[Federal Register Volume 85, Number 98 (Wednesday, May 20, 2020)]
[Rules and Regulations]
[Pages 30790-30815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10703]
[[Page 30789]]
Vol. 85
Wednesday,
No. 98
May 20, 2020
Part II
Department of Commerce
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National Oceanic and Atmospheric Administration
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15 CFR Part 960
Licensing of Private Remote Sensing Space Systems; Final Rule
Federal Register / Vol. 85 , No. 98 / Wednesday, May 20, 2020 / Rules
and Regulations
[[Page 30790]]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
15 CFR Part 960
[Docket No.: 200407-0101]
RIN 0648-BA15
Licensing of Private Remote Sensing Space Systems
AGENCY: National Environmental Satellite, Data, and Information Service
(NESDIS), National Oceanic and Atmospheric Administration (NOAA),
Department of Commerce (Commerce).
ACTION: Final rule; request for comments.
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SUMMARY: The Department of Commerce (Commerce), through the National
Oceanic and Atmospheric Administration (NOAA), licenses the operation
of private remote sensing space systems under the Land Remote Sensing
Policy Act of 1992. NOAA's existing regulations implementing the Act
were last updated in 2006. Commerce is now substantially revising those
regulations, as described in detail below, to reflect significant
changes in the space-based remote sensing industry since that time and
to modernize its regulatory approach.
DATES: This rule has been classified as a major rule subject to
Congressional review. The effective date is July 20, 2020. However, at
the conclusion of the Congressional review, if the effective date has
been changed, Commerce will publish a document in the Federal Register
to establish the actual effective date or to terminate the rule.
Additionally, Commerce will accept comments on this final rule until
June 19, 2020.
ADDRESSES: You may send comments by the following methods:
Federal eRulemaking Portal: Go to: www.regulations.gov and search
for the docket number NOAA-NESDIS-2018-0058. Click the ``Comment Now!''
icon, complete the required fields, and enter or attach your comments.
Mail: NOAA Commercial Remote Sensing Regulatory Affairs, 1335 East-
West Highway, G101, Silver Spring, Maryland 20910.
Instructions: The Department of Commerce and NOAA are not
responsible for comments sent by any other method, to any other address
or individual, or received after the end of the comment period. All
submissions received must include the agency name and docket number or
RIN for this rulemaking. All comments received will be posted without
change to www.regulations.gov, including any personal or commercially
proprietary information provided.
FOR FURTHER INFORMATION CONTACT: Tahara Dawkins, Commercial Remote
Sensing Regulatory Affairs, at 301-713-3385, or Glenn Tallia, NOAA
Office of General Counsel, at 301-628-1622.
SUPPLEMENTARY INFORMATION: Article VI of the Treaty on Principles
Governing the Activities of States in the Exploration and Use of Outer
Space, including the Moon and Other Celestial Bodies (Outer Space
Treaty), provides that the activities of non-governmental entities
require authorization and continuing supervision by states that are
parties to the treaty. This responsibility falls to the United States
(U.S.) Government with respect to the activities in outer space of
private entities subject to U.S. jurisdiction. In the Land Remote
Sensing Policy Act of 1992, codified at 51 U.S.C. 60101 et seq. (Act),
Congress authorized the Secretary of Commerce (Secretary) to fulfill
this responsibility for private remote sensing space activities, by
authorizing the Secretary to issue and enforce licenses for the
operation of such systems. The Secretary's authority under the Act has
been delegated to the NOAA Assistant Administrator for Satellite and
Information Services. NOAA issues licenses under its regulations
implementing the Act, found at 15 CFR part 960, most recently updated
in 2006 and now replaced in their entirety with this final rule.
Through the National Space Council, this Administration recognizes
that long-term U.S. national security and foreign policy interests are
best served by ensuring that U.S. industry continues to lead the
rapidly maturing and highly competitive private space-based remote
sensing market. Towards that end, the Administration seeks to establish
a regulatory approach that ensures the United States remains the ``flag
of choice'' for operators of private remote sensing space systems.
The President signed Space Policy Directive-2, Streamlining
Regulations on Commercial Use of Space (SPD-2), on May 24, 2018. This
directive required Commerce to review its private remote sensing
licensing regulations in light of SPD-2's stated policy and rescind or
revise them accordingly. Commerce began that review by publishing an
advance notice of proposed rulemaking (ANPRM) (83 FR 30592, June 29,
2018), seeking public comment on five topics related to the Act.
Commerce received nine detailed responses and used that input to inform
the drafting of the proposed rule, which Commerce issued last year (84
FR 21282, May 14, 2019).
Commerce's proposed rule laid out a detailed regulatory proposal
that attempted to increase transparency and certainty, and to reduce
regulatory burdens, without impairing essential governmental interests
in preserving U.S. national security, protecting foreign policy
interests, and adhering to international obligations. To meet these
goals, the proposed rule included a two-category framework, where the
license conditions applied to proposed systems were commensurate with
the potential risk posed by such systems to the national security and
international obligations and foreign policies of the United States.
The proposed rule also provided for conducting a full interagency
review and the potential for custom license conditions, but only when a
proposed system was novel and in the higher risk category.
Additionally, the proposed rule published many existing license
conditions for the first time and provided a public process for
periodically updating such conditions. This meant that the public had a
new opportunity to shape the conditions through public comment, whereas
in the past, the conditions would be known only to existing licensees
and to the U.S. Government before being included in a new license. In
short, the proposed rule brought the process for setting new,
operational license conditions into the public rulemaking space for the
first time, and proposed substantive changes that would help reduce the
regulatory burden on licensees.
Commerce received 27 public comments on the proposed rule, and
thanks all commenters for their time and consideration. While the
public comments on the proposed rule generally supported increased
transparency and the two-category system in theory, they nevertheless
characterized the proposed rule as overly restrictive and a
disincentive to operating in the United States. Despite the procedural
benefits (increased transparency, certainty, and public input) that the
proposed rule offered, the commenters explained that the proposed rule
did not deliver the desired dramatic substantive benefits--namely,
immediately reducing the current regulatory restrictions and license
conditions imposed on industry-leading remote sensing systems. For
example, the proposed rule would have subjected the high-risk
conditions (which, as drafted, were liberalized versions of existing
conditions) to public scrutiny for the first time. But even with
Commerce's liberalizations of
[[Page 30791]]
these conditions, public commenters objected to the conditions'
continued stringency and the permanency implied by including them in
regulations. As another example, Commerce proposed an objective set of
criteria that would distinguish low-risk systems from high-risk
systems, as a means to provide predictability to potential applicants.
Commenters objected to this approach, however, arguing that the
criteria were far too conservative, resulting in almost all commercial
systems being categorized as high-risk, and moreover that including
such a specific list in regulations was too rigid an approach.
Commerce took these concerns very seriously and revised the
proposed rule in two key ways in response, resulting in a dramatically
less burdensome final rule. First, Commerce will retain the notion of
categories of systems, but rather than categorizing systems by a set of
objective criteria that could be incrementally modified through future
rulemakings, Commerce will adopt a proposal made by several commenters
and the Advisory Committee on Commercial Remote Sensing (ACCRES).
Specifically, Commerce will categorize systems based on an analysis of
whether the unenhanced data to be generated by the proposed system are
already available in the United States or in other nations.
Second, Commerce will eliminate most of the permanent license
conditions existing in current licenses, license appendices, and
included in the proposed rule, retaining only the bare minimum of
permanent license conditions (generally only those required by the Act
or other laws). Further conditions could be included in a license if,
in Commerce's analysis, an application proposes to collect unenhanced
data that are entirely novel (i.e., unenhanced data are not available
from any source). In this limited case, Commerce would work with the
Department of Defense or the Department of State, as appropriate, and
the applicant, to craft narrowly tailored license conditions that would
be temporary. These temporary conditions would remain in effect for one
to three years from the time the licensee begins operations. Such
temporary conditions could be extended beyond three years, but only
upon a request specifically from the Secretary of Defense or State.
This move to temporary license conditions for novel technologies
would shift the burdens under the regulations. The 2006 regulations
place burdens of protecting national security and international
obligations on private remote sensing systems through extensive and
permanent license conditions. Under this final rule, by contrast,
temporary conditions are designed to allow the U.S. Government time to
adapt its operations to the novel technology where possible. Unlike in
2006, foreign space-based capabilities are significant and constantly
increasing, requiring the U.S. Government to adapt regardless of how it
regulates U.S. systems. Commerce's approach recognizes this new reality
and gives U.S. industry the best chance to continue to innovate and to
lead this global market.
Commerce provides a more detailed explanation of its reasoning
behind these and other changes to the proposed rule below. Commerce
reiterates its gratitude to all persons who commented on the ANPRM and
the proposed rule. These comments have been invaluable as Commerce has
assessed the best way to modernize and streamline these regulations.
General Overview
Problems With Existing Regulatory Approach
Under the existing regulations, license condition-setting
procedures are largely outside of the public rulemaking process:
License conditions are set through interagency discussions, without the
opportunity for public comment, even when the conditions would apply to
all systems. In addition to lacking transparency, this regulatory
approach is based on the mechanism of relying on license conditions to
address U.S. national security and international obligation and policy
concerns: By imposing conditions on certain types of imagery produced
by U.S. remote sensing systems, the expectation is that the restriction
contributes to protection of the interests in question.
Initially, this combination of setting conditions through a non-
public, application-specific process and including restrictive
conditions in licenses to protect U.S. national security and meet
international obligations was effective. The U.S. remote sensing
industry was small and had limited foreign competition, so it was
generally believed that there was little risk that the regulatory
environment in the United States would disadvantage U.S. industry in
relation to any foreign competitors. In addition, restricting the
capabilities of U.S. industry through license conditions largely did
protect national security, as it was often the only source of such
data. But as time has passed, foreign commercial capabilities have
emerged--at times, arguably, because U.S. regulations are too
restrictive, resulting in some operators establishing their remote
sensing businesses overseas.
To illustrate the dramatic changes that now motivate the
Administration to take a different approach, Commerce provides the
following statistics. When the Act was passed in 1992, there were no
private remote sensing space systems. In 2006, when Commerce last
updated its regulations, there were 25 U.S. licenses and roughly 29
non-U.S. systems. Today, there are 73 U.S. licenses held by 51 U.S.
licensees, and over 80 U.S. licenses have been closed due to the
system's end. Stated differently, Commerce issued roughly 25 licenses
in the 14 years from the passage of the Act in 1992 until the last
update to the regulations in 2006, but in the 14 years since that last
update, Commerce has issued well over 100 licenses.
At the same time, since 2006, more than an estimated 250 non-U.S.
remote sensing systems have either become operational or are planned (a
figure that does not include foreign systems that are not public
knowledge). Today, more than 40 countries other than the United States
have remote sensing space systems. And since 2006, foreign remote
sensing capabilities have extended to advanced phenomenologies such as
synthetic aperture radar (SAR) and hyperspectral imaging (HSI), of
which there are dozens of foreign systems each.
The pace of foreign competition has intensified, and Commerce
anticipates that these trends will continue. Now, any U.S. company with
a license restriction is at a disadvantage if a foreign competitor is
not subject to the same restriction, all else being equal. The end
result is that U.S. operators may not meet, let alone surpass, the
capabilities of such foreign competitors. Moreover, even if Commerce
loosens license restrictions as soon as it learns that foreign
competitors have caught up to a restricted U.S. phenomenology, U.S.
industry is guaranteed to be no better than tied for first place.
Take, for example, the U.S. SAR industry. Commerce license
conditions prevent such licensees from imaging at finer than 0.5 meters
impulse response (IPR), while some foreign competitors sell data at .24
meters IPR. Even a regulatory approach that allows U.S. licensees to
sell data at .24 meters IPR would only let U.S. industry meet, not
exceed, their foreign competition. This creates a market opportunity
for foreign entities to sell data at finer than .24 meters IPR. The
U.S. Government has no control over such foreign SAR systems and must
adapt to protect its operations, making such a regulatory
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approach ultimately ineffective and counterproductive. This approach is
also reactive: It presumes that the most highly capable U.S. remote
sensing licenses should be conditioned until circumstances render the
condition obsolete, rather than presuming that U.S. industry's
capabilities should not be conditioned at the outset. This situation is
likely to continue so long as the U.S. Government perpetuates current
practices.
Such license conditions, of course, have a valid goal: Most often,
to protect national security. But Commerce cannot restrict the
operation of non-U.S. remote sensing operators. Many national security
conditions placed on U.S. remote sensing operators have become or will
become ineffective due to uncontrollable foreign competition, and may
have in fact encouraged such foreign competition. The emergence of
intensifying and uncontrollable foreign competition requires
reassessment of the way Commerce licenses remote sensing operators.
Commerce believes that it must adapt its regulatory approach to be
better able to respond to these changes and help ensure continued U.S.
leadership in the global market for space-based remote sensing data.
Final Rule's Approach
As previewed above, two changes in the final rule, as compared with
the proposed rule, take the development of foreign competition and
commenters' concerns into account. First, the final rule categorizes
applicants based on the availability of their unenhanced data from
other sources. The proposed rule created categories, but would have
instead grouped applicants based on an objective set of criteria that
assessed the risk they would pose to national security. This worked
under the assumption that remote sensing systems would be regulated so
as to prevent them from causing harm to national security: The more
risk a system posed to national security, the more restrictive its
license would be. But in view of the development of foreign competition
that is uncontrollable, regardless of its risk, the final rule takes a
different approach to categorizing applicants. Based on suggestions
from several commenters, the final rule categorizes applicants based on
the degree to which the unenhanced data to be generated by their
proposed system are already available (rather than based on the amount
of risk they pose to national security).
If an applicant proposes a system that is capable only of
producing unenhanced data substantially the same as unenhanced data
available from sources not regulated by Commerce, such as foreign
sources, the system will be ``Tier 1,'' and receive the bare minimum of
conditions. This is because Commerce cannot prevent the harm that such
systems might cause to national security, regardless of how strictly
they are regulated, because substantially the same unenhanced data are
available from sources outside Commerce's control.
If an applicant proposes a system that is capable of
producing unenhanced data that are substantially the same as unenhanced
data available from U.S. sources only, the system will be ``Tier 2.''
As there is no foreign competition for that unenhanced data, a U.S.
license restriction could be effective.
If an applicant proposes a system that is capable of
producing unenhanced data that are substantially the same as no
available unenhanced data--that is, if the applicant has no
competitors, foreign or domestic--the system will be ``Tier 3,'' and
more stringent controls logically may be applied.
Commerce will also consult with the Departments of Defense and
State during the process of assigning a tier to ascertain whether there
are national security or international obligations or policy concerns
that would recommend a different tier than the tier resulting from the
availability analysis.
In addition, the final rule makes a second philosophical change in
response to commenters' stated concerns about the stringency of the
operating conditions. Instead of formalizing the existing permanent
operating conditions for low- and high-risk systems, the final rule
eliminates almost all such permanent operating conditions. ``Tier 1''
systems (those which produce unenhanced data available from sources
outside Commerce's control) will receive only those conditions required
by statute and will not be required to comply with limited-operations
directives (colloquially known as ``shutter control'' and referred to
in the relevant interagency memorandum of understanding (MOU) as
``modified operations''). This is because where the same capability
exists outside the United States, a limited-operations directive would
be less effective: even if all U.S. licensees complied fully with a
directive restricting certain data, some foreign systems (lying beyond
U.S. licensing jurisdiction) would be able to continue to generate such
data without restriction. Therefore, Commerce will not require systems
whose unenhanced data capabilities are substantially the same as those
of entities not licensed by Commerce (such as foreign entities) to
comply with shutter control, or with any operational limitations
including restrictions on non-Earth imaging (NEI), nighttime imaging,
and the like.
In contrast, ``Tier 2'' systems (those with only U.S.-licensed
competition) will receive the same minimal conditions as Tier 1, with
the addition of one NEI requirement--to obtain the consent of the owner
of any Artificial Resident Space Object (ARSO) orbiting the Earth and
to notify the Secretary five days before conducting resolved imaging
operations of the ARSO--and the requirement to comply with limited-
operations directives. Where a certain capability exists only in
systems subject to U.S. jurisdiction, a limited-operations directive
applying to those licensees will be effective at restricting the
dissemination of data. Therefore, to protect national security or meet
international obligations, Commerce will continue to require these
licensees to be prepared to comply with limited-operations directives.
Finally, with respect to the consent and notification requirement
for resolved ARSO imaging, Commerce will reevaluate the necessity of
such requirement in approximately two years, in consultation with the
Department of Defense. Should such reevaluation conclude that the
underlying national security concerns necessitating the requirement
have been abated, Commerce will consider appropriate action, including
a rulemaking to modify or remove the requirement.
The logic underlying this distinction between Tier 1 and Tier 2
means that these categories are not fixed. As soon as a non-U.S.-
licensed entity (such as a foreign commercial entity) has the
capability to collect unenhanced data substantially the same as a Tier
2 system, the Secretary may re-categorize the system as Tier 1,
removing the requirements addressing the resolved imaging of ARSO and
to comply with limited-operations directives. This makes sense because
where foreign competition exists, these requirements would be less
effective for the type of data at issue.
Finally, the final rule creates a third tier of systems, as
requested by several commenters. Tier 3 systems are those having a
completely novel capability, such that no foreign or U.S. entity can
produce substantially the same unenhanced data. Tier 3 systems will
have the same standard conditions as Tier 2, including the requirements
addressing resolved imaging of ARSO
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and to comply with limited-operations directives, but will also have
the potential for temporary, custom license conditions. As provided in
the final rule, these temporary conditions will be developed by the
Department of Defense or State, as appropriate, and then carefully
analyzed by Commerce in consultation with the applicant to determine
compliance with legal requirements. These temporary conditions will
last only one year (generally starting from initial spacecraft
operations), with the possibility of two one-year extensions if the
Department requesting the condition meets a burden of proof, following
review by Commerce and notification of licensees. The only possible
extension beyond three years is if the Secretary of Defense or State
requests an additional extension. The authority to request additional
extensions may not be delegated below the Secretary of Defense or
State.
Temporary conditions on Tier 3 systems shift away from primarily
protecting national security by restricting the capabilities of U.S.
private remote sensing systems indefinitely, and toward ensuring that
the U.S. Government takes timely action to mitigate any harm that could
result from remote sensing operations where possible. These temporary
restrictions are intended to provide the U.S. Government time to adopt
measures to mitigate the harm. Then, once the temporary restriction
expires, the system can operate unimpeded by those temporary
restrictions, and the U.S. Government will have learned how to protect
itself from new technology that, in time, is likely to spread to
foreign operators, out of Commerce's control.
