Daily Archives: April 23, 2012

Regulating Satellite Technology Exports; the military and the industry

Satellite export controls should be relaxed by Congress so that U.S. companies can better compete globally for sales of communications and remote-sensing equipment, a report by the Pentagon and State Department found (pdf).  “Limited national security benefits” are provided by a 1998 law (Section 1248 of the National Defense Authorization Act of Fiscal Year 2010 (Public Law 111-84)that applies more stringent controls on satellites than on other equipment that may have both civilian and military uses, the departments said in the report requested by Congress and released today to lawmakers.

The report is “a key step toward relieving U.S. commercial satellite system, component, and part manufacturers of unnecessary controls,” said John Ordway, an export-licensing attorney with Berliner, Corcoran & Rowe LLP in Washington.  Among companies that may benefit are Northrop Grumman Corp. (NOC), Boeing Co. (BA), Loral Space & Communications Inc. (LORL), Honeywell International Inc. (HON), L-3 Communications Holdings Inc. (LLL), Alliant Techsystems Inc. (ATK), Orbital Sciences Corp. (ORB), Moog Inc. (MOG/A) and America Pacific Corp.,….

The report specifies items that should remain on the State Department’s more restrictive munitions licensing lists and those than can be moved to the less restrictive oversight of the Commerce Department’s “Commerce Control List.”The equipment that can be shifted encompasses “hundreds of thousands of items we think U.S. industry should be able to compete” on, Gregory Schulte, deputy assistant secretary of defense for space policy, told reporters on a conference call.

The 1998 law “places the U.S. space industrial base at a distinct competitive disadvantage when bidding against companies from other advanced satellite-exporting countries that have less stringent export control practices and policies,” the report found….

The 1998 law was passed after a congressionally mandated commission headed by Representative Christopher Cox, a California Republican, concluded some U.S. companies gave China access to U.S. technology that may have aided the communist nation’s military missile programs….Industry groups such as the Aerospace Industries Association say the law has stifled U.S. exports. The report today backs that assertion, concluding, ‘‘Over the last 15 years, a substantial number of commercial satellite systems, subsystems and related technologies have become less critical to national security.’’  ‘‘At a time when the budget request for national security space is already slated for a 22 percent reduction, Congress needs to act to ensure the U.S. space industrial base remains viable,’’ AIA President and Chief Executive Officer Marion C. Blakey said.  ‘‘These companies can only sustain our technological edge if they aren’t regulated out of legitimate commercial markets,’’ she said in an e-mailed statement. U.S. manufacturers lost $21 billion in satellite revenue from 1999 to 2009, costing about 9,000 jobs because of the controls, according to her group.

The report emphasizes that the State and Defense departments aren’t advocating a wholesale abandonment of the 1998 law, saying the U.S. ‘‘should maintain strict controls on transfers of ‘‘non-critical’’ items ‘‘that are likely to be used against the U.S. national interest.’’  China’s continuing efforts to acquire U.S. military and dual-use technologies require vigilance, according to the report. That nation’s civilian and military space industry ‘‘are fused together such that reasonable regulators must consider the high likelihood that space-related items and technology will be diverted from a civil use and applied to military programs.”  China recently attempted to acquire a “fully functional, European imaging satellite constellation” that was blocked because it contained U.S. technology, the report found.

Excerpts, Tony Capaccio, Satellite Export Controls Should Be Eased, U.S Says, Bloomberg, Apr 18, 2012