U.S. Government Officials Tout Benefit of Space Technology Export Reforms

By Peter B. de Selding | Jul. 17, 2014

 

Ken Handelman, deputy assistant secretary for defense trade controls at the State Department said reform of the U.S. Munitions List, which for nearly 15 years has included virtually all space hardware and technology, is “a major milestone” for the industry. Credit: U.S. Department of Defense photo

FARNBOROUGH, England — U.S. Commerce and State department officials on July 15 sought to persuade Europeans that the U.S. government is taking concrete steps to make it easier for space commerce to crisscross the Atlantic without large legal teams to oversee compliance with technology-transfer rules.

 

At a forum organized at the Farnborough Air Show here by the U.S. Aeospace Industries Association, officials said the U.S. National Space Transportation Policy of 2013 and modifications of space technology-export rules that take effect in November both favor international trade in space goods and services.

 

Ken Handelman, deputy assistant secretary for defense trade controls at the State Department said reform of the U.S. Munitions List, which for nearly 15 years has included virtually all space hardware and technology, is “a major milestone” for the industry. “Nov. 10 is going to be a big deal,” he said.

 

Many space-related goods and services that were on the State-administered Munitions List are being moved to the more trade-friendly Commerce Control List, which is regulated by the Commerce Department, on that date.

 

Space-related goods are just one of 21 categories on the U.S. Munitions List, but they proved to be among the most difficult to modify, Handelman said. Not everything will change. For example, the State Department will continue to have responsibility for licensing space launch services.

 

“It’s a dreadful process,” Handelman said of the effort to reconcile industry’s desire to tap overseas markets with the government’s mandate to protect national security-related techologies. “The U.S. Munitions List went unreviewed for 20 years and we don’t want to do that again,” he said.

 

Handelman nonetheless said the current reform taking effect in November “does not mean the end of the export-reform process. This is not the end of the story. My team has been working flat-out on this and we’re starting to move people onto our export team.”

 

An official with propulsion manufacturer Aerojet Rocketdyne of Sacramento, California, said the new regulations notably make distinctions between space thruster capabilities that will leave hurdles in place for certain types of sytems for no apparent reason.

 

Operators of startup space tourism services have complained that the new rules are unclear. Handelman noted, for example, that a Chinese national could be denied a ticket as a passenger aboard a suborbital flight because of the continued special status of China in U.S. space regulations.

 

But a representative of a U.S. suborbital rocket company said his company has been assured that this is not the case.

 

The International Traffic in Arms Reguations (ITAR), which govern exports of Munitions List Items, have not prevented U.S. space technology from being used by non-U.S companies, but many smaller companies say only large system integrators have the scale needed to handle the legal complexities of ITAR compliance. For these smaller companies, ITAR has meant lost revenue at a time when the U.S. dollar’s weakness relative to the euro should have favored U.S. exports. 

 

The Commerce Department, meanwhile, is also increasing staff to handle what it expects will be an increase in export-license applications following the November shift of selected items from State to Commerce control, said Ken Hyatt, deputy under secretary for international trade in the department’s International Trade Administration.

 

Hyatt said the U.S. government’s recent decision to permit the commercial export of satellite Earth imagery with a sharper resolution than what was permitted before is another example of a trade-friendly policy addressing industry requests.

 

Hyatt said the decision, which imagery provider DigitalGlobe of Longmont, Colorado, has said will permit it to attack heretofore off-limits market niches, “leveled the playing field” for U.S. industry.

 

European officials have said there was no uneven playing field to be leveled since DigitalGlobe, both before and after the regulatory change, is the only company able to collect imagery at the sharper resolutions now permitted for commercial sale.

 

Handelman and Hyatt agreed that the increased space-export flexibility adopted at the top of the State and Commerce departments might not automatically trickle down to the lower levels of their bureaucracies, where the daily license-approval process occurs.

 

Hyatt said Commerce’s planned increase of staff to review exports will bring in new people who are not wedded to the earlier policy.

 

Handelman said U.S. sanctions against Russia because of its annexation of Ukraine’s Crimean Peninsula and Russia’s actions near Ukraine’s eastern border to date have not affected U.S. commercial space business with Russia, mainly launches of U.S. hardware on Russian rockets.

 

“The U.S. does a lot of business out of Baikonur,” Handelman said, referring to Russia’s principal commercial spaceport, the Baikonur Cosmodrome in Kazakhstan. “Not doing business as usual doesn’t mean stopping all this. We are taking a case-by-case approach for each launch.”