Apart from any temporary conditions on Tier 3 systems and the
consent and notification requirements for resolved ARSO imaging and
limited-operations directives for Tiers 2 and 3, there are no permanent
operating conditions. Previously required operating conditions
specifically addressing SAR, night-time imaging (NTI), short-wave
infrared (SWIR), and other capabilities, are no longer in the rule and
will not be automatically included in licenses (except if warranted as
a temporary condition for a Tier 3 license). NEI conditions are
eliminated for Tier 1 systems, eliminated for unresolved NEI, and
greatly reduced for Tiers 2 and 3. Licensees will be free, therefore,
to operate under the minimal conditions found in Sec. 960.8 for Tier 1
systems, and in Sec. Sec. 960.9 and 960.10 for Tier 2 and Tier 3
systems, respectively.
To illustrate how this approach would work, imagine a hypothetical
applicant seeking to operate a SAR system. Under the previous (2006)
regulations, the applicant would have waited up to 120 days (or more,
if the U.S. Government required additional review time), then received
a license including conditions restricting its SAR operations in terms
of data downlink locations, resolution thresholds, and the like. The
applicant, then licensee, would have been guaranteed no prior notice of
these conditions. Under the proposed rule, by contrast, the applicant
would have known that it would be categorized as ``high-risk'' due to
its SAR capabilities; it would have been able to read the SAR
conditions in the public rulemakings; and it would have received its
license in 90 days. But under the final rule, the applicant's system
would likely be categorized as Tier 1 (if it was capable of producing
unenhanced data substantially the same as foreign unenhanced data) or
Tier 2 (if it was capable of producing unenhanced data that are only
available from U.S. sources regulated by Commerce). Accordingly, the
license would contain no permanent operational conditions restricting
its SAR operations. The licensee would only be under the obligation to
comply with the consent and notification requirements for resolved ARSO
imaging and a limited-operations directive, if it were categorized as
Tier 2. Its SAR operations, otherwise, would be unencumbered by
regulation.
The final rule also reduces other regulatory burdens. For example,
regarding cybersecurity: Under the existing regulations, there are
requirements relating to data uplink, downlink, transmission, and
storage, and licensees are required to complete, update, and comply
with lengthy data protection plans. The proposed rule would have
required encryption and industry best practices for protection of
tracking, telemetry, and control (TT&C) for all licensed systems; with
higher level encryption and protection for both TT&C and mission data
transmissions, along with completion of a National Institute of
Standards and Technology (NIST) Cybersecurity Framework for ``high-
risk'' systems. Under the final rule, the only cybersecurity
requirements are that licensees operating spacecraft with propulsion
affirm that they have measures in place to ensure positive control of
those spacecraft; and for Tier 2 and 3 systems, if a limited-operations
directive is issued, the licensee will be required to protect data as
specified in the directive, which may include encrypting satellite TT&C
and mission data transmissions. Commerce notes that this license
condition requires the immediate ability to encrypt data and
transmissions in the event of a limited-operations directive. This
means that, during an inspection or investigation, Commerce may require
a demonstration of the licensee's ability to immediately come into
compliance with this requirement, as though a shutter control order had
just been issued. But at all other times when a directive has not been
issued, the licensee will be free to protect their data as they see
fit, in accordance with their own, self-developed plan to manage
cybersecurity risk. This shift in approach recognizes that Commerce
cannot continue to place the burden of mitigating national security
risks posed by data largely on licensees, and also that licensees
already have market incentives to protect their data and operations
from interference.
While Commerce is not mandating a specific approach to licensees'
self-developed plan to manage cybersecurity risk, the following are
best practice factors licensees should consider when developing one:
Incorporating design features and operational measures,
consistent with satellite constellation size, sophistication, and
propulsion, that protect against current and evolving malicious cyber
threats that can disrupt, deny, degrade, or destroy their systems and
data. This should include the ability to:
[cir] Prevent unauthorized access to the system,
[cir] Identify any unauthorized access,
[cir] Ensure positive control of spacecraft with propulsion at all
times, and
[cir] Where practicable, use encryption for all communications to
and from the on-orbit components of the system related to tracking,
telemetry, and control.
In short, the final rule represents a philosophical shift away from
a purely risk-based approach. No longer will the U.S. Government assess
systems based on the risk they may pose to national security and burden
them accordingly to protect against such risk. Nor will the U.S.
Government place conditions on licensees when a source of substantially
the same unenhanced data exists outside Commerce's control. Instead,
the U.S. Government will shift more of the burden of protecting
national security to itself, focusing on mitigating the risk posed by
the global remote sensing industry. This will help effectuate the
President's policy in SPD-2 of encouraging American leadership in
space: American industry will never be restricted more than foreign
competition. In addition, this new approach will provide additional
[[Page 30794]]
incentive to the U.S. Government to change its own operations to
minimize the risk from growing domestic and foreign remote sensing
capabilities.
Other Alternatives
Commerce considered other alternatives to the approach it took in
the final rule. One such alternative was to proceed with the substance
of the proposed rule. However, many commenters noted that the proposed
rule appeared so rigid as to actually set the commercial remote sensing
industry back--perhaps even by decades. Commerce understood based on
these comments that a significant change to the substance of the rule
was needed.
One way of attempting to create such a significant change would
have been to incrementally shift the proposed rule to a more industry-
favorable position. For example, Commerce could have adjusted the
objective considerations in the proposed rule's Sec. 960.6, which
described the difference between low- and high-risk systems. Commerce
could have set a less conservative threshold for low-risk systems, as
some commenters suggested. In addition, Commerce could have adjusted
the permanent license conditions in the proposed rule's Sec. Sec.
960.13 and 960.20, making them less stringent. However, both of these
changes would have further enshrined the risk-based approach that the
final rule rejects, and required regular, repeated updates through
future rulemaking processes to keep up with changes in foreign
competition, imaging technologies, risks, and mitigation techniques.
Other Major Changes
In addition to the shift in how Commerce categorizes and conditions
the operation of systems described above, Commerce made additional
important changes to the proposed rule. Commerce was not required to
make these changes due to its interpretation of the Act, but has chosen
to do so based on public comments and to advance the Administration's
policy objectives. These are described in greater detail in the
Subpart-by-Subpart Overview below, but include:
Defining remote sensing such that the final rule applies
only to systems in orbit of the Earth, capable of producing imagery of
the Earth, and clearly excluding instruments used for mission assurance
or other technical purposes;
Defining the scope of remote sensing space systems under
this final rule, such that Commerce's requirements apply to the remote
sensing instrument and only those additional components that support
its operation, receipt of unenhanced data, and data preprocessing,
excluding higher-level processing and data storage;
Eliminating the possibility of conditions imposed
unilaterally by Commerce on a licensee after license issuance
(colloquially known as ``retroactive conditions'');
Reducing the timeline for application review to 60 days
for all systems, regardless of categorization; and
Clarifying definitions and expectations, most notably
related to foreign investment and agreements.
For space-based activities not requiring a license from Commerce
under this final rule, Commerce continues to consider a more
comprehensive space regulatory regime for space activities not
currently addressed by federal regulatory frameworks. Vice President
Pence has directed the Secretary to ``report to the President, through
the National Space Council staff, on the authorization of commercial
space operations not currently regulated by any other Federal agency;
and, in coordination with the Secretary of Transportation, provide a
roadmap to enable all current and evolving United States commercial
space activities to receive authorization under appropriate Federal
regulatory frameworks.'' \1\ This report will incorporate this final
rule's parameters and provide insight into ensuring that U.S. space
operations are, in conformity with treaty obligations, authorized and
continuously supervised.
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\1\ ``Recommendations Approved by the National Space Council to
President Trump,'' National Space Council (Aug. 20, 2019) available
at: https://www.space.commerce.gov/secretary-ross-remarks-from-6th-national-space-council-meeting/.
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Summary
In summary, Commerce believes the final rule advances the policy of
SPD-2 in three areas compared to the previous (2006) regulations. As in
the proposed rule, (1) the processes in the final rule are more
transparent and more compliant with the Administrative Procedure Act.
Additionally, based on public comment on the proposed rule, under the
final rule (2) applicants and licensees are categorized into tiers
based on unenhanced data availability, rather than a risk assessment;
and (3) permanent license conditions are set at an absolute minimum,
primarily only those needed to comply with statutory requirements, and
only in very narrow circumstances can further conditions be added--
which must be temporary. This third group of changes modernizes the
remote sensing licensing regime by ensuring that the U.S. Government
takes more responsibility for safeguarding U.S. national security,
rather than continuing to place this burden largely on the U.S. remote
sensing industry. Commerce anticipates that these changes will unleash
U.S. innovation and allow it to compete in the global remote sensing
industry.
Response to Comments
Commerce received 27 comments on the proposed rule. These comments
originated from industry groups; commercial entities who are currently
licensed and will be subject to the final rule; commercial entities who
are not licensed or who will not likely be subject to the final rule;
academics; an anonymous commenter; and two individual commenters.
Commerce thanks each of these commenters, as well as those who
commented on the earlier ANPRM, for their time and input.
Many comments were broadly in agreement on desired changes to the
proposed rule. As a result, in the interest of clarity, Commerce will
not lay out comments one-by-one and respond to them individually.
Instead, Commerce has responded to the general tenor of comments above,
including the major changes to the final rule that respond to the
comments. Below, Commerce describes the final rule's provisions of
note. This description includes, where appropriate, responses to
comments. Furthermore, as mentioned above, Commerce welcomes further
comments on this final rule with comment period in the 30-day period
following publication and before this rule becomes effective.
Subpart-by-Subpart Overview
Subpart A--General
Subpart A sets out the purpose, jurisdictional scope,
grandfathering mechanisms, and definitions for the final rule. The
following provisions are of particular note.
Section 960.1 Purpose
As suggested by a commenter, this section emphasizes Commerce's
goal in issuing the final rule: Ensuring U.S. industry continues to
lead the global remote sensing market.
960.2 Jurisdiction
Section 960.2(a): The Secretary's jurisdiction attaches in two
ways: (1) When the operation of a system occurs within the United
States, and (2) when a U.S. person operates a system (see definitions
of ``operate,'' ``private remote sensing space system,'' and ``U.S.
person'' in Sec. 960.4). Thus, a non-U.S. person falls under the
Secretary's jurisdiction by operating within the
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United States, and a U.S. person falls within the Secretary's
jurisdiction when they operate a system (no matter where they operate
it). In response to comments, Commerce has changed the title of this
definition from ``U.S. citizen'' to ``U.S. person,'' and has added
lawful permanent residents.
Section 960.2(b): Commerce created a list of technical capabilities
that it has determined should be exempt from this regulation based on
policy and other considerations. Instruments used primarily for mission
assurance purposes or other technical purposes are not considered
remote sensing instruments under this final rule; therefore, a system
that contains only such instruments will not require a Commerce
license. Public commenters appreciated the proposed rule's attempt to
exempt certain technical capabilities from the definition of ``remote
sensing,'' but the details of that exemption confused some readers. In
response, Commerce removed the portion of the definition of ``remote
sensing'' in the proposed rule that would have exempted certain cameras
from the rule's jurisdiction. Instead, to achieve the desired effect of
reducing the scope of this final rule's application, Commerce created
this paragraph including a nonexclusive list of exceptions. These
exceptions are focused on the actual use of the instrument (e.g.,
mission assurance), rather than the instrument's objective description.
Many of these capabilities are found on space systems that are
already regulated by another Federal agency, including the Federal
Aviation Administration for instruments on launch vehicles and the
Federal Communications Commission for instruments on communications
satellites. As noted earlier, Commerce is continuing, separately from
this final rule, to work with the National Space Council toward a
comprehensive authorizing regime to facilitate space commerce,
including non-traditional space activities not currently regulated by
another Federal agency.
Section 960.3 Application to Existing Licensees, ``Grandfathering''
Many commenters requested clarification of the grandfathering
provisions. Commenters also requested, variously, that the new final
rule only apply to existing licensees in part, or apply only to the
extent that the licensee so desired, or apply only to the extent that
the final rule was more favorable to the licensee than the status quo.
Commerce has attempted to provide the public the assurances they asked
for by clarifying that the Secretary will retain any applicable waivers
or modifications in a new license. Also, the final rule provides 30
days in which the licensee can object to their new draft license.
Commerce's decision to replace a license with a new one is appealable.
It will be incumbent upon each licensee to specify which conditions, if
any, they object to, as part of this process. Examples:
A licensee with an existing Commerce license would receive
a new license on the effective date. The new license would reflect the
licensee's tier and include all applicable conditions. The licensee
would have 30 days from the delivery of this new license to object to
this new license.
A licensee with an existing license containing waivers or
amendments would receive a new license on the effective date. The new
license would carry over any waivers or amendments that would still be
relevant under the final rule. For example, if the licensee had a
waiver from a specific NEI requirement, and that requirement is found
in the standard conditions in this final rule, the waiver would carry
over into the new license. However, if the licensee had a waiver from
one or more of the NTI conditions, the waiver would likely not be
applicable simply because the new license would contain no permanent
NTI conditions, as permanent NTI conditions are not found in the
standard conditions in this final rule.
A licensee whose system no longer falls under the final
rule will receive a notification that their Commerce license has been
terminated as moot. Of course, this termination does not mean that the
former licensee is prohibited from any activity or that it is not
subject to any regulation by the U.S. Government; instead, it means
that the system's activities no longer require a Commerce license.
Section 960.4 Definitions
Anomaly: In response to commenters, Commerce narrowed the
definition of ``anomaly'' to events that ``could indicate a significant
technical malfunction or security threat,'' and clarified that
anomalies ``include any significant deviation from the orbit and data
collection characteristics of the system.'' This narrowed definition is
intended to reduce licensees' burdens by eliminating the requirement to
report minor anomalies.
Available: This definition affects the categorization of licenses
into tiers (see Sec. 960.6(a)) and the license condition implementing
the Kyl-Bingaman Amendment (see Sec. 960.8(a)(9)). It is intended to
be akin to the existing Kyl-Bingaman standard as articulated in the
2006 final rule (71 FR 24473, April 25, 2006), but modified slightly.
Under this final rule when the term ``available'' is used by itself,
Commerce will deem something to be ``available'' if it is readily and
consistently obtainable by an entity other than the U.S. Government or
a foreign government--but not necessarily only from commercial sources.
For example, if certain unenhanced data (see ``unenhanced data''
definition) are routinely made available from a foreign government to
the general public (for example, Copernicus Sentinel data), Commerce
would deem that they are available. Note that, under the Kyl-Bingaman
condition found at Sec. 960.8(a)(9), the data must be available
specifically from commercial sources, because the Kyl-Bingaman
Amendment requires this. Section 1064, Public Law 104-201.
Days: In response to comments, Commerce removed the definition of
``days.'' Commerce intends that references to ``days'' throughout the
rule will now refer to the ordinary meaning of a calendar day. Under
the proposed rule, any number of days shorter than ten days referred to
working days (i.e., not counting weekends and holidays). Because all
days are now calendar days, Commerce lengthened some of the shorter
time periods in the final rule. For example, in Sec. 960.8, reporting
periods of five (working) days under the proposed rule are now seven
(calendar) days under the final rule.
Material fact: Many commenters were confused by the proposed rule's
``material fact'' definition. Under the proposed rule and in the final
rule, Commerce intends that a ``material fact'' is any fact contained
in the application or license. This definition is broad because
Commerce is only requesting information that is critically important in
the application (see Appendix A), and will only carry over critically
important information into the license (see Appendix C). In other
words, all facts are material, because Commerce will not request any
immaterial facts. But because every fact in the application and license
is critically important, every one of those facts--if changed--will
require a license modification.
Some commenters asked Commerce to change ``material fact'' to ``a
fact the Secretary relied upon in issuing the license.'' Commerce
disagrees with this suggestion because it would make it subjective when
a license modification is required. The licensee cannot know what facts
the Secretary relied upon. Commerce hopes that this revised
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definition is clear: To determine whether a fact is material (and
therefore whether changing it after license issuance will require a
license modification), simply review your license to confirm whether
the fact is included therein. If it is, it is a material fact.
Memorandum of Understanding or MOU: In response to comments raising
concerns about the potential for the U.S. Government to amend the MOU
without notice-and-comment rulemaking, Commerce has clarified in this
definition that ``MOU'' refers only to the version of the MOU that was
signed on April 25, 2017, which is included as appendix D to the final
rule. Even if the U.S. Government amends the MOU at some later date,
those amendments would have no effect on this final rule absent a
rulemaking, because Commerce will continue to use the 2017 version for
all purposes under this rule. Furthermore, it is important to note that
if any terms of the MOU conflict with this rule, the definition
clarifies that the rule will govern.
Operate: Commerce narrowed the definition of ``operate'' to clarify
which activities qualify. The revised definition makes clear that the
entity with decision-making authority over the remote sensing
instrument's functioning is operating the system. This would include
the entity deciding what to image and how to accomplish the desired
imaging, but not an individual or service provider merely implementing
those commands. This is true regardless of how the commands technically
pass to the satellite. In most cases, Commerce anticipates that the
instrument owner will be the one who operates, but this may not always
be the case.
In addition, Commerce intends that activities such as operating a
ground station as a service or operating a spaceborne platform as a
service, without more, are not ``operating'' a remote sensing space
system. Examples:
Company A operates a ground station in the United States.
Company B owns a spacecraft with a remote sensing instrument. Through a
contract, Company B uses Company A's ground station to send command and
control communications to and from Company B's spacecraft. Company B is
operating the remote sensing system and would require a license, but
Company A would not require a Commerce license.
Company C operates a spacecraft that does not conduct
remote sensing. Through a contract, Company C hosts Company D's remote
sensing instrument on the same spacecraft. Company D decides what to
image with its remote sensing instrument. Commands are sent to Company
C for uplink, and unenhanced data are routed back to Company D through
Company C's system. Company D is operating the remote sensing system
and would require a license, but Company C would not require a Commerce
license.
Private remote sensing space system or system: The proposed rule
contained separate definitions for ``remote sensing instrument,''
``remote sensing space system,'' and ``private remote sensing space
system.'' Of these, in the interests of clarity and simplicity, the
final rule contains only ``private remote sensing space system or
system.'' Of particular note, this definition retains the proposed
rule's requirement that the system not be owned by an agency or
instrumentality of the U.S. Government (which would not be
``private''). It makes clear that every private remote sensing space
system consists, at the very least, of a remote sensing instrument (see
below). Nothing can be considered a system without such an instrument.
A ground station or satellite bus without a remote sensing instrument
is not a system.
