What we are spending on Homeland Security

Dec 29, 2006 Report.

DFW Weather Event

Passengers stuck on jet on tarmac over 8 hrs.

File Your Complaint with Regulators.

Border Security

Congressional Research Service Report.

Testimony of Jim Harper, Cato Institute

How Registered Traveler misunderstands the mission of airline security.

french film about airport security holes

Still trying to get it right.

Mining for Madmen

Potential for abuse is high, usefulness of information low since riddled with error. From the think tank, Cato Institute.

The MATRIX (for real)

Mission Creep.

Muslims forced to lift veil at airport security

Criminals dressed in drag adopt religous convention to escape.

Privacy Violation Report, TSA

The initial image is rich, given that it is of a stablizer.

Your Terror Score

It's like your credit score, only worse, because you don't get to see or correct it.

Still won't use the word "violated"

HS admits overreaching.

250K passengers skip screening in YYZ

Work to RULE!

Aviation's contribution to the UK's economic pie

How big is your slice?

I forgot. ..OK?

Demented old granny puts her month old grandson through airport Xray. Now whose fault is it she was carrying him in the first place?

So you agree that this is fishy?

[Federal Register: December 18, 2006 (Volume 71, Number 242)]
[Notices]
[Page 75752-75753]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18de06-44]

=======================================================================
-----------------------------------------------------------------------

PRIVACY AND CIVIL LIBERTIES OVERSIGHT BOARD


Watch List Redress Request for Public Comment

AGENCY: Privacy and Civil Liberties Oversight Board, The White House.

ACTION: Request for public comment.

-----------------------------------------------------------------------

SUMMARY: The Privacy and Civil Liberties Oversight Board, established
by the Intelligence Reform and Terrorism Prevention Act of 2004 (Pub.
L. 108-458, December 17, 2004), advises the President and other senior
executive branch officials to ensure that concerns about privacy and
civil liberties are appropriately considered in the implementation of
laws, regulations, and executive branch policies related to efforts to
protect the Nation against terrorism. This includes advising on whether
adequate guidelines, supervision, and oversight exist to protect the
important legal rights of all Americans.
Processes currently exist to redress errors and ameliorate false
positives associated with the use of watch list data for aviation and
other security screening purposes. Efforts to address, enhance,
conform, and potentially streamline these procedures are ongoing
throughout the Federal Government, and the Board is assisting relevant
executive branch departments and agencies in those efforts. The Board
seeks any comments, suggestions or other information from members of
the

[[Page 75753]]

public who have knowledge on this subject. Comments may be forwarded
via the Board's Web site at http://www.PrivacyBoard.gov. While there is

no specific deadline for the submission, the Board is interested in
receiving public comments soon. The Board is unable to respond to
individual comments and cannot assist individual redress requests.
Information gathered will be used solely to assist the Board in
understanding the effects of policy and program operations on
Americans' civil liberties.

DATES: While there is no specific deadline for the submission, the
Board is interested in receiving public comments soon.

ADDRESSES: Comments can be e-mailed to: PrivacyBoard@who.eop.gov.

FOR FURTHER INFORMATION CONTACT: Seth Wood, 202-456-1240.

SUPPLEMENTARY INFORMATION: Homeland Security Presidential Directive 6,
dated September 16, 2003, requires that the Attorney General establish
an organization to consolidate the Federal Government's approach to
terrorism screening and provide for the appropriate and lawful use of
terrorist information in screening processes. Pursuant to this
directive, the Secretaries of State, Defense, the Treasury, and
Homeland Security along with the Attorney General and the Director of
Central Intelligence established by a memorandum of understanding the
Terrorist Screening Center (TSC). Under TSC's supervision, the
Terrorist Screening Database (TSDB) was created to compile the most
thorough, accurate and current information possible about individuals
known or suspected to be or to have been engaged in conduct advancing
terrorism. This database consolidates the Federal Government's
terrorism screening databases into a single integrated database and
provides for its appropriate and lawful use in screening processes
administered by Federal, State, local, and tribal authorities.

Authority: Pub. L. 108-408 Sec. 1061 et seq. (Dec. 17, 2004).

Dated: December 11, 2006.
Mark Robbins,
Executive Director.
[FR Doc. E6-21465 Filed 12-15-06; 8:45 am]

BILLING CODE 3195-W7-P

AirBUS airworthiness directive

[Federal Register: December 15, 2006 (Volume 71, Number 241)]
[Proposed Rules]
[Page 75432-75433]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de06-11]

========================================================================
Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================



[[Page 75432]]



DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2006-26595; Directorate Identifier 2006-NM-208-AD]
RIN 2120-AA64


Airworthiness Directives; Airbus Model A320 Series Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

-----------------------------------------------------------------------

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Airbus Model A320 series airplanes. This proposed AD would
require replacing the carbon fiber reinforced plastic (CFRP) actuator
fittings of the rudder with aluminum actuator fittings and doing
related investigative and corrective actions. This proposed AD results
from rupture of a CFRP actuator fitting during maintenance. We are
proposing this AD to prevent rupture of a rudder actuator fitting,
which could result in reduced controllability of the airplane.

DATES: We must receive comments on this proposed AD by January 16,
2007.

ADDRESSES: Use one of the following addresses to submit comments on
this proposed AD.
DOT Docket Web site: Go to http://dms.dot.gov and follow

the instructions for sending your comments electronically.
Government-wide rulemaking Web site: Go to http://www.regulations.gov
and follow the instructions for sending your

comments electronically.
Mail: Docket Management Facility, U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590.
Fax: (202) 493-2251.
Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
Contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex,
France, for service information identified in this proposed AD.

FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer,
International Branch, ANM-116, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425)
227-2125; fax (425) 227-1149.

SUPPLEMENTARY INFORMATION:

Comments Invited

We invite you to submit any relevant written data, views, or
arguments regarding this proposed AD. Send your comments to an address
listed in the ADDRESSES section. Include the docket number ``FAA-2006-
26595; Directorate Identifier 2006-NM-208-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of the proposed AD. We will
consider all comments received by the closing date and may amend the
proposed AD in light of those comments.
We will post all comments we receive, without change, to http://dms.dot.gov
, including any personal information you provide. We will

also post a report summarizing each substantive verbal contact with FAA
personnel concerning this proposed AD. Using the search function of
that Web site, anyone can find and read the comments in any of our
dockets, including the name of the individual who sent the comment (or
signed the comment on behalf of an association, business, labor union,
etc.). You may review the DOT's complete Privacy Act Statement in the
Federal Register published on April 11, 2000 (65 FR 19477-78), or you
may visit http://dms.dot.gov.


