ACTION: Notice of guidelines for U.S. implementation of the agreement between the Government of the United States of America and the Government of the Russian Federation regarding international trade in commercial space launch services.
DATES: The Agreement entered into force on September 2, 1993. These guidelines on monitoring and enforcement are effective upon publication. FOR FURTHER INFORMATION CONTACT: Scott Monier, (202) 395-3320, Director for European Industry and Technology, Office of the U.S. Trade Representative, 600 17th Street, NW., Washington, DC 20506. (Copies of the Agreement referenced herein can be obtained from the official designated above.) SUMMARY: On September 2, 1993, the United States and the Russian Federation entered into the Agreement Between the Government of the United States of America and the Government of the Russian Federation Regarding International Trade in Commercial Space Launch Services (Agreement). The Agreement allows the Russian Federation (Russia) to enter the international commercial space launch market during the country's transition to an economy based on market principles in a manner intended to prevent disruption of normal competition. In order to assist in the successful operation of the Agreement, the U.S. Government has established certain guidelines it intends to follow in implementing the Agreement. This notice sets out those guidelines. SUPPLEMENTARY INFORMATION Background At the June 1992 Summit between former President Bush and Russian President Yeltsin, the United States announced that it was granting a one-time exception to its policy of prohibiting the export of U.S.-made satellites or satellites incorporating U.S. technology (essentially all Western satellites) to Russia for launch on Russian space launch vehicles. This one-time exception allowed the International Maritime Satellite Organization (INMARSAT) to select a Russian launcher to launch an INMARSAT 3 satellite. At the same time, the United States stated that, while no further exceptions would be granted, it was willing to undertake negotiations on Russian entry into the international commercial space launch services market. The negotiations culminated in an agreement which would provide Russia, during its transitional phase from a non-market to market economy, access to the international commercial launch services market yet ensure against severe market distortion or disruption to the market. The Agreement was signed by Vice President Gore and Russian Prime Minister Chernomyrdin and entered into force on September 2, 1993. The Agreement Definition of Terms The Agreement defines certain terms, as follows: Contract means (i) to agree or commit to the provision of commercial space launch services such that a launch is effectively removed from competition in the international market, or (ii) any such agreement or commitment. International customer means any person; or any kind of corporation, company, association, venture, partnership, or other entity, whether or not organized for pecuniary gain, or privately or governmentally owned or controlled; or any governmental body, excluding the Government of the United States of America and the Government of the Russian Federation; or any intergovernmental organization or quasi-governmental consortium, including but not limited to INTELSAT, INMARSAT and their respective legal successors, that is the ultimate owner or operator of a spacecraft or satellite or that will deliver the spacecraft or satellite to orbit for use by such ultimate owner or operator. Principal payload means a telecommunications satellite or, in the absence of a telecommunications satellite, any other spacecraft or combination of spacecraft. Russian space launch service provider means any entity, agent or instrumentality acting on its behalf, permitted by the Government of the Russian Federation to provide commercial space launch services or the space launch vehicles for such services. Agreement Terms The Agreement establishes basic rules for avoiding distortion which results from government involvement in the commercial space launch market by prohibiting such practices as certain subsidies, marketing inducements, and corrupt business practices. The terms of the Agreement also include the following specific provisions: Quantity Provisions The Agreement permits Russian space launch services providers to contract with international customers for the launch of up to eight (8) principal payloads, in addition to the INMARSAT- 3 satellite, to geosynchronous earth orbit (GEO) or geosynchronous transfer orbit (GTO), for the duration of the agreement (through December 31, 2000). Not more than two (2) such launches may be conducted in any twelve-month period. Up to four (4) of these launches may be of two principal payloads, and each of these may be counted against the quantity limitation as single launches if the parties mutually agree that the international space launch market so warrants. The Agreement also allows Russian space launch service providers to contract for up to three (3) launches to low earth orbit (LEO) for the Iridium system. Proposals by Russian space launch service providers for commercial suborbital launches LEO and launches to orbits other than GEO and GTO will be considered on a case by case basis, where there are competing comparable commercial space launch services. Pricing Provisions The Agreement provides that prices, terms, and conditions offered by Russian space launch service providers shall be comparable to those offered for comparable space launch services by commercial launch service providers from market economy countries. For GEO and GTO launches, the Agreement establishes a specific pricing mechanism. Bids or offers for launches to GEO or GTO more than 7.5% below the lowest market economy bid trigger special consultations