Document ID: FAA-2023-1194-0001
Agency: faa
Document Type: Proposed Rule
Title: U.S. Agents for Service on Individuals with Foreign Addresses Who Hold or Apply for Certain Certificates, Ratings, or Authorizations
Posted Date: 2023-06-12T04:00Z

[Federal Register Volume 88, Number 112 (Monday, June 12, 2023)]
[Proposed Rules]
[Pages 38001-38008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-12124]

 ========================================================================
 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.
 
 ========================================================================
 

  Federal Register / Vol. 88 , No. 112 / Monday, June 12, 2023 / 
Proposed Rules  

[[Page 38001]]

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 3

[Docket No.: FAA-2023-1194; Notice No. 23-07]
RIN 2120-AL85

U.S. Agents for Service on Individuals With Foreign Addresses Who 
Hold or Apply for Certain Certificates, Ratings, or Authorizations

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes that individuals with foreign addresses, and 
no U.S. physical address of record on file with the FAA, who hold or 
apply for certain certificates, ratings, or authorizations designate a 
U.S. agent for service of FAA documents. The U.S. agent would receive 
service of FAA documents on the certificate holder or applicant's 
behalf. This proposed rule would facilitate the FAA's ability to 
accomplish prompt and cost-effective service of process and service of 
other safety-critical or time-sensitive documents to individuals abroad 
through service on their U.S. agents.

DATES: Send comments on or before August 11, 2023.

ADDRESSES: Send comments identified by docket number FAA-2023-1194 
using any of the following methods:
     Federal eRulemaking Portal: Go to www.regulations.gov and 
follow the online instructions for sending your comments 
electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at (202) 493-2251.
    Docket: Background documents or comments received may be read at 
www.regulations.gov at any time. Follow the online instructions for 
accessing the docket or go to the Docket Operations in Room W12-140 of 
the West Building Ground Floor at 1200 New Jersey Avenue SE, 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Jessica Kabaz-Gomez, Office of the 
Chief Counsel, Enforcement Division, AGC-300, Federal Aviation 
Administration, 800 Independence Avenue SW, Washington, DC 20591; (202) 
267-7395; email [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Overview of Proposed Rule
    B. Background and Statement of the Problem
    C. Summary of the Costs and Benefits
II. Authority for This Rulemaking
III. Discussion of the Proposal
    A. Proposed Rule
    1. Rationale for Proposed Rule
    2. Applicability (Sec.  3.301)
    3. U.S. Agent for Service Defined (Sec.  3.302)
    4. U.S. Agent Designation Requirements (Sec.  3.303)
    5. Effective Date and Consequences for Failing To Comply (Sec.  
3.303)
IV. Regulatory Notices and Analyses
    A. Regulatory Impact Analysis
    B. Regulatory Flexibility Act
    C. International Trade Impact Assessment
    D. Unfunded Mandates Assessment
    E. Paperwork Reduction Act
    F. International Compatibility
    G. Environmental Analysis
V. Executive Order Determinations
    A. Executive Order 13132, Federalism
    B. Executive Order 13211, Regulations That Significantly Affect 
Energy Supply, Distribution, or Use
    C. Executive Order 13609, Promoting International Regulatory 
Cooperation
VI. Privacy
VII. Additional Information
    A. Comments Invited
    B. Electronic Access and Filing
    C. Small Business Regulatory Enforcement Fairness Act

I. Executive Summary

A. Overview of Proposed Rule

    This rulemaking proposes adding a new subpart C to part 3 of title 
14 of the Code of Federal Regulations (14 CFR). Proposed subpart C will 
require individuals who have a foreign address and no U.S. physical 
address of record on file with the FAA to designate a U.S. agent for 
service if they apply for a certificate, rating, or authorization 
issued under 14 CFR part 47, 61, 63, 65, 67, or 107, or hold a 
certificate, rating, or authorization issued under any of these parts.
    The U.S. agent would receive service of FAA documents on behalf of 
the certificate, rating, or authorization holder or applicant. This 
proposed rule would facilitate the FAA's ability to accomplish prompt 
and cost-effective service of process and service of other safety-
critical or time-sensitive documents to individuals abroad through 
service on their U.S. agents. This would conserve agency resources, 
ensure that lengthy delays in service of process do not compromise 
aviation safety, and provide individuals abroad with timely notice of 
FAA actions and the opportunity for more expedient due process.

B. Background and Statement of the Problem

    Currently, only air carriers and foreign air carriers are required 
to designate a U.S. agent for service of FAA documents.\1\ However, 
individuals across the world are able to hold and apply for FAA 
certificates, ratings, and authorizations. As of July 2022, there were 
approximately 115,000 individuals holding certificates, ratings, or 
authorizations issued under 14 CFR part 47, 61, 63, 65, 67, or 107 who 
had a foreign address and did not have a U.S. physical address of 
record on file with the FAA. Serving certain documents on these 
individuals outside of the U.S. presents a challenge for the FAA. 
Accomplishing valid service of process abroad requires compliance with 
international service requirements under multi-lateral treaties (i.e., 
the Hague Service Convention, 20 U.S.T. 361 (signed Nov. 15, 1965), and 
the

[[Page 38002]]

Inter-American Convention on Letters Rogatory, adopted January 30, 
1975, together with the Additional Protocol to the Convention (IACAP), 
adopted May 8, 1979, S. Treaty Doc. No. 98-27 (1986)) or by other means 
that comport with the receiving country and U.S.'s applicable laws 
regulating extraterritorial service.
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    \1\ See 49 U.S.C. 46103(a)(1) (requiring air carriers and 
foreign air carriers to designate an agent) and 14 CFR 119.49 and 
129.9 (implementing 46103(a)(1)).
---------------------------------------------------------------------------

    These international service requirements are triggered by the FAA's 
service of process abroad, specifically when the FAA sends documents 
abroad that compel compliance and are subject to administrative or 
judicial review. Such documents may include notices of proposed civil 
penalties, orders of suspension or revocation, and emergency orders of 
suspension or revocation. International service requirements can 
significantly delay service of these documents for months (and in some 
cases over a year), and also impose additional costs on the agency. 
These international service requirements cannot be waived by document 
recipients, or circumvented by sending documents electronically.