Examining the Docket

You may examine the AD docket on the Internet at http://dms.dot.gov
, or in person at the Docket Management Facility office

between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The Docket Management Facility office (telephone (800) 647-
5227) is located on the plaza level of the Nassif Building at the DOT
street address stated in the ADDRESSES section. Comments will be
available in the AD docket shortly after the Docket Management System
receives them.

Discussion

The European Aviation Safety Agency (EASA), which is the
airworthiness authority for the European Union, notified us that an
unsafe condition may exist on certain Airbus Model A320 series
airplanes. The EASA advises that a carbon fiber plastic reinforced
(CFRP) actuator fitting of the rudder ruptured during incorrect
accomplishment of airplane maintenance task 27-21-00-710-001.
Investigation revealed that the CFRP actuator fittings cannot sustain
limit loads resulting from ground gust conditions due to design of the
fitting. Rupture of a rudder actuator fitting, if not corrected, could
result in reduced controllability of the airplane.

Relevant Service Information

Airbus has issued Service Bulletin A320-55-1030, dated March 6,
2006. The service bulletin describes procedures for replacing all three
of the CFRP actuator fittings of the rudder with aluminum actuator
fittings and doing related investigative and corrective actions. The
related investigative action is an inspection of the bushings to ensure
that they are not elongated or out of measurement. The corrective
action is to replace any damaged bushing with a new bushing.
Accomplishing the actions specified in the service information is
intended to adequately address the unsafe condition. The EASA mandated
the service information and issued airworthiness directive 2006-0262,
dated August 25, 2006, to ensure the continued airworthiness of these
airplanes in the European Union.

FAA's Determination and Requirements of the Proposed AD

This airplane model is manufactured in France and is type
certificated for operation in the United States under the provisions of
section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and
the applicable bilateral airworthiness agreement. As described in FAA
Order 8100.14A, ``Interim Procedures for Working with the European
Community on Airworthiness Certification and Continued Airworthiness,''
dated August 12, 2005, the EASA has kept the FAA informed of the
situation described above. We have

[[Page 75433]]

examined the EASA's findings, evaluated all pertinent information, and
determined that we need to issue an AD for airplanes of this type
design that are certificated for operation in the United States.
Therefore, we are proposing this AD, which would require
accomplishing the actions specified in the service information
described previously.

Costs of Compliance

This proposed AD would affect about 38 airplanes of U.S. registry.
The proposed action would take about 100 work hours per airplane, at an
average labor rate of $80 per work hour. Required parts would cost
about $6,310 per airplane. Based on these figures, the estimated cost
of the proposed AD for U.S. operators is $543,780, or $14,310 per
airplane.

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, Section 106, describes the
authority of the FAA Administrator. Subtitle VII, Aviation Programs,
describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701, ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

We have determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the National Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that the proposed
regulation:
1. Is not a ``significant regulatory action'' under Executive Order
12866;
2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979); and
3. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
We prepared a regulatory evaluation of the estimated costs to
comply with this proposed AD and placed it in the AD docket. See the
ADDRESSES section for a location to examine the regulatory evaluation.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation safety, Safety.

The Proposed Amendment

Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

1. The authority citation for part 39 continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.


Sec. 39.13 [Amended]

2. The Federal Aviation Administration (FAA) amends Sec. 39.13 by
adding the following new airworthiness directive (AD):

Airbus: Docket No. FAA-2006-26595; Directorate Identifier 2006-NM-
208-AD.

Comments Due Date

(a) The FAA must receive comments on this AD action by January
16, 2007.

Affected ADs

(b) None.

Applicability

(c) This AD applies to Airbus Model A320 series airplanes,
certificated in any category; except those on which Airbus
Modification 21733 or 21999 has been incorporated in production.

Unsafe Condition

(d) This AD results from rupture of a carbon fiber reinforced
plastic (CFRP) actuator fitting during maintenance. We are issuing
this AD to prevent rupture of a rudder actuator fitting, which could
result in reduced controllability of the airplane.

Compliance

(e) You are responsible for having the actions required by this
AD performed within the compliance times specified, unless the
actions have already been done.

Replacement of Rudder Actuator Fittings

(f) Within 9,000 flight cycles or 12,000 flight hours, or 60
months after the effective date of this AD, whichever occurs first:
Replace all of the CFRP actuator fittings of the rudder with
aluminum actuator fittings and do all the related investigative
actions, by accomplishing all of the actions specified in Airbus
Service Bulletin A320-55-1030, dated March 6, 2006. Do any
applicable corrective actions before further flight in accordance
with the Accomplishment Instructions of the service bulletin.

Alternative Methods of Compliance (AMOCs)

(g)(1) The Manager, International Branch, ANM-116, Transport
Airplane Directorate, FAA, has the authority to approve AMOCs for
this AD, if requested in accordance with the procedures found in 14
CFR 39.19.
(2) Before using any AMOC approved in accordance with Sec.
39.19 on any airplane to which the AMOC applies, notify the
appropriate principal inspector in the FAA Flight Standards
Certificate Holding District Office.

Related Information

(h) European Aviation Safety Agency (EASA) airworthiness
directive 2006-0262, dated August 25, 2006, also addresses the
subject of this AD.

Issued in Renton, Washington, on November 27, 2006.
Ali Bahrami,
Manager Transport Airplane Directorate, Aircraft Certification Service.
[FR Doc. E6-21354 Filed 12-14-06; 8:45 am]

BILLING CODE 4910-13-P

Forced Age 60 Retirement likely to be abandoned

No one seems to be talking about how this age issue is going to affect bidding for the right seat, since the F/O cannot also be over 60 with the left seat over 60. No two over 60 pilots in the same cockpit, that's the proposed rule. So, someone's going to be bid denied in the right seat. Not only are they going to be bid denied for up to 5 years, they aren't going to make the big bucks for 5 more years. Not happy campers, I'd imagine.

AirlineMergers

Will not benefit consumers.

Travel Industry Groups Oppose TSA Risk 'tests'

Privacy a vanishing right.

europe nervous

Suspected Holiday Attacks.

Holes?

Airport Security Lapses.

Let's light this candle!

Human Space Flight (requirements, crewmembers).

US Travel and Tourism - Measures

Productivity.

Labor & Productivity in Air Transport

From the DOT.

US-VISIT program

See, elsewhere, fiasco.

Congressional Research Service Report

The future of the national airspace.

data mining costly, ineffective, threat to liberty

From the Think Tank, Cato Institute.

Costs of maintaining aging aircraft

Between 12 and 25 years old, the cost is negligible.

Your Security Score (sort of like your credit score, only more important)

But of course, you will not be allowed to see this one.

Here's the Federal Register Notice:


[Federal Register: November 2, 2006 (Volume 71, Number 212)]
[Notices]
[Page 64543-64546]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02no06-51]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Office of the Secretary

[DHS-2006-0060]


Privacy Act of 1974; System of Records

AGENCY: Privacy Office, Department of Homeland Security.

