Export control reform process is wrapping up

Nearly one year ago, the Congress approved a defense authorization bill that included a key provision for the US space industry: repealing language in the fiscal year 1999 defense authorization bill that put satellites and related components onto the US Munitions List, and thus under the control of the International Traffic in Arms Regulations (ITAR). The administration, which had already embarked on broader export control reform efforts, could now include that section of the USML in its rolling review of the overall list, determining what should remain on the list and what could be moved to the less restrictive Commerce Control List (CCL).

That process is now in its final phases. In May, the State Department published a draft of a revised Category XV of the USML, which includes satellites and related components, beginning the process of public comment. That publication stated a 45-day public comment period that ended in July. Since then, an interagency group has been reviewing those comments, which run to nearly 400 pages and include feedback from companies, trade organizations, and members of the general public.

That review of the public comments, and resulting changes to the new USML Category XV rule and related changes to the CCL, have been completed. In a statement provided to a meeting of the Commercial Space Transportation Advisory Committee’s (COMSTAC’s) International Space Policy Working Group in Washington on Tuesday, Dennis Krepp of the Commerce Department’s Bureau of Industry and Security said that the review of the public comments was done. “The Commerce Department hopes to enter the formal process to get approval from the Office of Management and Budget within the next week or so,” Krepp’s statement, as read by working group chairperson Patricia Cooper, stated. (Krepp was scheduled to attend the meeting in person but was unable to do so when federal government offices in Washington closed for the day because of inclement weather.) After approved by the OMB, the final rules would then be reviewed by Congress; Krepp’s statement indicated the Commerce Department expected formal publication of the final rules in late March or April in 2014, taking effect 180 days later.

Krepp’s statement gave no indication of what changes had been made to the draft rule published in May, but noted that “you will some some changes were made between the proposed rule and the final rule based on the public comments.” One area that will be closely watched will be changes to the section of the draft Category XV rule that kept “man-rated sub-orbital, orbital, lunar, interplanetary or habitat” spacecraft on the USML. That would, for example, make it much more difficult for suborbital vehicle developers like Virgin Galactic and XCOR Aerospace to operate out of the US, something that is a key part of both companies’ business plans.

During the public comment period, that provision of the proposed Category XV rule generated more feedback than any other section. Of the more than 100 separate submissions included in the public comment file published by the State Department, nearly half addressed that issue, with virtually all of those comments calling for such spacecraft to be taken off the USML. Those comments came from companies like Virgin and XCOR (as well as Lockheed Martin and Boeing) to the Commercial Spaceflight Federation to members of the general public with no obvious connections to relevant companies or organizations. While some submissions stretched for pages, others were remarkably brief: “Please move suborbital manned vehicles to the Commerce Control List,” read the entirety of one comment. By comparison, another popular issue in the public comments, the definition of a “defense service,” was discussed in about a third of the comments, but principally from law firms and corporate and university counsel.

“This is far from over, and I personally have some dire concerns relative to, for example, human-rating being used as a metric for export control,” Bigelow Aerospace’s Mike Gold, chairman of COMSTAC and a long-time advocate for export control, said at the full COMSTAC meeting on Wednesday. “I think you might as well use color of the spacecraft” to determine if something should fall under the USML.

Although the contents of the final rule won’t be public for at least three more months, there are unofficial hints that the wave of public comments on human-rated spacecraft will result in some changes. A participant at the Eilene M. Galloway Symposium on Critical Issues in Space Law in Washington earlier this month (held under the Chatham House Rule that restricts attribution) suggested that the discussion during the interagency review of the public comments did result in some changes, without being specific about what those changes were. “It probably isn’t going to satisfy everybody, but it’s a foot in the door” for more changes down the road, that conference participant said.

1 comment to Export control reform process is wrapping up

  • It’s tough getting the government to change direction, but the review process was designed to allow for public comment if change were thought necessary. Let’s see how well the democratic process works, because there is no doubt that sub-orbital space transportation is in the wrong category right now.

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