C. Summary of the Costs and Benefits

    Approximately 115,000 individuals outside the U.S. as of July 2022 
hold certificates, ratings, or authorizations issued under 14 CFR part 
47, 61, 63, 65, 67, or 107 and do not have a U.S. physical address of 
record on file with the FAA. Service of process abroad imposes 
burdensome costs on the FAA. This proposed rule would eliminate a 
majority of the costs of affecting international service and transfer 
some of these transaction costs back to the individual that 
necessitated them by requiring designation of a U.S. agent. The costs 
experienced by these individuals will depend on the arrangements made 
(e.g., hiring a professional U.S. agent for service of process could 
cost $150 to $300 annually). Although there may be some initial costs 
to the FAA to revise its systems to accommodate the change, these costs 
will be offset by avoiding the foreign process costs that include 
international mailings and foreign translations.

II. Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety, such as the 
rules governing service that are addressed in this notice, is found in 
Title 49 of the United States Code. 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, 
including the authority to issue regulations.
    This rulemaking is issued under the authority described in 49 
U.S.C. 44701(a)(5), which establishes the authority of the 
Administrator to prescribe regulations and minimum standards for other 
practices, methods, and procedures the Administrator finds necessary 
for safety in air commerce and national security. These regulations are 
within the scope of that authority and are consistent with 49 U.S.C. 
46103, which governs the FAA's service and provides that the FAA may 
effectuate service on an agent.

III. Discussion of the Proposal

    This proposed rule would amend 14 CFR part 3. If adopted, the 
proposal would require individuals who hold or apply for certificates, 
ratings, or authorizations issued under 14 CFR part 47, 61, 63, 65, 67, 
or 107 and who have a foreign address and no U.S. physical address of 
record on file with the FAA to designate a U.S. agent for service. The 
U.S. agent would receive service of FAA documents on the individual's 
behalf.

A. Proposed Rule

    Individuals who hold or apply for FAA certificates, ratings, or 
authorizations are not currently required to designate a U.S. agent for 
service of FAA documents. However, the FAA may serve documents on an 
agent as permitted under 49 U.S.C. 46103. The FAA therefore proposes to 
amend 14 CFR part 3 to add subpart C with Sec. Sec.  3.301 through 
3.303 to require individuals with foreign addresses, and no U.S. 
physical address of record on file with the FAA, who hold or apply for 
certificates, ratings, or authorizations issued under 14 CFR part 47, 
61, 63, 65, 67, or 107, as specified below, to designate a U.S. agent 
for service of certain FAA documents.
1. Rationale for Proposed Rule
    The FAA is proposing this rulemaking to enable prompt and cost-
effective service of documents to individuals abroad through service on 
their U.S. agents. This would avoid international service associated 
with service of process, which can impose significant costs and cause 
tremendous delays to service. As previously discussed, the FAA's 
service of process abroad can trigger international service 
requirements. International service requirements can delay service of 
these documents for months (and in some cases over a year) and impose 
burdensome costs on the agency. These service requirements cannot be 
circumvented by stipulation or agreement between the FAA and the 
individual receiving the document as that could violate a country's 
national sovereignty and potentially U.S. treaty obligations.\2\ 
Similarly, the FAA cannot avoid these international service 
requirements by sending these documents electronically by email.\3\
---------------------------------------------------------------------------

    \2\ Failure to honor such international treaty obligations or 
respect a country's national sovereignty when serving legal 
enforcement documents is in contravention of international and 
foreign law. In such instances, the offended country's government 
issues a demarche to the U.S. Department of State, which notifies 
the U.S. Department of Justice when the incident involves a U.S. 
Government attorney. Such incidents could harm diplomatic relations 
between the offended country and the United States.
    \3\ International service conventions do not expressly authorize 
email service of process abroad, and email service abroad could 
violate the internal law of the receiving state and potentially 
result in judgments that are unenforceable in foreign courts.
---------------------------------------------------------------------------

    The two international service conventions applicable to the FAA's 
service of these documents are the Hague Service Convention, 20 U.S.T. 
361 (signed Nov. 15, 1965), and the Inter-American Convention on 
Letters Rogatory, adopted January 30, 1975, together with the 
Additional Protocol to the Convention (IACAP), adopted May 8, 1979, S. 
Treaty Doc. No. 98-27 (1986). The main method for service under these 
conventions, when a country has objected to postal service under either 
convention, is through the country's designated central authority, 
which is cumbersome, slow, and costly compared to service of process 
accomplished directly through registered mail on the intended 
recipient. It can take three to six months for a country's central 
authority to effect service of process and provide proof of such 
service to the requester under the Hague Service Convention, and six 
months to a year under the IACAP. However, service times under the 
IACAP and Hague Service Convention are country dependent, with some 
countries taking a year or more.
    These delays can create a serious risk to aviation safety. For 
example, when the FAA is serving emergency orders on an individual the 
FAA finds unqualified to hold FAA certificates, ratings, or 
authorizations, the individual may attempt to continue exercising the 
associated privileges until the FAA serves the individual in accordance 
with international service requirements. Service delays may also impact 
when individuals receive notice of the FAA's action and their 
opportunity to timely respond.
    Additionally, international service requirements impose costs on 
the FAA in the form of fees from receiving countries' central 
authorities that process the FAA's service requests and document 
translation costs. The cost of