ACTION: Notice of Privacy Act system of records.

-----------------------------------------------------------------------

SUMMARY: To provide expanded notice and transparency to the public, the
Department of Homeland Security, U.S. Customs and Border Protection
gives notice regarding the Automated Targeting System, which is the
enforcement screening module associated with the Treasury Enforcement
Communications System and was previously covered by the Treasury
Enforcement Communications System ``System of Records Notice.'' This
system of records is subject to the Privacy Act of 1974, as amended (5
U.S.C. 552a).
The Treasury Enforcement Communications System is established as an
overarching law enforcement information collection, targeting, and
sharing environment. This environment is comprised of several modules
designed to collect, maintain, and screen data, conduct targeting, and
share information. Among these modules, the Automated Targeting System
performs screening of both inbound and outbound cargo, travelers, and
conveyances. As part of this screening function, the Automated
Targeting System compares information obtained from the public with a
set series of queries designed to permit targeting of conveyances,
goods, cargo, or persons to facilitate DHS's border enforcement
mission.
The risk assessment and links to information upon which the
assessment is based, which are stored in the Automated Targeting
System, are created from existing information in a number of sources,
including, but not limited to: the trade community through the
Automated Commercial System or its successor; the Automated Commercial
Environment system; the traveling public through information submitted
by their carrier to the Advance Passenger Information System; persons
crossing the United States land border by automobile or on foot; the
Treasury Enforcement Communications System, or its successor; or law
enforcement information maintained in other parts of the Treasury
Enforcement Communications System that pertain to persons, goods, or
conveyances.
As part of the information it accesses for screening, Passenger
Name Record (PNR) information, which is currently collected pursuant to
an existing CBP regulation (19 CFR 122.49d) from both inbound and
outbound travelers through the carrier upon which travel occurs, is
stored in the Automated Targeting System. PNR is comprised of data
which carriers collect as a matter of their usual business practice in
negotiating and arranging the travel transaction.
As noted above, this system of records notice does not identify or
create any new collection of information, rather DHS is providing
additional notice and transparency of the functionality of these
systems.

DATES: The new system of records will be effective December 4, 2006,
unless comments are received that result in a contrary determination.

ADDRESSES: You may submit comments, identified by docket number, by one
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments via docket number DH6-
2006-0060.
Fax: 202-572-8727.
Mail: Comments by mail are to be addressed to the Border
Security Regulations Branch, Office of Regulations and Rulings, Bureau
of Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint
Annex), Washington, DC 20229. Comments by mail may also be submitted to
Hugo Teufel III, Chief Privacy Officer, Department of Homeland
Security, 601 S. 12th Street, Arlington, VA 22202-4220.
Instructions: All submissions received must include the
agency name and docket number for this rulemaking. All comments
received will be posted without change to http://www.regulations.gov,

including any personal information provided.
Docket: For access to the docket to read background
documents or comments received go to http://www.regulations.gov.

Submitted comments may also be inspected during regular business days
between the hours of 9 a.m. and 4:30 p.m. at the Regulations Branch,
Office of Regulations and Rulings, Bureau of Customs and Border
Protection, 799 9th Street, NW., 5th Floor, Washington, DC.
Arrangements to inspect submitted comments should be made in advance by
calling Mr. Joseph Clark at (202) 572-8768.

[[Page 64544]]


FOR FURTHER INFORMATION CONTACT: For general questions please contact:
Laurence E. Castelli (202-572-8790), Chief, Privacy Act Policy and
Procedures Branch, Bureau of Customs and Border Protection, Office of
Regulations & Rulings, Mint Annex, 1300 Pennsylvania Ave., NW.,
Washington, DC 20229. For privacy issues please contact: Hugo Teufel
III (571-227-3813), Chief Privacy Officer, Privacy Office, U.S.
Department of Homeland Security, Washington, DC 20528.

SUPPLEMENTARY INFORMATION: Bureau of Customs and Border Protection
(CBP), Department of Homeland Security (DHS), has traditionally relied
on computerized cargo screening processes to aid the CBP inspection
workforce in the cargo release process. Separately, CBP has used the
advance submission of traveler information to aid in screening
travelers to facilitate its border enforcement mission. The Automated
Targeting System (ATS) associates information obtained from CBP's
cargo, travelers, and border enforcement systems with a level of risk
posed by each item and person as determined through the rule based
query of the cargo or personal information accessed by ATS.
The Privacy Act embodies fair information principles in a statutory
framework governing the means by which the United States Government
collects, maintains, uses, and disseminates personally identifiable
information. The Privacy Act applies to information that is maintained
in a ``system of records.'' A ``system of records'' is a group of any
records under the control of an agency from which information is
retrieved by the name of the individual or by some identifying number,
symbol, or other identifying particular assigned to the individual. In
the Privacy Act, an individual is defined to encompass United States
citizens and legal permanent residents. ATS involves the collection and
creation of information that is maintained in a system of records.
Previously, this information was covered by the Treasury
Enforcement Communications System (TECS) system of records notice, as
ATS is a functional module associated with the environment of TECS. ATS
is employed as an analytical tool to enhance CBP screening and
targeting capabilities by permitting query-based comparisons of
different data modules associated with the TECS system, as well as
comparisons with data sets from sources outside of TECS. As part of
DHS's updating of its system of records notices and in an effort to
provide more detailed information to the traveling public and trade
community, CBP has determined that ATS should be noticed as a separate
system of records, giving greater visibility into its targeting and
screening efforts.
The Privacy Act requires each agency to publish in the Federal
Register a description denoting the type and character of each system
of records that the agency maintains, and the routine uses that are
contained in each system in order to make agency recordkeeping
practices transparent, to notify individuals regarding the uses to
which personally identifiable information is put, and to assist the
individual to more easily find such files within the agency.
DHS is hereby publishing a description of the system of records
referred to as the Automated Targeting System. In accordance with 5
U.S.C. 552a(r), a report concerning this record system has been sent to
the Office of Management and Budget and to the Congress.
DHS/CBP-006

SYSTEM NAME:
Automated Targeting System (ATS)--DHS/CBP.

SYSTEM LOCATION:
This computer database is located at the Bureau of Customs and
Border Protection (CBP) National Data Center in Washington, DC.
Computer terminals are located at customhouses, border ports of entry,
airport inspection facilities under the jurisdiction of the Department
of Homeland Security (DHS) and other locations at which DHS authorized
personnel may be posted to facilitate DHS's mission.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
A. Persons seeking to enter or exit the United States;
B. Persons who engage in any form of trade or other commercial
transaction related to the importation or exportation of merchandise;
C. Persons who are employed in any capacity related to the transit
of merchandise intended to cross the United States border; and
D. Persons who serve as operators, crew, or passengers on any
vessel, vehicle, aircraft, or train who enters or exits the United
States.

