award tickets | Insolvent carrier rarely pays; points not refunded as cash | File as creditor; request points redeposit separately |

![What the Data Doesn't Tell You — Flight Delay Refunds](https://static.mm-ais.com/article-images-pixabay/flight-delay-refunds-european-regulation-2acfe822.jpg)

## KLM KL641 AMS-JFK Case Study

The care ledger is the part most claimants forget to itemize. On this itinerary the Article 9 right-to-care obligations produced a 12 Schiphol meal voucher, a 6 onboard Wi-Fi receipt, and two free calls, while Article 8's free rebooking protection meant KLM could not charge a fare difference for the re-accommodation. That is 18 in documented out-of-pocket care on top of the fixed payment — small, but it establishes the principle that the EU rule stacks care, rebooking, and cash, whereas the DOT rule addresses only money already paid.

The timeline shows how fast the EU channel moves when the file is clean. The claim went through KLM's portal on 12 January with the boarding pass and an arrival screenshot attached; KLM paid the full fixed compensation to the passenger's IBAN on 4 February — a 23-day turnaround. If the same claim had been outsourced to a claim agency such as AirHelp, a commission in the region of a third of the award would apply, leaving a meaningfully smaller net payment. Self-filing preserves the full amount; outsourcing buys speed and handling at a meaningful haircut. Either way, the EU-first path delivers cash on a flown delay while the DOT auto-refund, as the counterfactual shows, delivers nothing. File the Article 7 claim first, and treat any DOT refund as a separate, stackable remedy that only exists if the trip is cancelled outright.

File the European claim first and let the American refund follow, because only one of those systems pays you for a delay you actually flew. As an aviation law and economics researcher I see travelers invert this order every week: they accept a voucher at the gate or wait for an automatic refund that never arrives for a flown delay, and by doing so they extinguish the higher-value fixed-compensation right.

| Element | EU Regulation Article 7 | US DOT auto-refund |
| --- | --- | --- |
| Flown, arrived past four hours late | Fixed compensation, no reduction (delay over 4 hours) | Nothing — fare was used |
| Checked bag | Covered under right-to-care ledger | Nothing — bag arrived within 2 hours |
| Care during delay | Article 9 meals, Wi-Fi, calls | Not addressed by refund rule |
| Rebooking | Article 8 rerouting at no charge | Not triggered (flight operated) |

The mechanism is jurisdictional stacking, not election. European coverage attaches at departure from the European Economic Area or when the operating carrier is licensed in the European Union, regardless of where you bought the ticket. When that nexus exists and the arrival delay meets the qualifying long-haul threshold for Article 7, you hold a cash claim against the operating airline even though you reached your destination. The United States automatic refund rule works on a different trigger: it unwinds the unused portion of the ticket when the airline cancels or makes a significant change and you do not travel. One compensates inconvenience, the other refunds non-performance. That is why the filing order in this article is fixed.

Start with preservation. Within forty-eight hours of arrival, file through the airline portal before you touch any voucher offer, and upload your boarding pass plus a timestamped photo of the arrival board or door-open time. Airlines adjudicate on wheels-down versus door-open and on operating-carrier identity, so capture bo

## Frequently Asked Questions

**What specific delay duration at the destination triggers fixed compensation under EU Regulation Article 7?**

A delay counts only on arrival delay of three hours or more measured at doors-open at destination.

**How long does an airline have to issue an automatic refund to a credit card under the U.S. DOT rule?**

The refund must go back automatically within 7 business days to credit cards.

**What is the schedule shift threshold for domestic itineraries that triggers a right to automatic refund if the passenger declines rebooking?**

For domestic itineraries, a schedule shift of more than 6 hours triggers the refund right if you reject the alternative.

**Which maintenance-related events are explicitly excluded from the extraordinary-circumstances defense under the Wallentin-Hermann ruling?**

Routine technical faults discovered in maintenance do not exempt the airline, including a broken part, a failed check, or a crew-rotation problem cascading from a technical fault.

**When did American Express stop reimbursing taxes and fees charged on award tickets?**

As of April 22, 2026, Amex stopped reimbursing taxes and fees charged on award tickets.

**What is the baggage delay window for international flights that separately triggers an automatic ancillary-fee refund?**

Baggage delay separately triggers automatic ancillary-fee refunds when checked baggage is delayed beyond the 15-to-30-hour international window.

## Quick answers

| What action did Airlines for America take in May 2025 regarding the U.S. automatic refund rule? | Airlines for America filed a 93-page request with the Department of Transportation asking to repeal the mandatory automatic refund requirement. |
| --- | --- |
| How does the European Regulation (EU261) Article 7 determine eligibility for fixed compensation? | Eligibility is triggered by an arrival delay of three hours or more measured at doors-open at the destination, based on fixed distance bands for short-haul, medium-haul, and long-haul flights. |
| What is the primary difference between the payout mechanisms of EU Regulation Article 7 and the US DOT Refund Rule? | The EU rule pays fixed compensation for time lost even if the passenger flies, while the DOT rule only provides restitution for the unused ticket portion and prepaid ancillaries without paying extra for delays that still arrive. |
| Under what conditions can an airline avoid paying compensation under EU Regulation Article 5(3)? | An airline can void payment for events genuinely beyond control and unavoidable even with all reasonable measures, such as weather closing operations, air-traffic control decisions, and security risks. |
| Does providing care or rebooking a passenger extinguish the airline's liability for Article 7 compensation? | No, the fixed payment survives even if the airline rebooks the passenger and they complete the trip, meaning care cannot be used to extinguish the Article 7 liability. |

Also worth reading: **EU261's €600 vs DOT: What a Cancelled Flight Actually Pays**: [EU261's €600 vs DOT: What](https://aiflightrefunds.com/blog/eu261s-600-vs-dot-what-a-cancelled-flight-actually-pays.php) · **EU261 2026: €250–€600 Tiers, 1,500km Rule & Filing Routes**: [EU261 2026: €250–€600 Tiers, 1,500km](https://aiflightrefunds.com/blog/eu261-2026-250600-tiers-1500km-rule-filing-routes.php) · **AirHelp vs. Direct EU261 Claims: The Real Cost of 35% Fees**: [AirHelp vs. Direct EU261 Claims:](https://aiflightrefunds.com/blog/airhelp-vs-direct-eu261-claims-the-real-cost-of-35-fees.php)

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