[[Page 38003]]

service through a country's central authority varies for each country, 
with the United States' Central Authority imposing a $95 fee and many 
countries imposing a reciprocal fee. However, service of process to 
some remote locations within countries can cost several hundred 
dollars. In addition, countries that are parties to the IACAP, and many 
that are parties to the Hague Service Convention, impose translation 
requirements for the central authority to serve documents. The FAA 
currently must procure translation services when these treaties require 
translation, adding additional expense. If the FAA could serve its 
documents domestically on U.S. agents, then these international service 
treaties and their requirements would not apply. The FAA could save the 
costs of countries' central authority service fees and translation 
costs, as the FAA could serve the documents in English directly on 
individuals' U.S. agents.
    Further, most countries are not parties to the Hague Service 
Convention or the IACAP. Service of process to individuals in these 
countries must comport with the receiving country's laws and U.S. law 
regulating extraterritorial service of process. There is no central 
repository specifying what the service requirements are in each of 
these countries. Accordingly, at minimum, service to these countries 
requires the FAA to consult with the Department of State, Department of 
Justice, or local counsel in the receiving country to determine what 
constitutes effective and legally permissible service in that country. 
If a country objects to postal service, letters rogatory are likely the 
only available and recognized means of service. Letters rogatory 
through diplomatic channels take eighteen months or more.
    In sum, these international service requirements cause tremendous 
delays to service, with safety implications, and they impose 
significant costs on the agency. By requiring individual certificate 
holders abroad to designate a U.S. agent for service, this rulemaking 
would enable prompt and cost-effective service of documents to 
individuals abroad through service on their U.S. agents. This would 
conserve agency resources, ensure that lengthy delays in service of 
process do not compromise aviation safety, and provide individuals 
abroad with timely notice of FAA action. As previously discussed, for 
consistency, and to streamline service on U.S. agents, the agency is 
also proposing to serve other time-sensitive or safety-critical 
documents in its discretion on U.S. agents even when international 
service requirements are not triggered.
2. Applicability (Sec.  3.301)
    The FAA proposes to add Sec.  3.301 to specify subpart C's 
applicability. This new requirement to designate a U.S. agent for 
service would only apply to individuals, not entities. Additionally, 
only those individuals with a foreign address who do not have a U.S. 
physical address \4\ of record on file with the FAA, and who hold or 
apply for certificates, ratings, or authorizations issued under 14 CFR 
part 47, 61, 63, 65, 67, or 107, would be required to designate a U.S. 
agent for service. Foreign addresses are those that are not in the U.S. 
or its possessions or territories.
---------------------------------------------------------------------------

    \4\ A U.S. physical address is an address in the States of the 
United States, the District of Columbia, or any U.S. territory or 
possession, but excludes PO boxes, mail drop boxes, and commercial 
addresses that are not also residential addresses.
---------------------------------------------------------------------------

    The proposed rule would apply to individuals and not to entities 
because the FAA already has various means of easily reaching 
certificated entities abroad, but not a fast and cost-effective way of 
reaching individuals. For example, air carriers and foreign air 
carriers already designate an agent for service in their operation 
specifications, as required by 14 CFR 119.49 and 129.9. Foreign repair 
stations are required to provide a physical address to the FAA of their 
facilities, make these stations available for inspection, and notify 
the agency of any change to their address, in addition to complying 
with foreign business registration requirements, which may include 
designating agents for service in the country in which they are 
located. Other foreign entities, like design approval holders under 14 
CFR part 21, are under the jurisdiction of their foreign civil aviation 
authority.
    Additionally, individuals are traditionally more difficult to 
locate and serve than entities, given that entities have business 
registration, address, inspection, and agent requirements. Though 
certificated individuals are required to maintain a current mailing 
address on record with the FAA, if they fail to do so, the FAA has 
greater difficulty locating an individual certificate holder abroad 
than an entity or an individual in the United States. For these 
reasons, the proposed rule would only apply to individuals with a 
foreign address who do not have a U.S. physical address of record on 
file with the FAA.
    For the proposed rule to apply to these individuals, they must hold 
or apply for FAA certificates, ratings, or authorizations issued under 
14 CFR part 47, 61, 63, 65, 67, or 107. These individuals comprise the 
majority of individuals holding FAA certificates, ratings, and 
authorizations abroad and represent those who the agency most commonly 
serves with process and other safety-critical or time-sensitive 
documents. Individuals who only hold or apply for FAA certificates, 
ratings, or authorizations other than those issued under 14 CFR part 
47, 61, 63, 65, 67, or 107 are not covered by the proposed rule due to 
the limited benefit that would be derived by having the proposed rule 
apply to them. For instance, there are very few part 21 certificate 
holders who are individuals, with even fewer abroad, and the FAA could 
not identify any prior instances that required service of documents 
abroad to these certificate holders.
    Similarly, this rulemaking does not include FAA designees abroad 
who do not hold or apply for certificates issued under 14 CFR part 47, 
61, 63, 65, 67, or 107. FAA designees communicate through the designee 
management system (DMS) and their designations are privileges that the 
FAA can suspend or terminate within DMS, such that there are no issues 
or concerns with service abroad.
    For these reasons, proposed Sec.  3.301 provides that this proposed 
rule only applies to individuals who hold or apply for FAA 
certificates, ratings, or authorizations issued under 14 CFR part 47, 
61, 63, 65, 67, or 107 with a foreign address who do not have a U.S. 
physical address of record on file with the FAA.
3. U.S. Agent for Service Defined (Sec.  3.302)
    The proposed rule defines a U.S. agent for service as an entity or 
an adult (18 or older) with a U.S. address who a certificate, rating, 
or authorization holder or applicant designates to receive FAA service 
on their behalf. Accordingly, individuals can hire any entity, 
including registered agent service companies, with a U.S. address to be 
their designated U.S. agent for service. Alternatively, they can 
designate any adult who is 18 or older with a U.S. address, including a 
relative or associate, to be their U.S. agent for service.
    Regardless of who an individual designates as a U.S. agent, the 
U.S. agent must have a U.S. address for the FAA to serve. If an entity 
is serving as the U.S. agent, the FAA proposes that the U.S. agent's 
address must be the entity's office address. If an adult individual is 
serving as the U.S. agent, the FAA proposes that the U.S. agent address 
must be the U.S. agent's usual place of residence, or, if applicable, 
the U.S. agent's military office address in the

