[Federal Register Volume 62, Number 212 (Monday, November 3, 1997)]
[Proposed Rules]
[Pages 59317-59331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28948]


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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

[[Page 59318]]

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

[[Page 59319]]

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.

[[Page 59320]]

    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.

[[Page 59321]]

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

[[Page 59322]]

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

[[Page 59323]]

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

[[Page 59324]]

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

[[Page 59325]]

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

[[Page 59326]]

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

[[Page 59327]]

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

[[Page 59328]]

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

[[Page 59329]]

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

[[Page 59330]]

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.

[[Page 59331]]

    (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