The definition covers remote sensing instruments that are capable
of conducting remote sensing (see ``remote sensing'' definition) and
are not otherwise excluded from this rule due to being used primarily
for technical or mission assurance purposes (see Sec. 960.2(b)). The
definition also limits the scope of the system: It includes components
that support the remote sensing instrument's operation, plus receipt of
unenhanced data (see ``unenhanced data'' definition); and data
preprocessing. This is intended to capture the ground stations from
which the remote sensing instrument is commanded, as well as ground
stations where data are initially received, but not facilities that
conduct only higher-level data processing or storage. This is also
intended to capture items such as the satellite bus and all components
through which commands and unenhanced data flow, because all these
components relate directly to the remote sensing instrument and to
remote sensing.
Finally, this definition retains the proposed rule's clarification
that the system may include components that are owned or managed by
persons or entities other than the licensee. To clarify in response to
comments, Commerce intends this to mean that a ground station operated
as a service by a third party will be part of a licensed system if it
sends operational commands or receives unenhanced data, but it will not
constitute a system on its own, and operating it alone will not
constitute ``operating'' (see ``operate'' definition). If a licensee
chooses to use third parties for some of its operations, it will be
responsible for ensuring that those third parties comply with any
relevant license conditions (such as through contract terms). If the
licensee is unable to do so, then it may not use that third party to
support its licensed system. Commerce notes that, due to the dramatic
reduction in the number of license conditions, the practical effect of
this requirement to ensure third-party compliance with license
conditions is minimal. This approach allows maximum flexibility for
licensees to contract with the growing number of providers of ground
station services, cloud processing, hosted payloads platforms, etc.,
but does not encourage such use as a means to evade regulation or
disadvantage entities that choose to conduct those activities
themselves.
Remote sensing: After considering public comments and pertinent
policy considerations, this definition now applies only to (1) remote
sensing conducted when in orbit of the Earth, rather than in orbit of
any celestial body; and (2) to collecting data that can be processed
into imagery of the surface features of the Earth. This definition is
based on the definition of ``land remote sensing'' found at 51 U.S.C.
60101(4). Therefore, systems that can only produce data that cannot be
processed into Earth-surface imagery are not required to obtain a
license under this final rule. For example, a system in Earth orbit
designed to conduct NEI would likely be conducting remote sensing for
the purpose of this rule, because the instruments used for such
missions typically are capable of collecting data that can be processed
into imagery of the surface features of the Earth. Please see
``Jurisdiction,'' Sec. 960.2, for technical capabilities that are
specifically not licensed under this final rule.
Significant or substantial foreign agreement: In response to
comments, Commerce clarifies that this definition is intended to cover
only foreign agreements the execution of which would add or otherwise
change material facts (see ``material fact'' definition and explanation
above) and therefore would already require a license modification. In
other words, this definition is intended to articulate that
``significant or substantial foreign agreement'' are only agreements
that, when executed, will change something about the license.
Some commenters misunderstood the proposed rule's wording,
believing that it meant that a change in any fact
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involving a foreign country (even a low-value data sale to a foreign
country) would require a license modification due to this definition.
Commerce has changed the wording of this definition to attempt to
eliminate this confusion. The rewording is intended to carry out the
proposed rule's intent: That something is a significant or substantial
foreign agreement only if its execution would add or otherwise change a
material fact. This definition is intended to reduce licensees'
compliance burdens by requiring only one process--license
modification--rather than including a separate process for review of
foreign agreements that do not add or otherwise change material facts.
Some commenters requested that Commerce create a list of favorable
nations, transactions with which would not require a significant or
substantial foreign agreement process. Commerce disagrees because of
the likelihood that national security or foreign policy concerns would
outpace Commerce's ability to update this list. One commenter noted
that the Act requires only a notification--not a license modification--
for a significant or substantial foreign agreement. But as explained
above, Commerce has effectively collapsed the significant or
substantial foreign agreement process with the license modification
process, such that there are no significant or substantial foreign
agreements that do not separately require a license modification.
Commerce believes that it cannot further reduce this regulatory burden.
Examples:
Licensee contracts with a foreign company or government to
sell unenhanced data, to be delivered through a cloud service provider.
The license (as shown in appendix C) does not list recipients of
unenhanced data, whether foreign or within the United States.
Therefore, this contract is not a significant or substantial foreign
agreement because it does not require a license modification. The
Licensee can sign the contract without any approval by or notification
to Commerce.
Licensee contracts with a foreign company or government to
sell unenhanced data, to be delivered directly to a ground station at
the foreign entity's location. The license lists the location of ground
stations that receive unenhanced data. If the license does not already
list this ground station, delivering unenhanced data to it would
require approval of a license modification. Therefore, it is
technically a significant or substantial foreign agreement. However,
practically speaking, it would be processed as a license modification
request, regardless of whether the ground station in question is
foreign or domestic.
Unenhanced data: This definition, based on the definitions of
``unenhanced data'' and ``data preprocessing'' in the Act, attempts to
capture all data that are unique to remote sensing operators, including
basic imagery products, rather than higher-level products and analyses
that could be created by third parties who are not conducting remote
sensing themselves. This applies to the definitions of ``operate'' and
``remote sensing space system;'' the categorization process in Sec.
960.6; and the Kyl-Bingaman condition found in Sec. 960.8(a)(9),
having the effect of limiting the scope of those definitions.
U.S. person: Some commenters requested that Commerce define ``U.S.
person'' rather than ``U.S. citizen.'' Commerce has made this change.
Commerce makes a distinction between ``person'' and ``U.S. person.'' As
defined in this part, a ``person'' includes anyone, whether foreign or
domestic and including juridical persons, who is not the U.S.
Government. A ``person'' is required to obtain a license from Commerce
to operate a private remote sensing space system in the United States.
By contrast, a ``U.S. person'' is a United States national, either
natural or juridical. A ``U.S. person'' must obtain a license from
Commerce to operate anywhere in the world, inside or outside the United
States. The definition of ``U.S. person'' does not limit who may apply
for and receive a license from Commerce. Any person who desires to
operate a system from within the United States is eligible to apply for
a license. ``U.S. person,'' instead, only determines who must obtain a
license from Commerce to operate anywhere outside the United States.
Subpart B--License Application Submission and Categorization
Subpart B contains application and license review procedures, and
the analysis the Secretary will use for assigning systems to a tier.
The following provisions are of particular note.
Section 960.5 Application Submission
Section 960.5(d): In response to comments, Commerce included a
seven-day time limit on the Secretary's review of whether an updated
application constitutes a new application. If it does, the application
review timeline begins afresh.
Section 960.6 Application Categorization
Section 960.6(a): In response to comments and as discussed in
detail in the General Overview section above, Commerce eliminated the
technical criteria in the proposed rule (which separated ``low-risk''
systems from ``high-risk'' systems) in favor of criteria based solely
on unenhanced data availability. Commerce refers to the resulting
groups as ``tiers,'' partly due to commenters who suggested that the
proposed rule's category names were pejorative, but primarily because
the new tier system is not based on risk. A major benefit of this
approach is that the tier determination in the final rule is a
quintessentially commercial question suited to the Secretary of
Commerce. Accordingly, under the final rule, the Secretary makes the
determination of the appropriate category, and will consult with other
agencies, as appropriate, to resolve a difficult categorization. The
Secretary of Defense or State may notify the Secretary of Commerce if
they disagree with Commerce's determination of availability, including
taking into account matters of national security or international
obligations or policies not considered in availability, but such
notification must be sent by an official at least as senior as an
Assistant Secretary.
This approach to categorization is also akin to some commenters'
request for applications to be ``deemed granted'' if they proposed to
collect data that were already available; under the final rule, these
applications will be Tier 1, receive minimal conditions (see Sec.
960.8), and the Secretary may only deny them if there is a high degree
of evidence that they are not eligible for a license (see Sec.
960.7(a)). Finally, this tier determination is appealable after the
license is granted (because making it appealable before license grant,
as some commenters requested, would unduly slow the application review
process, which is quite short (see Sec. 960.7)).
Section 960.6(a)(1): Tier 1 consists of systems which, in the
Secretary's analysis, have the capability to collect unenhanced data
substantially the same (see definition of ``substantially the same'' in
Sec. 960.4 and discussion below) as unenhanced data already available
from entities not licensed under this part. If the Secretary determines
that unenhanced data outside the Secretary's control are available, and
a proposed system's unenhanced data will be substantially the same (in
a holistic sense) as that available data, the Secretary will categorize
the system as
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Tier 1. Primarily, the Secretary will examine what unenhanced data are
available from foreign sources when making this determination. More
details about the Secretary's analysis are below.
Capability: The Secretary's determination will focus on the
system's capability, rather than its business plans or planned mission.
For example, if a system's technical specifications demonstrate that it
is capable of collecting unenhanced data at 1 meter spatial resolution,
but the application states that the operator plans only to collect data
at 5 meters spatial resolution, the Secretary will evaluate the system
as though it were planning to collect its best technical capability (1
meter data).
Unenhanced data: The Secretary's analysis under Sec. 960.6(a)
looks to the system's ability to collect unenhanced data, including
preprocessed data and basic imagery products, rather than any processed
data or products that will be possible to create with the unenhanced
data (see ``unenhanced data'' definition in Sec. 960.4). For example,
if a foreign remote sensing space system produces imagery with a
spatial resolution of 5 meters, but when combined with data from non-
space based sources it can result in imagery with a spatial resolution
of 1 meter, the Secretary would consider the spatial resolution of 5
meters for the characterization analysis in Sec. 960.6.
Substantially the same: The Secretary will use a holistic approach
when comparing data, taking into account factors such as the spatial
resolution, temporal resolution (how frequently data collected over a
given spot on the Earth will be available), spectral bands used,
collection volume, etc. (see ``substantially the same'' definition in
Sec. 960.4). In other words, the Secretary's inquiry is whether the
unenhanced data are a market substitute for unenhanced data from other
sources, rather than the risk-focused question of whether the
unenhanced data pose the same national security risks as other data.
Available: When considering the availability of unenhanced data
outside the Secretary's control, the Secretary will consider whether
they are ``readily and consistently obtainable by an entity or
individual other than the U.S. Government or a foreign government''
(see definition of ``available'' at Sec. 960.4, and discussion above).
For purposes of Tier 1, Commerce will consider whether such an entity
or individual is able, readily and consistently, to obtain unenhanced
data from sources outside the Secretary's control, including foreign
sources. This standard is intended to capture arm's-length
transactions--essentially, where unenhanced data are available on the
open market on ordinary commercial terms. Commerce will perform a
thorough analysis using all information at its disposal, and broadly
welcomes information from U.S. Government agencies and others to inform
this analysis. Commerce also invites applicants to include evidence of
the availability of relevant data along with their application (see
Appendix A).
Section 960.6(a)(2): Tier 2: The analysis for whether a system is
Tier 2 is similar as the analysis for Tier 1; please see above for
discussion of the terms ``capable,'' ``unenhanced data,''
``substantially the same,'' and ``available.'' However, a system is
Tier 2 if the Secretary determines that it is capable of producing
unenhanced data substantially the same as unenhanced data available
only from systems licensed under this part. In other words, Tier 2 will
consist only of Commerce-licensed remote sensing systems. Where a
certain capability exists only among this group, it belongs in Tier 2
(see discussion of Tier 2 license conditions below) because a
restriction placed on this group, such as a limited-operations
directive, could effectively limit all access, globally, to such data.
Section 960.6(a)(3): Tier 3: Like with Tiers 1 and 2, the Secretary
will determine whether a system is Tier 3 based on whether it is
capable of producing unenhanced data substantially the same as
otherwise available unenhanced data (see above discussions about those
terms). Tier 3 consists of systems that are capable of producing
unenhanced data that are not available from any sources. Essentially,
Tier 3 consists of entirely novel capabilities. These must be treated
differently than systems from which unenhanced data are already
available (whether only from Commerce-controlled entities or
otherwise), because the U.S. Government is unlikely to have had a
chance yet to evaluate how to mitigate any risks the new capability
will pose (see discussion below on Sec. 960.10). Note that this does
not mean that no such data exist--merely that they are not available as
defined in this final rule. For example, if such data only exist due to
another Tier 3 system, and that Tier 3 system is still operating under
a temporary license condition (see discussion of Sec. 960.10) that
prohibits all dissemination of certain data, then a new system
proposing to produce such data would also be Tier 3, because the only
other such data in the world are not ``available.'' However, as soon as
such data are ``available'' due to the expiration of the temporary
condition, then the production of that data would no longer make a
system Tier 3. All such systems would become Tier 2. Note also that a
system's novelty (and therefore its categorization in Tier 3) is tied
only to its unenhanced data. A system cannot be categorized as Tier 3
simply because the combination of its unenhanced data with other data,
or the post-processing of its unenhanced data, would result in novel
products. Commerce will look only to whether the system's unenhanced
data alone are not substantially the same as any unenhanced data
available anywhere in the world.
Section 960.6(c): The shift to ``tiers'' is also responsive to
commenters who raised the concern that Commerce would not be able to
update the technical categorization criteria in the proposed rule
frequently enough to keep up with technological advances. As this
paragraph demonstrates, the tiers in the final rule are dynamic and do
not require rulemaking updates to reflect technological advances.
Instead, as explained in this paragraph, systems will automatically
move to lower-numbered tiers as the unenhanced data they are capable of
producing become available. For example, a system might belong in Tier
2 if it is capable of collecting unenhanced SWIR data at 10 meters
spatial resolution, and the only other 10-meter unenhanced SWIR data in
the world are available only from U.S. remote sensing licensees. As
soon as a system outside the Secretary's control (most likely a foreign
remote sensing space system) makes substantially the same 10-meter SWIR
unenhanced data available, this licensee would receive a Tier 1 license
under the procedures in this paragraph. The licensee would no longer be
required to comply with limited-operations directives. However, if the
reverse happens (a system is Tier 1 due to a single foreign competitor
producing the same unenhanced data, but the foreign competitor goes out
of operation), the Tier 1 license would not become a Tier 2 license.
The dynamic nature of this adjustment goes only in the direction of
reducing the burdens to industry.
See Sec. 960.13 for a discussion of how a system's tier may change
to a higher-numbered tier if the Secretary grants the licensee's
voluntary request for a license modification. Note, too, that it is
possible that a license application that is significantly altered such
that it is deemed withdrawn and refiled under Sec. 960.5(d) may be
categorized into a different tier (including a higher tier) than the
original application.
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Subpart C--License Application Review and License Conditions
Subpart C contains the standard for license grants and denials;
license conditions that will apply to each tier, including how
temporary license conditions will be set; compliance and monitoring;
license modification and waiver procedures; and details about how
licenses are terminated. The following provisions are of particular
note.
Section 960.7 License Grant or Denial
Describes the application review process, which is now generally
the same for all applications.
Section 960.7(a): Consistent with public comment, a presumption of
approval applies equally to all applications. Applications are granted
or denied based on the Secretary's determination whether the applicant
will comply with all legal obligations, and applicants are presumed to
comply unless the Secretary has specific, credible evidence to the
contrary. The Secretary cannot deny a license based on the capabilities
of the proposed system or any determination of risk to national
security.
Section 960.7(b): Consistent with public comment, the Secretary
will make a grant or denial determination on all applications within 60
days. If no determination is made within that time, the applicant can
request a determination, which must be provided within three days
unless the Secretary and applicant agree to extend the review period in
unusual circumstances.
Section 960.8 Standard License Conditions for All Tiers
This section contains conditions that will be included in licenses
for all tiers of systems. It primarily consists of those required to be
included in licenses by the Act or other law.
Section 960.8(a)(3): One commenter raised privacy and civil liberty
concerns regarding the condition requiring the licensee to provide
unenhanced data of a government's territory to that government, noting
the potential use of such data. The Act requires Commerce to include
this condition, so Commerce cannot lawfully omit this condition.
Commerce also notes that the origin of this is a resolution adopted in
1986 by the United Nations General Assembly: ``Principles Relating to
Remote Sensing of the Earth from Outer Space.''
Commenters were split on the proposed rule's decision not to
designate any data under 51 U.S.C. 60121(e), which resulted in
licensees not being required to make any unenhanced data available to
the Department of the Interior before deleting any such data. One
suggested that the requirement under the existing regulations (that all
data must be made available before deletion) is not burdensome and
should be retained, while others disagreed. Commerce is choosing to
keep the proposed rule's approach designating no data required to be
offered, but to avoid any confusion, Commerce removed the standard
condition found in the proposed rule. Licensees will not be required to
notify Commerce or offer unenhanced data to Interior before purging
such data. Commerce believes there is a burden to requiring licensees
to store and archive data that they may not otherwise wish to retain,
and to seek permission before purging it. However, licensees may offer
to donate such data, especially archived data, if they so choose.
Commerce can provide any interested licensees with appropriate contacts
at the Department of the Interior.
Section 960.8(a)(4): The ANPRM raised the issue of whether Commerce
should require liability insurance, perhaps as an alternative to
specifying acceptable means of satellite disposal in the regulations,
as either option would address the U.S. Government's policy of
minimizing orbital debris and reduce the U.S. Government's potential
liability for damages caused by licensees under the Convention on
International Liability for Damage Caused by Space Objects. In response
to ANPRM comments, the proposed rule did not require liability
insurance. While one commenter noted that the proposed rule, by not
requiring licensees to obtain liability insurance, places risk on the
U.S. Government and taxpayers, other commenters supported the decision
to require compliance with generally accepted disposal guidelines
instead.
However, as a commenter noted, nearly all Commerce-licensed systems
are also licensed by the Federal Communications Commission (FCC), and
FCC licenses already address orbital debris and disposal issues in a
comprehensive manner (and are in the process of being revised, subject
to a separate public rulemaking process (84 FR 4742, February 19,
2019)). To avoid duplicative regulation, Commerce has opted to defer to
FCC license requirements regarding orbital debris and spacecraft
disposal, and therefore there is no longer any license condition
requiring specific orbital debris or spacecraft disposal practices in
this final rule, and Commerce licenses will not include any such
condition. Sec. 960.8(a)(4) simply contains the text required by the
Act: That ``upon termination of operations under the license, [the
licensee shall] make disposition of any satellites in space in a manner
satisfactory to the President.'' Commerce clarifies that, until further
updates, the disposition manner satisfactory to the President is to
follow the relevant FCC license.
Note, however, that Commerce may issue guidance or undertake a
separate, narrow rulemaking to revise this license condition as future
developments may warrant.
Section 960.8(a)(5): Commerce consolidated all reporting
requirements into one condition and increased the time to report to
seven days. As noted above, Commerce revised the definition of anomaly
in response to comments so fewer anomalies would fall under this
condition and require reporting.
