Licensing of Private Land Remote-Sensing Space Systems

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 960

[Docket No. 951031259-7103-02]

Licensing of Private Land Remote-Sensing Space Systems

AGENCY: National Oceanic and Atmospheric Administration, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Oceanic and Atmospheric Administration (NOAA)

proposes regulations revising its regime for the licensing of private

Earth remote-sensing space systems under Title II of the Land Remote

Sensing Policy Act of 1992, 15 U.S.C. 5601 et seq. (1992 Act). These

proposed regulations implement the licensing provisions of the 1992 Act

and the Presidential Policy announced March 10, 1994. They are intended

to facilitate the development of the U.S. commercial remote-sensing

industry and thus promote the collection and widespread availability of

Earth remote sensing data while preserving essential U.S. national

security, international obligations and foreign policy interests. A

fundamental principle is that restrictions imposed on a licensee must

appropriately balance promoting competitive capabilities of U.S.

commercial firms and the protection of national security, international

obligations and foreign policy. The proposed regulations also describe

when a system, though privately owned, has received sufficient

financial or other support from the U.S. Government that the operator

may have to comply with a nondiscriminatory data access policy that

applies to all Government systems. These regulations reflect that

policy.

DATES: Comments must be received by January 2, 1998.

ADDRESSES: Comments should be sent to, Charles Wooldridge, NOAA,

National Environmental Satellite, Data, and Information Service, 1315

East-West Highway, Room 3620, Silver Spring, MD 20910-3282.

FOR FURTHER INFORMATION CONTACT: Charles Wooldridge at (301) 713-2024,

ext. 107 or Kira Alvarez, NOAA, Office of General Counsel at (301) 713-

1217.

SUPPLEMENTARY INFORMATION: Tile II of the 1992 Act authorizes the

Secretary of Commerce (Secretary) to issue licenses for operation of

private remote sensing space systems. The authority to issue licenses

has been delegated to the Administrator of NOAA and redelegated to the

Assistant Administrator for Satellite and Information Services.

On July 10, 1987, NOAA published final regulations (1987

Regulations) implementing Title IV of the Land Remote Sensing Act of

1984 (the 1984 Act) setting forth the requirements for obtaining a

license. In 1988 the Radio Television News Directors Association

(RTNDA) filed a Petition for Rulemaking requesting NOAA to reopen these

regulations in light of the President's January 5, 1988 Decision

Directive encouraging commercial space development. On January 18,

1989, NOAA responded to this Petition, agreeing to reopen the

rulemaking and incorporate certain principles favorable to commercial

development that were consistent with the Directive. see 54 FR 1995.

Shortly thereafter, Congress began to review the 1984 Act and, on

October 28, 1992, enacted the 1992 Act which repealed and succeeded the

1984 Act. The 1992 Act made significant changes to the 1984 Act,

particularly with regard to the latter's requirement that all

unenhanced data must be provide on a nondiscriminatory basis. The 1992

Act also provided for judicial review of

certain licensing and enforcement actions.

On March 10, 1994, the President announced a Policy Decision (the

``President's Policy'') to ``support and enhance U.S. competitiveness

in the field of remote sensing space capabilities while at the same

time protecting U.S. interests in the national security and

international obligations.'' This policy adopted a number of principles

that promote an appropriate balance between these interests.

On December 4, 1995 a Notice of Inquiry and Request for Public

Comment was published in the Federal Register (60 FR 62054), wherein

NOAA sought public comment to determine the extent the 1987 Regulations

needed revision to conform to the President's Policy and the 1992 Act,

and, if so, which issues should be addressed. NOAA received seven sets

of comments (see 61 FR 24480). On May 15, 1996, NOAA published a Notice

of Public Hearing in the Federal Register (61 FR 24480) announcing a

public hearing to be held at the Department of Commerce on June 14,

1996. The main theme that emerged at the public hearing was the request

of commercial representatives for transparency and predictability in

the regulations.

The regulations proposed herein update the 1987 Regulations to

reflect these intervening events and information gathered through the

public comment process, as well as the experience gained in the

issuance of licenses over the last five years. When finalized, these

regulations will apply to all existing licenses, as well as to all

pending license applications (i.e. those applications which are

currently being reviewed and for which no license has yet been issued)

and will apply to all future applications to operate a private remote

sensing system. The intent of the proposed regulations is to promote

the development of the commercial remote sensing industry by keeping

Government oversight to the minimum necessary to ensure protection of

U.S. national security, international obligations and foreign policy

interests. In addition, it is the intent of these regulations to make

U.S. Government policies regarding remote sensing and established

timeliness, predictable and transparent to licensees and applicants. An

underlying premise is that helping the U.S. industry to lead this

emerging market supports the long term national security, international

obligation and foreign policy interests of the United States.

Major Revisions

1. National Security and Foreign Policy Considerations

The regulations incorporate the basic regulatory principle that any

restrictions on a licensee, including those required for national

security, international obligations and foreign policy purposes, should

be the least burdensome possible to achieve the stated objective

Sec. 960.10(a)). This was one of the two principles previously

recognized in the January 18, 1989, response to the RTNDA Petition for

Rulemaking and is reflected in the President's Policy.

Proposed Sec. 960.10(a) sets forth a presumption that, in the case

of systems whose operational capabilities are similar to those of

systems already licensed, national security, international obligations

and foreign policy concerns can be resolved through license conditions

similar to those established by the President's Policy and described in

Secs. 960.9 and 960.10 without the necessity of permanently barring any

area from sensing. For systems whose operational capabilities exceed

those of systems already licensed, the Government will make every

effort to resolve any national security, international obligation and

foreign policy concerns that may arise in review of license

applications with license conditions rather than by denying the

license.

Section 960.10(b) sets forth the basic license condition that has

been designed to preserve national security, international obligations

and foreign policy interests. This condition was established in the

first license issued after the 1992 Act, refined slightly in the

President's Policy, and is contained in all licenses issued since then.

This condition provides that the Secretary of Commerce may require the

licensee to stop imaging an area and/or stop distributing data of an

area after being informed by the Secretary of Defense or State, as

appropriate, that a period exists when national security, international

obligations or foreign policy interests may be compromised. It should

be noted that the consultation and decisionmaking must take place at

the Secretarial level, thus ensuring that invoking this provision will

be invoked only at the highest levels within the U.S. Government. The

decision will take into account the potential negative economic impact

of interrupting commercial operations.

In reaching determinations as to whether the unrestricted data

collection and distribution capabilities of a licensed commercial

remote sensing system would adversely affect the U.S. national

security, international obligations and/or foreign policies, the

Secretary of Defense or Secretary of State will exercise his or her

judgment in light of the existing or emerging international situation.

Of particular concern will be situations in which: (a) A condition of

crisis or war exists or is developing and this condition poses an

immediate and serious threat to U.S. or allied national security

objectives such as affecting the lives or resources of U.S. or allied

personnel; (b) a condition of crisis or serious impairment to U.S.

international obligations or foreign policy exists or is developing and

this condition poses an immediate serious and permanent threat to U.S.

or allied relations with one or more foreign countries; (c) an

adversary's ability to receive and exploit the data from the licensee's

system contributes to the threat U.S. or allied national security

objectives, concerning military planning and operations, or to

implement international obligations, taking into account the ability of

the adversary to receive and exploit similar data from other sources.

Subsection (c) also includes additional criteria that reflect the

principle that restrictions be the least burdensome possible to achieve

the stated objective: restrictions will be imposed on the smallest area

and during the shortest period of time possible; alternatives to the

complete suspension of operations such as delaying transmission of data

and/or restricting the field of view will be considered; and the

distribution of data will generally not be restricted if comparable

data is otherwise available from foreign systems with comparable

resolution and accessibility over which the U.S. has no jurisdiction or

control.

The regulations implementing this condition recognize the need for

close coordination between the U.S. Government and the licensee during

periods when concerns relating to national security, international

obligations and foreign policies have been raised.

Subsection (d) allows (but does not require) the inclusion in a

license of a related condition, also derived from the President's

Policy, that ensures that, during periods when imaging or data

distribution are restricted for national security, international

obligations or foreign policy purposes under subsection (c), on request

the licensee will provide the data exclusively to the U.S. Government

by means of government furnished rekeyable encryption on the downlink.

This condition makes commercial remote sensing assets available as

appropriate

to enhance U.S. Government national security capabilities. Subsection

(e) provides that technical modifications needed to meet this condition

may be required to be paid for by the requesting agency in accordance

with section 507(d) of the Act.

2. Changes in Data Policy

A major change made by the 1992 Act was to remove the 1984

requirement that all private operators must make their unenhanced data

available on a nondiscriminatory basis. The 1992 Act retains this

requirement of essentially Governmental systems, such as the Landsat

system and those systems that are substantially funded by the U.S.

Government, but allows the operator of a non-governmental system to

follow normal commercial practices unless U.S. interests dictate

otherwise. (section 201(e), 202(b)(3), and 501).

Section 960.11 of the regulations implements this change within the

Act's overall objective of making environmental data available to the

widest possible spectrum of users, particularly for scientific and

operational purposes in support of the public good. This section

addresses three categories of licensees. The first are those whose

development, fabrication, launch, or operations costs have been funded

entirely or in substantial part directly by the Government. As dictated

by the Act, these operators must make their unenhanced data available

on a nondiscriminatory basis (Sec. 960.11(a)). This requirement ensures

that the data are broadly accessible and is consistent with the basic

policy codified in the Paperwork Reduction Act, 44 U.S.C. 3506 et. seq.

and included in OMB Circular A-130, that data paid for by the taxpayer

is a public good to be made equally available to all members of the

public see 44 U.S.C. 3506(d).

The second category of licensees are those that are fully

commercial, i.e., not funded by the Government in whole or in part.

