Companies look to Trump administration to further ease export rules for space technology

by

Four years after the Obama administration began loosening rules on space technology exports, companies experiencing the benefits are looking to the Trump administration for further regulatory relief.

“It’s not mission accomplished,” Fred Shaheen, Boeing’s chief council for global trade controls, said at the Satellite 2018 conference in Washington earlier this month. “Export control reform is definitely not done. There’s so much left to do.”

In 2014, authority to approve the export of many space-related technologies shifted from the U.S. State Department to the U.S. Commerce Department. The changes are helping the U.S. commercial space industry, John Shane, a partner specializing in international trade at Wiley Rein LLP, a Washington law firm, said at the Satellite 2018 conference.

When communications satellites were included in the U.S. Munitions List, the State Department’s list of defense articles subject to extensive International Traffic and Arms Regulations (ITAR), “a lot of foreign parties were not interested in talking to American companies because of the regulatory hurdles they would have to go through,” said Fred Shaheen, Boeing’s chief council for global trade controls. Credit: SpaceNews
When communications satellites were included in the U.S. Munitions List, the State Department’s list of defense articles subject to extensive International Traffic and Arms Regulations (ITAR), “a lot of foreign parties were not interested in talking to American companies because of the regulatory hurdles they would have to go through,” said Fred Shaheen, Boeing’s chief council for global trade controls. Credit: SpaceNews

When communications satellites were included in the U.S. Munitions List, the State Department’s list of defense articles subject to extensive International Traffic and Arms Regulations (ITAR), “a lot of foreign parties were not interested in talking to American companies because of the regulatory hurdles they would have to go through,” Shaheen said.

Although those hurdles are lower, “we don’t want to rest on our laurels,” Mike Gold, Maxar Technologies vice president for regulatory and policy, said in an interview. “Technology is in a constant state of change and export control reform needs to keep pace.”

Since the U.S. government revised its rules for exporting space-related goods and services in 2014, satellite technology has changed significantly, Shane said. “Therefore, you need a fresh look at the real national security issues versus concerns about hindering the development of commercial space activities,” he added.

For example, companies developing technology to perform services on commercial satellites in orbit and firms developing spacecraft to carry passengers hope their technologies will not be subject to ITAR, Dennis Burnett, chairman of the University of Nebraska College of Law’s Space, Cyber and Telecommunications Law Program Advisory Board, said at the Satellite 2018 conference.

Those firms and many others are pinning their hopes for further regulatory relief on the Trump administration since the National Space Council’s executive secretary, Scott Pace, is working with members of the panel to recommend changes to export rules by the end of the year.

One of the recommendations Gold supports would direct U.S. government agencies to undertake regular, mandatory reviews of items on the Munitions List and the Commerce Control List.

“It doesn’t have to be all at once,” Gold said, adding that agencies could review 20 percent of the lists every year, completing the task in five-year cycles. “Having an export control regime that matches technological progress takes constant vigilance,” he said.

The Satellite Industry Association has compiled a list of commercially available items it would like the government to move off the Munitions List. The items are: electric propulsion systems and thrusters, bipropellant thrusters, liquid apogee engines and navigation units including gyroscopes.

It remains to be seen how the Trump administration will respond to specific proposals, but recent remarks by Commerce Secretary Wilbur Ross make it clear “they are seeking to minimize the regulations on the space industry and that’s consistent with the overall philosophy of the administration,” Tom Stroup, Satellite Industry Association president, said in an interview. “There is an opportunity to address these issues.”

U.S. Commerce Secretary Wilbur Ross. Credit: Commerce Department
U.S. Commerce Secretary Wilbur Ross. Credit: Commerce Department

Burnett added that the Trump administration seems “willing to examine fundamental assumptions” about space system exports. “For example, is a positive list the right approach? You might conclude that writing a positive list and trying to reform it is an errand we can never succeed at,” he added.

By a positive list, Burnett is referring to a list of technical parameters that describe the items being regulated. That type of list inadvertently sweeps up commercial technology, he said.

Dennis Krepp, director of the U.S. Commerce Department’s Office of National Security and Technology Transfer Controls Sensors and Aerospace Division, agreed that regulators struggle to keep up with the rapid pace of technological change. Still, he likes having a positive list because it is easy for Commerce Department engineers, licensing officials and industry to determine which regulations cover various technologies, Krepp said at the Satellite 2018 conference.

Items are included on the Munitions List when government officials are concerned their export could threaten national security. Any technology that can be used to extend the life of commercial satellites in orbit could also service military satellites or harm military satellites, Tony Dearth, acting managing director for the State Department Office of Defense Trade Controls, said at the Satellite 2018 conference. “We see the somewhat magnificent benefits of not ITAR-controlling items but you always look at the problems, too.”

Government officials are well aware that prior to 2014 the U.S. industrial base suffered because it was difficult to export space-related goods and services. That problem has eased considerably, Dearth said.

Before export control reform, the State Department’s record for space system licenses was 5,000 in a single year. In 2017, the State Department issued fewer than 500 space system licenses because the vast majority of the space technologies no longer required licenses. If the current pace holds, the State Department will issue fewer than 300 licenses in 2018, Dearth said.

Going forward, should the U.S. government focus on broader export reform or continue trying to decrease the number of satellite technologies that require State Department licenses, Dearth asked. “I’m not sure what more the industry hopes to squeeze out of this rag,” he added.