Section 960.8(a)(7): In response to a comment, all systems now
require only annual certification of the continued accuracy of material
facts in the license, as opposed to semiannual reporting as required
for some systems in the proposed rule. See discussion of Sec. 960.14
for more details about this certification.
Section 960.8(a)(8): The rule retains the possibility of physical
site inspections, but does not require them. It now provides a minimum
of 48 hours' notice, but does not require any prior evidence to suggest
non-compliance or risk, as some commenters requested. This is an
important tool to ensure compliance. Commerce disagrees with comments
suggesting that physical inspections are always outdated and cost-
ineffective, but Commerce will continually evaluate whether particular
inspections are necessary. Note that in response to comments, Commerce
greatly restricted the definition of a system, which has the effect of
limiting the facilities that could be subject to inspection. For
example, because data storage facilities are now excluded from the
definition of a system, if system data are stored in a commercial
cloud, Commerce will not require the ability to inspect those physical
data centers.
Section 960.8(a)(9): In response to comments, the rule does not
specify a resolution threshold for imagery over the State of Israel.
Instead, Commerce will regularly evaluate the resolution available from
commercial sources, using the definition of ``available'' found in this
part, and specify the requirement in the Federal Register. Commerce
encourages the public to provide evidence of data available from
commercial sources of the State of Israel at a resolution finer than
our latest Federal Register notice. At the time of
[[Page 30800]]
issuance of this final rule, the latest such notice sets this
resolution threshold at 2 meters spatial resolution (83 FR 51929,
October 15, 2018).
Section 960.9 Additional Standard License Conditions for Tier 2 Systems
Tier 2 systems have no conditions restricting the operation of the
system apart from the requirements to: (1) Obtain the written consent
of the owner of an Artificial Resident Space Object (ARSO) before
conducting resolved imaging of the ARSO and providing the Secretary
notification five days in advance of such imaging and, (2) comply with
limited-operations directives. The proposed rule contained
significantly restrictive conditions on specific types of imaging,
including NTI, SWIR, and SAR. Future updates to the regulations could
have revised or removed some of these restrictions, but also could have
added new restrictions for other imaging types. Commenters were
strongly opposed to these conditions as they applied to high-risk
systems in the proposed rule. Accordingly, Commerce has removed them
altogether. There are no permanent conditions restricting any imaging
techniques in this final rule. Furthermore, because Commerce has
previously licensed all of the above techniques, all such systems would
either be Tier 1 or Tier 2 and therefore have no possibility of
additional conditions, unless they produce unenhanced data that are
novel in some way, in which case they would be categorized as Tier 3.
Section 960.9(a)(1): To ensure compliance if a limited-operations
directive is issued in an emergency, Tier 2 systems must be capable of
encrypting telemetry tracking and control and data specified in the
limited-operations directive. Tier 2 systems must also be capable of
implementing other best practice measures to prevent unauthorized
access to the system. For the purposes of complying with this
condition, however, such encryption and other measures need not be
active in the absence of a current limited-operations directive, so
long as the system can immediately comply with a directive when it is
issued. Note that during an inspection or investigation, Commerce may
require the licensee to demonstrate that sufficient encryption and
other measures could become active immediately as though a limited-
operations directive had just been issued. If the licensee is unable to
demonstrate this ability, the licensee would be out of compliance with
this condition even absent a real-world limited-operations directive.
Through this structure, Commerce is striking a balance between some
commenters' request that Commerce not require specific encryption, and
the legitimate need to encrypt sensitive data in the event of a
national-security emergency.
It is Commerce's understanding, at the time of this writing, that
encryption of data in some or all cases cannot be turned on and off.
Therefore, Commerce believes that, in those cases, licensees will in
practice be required to encrypt data at all times; otherwise, they will
not be able to turn encryption on immediately in the event of a
limited-operations directive, which means they would already be in
violation of this license condition. However, Commerce welcomes updated
information about the technical capabilities in this area.
While some comments supported the proposed rule's approach
requiring National Institute of Standards and Technology (NIST)-
approved encryption, one commenter suggested this was overly
prescriptive. Commerce believes that this approach provides some
benchmark of what encryption will be acceptable during an emergency,
which provides a ``safe harbor'' for licensees who want to ensure that
their preparation for a limited-operations directive will suffice.
However, Commerce notes that applicants and licensees can always seek a
waiver or modification if they prefer to take a different approach.
Also in response to comments, Commerce will no longer require
completion of a NIST Cybersecurity Framework document, and industry
best practice is relative to the system operator's business size.
Nonetheless, Commerce has provided some best practice factors above in
the preamble to this final rule for licensees to consider regarding
cybersecurity.
Section 960.10 Additional Standard and Temporary License Conditions for
Tier 3 Systems
In addition to the standard license conditions in Sec. 960.9
applicable to Tier 2, Tier 3 systems will need to comply with possible
temporary conditions. This section describes the process for imposing
such temporary conditions.
Section 960.10(b): The first step in setting a temporary license
condition on a Tier 3 system is Commerce's notification to the
Secretaries of Defense and State. The notified Secretaries will have 21
days from that notification to craft any temporary conditions. This
limited time frame will avoid the long delays that have regularly
occurred during the review of applications for novel phenomenologies.
Importantly, the temporary condition must be designed to expire within
one year from the date the Secretary obtains data suitable for
evaluating the system's capabilities (generally, the date of initial
operating capabilities). As explained above, temporary conditions are
designed to give the U.S. Government an opportunity to mitigate the
risk it foresees from novel technology; Commerce anticipates that one
year will be sufficient, in many cases, to allow the U.S. Government to
understand how to mitigate such risk (see discussion of Sec. 960.10(e)
for information about extensions).
Section 960.10(c): Commerce will not simply impose the Secretary of
Defense or State's proposed temporary condition directly in a Tier 3
license. Instead, this paragraph lays out the stringent criteria and
process through which Commerce will evaluate the proposed condition.
The relevant criteria include considerations of applicable law, with
the intent to ensure that the condition is as narrowly tailored to the
risk as possible. Also, this paragraph specifies that Commerce will
consult with the Secretary requesting the condition and with the
applicant or licensee. This consultation is aimed at resulting in the
least restrictive possible temporary condition. Of particular note, the
paragraph considers whether the applicant or licensee can mitigate the
concern another way: This is intended to give the applicant or licensee
an opportunity to creatively alter their technical or business plan, if
possible, to avoid the identified risk.
Section 960.10(e): Commerce recognizes that, in some cases, an
extension of the temporary condition beyond one year may be necessary.
However, Commerce also recognizes that indefinite extensions would
render temporary conditions effectively permanent, meaning that
applicants would have no certainty that the conditions will actually
expire at some point and allow them to fully exploit their system's
capabilities. This paragraph attempts to strike an appropriate balance
between those concerns. It sets out stringent requirements for Commerce
to extend a temporary condition at the request of the Secretary of
Defense or State. These requirements include notification no less than
60 days before the expiration of the condition (to give licensees fair
notice of a potential extension) and a showing of the necessity of
continuing the condition under paragraph (c). If Commerce finds these
requirements are met, it may extend the temporary condition for one
year. With the exception of a request specifically from the Secretary
of Defense or State and the requisite showing of need, Commerce
[[Page 30801]]
may not grant more than two one-year extensions. Therefore, a temporary
condition will, absent an approved Secretarial request, last for an
absolute maximum of three years. Commerce anticipates that no more than
three years should be needed for the U.S. Government to take necessary
steps to protect itself from a new technology. Even if the U.S.
Government is unable to mitigate to the level it would like to, by this
point, it is likely that foreign capabilities would be under
development, and allowing temporary conditions to possibly become
permanent would only encourage the development of such foreign
capabilities.
Section 960.10(f): Some comments raised concerns with the number of
times in the proposed rule that Commerce would consult with the
Secretaries of Defense and State, because each consultation required
any disagreement to be resolved via the MOU, potentially resulting in
prolonged delays. Due to the philosophical changes described above,
Commerce does not need to consult with other agencies under the final
rule nearly as often as it would under the proposed rule. Moreover,
most of the consultations that remain do not require interagency
concurrence. Temporary conditions, as discussed further below, are a
unique exception that require the expertise and authority of the
Departments of Defense and State. Accordingly, Sec. 960.10(e) is the
sole provision to use the MOU's complete interagency dispute resolution
procedures in the final rule. Note that Sec. 960.6(b) uses the MOU's
interagency dispute resolution procedures as well, but only the higher
level procedures, and only after an Assistant Secretary has asked the
Secretary to reconsider a system categorization.
Section 960.11 No Additional Conditions
This confirms that neither Commerce nor the Departments of Defense
or State may impose any conditions on a system other than those
described in Sec. Sec. 960.8, 960.9, 960.10, and temporary conditions
developed pursuant to the process in Sec. 960.10. Therefore, existing
conditions (including Geographic Exclusion Areas, license appendices,
and Data Protection Plan requirements) will not automatically or
permanently be included in any license. This inability to impose any
additional conditions also includes a ban on ``retroactive'' conditions
(that is, conditions required by the U.S. Government after license
issuance, other than due to a licensee's voluntary request for a
license modification), which is consistent with many comments which
indicated the possibility of such conditions were very harmful to
individual companies, investment, and the reputation of the U.S.
business environment. The Act still contains an authority for
retroactive conditions: 51 U.S.C. 60147(d) allows Commerce to require
the Secretary of Defense to reimburse a licensee for imposing a
technical modification. However, because Sec. 960.11 now prohibits
Commerce from imposing any retroactive conditions, the question of
reimbursing licensees for any such conditions is moot.
Note that additional conditions may be necessary if a licensee
voluntarily requests a license modification, and the modification would
require the system's re-categorization to Tier 3, which can involve
temporary conditions (see Sec. 960.13(b)). But in that case, the
licensee will have an opportunity to withdraw or revise the
modification request if the licensee wishes to avoid any such
conditions.
Section 960.12 Applicant-Requested Waiver Before License Issuance
For clarity, Commerce moved these provisions into their own
section, whereas the proposed rule included them along with the
standard license conditions for low- and high-risk conditions. On a
related note, some commenters requested that Commerce eliminate the
provision that certain standard conditions in the proposed rule could
not be waived. Commerce notes that those conditions were largely ones
that were required by the Act (51 U.S.C. 60122) or other law, so
Commerce may not have the authority to waive them. Nevertheless,
Commerce now addresses this issue in Sec. 960.12 by requiring the
Secretary to determine, before granting a waiver (or perhaps adjusting
a condition, rather than waiving it altogether), that granting the
waiver or adjustment would not violate the Act or other law.
Consequently, Commerce has removed the distinction between inherently
waivable and non-waivable conditions.
Section 960.13 Licensee-Requested Modifications After License Issuance
This section contains the process for requesting a modification to
a license. Such a modification could be to change a material fact in
the license or to amend a license condition. As described in the
definitions, ``waiver'' will exclusively refer to a request to amend a
license condition prior to license issuance, while ``modification''
will refer to a request to amend the text of the license after license
issuance.
Section 960.14 Routine Compliance and Monitoring
Commerce notes that the minimal compliance and monitoring
requirements in this section are intended to streamline, to the
greatest extent possible, all paperwork burdens for licensees. But
licensees must understand how critical it is to comply with this
requirement carefully. Once each year, licensees will be required to
certify that each material fact in their license remains true (see
``material fact'' definition in Sec. 960.4). The annual certification
is not a substitute for a license modification request; instead, if a
material fact is no longer true at the time of the annual
certification, the licensee is already out of compliance with the
requirement to obtain approval for a license modification prior to a
change in any material fact (see Sec. 960.16(d)).
Subpart D--Prohibitions and Enforcement
Subpart D contains prohibitions and enforcement mechanisms. The
following provisions are of particular note.
Section 960.16 Prohibitions
Section 960.16(a): This clarifies that a person (whether an
individual or a legal entity; see definition of ``person'' in Sec.
960.4) is prohibited from operating a remote sensing space system (see
definition of ``private remote sensing space system'' in Sec. 960.4)
without a Commerce license, if (1) the person operates a system from a
location within the United States, regardless of their nationality, or
(2) the person is a U.S. person (see definition of ``U.S. person'' in
Sec. 960.4) who operates a system from any location.
Section 960.16(d): This clarifies that a licensee must not only
refrain from violating license conditions (per Sec. 960.16(b)), but
must also obtain approval of a license modification before taking any
action that would change a material fact in the license. For example,
the location of the system's mission control center is a material fact
included in the license template in appendix C. Prior to changing the
location from the one listed in the license, the licensee must obtain
approval of a license modification. Failing to do so violates the
prohibition described in this paragraph.
Section 960.17 Investigations and Enforcement
This provision simply notes Commerce's statutory investigation and
enforcement authorities without restating them. These authorities
[[Page 30802]]
include conducting investigations, issuing civil penalties, seizing
objects pursuant to a warrant, and seeking an injunction from a U.S.
district court to terminate, modify, or suspend licenses in order to
investigate, penalize noncompliance, and prevent future noncompliance.
Subpart E--Appeals Regarding Licensing Decisions
Subpart E describes administrative appeals. The following
provisions are of particular note.
Section 960.18 Grounds for Adjudication by the Secretary
This provision describes the types of actions subject to
administrative appeal and the legal grounds for appeal of those
actions.
Section 960.18(c): One commenter expressed concern with the
exception for an appeal ``to the extent that there is involved a
military or foreign affairs function of the United States.'' This
exception, however, is required by the Administrative Procedure Act, 5
U.S.C. 554(a)(4). To clarify, a person may appeal an action that
involves such a function, but any portion of the appeal that involves
that function cannot be considered during the appeal. For example, the
rationale for a temporary license condition under Sec. 960.10 may
involve a military function. A licensee may appeal to determine whether
Commerce followed the correct administrative procedures, such as those
in Sec. 960.10, and considered the factors in paragraph (c), but the
appellant could not appeal the military rationale itself.
Per multiple comments, Commerce has added the categorization of the
system and the Secretary's failure to make a final determination on an
application or modification request to the list of actions subject to
appeal.
Section 960.19 Administrative Appeal Procedures
This provision describes the process for appealing one of the
actions described in Sec. 960.18.
Appendices
The appendices include (A) a sample application, (B) application
instructions, (C) a sample license, and (D) the MOU.
Appendix A: Application
Note that all responses to questions in this application constitute
material facts (see definition of ``material fact'' at Sec. 960.4, and
discussion of the importance of material facts in the preamble sections
describing Sec. Sec. 960.14 and 960.16 above).
In response to comments, Commerce dramatically increased the
threshold for reporting foreign ownership: The proposed rule required
reporting of any foreign ownership, but the final rule requires only
the reporting of foreign ownership interests of 10 percent or greater,
and only if the overall U.S. ownership is not at least 50 percent.
Examples:
Company A is 51 percent owned by a U.S. entity and 49
percent owned by a foreign entity. Company A does not need to list the
foreign entity in its application (but it would need to list the U.S.
entity, as it is a single owner with greater than 50 percent
ownership).
Company B is 40 percent owned by U.S. entities, and twelve
foreign entities own 5 percent each. Although Company B is below
majority U.S. ownership, none of the foreign owners have at least 10
percent ownership, so Company B does not need to list the foreign
entities in its application.
Company C is 25 percent owned by U.S. entities, 25 percent
owned by foreign entity X, and ten other foreign entities own 5 percent
each. Company C must report only foreign entity X.
Company D is 40 percent owned by two different U.S.
entities, and 10 percent owned by six different foreign entities.
Company D must report those six foreign entities.
Because the final rule does not use the objective criteria the
proposed rule used to categorize systems as low- or high-risk, Commerce
will no longer consider whether there is ``no'' foreign investment when
categorizing applicants. Many commenters raised concerns with this
criterion. Instead, as discussed above, Commerce will only consider the
availability of substantially the same unenhanced data when
categorizing applicants. To aid this analysis, the application includes
a number of questions about the technical capabilities of the proposed
system.
Because the scope of the definition of ``private remote sensing
space system'' (see Sec. 960.4) is greatly reduced, the application
now requests much less information about downstream components of the
system. For example, there is no need to report the location of or any
other details about any cloud storage facilities.
Appendix C: Sample License
As with the application, all facts included in the license will be
material facts. Any deviation from these material facts requires
approval of a license modification request.
Appendix D: 2017 Memorandum of Understanding (MOU)
Commerce appreciated the comments raising concerns about the
frequent use of the MOU's dispute resolution and escalation procedures
in the proposed rule. Due to these comments, and due to the
dramatically decreased role of interagency consultation in the final
rule, the final rule uses the MOU's dispute resolution procedures only
twice: In Sec. 960.10, and in an abbreviated manner in Sec. 960.6.
Under all other circumstances, Commerce will make regulatory
determinations, consulting with another agency as appropriate, as
specified in the rule. Please also see the discussion of the refined
definition of ``MOU'' in Sec. 960.4.
Other Comments
Some commenters requested that Commerce address privacy concerns.
However, such concerns are outside the scope of the Act. These requests
are better addressed to Congress.
Some commenters asked for an explicit statement that Commerce would
respect the protections afforded under the Freedom of Information Act
for proprietary information. Commerce understands the concern, but
wishes to reassure the public that regardless of any explicit statement
in the final rule, Commerce will follow all legal requirements to
protect trade secrets and commercial proprietary information. Commerce
believes that it is superfluous to say so in the final rule.
Conversely, at least two commenters asked Commerce to make
applications and licenses publicly available. Due to the risk of
exposing proprietary information, Commerce cannot make full
applications or licenses available. Additionally, due to the
philosophical approach that the rule should impose as few requirements
on licensees as possible, Commerce will not require licensees to
prepare publicly releasable summaries. However, Commerce may make non-
privileged summaries of licensed systems available in its discretion.
Classification
Background
Commerce has evaluated whether this rule is a logical outgrowth of
the proposed rule as required by the Administrative Procedure Act (APA,
5 U.S.C. 500 et seq.). Commerce has also examined the impacts of this
rule as required by E.O. 12866 on Regulatory Planning and Review
(September 30, 1993), E.O. 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), E.O. 13771 on
[[Page 30803]]
Reducing Regulation and Controlling Regulatory Costs (January 30,
2017), the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the
Paperwork Reduction Act (PRA, 44 U.S.C. 3501 et seq.), the National
Environmental Policy Act (42 U.S.C. 4321 et seq.), the Unfunded
Mandates Reform Act (2 U.S.C. 1531 et seq.), E.O. 13132 (August 10,
1999), E.O. 13175 (November 9, 2000), and the Congressional Review Act
(5 U.S.C. 801 et seq.).