These operators will be allowed to follow their preferred commercial

data practices, subject to providing the unenhanced data to the

governments of those states sensed, subject to national security,

international obligations and foreign policy concerns, as discussed

below (Sec. 960.11(b)). These licensees will be encouraged to promote

access to their data on as widespread a basis as possible and it is

anticipated that, in most cases, there will be a commercial incentive

to reach a broad customer base. It is recognized that in some cases,

some of the data collected by such systems may not become generally

accessible. However, NOAA believes that overall this loss will be

outweighed by the substantially greater volume of data that will be

collected by a vigorous commercial industry. It should be noted that

limited purchases by the United States Government as a normal customer

of the licensee would not constitute funding or support for purposes of

this section.

The third category of licensees falls between the first two and

consists of those for whom the U.S. Government provides some support.

Here, the Government's interest is more significant, because of the

investment by the taxpayer and the possible precedential effect hat

permitting restricted access could have on future U.S. access to the

data from foreign international data exchange involving government

subsidized public-private ventures. The data policy applicable to these

licensees will be determined on a case-by-case basis, balancing the

effect on the licensee of limiting its commercial options against the

potential benefits of providing widespread access of the data for

scientific, educational or other non-commercial purposes supporting the

public good. In evaluating the potential for data loss, NOAA will

consider both the data to be gathered by the particular licensee as

well as the possible implications for future intergovernmental data

exchanges.

It is anticipated that the U.S. Government interest in making the

data available frequently can be addressed through terms and conditions

in the license that do not require full nondiscriminatory data access

policy. For example, it may be possible to accommodate such interests

by ensuring access for research, education, and other governmental

purposes, while protecting a licensee's commercial options.

3. The Sensed State Provision

When Congress removed the blanket nondiscriminatory data access

requirement, it was careful to ensure that access to the unenhanced

data would remain consistent with the basic international principle,

contained in the United Nations' Principles on Remote Sensing, that the

government of a sensed state should have timely access to all such data

concerning its own territory. Section 202(b)(2) of the 1992 Act

requires that all licenses include the condition that the licensee

shall make available to the government of any country, including the

United States, unenhanced data collected by the system concerning the

territory under the jurisdiction of such government on reasonable terms

and conditions as soon as such data are available; consistent with

national security, international obligations and foreign policy of the

U.S.

Section 960.9(c) of the proposed regulations incorporates this

requirement and discusses the terms and conditions that are

``reasonable'' in those cases where the data will not be made available

on a nondiscriminatory basis. Making the data available to different

classes of customers, e.g. researcher, commercial end user, and value-

added redistributor, at different prices is reasonable provided the

data is available to the sensed state on the most favorable terms

available to any member of the class appropriate to the intended use by

that state.

If a licensee intends to provide its unenhanced data on a

restricted or exclusive basis, it becomes more difficult to determine

what is ``reasonable'' vis-a-vis a sensed state. The price of these

data, if measured in terms of their value to a particular commercial

customer, may be prohibitive to a small government that simply wishes

to monitor its own natural resources or to use the data, for example,

for purposes of land use planning or to mitigate the effects of a

recent natural disaster. On the other hand, the same price may be

reasonable if the sensed state intends to use the data for competitive

purposes. The terms and conditions will have to be considered on a

case-by-case basis. In any event, the sensed state has the opportunity

to demonstrate that the terms result in an undue hardship

(Sec. 960.9(c)(3)(D)).

4. Procedural Changes

The existing regulations state that they are intended to provide

the ``minimum practicable procedures'' for licensing private operators

of remote sensing space systems. In order to promote the growth of the

U.S. remote sensing industry, U.S. Government review of license

applications and foreign agreements must be as efficient and

expeditious as possible. Congress recognized this need by establishing

certain statutory deadlines for U.S. Government administrative action.

The Government's remote sensing policy with regards to preserving

national security, international obligations and foreign affairs

interests should be clear and predictable. Predictability is critical

in terms of the conditions that may require restrictions on imaging

after a system is operational. The provisions of the regulations

describing these conditions are discussed under number 1 above and set

forth at Sec. 960.10.

The proposed regulations clearly state, and are intended to promote

adherence to, the time limits that Congress has established for these

reviews.

The specific process by which the various agencies of the U.S.

Government will interact in the review of a license and amendment

applications, significant or substantial foreign agreement, and

determinations concerning the restrictions and limitation on imaging

and data collection, will be established in a Memorandum of

Understanding (MOU) among the agencies. The MOU will specify that

disagreements among the agencies will be decided by the President. To

promote transparency and predictability of government action in these

procedures, we expect that the MOU will be publicly available. The MOU

will be finalized by the time of issuance of a final rule.

Section 960.6 of both the existing and proposed regulations require

a license applicant to supply the NOAA Administrator with sufficient

information about a proposed remote-sensing space system's orbit and

data collection characteristics to determine that a system will be

operated in a manner that preserves the national security and

international obligations of the United States.

Section 960.8(f) allows the applicant to request a hearing before

an Administrative Law Judge (ALJ) regarding any adverse action on a

license application. The documentation in the record will serve as the

basis for the ALJ's determination as to whether the Administrator's

action regarding any conditions imposed on the license, denial of the

license, or a decision that no action can be taken within the required

limit, was appropriate.

Section 960.12 sets forth regulations for the review of proposed

significant and substantial foreign agreements between licensees and

foreign nations or persons for which notification is required pursuant

to section 202(b)(6) of the Act and Sec. 960.9(g) of these regulations.

We would note that the Act does not expressly confer the right to

approve foreign agreements, but it is our interpretation that the

Secretary has sufficient authority under the statute to prevent a

licensee from entering into an agreement that violates the national

security, international obligation or foreign policy interests of the

United States. Accordingly, submission and approval of these will be a

condition of the license (960.9(c)).

To provide due process, the regulations treat negative advice to a

licensee concerning a proposed foreign agreement as an ``adverse

action'' under section 203(b) of the Act, which grants the right to a

hearing on the record for certain actions, e.g., denying or

conditioning a license. Finally, Sec. 960.12 contains a number of

implementing record keeping requirements similar to those for the

initial license review (see Sec. 960.12(b)-(d)).

5. Investors in Licensees

Section 960.14 is new. It is intended to encourage investment in

the space remote sensing industry while ensuring that those licensed to

operate these systems retain sufficient control to be able to preserve

U.S. national security, international obligations and foreign policies.

In essence, it requires a licensee to notify NOAA of significant

changes in ownership and to give the Government the opportunity to

review those changes that might result in a shift of control,

particularly to foreign persons or nations.

Section 960.14(a)(1) simply requires the licensee to notify NOAA

when a domestic investor's financial interest in the licensee reaches

ten percent. Certain basic information such as the identity of the

investor and the extent of the holdings must be provided within ten

days after the 10 percent threshold is reached.

Section 960.14(a)(2) recognizes that the potential for transfer of

control of the management and/or operations of a licensee is more

likely when a single domestic investor acquires a financial interest in

the licensee of 25 percent or more. If the licensee, notwithstanding

the acquisition of such interest, will retain control, it must document

this fact and include the information described in this section.This

documentation is to be filed within 10 days of the transaction.

Section 960.14(a)(3) requires an amendment where the financial

interest of a single domestic investor will reach or exceed 40 percent

of the licensee. In effect, it is presumed that an investment at this

level results in a transfer of control.

Section 960.14(b)(1) requires the licensee to notify NOAA when a

foreign investor's financial interest in the licensee reaches five

percent. Certain basic information such as the identity of the investor

and the extent of the holdings, and any updates to the technology

control plans, if necessary, must be provided within ten days after the

five percent threshold is reached.

Section 960.14(b)(2) recognizes that the potential for transfer of

control of the management and/or operations of a of a licensee is more

likely when a foreign investor holds a financial interest in the

licensee of 15 percent or more. If the licensee, notwithstanding such

acquisition, will retain control, it must document this fact and

include the information described in this section. Section 960.14(b)(3)

provides that this documentation must be filed 60 days prior to

acquisition together with the relevant investment agreement which is

considered a ``significant agreement'' under Sec. 960.12.

Section960.14(b)(4) requires an amendment to the license where the

financial interest of either a foreign investor or foreign investors as

a whole will exceed 40 percent of the licensee. In effect, it is

presumed that an investment at this level results in control. Since

control by foreign investors generally will not be approved, licensees

may obtain approval for an amendment of this nature only by rebutting

this presumption with clear documentation that it retains control over

its management and operations. In addition to other specified

information for an amendment, it must include a certification that no

foreign persons can influence the corporation's activities and that the

control of the Board of Directors is still exerted by the majority U.S.

shareholders. The licensee must also establish a technology control

plan that ensures that the company complies with relevant U.S. laws

such as export control laws.

Foreign investment that exceeds 49 percent of the licensee is

prohibited in Sec. 960.14(b)(5).

Section 960.14(c) provides that if through the acquisition of a

financial interest by any person(s) or nation(s), regardless of the

percentage of investment, or a through contractual or other

relationship, there will be a transfer of control of the licensee,

Sec. 960.13(d)(2) requires an amendment of the license. However, as

this section makes clear, control of these sensitive remote-sensing

systems to foreign investors generally raises national security,

international obligation or foreign policy concerns and an amendment

involving such a transfer of control is unlikely to be approved.

The procedures in this section applies only to U.S. operators that

are subject to U.S. jurisdiction or control. However, a foreign

operator over which the U.S. initially has no jurisdiction or control,

may decide to carry out its activities in the U.S. to the extent that

it becomes subject to U.S. jurisdiction and control under

Sec. 960.2(c). In such cases the provisions with respect to changes in

foreign ownership will be set forth in the license.

6. New Enforcement Provisions

Section 203(a) of the 1992 Act revised the administrative

authorities granted to the Secretary, primarily to provide grater

judicial oversight and more predictability for the licensees. Thus, the

Administrator now may seek an injunction in order to terminate, modify,

or suspend a license or to terminate licensed operations in the case of

violations of the Act, regulations, or license. Further, the

Administrator may obtain a warrant in order to seize records or objects

believed to be used in a violation.

