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Bigelow Aerospace module
Bigelow Aerospace has run into many issues dealing with export control for the launch of its first two test modules, and one company official is hoping for at least some degree of reform in the next administration. (credit: J. Foust)

The uphill battle for export control reform

One of the most persistent calls for change in space policy in the US in recent years has revolved around export control. Current law puts virtually most space hardware under the jurisdiction of the International Traffic in Arms Regulations (ITAR), an acronym that has become figuratively and literally a four-letter word in the industry given the costs, delays, and general uncertainty involved in dealing with those regulations. There’s no shortage of horror stories among companies who have run into ITAR when dealing with seemingly innocuous components, and a growing stack of studies that conclude that ITAR has put US companies at a disadvantage in the global market and spurred other countries to develop their own versions of protected components.

Given those arguments, and the general tide of change that swept into Washington with last month’s elections, now would seem to be a good time to pursue export control reform. Indeed, in the space policy his campaign issued in August, President-Elect Barack Obama called for ITAR reform. “While protecting our national security interests, Barack Obama will direct a review of the ITAR to reevaluate restrictions imposed on American companies, with a special focus on space hardware that is currently restricted from commercial export,” the document states (see “The transition from politics to policy”, The Space Review, November 10, 2008).

“In the political environment we operate in, China is the third rail,” Moore said. “It’s very difficult to tell somebody after the ASAT test that we have be sitting back and being looser about these things.”

That, however, may be easier said than done. During a panel session on ITAR at a space law and policy conference in Washington November 14 organized by the Space and Telecom Law Program of the University of Nebraska’s College of Law, some panelists from industry and government were skeptical that the new administration could work with Congress to pass major legislative reforms desired by the space industry, in large part because of politics.

“Democrats in the new Congress will be reticent to take this issue back up again because Republicans will probably be looking to score some easy points early,” warned Tom Moore, a senior Republican staffer on the Senate Foreign Relations Committee. He cited how concerns about technology proliferation to China a decade ago, which led to the changes in the export control regime, “was used to beat the Clinton Administration up.”

Those concerns about China are still present today, Moore added. “In the political environment we operate in, China is the third rail,” he said. “It’s very difficult to tell somebody after the ASAT test that we have be sitting back and being looser about these things.”

One of the major arguments used in support of ITAR reform is that it has enabled other countries to develop similar components that they would have ordinarily purchased from US suppliers. A key example is the rise of so-called “ITAR-free” satellites, so named because they contain no US-built components and thus can be exported to places like China that would not be possible under the ITAR. One major European satellite manufacturer, Thales Alenia Space, has specialized in ITAR-free satellites, primarily for customers either in China or seeking lower-cost Chinese launches.

However, another major European manufacturer isn’t sold on the benefits of ITAR-free satellites. “We wrestle with it all the time because the question comes up, ‘Why don’t we make a satellite that’s ITAR-free?’” said Dennis Burnett, vice president of trade and export controls for EADS North America, whose corporate parent’s divisions include satellite manufacturer EADS Astrium. EADS, he explained, is in the business of making “sophisticated” satellites—more advanced, he claimed, than the ITAR-free models sold by Thales—and thus require US-built components even though that means dealing with export control regulations.

“You cannot build a big sophisticated satellite without US parts and components, you just cannot do it,” he said. Those components might comprise no more than five percent of the satellite, “but still, it’s a very important five percent.” He added that a decision to use a US-built component is a business decision, where the cost of compliance with ITAR is one of several factors that also include the cost of non-US alternatives and the value of the dollar versus the euro.

Alternatives to full-scale reform

If full-scale ITAR reform proves to be infeasible, politically or otherwise, what alternatives might exist for changes that could at least lessen some of the burden of dealing with ITAR that falls on the shoulders of US companies? One step would be to closely examine exactly what items that are currently deemed to fall under the jurisdiction of the ITAR need not be there. Mike Gold of Bigelow Aerospace, an outspoken advocate for ITAR reform, recounted at the Washington conference one of the more infamous examples his company has encountered: a shipping platform for their Genesis spacecraft that was effectively an upside-down table, yet considered space hardware by the State Department and thus subject to the full spectrum of ITAR compliance, including guards for the platform when it was Russia. (That monitoring requirement, Gold noted, was eventually waived by the State Department.)

“If you want to go forward as an area for reform,” said Moore, examining what should be on the US Munitions List (USML), and thus is governed by the ITAR, “would be a path forward for doing it in my opinion, because I think it rests on a firmer understanding about politics and practicalities of this technology, and where we need to be as a country in terms of protecting it, investing in it, and regulating it.”

“You cannot build a big sophisticated satellite without US parts and components, you just cannot do it,” EADS North America’s Burnett said.

That examination, he added, could move relatively benign technology, like hoses used in spacecraft, off the USML into the jurisdiction of the Commerce Department, but could also involve moving sensitive technology presently on the Commerce Control List (CCL) onto the USML. “I don’t care about hoses, but I’m not willing to let that go until I get things off the CCL like focal plane arrays and other things that are sensitive.” He cited a 2002 interagency process that involved the Departments of State, Commerce, and Defense that tried to clarify what “space-qualified” components would be on the USML and which would be on the CCL. “I don’t understand what was the dividing line in the interagency in 2002 was so that hoses stayed on the USML and focal plane arrays went to the CCL.”

Accomplishing this, Moore said, would require a “statutory adjustment”, that is, an act of Congress. “Congress would have to act, to go in and basically go back to Thurmond,” a reference to the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999, which put satellites and related components on the USML.

Another more feasible path towards reform would be improvements in the overall implementation of the export control process, an area where there has been some recent progress, but still today provides companies with unpleasant surprises. Gold said he recently received a $60,000 “reconciliation bill” from the Defense Technology Security Administration for government monitoring of Bigelow Aerospace activities in Russia from back in 2006, on top of the $160,000 the company already paid. “It’s preposterous!” he said.

One reform that both Moore and Gold endorsed is the “cohabitation” of the licensing functions of Commerce and State, improving communications between the agencies on issues of licensing jurisdiction and related activities. That concept has been proposed in the past but has met with stiff opposition from those two departments. “You’d probably call that a baby step, or not enough of a step,” Moore said, “but it’s a step that everybody can agree on—except the people who actually have to do the regulations.”

“To the extent that we are reformers,” Gold said, “we need to be realistic about what can and should happen.”

Gold said he was hopeful that the new administration, and a reconstituted National Aeronautics and Space Council, could press for ITAR reforms of some kind. “If we got leadership at the executive level from a properly-empowered National Space Council, bring together DoD, DoC, the Hill, et cetera, then we might see something happen. Maybe.”

Moore said that those who hope for radical reforms, such as moving export control regulations back to where they were in the mid-1990s, are asking for too much. “That kind of overreach is what kills a lot of these ideas right off the bat.”

“We are not saying the ITAR should be eliminated, everything should be moved over to Commerce, just the opposite,” Gold said. “We are firm believers that we can work within the system, that the system can and should function… To the extent that we are reformers, we need to be realistic about what can and should happen.”