Logical Outgrowth--APA
Commerce acknowledges that some of the changes between the proposed
rule and the final rule may appear dramatic to some. However, Commerce
believes that the changes are logical outgrowths of the proposed rule,
as required by the APA. The APA's logical outgrowth requirement is
directed at ensuring that the public had adequate notice of the final
rule that could result from a proposed rule, so that the public had an
opportunity to comment on all matters. As a result, a final rule is a
logical outgrowth of a proposed rule if the public should have
anticipated that certain changes were possible.
In this case, the two most significant changes between the proposed
rule and the final rule are: (1) The elimination of nearly all
permanent operational license conditions, and (2) the revised approach
to categorizing systems. Importantly, Commerce specifically called
attention to these two areas and requested comment on them. The
proposed rule's preamble reads: ``Of particular note, Commerce seeks
feedback on the proposed rule's criteria used to distinguish between
low- and high-risk systems, and the standard license conditions
proposed for low- and high-risk systems, respectively (including cost
of complying with such conditions and suggested alternative
approaches).'' 84 FR 21283.
As for the first major change, removing most operational
conditions: Public comments were in nearly unanimous agreement that the
proposed rule's operational conditions were too stringent. Commerce
believes that it was foreseeable that Commerce might remove these
proposed conditions, and courts have recognized that it is always
foreseeable that an agency may drop a portion of a proposed rule. See
Mid Continent Nail Corp. v. United States, 846 F.3d 1364, 1374 (Fed.
Cir. 2017).
The second major change was from categorizing systems into high-
risk and low-risk categories, based on an objective set of technical
criteria to evaluate risk, to the final rule's approach of categorizing
systems into tiers based on commercial availability. Commerce believes
that this change was foreseeable to commenters. First, several
commenters, including NOAA's Advisory Committee on Commercial Remote
Sensing, specifically requested this change, which suggests that the
public in fact foresaw that possibility.
Moreover, this change may appear larger than it truly is from an
APA perspective: Under both the proposed rule's and final rule's
approach, Commerce would treat categories of licensees proportionally,
in a predictable, uniform way. Under the proposed rule, Commerce
proposed to do this by looking only to risk: The logic was that a
system should have conditions commensurate to the amount of risk that
the system posed to U.S. Government. But commenters pointed out that
the U.S. Government would act illogically if it looked at U.S. systems
in a vacuum, not considering the capabilities of comparable systems
abroad. As a result, some commenters suggested categorizing systems
based on commercial availability, and Commerce accepted this
suggestion.
This approach does not abandon the consideration of risk. Instead,
the final rule logically tailors the U.S. Government's consideration of
risk to those types of capabilities that the U.S. Government can
uniquely control. Specifically, the final rule distinguishes between
Tiers 1 (no exclusive U.S. control) and 2 (exclusive U.S. control)
systems, and it creates Tier 3 (exclusive U.S. control over completely
novel capability), recognizing the potential for unforeseeable risk
posed by truly novel systems. In other words, the new tiering approach
is conceptually derived from the proposed rule's risk-focused approach,
but it is informed by public comment and results in a rational outcome,
wherein the categories (now called tiers) are tied to the amount of
control over a system that the U.S. Government realistically can exert.
Therefore, Commerce believes that this change, like the changes to the
permanent operating conditions, is a logical outgrowth of the proposed
rule.
The other, more minor, changes in the draft final rule as compared
with the proposed rule are all the direct result of public comment. For
example, Commerce reduced the scope of its jurisdiction over remote
sensing in the orbit of celestial bodies other than Earth; scoped down
the definition of ``anomaly;'' and scoped down the definition of
``remote sensing'' and ``remote sensing space system.'' All of these
changes were specifically requested by public comments to the proposed
rule, as invited by the proposed rule. Commerce believes that these
changes, therefore, were reasonably foreseeable and meet the
requirements of logical outgrowth.
For these reasons, Commerce believes that the final rule represents
a logical outgrowth of the proposed rule. However, because Commerce
recognizes that the final rule is substantially revised from the
proposed rule, Commerce is issuing this final rule as a final rule with
comment period. This will provide 30 days for additional public
comment. After this point, assuming the public does not provide
comments that justify further revising the final rule, the final rule
will go into effect after 60 days from publication.
Regulatory Planning and Review--E.O.s 12866 and 13563
E.O.s 12866 and 13563 direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Section 3(f) of E.O. 12866
defines a ``significant regulatory action'' as an action that is likely
to result in a rule (1) having an annual effect on the economy of $100
million or more in any single year, or adversely and materially
affecting a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or state, local or tribal
governments or communities (also referred to as ``economically
significant''); (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy issues arising out of
legal mandates, the President's priorities or the principles set forth
in the E.O. This rule is significant under E.O. 12866.
E.O. 13563 reaffirms the principles of E.O. 12866 while calling for
improvements in the nation's regulatory system to promote
predictability, to reduce uncertainty, and to use the best, most
innovative, and least burdensome tools for achieving regulatory ends.
The E.O. directs agencies to consider regulatory approaches that reduce
burdens and maintain flexibility and freedom of choice for the public
where these approaches are relevant, feasible, and consistent with
regulatory objectives. E.O. 13563 emphasizes further that regulations
must be based on the best available science and that the rulemaking
process must allow for
[[Page 30804]]
public participation and an open exchange of ideas. Commerce has
developed this rule in a manner consistent with these requirements.
This rule is consistent with E.O. 13563, and in particular with the
requirement of retrospective analysis of existing rules, designed ``to
make the agency's regulatory program more effective or less burdensome
in achieving the regulatory objectives.'' The final rule is
dramatically less burdensome for the regulated community because it
eliminates most permanent license conditions and makes any specialized
license conditions temporary. Additionally, it greatly reduces
paperwork burdens and associated administrative costs. For example,
while the proposed rule required much of the regulated community to
file a certification of compliance biannually, the final rule only
requires such filing annually.
Commerce believes that there is substantial information
demonstrating the need for and consequences of the proposed action
because it has engaged with the industry and the public in recent
years, including through ACCRES, to study changes in the industry.
Through direct contact with the remote sensing space industry, ACCRES,
and other fora, Commerce is well informed about the growth in the
industry and the challenges imposed by the existing regulations.
Commerce also sought public input on the proposed rule to obtain even
more information about the need for and consequences of its proposed
course of action. Commerce has incorporated the public comments to the
greatest extent feasible to reduce the regulatory burden.
Commerce believes that the rule will reduce the monetary and non-
monetary burdens imposed by the regulation of remote sensing. Moreover,
Commerce believes that the potential benefits to society resulting from
the rule are large relative to any potential costs, primarily because
it is the longstanding policy of the United States to endeavor to keep
the United States as the world leader in the strategic remote sensing
industry. Because the final rule is structured to ensure that U.S.
remote sensing licensees cannot be subject to greater burdens than
their foreign counterparts, Commerce believes that the final rule will
promote this policy.
In Commerce's view, the benefit to society of this regulatory
program is that it promotes the growth and continued innovation of the
U.S. remote sensing industry, which is a significant component of the
U.S. commercial space sector. Another benefit to society is to preserve
long-term U.S. national security, which is admittedly difficult to
quantify. Due to the national security benefits that accrue, it is
critical that the most innovative and capable remote sensing systems be
licensed to do business from within the United States. A regulatory
approach that is less burdensome to industry and thereby encourages
businesses not to leave the United States, therefore, is a benefit to
U.S. national security. In addition, a regulatory approach that
encourages potential foreign operators of private remote sensing
systems to choose to be licensed in and operate from the United States
also significantly benefits U.S. national security.
Commerce believes that the rule will result in no incremental costs
to society as compared with the status quo. Generally, the costs to
society that might be expected from regulations implementing the Act
would be additional barriers to entry in the remote sensing field, and
increased costs to operate in this industry. However, the rule takes a
significantly lighter regulatory approach than the existing
regulations, eliminating most permanent license conditions, and
increases certainty, transparency, and predictability, while still
allowing Commerce to preserve U.S. national security and observe
international obligations as required by the Act. For these reasons,
Commerce believes that the benefits of the proposed rule vastly
outweigh its costs, which are expected to be reduced by the rule.
E.O. 13771
As described in the preamble, the rule dramatically decreases
regulatory burdens. For example, the rule eliminates most license
conditions, and makes all license-specific license conditions
temporary. It also decreases administrative burdens associated with
compliance, such as by eliminating much of the paperwork burden (see
below section on Paperwork Reduction Act impacts) and by decreasing the
amount and frequency of reporting requirements. Accordingly, Commerce
has determined that the rule is a deregulatory action under E.O. 13771.
Regulatory Flexibility Act
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.),
whenever a Federal agency is required to publish a notice of rulemaking
for any proposed rule, it must prepare a regulatory flexibility
analysis (RFA) that describes the effect of the rule on small entities
(i.e., small businesses, small organizations, and small government
jurisdictions). Accordingly, Commerce has prepared the below RFA for
this rule.
This RFA describes the economic impact this rule is anticipated to
have on small entities in the space-based remote sensing industry
(NAICS 336414, defined as having fewer than 1,250 employees). A
description of the reasons for the action, the objectives of and legal
basis for this action are contained in the preamble. The reporting,
recordkeeping, and compliance requirements are described in the
Paperwork Reduction Act analysis below and the Subpart-by-Subpart
Overview. Commerce does not believe there are other relevant Federal
rules that duplicate, overlap, or conflict with this rule.
At the time of the last issuance of a final rule on this subject,
Commerce found that the rule would not have a significant economic
impact on a substantial number of small entities due to the
``extraordinary capitalization required'' to develop, launch, and
operate a private remote sensing space system. Since that time,
significant technological developments have greatly reduced these
costs: For example, such developments have resulted in reduced costs to
launch partly due to greater competition, and small satellites have
become cheaper to produce due to standardization. These changes and
others have enabled small businesses, universities, secondary and
elementary school classes, and other small entities to enter this
field. Based on an analysis of the last decade's license applications
and an attempt to project those trends into the future, Commerce
estimates that several dozen and up to a couple hundred small entities
may be affected by this rule in the years to come.
Commerce received public comment on the question of whether
economic benefits would accrue to small businesses under the proposed
rule. A major difference between the proposed rule and the final rule
is that the proposed rule would have categorized entities not based on
whether their unenhanced data are available, but based on the objective
risk they posed to national security. The objective criteria for this
analysis in the proposed rule were so stringent that, according to
public comment, very few businesses (including small businesses) would
have benefited from the light regulatory touch of the proposed rule's
``low risk'' category. Commerce has taken into account these public
comments, and believes that the final rule will be much more
economically advantageous for small businesses than the proposed rule
would have been.
[[Page 30805]]
Commerce has attempted to minimize the economic impact to small
businesses in its final rule. Most notably, Commerce will evaluate
applicants and licensees on the basis of whether the unenhanced data
their system can collect is substantially the same as unenhanced data
otherwise available, and not under the control of Commerce. If it is,
Commerce will treat that system with a very light regulatory touch,
applying the bare minimum of regulatory requirements. For example, if
an applicant proposes to collect panchromatic imagery at a spatial
resolution of 2 meters, and substantially the same unenhanced data are
available from foreign sources on the open market Commerce will treat
that system as ``Tier 1,'' resulting in the system being granted a
license with very few conditions and regulatory requirements. Commerce
anticipates that most small businesses will fall into this category.
Therefore, Commerce anticipates that small businesses will receive a
significant economic benefit under this rule, as compared with the
status quo.
Even if small businesses operate systems that would be categorized
as Tier 2 or Tier 3 under the final rule, the majority of them will
nevertheless receive significant benefits compared to the status quo.
These systems will receive the same bare minimum license conditions as
those categorized as Tier 1, with the addition of the consent and
notification requirement for conducting resolved ARSO imaging and
requirement to comply with limited-operations directives, and some
associated requirements to be able to protect sensitive data.
Additionally, Tier 3 licensees may receive temporary, system-specific
license conditions. As compared with the status quo, even systems such
as these will have far fewer regulatory requirements.
Commerce considered five alternatives to the proposed rule. The
first four alternatives, none of which garnered support in the public
comments, were to:
1. Retain the status quo and not update the regulations;
2. Retain the bulk of the existing regulations and edit them in
minor ways only to account for technological changes since 2006;
3. Repeal the status quo regulations and not replace them, instead
relying solely on the terms of the Act; or
4. Update the status quo regulations to provide an expanded role
for the Departments of Defense and State, and the Office of the
Director of National Intelligence, in recognition of the threat to
national security posed by some of the latest technological
developments.
A fifth alternative became clear after the proposed rule: Commerce
could have gone forward with the proposed rule's approach of
categorizing systems based on risk and imposing permanent license
conditions. However, that approach would have been less responsive to
public comment, which favored a lighter regulatory touch and more
flexible categorization of systems (not based on objective technical
criteria).
Paperwork Reduction Act
This rule contains a revised collection-of-information requirement
subject to the Paperwork Reduction Act (PRA, 44 U.S.C. 3501 et seq.)
that will modify the existing collection-of-information requirement
that was approved by OMB under control number 0648-0174 in January
2017. This revised requirement will be submitted to OMB for approval
along with the rule.
Public reporting burden for this requirement is estimated to
average: 15 hours for the submission of a license application; 1 hour
for the submission of a notification of each deployment to orbit; 1
hour for the submission of notification of a system anomaly or
disposal; 1 hour for notification of financial insolvency; 1 hour for a
license modification request (if the licensee desires one); and 2 hours
for an annual compliance certification. Commerce estimates that this
burden is less than a fifth of the existing paperwork burden (an
estimated 21 hours compared with 110). It is also less than the
proposed rule's collection-of-information requirement, because the
Cybersecurity Framework is no longer required, and all systems must
only complete one annual compliance certification (whereas under the
proposed rule, high-risk systems had to complete two certifications
each year).
The public burden for this collection of information includes the
time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information. Regardless of any other provision of
law, no person is required to respond to, nor shall any person be
subject to a 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.
For ease of comparison between the existing, proposed rule's, and
final rule's paperwork burdens, Commerce provides the following table:
Table 1
----------------------------------------------------------------------------------------------------------------
Proposed rule Final rule
Document Existing burden (hrs) (hrs) (hrs)
----------------------------------------------------------------------------------------------------------------
Application................................ 40................................. 20 15
Data Protection Plan....................... 23................................. n/a n/a
Cybersecurity Framework.................... n/a................................ 10 n/a
License Amendment (Modification)........... 10................................. 1 1
Public summary............................. 2.................................. n/a n/a
Foreign agreement notification............. 2.................................. n/a n/a
Completion of Pre-ship review.............. 1.................................. n/a n/a
Information when Spacecraft Launches or 8.................................. 5 5
Deploys; Disposal of Spacecraft; Detection
of Anomaly; or Financial Insolvency or
Dissolution.
Orbital Debris Mitigation Standard Comparable to existing part of 10 n/a
Practices Plan. application.
Planned Information Purge.................. 2.................................. n/a n/a
Operational Quarterly Report............... 3.................................. n/a n/a
Semiannual Compliance Certification (high- n/a................................ 2 n/a
risk only).
Annual compliance audit (certification).... 8.................................. 2 2
Annual Operational audit................... 10................................. n/a n/a
--------------------------------------------------------------------
Total.................................. 110................................ 48 21
----------------------------------------------------------------------------------------------------------------
[[Page 30806]]
National Environmental Policy Act
Publication of this rule does not constitute a major Federal action
significantly affecting the quality of the human environment.
Therefore, an environmental impact statement is not required.
Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments.
E.O. 13132: Federalism
This action does not have federalism implications, as specified in
E.O. 13132 (64 FR 43255, August 10, 1999).
E.O. 13175: Consultation and Coordination With Indian Tribal
Governments
This action does not have tribal implications as specified in E.O.
13175 (65 FR 67249, November 9, 2000).
Congressional Review Act (CRA)
This action is subject to the CRA, 5 U.S.C. 801 et seq., and
Commerce will submit a rule report to each House of the Congress and to
the Comptroller General of the United States. This action is a ``major
rule'' as defined by 5 U.S.C. 804(2).
List of Subjects in 15 CFR Part 960
Administrative practice and procedure, Confidential business
information, Penalties, Reporting and record keeping requirements,
Satellites, Scientific equipment, Space transportation and exploration.
Dated: May 13, 2020.
Stephen Volz,
Assistant Administrator for Satellite and Information Services,
National Oceanic and Atmospheric Administration, Department of
Commerce.
0
For the reasons set forth above, 15 CFR part 960 is revised to read as
follows:
PART 960--LICENSING OF PRIVATE REMOTE SENSING SPACE SYSTEMS
Subpart A--General
Sec.
960.1 Purpose.
960.2 Jurisdiction.
960.3 Applicability to existing licenses.
960.4 Definitions.
Subpart B--License Application Submission and Categorization
960.5 Application submission.
960.6 Application categorization.
Subpart C--License Application Review and License Conditions
960.7 License grant or denial.
960.8 Standard license conditions for all tiers.
960.9 Additional standard license conditions for Tier 2 systems.
960.10 Additional standard and temporary license conditions for Tier
3 systems.
960.11 No additional conditions.
960.12 Applicant-requested waiver before license issuance.
960.13 Licensee-requested modification after license issuance.
960.14 Routine compliance and monitoring.
960.15 Term of license.
Subpart D--Prohibitions and Enforcement
960.16 Prohibitions.
960.17 Investigations and enforcement.
Subpart E--Appeals Regarding Licensing Decisions
960.18 Grounds for adjudication by the Secretary.
960.19 Administrative appeal procedures.
Appendix A to Part 960--Application Information Required
Appendix B to Part 960--Application Submission Instructions
Appendix C to Part 960--License Template
Appendix D to Part 960--Memorandum of Understanding
Authority: 51 U.S.C. 60124.
Subpart A--General
Sec. [thinsp]960.1 Purpose.
(a) The regulations in this part implement the Secretary's
authority to license the operation of private remote sensing space
systems under the Land Remote Sensing Policy Act of 1992, as amended,
codified at 51 U.S.C. 60101 et seq., and are intended to promote
continued U.S. private sector innovation and leadership in the global
remote sensing industry.
(b) In carrying out this part, the Secretary takes into account the
following considerations:
(1) Technological changes in remote sensing;
(2) Non-technological changes in the remote sensing space industry,
such as to business models and practices;
(3) The relative burden to licensees and benefits to national
security and international policies of license conditions;
(4) Changes in the methods to mitigate risks to national security
and international policies;
(5) International obligations of the United States;
(6) The availability of data from sources in other nations;
(7) The remote sensing regulatory environment in other nations; and
(8) The potential for overlapping regulatory burdens imposed by
other U.S. Government agencies.
