Changes to Space Export Controls Will Boost 'Secure Trade' With Allies, US Says

The rulemakings are designed to “modernize” U.S. export controls on space-related items, a senior Commerce official said during an Oct. 17 call with reporters, including by easing restrictions on exports of less sensitive technologies, certain spacecraft-related components and more.

The measures build on an effort begun by both agencies in 2019 to streamline controls for the commercial space industry (see 1903070037). But “this isn't just a regulatory update,” the Commerce official said. “This is about maintaining our leadership in space technology, protecting our national security and bolstering our partnerships around the world.”

The revisions and proposals are the result of public comments received by the government, consultations with Commerce’s technical advisory committees, discussions with companies and extensive talks within the administration, the official said. It also comes after the National Space Council, headed by Vice President and presidential nominee Kamala Harris, ordered the government in December to review its space export controls.

Space-related capabilities, from GPS to satellite data, are “more integrated into our economy and our national security than ever before,” the Commerce official said. “We are very excited about this rollout. It's been a long time coming, and I think it's going to be very meaningful for our national security and foreign policy interests and certainly facilitate secure trade with our partners.”

The rules received early praise from at least one industry organization. Eric Fanning, president of the Aerospace Industries Association, said AIA is “encouraged” by the announcement.

“The United States of America has always been the leader in space technology, and today’s rules from the Commerce Department will help us expand that technological leadership into the future,” Fanning said. “These rules -- and ones like them -- take a tailored approach to facilitate more trade with our closest allies and partners while still protecting national security.”

One final rule issued by the Bureau of Industry and Security and effective Oct. 23 will remove controls for certain spacecraft and related items for exports and reexports to Australia, Canada and the U.K., including spacecraft that “involve remote sensing or space-based logistics, assembly, or servicing.” The rule will remove all three countries from the “worldwide license requirement for” items controlled under Export Control Classification Numbers 9A515.a.1, a.2, a.3, a.4, .g, and 9E515.f, BIS said.

The rule “deepens our commitment, the U.S. commitment, to some of our closest allies, furthering our collective security, reducing unnecessary export control restrictions and ensuring secure trade,” the Commerce official said. BIS said it’s expecting the changes to result in a drop in 90 license applications submitted to the agency annually.

A second rule, which BIS issued as an interim final rule, will reduce license requirements on certain less sensitive space-related items to more than 40 countries, BIS said, and broaden certain license exceptions that support NASA programs. Other changes add certain ECCNs to an existing agency licensing exclusion when used in the context of standards-setting activities, clarify the “jurisdictional control status” of certain thermal batteries, and more.

One change will specifically update certain licensing reasons for items controlled by 9A515.x, which serves as a “catch-all control” for certain parts, components, accessories and attachments “specially designed” for certain spacecraft-related items. Although those catch-all controls “play an important role in the 9x515 control structure,” because of the “less sensitive nature of many of the 9A515.x commodities, in particular when exported and reexported to U.S. allies and partners, and the importance of the items to the U.S. industrial base, BIS has determined it is warranted to take these steps to better rationalize the 9A515.x license requirement,” the agency said.

This will “better facilitate exports and reexports to U.S. allies, partners, and other destinations of less export control concern by reducing the 9A515.x reasons for control,” the agency said.

The rule makes a range of other changes and clarifications, including one that clarifies that a shipment of items to a launch platform or facility in international waters is treated as an export to the country that owns the platform or facility. This update was meant to address uncertainty around “where in the ocean the United States begins and ends,” a question that had caused confusion for some companies about, for example, whether a rocket launched from the ocean was considered an export.

The agency said it “welcomes” feedback on this change and whether any “additional clarifications” are needed to address exports in “international waters scenarios.”

The rule is also effective Oct. 23, though BIS is accepting public comments through Nov. 22. All exports that now require a license as a result of this rule but were aboard a carrier to a port as of Oct. 23 may proceed to their destinations under the previous eligibility as long as the items are exported by Nov. 22, BIS said.