CATEGORIES OF RECORDS IN THE SYSTEM:
ATS builds a risk assessment for cargo, conveyances, and travelers
based on criteria and rules developed by CBP. ATS maintains the
resulting assessment together with a record of which rules were used to
develop the assessment. With the exception of PNR information,
discussed below, ATS maintains a pointer or reference to the underlying
records from other systems that resulted in a particular assessment.
This assessment and related rules history associated with developing a
risk assessment for an individual are maintained for up to forty years
to support ongoing targeting requirements.
ATS--P (Automated Targeting System--Passenger), a component of ATS,
maintains the PNR information obtained from commercial carriers for
purposes of assessing the risk of international travelers. PNR may
include such items as:
PNR record locator code,
Date of reservation,
Date(s) of intended travel,
Name,
Other names on PNR,
Number of travelers on PNR,
Seat information,
Address,
All forms of payment information,
Billing address,
Contact telephone numbers,
All travel itinerary for specific PNR,
Frequent flyer information,
Travel agency,
Travel agent,
Code share PNR information,
Travel status of passenger,
Split/Divided PNR information,
Identifiers for free tickets,
One-way tickets,
E-mail address,
Ticketing field information,
Automated Ticketing Fare Quote (ATFQ) fields,
General remarks,
Ticket number,
Seat number,
Date of ticket issuance,
Any collected APIS information,
No show history,
Number of bags,
Bag tag numbers,
Go show information,
Number of bags on each segment,
Other Supplementary information (OSI),
Special Services information (SSI),
Special Services Request (SSR),
Voluntary/involuntary upgrades,
Received from information, and
All historical changes to the PNR
Not all carriers maintain the same sets of information for PNR.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
19 U.S.C. 482, 1461, 1496, and 1581-1582, 8 U.S.C. 1357, Title VII
of Public Law 104-208, and 49 U.S.C. 44909.

Purpose(s):
(a) To perform targeting of individuals, including passengers and

[[Page 64545]]

crew, focusing CBP resources by identifying persons who may pose a risk
to border security, may be a terrorist or suspected terrorist, or may
otherwise be engaged in activity in violation of U.S. law;
(b) To perform targeting of conveyances and cargo to focus CBP's
resources for inspection and examination and enhance CBP's ability to
identify potential violations of U.S. law, possible terrorist threats,
and other threats to border security; and
(c) To assist in the enforcement of the laws enforced or
administered by DHS, including those related to counterterrorism.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES
OF USERS AND THE PURPOSES OF SUCH USES:
In addition to those disclosures generally permitted under 5 U.S.C.
552a(b) of the Privacy Act, all or a portion of the records or
information contained in this system may be disclosed outside DHS as a
routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To appropriate Federal, state, local, tribal, or foreign
governmental agencies or multilateral governmental organizations
responsible for investigating or prosecuting the violations of, or for
enforcing or implementing, a statute, rule, regulation, order, or
license, where CBP believes the information would assist enforcement of
civil or criminal laws;
B. To appropriate Federal, state, local, tribal, or foreign
governmental agencies maintaining civil, criminal, or other relevant
enforcement information or other pertinent information, which has
requested information relevant or necessary to the requesting agency's
hiring or retention of an individual, or issuance of a security
clearance, license, contract, grant, or other benefit and disclosure is
appropriate to the proper performance of the official duties of the
person making the disclosure;
C. To a court, magistrate, or administrative tribunal in the course
of presenting evidence, including disclosures to opposing counsel or
witnesses in the course of civil discovery, litigation, or settlement
negotiations, or in response to a subpoena, or in connection with
criminal law proceedings;
D. To third parties during the course of a law enforcement
investigation to the extent necessary to obtain information pertinent
to the investigation, provided disclosure is appropriate to the proper
performance of the official duties of the officer making the
disclosure;
E. To an agency, organization, or individual for the purposes of
performing audit or oversight operations as authorized by law;
F. To a Congressional office, for the record of an individual in
response to an inquiry from that Congressional office made at the
request of the individual to whom the record pertains;
G. To contractors, grantees, experts, consultants, students, and
others performing or working on a contract, service, grant, cooperative
agreement, or other assignment for the Federal government, when
necessary to accomplish an agency function related to this system of
records, in compliance with the Privacy Act of 1974, as amended;
H. To an organization or individual in either the public or private
sector, either foreign or domestic, where there is a reason to believe
that the recipient is or could become the target of a particular
terrorist activity or conspiracy, to the extent the information is
relevant to the protection of life or property and disclosure is
appropriate to the proper performance of the official duties of the
person making the disclosure;
I. To the United States Department of Justice (including United
States Attorney offices) or other Federal agency conducting litigation
or in proceedings before any court, adjudicative or administrative
body, when it is necessary to the litigation and one of the following
is a party to the litigation or has an interest in such litigation: (a)
DHS, or (b) any employee of DHS in his/her official capacity, or (c)
any employee of DHS in his/her individual capacity where DOJ or DHS has
agreed to represent said employee, or (d) the United States or any
agency thereof;
J. To the National Archives and Records Administration or other
Federal government agencies pursuant to records management inspections
being conducted under the authority of 44 U.S.C. 2904 and 2906;
K. To appropriate Federal, state, local, tribal, or foreign
governmental agencies, if necessary to obtain information relevant to a
DHS decision concerning the hiring or retention of an employee, the
issuance of a security clearance, the reporting of an investigation of
an employee, the letting of a contract, or the issuance of a license,
grant or other benefit and disclosure is appropriate to the proper
performance of the official duties of the individual making the
disclosure;
L. To appropriate Federal, State, local, tribal, or foreign
governmental agencies or multilateral governmental organizations, for
purposes of assisting such agencies or organizations in preventing
exposure to or transmission of a communicable or quarantinable disease
or for combatting other significant public health threats;
M. To Federal and foreign government intelligence or
counterterrorism agencies or components where CBP becomes aware of an
indication of a threat or potential threat to national or international
security, or where such use is to assist in anti-terrorism efforts and
disclosure is appropriate to the proper performance of the official
duties of the person making the disclosure;
N. To appropriate Federal, State, local, tribal, or foreign
governmental agencies or multilateral governmental organizations where
CBP is aware of a need to utilize relevant data for purposes of testing
new technology and systems designed to enhance border security or
identify other violations of law;
O. To appropriate agencies, entities, and persons when (1) it is
suspected or confirmed that the security or confidentiality of
information in the system of records has been compromised; (2) CBP has
determined that as a result of the suspected or confirmed compromise
there is a risk of harm to economic or property interests, identity
theft or fraud, or harm to the security or integrity of this system or
other systems or programs (whether maintained by CBP or another agency
or entity) that rely upon the compromised information; and (3) the
disclosure is made to such agencies, entities, and persons when
reasonably necessary to assist in connection with the CBP's efforts to
respond to the suspected or confirmed compromise and prevent, minimize,
or remedy such harm.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING,
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
The data is stored electronically at the National Data Center for
current data and offsite at an alternative data storage facility for
historical logs and system backups.