Subpart C of the proposed regulations would implement these

changes. They also continue to set forth the procedures for imposing

any administrative civil penalty under section 203(b) of the Act. These

include provisions for the formal agency adjudication on the record to

which the licensee is entitled which are found in 15 CFR part 904.

7. Additional Changes

a. Definitions

Several new technical definitions have been added relating to the

operational capability of a remote sensing system. These include the

terms: ``ground sample distance,'' ``field of view,'' ``instantaneous

field of view,'' ``resolution,'' ``spatial resolution,'' and

``tasking.'' Experience in prior licensing exercises has shown that

these parameters help define the operational characteristics of the

system for the purpose of determining national security and foreign

policy concerns and the definitions are intended to establish these

informational requirements as precisely as possible.

In accordance with the President's policy, the regulations define

the term ``foreign agreement'' to establish those that are

``significant and substantial'' and, therefore, subject to the advance

notification requirement of sections 202(b)(6) of the Act and

implemented in Sec. 960.9(g) of the regulations. The definition focuses

on the two types of agreements that could have particular national

security or foreign policy implications: Those that give a foreign

party a degree of control over the operation of the system, e.g. the

ability to control the spacecraft, task the sensors, or exercise

managerial control over the system, including technology transfer; and

those that establish a particularly important role for a foreign party

in distributing the data from the system, either by operating a foreign

ground station or by acting as a major customer or distributor; and

those that involve foreign investment. If the agreement effectively

expands the capability of the system, for example by adding a ground

station that could collect data not anticipated by the license, the

process would require an amendment to the license (see

Sec. 960.13(e)(3)).

The proposed regulations would state that ordinary data sales

agreements might be considered a significant or substantial foreign

agreement. However, NOAA requests comment on this issue.

New definitions have also been added defining ``beneficial owner''

and ``voting interest,'' as part of the new foreign investment

agreement provisions.

Finally, the definition of ``unenhanced data'' has been modified

consistent with the 1992 Act, and the definition of ``value-added

activity'' has been deleted as no longer necessary.

b. Informational Requirements

The proposed regulations update the informational requirements of a

license application. As with the existing regulations, the intent is to

solicit only that information relevant to those limited U.S. interests

covered by the 1992 Act while ensuring that applications will be as

complete as possible. The information of primary importance is that

describing the orbit and data collection characteristics aspects of a

proposed system which are significant in terms of its national security

and foreign policy implications (Sec. 960.6(c). Additional relevant

information concerns the applicant's data distribution plans and the

extent of any U.S. government support of the system. This information

is needed to determine the appropriate data access policy

(Secs. 960.6(d) and (e)).

c. The Archive Provision

In accordance with section 502 of the Act Sec. 960.9(h) states that

licenses will include terms and conditions for making unenhanced data

available to U.S. Government agencies, including the Archive, for the

specific purpose of including it in the basic data set. The negotiation

to provide such data on reasonable terms and conditions will take into

account the commercial value of the data. This section also states that

before the licensee unenhanced data obtained under the license is

purged, the licensee shall offer such unenhanced data to the Archive,

at the cost of reproduction and transmission, which the Archive will

then distribute at the cost of fulfilling user requests. Because the

licensee will offer this unenhanced data at this minimum cost and the

Archive will distribute the data at the cost of fulfilling user

requests, it is presumed that the commercial value of the data is

negligible. No licensee can negotiate terms with a potential customer

or distributor that would prohibit or otherwise prevent the licensee

from meeting its obligation to make all data collected available to the

Archive.

d. Protecting Proprietary Information

Proposed Sec. 960.7 would require that the applicant for a license

submit two different versions of their application. One version would

be the proprietary version, with brackets around the information that

should be given confidential treatment; and the other would be the

public version, with the information inside the brackets taken out. The

prospective licensee must include a general justification for such

confidential treatment. This requirement reflects a balance between the

needs of the licensees to be assured that the sensitive information

which they submit will be treated confidentially, and the need to

enable the public to have access to these government records.

Request for Public Comment

NOAA is requesting public comment on the major revisions in the

proposed regulations, as described above. NOAA is particularly seeking

comment on the following: (1) The definition of ``Significant or

Substantial Foreign Agreement''; (2) the review of foreign investment

agreements; (3) the reporting of ``beneficial owners''; and (4) the

information requirements of the application process.

With regards to the definition of ``Significant or Substantial

Foreign Agreement'' as well as the review of such foreign agreements,

NOAA has proposed a regime for addressing issues of foreign ownership,

or control over U.S. licensed private remote sensing systems. As stated

in an earlier section, the intent is to set up a regime that ensures

that undue foreign control or influence over satellite operations does

not compromise national security or foreign policy goals while at the

same time promoting and permitting investment in these capital

intensive systems. By monitoring the investment closely and having

certain thresholds which raise the level of scrutiny, the intent is

that detailed review at certain thresholds will be able to prevent the

occurrence of any imperiling national security situations. We are

interested in hearing if our approach adequately achieves our

intentions, or, given our intent, it would be better to adopt a regime

similar to that found at 10 U.S.C. 2327 for defense procurements or 50

U.S.C. app. 2710, the Exon-Florio investment review procedures. Also of

concern is whether the requirement to provide information about

beneficial owners should be qualified to require that information only

need be provided about ``known'' beneficial owners. This would make the

NOAA regulatory requirement consistent with the Security and Exchange

Commission's requirement to provide information on ``known'' beneficial

owners.

Concerning information requirements of the application process, and

technical definitions found in these proposed regulations, NOAA is

considering placing these requirements in an appendix to the

regulations. This would make it easier to change the required contents

of an application, as only notice in the Federal Register need be

provided for changes. This would give the Administrator greater

flexibility in the face rapidly changing technology. NOAA has also

increased the information requested in the application to include

information about export licenses which the applicant holds or intends

to apply for. NOAA is seeking comment on whether this requirement is

duplicative of the existing export control regime.

Classificaiton

A. Regulatory Flexibility Act (5 U.S.C. 601 et seq.)

This proposed rule establishes a process intended to promote the

development of the industry and to minimize any adverse impact on any

entity, large or small, that may seek a license to operate a private

remote-sensing space system. Even though there has been a substantial

reduction in size and cost of Earth remote-sensing space projects,

costs of development and launch still involve extraordinary

capitalization. As such, small entities have yet to enter this field

and appear highly unlikely to do so.

Accordingly, the Assistant General Counsel for Legislation and

Regulation of the Department of Commerce has certified to the Chief

Counsel for Advocacy of the Small Business Administration that the

proposed rule, if adopted, would not have a significant economic impact

on a substantial number of small entities.

B. Paperwork Reduction Act of 1995 (35 U.S.C. 3500 et seq.)

This proposed rule contains collection-of-information requirements

subject to review and approval by OMB under the Paperwork Reduction Act

(PRA). The proposed rule revises collection of information requirements

that were previously approved by the Office of Management and Budget

under control number 0648-0174. A request to make these revisions has

been submitted to the Office of Management and Budget for approval.

Public reporting burden for these collections of information is

estimated to average 20 hours per license applications; 5 hours for

amendment submissions; 10 hours for foreign agreement notification; 2

hours for notification of disposition/orbital debris change; and 1 hour

for notification of deviation of orbit. This estimates include the time

for reviewing instructions, searching existing data sources, gathering

and maintaining the data needed, and completing and reviewing the

collection of information. Comments are invited on: (a) Whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

information will have practical utility; (b) the accuracy of the

agency's estimate of the burden of the proposed collection of

information; (c) ways to enhance the quality, utility, and clarity of

the information to be collected; and (d) ways to minimize the burden of

the collection of information on respondents, including, through the

use of automated collection techniques or other forms of information

technology. Send comments regarding this burden estimate or any other

aspect of this collection of information to Charles Woolbridge, NOAA,

National Environmental Satellite, Data, and Information Service, 1315

East West Highway, Room 3620, Silver Spring, MD 20910-3282 and to OMB

at the Office of Information and Regulatory Affairs, Office of

Management and Budget, Washington, DC 20503 (Attention: NOAA Desk

Officer). Notwithstanding any other provision of the law, no person is

required to respond to, nor shall any person be subject to penalty for

failure to comply with, a collection of information subject to the

requirements of the PRA unless that collection of information displays

a currently valid OMB control number.

C. National Environmental Policy Act (42 U.S.C. 4321 et seq.)

Publication of the proposed regulations does not constitute a major

federal action significantly affecting the quality of the human

environment. Therefore, an environmental impact statement is not

required.

List of Subjects in 15 CFR Part 960

Scientific equipment, Space transportation and exploration.

Dated: October 28, 1997.

Robert S. Winokur,

Assistant Administrator.

Accordingly, for the reasons set forth above, part 960 of Title 15

of the Code of Federal Regulations is proposed to be revised to read as

follows:

PART 960--LICENSING OF PRIVATE REMOTE-SENSING SYSTEMS

Subpart A--General

Sec.

960.1 Purpose.

960.2 Scope.

960.3 Definitions.

Subpart B--Application Process

960.4 Pre-application consultation.

960.5 Filing Information.

960.6 Information to be included with application.

960.7 Confidentiality of information.

960.8 Review procedures for license applications.

960.9 Conditions for operation.

960.10 National security, International Obligations and Foreign

Policy concerns.

960.11 Data policy for remote sensing space systems.

960.12 Notification of foreign agreements.

960.13 Amendments to licenses.

960.14 Investment agreements.

960.15 Certain rights not conferred by license.

Subpart C--Enforcement Procedures

960.16 General.

960.17 Prohibitions.

960.18 Sanctions.

960.19 Civil penalties.

960.20 Seizure.

Authority: 15 U.S.C. 5624.

Subpart A--General

Sec. 960.1 Purpose.

