U.S. Report Supports Sweeping Reform of Satellite Export Rules

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COLORADO SPRINGS, Colo. — Most communications satellites and some low-performing remote sensing satellites could, for export purposes, be treated as nonmilitary technology without any harm to national security, a long-awaited and overdue report from the U.S. government concluded.

The report from the U.S. State and Defense departments, released April 18, said that many satellites and satellite components could be transferred to the Commerce Department’s Commerce Control List. Currently these items fall on the U.S. Munitions List, which is administered by the Department of State.

Gregory Schulte, deputy assistant secretary of defense for space policy, said that “literally hundreds of thousands of items” could be transferred.

The so-called 1248 report, mandated by Section 1248 of the National Defense Authorization Act for 2010, recommends giving the U.S. president the authority to determine export jurisdiction for satellite components, which were transferred to the Munitions List by an act of Congress. The report also recommends retaining and even strengthening a de facto ban on shipping U.S. satellite technology to China for launch on Chinese rockets.

Shifting some items to Commerce control would strengthen national security by “allowing us to focus our controls and our enforcement on those technologies, those capabilities that are truly the most sensitive,” Schulte said during a press conference here at the 28th National Space Symposium. In addition, softening export controls for select satellites and components would allow “our industry to compete on the global markets for satellites and technology and subsystems that are readily available,” he said, adding that this is especially important given the decline in U.S. defense spending.

Satellites and satellite components are currently grouped under Category 15 of the U.S. Munitions List. That makes exporting U.S.-built satellites and components a complex endeavor for industry, manufacturers have said. Getting satellite technology off the Munitions List requires an act of Congress to reverse a provision in the Strom Thurmond National Defense Authorization Act for 1999 that transferred export licensing jurisdiction for all space-related technology to State.

Such a bill already has been introduced in the House by Rep. Howard Berman (D-Calif.), ranking member of the House Foreign Affairs Committee. The proposed legislation would give the president the authority to set export jurisdiction for satellites and related components, but its prospects for passage are far from certain in an election year.

U.S. Sen. Michael Bennet (D-Colo.) announced April 18 he plans to introduce similar legislation in the Senate.

In an April 18 statement, Berman said the report “makes clear that restricting exports of all commercial satellites and components as if they were lethal weapons, regardless of whether they’re going to friend or foe, has gravely harmed U.S. space manufacturers. U.S. national security depends upon these manufacturers for our own defense needs.”

Rep. Michael Turner (R-Ohio), chairman of the House Armed Services strategic forces subcommittee, gave the report a cooler reception.

“I am glad that the Administration has finally submitted this long overdue report,” Turner said in a statement April 18. “I look forward to looking at how the report takes into account the vital mission of protecting U.S. space technology from diversion to the space, counter-space and ballistic missile programs of other nations. However, the administration’s request for blanket authority to relax our export control regime over thousands of space technologies would not make this country safer, or further our goals.”

Aerospace industry groups, who for years have lobbied hard for export reform, welcomed the report.

Patricia Cooper, president of the Washington-based Satellite Industry Association, said the group “and our members are gratified that, after thorough and careful assessment, the nation’s national security and export control communities supported reform of the current outmoded approach to regulating exports of satellites and related items.”

Cooper said her organization is delighted that Bennet is introducing a companion bill to Berman’s legislation.

Likewise, the Arlington, Va.-based Aerospace Industries Association said the “report signals a major milestone toward improving American competitiveness and restoring our global leadership in space.”

“Overseas, some foreign competitors started marketing things they called ITAR-free satellites,” said Schulte, referring to satellites free of U.S. components governed by the International Traffic in Arms Regulations. These are the rules by which State licenses exports of Munitions List items.

ITAR-free satellites contain no U.S.-made components and thus can be exported to China for launch on Chinese rockets. U.S. component makers say ITAR-free satellites, marketed by the Franco-Italian manufacturer Thales Alenia Space, have hurt their business.

“We would hope that with this type of legislation, the ITAR-free label would become irrelevant,” Schulte said.

The April 18 report included a five-page appendix about China, which has advanced its space capabilities rapidly and last year had the highest tally of space launches of any nation. The report recommends maintaining and even toughening export restrictions for China and other embargoed nations such as Iran, Syria and North Korea.