[[Page 38004]]

United States.\5\ A post office (PO) box, military post office (APO), 
or mail drop box would not suffice as a U.S. agent address as these 
types of addresses create service difficulties.
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    \5\ A designated U.S. agent may only use a military office 
address if they are serving as a U.S. agent in their official 
capacity, rather than their personal capacity.
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    Under the proposed rule, the FAA would serve the designated U.S. 
agent in lieu of serving the individual or applicant at their foreign 
address. The U.S. agent would directly receive the FAA's service of 
process, and other time-sensitive or safety critical documents. Service 
of process includes the FAA's service of documents that compel 
compliance and are subject to administrative or judicial review. 
Examples include initiating legal enforcement action documents, such as 
notices of proposed civil penalty or assessment, orders of suspension 
or revocation, and emergency orders of suspension or revocation. For 
consistency, and to streamline service on U.S. agents, the agency in 
its discretion is also proposing to serve other time-sensitive or 
safety-critical documents on U.S. agents. Examples of such documents 
include reexamination letters, letters of investigation, Office of 
Aerospace Medicine letters requesting additional information or denying 
a medical certificate, and notices to aircraft owners of ineffective or 
invalid aircraft registration.
    In some instances, the appeal and reply deadlines of these 
documents can be very short. For example, FAA emergency orders have a 
two-day deadline, from receipt by the U.S. agent, for the certificate 
holder to seek review of the FAA's emergency determination, and ten 
days from the order's date of service for appeal of the order. As 
discussed in greater detail below, the U.S. agent would be responsible 
for timely transmitting all documents the FAA served on the U.S. agent 
to the certificated individual or applicant who designated them.
    Ultimately, the individual who holds the certificate, rating, or 
authorization is responsible for ensuring that service can be 
effectuated on their designated U.S. agent at the U.S. agent address 
provided. If the U.S. agent is unavailable for service, the individual 
who holds the certificate, rating, or authorization is responsible for 
ensuring that he or she timely receives the mail in question. For 
example, if a U.S. agent for service is on travel at the time of 
mailing, the individual who holds the certificate, rating, or 
authorization may want to have a friend or associate collect the mail 
and notify the individual of the service. The specific requirements and 
responsibilities for designated U.S. agents are further detailed below.
4. U.S. Agent Designation Requirements (Sec.  3.303)
    The FAA proposes that individuals designate a U.S. agent for 
service in writing to the FAA in a form and manner prescribed by the 
Administrator. The FAA will publish an Advisory Circular with the final 
rule specifying the proposed acceptable form and manner for individuals 
to submit their designation of a U.S. agent for service. The FAA will 
encourage individuals to designate their U.S. agent for service 
electronically, for expediency. An individual designating a U.S. agent 
for service would be required to provide the U.S. agent's full name; 
their U.S. agent address, as previously discussed; their email address, 
should electronic service be feasible; their fax number (optional); and 
their phone number (optional), in the event of service issues.
    Individuals who hold or apply for more than one FAA certificate, 
rating, or authorization issued under 14 CFR part 47, 61, 63, 65, 67, 
or 107, would only be required to designate a single U.S. agent for 
service. Once an individual designates a U.S. agent there would be no 
need to re-designate a U.S. agent with each certificate, rating, or 
authorization renewal or application for a new certificate, rating, or 
authorization. However, all individuals would be required to keep their 
U.S. agent designation current. The FAA proposes that individuals 
notify the FAA of any change to their U.S. agent's contact information 
or a change to whom they have designated as their U.S. agent within 
thirty calendar days of the change.
    Absent extraordinary circumstances, the FAA would consider service 
on an individual's U.S. agent the equivalent of service directly on the 
individual, triggering all applicable appeal and reply deadlines. As 
previously explained, the reply and appeal deadlines in documents 
served can be very short. For these reasons, prior to designating a 
U.S. agent for service, the FAA proposes that individuals ensure the 
U.S. agent they have selected understands the requirements for serving 
as a U.S. agent, including timely transmitting FAA documents to the 
individual who designated them, and agrees to serve in that capacity. 
In addition, the FAA proposes under Sec.  3.303 that a U.S. agent must 
be mentally competent to assume this duty. The FAA further proposes 
that the responsibility for ensuring these requirements are met falls 
on the individual designating the U.S. agent. Individuals designating 
U.S. agents would be required to certify to the FAA, under penalty of 
perjury, that a U.S. agent has accepted the responsibility of receiving 
FAA service on behalf of the individual.
5. Effective Date and Consequences for Failing To Comply (Sec.  3.303)
    Enforceability of this proposed rule is important to provide its 
intended benefit to the FAA and the public. Accordingly, the FAA 
proposes consequences for noncompliance with the requirement to 
designate a U.S. agent for service. If six months after publication of 
the final rule, an individual has not designated a U.S. agent as 
required, the FAA proposes to not permit an individual to exercise the 
privileges of any certificate, rating, or authorization issued under 
part 47, 61, 63, 65, 67, or 107, and an individual aircraft owner's 
aircraft registration certificate would not be considered effective.
    The FAA may take enforcement action against individuals who fail to 
timely comply with the proposed rule consistent with FAA Enforcement 
and Compliance Order 2150.3. This six-month time span is proposed to 
provide sufficient time for affected individuals to comply with this 
rulemaking. Additionally, after publication of the final rule, the FAA 
proposes to preclude issuance of certificates, ratings, or 
authorizations under part 47, 61, 63, 65, 67, or 107 to applicants with 
a foreign address who do not have a U.S. physical address unless they 
designate a U.S. agent at the time of application, as required by this 
proposed rule. For applications currently before the agency for review 
when the final rule is published, the FAA proposes to notify applicants 
of the requirement to designate a U.S. agent for service and provide 
them sufficient opportunity to comply with the requirements before the 
FAA would permit issuance of their certificates, ratings, or 
authorizations.