RETRIEVABILITY:
The data is retrievable by name or personal identifier from an
electronic database.

SAFEGUARDS:
All records are protected from unauthorized access through
appropriate administrative, physical, and technical safeguards. These
safeguards include all of the following: restricting access to those
with a ``need to know''; using locks, alarm devices,

[[Page 64546]]

and passwords; compartmentalizing databases; auditing software; and
encrypting data communications.
ATS also monitors source systems for changes to the source data.
The system manager, in addition, has the capability to maintain system
back-ups for the purpose of supporting continuity of operations and the
discrete need to isolate and copy specific data access transactions for
the purpose of conducting security incident investigations. ATS
information is secured in full compliance with the requirements of the
DHS IT Security Program Handbook. This handbook establishes a
comprehensive information security program.
Access to the risk assessment results and related rules is
restricted to a limited number of authorized government personnel who
have gone through extensive training on the appropriate use of this
information and CBP policies, including for security and privacy. These
individuals are trained to review the risk assessments and background
information to identify individuals who may likely pose a risk. To
ensure that ATS is being accessed and used appropriately, audit logs
are created and reviewed routinely by CBP's Office of Internal Affairs.

RETENTION AND DISPOSAL:
The information initially collected in ATS is used for entry
screening purposes. Records in this system will be retained and
disposed of in accordance with a records schedule to be approved by the
National Archives and Records Administration. ATS both collects
information directly, and derives other information from various
systems. To the extent information is collected from other systems,
data is retained in accordance with the record retention requirements
of those systems.
The retention period for data specifically maintained in ATS will
not exceed forty years at which time it will be deleted from ATS. Up to
forty years of data retention may be required to cover the potentially
active lifespan of individuals associated with terrorism or other
criminal activities. The touchstone for data retention, however, is its
relevance and utility. Accordingly, CBP will regularly review the data
maintained in ATS to ensure its continued relevance and usefulness. If
no longer relevant and useful, CBP will delete the information. All
risk assessments need to be maintained because the risk assessment for
individuals who are deemed low risk will be relevant if their risk
profile changes in the future, for example, if terrorist associations
are identified. Additionally, certain data collected directly by ATS
may be subject to shorter retention limitations pursuant to separate
arrangements. The adoption of shorter retention periods may not be
publicly disclosed if DHS concludes that disclosure would affect
operational security, for example by giving terrorism suspects the
certainty that their past travel patterns would no longer be known to
U.S. authorities.

SYSTEM MANAGER(S) AND ADDRESS:
Executive Director, National Targeting and Security, Office of
Field Operations, U.S. Customs and Border Protection, Ronald Reagan
Building and Director, Targeting and Analysis, Systems Program Office,
Office of Information Technology, U.S. Customs and Border Protection.

NOTIFICATION PROCEDURE:
Generally, this system of records may not be accessed for purposes
of determining if the system is a record pertaining to a particular
individual. (See 5 U.S.C. 552a(e)(4)(G) and (f)(1)).
General inquiries regarding ATS may be directed to the Customer
Satisfaction Unit, Office of Field Operations, U.S. Customs and Border
Protection, Room 5.5-C, 1300 Pennsylvania Avenue, NW., Washington, DC
20229 (phone: (202) 344-1850 and fax: (202) 344-2791).

RECORD ACCESS PROCEDURES:
Generally, this system of records may not be accessed under the
Privacy Act for the purpose of inspection. The majority of this system
is exempted from this requirement pursuant to 5 U.S.C. 552a(j)(2) and
(k)(2).
General inquiries regarding ATS may be directed to the Customer
Satisfaction Unit, Office of Field Operations, U.S. Customs and Border
Protection, Room 5.5-C, 1300 Pennsylvania Avenue, NW., Washington, DC
20229.
Requests should conform to the requirements of 6 CFR Part 5,
Subpart B, which provides the rules for requesting access to Privacy
Act records maintained by DHS. The envelope and letter should be
clearly marked ``Privacy Act Access Request.'' The request should
include a general description of the records sought and must include
the requester's full name, current address, and date and place of
birth. The request must be signed and either notarized or submitted
under penalty of perjury.

CONTESTING RECORD PROCEDURES:
Since this system of records may not be accessed, generally, for
purposes of determining if the system contains a record pertaining to a
particular individual and those records, if any, cannot be inspected,
the system may not be accessed under the Privacy Act for the purpose of
contesting the content of the record.

RECORD SOURCE CATEGORIES:
The system contains information derived from other law enforcement
systems operated by DHS and other government agencies, which collected
the underlying data from individuals and public entities directly.
In addition, the system contains information collected from
carriers that operate vessels, vehicles, aircraft, and/or trains that
enter or exit the United States.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
Pursuant to 31 CFR 1.36 pertaining to the Treasury Enforcement
Communications System, the Automated Targeting System, which was
previously covered by the Treasury Enforcement Communications System
(TECS) system of records notice and associated with the below
exemptions, records and information in this system are exempt from 5
U.S.C. 552a(c)(3), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), (e)(4)(G),
(H), and (I), and (f) of the Privacy Act pursuant to 5 U.S.C.
552a(j)(2) and (k)(2). DHS intends to review these exemptions and, if
warranted, issue a new set of exemptions specific to ATS within ninety
(90) days of the publication of this notice.

Dated: October 27, 2006.
Hugo Teufel III,
Chief Privacy Officer.
[FR Doc. 06-9026 Filed 10-30-06; 3:31 pm]

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Update, legal challenge to terrorism risk score.

Ownership/Control of US air carriers

[Federal Register: December 8, 2006 (Volume 71, Number 236)]
[Proposed Rules]
[Page 71106-71109]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08de06-29]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 399

[Docket No. OST-2003-15759]
RIN: 2105-AD25


Actual Control of U.S. Air Carriers

AGENCY: Office of the Secretary, DOT.

ACTION: Withdrawal of certain proposed amendments.

