DDTC Asked to Clarify, Delay New Space-Related Controls

The Directorate of Defense Trade Controls issued the proposal in October alongside several Bureau of Industry and Security rules that the government said were designed to reduce licensing requirements for exports of certain space-related items to a range of U.S. trading partners. The DDTC rule specifically proposed transferring export control jurisdiction over certain space-related defense items from the U.S. Munitions List to the Commerce Control List, potentially lowering trade barriers faced by the commercial space industry for years (see 2410180027).

In comments released last week, the Satellite Industry Association said it “appreciates” several of DDTC’s “proposed reductions in controls” for commercially available technology, including for satellites used to autonomously detect and trace ground vehicles and aircraft, and for autonomous collision-avoidance technology. The Aerospace Industries Association also called the rule a “positive step towards modernizing space-related export controls,” while aerospace firm RTX said it’s “generally supportive” of the proposals.

But both associations and RTX also said DDTC should continue to refine the changes before making them final. SIA specifically pointed to some of the “housekeeping” changes outlined in the rule, which would actually make “substantive” revisions to the International Traffic in Arms Regulations and “could negatively impact the U.S. commercial space industry.”

One proposed DDTC change would narrow an existing exclusion involving services for the transmission of space launch vehicle telemetry, a system used by space vehicles to send information back to Earth. SIA urged the agency not to move forward with this change, saying many commercial space companies rely on the telemetry exclusion to share important data with other companies, suppliers and vendors.

“The industry has long relied on this exclusion and DDTC provides no rationale for why this telemetry data, so long treated as uncontrolled, is now more sensitive and merits control,” the association said. And even though companies can now encrypt telemetry data, it doesn’t mean that “the data should or must be encrypted to safeguard national security,” it added.

“Even if the data were encrypted, it should remain uncontrolled to allow continued sharing of that information in support of satellite operations,” SIA said, “especially when shared intra-company by U.S. companies and their employee base and U.S. and non-U.S. subsidiaries supporting satellite operations.”

If DDTC decides to move forward with this narrower exclusion -- without a carve-out for intra-company or intra-subsidiary transfers -- it should put in place a “substantial grace period for implementation” to allow companies time to apply for export licenses, it said.

The Aerospace Industries Association, which released a summary of its 12-page comments, said DDTC should make sure its revised controls align with the multilateral Missile Technology Control Regime. It noted that the rule controls technology no longer listed by the MTCR, including certain unmanned drone rocket propulsion subsystems, and that isn’t controlled by other MTCR partner countries. Other changes include language "that may create confusion among industry regarding MTCR determination of articles,” AIA said.

And although the rule moves certain items from the USML to the CCL, AIA said more items should be transferred or decontrolled to “reflect U.S. innovation and the global commercial market.” It specifically pointed to certain space separation mechanisms, certain radar sensing capabilities, certain systems that can determine low Earth orbit positions, and more.

“Technical parameters for classifying commercial space technology should reflect what is available on the commercial market to ensure U.S. companies are not at a disadvantage,” AIA said. “DDTC and BIS should continue to work with industry to review space articles to identify differences between civilian and military applications of technology.”

Several commenters asked DDTC to address the proposed changes to the way it will control “specially designed parts and components” for various items. RTX specifically pointed to proposed updates to USML Category IV(b)(1), which would incorporate “specially designed parts and components” for launch systems and equipment. The company said this is a departure from the current ITAR language, which only controls certain systems, subsystems, parts, components, accessories, attachments or associated equipment for many Category IV items but not the “specially designed” parts for launch systems and equipment.

RTX said the launcher parts that would be controlled under this language are already being made or exported outside the U.S. in compliance with the BIS Export Administration Regulations. “If DDTC intends to capture these items on the ITAR it must account for the current world state and either exclude or provide some type of ‘grandfathering’ for existing exports and manufacturing agreements,” the company said. If it doesn’t, the agency may “impair existing supply chains without accomplishing DDTC’s core goal.”

The Commercial Space Federation, which represents a host of spaceflight companies, asked DDTC to revise its new proposed definition for “spacecraft” to change how it defines the demarcation line for the start of space above the Earth’s surface. CSF said the U.S. recognizes 50 miles, or 80 kilometers, as the demarcation for space, as opposed to the proposed definition, which lists 100 km. A 100 km demarcation line “would impede space tourism industry providers’ ability to conduct space tourism operations and should be removed,” the federation said.

CSF also urged DDTC to change its new space tourism and research exemption, in part to delete language that would only allow the exemption to be used by spacecraft with “suborbital trajectories.” This would “ensure greater U.S. competitiveness in the space tourism and fundamental research market,” it said.

Boeing asked DDTC to clarify and change several portions of the rule, including by providing “additional” definitions for space launch vehicles, rockets, and separation systems. It also warned the agency about a proposed change to USML Category XV(d) that would replace the term “thruster” with “propulsion system.” Boeing said this would expand the scope of the control because the term “system” is broader and would capture more than just the thruster. “Industry understands thrusters to be one article within a propulsion system,” it said.

The aerospace company also asked DDTC to allow plenty of time for the space industry to come into compliance with the proposed changes. It said the agency’s next step should be an interim final rule “with no less than a one-year implementation period.” AIA said DDTC should “delay implementation” for three years.

RTX also called for an “extended implementation period,” in part to allow it to update the export jurisdictions of its products and make classification determinations. It’s expecting the rule to impact classification determination for “a large number of products,” which will require companies to update their internal compliance systems.

A lengthy implementation timeline and DDTC guidance also will help the agency "manage a potential surge in licensing requests related to reclassifications and, where relevant, provide time for industry to obtain new authorizations needed to support existing manufacturing efforts,” RTX said.