(a) These regulations set forth the procedural and informational

requirements for licensing and supervising the operation of a private

remote sensing space system under Title II of the Land Remote Sensing

Policy Act of 1992 (15 U.S.C. 5601 et seq.) (Pub. L. 102-555) (the

Act). The regulations are intended to facilitate development of the

commercial space remote-sensing industry in the United States and

broadly promote the beneficial use of remote sensing data while

ensuring compliance with basic requirements of the Act:

(1) Preserving the national security of the United States;

(2) Observing the international obligations and policies of the

United States;

(3) Ensuring that unenhanced data collected by licensed systems

concerning the territory of any country are made available to the

government of that country as soon as such data are

available and on reasonable terms and conditions;

(4) Ensuring that remotely sensed data from space are widely

available for research, particularly environmental and global change

research; and

(5) Maintaining a permanent comprehensive government archive of

global land remote sensing data for long-term monitoring and study of

the changing global environment and other archival purposes.

(b) In accordance with the Act and the President's Policy announced

on March 10, 1994 entitled, ``U.S. Policy on Foreign Access to Remote

Sensing Space Capabilities'', decisions regarding the issuance of

licenses and operational conditions (see Secs. 960.8, 960.9, 960.12,

960.13 and 960.14) will be made by the Secretary of Commerce, or his or

her designee, after consultation with the Secretaries of Defense and

State with respect to national security, international obligations, and

foreign policy.

(c) Obtaining a license to operate a satellite pursuant to these

regulations does not affect related licensing requirements of other

Federal agencies such as the Department of State, the Federal

Communications Commission, and the Department of Transportation.

Sec. 960.2 Scope.

(a) The Act and these regulations apply to any person subject to

the jurisdiction or control of the United States who operates or

proposes to operate a private remote-sensing system either directly or

through affiliate, or subsidiary. For the purposes of these regulations

a person is subject to the jurisdiction or control of the United States

if such person is:

(1) An individual who is a United States citizen; or

(2) A corporation, partnership, association, or other entity

organized or existing under the laws of any state, territory, or

possession of the United States.

(b) Other private space system operators may be subject to U.S.

jurisdiction and control, and their operations, therefore, subject to

the provisions of the Act and these regulations, if they have

substantial connections with the United States or deriving substantial

benefits from U.S. law that support their international remote-sensing

operations. Substantial connections include factors or a combination of

factors such as using a U.S. launch vehicle and/or platform, operating

a spacecraft command and/or data acquisition station in the U.S., and

processing the data at and/or marketing it from facilities within the

U.S. The following examples are intended to illustrate the application

of this paragraph, and should not be considered limitations thereon, or

as an indication of how other Federal agencies may interpret related

licensing requirements that they administer.

Example 1: A non-U.S. corporation launches an operational

remote-sensing space system, pursuant to a Department of

Transportation license, using a U.S. operated launch vehicle and/or

a platform launched from U.S. territory. The company operates no

spacecraft command ground station in the U.S. although it has

technicians and supervisors present in the U.S. to ensure

integration of the foreign-built satellite or space system with the

launch vehicle. The company acquires data directly from the space

system and processes and distributes it from facilities outside the

U.S., although it advertises the availability of data and/or

information in U.S. publications.

The company is not subject to U.S. jurisdiction or control and

requires no license for its remote-sensing activities.

Example 2: A company's operation is the same as in Example 1

except that it acquires, processes and distributes the data to U.S.

and foreign customers from one or more facilities within the U.S.

The company is subject to U.S. jurisdiction and control and

requires a license for the purposes of this Act and these

regulations.

Potential applicants with questions concerning the application

of these regulations to specific operations may consult with the

Administrator prior to filing an application. Such consultations

shall not be included in the record of any subsequently filed

application unless the applicant specifically so requests or the

Administrator so advises the applicant.

(c) These regulations are applicable to any action taken on or

after the effective date of these regulations by the Secretary with

respect to any existing, proposed or future license.

Sec. 960.3 Definitions.

For purposes of these regulations, the following terms have the

following meanings:

Act means the Land Remote Sensing Policy Act of 1992.

Administrator means the Administrator of NOAA or his or her

designee.

Affiliate means any person who is under common ownership or control

with the applicant or licensee.

Archive means the National Satellite Land Remote Sensing Data

Archive established by the Secretary of the Interior pursuant to the

archival responsibilities defined in sec. 502 of the Act.

Basic data set means those unenhanced data generated by the Landsat

system or by any remote sensing space system licensed under the Act

that have been selected by the Secretary of the Interior to be

maintained in the Archive, as described in section 502(c) of the Act.

Beneficial Owner means any person who, directly or indirectly,

through any contract, arrangement, understanding, relationship, or

otherwise has or shares: the right to exercise the voting power of any

security or financial interest in a licensee; and the power to dispose

of, or to direct the disposition of, any security or other financial

interest in a licensee. All securities or other financial interests of

the same class beneficially owned by a person, regardless of the form

which such beneficial ownership takes, shall be aggregated in

calculating the number of shares beneficially owned by such person. A

person shall be deemed to be the beneficial owner of a security or

other financial interest if that person has the right to acquire

beneficial ownership, as defined above, within sixty days including but

not limited to any right to acquire: through the exercise of any

option, warrant or right; through the conversion of a security;

pursuant to the power to revoke a trust, discretionary account, or

similar arrangement; or pursuant to the automatic termination of a

trust, discretionary account or similar arrangement.

Field of view means the solid angle through which an instrument is

sensitive to radiation.

Ground sample distance (GSD) means the distance of the terrain

between successive ground resolution cells (the area on the terrain

that is covered by the instantaneous field of view of a detector).

Instantaneous field of view (IFOV) means the narrow angle within

which incident energy is focused on the detector of the radiometer at a

particular instant in time; defined as the radio of detector size to

the focal length of the optical system, and often expressed in

microradians.

Measured values means the assigned numbers, shades or colors, which

represent, in a standardized system, an amount of electromagnetic

radiation sensed in a spectral band.

NOAA means the National Oceanic and Atmospheric Administration.

Party (to a licensing process of foreign agreement notification)

shall include the Secretary, the applicant, or the Secretary of

Defense, the Secretary of State and the head of any other Federal

organization, as appropriate, recognized by the Secretary of Commerce

as being involved in any proceedings between the U.S. Government and a

licensee/applicant.

Person means any individual (whether or not a citizen of the United

States), corporation, partnership, association, or other entity

organized or existing under the laws of any nation, or consortium of

any such entities acting together for the acquisition, holding, or

disposal of securities or other financial interests in the licensee.

``Person'' does not include any government or intergovernmental

organization or agency thereof.

President's Policy means the President's Policy entitled ``U.S.

Policy on Foreign Access to Remote Sensing Space Capabilities''

announced on March 10, 1994.

Remote sensing space system means any instrument or device or

combination thereof flown on any space-borne platform and any related

ground based facilities capable of actively or passively sensing the

Earth's surface (including bodies of water) from space by making use of

the properties of the electromagnetic waves emitted, reflected, or

diffracted by the sensed objects. For purposes of these regulations,

small, hand-held cameras shall not be considered remote sensing

systems.

Resolution means the ability of an entire remote sensing system,

including lens, antennae, display, exposure, processing, and other

factors, to render an interpretable image.

Secretary means the Secretary of Commerce.

Security means any note, stock, treasury stock, bond, debenture,

evidence of indebtedness, certificate of interest or participation in

any profit-sharing agreement, collateral trust certificate, pre-

organization certificate or subscription, transferable share,

investment contract, voting trust certificate, certificate of deposit

for a security, any put, call, straddle, option, or privilege on any

security, certificate of deposit, or group or index of securities

(including any interest therein or based on the value thereof), or any

put, call, straddle, option, or privilege entered into a national

securities exchange relating to foreign currency, or, in general, any

interest or instrument commonly as a ``security'', or any certificate

of interest or participation in, temporary or interim certificate for,

recipe for, guarantee of, or warrant or right to subscribe to or

purchase, any of the foregoing.

Significant or substantial foreign agreement means an agreement

with a foreign nation or person that provides for:

(1) Cooperation in the operation of the spacecraft;

(2) Tasking of the satellite sensors, modifying satellite tasking

commands, or revising the priority of tasking requests, or otherwise

providing an opportunity to exercise a significant level of managerial

control over the system's operation;

(3) Real-time direct access to the system's unenhanced data.

(4) Distributorship arrangements involving the receipt of high

volumes of the system's unenhanced data;

(5) An equity interest in the Licensee, if the equity interest in

the Licensee by a foreign nation and/or person equals or exceeds or

will equal or exceed 15 percent of total outstanding shares, or

entitles the foreign person to a position on the Licensee's Board of

Directors;

(6) The acquisition by any person(s) or nation(s) of any security

or other financial interest of the licensee, regardless of the

percentage acquired, that will result in a transfer of sufficient

voting power to control the management, policies, and/or operations of

the licensee; or any contractual or other relationship with a foreign

person or nation, wherein the foreign person or nation obtains the

ability to control the management, policies, technology transfer and/or

operations of the licensee.

(7) Significant or Substantial Foreign agreements may include

agreements for the sale of data, for the sale of value added products,

or for the establishment of marketing outlets in foreign countries,

pursuant to operations in the ordinary course of business as described

in the applicant's plan for sale and distribution contained in a

license application submitted pursuant to these regulations.

Spatial resolution means the ground area sensed by a radiometers's

IFOV calculated at nadir as the product of the IFOV and the satellite

altitude.

Spectral band means the interval in the electromagnetic spectrum

defined by two wavelengths, frequencies, or wave numbers.

Subsidiary means a person in which the applicant or licensee holds

the voting power necessary to control its management, policies, and/or

operations. If a subsidiary is the entity responsible for operation a

remote sensing space system, and the subsidiary is under the

jurisdiction or control of the United States, the subsidiary must

obtain the license.

Tasking means any action taken to command a satellite or it's

sensor to acquire data for direct transmission or storage on the

satellite's recording subsystem. Such action can be in the form of

commands sent to the satellite from a ground site for immediate

execution or for storage in the satellite's memory for execution at a

specified time or location within a given orbit.

