Congress, Other

Export control reform followup

Yesterday we noted new legislation introduced last week to reform satellite export controls by giving the president the ability to remove satellite and related components from the US Munitions List (USML), although still prohibiting their export to China. However, some caution that the introduction of that legislation doesn’t mean reform is right around the corner.

During a meeting of the Export Controls Working Group of the FAA’s Commercial Space Transportation Advisory Committee (COMSTAC), congressional staffers, speaking on a not-for-attribution basis, warned that a couple of obstacles will hinder any near-term progress. One is the so-called “Section 1248 report”, after the section of the FY2010 defense authorization act that required the Defense Department to prepare “an assessment of the national security risks of removing satellites and related components from the United States Munitions List.” That report was due in April 2010, but only in the last few days has Congress received an “interim” report. That interim report, according to one staffer, concluded that there are “no unacceptable security risks” of moving commercial satellites and related components off the list. Until the administration releases a final report, not expected until late this year, though, that staffer expected Congress not to act on any reform effort. (Space News has more details on the details of that report.)

The second factor is the administration’s ongoing export control reform efforts, which seek to unify various export control lists and systems. (That work is one reason why the Section 1248 report is so late.) Such an effort is a major, and slow, process. “This is a momentous undertaking,” said a panelist. “Sisyphus had an easier job than what they’re attempting to do with this export control reform.” The thinking on Capitol Hill, according to the panelist, is that Congress prefers to wait to see how that reform effort works out before moving to make changes of its own. There’s also skepticism that the reform effort will work out as the administration has proposed: while there’s support for a unified IT system and even a single, tiered export control list, there’s less support for two other major aspects of the reform effort, creation of a single licensing agency and single enforcement agency.

Panelists also noted one of the challenges for proponents for export control reform has been the difficulty in identifying specific negative impacts on US industry caused by moving satellites and related components to the USML n the late 1990s. While the share of the commercial satellite market held by American manufacturers dropped after that change, other factors could also play a role in that change, and various reports on export control policy have not been able to quantify the its effect on American industry. What has changed minds on Congress about the issue, though, according to one staffer, is the introduction in recent years of “ITAR-free” satellites by European manufacturer Thales Alenia Space. Those satellites, which contain no US-built components, can be freely exported to China for launch there. “That was proof that control of satellites on the ITAR is working against US interests,” said a staffer.

“I think there is a lot of support for moving commercial satellites and related components off the list. I think it’s just a question of timing,” one panelist concluded. And that timing is not particularly urgent.

16 comments to Export control reform followup

  • amightywind

    “no unacceptable security risks”

    A tepid endorsement. This makes one wonder what an acceptable security risk is. There is no mention of what those are. Yes, Thales builds ITAR free satellites. I suppose they work somewhat, but they are not particularly competitive with Hughes (Boeing), Lockmart, or Loral. Bottom feeders will be attracted to the Thales platform and Chinese launchers. Let them pay low prices and assume the risk of their technology being stolen by the Chinese.

  • “That was proof that control of satellites on the ITAR is working against US interests,” said a staffer.

    For a retro-nationalist, you sure missed that quote Windy.

    A thorough reassessment of the ITAR is long over-due, since it was a 1990s policy anyway. Restrict DoD/DARPA/NRO satellite quality tech to ITAR, let the rest go to the commercial sector.

  • I think ‘amightywind’ needs a reality check. Thales satellites, with both ITAR and non-ITAR components work fine and actually cost more (as do Astrium satellites) than US built ones, yet both European companies have gained market share at US manufacturers expense as they can engage customers and develop more responsive offerings. ITAR rules on satellites make liaison and proposal submission a living hell for US satellite manufactures. Chinese launches are more expensive than SpaceX and shared launches on Ariane 5, so, get your facts right about low prices. As for the Chinese stealing satellite technology at the launch site – ever seen a finished satellite? Looks like its shrink wrapped in foil – no way to get a peek inside. Having the Chinese available to launch US satellites gives operators and US manufacturers more available launch capacity to consider for limited mass missions…

  • Ben Russell-Gough

    This whole situation is remarkably sticky in a way, especially when you realise that, sometimes, commercial satellites are of overall better quality and technology than their government-owned cousins!

    That said, America has one big issue right now: Balance of payments. How is it going to be able to bring down its national debt if the one thing that it is definately still good at – high-tech manufacturing – has an effective export embargo? Okay, some things are too important to allow out but there should be some kind of mechanism for declassifying low- and reduced-risk technologies and allowing either export or license production overseas. Otherwise, the investment in R & D is lost as soon as it goes out of production in the US, massively reducing the incentive to innovate.