in which Russia must demonstrate that its offer conforms to the principles of the Agreement. Bids or offers for Russian launch services to orbits other than GEO/GTO are not subject to a specific pricing mechanism; however, prices, terms, and conditions must be comparable to those offered by providers from market economy countries. Accordingly, the comparable pricing provision of the Agreement applies to all launches by Russian space launch service providers, including those to LEO. The pricing provisions of the Agreement apply to bids or offers made as part of a sole-source procurement as well as to completed contracts. Consultations The Agreement requires the United States and Russia to hold annual consultations to `` * * * review and examine implementation of the Agreement and market developments in commercial space launch services.'' The Agreement also allows the United States or Russia to request special consultations ``on an urgent basis'' prior to the conclusion of a contract, if possible, if either Party has reason to believe that a contract or pending contract is inconsistent with the terms of the Agreement. Applicability Guidelines Russian Launch Vehicles All types or classes of launch vehicles that may be used by a Russian space launch service provider to provide commercial space launch services are subject to the Agreement. Russian Space Launch Service Providers Transactions involving launch service providers, regardless of nationality, permitted by the Russian Federation to provide commercial space launch services on Russian launch vehicles are subject to the terms of the Agreement. Leasing on-Orbit Leasing a satellite on orbit or satellite transponders does not remove a transaction from the terms of the Agreement. As a general rule, the Agreement applies to a contract calling for the leasing of a satellite on-orbit as to one requiring the launch of a satellite purchased by the customer. The definition of ``international customer'' as defined in the Agreement makes no distinction based upon the financing arrangement selected for the satellite. There will be no special consideration given to leased satellites launched solely for use by an international customer. Nationality of Satellite Manufacturer The terms of the Agreement apply to all satellites, regardless of the manufacturer's nationality. The Agreement is intended to be neutral in its effects on the satellite market. Contracts Signed Prior to the Agreement Contracts signed prior to the Agreement for the launch of a satellite subject to United States export controls will be considered under the terms of the Agreement. Contracts signed prior to the Agreement for the launch of a Russian-built satellite for purchase or lease by an international customer are excluded from the terms of the Agreement. Options Agreements/Reservations An option agreement or reservation for Russian commercial space launch services, entered into on or before September 2, 1993, is subject to the terms and provisions of the Agreement. Monitoring and Enforcement A. Designation of Responsibility The Trade Policy Staff Committee Subcommittee on Russian Space Launch Services (Subcommittee), will be responsible for overall implementation of the Agreement. B. Subcommittee Organization For purposes of carrying out its responsibilities with respect to overall implementation of the Agreement, the Subcommittee will be chaired by the Office of the United States Trade Representative (USTR) and will be composed of the Departments of Transportation, State, Commerce, Justice, Defense and Treasury, the Office of Management and Budget (OMB), the National Aeronautics and Space Administration (NASA), the Office of Science and Technology Policy (OSTP), the Joint Chiefs of Staff, and such other departments and agencies as may be invited by the Chair to participate. A Working Group on Information (WGI) will be established to assemble such information as is necessary to enable the Subcommittee to carry out its responsibilities. The WGI will be chaired by the Department of Transportation (DOT) and will include the Departments of Commerce, State, Defense, and such other departments or agencies as designated by the Chair of the Subcommittee. C. Monitoring and Data Collection The Subcommittee will monitor Russian compliance with the Agreement. To this end, the Subcommittee will review market and other information relevant to participation in the commercial launch services market by Russian space launch service providers and compliance by those providers with the terms of the Agreement. This information will be assembled, together with a preliminary assessment, and presented to the Subcommittee by the WGI. In monitoring Russian compliance with the Agreement, particular attention will be given to information on the number of contracts with international customers and the distribution of contracts by Russian space launch service providers within any twelve- month period; prices, terms and conditions offered or provided by Russian space launch service providers; unfair business practices; grants and subsidies to commercial space launch services suppliers; inducements to international customers; insurance or reflight guarantees; and government-supported financing for commercial space launch vehicles or services except in accord with the Organization for Economic Cooperation and Development's (OECD) ``Arrangement on Guidelines for Officially-Supported Export Credits.'' The Subcommittee will review and determine which information is to be provided to Russia to comply with U.S. obligations under the Agreement. This information will be assembled, together with a preliminary assessment, and presented to the Subcommittee by the WGI in a timely fashion so that it could then be made available to Russia in accordance with the terms of the Agreement. Particular attention