House Intelligence Committee Weighs in on ITAR Reform

WASHINGTON — Capping a slate of legislation aimed at reforming the U.S. export control system, members of the U.S. House Intelligence Committee are calling on the administration of President Barack Obama to review the U.S. International Traffic in Arms Regulations (ITAR), a suite of rules enforced by the U.S. State Department that govern the export of sensitive technologies, including commercial communications satellites.

In late June, the House Permanent Select Committee on Intelligence approved language in the Intelligence Authorization Act for 2010 requiring the director of national intelligence (DNI) to assess the national security threat posed by foreign countries’ efforts to acquire sensitive equipment and technology. Report language accompanying the bill also asked the DNI to determine the degree to which
U.S.
export controls encourage such efforts.

“Government and industry assert that the State Department has managed ITAR in such a way so as to encourage non-U.S. companies to develop a collaborative research and development environment that has allowed the indigenous production of banned technologies, which defeats the premise of ITAR and causes a significant loss of market share in key industries for U.S. corporations,” the report said.

Industry observers say
U.S.
satellite manufacturers have struggled to maintain their share of the global market since Congress transferred oversight of all communications satellite exports from the Commerce department to the State department. Before that legislation was passed as part of the Strom Thurmond National Defense Authorization Act of 1999, the Commerce department had export licensing authority over all but the most sophisticated commercial communications satellites.

The push for the DNI review follows an Oct. 3 report prepared by the House Intelligence technical and tactical intelligence subcommittee that said
U.S.
export control restrictions have prompted European companies to produce ITAR-free space technologies. The report, “Report on Challenges and Recommendations for United States Overhead Architecture,” was based on interviews with government and space industry officials.

“Government and industry participants described how ITAR has motivated European companies to establish an international (non-U.S) collaborative [research and development] environment where ITAR-banned technologies are produced indigenously, thereby defeating the premise of ITAR,” the report states.

The intelligence bill is the latest piece of legislation this year to address the ITAR issue.

On June 25, the full House of Representatives approved legislation in the 2010 National Defense Authorization Act requiring the Defense and State departments to report on the national security risks of removing satellites and related components from the State Department-controlled U.S. Munitions List. The report, due 180 days after enactment of the legislation, calls for the two agencies to recommend specific space and space-related technologies that should remain on, or which may be candidates for removal from, the Munitions List.

The defense authorization language echoes legislation in the Foreign Relations Authorization Act for 2010 and 2011, approved by the House June 10, giving the White House authority to remove
U.S.
commercial communications satellites from State Department export purview. However, the foreign relations authorization bill requires the administration to convince lawmakers that a satellite or related component is worthy of removal, and that its deregulation would not pose a threat to national security.

The House intelligence authorization report directly references the House version of the foreign relations authorization act, asserting that the review requested of the DNI will help the president and Congress better evaluate the merits of removing commercial communications satellites from the Munitions List.

The Senate Intelligence Committee completed mark-up of its intelligence authorization bill in mid-July, though it is unclear whether the legislation weighs in on arms export reform.

The Senate version of the National Defense Authorization Act for 2010, meanwhile, does not include language on ITAR.

The Senate Foreign Relations Committee has yet to take up a foreign relations authorization bill this year. Congressional aides say that while positive signs of movement on export control reform within Congress and the executive branch are emerging, it could be several years before any meaningful action is taken.

During a June 7 public meeting of the National Research Council’s Planetary Sciences Decadal Survey, Richard Obermann, majority staff director on the House Science and Technology subcommittee on space and aeronautics, said that despite the promise of pending House legislation, “the pace of ITAR reform is unclear.”