IV. Regulatory Notices and Analyses

    Federal agencies consider impacts of regulatory actions under a 
variety of Executive orders and other requirements. First, Executive 
Order 12866 and Executive Order 13563, as amended by Executive Order 
14094 (``Modernizing Regulatory Review''), direct that each Federal 
agency to propose or adopt a regulation only upon a reasoned 
determination that the benefits of the intended regulation justify its 
costs. Second, the Regulatory

[[Page 38005]]

Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze 
the economic impact of regulatory changes on small entities. Third, the 
Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting 
standards that create unnecessary obstacles to the foreign commerce of 
the United States. Fourth, the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4) requires agencies to prepare a written assessment of 
the costs, benefits, and other effects of proposed or final rules that 
include a Federal mandate that may result in the expenditure by State, 
local, and Tribal governments, in the aggregate, or by the private 
sector, of $100,000,000 or more (adjusted annually for inflation) in 
any one year. The current threshold after adjustment for inflation is 
$165,000,000, using the most current (2021) Implicit Price Deflator for 
the Gross Domestic Product. This portion of the preamble summarizes the 
FAA's analysis of the economic impacts of this rulemaking.
    In conducting these analyses, the FAA has determined that this 
proposed rule: will result in benefits that justify costs; is not an 
economically ``significant regulatory action'' as defined in section 
3(f) of Executive Order 12866; will not have a significant economic 
impact on a substantial number of small entities; will not create 
unnecessary obstacles to the foreign commerce of the United States; and 
will not impose an unfunded mandate on State, local, or Tribal 
governments, or on the private sector.

A. Regulatory Impact Analysis

1. Baseline for the Analysis
    As mentioned previously, approximately 115,000 individuals in July 
2022 applied for or held certificates, ratings, and authorizations 
issued under 14 CFR parts 47, 61, 63, 65, 67, and 107 using a foreign 
address. The FAA estimates that approximately 97 percent of these 
individuals that used a foreign address are citizens of foreign 
countries. As also described above, service of process abroad imposes 
burdensome costs on the agency. The FAA estimates that it sends over 
8,000 documents abroad annually, including both service of process and 
other documents, at a cost close to $600,000 including mailing costs, 
staff time, and translation services when required.\6\ Examples of 
documents that have been sent abroad are shown in Table 1.
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    \6\ The average cost to FAA per document served is $75.

              Table 1--Examples of Documents Served Abroad
------------------------------------------------------------------------
                                Documents
-------------------------------------------------------------------------
Aerospace Medicine's letters, for example:
   All Denial Letters.
   Withdrawal of Special Issuance (SI) Authorization Letters.
   Special Issuance Authorization Letters.
   Re-examination/Request for Information Letters.
   Lack of Qualification Letters with Referral to Legal.
   Letters of investigation.
------------------------------------------------------------------------
    Aerospace Medicine's Federal Drug and Alcohol Testing Letters of
                              Investigation
------------------------------------------------------------------------
Enforcement action documents, for example:
   Notice of Proposed Civil Penalty (NOPCP).
   Final Notice of Civil Penalty (FNPCP).
   Order Assessing Civil Penalty (OACP).
   Notice of Proposed Assessment (NOPA).
   Civil Penalty Letter.
   Notice of Proposed Certificate Action (NOPCA).
   Order of Suspension (OS).
   Order of Revocation (OR).
Emergency enforcement action documents, for example:
   Emergency Order of Revocation (EOR).
   Emergency Order of Suspension (EOS).
------------------------------------------------------------------------
                 Flight Standards Reexamination Letters
------------------------------------------------------------------------
All FAA Program Office's Letters of Investigation.
Aircraft Registry's letters, for example:
   Notices to Aircraft Owners of Ineffective Aircraft
   Registration
   Notices to Aircraft Owners of Invalid Aircraft Registration
------------------------------------------------------------------------