Sec. [thinsp]960.2 Jurisdiction.
(a) The regulations in this part set forth the requirements for the
operation of private remote sensing space systems within the United
States or by a U.S. person.
(b) Instruments used primarily for mission assurance or other
technical purposes, including but not limited to navigation, attitude
control, monitoring spacecraft health, separation events, or payload
deployments, such as traditional star trackers, sun sensors, and
horizon sensors, shall not be subject to this part.
(c) In the case of a system that is used for remote sensing and
other purposes, as determined by the Secretary, the scope of the
license issued under this part will not extend to the operation of
instruments that do not support remote sensing.
(d) The Secretary does not authorize the use of spectrum for radio
communications by a private remote sensing space system.
Sec. [thinsp]960.3 Applicability to existing licenses.
(a) After reviewing each license existing prior to July 20, 2020,
on July 20, 2020, the Secretary will either:
(1) Replace the existing license with one developed in accordance
with this part, retaining any applicable waivers and modifications; or
(2) If the Secretary determines that an existing licensee no longer
requires a license under this part the Secretary will notify the
existing licensee that the license is terminated.
(b) The replacement license or termination determination will be
effective 30 days after delivery by the Secretary to existing
licensees. Existing licensees who object to their existing license
being replaced or terminated must notify the Secretary in writing
within those 30 days, and specify their objection in the notification.
Sec. [thinsp]960.4 Definitions.
For purposes of this part, the following terms have the following
meanings:
Act means the Land Remote Sensing Policy Act of 1992, as amended,
codified at 51 U.S.C. 60101, et seq.
Anomaly means an unexpected event or abnormal characteristic
affecting the operations of a system that could indicate a significant
technical malfunction or security threat. Anomalies include any
significant deviation from the orbit and data collection
characteristics of the system.
Appellant means a person to whom the Secretary has certified an
appeal request.
[[Page 30807]]
Applicant means a person who submits an application to operate a
private remote sensing space system.
Application means a document submitted by a person to the Secretary
that contains all the information described in appendix A of this part.
Available means readily and consistently obtainable by an entity or
individual other than the U.S. Government or a foreign government.
Ground sample distance or GSD refers to the common measurement for
describing the spatial resolution of unenhanced data created from most
remote sensing instruments, typically measured in meters. A resolution
``finer than'' X meters GSD means the resolution is a number lower than
X. For example, 5 meters GSD is finer than 10 meters GSD.
In writing or written means written communication, physically or
electronically signed (if applicable), transmitted via email, forms
submitted on the Secretary's website, or traditional mail.
License means a license granted by the Secretary under the Act.
Licensee means a person to whom the Secretary has granted a license
under the Act.
Material fact means a fact an applicant provides in the
application, or a fact in Parts C or D of a license.
Memorandum of Understanding or MOU means the April 25, 2017 version
of the ``Memorandum of Understanding Among the Departments of Commerce,
State, Defense, and Interior, and the Office of the Director of
National Intelligence, Concerning the Licensing and Operations of
Private Remote Sensing Satellite Systems,'' which is included as
appendix D of this part. In the event that any provisions of the MOU
conflict with this part, this part shall govern.
Modification means any change in the text of a license after
issuance.
Operate means to have decision-making authority over the
functioning of a remote sensing instrument. If there are multiple
entities involved, the entity with the ultimate ability to decide what
unenhanced data to collect with the instrument and to execute that
decision, directly or through a legal arrangement with a third party
such as a ground station or platform owner, is considered to be
operating that system.
Person or private sector party means any entity or individual other
than agencies or instrumentalities of the U.S. Government.
Private remote sensing space system or system means an instrument
that is capable of conducting remote sensing and which is not owned by
an agency or instrumentality of the U.S. Government. A system must
contain a remote sensing instrument and all additional components that
support operating the remote sensing instrument, receipt of unenhanced
data, and data preprocessing, regardless of whether the component is
owned or managed by the applicant or licensee, or by a third party
through a legal arrangement with the applicant or licensee.
Remote sensing means the collection of unenhanced data by an
instrument in orbit of the Earth which can be processed into imagery of
surface features of the Earth.
Secretary means the Secretary of Commerce, or his or her designee.
Significant or substantial foreign agreement means a contract or
legal arrangement with a foreign national, entity, or consortium
involving foreign nations or entities, only if executing such contract
or arrangement would require a license modification under Sec. 960.13.
Subsidiary or affiliate means a person who directly or indirectly,
through one or more intermediaries, controls or is controlled by or is
under common control with, the applicant or licensee.
Substantially the same means that one item is a market substitute
for another, taking into account all applicable factors. When comparing
data, factors include but are not limited to the data's spatial
resolution, spectral bandwidth, number of imaging bands, temporal
resolution, persistence of imaging, local time of imaging, geographic
or other restrictions imposed by foreign governments, and all
applicable technical system factors listed in the application in
appendix A of this part.
Unenhanced data means the output from a remote sensing instrument,
including imagery products, which is either unprocessed or
preprocessed. Preprocessing includes rectification of system and sensor
distortions in data as it is received directly from the instrument in
preparation for delivery to a user, registration of such data with
respect to features of the Earth, and calibration of spectral response
with respect to such data, but does not include conclusions,
manipulations, or calculations derived from such data, or a combination
of such data with other data.
U.S. person means:
(1) Any individual who is a citizen or lawful permanent resident of
the United States; and
(2) Any corporation, partnership, joint venture, association, or
other entity organized or existing under the laws of the United States
or any State, the District of Columbia, Puerto Rico, American Samoa,
the United States Virgin Islands, Guam, the Northern Mariana Islands,
and any other commonwealth, territory, or possession of the United
States.
Waiver means any change from the standard license text in Sec.
960.8, Sec. 960.9, or Sec. 960.10, which change is included in a
license upon license issuance, in response to a request by the
applicant pursuant to Sec. 960.12.
Subpart B--License Application Submission and Categorization
Sec. [thinsp]960.5 Application submission.
(a) Before submitting an application, a person may consult
informally with the Secretary to discuss matters under this part,
including whether a license is likely to be required for a system.
(b) A person may submit an application for a license in accordance
with the specific instructions found in appendix B of this part. The
application must contain fully accurate and responsive information, as
described in appendix A of this part. Responses an applicant provides
to each prompt in the application constitute material facts.
(c) Within seven days of the submission, the Secretary shall
determine, after consultation with the Secretaries of Defense and
State, whether the submission is a complete application meeting the
requirements of appendix A of this part. If the submission is a
complete application, the Secretary shall immediately notify the
applicant in writing. If the submission is not a complete application,
the Secretary shall inform the applicant in writing of what additional
information or clarification is required to complete the application.
(d) If any information the applicant submitted becomes inaccurate
or incomplete at any time after submission to the Secretary but before
license grant or denial, the applicant must contact the Secretary and
submit correct and updated information as instructed by the Secretary.
The Secretary will determine whether the change is significant. If the
Secretary determines that the change is significant, the Secretary will
notify the applicant within seven days of receipt of the correct and
updated information that the revision constitutes a new application
submission under paragraph (b) of this section, and that the previous
application is deemed to have been withdrawn.
(e) Upon request by the applicant, the Secretary shall provide an
update on the status of their application review.
[[Page 30808]]
Sec. [thinsp]960.6 Application categorization.
(a) Within seven days of the Secretary's notification to the
applicant under Sec. [thinsp]960.5(c) that the application is
complete, the Secretary shall determine, after consultation with the
Secretaries of Defense and State as appropriate, the category for the
system as follows:
(1) If the application proposes a system with the capability to
collect unenhanced data substantially the same as unenhanced data
already available from entities or individuals not licensed under this
part, such as foreign entities, the Secretary shall categorize the
application as Tier 1;
(2) If the application proposes a system with the capability to
collect unenhanced data substantially the same as unenhanced data
already available, but only from entities or individuals licensed under
this part, the Secretary shall categorize the application as Tier 2;
and
(3) If the application proposes a system with the capability to
collect unenhanced data not substantially the same as unenhanced data
already available from any domestic or foreign entity or individual,
the Secretary shall categorize the application as Tier 3.
(b) If the Secretary of Defense or State disagrees with the
Secretary's determination in paragraph (a) of this section, the
Secretary of Defense or State may notify the Secretary and request the
Secretary's reconsideration. Such a request for reconsideration may not
be delegated below the Assistant Secretary level. If the Secretary of
Defense or State disagrees with the Secretary's reconsideration
decision, the Secretary of Defense or State may appeal that tier
categorization pursuant to the interagency dispute resolution
procedures in Section IV(B) of the MOU, but only at the Advisory
Committee on Private Remote Sensing Space Systems level or higher. The
Secretary shall categorize the system in accordance with the decision
resulting from such MOU procedures.
(c) The system shall remain in the tier assigned to it under
paragraph (a) in this section until such time as the Secretary
determines, after consultation with the Secretaries of Defense and
State as appropriate, that the system belongs in a lower-numbered tier
due to the advancement of non-U.S. commercial remote sensing
capabilities or due to other facts, or until the Secretary grants the
licensee's request for a license modification that results in re-
categorization under Sec. [thinsp]960.13. When the Secretary
determines that a lower-numbered tier is appropriate due to reasons
other than a modification under Sec. [thinsp]960.13, the Secretary
will notify the applicant or licensee in writing that the system falls
under a lower-numbered tier than the one previously assigned under this
section. Upon receiving that notification, the applicant or licensee
will be responsible for complying only with the license conditions
applicable to the new tier.
Subpart C--Application Review and License Conditions
Sec. [thinsp]960.7 License grant or denial.
(a) Based on the Secretary's review of the application, the
Secretary must determine whether the applicant will comply with the
requirements of the Act, this part, and the license. The Secretary will
presume that the applicant will comply, unless the Secretary has
specific, credible evidence to the contrary. If the Secretary
determines that the applicant will comply, the Secretary shall grant
the license.
(b) The Secretary shall make the determination in paragraph (a) of
this section within 60 days of the notification under Sec.
[thinsp]960.5(c), and shall notify the applicant in writing whether the
license is granted or denied.
(c) If the Secretary has not notified the applicant whether the
license is granted or denied within 60 days, the applicant may submit a
request that the license be granted. Within three days of this request,
the Secretary shall grant the license, unless the Secretary determines
with specific, credible evidence that the applicant will not comply
with the requirements of the Act, this part, or the license, in which
case the Secretary will deny the license, or the Secretary and the
applicant mutually agree to extend this review period.
Sec. [thinsp]960.8 Standard license conditions for all tiers.
All licenses granted under this part shall specify that the
licensee shall:
(a) Comply with the Act, this part, the license, applicable
domestic legal obligations, and the international obligations of the
United States;
(b) Operate the system in such manner as to preserve the national
security of the United States and to observe international obligations
and policies, as articulated in the other conditions included in this
license;
(c) Upon request, offer 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 without delay
and on reasonable terms and conditions, unless doing so would be
prohibited by law or license conditions;
(d) Upon termination of operations under the license, make
disposition of any satellites in space in a manner satisfactory to the
President;
(e) Notify the Secretary in writing of each of the following
events, no later than seven days after the event:
(1) The launch and deployment of each system component, to include
confirmation that the component matches the orbital parameters and data
collection characteristics of the system, as described in Part D of the
license;
(2) Each disposal of an on-orbit component of the system;
(3) The detection of an anomaly; and
(4) The licensee's financial insolvency or dissolution;
(f) Request and receive approval for a license modification before
taking any action that would change a material fact in the license;
(g) Certify that all material facts in the license remain accurate
pursuant to the procedures in Sec. 960.14 no later than October 15th
of each year;
(h) Cooperate with compliance, monitoring, and enforcement
authorities described in the Act and this part, and permit the
Secretary to access, at all reasonable times and with no shorter notice
than 48 hours, any component of the system for the purpose of ensuring
compliance with the Act, this part, and the license; and
(i) Refrain from disseminating unenhanced data, or processed data
or products derived from the licensee's system, of the State of Israel
at a resolution finer than the resolution most recently specified by
the Secretary in the Federal Register as being available from
commercial sources.
Sec. 960.9 Additional standard license conditions for Tier 2 systems.
If the Secretary has categorized the system as Tier 2 under Sec.
960.6, the license shall specify that the licensee shall comply with
the conditions listed in Sec. 960.8 and further shall comply with the
following conditions until the Secretary notifies the licensee that the
system belongs in a lower-numbered tier:
(a) Comply with limited-operations directives issued by the
Secretary, in accordance with a determination made by the Secretary of
Defense or the Secretary of State pursuant to the procedures in Section
IV(D) of the MOU, that require licensees to temporarily limit data
collection and/or dissemination during periods of increased concerns
for national security and where necessary to meet international
obligation or foreign policy interests; and:
[[Page 30809]]
(1) Be able to comply with limited-operations directives at all
times. This includes:
(i) The ability to implement National Institute of Standards and
Technology-approved encryption, in accordance with the manufacturer's
security policy, wherein the key length is at least 256 bits, for
communications to and from the on-orbit components of the system
related to tracking, telemetry, and control and for transmissions
throughout the system of the data specified in the limited-operations
directive; and
(ii) Implementing measures, consistent with industry best practice
for entities of similar size and business operations, that prevent
unauthorized access to the system and identify any unauthorized access
in the event of a limited-operations directive;
(2) Provide and continually update the Secretary with a point of
contact and an alternate point of contact for limited-operations
directives; and
(3) During any such limited-operations directive, permit the
Secretary to immediately access any component of the system for the
purpose of ensuring compliance with the limited-operations directive,
the Act, this part, and the license.
(b) Conduct resolved imaging of other artificial resident space
objects (ARSO) orbiting the Earth only with the written consent of the
registered owner of the ARSO to be imaged and with notification to the
Secretary at least five days prior to imaging. For purposes of this
paragraph (b), ``resolved imaging'' means the imaging of another ARSO
that results in data depicting the ARSO with a resolution of 3 x 3
pixels or greater.
Sec. 960.10 Additional standard and temporary license conditions for
Tier 3 systems.
(a) If the Secretary has categorized the system as Tier 3 under
Sec. 960.6, the license shall specify that the licensee shall comply
with the conditions listed in Sec. 960.8 and further shall comply with
the following conditions until the Secretary notifies the licensee that
the system belongs in a lower-numbered tier for which the following
conditions are not required:
(1) Comply with limited-operations directives issued by the
Secretary, in accordance with a determination made by the Secretary of
Defense or the Secretary of State pursuant to the procedures in Section
IV(D) of the MOU, that require licensees to temporarily limit data
collection and/or dissemination during periods of increased concerns
for national security and where necessary to meet international
obligations or foreign policy interests; and:
(i) Be able to comply with limited-operations directives at all
times. This includes:
(A) The ability to implement National Institute of Standards and
Technology-approved encryption, in accordance with the manufacturer's
security policy, wherein the key length is at least 256 bits, for
communications to and from the on-orbit components of the system
related to tracking, telemetry, and control and for transmissions
throughout the system of the data specified in the limited-operations
directive; and
(B) Implementing measures, consistent with industry best practice
for entities of similar size and business operations, that prevent
unauthorized access to the system and identify any unauthorized access
in the event of a limited-operations directive;
(ii) Provide and continually update the Secretary with a point of
contact and an alternate point of contact for limited-operations
directives; and
(iii) During any such limited-operations directive, permit the
Secretary to immediately access any component of the system for the
purpose of ensuring compliance with the limited-operations directive,
the Act, this part, and the license.
(2) Conduct resolved imaging of other artificial resident space
objects (ARSO) orbiting the Earth only with the written consent of the
registered owner of the ARSO to be imaged and with notification to the
Secretary at least five days prior to imaging, or as may otherwise be
provided in a temporary license condition developed under paragraphs
(b) and (c) of this section. For purposes of this paragraph (a)(2),
``resolved imaging'' means the imaging of another ARSO that results in
data depicting the ARSO with a resolution of 3 x 3 pixels or greater.
(3) Comply with any temporary license conditions developed in
accordance with paragraphs (b) and (c) of this section until their
specified expiration date, including any extensions of the expiration
date.
(b) To determine whether additional temporary license conditions
are necessary, the Secretary shall notify the Secretaries of Defense
and State of any system categorized as Tier 3 under Sec.
[thinsp]960.6. The Secretaries of Defense and State shall determine
whether any temporary license conditions are necessary (in addition to
the standard license conditions in Sec. [thinsp]960.8) to meet
national security concerns or international obligations and policies of
the United States regarding that system. Within 21 days of receiving
the notification, the Secretary of Defense or State shall notify the
Secretary of any such conditions and the length of time such conditions
should remain in place, which shall not exceed one year from the
earlier of either when the licensee first delivers unenhanced data
suitable for evaluating the system's capabilities to the Secretary
(under reasonable terms and conditions or other mutually agreed
arrangement with the Secretary of Defense or State), or when the
Secretary of Defense or State first obtains comparably suitable data
from another source, unless the length of such condition is extended in
accordance with paragraph (e) of this section.
(c) The Secretary shall review the notification from the Secretary
of Defense or State under paragraph (b) of this section and aim to
craft the least restrictive temporary license condition(s) possible,
before the expiration of the 60-day application review period under
Sec. [thinsp]960.7(b). In crafting such conditions the Secretary shall
consult, as appropriate, with the Secretaries of Defense and State and
the applicant or licensee, to determine whether the proposed condition
would be consistent with applicable laws. In making this determination,
the Secretary shall consider whether:
(1) The risk addressed by the proposed condition is specific and
compelling;
(2) The proposed condition would be effective against the risk;
(3) The proposed condition addresses only the data proposed to be
collected that are not available from any domestic or foreign source;
(4) The U.S. Government cannot currently mitigate the risk without
the proposed condition;
(5) The U.S. Government cannot address the risk by some less
restrictive means than the proposed condition; and
(6) The applicant or licensee can mitigate the risk by taking
alternative action.
(d) When considering the factors under paragraphs (c)(1) through
(6) of this section, the Secretary shall accept as final the
determinations made by the Secretary of Defense or State as
appropriate, in such Secretary's notification to the Secretary of the
need for such conditions. If the Secretary determines that a condition
proposed by the Secretary of Defense or State would be consistent with
applicable law, the Secretary shall include such condition in the
license, absent any elevation of a dispute under paragraph (f) of this
section.
