Licensing of Private Remote Sensing Space Systems, 30790-30815 [2020-10703]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[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

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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

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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

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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

[[Page 30795]]

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

[[Page 30796]]

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

[[Page 30797]]

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

[[Page 30798]]

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.

[[Page 30799]]

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