Unenhanced data means Earth remote sensing signals or imagery

products that are unprocessed or subject only to data preprocessing.

Data preprocessing may include rectification of system and sensor

distortions in remote-sensing data received directly from the

satellite; registration of such data with respect to features of the

Earth; and calibrations of spectral response with respect to such data,

but does not include conclusions, manipulations, or calculations

derived from such data, or a combination of the remote-sensing data

with other data and excludes phase history data for synthetic aperture

radar systems or other space based radar systems.

Voting Power means the power to vote, or direct the voting of, any

security or other financial interest in a licensee, including the power

to vote on or for:

(1) The conduct of the operations or significant policies of the

licensee;

(2) The selection or appointment of directors, trustees, or

partners (or persons exercising similar functions of the licensee);

and/or

(3) The power to vote on the appointment of the principal executive

officers of the licensee.

Subpart B--Application Process

Sec. 960.4 Pre-application consultation.

Potential applicants are encouraged to contact the Administrator at

the earliest possible planning stages. Such consultation may reveal

design or data collection requirements that may be accommodated early

at low cost or avoid costly changes in design or data collection

characteristics. Consultation before a license application is submitted

may also prove useful in defining informational requirements and in

expediting review. Informal consultations held prior to the submission

of an application will not be considered part of the agency record of

an application. The agency record will be open upon the filing of the

application pursuant to Sec. 960.5.

Sec. 960.5 Filing Information.

(a) Who must file. A person desiring to operate a private remote

space sensing system and/or establish substantial connections with the

United States relating to the operation of a private remote space

sensing system shall file an application for such a license under these

regulations. The holder of an existing license seeking to modify the

terms of that license shall file an application for an amendment under

Sec. 960.13.

(b) Where to file. Applications and all related documents shall be

filed with the Assistant Administrator, National

Environmental Satellite, Data and Information Service (NESDIS), NOAA,

Department of Commerce, Washington, D.C. 20233.

(c) Form. No particular form is required but each application must

be in writing, must include all of the information specified in this

subpart, and must be signed by an authorized principal executive

officer.

(d) Number of copies. Three (3) copies of each application must be

submitted in a readily reproducible form. If proprietary treatment is

requested for any portion of the application, one (1) copy of the

public version required by Sec. 960.7(b) must also be submitted in a

readily reproducible form.

Sec. 960.6 Information to be included in the application.

The following information shall be filed by the applicant and

revised as necessary:

(a) The name, mailing address, telephone number and citizenship of:

The applicant and any affiliates or subsidiaries; the chief executive

officer of the applicant and each director, if the applicant is a

corporation, or each general partner, if the applicant is a

partnership; all executive personnel or senior management; any

directors, partners, executive personnel or senior management who hold

positions with or serve as consultants for any foreign nation or

person; each domestic beneficial owner of an interest equal to or

greater than 10 percent in the applicant; each foreign owner of an

interest equal to or greater than 5 percent in the applicant; each

foreign lender and amount of debt where foreign indebtedness exceeds 25

percent of an applicants total indebtedness; and a person upon whom

service of all documents may be made.

(b) A copy of the charter or other authorizing instrument certified

by the jurisdiction in which the applicant is incorporated or organized

and authorized to do business.

(c) Orbital and data collection characteristics regarding the

applicant's proposed remote sensing space system in sufficient detail

to enable the secretary to determine whether the proposal meets

requirements of the Act and the President's Policy. These

characteristics shall include:

(1) The date of the intended commencement of operations and the

expected duration of the operations;

(2) The number and type of satellites and sensors proposed;

(3) The range of orbits and altitudes proposed, orbital

characteristics such as inclination angle, equator crossing time, and

those parameters which affect swath width;

(4) The range of ground sample distance, spatial resolution, field

of view, and instantaneous field of view proposed;

(5) The specific spectral bands and/or radar characteristics that

are proposed;

(6) The data collection capabilities proposed including on board

storage capacity, off-nadir viewing, scene revisit time, tasking

procedures, and scheduling plans;

(7) The command (uplink and downlink) and mission data (downlink)

transmission frequencies and system transmission (uplink and downlink)

footprint;

(8) The methods applicant will use to ensure that integrity of its

operations during a national security crisis, including plans for:

positive control of the spacecraft and relevant ground stations; denial

of unauthorized access to data transmissions to or from the satellite;

and restriction of collection and/or distribution of unenhanced data

from specific areas at the request of the U.S. Government. If such

plans include encryption, encryption devices used will require U.S.

Government approval.

(9) A description of an significant or substantial agreements

between the applicant, its affiliates and subsidiaries, with foreign

nation or person, including copies if available;

(10) The proposed concept of operations for the system; and

(11) If the applicant wishes, information concerning the extent to

which data comparable to those generated by the applicant's system

could be acquired or made available from foreign systems which are not

subject to these regulations.

(d) The applicant's proposed technology control plan, if the

concept of operations includes any international component which

requires an export license. Such plan should ensure that the applicant:

(1) Maintain policies and procedures to safeguard the export of

controlled information that is entrusted to it; and

(2) Complies with U.S. export control laws and regulations, and

does not take actions adverse to the conditions of the license; and

(3) Protects the operational control of the licensed system from

foreign influence and any technology transfer that would impinge on

national security, international obligations and foreign policy; and

(4) Informs the Administrator of all export licenses which the

applicant holds or intends to apply for.

(e) The applicant's plans for providing access to or distributing

the unenhanced data generated by the system including:

(1) A description of the plan for the sale and distribution of such

data;

(2) The method for making the data available to governments whose

territories have been sensed;

(3) A description of the place for making data available to the

Archive inclusion in the basic data set; and

(4) Opportunities for the data to be made available for long term

monitoring, protection, and study of the changing global environment

and study of the changing global environment.

(f) If the applicant is proposing to follow a commercial data

distribution and pricing policy as provided for by Sec. 960.11(b) or

(c), the application shall include the following additional financial

information:

(1) The extent of the private investment in the system;

(2) The extent of any direct funding or other direct assistance

which the applicant or its affiliates or subsidiaries have received or

anticipate receiving from any agency of the U.S. Government for the

development, fabrication, launch, or operation of the system including

direct financial support, loan guarantees, or the use of U.S.

Government equipment or services;

(3) Any existing or anticipated contract(s) between the applicant,

affiliate, or subsidiary and U.S. Government agencies for the purchase

of data, information, or services from the proposed system;

(4) Any other relationship between the applicant, affiliate, or

subsidiary and the U.S. Government which has supported the development,

fabrication, launch, or operation of the system; and

(5) Any plans to provide preferred or exclusive access to the

unenhanced data to any particular user or class of users.

(g) The plan for post-mission disposition of any remote-sensing

satellites owned or operated by the applicant to allow a determination

that the plan minimizes orbital debris and does not endanger public

safety. If the satellite disposition involves an uncontrolled re-entry

the applicant must provide an analysis of the total debris casualty

area of the system's components and structure surviving re-entry and

assure that the system design minimizes the threat to the public from

such re-entry.

(h) If information supplied in an application becomes materially

inaccurate or incomplete prior to issuance of the license, the operator

must promptly file the new or corrected information with the

Administrator. If new or revised information is filed

during the application process, the Administrator shall promptly

determine whether the deadline imposed by section 201(c) of the Act

must be extended to allow adequate review of the revised application

and, if so, for how long.

Sec. 960.7 Confidentiality of information.

(a) Proprietary information. The Administrator will treat business

or trade secrets or commercial or financial information, the release of

which to the public would cause substantial harm to the competitive

position of the submitter, as proprietary information, if that

information is so designated by the submitter.

(1) Any person who submits information to the Administrator in

connection with any requirements imposed by these regulations may

request that the Administrator consider that information, or any

specified part, be treated as proprietary.

(2) The submitter shall identify proprietary information on each

page by placing brackets around the proprietary information and clearly

stating at the top of each page containing such information

``Proprietary Treatment Requested.''

(3) The submitter shall provide a general explanation as to why

proprietary treatment is being requested.

(b) Public summary. Prior to issuance of a license, any person

submitting information for which proprietary treatment is requested,

shall also provide to the Administrator a public version of the

document. This public summary shall be available for public review at a

location designated by the Administrator. The public summary shall

include:

(1) An adequate public summary of all proprietary information; and

(2) A statement itemizing those portions of the proprietary

information which cannot be summarized adequately and all arguments

supporting that conclusion for each portion.

(c) Status during consideration of request. While considering

whether to grant a request for proprietary treatment, the Administrator

will not disclose or make public the information. The Administrator

normally will decide not later than 14 days after the Secretary

receives the request. The Administrator will give persons whose request

for proprietary treatment of their information has been denied seven

(7) working days notice before the information is disclosed.

(d) Treatment of proprietary information. Unauthorized disclosure

of any proprietary information marked in accordance with this section

is subject to the criminal penalties set forth in 18 U.S.C. 1905. NOAA

shall provide marked information only to those interested agencies

which require the information for review purposes and shall ensure that

the copies provided to these agencies contain all markings provided.

(e) Requests for disclosure. (1) Requests for public disclosure of

information submitted, reported, or collected pursuant to this part

shall be in accordance with 15 CFR 903.1 (which directs the reader to

15 CFR part 4).

(2) Upon receipt of a request for disclosure of information for

which proprietary treatment has been requested, NOAA will immediately

notify the applicant or licensee who submitted the information and

inquire whether the applicant or licensee continues to request

proprietary treatment.

(3)(i) If the applicant or licensee waives or withdraws a request

for proprietary treatment in full or in part, the person shall deliver

to NOAA a written statement to that effect. If the person confirms the

request for proprietary treatment, such person is strongly encouraged

to deliver to NOAA a written statement in sufficient time for NOAA to

fully consider it in making its formal determination (generally, not

later than the close of business on the seventh working day after being

notified under paragraph (e)(3) of this section). Such statement shall

provide an explanation as to why each piece of information subject to

the request is entitled to proprietary treatment under this section.

