U.S. Says It Blocked China’s Attempt To Buy Bankrupt Satellite Imaging Firm

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COLORADO SPRINGS, Colo. — The U.S. State Department recently blocked an attempt by China to buy a fully functional European satellite imaging constellation because the spacecraft contained U.S. technology, according to a newly released government report.

The report, prepared by the U.S. State and Defense departments at the behest of Congress, did not identify the constellation, but a very likely suspect is the RapidEye system operated by a German venture that went bankrupt last year and eventually was purchased by a Canadian company. The RapidEye constellation consists of five medium-resolution Earth imaging satellites built by an industry team led by MacDonald, Dettwiler and Associates of Canada and Surrey Satellite Technology of the United Kingdom.

The report, which recommends sweeping changes to U.S. satellite technology export regulations to make it easier for U.S. space hardware makers to compete internationally, was released April 18. It recommends authorizing the U.S. president to remove certain classes of satellites and related components from the U.S. Munitions List (USML), a registry of militarily sensitive technologies whose exports are licensed by the State Department.

Requested by the National Defense Authorization Act of 2010, the report also recommends continuing the U.S. policy that bars exports of U.S. satellites and related technology to China, either directly or through third parties. “Recently, China attempted to acquire a fully functional, European satellite imaging constellation but was blocked by USML re-export laws due to U.S. technology being on the satellites,” the report said. “As part of the Administration’s recommendations in this report, this technology would remain subject to the USML.”

During a press conference on the report at the 28th National Space Symposium here April 18, Lou Ann McFadden, chief of strategic issues at the Pentagon’s Defense Technology Security Administration, declined to identify the satellite system, but noted that the company involved was going bankrupt and had an active constellation on orbit. The company sought, but was denied, State Department approval to re-export the USML technology that was aboard the satellites to China, she said.

RapidEye AG of Brandenberg, Germany, which launched its constellation of satellites in August 2008, filed for bankruptcy protection in Germany last spring. The company was purchased in late summer by Canada’s Iunctus Geomatics Corp. of Lethbridge, Alberta, which continues to operate the satellites and market the imagery.