U.S.-French Deal Gives Green Light to UAE Observation Satellites

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Updated Feb. 14 at 10:03 a.m. EDT

PARIS — The U.S. government, after months of indecision, has agreed to permit the export of U.S. satellite components for a French contract to provide two high-resolution optical Earth observation satellites to the United Arab Emirates (UAE), European industry officials said.

The decision, which they said came only after the U.S. State Department first agreed to the deal and then withdrew its agreement and passed the subject to the White House, should enable the $1.1 billion Falcon Eye contract to begin its production phase.

Nonetheless, the Feb. 12 U.S. approval, during a Feb. 11-12 summit between U.S. President Barack Obama and French President Francois Hollande, of the export to France of satellite components came several weeks after a late-January contractual deadline agreed to by UAE and the French contracting team.

The two co-prime contractors selected by the UAE last July, Airbus Defence and Space and Thales Alenia Space, said they were confident that the UAE Armed Forces would not force a complete contract renegotiation. They expect to meet UAE officials the week of Feb. 17 in what they said they hoped would be a quick wrap-up of contract details, the agreement of a payment schedule and the start of hardware construction.

The satellites carry U.S. components covered by the U.S. International Traffic in Arms Regulations, ITAR, which govern exports of militarily sensitive technologies. In 1999, the U.S. government cracked down on space technology exports by placing virtually all satellites and related components under ITAR’s purview, effectively classifying them as weaponry.

Obama’s administration has proposed removing certain space-related components and technologies from ITAR’s purview, which would make them easier to export. Administration officials have said new satellite regulations should be published by the middle of this year.

The two Falcon Eye satellites will be launched in 2017 and 2018 aboard European Vega rockets under a contract signed in late 2013, Stephane Israel, chief executive of Europe’s Arianespace launch service provider, said here Feb. 13.

The Falcon Eye satellite contract, more than a decade in negotiation, featured a rare open competition between U.S. and European bidders. A U.S. bidder said after the July decision that the win by the French consortium had nothing to do with U.S. policy on satellite-image exports, sometimes referred to as “shutter control.”

Francois Auque, chief executive of Airbus Defence and Space’s Space Systems division, said one key element was the strong support for the program from French Defense Minister Jean-Yves Le Drian, who made multiple visits to the UAE in the weeks preceding the contract decision.

“I have never seen a defense minister in France, or in Europe, devote himself to this extent on behalf of an export bid,” Auque said here Feb. 13 during a space policy conference organized by the French Aerospace Industries Association, GIFAS, and by the Euroconsult consulting firm.

Auque and Jean-Loic Galle, chief executive of Thales Alenia Space, both said the final decision on the U.S.-built components would now permit the contract to move forward. But they expressed disagreement as to how this final export approval was obtained.

“There was a lot of bureaucracy and lots of paper, but at the end of the day it was pretty much business as usual and followed the normal process,” Auque said, adding that Airbus has never sought to produce satellites, in telecommunications or Earth observation, devoid of U.S. components. Auque said Airbus’ various divisions have too much at stake in the United States to anger the U.S. government on satellite exports.

Referring to a program that Galle’s company tried to implement until 2013 — called the “ITAR-free” satellite — Auque said a European contractor trying to keep its dependence on U.S. manufacturers limited to nonsensitive components was fighting a losing battle.

“I have never believed the idea of an ‘ITAR-free’ satellite,” Auque said. “We need to be realistic. You are dealing with a set of rules defined by the U.S. government. If the U.S. government decides that it doesn’t want you to export somewhere, it will just add current non-ITAR products to the ITAR list. So the choice is really more simple: Use U.S. products or not.”

Galle, whose company recently shut down its ITAR-free satellite program following what he said was a U.S. government broadening of satellite components covered by ITAR, had a different assessment of the Falcon Eye contract.

“This has been an unusual approval process, with an initial blessing, then a withdrawal of approval, and then a final decision after the meeting of the heads of state,” Galle said. “One must understand we are in a commercial war in this field with respect to world exports. The U.S. and European industries are the only ones capable of delivering such products.

“One can imagine that U.S. industry is lobbying the U.S. administration to prevent their only real competitors, the Europeans, from selling products where they cannot. The fact that the positive decision was made after the contractual deadline has added a small issue that we will now overcome.”

Auque said that since the French contract win was announced in July, he had seen “a festival of countertruths and fantasies trotted out into the public arena. I have never seen such a thing. It’s one for the Guinness Book of World Records.”

Galle said one of the rumors — again, he suspected U.S. industry at its origin — was that the French contractors had allowed the U.S. government to place a sensor on the Falcon Eye satellites to permit U.S. surveillance of what the spacecraft was imaging.

Galle ridiculed the idea, saying anyone who knew how the U.S. gear is integrated into the Falcon Eye satellites would not suggest such a thing. 

 

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