2. Benefits
    The benefits of the proposed rule include prompt and cost-effective 
service of these documents to individuals abroad through service on 
their U.S. agents. Prompt service will conserve agency resources, 
ensure that lengthy delays in service do not compromise aviation 
safety, and provide individuals abroad timely notice of the FAA's 
actions. However, these benefits are not quantified because the 
ultimate impacts on aviation are not known.
3. Costs
    Under the proposed rulemaking, the affected individuals will bear 
the transaction costs associated with having a foreign address on file 
with the FAA. There is a minimal cost associated with designating new 
U.S. agent and any updates thereafter. Individuals may designate an 
entity or an adult (18 or older) with a U.S. address to serve as their 
U.S. agent. The FAA determined that the cost of hiring a registered 
U.S. agent service company may range from $150 to $300 annually.\7\ 
However, it is possible that many individuals with foreign addresses 
have a friend or family member residing in the U.S. whom they may 
choose to designate as their U.S. agent. Given the uncertainty 
regarding how individuals with foreign addresses may choose to comply 
with this proposed rule, the FAA solicits comments and data on the 
estimated costs of compliance.
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    \7\ See https://www.legalzoom.com/articles/how-much-does-it-cost-to-have-a-registered-agent (last accessed Dec. 19, 2022).
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    The FAA would incur implementation costs to collect the U.S. agent 
information. However, the FAA anticipates developing an automated 
system that would not require agency staff processing time. The initial 
implementation costs will then be offset by saving the baseline foreign 
service process costs and avoiding the costs of translation services 
(required by contracting parties to the Hague Service Convention or 
IACAP).
4. Comparison of Costs and Benefits
    In summary, the FAA expects that the benefits of prompt document 
service, which could affect aviation safety, will exceed any costs 
associated with implementing this administrative change. Costs 
associated with designating a U.S. agent for affected individuals 
abroad would be largely incurred by the individual who holds the 
certificate, rating, or authorization, rather than the FAA. This 
proposed rule would eliminate a majority of the costs of affecting 
international service and transfer some of these transaction costs back 
to the individual that necessitated them by requiring designation of a 
U.S. agent. The FAA solicits comments regarding this assessment of 
impacts.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354, 94 
Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 
857, Mar. 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 
111-240, 124 Stat. 2504, Sept. 27, 2010), requires Federal agencies to 
consider the effects of the regulatory action on small business and 
other small entities and to minimize any significant economic impact. 
The term ``small entities'' comprises small businesses and not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and

[[Page 38006]]

governmental jurisdictions with populations of less than 50,000.
    The FAA did not identify any small entities that would be affected 
by the proposed rule because this rule concerns only individuals and 
not their employers or entities or businesses the individuals are 
associated with. Therefore, the FAA proposes to certify that the rule 
will not have a significant economic impact on a substantial number of 
small entities. The FAA welcomes comments on the basis for this 
certification.

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the 
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal 
agencies from establishing standards or engaging in related activities 
that create unnecessary obstacles to the foreign commerce of the United 
States. Pursuant to these Acts, the establishment of standards is not 
considered an unnecessary obstacle to the foreign commerce of the 
United States, so long as the standard has a legitimate domestic 
objective, such as the protection of safety, and does not operate in a 
manner that excludes imports that meet this objective. The statute also 
requires consideration of international standards and, where 
appropriate, that they be the basis for U.S. standards. The FAA has 
determined that this proposed rule is not considered an unnecessary 
obstacle to trade.

D. Unfunded Mandates Assessment

    Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) 
requires agencies to prepare a written assessment of the costs, 
benefits, and other effects of proposed or final rules that include a 
Federal mandate that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. The 
current threshold after adjustment for inflation is $177 million using 
the most current (2022) Implicit Price Deflator for the Gross Domestic 
Product.

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the FAA consider the impact of paperwork and other information 
collection burdens imposed on the public. According to the 1995 
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an 
agency may not collect or sponsor the collection of information, nor 
may it impose an information collection requirement, unless it displays 
a currently valid Office of Management and Budget (OMB) control number.
    This action contains the following proposed new information 
collection requirements. As required by the Paperwork Reduction Act of 
1995 (44 U.S.C. 3507(d)), the FAA has submitted the proposed 
information collection to OMB for its review.
    Summary: The FAA is proposing to require individuals who hold or 
apply for certificates, ratings, or authorizations issued under 14 CFR 
part 47, 61, 63, 65, 67, or 107 and who have a foreign address and no 
U.S. physical address of record on file with the FAA to designate a 
U.S. agent.
    Use: The information collected and maintained in FAA databases 
would be used to serve various documents to the designated U.S. agents 
of individuals with a foreign address.
    Respondents: There are currently 115,132 individuals who hold 
certificates, ratings, or authorizations issued under 14 CFR part 47, 
61, 63, 65, 67, or 107 with a foreign address and who do not have a 
U.S. physical address of record on file with the FAA. After the 
implementation of the proposed rule in Year 1, the FAA expects that the 
number of new applicants who would be required to designate a U.S. 
agent would be 4,362. In addition, the FAA estimates that annually 
approximately 4,606 respondents might process a change of U.S. agent 
designation or an update to their U.S. agents' contact information.
    Frequency: All 115,132 individuals with a foreign address, with no 
U.S. physical address, who currently hold certificates, ratings, or 
authorizations issued under 14 CFR part 47, 61, 63, 65, 67, or 107 will 
be required to designate a U.S. agent once during the implementation of 
the rule in Year 1. Similarly, 4,362 respondents identified as new 
applicants would be required to designate a U.S. agent at the time of 
their application in Year 2. Additionally, 4,606 respondents might need 
to change their U.S. agent or update the information for their current 
U.S. agent. This would require submission of a new U.S. agent 
designation.
    Annual Burden Estimate: The FAA estimates that it would take an 
individual 10 minutes to submit a U.S. agent designation. In Year 1, 
the number of annual burden hours would be 19,189 [(115,132 individuals 
x (10 minutes / 60 minutes)], and 1,495 hours each year afterwards 
(=[(4,362 + 4,606) x (10 minutes / 60 minutes)]). The annual cost of 
this U.S. agent designation requirement to individuals would be 
$1,195,761 in Year 1 and $93,131 each year afterwards.
    The collection of the U.S. agent designation will be fully 
automated. Therefore, there will be no new cost to the government.
    The agency is soliciting comments to--
    (1) Evaluate whether the proposed information requirement is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of collecting information on those who are 
to respond, including by using appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Individuals and organizations may send comments on the information 
collection requirement to the address listed in the ADDRESSES section 
at the beginning of this preamble by August 11, 2023. Comments also 
should be submitted to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Attention: Desk Officer for FAA, 
New Executive Building, Room 10202, 725 17th Street NW, Washington, DC 
20053.