[[Page 30810]]
(e) The Secretary will notify the Secretaries of Defense and State
90 days before the expiration of a temporary condition imposed under
this section. If, within 30 days after such notification, either the
Secretary of Defense or State notifies the Secretary that an extension
is needed, the Secretary shall consult with the Secretary of Defense or
State about the ongoing need for the temporary condition. The Secretary
may extend the expiration date of the temporary condition for a maximum
of one year, and may extend the condition no more than two times unless
requested by the Secretary of Defense or State. The authority to
request such additional extensions shall not be delegated by the
Secretary of Defense or State. Therefore, absent a request specifically
from the Secretary of Defense or State, any temporary condition may
exist for no more than a total of three years. The Secretary shall
grant an extension if the Secretary determines that:
(1) The Secretary requesting the extension has shown that the
considerations in paragraph (c) of this section justify an extension;
and
(2) The Secretary has notified the affected licensee no less than
60 days before the expiration of the temporary condition that an
extension is being sought.
(f) If, at any point during the procedures in this section, the
Secretary, the Secretary of Defense, or the Secretary of State objects
to any determination, they may elevate the objection pursuant to the
interagency dispute resolution procedures in Section IV(B) of the MOU.
Sec. [thinsp]960.11 No additional conditions.
No other conditions shall be included in a license granted under
this part, or imposed in such a license after the license has been
issued, except in accordance with the provisions of Sec.
[thinsp]960.13 or Sec. [thinsp]960.17.
Sec. [thinsp]960.12 Applicant-requested waiver before license
issuance.
As part of the application, the applicant may request that any
condition listed in Sec. 960.8, Sec. 960.9, or Sec. 960.10 be waived
or adjusted. The Secretary may approve the request to waive or adjust
any such condition if the Secretary determines, after consultation with
the Secretaries of Defense and State as appropriate, that the Secretary
may waive or adjust the condition without violating the Act or other
law, and:
(a) The requirement is not applicable due to the nature of the
applicant or the proposed system;
(b) The applicant will achieve the goal in a different way; or
(c) There is other good cause to waive or adjust the condition.
Sec. [thinsp]960.13 Licensee-requested modification after license
issuance.
(a) The licensee may request in writing that the Secretary modify
the license after the license is issued. Such requests should include
the reason for the request and relevant supporting documentation.
(b) If the Secretary determines that the requested modification of
a license would result in its re-categorization from Tier 1 to Tier 2
under Sec. 960.6, the Secretary shall notify the licensee that
approval would require issuance of the conditions in Sec. 960.9, and
provide the licensee an opportunity to withdraw or revise the request.
(c) If the Secretary determines that the requested modification of
a license would result in its re-categorization from Tier 1 or 2 to
Tier 3 under Sec. 960.6, the Secretary shall consult with the
Secretaries of Defense or State, as appropriate, to determine whether
approval of the request would require additional temporary conditions
in accordance with the procedures in Sec. [thinsp]960.10. If so, the
Secretary shall notify the licensee that approval would require such
additional temporary conditions, and provide the licensee an
opportunity to withdraw or revise the request.
(d) The Secretary shall approve or deny a modification request
after consultation with the Secretaries of Defense and State as
appropriate, and shall inform the licensee of the approval or denial
within 60 days of the request, unless the Secretary and the applicant
mutually agree to extend this review period.
Sec. [thinsp]960.14 Routine compliance and monitoring.
(a) Annually, by the date specified in the license, the licensee
will certify in writing to the Secretary that each material fact in the
license remains accurate.
(b) If any material fact in the license is no longer accurate at
the time the certification is due, the licensee must:
(1) Provide all accurate material facts;
(2) Explain the reason for any discrepancies between the terms in
the license and the accurate material fact; and
(3) Seek guidance from the Secretary on how to correct any errors,
which may include requesting a license modification.
Sec. [thinsp]960.15 Term of license.
(a) The license term begins when the Secretary transmits the signed
license to the licensee, regardless of the operational status of the
system.
(b) The license is valid until the Secretary confirms in writing
that the license is terminated, because the Secretary has determined
that one of the following has occurred:
(1) The licensee has successfully disposed of, or has taken all
actions necessary to successfully dispose of, all on-orbit components
of the system, and is in compliance with all other requirements of the
Act, this part, and the license;
(2) The licensee never had system components on orbit and has
requested to end the license term;
(3) The license is terminated pursuant to Sec. [thinsp]960.17; or
(4) The licensee has executed one of the following transfers,
subsequent to the Secretary's approval of such transfer:
(i) Ownership of the system, or the operations thereof, to an
agency or instrumentality of the U.S. Government; or
(ii) Operations to a person who is not a U.S. person and who will
not operate the system from the United States.
Subpart D--Prohibitions and Enforcement
Sec. [thinsp]960.16 Prohibitions.
Any person who operates a system from the United States and any
person who is a U.S. person shall not, directly or through a subsidiary
or affiliate:
(a) Operate a system without a current, valid license for that
system;
(b) Violate the Act, this part, or any license condition;
(c) Submit false information, interfere with, mislead, obstruct, or
otherwise frustrate the Secretary's actions and responsibilities under
this part in any form at any time, including in the application, during
application review, during the license term, in any compliance and
monitoring activities, or in enforcement activities; or
(d) Fail to obtain approval for a license modification before
taking any action that would change a material fact in the license.
Sec. [thinsp]960.17 Investigations and enforcement.
(a) The Secretary may investigate, provide penalties for
noncompliance, and prevent future noncompliance, by using the
authorities specified at 51 U.S.C. 60123(a).
(b) When the Secretary undertakes administrative enforcement
proceedings as authorized by 51 U.S.C. 60123(a)(3) and (4), the parties
will follow the procedures provided at 15 CFR part 904.
[[Page 30811]]
Subpart E--Appeals Regarding Licensing Decisions
Sec. [thinsp]960.18 Grounds for adjudication by the Secretary.
(a) In accordance with the procedures in this subpart, a person may
appeal the following adverse actions for adjudication by the Secretary:
(1) The denial of a license;
(2) The categorization of a system in a tier;
(3) The failure to make a final determination on a license grant or
denial or a licensee's modification request within the timelines
provided in this part;
(4) The imposition of a license condition;
(5) The denial of a licensee-requested license modification; and
(6) The replacement of an existing license with a license granted
under Sec. 960.3(a)(1) or termination of an existing license under
Sec. 960.3(a)(2).
(b) The only acceptable grounds for appeal of the actions in
paragraph (a) of this section are as follows:
(1) The Secretary's action was arbitrary, capricious, or contrary
to law; or
(2) The action was based on a clear factual error.
(c) No appeal is allowed to the extent that there is involved the
conduct of military or foreign affairs functions.
Sec. [thinsp]960.19 Administrative appeal procedures.
(a) A person wishing to appeal an action specified at Sec.
[thinsp]960.18(a) may do so within 21 days of the action by submitting
a written request to the Secretary.
(b) The request must include a detailed explanation of the reasons
for the appeal, citing one of the grounds specified in Sec.
[thinsp]960.18(b).
(c) Upon receipt of a request under paragraph (a) of this section,
the Secretary shall review the request to certify that it meets the
requirements of this subpart and chapter 7 of title 5 of the United
States Code. If it does, the Secretary shall coordinate with the
appellant to schedule a hearing before a hearing officer designated by
the Secretary. If the Secretary does not certify the request, the
Secretary shall notify the person in writing that no appeal is allowed,
and this notification shall constitute a final agency action.
(d) The hearing shall be held in a timely manner. It shall provide
the appellant and the Secretary an opportunity to present evidence and
arguments.
(e) Hearings may be closed to the public, and other actions taken
as the Secretary deems necessary, to prevent the disclosure of any
information required by law to be protected from disclosure.
(f) At the close of the hearing, the hearing officer shall
recommend a decision to the Secretary addressing all factual and legal
arguments.
(g) Based on the record of the hearing and the recommendation of
the hearing officer, and after consultation, as appropriate, with the
Secretaries of Defense and State in decisions implicating national
security and international obligations and policy, respectively, the
Secretary shall make a decision adopting, rejecting, or modifying the
recommendation of the hearing officer. This decision constitutes a
final agency action, and is subject to judicial review under chapter 7
of title 5 of the United States Code.
Appendix A to Part 960--Application Information Required
To apply for a license to operate a remote sensing space system
under 51 U.S.C. 60101, et seq. and this part, you must provide:
1. Material Facts: Fully accurate and responsive information to
the following prompts under ``Description of Applicant (Operator)''
and ``Description of System.'' If a question is not applicable,
write ``N/A'' and explain, if necessary.
2. Affirmation: Confirm by indicating below that there will be,
at all times, measures in place to ensure positive control of any
spacecraft in the system that have propulsion, if applicable to your
system. Such measures include encryption of telemetry, command, and
control communications or alternative measures consistent with
industry best practice.
3. Your response to each prompt below constitutes a material
fact. If any information you submit becomes inaccurate or incomplete
before a license grant or denial, you must promptly contact the
Secretary and submit correct and updated information as instructed
by the Secretary.
Part A: Description of Applicant (Operator)
1. General Applicant Information
a. Name of Applicant (entity or individual):
b. Location and address of Applicant:
c. Applicant contact information (for example, general corporate
or university contact information):
d. Contact information for a specific individual to serve as the
point of contact with Commerce:
e. Contact information for a specific individual to serve as the
point of contact with Commerce for limited-operations directives, if
different than main point of contact, in the event that the
applicant will receive a license in Tier 2 or Tier 3:
f. Place of incorporation and, if incorporated outside the
United States, an acknowledgement that you will operate your system
within the United States and are therefore subject to the
Secretary's jurisdiction under this part:
2. Ownership interests in the Applicant:
a. If there is majority U.S. ownership: Report any domestic
entity or individual with an ownership interest in the Applicant
totaling at least 50 percent:
b. If there is not majority U.S. ownership: Report all foreign
entities or individuals whose ownership interest in the Applicant is
at least 10 percent:
c. Report any ownership interest in the Applicant by any foreign
entity or individual on the Department of Commerce's Bureau of
Industry and Security's Denied Persons List or Entity List or on the
Department of the Treasury's Office of Foreign Asset Control's
Specially Designated Nationals and Blocked Person List:
3. Identity of any subsidiaries and affiliates playing a role in
the operation of the System, including a brief description of that
role:
Part B: Description of System
1. General System Information
a. Name of system:
b. Brief mission description:
2. Remote Sensing Instrument(s) parameters
a. Sensor type (Electro Optical, Multi-Spectral (MSI),
Hyperspectral (HSI), Synthetic Aperture Radar (SAR), Light Detection
and Ranging (LIDAR), Thermal Infrared (TIR), etc.):
b. Imaging/frame rate in Hertz; pulse repetition frequency for
SAR or LIDAR:
c. Spatial resolution in meters (show calculation for the
anticipated finest ground spatial distance (GSD), impulse response
(IPR), or other relevant appropriate unit of resolution):
d. Spectral range in nanometers:
e. Collection volume in area per unit time per spacecraft:
Provide an estimate of the maximum number of square kilometers of
which the system can provide data/imagery per hour or per minute. If
this is a fast-framing system, consider each recorded frame as a
separate image collected:
f. Ability of the remote sensing instrument to slew, point, or
digitally look off-axis from the x, y, and z axes of travel:
3. If any entity or individual other than the Applicant will
own, control, or manage any remote sensing instrument in the System:
a. Identity and contact information of that entity or
individual:
b. Relationship to Applicant (i.e., operating under Applicant's
instructions under a contract):
4. Spacecraft Upon Which the Remote Sensing Instrument(s) is
(are) Carried
a. Description:
b. Estimated launch date(s) in calendar quarter:
c. Number of spacecraft (system total and maximum in-orbit at
one time):
d. For each spacecraft, provide the following (or if an entire
constellation will have substantially the same orbital
characteristics, provide these values for the entire constellation
and note whether or not all spacecraft will be evenly spaced)
i. Altitude range in kilometers:
ii. Inclination range in degrees:
iii. Period (time of a single orbit):
iv. Longitude of the ascending node:
v. Eccentricity:
vi. Argument of perigee:
[[Page 30812]]
vii. Propulsion (yes/no). (If ``yes,'' you must complete the
affirmation in the beginning of this application):
viii. Ability of the spacecraft to slew, point, or digitally
look off-axis from the x, y, and z axes of travel:
5. If any entity or individual other than the Applicant will
own, control, or manage any spacecraft in the System
a. Identity and contact information of that entity or
individual:
b. Whether that entity or individual is a U.S. person:
c. Relationship to Applicant (i.e., operating under Applicant's
instructions under a contract):
6. Ground Components
a. Location of Mission Control Center(s) with the ability to
operate the system, including where commands are generated:
b. Location of other Ground Station components of the system,
meaning facilities that communicate commands to the instrument or
receive unenhanced data from it, and facilities that conduct data
preprocessing:
c. If any entity or individual other than the Applicant will
own, control, or manage any mission control center(s) with the
ability to operate the System
i. Identity and contact information of that entity or
individual:
ii. Relationship to Applicant (i.e., operating under Applicant's
instructions under a contract):
7. Information Applicable to Multi-Spectral Imaging (MSI) and/or
Hyper-Spectral Imaging (HSI). Applicants must complete this section
only if the response in Part B section 2.a. is ``MSI'' and/or
``HSI.''
a. Number of spectral bands:
b. Individual spectral bandwidths (to include range of the upper
and lower ends of each spectral band in nanometers):
8. Noise Equivalent Target (NET). Applicants must complete this
section only if the response in Part B 2.c. is 5 meters or less, and
the answer in Part B section 2.a. is neither ``SAR'' nor ``LIDAR.''
NET is the primary parameter used by the U.S. Government to describe
an Electro Optical sensor's light sensitivity performance for a
target at the same distance from the sensor as is specified as the
minimum operating altitude in Part B section 4.d.i. If NET cannot be
calculated, simply report the expected minimum detectable ground
target radiance in watts:
9. Information Applicable to Light Detection and Ranging (LIDAR)
if used for remote sensing. Responses should include the
calculations used to derive the reported parameters. Applicants must
complete this section only if the response in Part B section 2.a. is
``LIDAR.''
a. Type (linear scanning or flash LIDAR (Geiger)):
b. Laser wavelength and pulse frequency:
c. Laser pulse width:
d. Spectral linewidth:
e. Z/Elevation accuracy in meters:
10. Information Applicable to Synthetic Aperture Radar (SAR).
Applicants must complete this section only if the response in Part B
section 2.a. is ``SAR.''
a. Azimuth resolution (ground plane):
b. Range resolution (ground plane):
c. SAR Signal-To-Noise Ratio (SNR):
d. Polarization Capability (i.e. dual polarization, quad
polarization):
e. Complex data: Preservation of phase history data in standard
format? (yes/no):
f. Center frequency:
g. Squint and Graze angles (include maximum and minimum), or
other parameters that determine the size and shape of the area of
regard of the sensor collection footprint at the ground:
11. Information Applicable to Thermal Infrared (TIR). TIR is
defined as collecting in the spectral range of 3.0-5.0 and/or 8.0-
12.0-micrometers. Applicants must complete this section only if the
response in Part B section 2.a. is ``TIR.''
a. Estimated relative thermometric accuracy in degrees Kelvin
(+/- x degrees of actual):
b. Noise Equivalent Differential Temperature (NEDT), or if NEDT
cannot be calculated, simply provide the expected temperature
sensitivity in terms of minimum resolvable temperature difference in
degrees \1\:
---------------------------------------------------------------------------
\1\ NEDT (noise equivalent differential temperature) is the key
figure of merit which is used to qualify midwave (MWIR) and longwave
(LWIR) infrared cameras. It is a signal-to-noise figure which
represents the temperature difference which would produce a signal
equal to the camera's temporal noise. It therefore represents
approximately the minimum temperature difference which the camera
can resolve. It is calculated by dividing the temporal noise by the
response per degree (responsivity) and is usually expressed in units
of milliKelvins. The value is a function of the camera's f/number,
its integration time, and the temperature at which the measurement
is made.
---------------------------------------------------------------------------
Part C: Requests for Standard License Condition Waivers or Adjustments
Standard license conditions are listed at Sec. Sec. 960.8.
960.9, and 960.10 for Tier 1, Tier 2, and Tier 3 systems,
respectively. If requesting that any of these be waived or adjusted,
please identify the specific standard license condition and explain
why one of the following circumstances applies:
1. The requirement is not applicable due to the nature of the
Applicant or the proposed system;
2. The Applicant will achieve the goal in a different way; or
3. There is other good cause to waive or adjust the condition.
Optional: You may submit evidence of the availability of
unenhanced data that is substantially the same as unenhanced data
you propose to produce with your system. The Secretary will take any
such evidence into account, in addition to other evidence of
availability, when determining the appropriate tier for your system
under Sec. 960.6.
Appendix B to Part 960--Application Submission Instructions
A person may apply to operate a private remote sensing space
system by submitting the information to the Secretary as described
in appendix A of this part. This information can be submitted in any
one of the following three ways:
1. Complete the fillable form at the Secretary's designated
website, presently at www.nesdis.noaa.gov/crsra.
2. Respond to the prompts in appendix A of this part and email
your responses to [email protected].
3. Respond to the prompts in appendix A of this part and mail
your responses to: Commercial Remote Sensing Regulatory Affairs,
1335 East-West Highway SSMC-1/G-101, Silver Spring, MD 20910.
Appendix C to Part 960--License Template
Part A: Determination and License Grant
1. The Secretary determines that [licensee name], as described
in Part C, will comply with the requirements of the Act, the
regulations at this part, and the conditions in this license.
2. Accordingly, the Secretary hereby grants [licensee name]
(hereinafter ``Licensee''), as described in Part C, this license to
operate [system name] (hereinafter ``the System''), as described in
Part D, subject to the terms and conditions of this license. This
license is valid until its term ends in accordance with Sec.
960.15. The Licensee must request and receive approval for a license
modification before taking any action that would contradict a
material fact listed in Part C or D of this license.
3. The Secretary makes this determination, and grants this
license, under the Secretary's authority in 51 U.S.C. 60123 and
regulations at this part. This license does not authorize the
System's use of spectrum for radio communications or the conduct of
any non-remote sensing operations that are proposed to be undertaken
by the Licensee. This license is not alienable and creates no
property right in the Licensee.
Part B: License Conditions
The Licensee (Operator) must, at all times:
[Depending upon the categorization of the application as Tier 1,
2, or 3, Commerce will insert the applicable standard license
conditions, found at Sec. [thinsp]960.8, Sec. [thinsp]960.9, and/
or Sec. [thinsp]960.10, and, for a Tier 3 license, any applicable
temporary conditions resulting from the process in Sec.
[thinsp]960.10, in this part of the license.]