-----------------------------------------------------------------------

SUMMARY: Current law requires that U.S. citizens actually control each
U.S. air carrier, that U.S. citizens own or control at least 75 percent
of the shareholders' voting interest, and that the president and two-
thirds of the directors and the managing officers must be U.S.
citizens. The Department interprets this law in conducting initial and
continuing fitness reviews of U.S. air carriers. We are withdrawing a
proposal to modify by regulation the standards we apply in those cases
where ``actual control'' by U.S. citizens is at issue.
The proposal being withdrawn would have narrowed the scope of our
inquiry in such cases to those core matters affecting compliance with
U.S. requirements affecting safety, security, national defense and
corporate governance. These rationalized standards for deciding whether
U.S. citizens maintained ``actual control'' of a carrier would have
applied only to proposed transactions involving investors whose
countries have an open-skies air services agreement with the United
States and offer reciprocal investment opportunities to U.S. citizens.
Our interpretation of other aspects of the statutory citizenship
requirement would have been unchanged.
Although we are withdrawing the current proposal, we will continue
to consider other ways to rationalize and simplify our domestic
investment regime. The need for greater certainty and transparency in
our requirements and administrative process has become very apparent.
Indeed, public comment in this docket has only served to confirm the
Department's growing concern that the current regime is so unduly
complex and burdensome that it needlessly inhibits the movement of
capital that otherwise would flow into the U.S. airline industry and
thus interferes with the legitimate needs of U.S. carriers to attract
strategic investors from overseas markets. The Department notes that
most of the American economy has progressed well beyond the antiquated
notions that continue to apply to the airline industry because of our
administrative interpretations of the current statute. In a modern,
global industry such as aviation, we believe that the United States
should not shut its doors to foreign investment by perpetuating archaic
and time-consuming administrative practices that serve neither a
statutory purpose nor an identifiable policy interest of the United
States.
The Department had also proposed amendments to 14 CFR Part 204, the
rules governing the data used in fitness determinations, and invited
comment on the procedures used in fitness cases. The Department will
publish a separate decision on those matters.

FOR FURTHER INFORMATION CONTACT: William M. Bertram, Chief, Air Carrier
Fitness Division (X-56), Office of Aviation Analysis, U.S. Department
of Transportation, 400 7th Street, SW., Washington, DC 20590; (202)
366-9721.

SUPPLEMENTARY INFORMATION:

Introduction

Under Title 49 of the U.S. Code, only ``citizens'' of the United
States may obtain certificate authority to provide air transportation
within the United States or operate as a U.S. air carrier on
international routes. (49 U.S.C. 41102 or 41103.) The Department
proposed to modify its interpretation of ``actual control,'' an element
in the statutory definition of a citizen of the United States, 49
U.S.C. 40102(a)(15), because it believes that modernizing its policies
so as to allow more foreign investment in U.S. carriers would better
reflect the realities of a global aviation industry, strengthen the
U.S. air transportation system, and encourage other countries to open
their own air services and investment markets.
Our proposal would not have and could not have altered the
statutory test for citizenship nor was it an attempt to do so. We
stated our intention to continue vigorous enforcement of the statute's
express requirements. We did propose, however, to eliminate certain
additional citizenship restrictions that had been established
administratively over the course of decades in individual fitness cases
and that in our view are anachronistic, overly complex, and unduly
burdensome. Accordingly, the net result of our proposal would have been
to end a long-standing, extraneous administrative prohibition against
foreign investors having even a ``semblance'' of control over airline
commercial decisions; the revised approach would have applied only to
investors whose home countries had open-skies agreements with the
United States and provided reciprocal investment opportunities for U.S.
citizens. The proposal would have maintained the prohibition against
foreign citizen control of decisions on corporate governance, safety,
security, and participation in the Civil Reserve Air Fleet program and
other national defense airlift programs (for simplicity, referred to as
``CRAF'' hereafter). To ensure control by U.S. citizens, as an added
measure we would have required that any delegation of authority by U.S.
citizens to foreign investors be fully revocable by the shareholders or
board of directors.
We provided several opportunities for interested parties to comment
on the proposal, including a supplemental notice of proposed rulemaking
(SNPRM) that further clarified our proposed modified interpretation of
``actual control.'' 71 FR 26425 (May 5, 2006). In the supplemental
notice, we made refinements to our proposal reflecting further
consultations with our Federal Aviation Administration (FAA), the
Department of Homeland Security (DHS), and the Department of Defense
(DOD). We also acknowledged requests by members of Congress, who wanted
us to provide time for more public comment on the proposal and for
Congressional hearings on the topic.
The additional comments that we received in response to the SNPRM
confirmed our earlier determination that the Department's historic
interpretation of the actual control requirement did not serve the
public interest well.
During the rulemaking we also proposed several technical changes to
the rules governing the data for fitness determinations, 14 CFR Part
204. Those proposals were unopposed. We also requested public comment
on the procedures used by us in resolving citizenship issues. We will
publish our decision on those proposals in a separate rulemaking
document.

Background

A firm may not be certificated as an air carrier to operate within
the United

[[Page 71107]]

States or as a U.S. carrier on international routes unless it is a
citizen of the United States. 49 U.S.C. 40102(a). We examine carrier
citizenship primarily in two situations. First, when a firm applies for
authority to operate as a U.S. carrier, we conduct an initial fitness
review, which necessarily includes a review of the carrier's
citizenship. We conduct initial fitness reviews through adjudicatory
proceedings for which a public record is maintained in our docket.
Second, we conduct a continuing fitness review if a carrier undergoes a
substantial change in ownership, operations, or management. We usually
conduct continuing fitness investigations without a public proceeding
and thus without a public record or an opportunity for public comment.
In some continuing fitness cases, we may decide to use procedures that
are more public so that there will be a public record and an
opportunity for public comment. We may amend, modify, suspend, or
revoke the carrier's license, or begin an enforcement action if a
carrier no longer meets the citizenship test. See 71 FR 26426-26427.
The statute defines the requirements for United States citizenship. 49
U.S.C. 40102(a)(15)(C). For many years that statute required only that
the president and at least two-thirds of the board of directors and
other managing officers be citizens of the United States, and that at
least 75 percent of the voting interest be owned or controlled \1\ by
persons that are citizens of the United States. Our predecessor agency
in administering this statute, the Civil Aeronautics Board (the Board),
created an additional requirement not then required by the text of the
statute: the requirement that U.S. citizens must ``actually control''
each U.S. carrier. Willye Peter Daetwyler, d.b.a. Interamerican Air
Freight Co., Foreign Permit, 58 CAB 118, 120-121 (1971).
---------------------------------------------------------------------------

\1\ We and the Board have always interpreted this part of the
statute as ``owned and controlled.''
---------------------------------------------------------------------------