F. International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to conform to 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these proposed regulations.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 5-6.6f and involves no extraordinary 
circumstances.

[[Page 38007]]

V. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order (E.O.) 13132, Federalism. The FAA has 
determined that this action would not have a substantial direct effect 
on the States, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government, and, therefore, would not have 
federalism implications.

B. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Consistent with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments,70 and FAA Order 1210.20, 
American Indian and Alaska Native Tribal Consultation Policy and 
Procedures,71 the FAA ensures that Federally Recognized Tribes (Tribes) 
are given the opportunity to provide meaningful and timely input 
regarding proposed Federal actions that have the potential to affect 
uniquely or significantly their respective Tribes. At this point, the 
FAA has not identified any unique or significant effects, environmental 
or otherwise, on tribes resulting from this proposed rule.

C. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

    The FAA analyzed this proposed rule under E.O. 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). The FAA has determined that it 
would not be a ``significant energy action'' under the Executive order 
and would not be likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

D. Executive Order 13609, Promoting International Regulatory 
Cooperation

    E.O. 13609, Promoting International Regulatory Cooperation, 
promotes international regulatory cooperation to meet shared challenges 
involving health, safety, labor, security, environmental, and other 
issues and to reduce, eliminate, or prevent unnecessary differences in 
regulatory requirements. The FAA has analyzed this action under the 
policies and agency responsibilities of E.O. 13609, and has determined 
that this action would have no effect on international regulatory 
cooperation.

VI. Privacy

    With regard to the information persons may submit in accordance 
with this proposed rule's requirements, the FAA conducted a privacy 
impact assessment (PIA) under section 522(a)(5) of division H of the FY 
2005 Omnibus Appropriations Act, Public Law 108-447, 118 Stat. 3268 
(Dec. 8, 2004) and section 208 of the E-Government Act of 2002, Public 
Law 107-347, 116 Stat. 2889 (Dec. 17, 2002). The PIA found the NPRM 
requirements that affect privacy include the collection of personally 
identifiable information (PII) of U.S. agents designated by individuals 
with a foreign address and no U.S. physical address on file with the 
FAA that hold or apply for certificates, ratings, or authorizations 
issued under 14 CFR part 47, 61, 63, 65, 67, or 107. The information 
the NPRM proposes to collect includes the U.S. agent's full name, U.S. 
address, fax number, phone number, and email address.
    As part of the PIA, the FAA analyzed the effect the proposed rule 
might have on collecting, storing, and disseminating personally 
identifiable information (PII) of U.S. agents designated by individuals 
with a foreign address and no U.S. physical address on file with the 
FAA that hold or apply for certificates, ratings, or authorizations 
issued under 14 CFR part 47, 61, 63, 65, 67, or 107. The FAA also 
examined and evaluated protections and alternative information-handling 
processes in developing the proposed rule to mitigate potential privacy 
risks. A copy of the draft PIA is posted in the docket for this 
rulemaking.\8\
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    \8\ Upon finalization, PIAs are posted on the Department of 
Transportation's Privacy Program page.
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VII. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. The FAA also 
invites comments relating to the economic, environmental, energy, or 
federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. To ensure the docket does not contain 
duplicate comments, commenters should submit only one time if comments 
are filed electronically or commenters should send only one copy of 
written comments if comments are filed in writing.
    The FAA will file in the docket all comments it receives, as well 
as a report summarizing each substantive public contact with FAA 
personnel concerning this proposed rulemaking. Before acting on this 
proposal, the FAA will consider all comments it receives on or before 
the closing date for comments. The FAA will consider comments filed 
after the comment period has closed if it is possible to do so without 
incurring expense or delay. The FAA may change this proposal in light 
of the comments it receives.
    The FAA also specifically invites comments and requests data and 
information in response to the following questions:
    (1) How many individuals impacted by this rule are likely to have 
contacts within the United States that they could designate as their 
U.S. agent for service at no cost?
    (2) Apart from publishing the rulemaking in the Federal Register 
for notice and comment, what other methods of outreach could the agency 
undertake to inform individuals impacted by this rule?
    Confidential Business Information: Confidential Business 
Information (CBI) is commercial or financial information that is both 
customarily and actually treated as private by its owner. Under the 
Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from 
public disclosure. If your comments responsive to this NPRM contain 
commercial or financial information that is customarily treated as 
private, that you actually treat as private, and that is relevant or 
responsive to this NPRM, it is important that you clearly designate the 
submitted comments as CBI. Please mark each page of your submission 
containing CBI as ``PROPIN.'' The FAA will treat such marked 
submissions as confidential under the FOIA, and they will not be placed 
in the public docket of this NPRM. Submissions containing CBI should be 
sent to the person listed under the FOR FURTHER INFORMATION CONTACT 
heading at the beginning of the preamble. Any commentary that the FAA 
receives which is not specifically designated as CBI will be placed in 
the public docket for this rulemaking.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments 
from the public to better inform its rulemaking process. DOT posts 
these comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.dot.gov/privacy.