will be given to U.S. obligations under the Agreement with respect to the provision of publicly releasable information to Russia on prices, terms, and conditions offered in the international market for commercial launch services, including insurance arrangements relating to such services. The WGI will periodically produce information and preliminary assessments of conditions in the commercial launch services market, including prices, terms and conditions, commitments, and market forecasts for the Subcommittee as needed to implement effectively the Agreement and at least 30 days prior to annual consultations. The WGI will also provide to the Subcommittee such additional information and preliminary assessments on compliance by Russian space launch service providers with the provisions of the Agreement as needed, and at least 30 days prior to annual consultations, or as needed prior to any additional or special consultations. D. Consultations The Subcommittee will hold annual consultations with the Russian Federation as outlined in the Agreement. The Subcommittee will exchange information with Russian authorities in advance of such consultations. The Subcommittee will meet in advance of the annual consultations. The Subcommittee will provide all information, including prices, terms and conditions offered for commercial space launch services, necessary to monitor the Agreement and carry out regular and special consultation. Such information shall be provided to U.S. and/or Russian government authorities promptly, and in any case, no later than 30 days after a request, except that such information need not be provided prior to bids for commercial space launch services. Following consultations, the Subcommittee will also report on the results of the consultations and recommend any follow- up actions to the TPSC or other appropriate government agencies. The Subcommittee will consider whether consultations with other international parties could be beneficial, by aiding in the monitoring of the Agreement. If the Subcommittee determines that consultations could be beneficial, it will recommend to the TPSC and to the USTR that such consultations be initiated. The Subcommittee and the WGI may, in carrying out the functions and procedures set forth herein, consult with U.S. commercial launch services providers, launch vehicle and satellite manufacturers, and, as appropriate, interested Congressional committees, the user community, and other interested parties, including the relevant private sector advisory committees. Such contacts will be made in conjunction with the information collection and assessments referred to herein and U.S. preparation for, and follow-up on the results of, meetings with Russia held under the Agreement. The Subcommittee will also, as appropriate, inform such interested parties of significant requests or notifications made by Russia under the Agreement, or significant developments under the Agreement. E. Information Sharing In the course of consulting with interested parties, in particular prior to annual consultations under the Agreement, the U.S. Government may provide such information provided by Russia as is allowed and appropriate under the Agreement, subject to business confidentiality. F. Collection of Information DOT, as Chair of the WGI, will have primary responsibility for soliciting and receiving relevant information, and will maintain data to be collected and reviewed by the WGI for purposes of this Agreement. Members of the U.S. industry, and other interested members of the public, are invited to submit written comments on issues related to the Agreement and its operation. Comments must be provided in twenty copies to the DOT Office of Commercial Space Transportation, Attention: Working Group on Information for Russian Space Launch Services, 400 7th Street, SW., room 5408, Washington, DC 20590-0001. Submissions from the public will be placed in a file open to public inspection at the above address pursuant to 15 CFR sec 2003.5, except confidential business information exempt from public inspection in accordance with 15 CFR 2003.6. Confidential business information submitted in accordance with 15 CFR 2003.6 must be clearly marked ``Business Confidential'' at the top of the cover page or letter and each succeeding page, and must be accompanied by a nonconfidential summary of the confidential information. G. Enforcement If the Subcommittee is of the view that the provisions of the Agreement have been violated as a result of information obtained in any annual or special consultation and review required under Article VII of the Agreement or on the basis of information presented to it by the WGI, the Subcommittee will notify the TPSC and recommend consultations with Russia. If consultations proceed and satisfactory resolution is not achieved with Russia, or if consultations are deemed to be inappropriate in the circumstances, based on recommendations of the Subcommittee, the Section 301 Committee may be requested to review the case. The USTR will, from time to time, advise the Secretary of State and the Secretary of Commerce of the status of the implementation of the agreement in order that this information may be available to the Secretaries with respect to the State Department export license responsibilities under the Arms Export Control Act and the implementing regulations, the International Traffic in Arms Regulations, 22 CFR parts 120-130 and the Commerce Department export license responsibilities under the Export Administration Act. Frederick L. Montgomery, Chairman, Trade Policy Staff Committee. [FR Doc. 94-5498 Filed 3-9-94; 8:45 am] BILLING CODE 3190-01-M
The Contents entry for this article reads as follows: Russian Federation and U.S.; agreement regarding international trade in commercial space launch services; implementation guidelines, 11360