A step forward in space export control reform

A decade ago, the commercial space industry in the United States celebrated a hard-fought victory in efforts to reform export controls. After years of effort, the State Department enacted changes to move many space technologies off the U.S. Munitions List (USML), subject to the more restrictive export control rules known as International Traffic in Arms Regulations (ITAR) to the less-restrictive Commerce Control List. That made it easier for American companies to see those technologies, from components to full satellites, to foreign customers (see “Export control reform (almost) reaches the finish line”, The Space Review, May 27, 2014.)

The hope then was that the rule would lead to more regular updates to export control regulations to reflect the pace of technological development in the U.S. and other countries. There have been a few tweaks to what is on the USML, and promises for years of bigger reforms, but little action.

“It’s been over a decade since we had the last significant amount of export control review on space technology,” said Chirag Parikh, executive secretary of the National Space Council, in a speech at the Space Symposium in April. “I think the technology has evolved. I think the global capabilities of space have evolved.”

At that time, he said that the Commerce Department, which runs the Commerce Control List (CCL), and the State Department would publish an advance notice of potential rulemaking in the summer, seeking industry input on what space technologies would be moved from the USML to the CCL.

What happened was somewhat different. On October 17, the Commerce Department announced the publication of three rules, along with one from the State Department, that offer phased changes to export control rules, making it easier to export some technologies to some countries.

“We’re releasing three rules today the help us ensure export controls keep pace while continuing to secure these technologies and safeguard them from potential adversaries,” a senior Commerce Department official, speaking on background, said in a hastily arranged call with reporters to announce the changes. “This is about maintaining our leadership in space technology, protecting our national security, and bolstering our partnerships around the world.”

Two of the rules deal with items already on the CCL. One rule, already finalized, removed the need for a license for exporting remote sensing and “space-based logistics, servicing, and assembly” spacecraft and related items to Australia, Canada and the United Kingdom. A second “interim final” rule—meaning the Commerce Department can make final tweaks to is based on public comments—reduces license requirements for what it called “less sensitive” items to 40 countries, primarily NATO and European Union countries as well as other close allies like Australia, Japan, and South Korea.

The intent of those rules is to eliminate hundreds of license applications annually, said Matt Borman, principal deputy assistant secretary for export administration in the Commerce Department’s Bureau of Industry and Security (BIS), at a public meeting last week to discuss the new rules. “This reflects the general approach that BIS has taken to coordinate export control with allies and build trusted technology ecosystems that secure innovation,” he said.

The third Commerce Department rule, along with a separate one from the State Department, would move some items from the USML to the CCL. They include spacecraft performing in-space refueling and other logistics activities, as well as for certain components such as optics, electric thrusters, and gyroscopes.

The proposed rules also create certain license exemptions for specific applications. One is for commercial technology used in spacecraft for official space agency programs, which officials said range from Mars Sample Return to the Nancy Grace Roman Space Telescope. It would also extend to NASA’s Commercial LEO Destinations program that seeks to support development of commercial space stations to succeed the International Space Station, which has long been exempted from ITAR.

“As we at NASA look at maintaining our human spaceflight presence in low Earth orbit, it was really important to us that the accommodations that were made for ISS were also extended to items that employ similar technologies and will be of similar sensitivity as a result,” said Michael Tu of NASA’s Office of International and Interagency Relations at the public meeting. “We see the Commercial Low Earth Orbit Development program as a successor to the ISS and it’s been an important part of our overall strategy to maintain a robust presence with human spaceflight in LEO: essentially ISS in all but name.”

The proposed rules would also allow the export of commercial suborbital vehicles for tourism or research provided there is no transfer of ownership. This would benefit companies like Virgin Galactic, which has long-term plans to operate a fleet of suborbital spaceplanes at spaceports around the world, not just New Mexico’s Spaceport America.

Both proposed rules are open to public comment until November 22, as officials at both Commerce and State requested feedback on what should be included or excluded. “You always want to be very specific,” advised Timothy Mooney, senior export policy analyst at the BIS Regulatory Policy Division. “A comment ‘I don’t like this’ is not very helpful to the government.”

One specific area where industry already stated they did not like the proposed rules regarded export control restrictions for synthetic aperture radar (SAR) satellites, which set a bandwidth threshold for 500 megahertz above which the new rules did not apply. Industry officials said that threshold was dated given the existence of commercial SAR satellites built in other countries with much higher bandwidth and thus improved performance.

“The critical military intelligence standard when we’re identifying what to retain on the U.S. Munitions List,” said Chris Weil, technology and jurisdiction analysis division chief in the State Department’s Directorate of Defense Trade Controls. “Based on the rule, 500 megahertz is the point at which we currently assess it.” He declined to discuss how the State Department determined that threshold, but asked for input on whether a higher threshold should be used.

Once the public comment period closes, Commerce and State will review the feedback they received. Officials said at the public meeting that any final changes to the interim final Commerce rule, one regarding reduced license requirements to 40 countries, should be completed fairly quickly: by the end of the year or, at latest, by the end of the Biden Administration on January 20.

The State and Commerce rules on moving items from the USML to the CCL will take longer. “It will probably take us at least 30 days to review those comments and have that discussion,” Weil said. “So not this year, in 2024.”

How much into 2025, or beyond, is unclear, but he noted that the State started planning for this transfer in 2019. “I would not expect anywhere near that amount of time for the final rule, if that is the concern,” he said. “It is a priority for us to continue with this and get final rules published.”

That means that work will continue into the second Trump Administration. Parikh, speaking at the public meeting last week, said the end of the current administration helped drive the schedule for releasing the various rules. “Sometimes, as we change administrations, everybody wants to have a reset,” he said. But, he added, “party independent, everybody wants to be able to move forward on these efforts.”

He said he suspected that if he asked people attending the meeting if they felt the reforms included in the rules were sufficient, most would think they did not go far enough. “I understand that,” he said. “Certainly, this is not the destination. This is a journey, and this is a significant step forward in what we’ve all been clamoring for for the better part of a decade.”

This article originally appeared on The Space Review.