The third BIS rule proposes to transfer the export control jurisdiction of certain space-related defense items from the State Department’s U.S. Munitions List, overseen by the Directorate of Defense Trade Controls, to the BIS Commerce Control List. These items no longer “provide a critical military or intelligence advantage,” BIS said, and should benefit from a more “nuanced” licensing policy.

The CCL allows for a more “nuanced approach based on specific technology parameters, how the technology will be used, where it will be used, and who will use it,” the Commerce official said. “That nuance doesn't exist for the munitions items controlled by State.”

The rule “seeks to account for advances in technology and the changing operational environment and to facilitate international cooperation in commercial space activities,” the official added, and could transfer items like spacecraft that refuel other spacecraft and spacecraft capable of “autonomous collision avoidance.” The rule also proposes new License Exception CSA (Commercial Space Activities), which would “mirror” existing International Traffic in Arms Regulations exemptions for some of those items.

One notable change could add a new “materials” ECCN to the CCL by adding a new ECCN 9C515, which would control certain materials, coatings and treatments for “reducing in-orbit signatures” of spacecraft not described by USML Categories XIII(j) or XV(e)(22). “This new ECCN 9C515 would only control ‘materials’ that are not subject" to the International Traffic in Arms Regulations, BIS said.

It would also add ECCN 9D515.c to capture certain software, including “Space Situational Awareness” analysis software used to model, simulate, optimize, or perform operations involving spacecraft maneuvers, trajectory planning or debris tracking. ECCN 9E515 also would be updated, including by adding language to control certain technology needed for the development, production, operation, "failure analysis or anomaly resolution of commodities controlled by" certain items listed within ECCN 9A515.

Proposed new License Exception CSA would cover certain exports involving “official space agency programs and space tourism and research.” Those exports would be authorized for certain activities involving various NASA programs, telescopes, observatories and more.

BIS said the new controls outlined in this rule could lead to an increase in 90 license applications per year, though License Exception CSA could lead to 100 fewer applications annually. Public comments are due Nov. 22.

Another rule proposed by DDTC would add and remove items from the USML “in concert” with the BIS rule to transfer certain items to the CCL, the Commerce official said. It would also introduce new license exemptions to the ITAR related to “civil space activity" and more, among other updates. The rule outlines possible changes and clarifications to a range of items listed in USML Categories IV and XV, including for exports of certain man-portable air defense systems, anti-tank missiles, propulsion systems and more.

Some notable proposed changes to USML Category XV (spacecraft and related articles) could delete language to specify that certain spacecraft controlled in this category are defense articles, “regardless of intended end-use”; update the threshold for some remote sensing capabilities to “better reflect the current state of technology”; and increase the “bandwidth criterion” for certain controlled radar remote sensing items.

The rule proposes to remove certain technologies from the USML, including “spacecraft that autonomously perform collision avoidance,” because the State Department said this feature is becoming more common. “In an increasingly congested orbital environment, the Department assesses many spacecraft will have to perform this task, and that doing so no longer provides a critical military or intelligence advantage,” the agency said.

One of the proposed license exemptions outlined in the rule is designed to “promote U.S. industrial base participation in civil space activity,” including by authorizing certain defense transfers “when conducted entirely within the scope of” a list of official U.S. government agency space programs. Other exemptions would authorize certain transfers involving space launches, manned spacecraft for space tourism or in support of fundamental research, certain transfers of defense articles while they are incorporated into spacecraft subject to the Export Administration Regulations, and more.

Comments on the DDTC rule also are due Nov. 22.

The Commerce official said the agencies specifically want feedback about other items that companies believe should no longer be controlled under the USML and may instead warrant inclusion on the CCL.

“The specific feedback that's most helpful to us, frankly, it's often technical: a use case we might not have encountered on our own, or technical parameters that differentiate commercial items from those that provide a critical military or an intelligence advantage are particularly helpful,” the official said.

“The more the industry and stakeholders can help us distinguish less critical technologies from the critical ones, the clearer, more consistent and fit for purpose we can make our regulations.”