[[Page 38008]]

B. Electronic Access and Filing

    A copy of this NPRM, all comments received, any final rule, and all 
background material may be viewed online at www.regulations.gov using 
the docket number listed above. A copy of this proposed rule will be 
placed in the docket. Electronic retrieval help and guidelines are 
available on the website. It is available 24 hours each day, 365 days 
each year. An electronic copy of this document may also be downloaded 
from the Office of the Federal Register's website at 
www.federalregister.gov and the Government Publishing Office's website 
at www.govinfo.gov. A copy may also be found at the FAA's Regulations 
and Policies website at www.faa.gov/regulations_policies.
    Copies may also be obtained by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW, Washington, DC 20591, or by calling (202) 267-9677. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this proposed rule, 
including economic analyses and technical reports, may be accessed in 
the electronic docket for this rulemaking.

C. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. A small entity with questions regarding this 
document may contact its local FAA official, or the person listed under 
the FOR FURTHER INFORMATION CONTACT heading at the beginning of the 
preamble. To find out more about SBREFA on the internet, visit 
www.faa.gov/regulations_policies/rulemaking/sbre_act/.

List of Subjects in 14 CFR Part 3

    Aircraft, Aviation safety, U.S. agent for service.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend chapter I of title 14, Code of Federal 
Regulations as follows:

PART 3--GENERAL REQUIREMENTS

0
1. The authority citation for part 3 is revised to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 44701, 44704, 46111, 
and 46103.

0
2. Add subpart C to read as follows:
Subpart C--Designated U.S. Agents for Service
Sec.
3.301 Applicability.
3.302 Definitions.
3.303 Designation of a U.S. agent for service.

Sec.  3.301  Applicability.

    This subpart applies to individuals who:
    (a) Do not have a U.S. physical address of record on file with the 
FAA;
    (b) Have a foreign address of record on file with the FAA; and
    (c) Hold or apply for certificates, ratings, or authorizations 
under part 47, 61, 63, 65, 67, or 107 of this chapter.

Sec.  3.302  Definitions.

    U.S. agent address is an address in the States of the United 
States, the District of Columbia, or any U.S. territory or possession. 
If the U.S. agent is an entity, the address must be the U.S. agent's 
office address. If the U.S. agent is an individual, the address must be 
the U.S. agent's usual place of residence or, if applicable, the 
individual's U.S. military office address. A U.S. agent may only use a 
military office address if they are serving as a U.S. agent in their 
official capacity with the military. A U.S. agent address may not be a 
post office box, military post office box, or a mail drop box.
    U.S. agent for service (U.S. agent) is an entity or an adult 
(individual who is 18 or older) with a U.S. address who a certificate, 
rating, or authorization holder or applicant designates to receive FAA 
service on their behalf.
    U.S. physical address is an address in the States of the United 
States, the District of Columbia, or any U.S. territory or possession, 
but excludes post office boxes, military post office boxes, mail drop 
boxes, and commercial addresses that are not also residential 
addresses.

Sec.  3.303  Designation of a U.S. agent for service.

    (a) Individuals must designate a U.S. agent for service within the 
U.S. in writing to the FAA in a form and manner prescribed by the 
Administrator. Individuals designating a U.S. agent must ensure that 
the U.S. agent understands the requirements for receiving FAA service 
on behalf of the individual and is competent to perform that 
responsibility.
    (b) The designation must include the U.S. agent's full name, 
address, email address, and certification by the individual that the 
U.S. agent has accepted responsibility for receiving FAA service on 
behalf of the individual. It may also include the U.S. agent's fax 
number and phone number.
    (c) Individuals must notify the FAA in a form and manner prescribed 
by the Administrator of any change to their U.S. agent designation or 
the U.S. agent's contact information within 30 days of the change.
    (d) Individuals must comply with the requirements listed in this 
subpart no later than:
    (1) [DATE 6 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL 
REGISTER], for certificate holders. Certificate holders that fail to 
timely designate a U.S. agent for service and comply with the 
requirements under this subpart may not exercise the privileges of any 
certificate, rating, or authorization issued under part 47, 61, 63, 65, 
67, or 107, and an individual aircraft owner's aircraft registration 
certificate will be considered ineffective; and
    (2) [EFFECTIVE DATE OF FINAL RULE], for applicants. An applicant 
that fails to designate a U.S. agent for service and comply with the 
requirements under this subpart shall not be issued a certificate, 
rating, or authorization under parts 47, 61, 63, 65, 67, or 107.
    3. Effective [DATE 6 MONTHS AFTER DATE OF PUBLICATION IN THE 
FEDERAL REGISTER], amend Sec.  3.303 by revising paragraph (d) and 
adding paragraph (e) to read as follows:

Sec.  3.303  Designation of a U.S. agent for service.

* * * * *
    (d) No individual shall exercise the privileges of any certificate, 
rating, or authorization issued under part 47, 61, 63, 65, 67, or 107 
of this chapter unless the individual has designated a U.S. agent as 
required under this subpart. Aircraft registration certificates issued 
to individuals who fail to designate a U.S. agent as required under 
this subpart will be ineffective.
    (e) No individual shall be issued a certificate, rating, or 
authorization under part 47, 61, 63, 65, 67, or 107 of this chapter 
unless the individual has designated a U.S. agent as required under 
this subpart.

    Issued under authority provided by 49 U.S.C. 106(f), 44701(a), 
and 44703 in Washington, DC.
Marc Nichols,
Chief Counsel, Office of the Chief Counsel.
[FR Doc. 2023-12124 Filed 6-9-23; 8:45 am]
BILLING CODE 4910-13-P