A Brief Overview of US Export Control Policy for Space Technology

Better make sure those are ITAR Approved (Mercator Cargo)
Better make sure those are ITAR Approved
(Mercator Cargo)

Congress passed the Arms Export Control Act in the 1970s to prevent sensitive technology from being exported to US adversaries.  To accomplish this goal, the Act created the International Traffic in Arms Regulations (ITAR), which authorized the Department of State to create a set of guidelines to control and license sensitive exports.  ITAR’s purpose is to further “world peace and the security and foreign policy of the United States.”[1]  Although a sensible precaution to prevent sensitive technology from being transferred to the Soviet Bloc during the Cold War, maintaining space systems as munitions only hurts US industry today.  However, the ITAR licensing regime is a vestige of a bygone era.  Indeed, the United States is the only country that continues to treat commercially applicable space technology as a weapons system for export licensing—other states generally regulate this as a “dual use” item.  Dual use regulation is sensible because it concedes that the technology has commercial applications while recognizing that there are also military uses.  Space technology today is not what it was in the 1960s and 1970s: much of it is readily available and easily duplicated by others in the industry.

Since commercial satellites were returned to the ITAR regime in 1999, a Department of Defense study estimates that the US share of the commercial satellite manufacturing market has fallen by nineteen percent.[2]  Satellite industry trade groups estimate the losses are even larger.[3]  Although globally the satellite industry has grown, the US share of the market has diminished and US companies are increasingly dependent on US government contracts.[4]  In 2000, the US captured $6 billion of the $11.5 billion global satellite manufacturing industry.[5]  But 2008, the US satellite manufacturing only accounted for $3.1 billion of a $10.5 billion industry.[6]

The United States must relax its export controls for space technology.  No longer does the US have the technology monopoly it once had, making ITAR’s strict restrictions nonsensical when comparable technology is available from companies in other states.  Further, the geopolitical environment is no longer the bipolar hegemony that controlled in the Cold War.  Recognizing these changes, Congress took a step in the right direction to restore US industry as a player in the global marketplace when it returned the President’s discretion to place spacecraft systems on the Commerce Control List.  Pursuant to this authority, President Obama issued an executive order on March 8, 2013, which delegated authority to the Department of State to license certain items under the more trade-friendly Commerce regime.  However, if more drastic changes are not made, ITAR risks further isolating domestic industry as the rest of the world find easier and more reliable sources abroad.

There are also several voluntary international regimes that regulate sensitive technology with the aim to prevent weapons proliferation.  The Missile Technology Control Regime (MTCR) and the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC) seek to harmonize export regulations for space related technology and prevent proliferation of space-based weapons technology.  MTCR, however, merely provides a regulatory floor for those states that subscribe to it.  States—the US in particular—can impose higher licensing requirements.  HCOC, on the other hand, controls a wide array of space-related technology in order to curb the proliferation of ballistic weapons.  These controls are less burdensome on domestic industry because US regulations usually exceed their minimum requirements.

Dan St. John is the Denver Journal of International Law & Policy’s Online Editor in Chief and the Founding President of the Space Law Society at the Sturm College of Law.  Follow him on Twitter @danstjohn2.

[1] 22. U.S.C. § 2778(a)(1) (2012).

[2] Karri Allen, Comment, Communications Satellites and U.S. Export Controls: Correcting the Balance, 18 CommLaw Conspectus 463, 478 (2010).

[3] Id.

[4] Id. at 278; see also Ctr. for Strategic & Int’l Studies, Briefing on the Working Group of the Health of the U.S. Space Industrial Base and the Impact of Export Controls 37 (2008), available at http://csis.org/files/media/csis/pubs/021908_csis_spaceindustryitar_final.pdf.

[5] David Damast, Export Control and the Space Industry, 42 Geo. J. Int’l L. 211, 220 (2011).

[6] Id.