In order to determine citizenship to verify compliance with the
actual control requirement, both the Department and the Board have
employed a fact-specific method of inquiry. See 71 FR 26437, citing 68
FR 44675, 44676 (July 30, 2003). Each decision considered the
``totality of circumstances'' of the airline's organization, including
its capital structure, management, and contractual relationships, in
determining whether U.S. citizens actually control a carrier. We
developed our policies on interpreting the actual control requirement
through our decisions in individual cases, based on the facts and
circumstances of each case, and did not establish a specific definition
of ``actual control'' through any rulemaking. We have continually
modified our interpretation over time in light of changing conditions.
See 71 FR 27437, citing Northwest Airlines Acquisition by Wings
Holdings, Order 91-1-41 (January 23, 1991), and a more recent decision
enabling Hawaiian Airlines to complete its reorganization with some
foreign investment.
Neither the Department nor the Board has administered the actual
control requirement in a way that barred U.S. carriers from having
substantial commercial relationships with foreign carriers and other
foreign firms. For instance, we have held that a U.S. airline continued
to satisfy the actual control requirement when it had an alliance
relationship with a foreign airline that necessarily enabled the
foreign partner airline to influence the U.S. airline's commercial
decisions. Acquisition of Northwest Airlines by Wings Holdings, Inc.,
Order 92-11-27 (November 16, 1992), at 16-17.
Nonetheless, the Department's and the Board's interpretations of
``actual control,'' by effectively prohibiting foreign investors from
enjoying any meaningful participation in the decision-making of U.S.
airlines, has left foreign investors with a very limited ability to
protect their interests as minority investors. We at times implemented
the ``actual control'' requirement as barring foreign investors from
having any ``semblance'' of control, which effectively relegated them
to being passive investors, unable to participate in carrier commercial
decisions that affected the value of their own investment.
Three years ago Congress amended the citizenship definition by
expressly adding an actual control requirement to the statute. As a
result, the statute provides that a corporation can only be a citizen
of the United States if it is ``under the actual control of citizens of
the United States.'' Vision 100--Century of Aviation Reauthorization
Act, P.L. 108-176, Sec. 807, 117 Stat. 2490 (2004). Congress chose not
to define ``actual control.''

Notice of Proposed Rulemaking

We proposed our modified interpretation of ``actual control'' in
order to facilitate efforts by U.S. airlines to remain competitive in
the global airline industry. We grounded our proposal on three
premises: first, that in view of the changes taking place in the global
economy, U.S. air carriers should have the broadest access to the
global capital markets permitted by law; second, that our historical
interpretation of the term ``actual control'' has failed to keep pace
with the changes in the global economy; and third, that in order to
provide U.S. carriers with more flexibility to compete in the global
economy, we should not maintain an interpretation of ``actual control''
that is more restrictive than necessary to meet statutory requirements.
71 FR 26427-26429; 70 FR 67393-67394. In sum, we acted on the policy
that we should remove unnecessary restrictions on U.S. carriers seeking
access to global capital markets.
In 2003, we issued an Advance Notice of Proposed Rulemaking (ANPRM)
that sought comment on our standards and procedures for determining
whether U.S. citizens actually control a carrier. 68 FR 44675 (July 30,
2003). After considering the comments, we issued a Notice of Proposed
Rulemaking (NPRM) concerning our interpretation of ``actual control''
and use of informal procedures in most continuing fitness reviews. 70
FR 67389 (November 7, 2005). The Department proposed to update our
interpretation of ``actual control'' so as to end restrictions on
foreign involvement that, in our view, needlessly interfere with the
ability of U.S. carriers to access international capital markets and
thus to compete effectively in the global marketplace. Under our
proposal, U.S. citizens would remain in control of the carrier through
their authority over corporate governance and those areas of airline
operations subject to significant government regulation: Safety,
security, and CRAF participation. This modification would apply only if
the foreign investors' home country had an open-skies air services
agreement with the United States and, further, provided investment
reciprocity for U.S. citizens wishing to invest in that country's
airlines, or where the United States' international obligations
otherwise required the same approach.

Supplemental Notice of Proposed Rulemaking

We issued a Supplemental Notice of Proposed Rulemaking (SNPRM) to
address comments received on the NPRM, and to propose additional
refinements to the proposal in order to definitively clarify that U.S.
citizens would still retain actual control of U.S. carriers under the
Department's proposal. 71 FR 26425 (May 5, 2006).
The SNPRM retained our proposal to allow carriers to delegate
decision-making responsibilities to foreign citizens (except for
organizational documents, safety, security, and CRAF

[[Page 71108]]

participation matters). However, we added language to make clear that
such delegations would have to be revocable by the board of directors
or shareholders--whose votes would be controlled by U.S. citizens. The
right to revoke delegations of management authority, we felt, was
intrinsic to the requirement that U.S. citizens maintain actual control
of the carrier. We further proposed in the SNPRM to broaden the scope
of decision-making in the areas of safety, security, and CRAF
participation that must remain under the actual control of U.S.
citizens. The proposed revisions would unequivocally ensure that safety
and security decisions generally, not just those related to FAA and TSA
safety and security requirements, as well as all decisions on national
defense airlift commitments, not just CRAF commitments, remained firmly
under the actual control of U.S. citizens. Our refinement of our
proposals on safety, security, and CRAF participation reflected as well
our discussions with the FAA, DHS, TSA, and DOD.
We determined that we have the authority to interpret the statutory
definition of ``actual control,'' because we are responsible for
administering it; that authority enables us to modify our
interpretations when changing industry conditions and policies require
doing so; and our proposed modified interpretation would be consistent
with the language and purpose of the statute. We further stated that we
should change our interpretation when the past interpretation has
become inconsistent with commercial developments and the public policy
goals set by our statute, 49 U.S.C. 40101(a). Finally, we noted that
neither the statute nor its legislative history indicated that Congress
had intended to freeze our earlier interpretations of ``actual
control.'' 71 FR 26436-26439.
After we issued the SNPRM, the Aviation Subcommittee of the Senate
Committee on Commerce, Science, and Transportation held a hearing on
our proposal on May 9, 2006. The Aviation Subcommittee of the House
Transportation and Infrastructure Committee had held a hearing on our
proposal on February 8, 2006, based on the NPRM. Jeffrey N. Shane, the
Department's Under Secretary for Policy, testified at both hearings.
Several members of Congress have written letters to the Secretary
that contend that our proposal is unwise and a significant departure
from what they perceive as existing precedent. These concerns were also
raised at hearings and in proposed legislation.