The explanation should describe:

(A) The commercial or financial nature of the information;

(B) The nature and extent of competitive advantage enjoyed as a

result of possession of the information;

(C) The nature and extent of the competitive harm that would result

from public disclosure of the information;

(D) The extent to which the information has been disseminated to

employees and contractors of the person submitting the information;

(E) The extent to which persons other than the person submitting

the information possess, or have access to, the information; and

(F) The nature of the measures that have been and are being taken

to protect the information from disclosure; and

(G) Present any other arguments against disclosure of information.

(ii) Failure to respond to the agency notification in a written

statement will be deemed as a waiver of confidential treatment.

Sec. 960.8 Review procedures for license applications.

(a)(1) Within twenty-one (21) days after the receipt of an

application, the Administrator, shall notify the applicant, in writing

whether the application omits any of the information required by

Sec. 960.6.

(2) For any systems whose operational capabilities are similar to

those of previously licensed systems, an application will be considered

to be complete on the date of receipt if all information required in

Sec. 960.6 has been provided. For any systems whose operational

capabilities exceed those of previously licensed systems, the

Administrator shall determine the additional information necessary to

complete the application. The Administrator shall notify the applicant

of the need for this information and specify the period of time in

which to provide it. The 120 day review period prescribed in section

201(c) of the Act will commence upon receipt of the information

requested by the Administrator.

(b) The Administrator shall review any completed application and

make a determination thereon, in accordance with the Act and

Sec. 960.1(b) within 120 days of the receipt of such completed

application. If final action has not occurred within such time, the

Administrator shall inform the applicant of any pending issues and of

actions required to resolve them.

(c) Before issuing a licensee, the Administrator shall find, in

writing, that the applicant will comply subject to penalties prescribed

by law with any national security concerns, international obligations,

and foreign policies of the United States and with all other

requirements of the Act and these regulations.

(d)(1) If the Administrator denies the license or includes

additional conditions in the license other than those set forth in

Secs. 960.9 and 960.10, the Administrator shall notify the applicant in

writing together with a concise statement, of the facts in the record

which the Administrator has determined support the action. Such notice

shall inform the applicant that, within twenty-one (21) days of the

date the notice was mailed, the applicant may request a hearing on the

record on the Administrator's decision by serving a written request on

the Administrator at the address specified in the Notice.

(2) The applicant shall be entitled at any time during business

hours to inspect and copy the entire record, in

accordance with applicable law (e.g. 5 U.S.C. 552b, the Freedom of

Information Act), upon which the decision was made.

(3) In the interest of compiling an accurate record of the

decisionmaking for later possible review, oral communications on

matters affecting the substance of a pending receives such a

communication, the Administrator shall include in the record a summary

of the communication and the circumstances surrounding its receipt.

(e)(1) The hearing requested under paragraph (d)(1) of this section

may be granted unless, in accordance with 5 U.S.C. 554(a)(4), the

hearing would involve the conduct of a military or foreign affairs

function, i.e. determinations concerning license conditions necessary

to meet national security concerns, international obligations and

foreign policy concerns are not subject to review. A determination to

deny a hearing on this basis shall constitute final agency action.

(2) Any hearing shall be closed to the public as necessary to

protect classified information.

(3) A hearing under this section shall be based solely on the

record developed in accordance with Sec. 960.6 and this section.

(4) The hearing shall be held in accordance with the procedures set

forth at 15 CFR part 904, subpart C, except to the extent that these

sections allow the introduction of testimony or other evidence not

contained in the administrative record upon which the decision was made

(see e.g. Secs. 904.204(d) and (e); 904.240-242; and 904.252).

(f) The Administrator shall terminate the license application

process if:

(1) The application is withdrawn before the decision approving or

denying it is issued; or

(2) the applicant, after receiving a request for additional

information pursuant to paragraph (c) of this section, does not provide

such information within the time stated in the notice.

Sec. 960.9 Conditions for operation.

(a) Each license issued for the operation of a remote sensing space

system shall specify that the licensee shall comply with all the

requirements of the Act and these regulations, and shall set forth the

conditions necessary to ensure compliance.

(b) A licensee shall operate its system in a manner that preserves

the national security and observes the international obligations and

the foreign policies of the United States. The basic license conditions

to ensure compliance with these requirements are set forth in

Sec. 960.10 and conditions consistent with this section will be

incorporated in each license. Any additional conditions necessary to

ensure compliance with these requirements will be incorporated into

that license in accordance with Sec. 960.8(d).

(c)(1) A licensee shall make available to the government of any

country (including the United States) unenhanced data collected by its

system concerning the territory under the jurisdiction of such

government as soon as such data are available and on reasonable terms

and conditions. However, no sensed data shall be provided to the sensed

state if such release is contrary to U.S. national security,

international obligations or foreign policy concerns, e.g. where the

sensed state is deemed to be a state sponsor of terrorism or a country

subject to U.S. or international arms embargoes.

(2) To comply with this subsection, a licensee must make its

unenhanced data available on request to the affected government as soon

as the licensee is able to distribute them commercially or as soon as

the licensee has processed them into a format that the licensee uses

for its own purposes, whichever occurs sooner.

(3) For purposes of this subsection, terms and conditions are

reasonable if the licensee:

(i) Follows a nondiscriminatory data access policy that complies

with section 501 of the Act and Sec. 960.11 of this part;

(ii) Makes the unenhanced data available to all users on a regular

commercial basis and does not establish terms and conditions which

favor any user, or any class or users over the affected government in

terms of delivery, format pricing, or technical considerations; or

(iii) Establishes separate, reasonable terms and conditions for the

affected government if the licensee makes some or all of the unenhanced

data available only to particular users. In establishing these

reasonable terms and conditions the licensee shall take into account

the intended use of the data by the affected government; and

(iv) Has provided affected governments an opportunity to

demonstrate that the above terms and conditions present an undue

hardship in acquiring the unenhanced data.

(4) Issues relating to appropriate notification of affected

governments including issues concerning disputed territories and the

methods for ensuring availability, international obligations and

foreign policy will be referred to the Department of State.

(5) Issues relating to national security will be referred to the

Department of Defense.

(d) A licensee shall make available on a nondiscriminatory basis in

accordance with section 501 of the Act and Sec. 960.11 of this part any

unenhanced data designated by the Administrator in the license in

accordance with section 201(e) of the Act and Sec. 960.11.

(e) A licensee shall dispose of any space platforms owned or

operated by the licensee upon termination of operations under the

license in a manner satisfactory to the President. The licensee shall

obtain approval from the Administrator of all plans and procedures for

the disposition of such platforms, e.g. uncontrolled re-entry, burn on

re-entry or controlled de-orbit, providing sufficient notification to

allow determination that the proposed procedures will minimize orbital

debris and not jeopardize safety.

(f) A licensee shall inform the Administrator immediately of any

deviation or proposed deviation from the approved operational

characteristics of the system furnished pursuant to Sec. 960.6 or

Sec. 960.13. Such notification is required sufficiently prior to the

deviation so as to enable government approval of such deviation if

circumstances permit or, if advance notice is not possible because of

an emergency posing an imminent and substantial threat of harm to human

life, property, the environment or the remote sensing space system

itself, the licensee shall notify the Administrator of the deviation as

soon as circumstances permit.

(g) A licensee shall notify the Administrator, for review under

Sec. 960.12, or its intent to enter into any significant or substantial

foreign agreement. The proposed agreement may not be implemented by the

licensee until the licensee has been advised by the Administrator that

the document's provisions are acceptable or acceptable with conditions.

(h) A licensee shall make available unenhanced data requested by

the Archive for the basic data set on reasonable terms as agreed by the

licensee and the Archive. A licensee shall make available to the

Administrator for review upon request the record of unenhanced data

obtained pursuant to the license. Before any unenhanced data so

obtained is purged from its holdings, or the holdings of its

distributors, or customers that may have rights to distribute such

data, the licensee shall make such data available to the Archive at the

cost of reproduction and transmission with no

further restrictions on release of the data to the public.

(i) If the space system will utilize a U.S. Government platform,

the licensee will reach an agreement with the appropriate agency to

reimburse the Government for all related costs and to ensure that use

of the platform will not interfere with the Government's mission.

Sec. 960.10 National security, international obligations and foreign

policy concerns.

(a) For any system whose operational capabilities are similar to

those of previously licensed systems, it is presumed that any concerns

relating to national security, international obligations, and foreign

policies can be resolved through the imposition of similar license

conditions. For any system whose operational capabilities exceed those

of previously licensed systems, the Administrator shall make every

effort to resolve these concerns through license conditions and any

additional ones as necessary, but may deny the issuance of a license if

necessary to avoid compromising these concerns.

(b) The conditions in licenses shall include:

(1) The licensee shall maintain positive control of the spacecraft

at all times and shall include safeguards to ensure the integrity of

spacecraft operations. The Licensee shall also maintain and make

available to the U.S. Government, upon request, a record of all

satellite tasking operations for the previous year, and allow the

Administrator to inspect such records at all reasonable times.

(2) During periods when national security or international

obligations and/or foreign policies may be compromised, as defined by

the Secretary of Defense or the Secretary of State, respectively, the

Secretary may, after consultation with the appropriate agency(ies),

require a Licensee to limit data collection and/or distribution by the

system to the extent necessitated by the given situation. Decisions to

impose such limits only will be made by the Secretary of Commerce in

consultation with the Secretary of Defense or the Secretary of State,

as appropriate.

(3) During those periods when, and for those geographic areas that,

the Secretary will require the Licensee to limit distribution under

paragraph (b)(2) of this section the licensee shall, on request, make

the unenhanced data thus limited available exclusively to the U.S.

Government by means of government furnished rekeyable encryption on the

down-link. To make this possible, the conditions in the license shall

also require the licensee to use only encryption devices approved by

the U.S. Government and to use a data down-link format that allows the

U.S. Government access and use of these data during such periods.