Part C: Description of Licensee
Every term below constitutes a material fact. You must request
and receive approval of a license modification before taking any
action that would contradict a material fact.
1. General Licensee Information
a. Name of Licensee (entity or individual):
b. Location and address of Licensee:
c. Licensee contact information (for example, general corporate
or university contact information):
d. Contact information for a specific individual to serve as the
point of contact with Commerce:
e. If Tier 2 or Tier 3, contact information for a specific
individual to serve as the point of contact with Commerce for
limited-operations directives, if different than main point of
contact:
f. Place of incorporation and, if incorporated outside the
United States, confirmation that the Licensee acknowledged
[[Page 30813]]
as part of the application that the Licensee will operate its system
within the United States and is therefore subject to the Secretary's
jurisdiction under this part:
2. Identity of any subsidiaries and affiliates playing a role in
the operation of the System, including a brief description of that
role:
Part D: Description of System
1. General System Information
a. Name of system:
b. Brief mission description:
2. Remote Sensing Instrument(s) parameters
a. Sensor type (Electro Optical, Multi-Spectral (MSI),
Hyperspectral (HSI), Synthetic Aperture Radar (SAR), Light Detection
and Ranging (LIDAR), Thermal Infrared (TIR), etc.):
b. Imaging/frame rate in Hertz; pulse repetition frequency for
SAR; or number of looks for LIDAR:
c. Spatial resolution in meters:
d. Spectral range in nanometers:
e. Collection volume in area per unit time per spacecraft: An
estimate of the maximum number of square kilometers of which the
system can provide data/imagery per hour or per minute:
f. Ability of the remote sensing instrument to slew, point, or
digitally look off-axis from the x, y, and z axes of travel:
3. If any entity or individual other than the Licensee will own,
control, or manage any remote sensing instrument in the System:
a. Identity and contact information of that entity or
individual:
b. Relationship to Licensee (i.e., operating under Licensee's
instructions under a contract):
4. Spacecraft Upon Which the Remote Sensing Instrument(s) is
(are) Carried
a. Description:
b. Estimated launch date(s) in calendar quarter:
c. Number of spacecraft (system total and maximum in-orbit at
one time):
d. For each spacecraft:
i. Altitude range in kilometers:
ii. Inclination range in degrees:
iii. Period (time of a single orbit):
iv. Longitude of the ascending node:
v. Eccentricity:
vi. Argument of perigee:
vii. Propulsion (yes/no):
viii. Ability of the spacecraft to slew, point, or digitally
look off-axis from the x, y, and z axes of travel:
5. If any entity or individual other than the Licensee will own,
control, or manage any spacecraft in the System
a. Identity and contact information of that entity or
individual:
b. Whether that entity or individual is a U.S. person:
c. Relationship to Licensee (i.e., operating under Licensee's
instructions under a contract):
6. Ground Components
a. Location of Mission Control Center(s) with the ability to
operate the system, including where commands are generated:
b. Location of other Ground Station components of the system,
meaning facilities that communicate commands to the instrument or
receive unenhanced data from it, and facilities that conduct data
preprocessing:
c. If any entity or individual other than the Licensee will own,
control, or manage any mission control center(s) with the ability to
operate the System
i. Identity and contact information of that entity or
individual:
ii. Relationship to Licensee (i.e., operating under Licensee's
instructions under a contract):
7. Information Applicable to Multi-Spectral Imaging (MSI) and/or
Hyper-Spectral Imaging (HSI).
a. Number of spectral bands:
b. Individual spectral bandwidths (to include range of the upper
and lower ends of each spectral band in nanometers):
Appendix D to Part 960--Memorandum of Understanding
Memorandum of Understanding Among the Departments of Commerce,
State, Defense, and Interior, and the Office of the Director of
National Intelligence, Concerning the Licensing and Operations of
Private Remote Sensing Satellite Systems. April 25, 2017.
I. Authorities and Roles
This Memorandum of Understanding (MOU) is undertaken pursuant to
the National and Commercial Space Programs Act, 51 U.S.C, 60101 et
seq. (``the Act''), 15 CFR part 960, National Security Presidential
Directive 27 (NSPD-27), and Presidential Policy Directive-4 PPD-4)
(``applicable directives''), or to any renewal of, or successor to,
the Act and the applicable directives.
The principal Parties to this MOU are the Department of Commerce
(DOC), Department of State (DOS), Department of Defense (DOD), and
Department of the Interior (DOI). The Office of the Director of
National Intelligence (ODNI) and the Joint Chiefs of Staff (JCS)
provide supporting advice pertaining to their areas of expertise.
The Secretary of commerce is responsible for administering the
licensing of private remote sensing satellite systems pursuant to
the Act and applicable directives, and fulfills this responsibility
through the National Oceanic and Atmospheric Administration (NOAA).
For remote sensing issues, the Act also grants the authority to the
Secretary of State to determine conditions necessary to meet
international obligations and foreign policies, and to the Secretary
of Defense to determine conditions necessary to meet the national
security concerns raised by any remote sensing license application
submitted pursuant to the Act and applicable directives, or to any
amendment, renewal, or successor thereto. In addition, pursuant to
this MOU, NOAA shall also consult with the Director of National
Intelligence (DNI) for the views of the Intelligence Community (IC)
and with the Chairman of the Joint Chiefs of Staff for the views of
the DOD joint operational community.
II. Purpose
The purpose of this MOU is to establish the interagency
consultation process for adjudicating remote sensing licensing
actions, and the consultation process for the interruption of normal
commercial operations pursuant to the Act and applicable directives.
III. Policy
In consultation with affected departments and agencies,
including the DNI and JCS, the Secretary of Commerce will impose
constraints on private remote sensing systems when necessary to meet
the international obligations, foreign policy concerns, and/or
national security concerns of the United States, and shall accord
with the determinations of the Secretary of State and the Secretary
of Defense, and with applicable laws and directives. Procedures for
implementing this policy are established below, with each Party to
this MOU separately establishing and documenting its internal
timelines and decision authorities below the Cabinet level.
IV. Procedures for Department/Agency Review
A. Consultation During Review of Licensing Actions
Pursuant to the Act and applicable directives, or to any renewal
thereof or successor thereto, the Secretary of Commerce shall review
any application and make a determination within 120 days of receipt
of such application. If final action has not occurred within such
time, then the Secretary shall inform the applicant of any pending
issues and of actions required to resolve them. The DOC will provide
copies of requests for licensing actions to DOS, DOD, DOI, ODNl, and
JCS within 3 working days. Each of these entities will inform DOC,
through NOAA, of the office of primary responsibility, including
primary and backup points of contact, for license action
coordination.
(1) DOC will defer its decision on licensing requests until the
other reviewing agencies have had a reasonable time to review them,
as provided in this section. Within 10 working days of receipt, if
DOS, DOD, DOI, ODNI, or JCS wants more information or time to
review, then it shall notify, in writing, DOC/NOAA (a) of any
additional information that it believes is necessary to properly
evaluate the licensing action, or (b) of the additional time, not to
exceed 10 working days, necessary to complete the review. This
notification shall state the specific reasons why the additional
information is sought, or why more time is needed.
(2) After receiving a complete license package, including any
additional information that was requested as described above, DOS,
DOD, DOI, ODNI and JCS will provide their final recommendations on
the license package within 30 days, or otherwise may request from
DOC/NOAA additional time necessary to provide a recommendation. If
DOS determines that imposition of conditions on the actions being
reviewed is necessary to meet the international obligations and
foreign policies of the United States, or DOD determines that
imposition of conditions are necessary to address the national
security concerns of the United States, the MOU Party identifying
the concern will promptly notify, in writing, DOC/NOAA and those
departments and
[[Page 30814]]
agencies responsible for the management of operational land imaging
space capabilities of the United States. Such notification shall:
(a) Describe the specific national security interests, or the
specific international obligations or foreign policies at risk, if
the applicant's system is approved as proposed; (b) set forth the
specific basis for the conclusion that operation of the applicant's
system as proposed will not preserve the identified national
security interests or the identified international obligations or
foreign policies; and (c) either specify the additional conditions
that will be necessary to preserve the relevant U.S. interests, or
set forth in detail why denial is required to preserve such
interests. All notifications under this paragraph must be in
writing.
B. Interagency Dispute Resolution for Licensing Actions
(1) Committees. The following committees are established,
described here from the lowest level to the highest, to adjudicate
disagreements concerning proposed commercial remote sensing system
licenses.
(a) Operating Committee on Private Remote Sensing Space Systems.
An Operating Committee on Private Remote Sensing Space Systems
(RSOC) is established. The Under Secretary of Commerce for Oceans
and Atmosphere and NOAA Administrator shall appoint its Chair. Its
other principal members shall be representatives of DOS, DOD, and
DOI, or their subordinate agencies, who along with their subject
matter experts, can speak on behalf of their department or agency.
Representatives of the ODNI and the JCS shall participate as
supporting members to provide independent advice pertaining to their
areas of expertise. The RSOC may invite representatives of United
States Government departments or agencies that are not normally
represented in the RSOC to participate in the activities of that
Committee when matters of interest to such departments or agencies
are under consideration.
(b) Advisory Committee on Private Remote Sensing Space Systems.
An Advisory Committee on Private Remote Sensing Space Systems
(ACPRS) is established and shall have as its principal members the
Assistant Secretary of Commerce for Environmental Observation and
Prediction, who shall be Chair of the Committee, and Assistant
Secretary representatives of DOS, DOD, and DOI. Appointed
representatives of ODNI and JCS shall participate as supporting
members to provide independent advice pertaining to their areas of
expertise. Regardless of the department or agency representative's
rank and position, such representative shall speak at the ACPRS on
behalf of his/her department or agency. The ACPRS may invite
Assistant Secretary level representation of United States Government
departments or agencies that are not represented in the ACPRS to
participate in the activities of that Committee when matters of
interest to such departments or agencies are under consideration.
(c) Review Board for Private Remote Sensing Space Systems. The
Board shall have, as its principal members, the Under Secretary of
commerce for Oceans and Atmosphere, who shall be Chair of the Board,
and Under Secretary or equivalent representatives of DOS, DOD, and
DOI. The Director of National Intelligence and Chairman of the Joint
Chiefs of Staff shall be represented at an appropriate level as
supporting members to provide independent advice pertaining to their
areas of expertise. The Board may invite the representatives of
United States Government departments or agencies that are not
represented on the Board, to participate in the activities of the
Board when matters of interest to such departments or agencies are
under consideration.
(2) Resolution Procedures.
(a) If, following the various intra-departmental review
processes, the principal members of the RSOC do not agree on
approving a license or on necessary conditions that would allow for
its approval, then the RSOC shall meet to review the license
application. The RSOC shall work to resolve differences in the
recommendations with the goal of approving licenses with the least
restrictive conditions needed to meet the international obligations,
foreign policies, or national security concerns of the United
States. If the issues cannot be resolved, then the Chair of the RSOC
shall prepare a proposed license that reflects the Committee's views
as closely as possible, and provide it to the principal members of
the RSOC for approval. The proposed license prepared by the RSOC
chair shall contain the conditions determined necessary by DOS or
DOD. Principal members have 5 working days to object to the proposed
license and seek a decision at a higher level. In the absence of a
timely escalation, the license proposed by the RSOC Chair will be
issued.
(b) If any of the principal Parties disagrees with the proposed
license provided by the RSOC Chair, they may escalate the matter to
the ACPRS for resolution, Principal Parties must escalate the matter
within 5 working days of such a decision. Escalations must be in
writing from the principal ACPRS member, and must cite the specific
national security, foreign policy, or international obligation
concern. Upon receipt of a request to escalate, DOC will suspend any
further action on the license action until ACPRS resolution. The
ACPRS shall meet to review all departments' information and
recommendations, and shall work to resolve interagency
disagreements. Following this meeting, the Chair of the ACPRS shall,
within 11 working days from the date of receiving notice of
escalation, provide the reviewing departments a proposed license
that contains the conditions determined by DOS or DOD. Within 5
working days of receipt of the proposed license, an ACPRS principal
member may object to the prepared license and seek to escalate the
matter to the Review Board. In the absence of an escalation within 5
working days, the license prepared by the ACPRS Chair will be
issued.
(c) If any of the principal Parties disagrees with the license
prepared by the ACPRS Chair, it may escalate the matter to the
Review Board for resolution. Principal Parties must escalate the
matter within 5 working days of such a decision. Escalations must be
in writing from the principal Review Board member, and must cite the
specific national security, foreign policy, or international
obligation concern. Upon receipt of a request to escalate, DOC will
suspend any further action on the license action until Review Board
resolution. The Review Board shall meet to review information and
recommendations that are provided by the ACPRS, and such other
private remote sensing matters as appropriate. The Chair of the
Board shall provide reviewing departments and agencies a proposed
license within 11 working days from the date of receiving notice of
escalation. The proposed license prepared by the Review Board chair
shall contain the conditions determined necessary by DOS or DOD. If
no principal Parties object to the proposed license within 5 working
days, it will be issued.
(d) If, within 5 working days of receipt of the draft license, a
principal Party disagrees with any conditions imposed on the
license, that Party's Secretary will promptly notify the Secretary
of Commerce and the other principal Parties in writing of such
disagreement and the reasons therefor, and a copy will be provided
to the Assistant to the President for National Security Affairs and
the Assistant to the President for Science and Technology.
(e) Upon notification of such a disagreement, DOC will suspend
further action on the license that would be inconsistent with the
Secretary of State or the Secretary of Defense determination. If the
Secretary of Commerce believes the limits defined by another
Secretary are inappropriate, then the Secretary of Commerce or
Deputy Secretary shall consult with his or her counterpart in the
relevant department within 10 working days regarding unresolved
issues. If the relevant Secretaries are unable to resolve any
issues, the Secretary of Commerce will notify the Assistant to the
President for National Security Affairs, who, in coordination with
the Assistant to the President for Science and Technology, will seek
to achieve consensus among departments and agencies, or failing
that, by referral to the President. All efforts will be taken to
resolve the dispute within 3 weeks of its submission to the
Assistant to the President for National Security Affairs and the
Assistant to the President for Science and Technology.
C. Interagency Dispute Resolution Concerning Other Commercial
Remote Sensing Matters
Nothing in this MOU precludes any Party to this MOU from
addressing through other appropriate channels, consistent with the
Act and applicable directives, any matter regarding commercial
remote sensing unrelated to (1) adjudicating remote sensing
licensing actions, or (2) the interruption of normal commercial
operations. Such matters may be raised using standard coordination
processes, including by referral to the Assistant to the President
for National Security Affairs, who, in coordination with the
Assistant to the President for Science and Technology, will seek to
achieve consensus among the departments and agencies, or failing
that, by referral to the President, when appropriate.
[[Page 30815]]
D. Consultation During Review of Interruption of Normal Commercial
Operations
(1) This section establishes the process to limit the licensee's
data collection and/or distribution where necessary to meet
international obligations or foreign policy interests, as determined
by the Secretary of State, or during periods of increased concern
for national security, as determined by the Secretary of Defense in
consultation with the Director of National Intelligence and the
Chairman of the Joint Chiefs of Staff. DOC will provide DOS, DOD,
ODNI, and JCS copies of licensee correspondence and documents that
describe how the licensee will comply with such interruptions of its
commercial operations.
(2) Conditions should be imposed for the smallest area and for
the shortest period necessary to protect the international
obligations and foreign policies or national security concerns at
issue. Alternatives to prohibitions on collection and/or
distribution shall be considered as ``modified operations,'' such as
delaying or restricting the transmission or distribution of data,
restricting disseminated data quality, restricting the field of view
of the system, obfuscation, encryption of the data, or other means
to control the use of the data, provided the licensee has provisions
to implement such measures.
(3) Except where urgency precludes it, DOS, DOD, DOC, ODNI and
JCS will consult to attempt to come to an agreement concerning
appropriate conditions to be imposed on the licensee in accordance
with determinations made by DOS or DOD. Consultations shall be
managed so that, in the event an agreement cannot be reached at the
staff level, sufficient time will remain to allow the Secretary of
Commerce to consult personally with the Secretary of State, the
Secretary of Defense, the Director of National Intelligence, or the
Chairman of the Joint Chiefs of Staff as appropriate, prior to the
issuance of a determination by the Secretary of State, or the
Secretary of Defense, in accordance with (4) below. That function
shall not be delegated below the Secretary or acting Secretary.
(4) After such consultations, or when the Secretary of State or
the Secretary of Defense, specifically determines that urgency
precludes consultation with the Secretary of Commerce, the Secretary
of State shall determine the conditions necessary to meet
international obligations and foreign policy concerns, and the
Secretary of Defense shall determine the conditions necessary to
meet national security concerns. This function shall not be
delegated below the Secretary or acting Secretary.
(5) The Secretary of State or the Secretary of Defense will
provide to the Secretary of Commerce a determination regarding the
conditions required to be imposed on the licensees. The
determination will describe the international obligations, specific
foreign policy, or national security interest at risk. Upon receipt
of the determination, DOC shall immediately notify the licensees of
the imposition of limiting conditions on commercial operations.
Copies of the determination and any implementing DOC action will be
provided promptly to the Assistant to the President for National
Security Affairs and the Assistant to the President for Science and
Technology.
(6) If the Secretary of Commerce believes the conditions
determined by another Secretary are inappropriate, he or she will,
simultaneous with notification to, and imposition of such conditions
on, the licensee, so notify the Secretary of State or the Secretary
of Defense, the Assistant to the President for National Security
Affairs, and the Assistant to the President for Science and
Technology. The Assistant to the President for National Security
Affairs, in coordination with the Assistant to the President for
Science and Technology, may initiate as soon as possible a
Principals-level consultative process to achieve a consensus or,
failing that, refer the matter the President for decision. All
efforts will be taken to resolve the disagreement within 7 working
days of its submission to the Assistant to the President for
National Security Affairs and the Assistant to the President for
Science and Technology.
E. Coordination Before Release of Information Provided or Generated
by Other United States Government Departments or Agencies
Before releasing any information provided or generated by
another department or agency to a licensee or potential licensee, to
the public, or to an administrative law judge, the agency proposing
the release must consult with the agency that provided or generated
the information. The purpose of such consultations will be to review
the propriety of any proposed release of information that may be
privileged or restricted because it is classified, pre-decisional,
deliberative, proprietary, or protected for other reasons. No
information shall be released without the approval of the department
or agency that provided or generated it unless required by law.
F. No Legal Rights
No legal rights or remedies, or legally enforceable causes of
action, are created or intended to be created by this MOU.
[FR Doc. 2020-10703 Filed 5-19-20; 8:45 am]
BILLING CODE 3510-HR-P