Summary of Comments

We invited comments on the proposal as refined by our SNPRM. We
received 21 comments on the SNPRM from carriers, labor parties, and
industry associations, and three comments from individuals.
The majority of commenters supported the policy change as a way to
strengthen the U.S. airline industry and encourage the liberalization
of international aviation. The Department received general support for
its proposed changes from Airports Council International-- Europe
(ACI), Airports Council International-- North America (ACI-NA),
Association of European Airlines (AEA), bmi, Delta Air Lines (Delta),
DePaul University College of Law International Aviation Law Institute
(DePaul), Federal Express (FedEx), Hawaiian Airlines (Hawaiian),
International Air Transport Association (IATA), United Air Lines
(United), United Parcel Service (UPS), United States Airports for
Better International Air Service (USA-BIAS), U.S. Airways, and the
Washington Airports Task Force (WATF).
Other commenters--notably the Aircraft Mechanics Fraternal
Association (AMFA), Air Line Pilots Association (ALPA), British
Airways, Continental Airlines (Continental), Independent Pilots
Association (IPA), Transportation Trades Department AFL-CIO (TTD), and
Virgin Atlantic Airways (Virgin Atlantic)--opposed our proposal,
claiming that the proposed rule would be unlawful, impracticable,
ineffective in achieving the desired result, or harmful to the airline
industry and its unionized employees.
Both supporters and opponents of our proposal asserted that the
rule, as proposed, provided inadequate guidance to carriers and
potential foreign investors and that our final decision should provide
examples of the kind of business relationships that would or would not
be permitted by a final rule. See, e.g., AEA Comments at 4; British
Airways Comments at 3-4; IATA Comments at 6; Virgin Atlantic Comments
at 5-6; ACI Comments at 2. Other commenters asserted that it was not
clear whether our proposed revocability requirement--the requirement
that a U.S. carrier have the practicable ability to revoke any
delegation of decision-making authority to a foreign investor--would be
consistent with standard commercial practices in other industries,
which make a firm's ability to revoke a contract with its investors
subject to conditions limiting the ability to revoke in order to
protect the investors' legitimate interests. See, e.g., FedEx Comments
at 7-9; ACI-NA Comments at 4; DePaul Comments at 4; US-BIAS Comments.
Some commenters contended that our proposals were too restrictive;
Delta, for example, asserted that the revocation requirement was
``flatly inconsistent'' with our goal of encouraging foreign
investment. Delta Comments at 6-7.

Our Final Decision

We have decided to withdraw the proposal on interpretation of
``actual control.'' We still believe there are significant benefits to
be realized by liberalizing and rationalizing our domestic investment
regime for U.S. air carriers. Nonetheless, our policy could gain from
additional public insight into the practical advantages and drawbacks
of particular administrative reforms.
We maintain that our past administration of the ``actual control''
requirement is obsolete and the notion has needlessly precluded foreign
investment in the U.S. airline industry to its detriment. In the
Department's view, retention of the anachronistic administrative
standard for determining actual control serves no discernible policy
interest of the United States. Instead, it has prevented U.S. carriers
from entering into sound and desirable business relationships with
foreign allies ``relationships that U.S. corporate management concluded
would benefit their carrier, their employees and shareholders. See,
e.g., FedEx Comments at 2; Atlas & Polar Comments on NPRM at 3; United
Comments at 3. We continue to believe we need a way to enable strategic
investors ``interested in long-term gain, not short-term arbitrage--to
participate more meaningfully in the decision-making at U.S. carriers,
as such investors would ``more likely be concerned about a U.S.
airline's product quality, market strategy, and its capital
reinvestment plans than short-term investors who view airlines merely
as trading vehicles.'' 71 FR 26428. An up-to-date approach towards
administering the ``actual control'' requirement that takes into
account the realities of modern capital markets would permit our
carriers to catch up with increasingly competitive and financially
stronger foreign airlines in terms of integrating their operations and
services with those of marketing partners. It would also enable
investments abroad by U.S. air carriers and the formation of durable
business relationships with foreign carriers, such as Continental, for
example, enjoys with COPA, a leading Latin American airline.
Continental Airlines, SEC Report on Form 10-Q (July 21, 2006) at 34. In
our view, we

[[Page 71109]]

should encourage additional foreign investment in the U.S. airline
industry, give U.S. carriers freedom in developing beneficial business
relationships across borders and eliminate outdated restrictions on
business conduct.
Our proposal has become controversial, as to both the questions of
whether our interpretation of ``actual control'' should be changed and
whether our specific proposal will effectively accomplish our
objectives. In addition, as noted, letters sent by members of Congress
have urged the Department not to adopt the proposal without further
discussion. In this particular instance, we have concluded that the
expressions of concern support the concept that more public discussion
of the underlying issues is warranted. By withdrawing the proposal, we
will be free to engage in broad-ranging dialogue without the
constraints of a specific rulemaking proposal.

Rulemaking Analyses and Notices

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), as amended
by the Small Business Regulatory Enforcement Fairness Act of 1996,
requires federal agencies, as part of each rule, to consider regulatory
alternatives that minimize the impact on small entities while achieving
the objectives of the rulemaking. Because we are withdrawing our
proposal, we are not adopting any final rule requiring a regulatory
flexibility analysis.

Trade Impact Assessments

The Trade Agreement Act of 1979 prohibits federal agencies from
establishing any standards or engaging in related activities that
create unnecessary obstacles to the foreign commerce of the United
States. Legitimate domestic objectives, such as safety, are not
considered unnecessary obstacles. The statute also requires
consideration of international standards and, where appropriate, that
U.S. standards be compatible. The Department has assessed the potential
effect of this withdrawal of the proposed rule and has determined that
it will have no effect on any trade-sensitive activity.

International Compatibility

In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is the Department's policy to comply
with International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The Department
has determined that there are no ICAO Standards and Recommended
Practices that correspond to this withdrawal notice.

Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1955 (the Act) is intended,
among other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and tribal governments. Title II of the Act
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed or final agency rule
that may result in an expenditure of $100 million or more (adjusted
annually for inflation) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' This withdrawal
notice is not a final or proposed rule. The requirements of Title II of
the Act, therefore, do not apply.

Executive Order 13132, Federalism

This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132, dated August 4, 1999 (64
FR 43255). This withdrawal notice does not have a substantial direct
effect on, or significant federalism implications for the States, nor
would it limit the policymaking discretion of the States.
It will not directly preempt any State law or regulation, or impose
burdens on the States. This action will have not a significant effect
on the States' ability to execute traditional State governmental
functions. The agency has therefore determined that this withdrawal
notice does not have sufficient federalism implications to warrant
either the preparation of a federalism summary impact statement or
consultations with State and local governments.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.)
requires federal agencies to obtain approval from the Office of
Management and Budget (OMB) for each collection of information they
conduct, sponsor, or require through regulation. Because this is a
withdrawal notice, it will not impose any additional requirements.
Thus, there is no change in the paperwork collection, as it currently
exists.

Issued in Washington, DC on December 5, 2006.
Andrew B. Steinberg,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 06-9603 Filed 12-5-06; 12:39 pm]

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