(c) In determining the extent of required controls on the

collection or distribution of imagery, the Government will give full

consideration to:

(1) Making limitations imposed applicable to the smallest

geographic area feasible and for the briefest period of time necessary

for the full achievement of the intended objective.

(2) Alternative actions such as delaying the transmission or

distribution of data, restricting the field of view of the system,

encryption of the data if this is possible, or other means to control

access to the data so as to justify the overall impact on commercial

operations.

(d) In accordance with section 507(d) of the Act, if the conditions

described in paragraph (b)(3) of this section or any other license

conditions result in technical modifications being imposed on a

licensee on the basis of national security concerns and the

Administrator, in consultation with the appropriate federal agencies,

determines that additional costs will be incurred by the licensee, or

that past development costs (including the cost of capital) will not be

recovered by the licensee, the agency or agencies requesting such

technical modifications may be required to reimburse the licensee for

such additional or development costs, but not for anticipated profits.

Reimbursements may cover costs associated with required changes in

system performance, but not costs ordinarily associated with doing

business abroad. The costs and terms associated with meeting this

condition will be negotiated directly between the Licensee and the

agency or agencies requesting the technical modifications in accordance

with section 507(d) of the Act. In no event shall licensees be entitled

to reimbursements for license conditions imposed on the basis of

international obligations and foreign policy considerations.

Sec. 960.11 Data policy for remote sensing space systems.

(a) In accordance with section 501 of the Act, if the U.S.

Government has or will directly fund all or a substantial part of the

development, fabrication, launch, or operation costs of a licensed

system, the Administrator shall state in the license that all of the

unenhanced data from the system shall be made available on a

nondiscriminatory basis.

(b) If the U.S. Government has not funded and will not fund, either

directly or indirectly,any of the development, fabrication, launch, or

operations costs of a licensed system, the Administrator shall make no

designation in the license and the licensee may provide access to its

unenhanced data in accordance with normal commercial policies, subject

to the requirement for providing data to the government of any sensed

state in Sec. 960.9(c) and subject to implementation of the licensee's

plan contained in its application to provide widespread access to its

unenhanced data for non-commercial scientific and educational purposes.

(c) If the U.S. Government has funded some of the development,

fabrication, launch, or operations costs of a licensed system (either

directly or indirectly), the Administrator, in consultation with other

appropriate U.S. agencies, shall determine whether the interest of the

United States in promoting widespread availability of remote-sensing

data requires that some or all of the unenhanced data from the system

be made available on a nondiscriminatory basis in accordance with

section 501 of the Act and shall designate in the license any data

subject to this requirement. In making this determination, the

Administrator shall consider:

(1) The extent and proportion of private and federal funding of the

system;

(2) The extent of the governmental versus the commercial market for

the unenhanced data;

(3) The effect of a nondiscriminatory data access designation on

the applicant's commercial activity;

(4) The extent to which the applicant's proposed commercial data

policies would encourage foreign operators to limit access,

particularly for research and public benefit purposes; and

(5) The extent to which the U.S. interest in promoting widespread

data availability can be satisfied through license conditions that

ensure access to the data for research and public benefit purposes

without requiring full nondiscriminatory access.

(d) The data policy established pursuant to this section shall be

consistent with any contract or other agreement entered into between a

U.S. government agency and the licensee.

Sec. 960.12 Notification of Foreign Agreements

(a) Upon notification by a licensee, pursuant to Sec. 960.9(g), the

Administrator shall initiate review of the proposed significant or

substantial

agreement in light of the national security, international obligations

and foreign policy concerns of the U.S. Government.

(b)(1) If the Administrator determines, pursuant to the Act and

Sec. 960.1(b), that a proposed agreement will impair his or her ability

to enforce the terms or conditions of the license, the Administrator

shall identify the terms and conditions of the license and specify how

the agreement impairs enforcement.

(2) If the Administrator determines, under paragraph (d)(1) of this

section that a proposed agreement will compromise a specific national

security interest, international obligation, or foreign policy of the

United States, the Administrator shall provide the Licensee with an

unclassified explanation of the U.S. interest that is at risk, if such

is possible without jeopardizing the interest at risk. Such notice

shall inform the licensee that, within twenty-one (21) days from the

date the notice was mailed, the licensee may provide an alternative

that will not jeopardize the U.S. interest that is at risk or request a

hearing or, within seven (7) days of such date, may request an

expedited hearing.

(e)(1) The Administrator shall grant the hearing requested under

paragraph (d) of this section unless, in accordance with 5 U.S.C

554(a)(4), the hearing would involve the conduct of a military or

foreign affairs function, i.e. determinations of the concerning license

conditions necessary to meet national security concerns, international

obligations and foreign policy concerns are not subject to review. A

determination to deny a hearing on this basis shall constitute final

agency action. Any hearing shall be closed as necessary to protect

classified information. The hearing shall be based solely on the record

developed in accordance with this section and shall be for the purpose

of determining whether a preponderance of the evidence in that record

supports the objection raised to the proposed agreement.

(2) The applicant shall be entitled at any time during business

hours to inspect and copy the entire record, in accordance with

applicable law, upon which the decision was made.

(3) In the interest of compiling an accurate record of the

decisionmaking for later possible review, oral communications on

matters affecting the substance of a pending receives such a

communication, the Administrator shall include in the record a summary

of the communication and the circumstances surrounding its receipt.

(f)(1) A hearing requested under paragraph (d) of this section

shall be held in accordance with the procedures set forth as 15 CFR

part 904, subpart C, except insofar as those procedures provide for the

introduction of testimony or other evidence not contained in the

administrative record upon which the decision was made (see e.g.

Secs. 904.204 (d) and (e); 904.240-242; and 904.251-252).

(2) The Licensee shall be entitled to an expedited hearing as

provided for in 15 CFR 904.209 if the request is filed and all other

parties are served within seven (7) days of the date the

Administrator's notice under paragraph (d) of this section, was mailed,

specifically sets forth the Licensee's objections to the determinations

contained in the notice, and demonstrates that delaying the proposed

agreement during the time necessary to complete the normal hearing

process will jeopardize that agreement. Where an expedited hearing is

granted, the procedures of subpart C of 15 CFR part 904 shall be

modified to accommodate the following schedule:

(i) The hearing shall commence within 5 days after the filing of

the request with the Office of the Administrative Law Judge (ALJ)

unless the ALJ postpones the date of the hearing or grants continuation

of the hearing in the interest of justice or the parties agree that it

shall commence at a later time.

(ii) The ALJ shall make provision for daily transcripts. Hearing

shall be stenographically reported, transcribed, and made available to

the public as required by statute.

(iii) Within 5 days of the conclusion of the hearing, the parties

shall propose findings and conclusions to the ALJ accompanied by a

supporting brief.

(iv) Within 10 days after receipt of such brief, the ALJ shall

issue his or her findings and conclusions and a statement of the

reasons on which they are based. The ALJ's decision shall become final

in 10 days unless a party files suit in the United States District

Court contesting the decision as not based upon substantial evidence in

the record considered as a whole.

(v) Extensions of procedural dates shall be granted only when

required in the interest of justice, unless the parties otherwise

agree.

(g) Notification of any agreement that provides for an on-going or

a continuous relationship serves as notification of specific

transactions carried out within the scope of that agreement.

(h) A Licensee seeking to enter a foreign agreement that would

require the modification of the terms of an existing license shall

submit a license amendment as provided in Sec. 960.14 and the proposed

foreign agreement shall be considered in the context of the amendment

review process.

Sec. 960.13 Amendments to licenses.

(a) The licensee shall notify the Administrator when the

information supporting a license has become inaccurate and shall file

all necessary amendment applications in a timely manner. Notifications

shall contain all relevant new information and shall be filed at the

same address identified in Sec. 960.5(a). Amendment applications shall

be filed in accordance with the procedures specified in Secs. 960.5 and

960.6 for original license applications.

(b) Pursuant to the Act and Sec. 960.1(b), the Administrator shall

determine whether the amendment is permissible under the Act and

Sec. 960.9.

(c) If the Administrator determines that the notification omits

information required for an amendment application, the Administrator

shall notify the licensee of the items omitted.

(d) A licensee may not take any of the following actions until it

has been granted an amendment to the license:

(1) Assign the license;

(2) Transfer sufficient voting power to control the management,

policies and/or operations of the licensee or an operating subsidiary

to any person or to foreign nations or persons collectively;

(3) Incur any change in citizenship of the chairman of the board,

president, or other chief executive officer; or

(4) Deviate from the orbital characteristics, performance

specifications, data collection and exploitation capabilities, and any

other operational characteristic identified under Sec. 960.6(c), except

to the extent necessitated by an emergency posing an imminent and

substantial threat of harm to human life, property, the environment or

the remote sensing space system itself. In such emergency cases, the

licensee shall return to previously approved operations as soon as

circumstances permit. Any request to depart from approved orbital and

data collection characteristics of the system for an extended period

shall be in the form of a timely request to amend the license.

Sec. 960.14 Investment agreements.

(a)(1) Domestic investment agreements. If the acquisition of any

security or other financial interest in a licensee results in any

domestic person becoming the beneficial owner of 10 percent or more of

such securities or class of such securities, or of any other financial

interest in the licensee, the

acquisition constitutes a material change in the information supporting

the license and requires notification under Sec. 960.13. The licensee

shall file this notification within ten days of the acquisition and

shall include:

(i) The name of the acquirer;

(ii) The date of acquisition;

(iii) The number of shares of securities or the extent of any other

financial interest in the licensee owned; and

(iv) Such other information as NOAA may specify.