  • amightywind

    As for the Chinese stealing satellite technology at the launch site – ever seen a finished satellite?

    Some of what I have seen I am not at liberty to discuss. I used to be an engineer at Hughes on 601 and 702 (Galaxy 11, TDRS, Spaceway…) satellite programs in El Segundo during this famous incident. Afterward, the Chinese engineers celebrated, blaming the crash on the satellite payload. Hughes also famously violated the law and assisted the Chinese in a failure mode analysis that helped them improve their launchers.

  • Robert G. Oler

    amightywind wrote @ May 11th, 2011 at 8:09 am

    “A tepid endorsement. This makes one wonder what an acceptable security risk is.”

    thats easy..when you have more to lose by some law/thing/etc then the other side has.

    Robert G. Oler

  • Space Cadet

    When an export restriction applies to a technology available only from the US then it can be effective in preventing the acquisition of that technology by a country from whom we want to withhold it.

    But when a technology is available from non-US vendors, the goal of restricting the technology is not accomplished. What does happen is that US employers are prevented from competing in the global marketplace and the US loses revenue and jobs. The placement of widely-available commercial space components on the Munitions List has left the US space industry crippled in the international market. Companies refer to US components and software as “ITAR contamination”, since if they buy even a single chip, screw, or line of code from a US supplier, they are then unable to sell their system or satellite. Commercial space on the Munitions List is the “Buy Anywhere But American Act”

  • Space Cadet

    The surface of Mars has no national security value. Yet anything designed for use on the surface of Mars is considered to be a “Munition”. This significantly raises the risk of failure of NASA missions conducted in partnership with other countries (e.g. ESA) by prohibiting NASA from communicating any information that would reduce the probability of failure of (i.e. ‘improve’) the foreign system or component, even when failure of that part or system would result in failure of the NASA mission.

  • Space Cadet

    Question: What would be the impact of ITAR reform on this current situation?

    (1) Our allies in Europe might improve their ability to perform scientific investigations of the surface of Mars. National security risks of our allies having improved understanding of Mars: zero.

    (2) NASA missions – costing $ 100’s of millions of US taxpayer $ – would have a significantly lower risk of failure.

  • vulture4

    The main purpose of ITAR seems to be to make it easier for foreign manufacturers to get all the business. Economics can defeat us at least as effectively as military force.

  • Bennett

    vulture4 wrote @ May 11th, 2011 at 11:26 pm

    I’m trying to follow that logic…

    Wait wait, we’re actually screwing ourselves into financial ruin?

    Holy financial bailout, Batman!

  • Bennett

    “economic ruin” would have been better.

  • common sense

    @ Bennett wrote @ May 12th, 2011 at 10:23 pm

    “Wait wait, we’re actually screwing ourselves into financial ruin?”

    No, no, what are you saying? We have an export control system under ITAR that allows us to not sell anything that is related to anything that is being used for munitions.

    So, if you use a pencil to design a draft for a bulb you plan to put on a system inside an opening in a satellite you’d like to see in, then and only then you cannot export well the pencil. Actually you cannot talk about the pencil technical data itself to a foreign person because that would be an illegal export. It’s a security thing.

    Yet if said foreign person goes to a shop and buys the pencil then what is it? I don’t know. A legal sell of an ITAR protected item? Oh and btw a US person includes residents and citizens of the US. But if a US citizen works for a foreign company then he is not a US person anymore even if living in the US. Now when said person works again for a US company then he re-becomes a US person. And now you can talk about the pencil. Which you could have not when the person worked for a foreign company.

    I hope it helps you understand the great value of this security asset that is ITAR.

    And if you understand it, well it’d be nice you explain it to me.

    Oh well…

  • Byeman

    ” I used to be an engineer at Hughes”
    That explains why Hughes went into the dumps. They must have lowered their HR standards.

  • Space Cadet

    The pencil in your example is not a spacecraft, or a component of a spacecraft, or equipment to operate a spacecraft, so it’s not on the Munitions List.

    But if a British company want to buy a bolt cut to a non-standard length for a spacecraft, a US company cannot sell the screw to the British company without an export license, which increases the cost and takes at best many weeks to obtain. Said British company is likely to buy from a European supplier instead. So yes, we are ‘screwing’ our aerospace industry into economic ruin.

  • common sense

    @ Space Cadet wrote @ May 16th, 2011 at 3:53 am

    Of course the pencil is not a spacecraft… Call it a bolt if you wish. Who cares? The process I describe is real. It is insane, a parody.

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