(2) If the acquisition of any security or other financial interest

in a licensee results in any domestic person becoming the beneficial

owner of 25 percent or more of such class of securities, or any other

financial interest of the licensee, the licensee shall provide

assurance that such acquisition will not result in a transfer of

sufficient voting power to control its management, policies, and/or

operations. The licensee shall file a statement within 10 days of such

acquisition setting forth the basis for its conclusion that no such

transfer of voting power will occur and include the following

information in addition to that required by paragraph (a)(1) of this

section:

(i) The identity and residence of the beneficial owner and of all

other persons by whom or on whose behalf the purchases are to be

effected;

(ii) The number of shares of such securities or the extent of any

other financial interest in the licensee which are beneficially owned,

and the number of shares or other financial interests which there is a

right to acquire, directly or indirectly, by

(A) Such person, and

(B) By each affiliate of such person, giving the background,

identity, and residence of each such associate;

(iii) Information as to any contracts, arrangements, or

understandings with any person with respect to any securities of or

other financial interests in the licensee, including but not limited to

transfer of any of the securities, joint ventures, loan or option

arrangements, guaranties of loans, guaranties against loss or

guaranties of profits, division of losses or profits, or the giving or

withholding of proxies, naming the persons with whom such contracts,

arrangements, or understandings have been entered into, and giving the

details thereof;

(iv) The number of shares of the securities and the particular

class of securities, or the extent of the other financial interests in

the licensee, which are retained by existing beneficial owners; and

(v) Such additional information, as NOAA may prescribe as necessary

or appropriate to protect the national security interests or

international obligations of the United States.

(3) Before any domestic person becomes the beneficial owner of 40

percent or more of any securities, any class of securities, or any

other financial interest of the licensee, the licensee must file an

amendment application in accordance with Sec. 960.13 at least 90 days

prior to acquisition.

(b)(1) Foreign investment agreements. If the acquisition of any

security or other financial interest in a licensee results in any

foreign person or nation becoming the beneficial owner of 5 percent or

more of such securities or class of such securities, or of any other

financial interest in the licensee, the acquisition constitutes a

material change in the information supporting the license and requires

notification under Sec. 960.13 unless the licensee has provided notice

in advance of acquisition pursuant to paragraphs (b) (2)-(5) of this

section. The licensee shall file this notification within ten days of

the acquisition and shall include:

(i) The name of the acquirer;

(ii) The date of acquisition;

(iii) The number of shares of securities or the extent of any other

financial interest in the licensee owned;

(iv) Any updates to the technology control plan, if necessary; and

(v) Such other information as NOAA may specify.

(2) Before any foreign person or nation, becomes the beneficial

owner or 15 percent or more of any securities, any class of securities,

or any other financial interest of the licensee, the licensee shall

provide assurance that such acquisition will not result in a transfer

of sufficient voting power to control its management, policies, and/or

operations. The licensee shall file a statement setting forth the basis

for its conclusion that no such transfer will occur and include the

following information in addition to that required by paragraph (b)(1)

of this section:

(i) The identity, residence, and citizenship of the beneficial

owner and of all other foreign persons or nations by whom or on whose

behalf the purchases are to be effected;

(ii) The number of shares of such securities or the extent of any

other financial interest in the licensee which are beneficially owned,

and the number of shares or other financial interests which there is a

right to acquire, directly or indirectly, by

(A) Such foreign person or nation, and

(B) By each affiliate of such foreign person or nation, giving the

background, identity, residence and citizenship of each such associate;

(iii) Information as to any contracts, arrangements, or

understanding with any foreign person or nation with respect to any

securities of or other financial interests in the licensee, including

but not limited to transfer of any of the securities, joint ventures,

loan or option arrangements, guaranties of loans, guaranties against

loss or guaranties of profits, division of losses or profits, or the

giving or withholding of proxies, naming the persons with whom such

contracts, arrangements, or understandings have been entered into, and

giving the details thereof;

(iv) The number of shares of the securities and the particular

class of securities, or the extent of the other financial interests in

the licensee, which are retained by existing beneficial owners;

(v) Any updates to the technology control plan, if necessary; and

(vi) Such additional information, as NOAA may prescribe as

necessary or appropriate to protect the national security interests or

international obligations of the United States.

(3) The statement required by this section shall be provided at

least 60 days prior to acquisition by foreign persons or nations. The

statement shall be filed with the relevant investment agreement which

shall be deemed a ``significant or substantial agreement'' and reviewed

in accordance with Sec. 960.12.

(4) Before any foreign person(s) or nation(s) collectively become

the beneficial owners of more than 40 percent of any securities, any

class of securities, or any other financial interest of the licensee,

the licensee must file an amendment application in accordance with

Sec. 960.13 at least 90 days prior to acquisition. The amendment

application must clearly rebut the presumption that the acquisition

will result in the transfer of sufficient voting power to control the

licensee's management, policies, and/or operations and shall include a

certification, in writing, to the Administrator that no foreign persons

or nations, either individually or collectively, can influence the

Licensee's corporate activity related to its obligations under the

terms and conditions of its license; this certification must show that

control over the Board of Directors is still exercised by the majority

U.S. shareholders and explain how the Board of Directors insures that

there is no undue influence exercised by the foreign shareholders on

the appointment of key officers of the corporation.

(5) No amendment shall be granted where more than 49% of the voting

interest will be beneficially owned by foreign persons or nations.

(c) If the acquisition by any person(s) or nation(s) of any

security or other financial interest of the licensee, regardless of the

percentage acquired, will result in a transfer of sufficient voting

power to control the management, policies, and/or operations of the

licensee; or if any person(s) or nation(s) will through a contractual

relationship or any other means obtain the ability to control the

management, policies and/or operations of the licensee, the licensee

must file an amendment application in accordance with Sec. 960.13 at

least 90 days prior to acquisition. There is a strong presumption that

the transfer of such an interest to foreign persons or nations will not

preserve the national security or international obligations of the

United States and will not be approved.

(d) The provisions of this section apply only to licensees that are

subject to U.S. jurisdiction or control under Sec. 960.2(a). Foreign

persons that are subject to U.S. jurisdiction or control under

Sec. 960.2(b) shall report changes in their financial interests in

accordance with the terms and conditions of their licensees.

Sec. 960.15 Certain rights not conferred by license.

Issuance of a license does not affect the authority of the Federal

Communications Commission under the Communications Act of 1934 (47

U.S.C. 151 et seq.), or the authority of the Secretary of

Transportation under the Commercial Space Launch Act of 1984 (49 U.S.C.

app. 2601 et seq.), the authority of the Secretary under the Export

Administration Act (50 U.S.C. app. 2401 et seq.), or the authority of

the Secretary of State under the Arms Export Control Act (22 U.S.C.

2778).

Subpart C--Enforcement Procedures

Sec. 960.16 General.

The Administrator may take appropriate actions against a licensee

if the licensee fails to comply with the Act, these regulations, or any

condition or restriction in the license, Such actions may include any

or all of the following: pursuit of judicial determinations to

terminate, modify or suspend licenses or to terminate licensed

operations, administratively imposed civil penalties, and seizure

pursuant to warrant. Such actions shall be taken in accordance with

this subpart.

Sec. 960.17 Prohibitions.

It is unlawful for any person who is subject to the jurisdiction or

control of the United States, directly or through any subsidiary or

affiliate to:

(a) Operate a private remote sensing system without possession of a

valid license issued under the Act and these regulations;

(b) Violate any provision of the Act or these regulations or any

term, condition, or restriction of the license; or

(c) Violate any order, directive, or other notice issued by the

Secretary in accordance with Sec. 960.10(b)(2) to inform the licensee

of any temporary restrictions imposed or necessary actions to be

followed during periods when national security or international

obligations/and or foreign policies may be compromised.

Sec. 960.18 Sanctions.

As authorized by section 203(a) of the Act, if the Administrator

determines that the licensee has substantially failed to comply with

the Act, these regulations, or any term, condition or restriction of

the license, the Administrator may request the appropriate U.S.

Attorney to seek an order of injunction or similar judicial

determination from the U.S. District Court for the District of Columbia

Circuit or a U.S. District Court within which the licensee resides or

has its principal place of business, to terminate, modify, or suspend

the license, and/or to terminate licensed operations on an immediate

basis. For purposes of this section, failure to comply with the Act,

these regulations or a term, condition, or restriction of a license or

of the Act shall be considered substantial where

(a) The failure is knowing; or

(b) The failure occurs after notice by the Administrator; or

(c) The licensee has been advised that it failed to comply with an

international obligation, foreign policy or national security concern

of the United States.

Sec. 960.19 Civil penalties.

(a) In addition to the sanctions provided in Sec. 960.16, any

person who violates any provision of the Act or of any license issued

thereunder or regulation contained in this part may be assessed a civil

penalty by the Administrator of not more that $10,000 for each

violation. Each day of operation in violation constitutes a separate

violation.

(b) When the Administrator proposes the assessment of a civil

penalty under this section, the Administrator will serve upon the

licensee by mail a Notice of Civil Penalty and Assessment (Notice)

containing:

(1) A concise statement of the facts believed to show a violation;

(2) A specific reference to the provisions of the Act, regulation,

or license allegedly violated;

(3) The amount of the proposed penalty in accordance with paragraph

(a) of this section.

(c) Within 30 days after receipt of the Notice, the licensee may

request a hearing by serving a written request on the Administrator

either in person or by certified or registered mail, return receipt

requested, at the address specified in the Notice. Such hearing shall

be held in accordance with procedures set forth at 15 CFR part 904,

supart C.

(d) If the respondent does not request a hearing within thirty days

of the date of the Notice, the civil penalty and the assessment shall

become the final determination of the Administrator.

Sec. 960.20 Seizure.

If the Administrator believes that any object, record, or report,

was used, is being used or is likely to be used in violation of the

Act, these regulations or any condition or restriction of the license,

the Administrator may seek a warrant from a magistrate to seize such

item(s) by showing probable cause for this belief. Seizure shall be

conducted in accordance with 15 CFR part 904, subpart F.

[FR Doc. 97-28948 Filed 10-31-97; 8:45 am]

BILLING CODE 3510-12-M