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U.S. House, Senate Pass Satellite Export Reform Legislation

U.S. Rep. C.A. Dutch Ruppersberger (D-Md.). Credit: U.S. Army Armament Research, Development and Engineering Center photo

UPDATED at 4 p.m. EDT Dec. 21

WASHINGTON — The U.S. House and Senate have approved defense authorization legislation that would give the president the discretion to determine export jurisdiction for satellites and related components in what is being billed as a major victory for the U.S. space industry.

The final version of the National Defense Authorization Act (NDAA) for Fiscal Year 2013 repeals a 1998 law that transferred export jurisdiction for all U.S. space technology, regardless of sophistication or international availability, to the Department of State, a move that effectively reclassified satellites as weapons. Up until that law was passed, exports of all but the most sophisticated commercial satellite technologies were licensed by the Commerce Department, whose review process is considered less rigorous than State’s.

Congressional export reform proponents hailed the NDAA, expected to be signed into law in the coming days by President Barack Obama, as a victory that will boost the competitiveness of the U.S. satellite industry.

“This provision will restore the President’s ability to move satellites and related items from the U.S. Munitions List to the dual-use Commerce Control List, while prohibiting the export of such items to China, North Korea and States Sponsors of Terrorism, including Syria and Iran,” Rep. Howard Berman (D-Calif.) said in a statement issued Dec. 18.

Berman, the ranking member of the House Foreign Affairs Committee, drafted a bill on which the reform measure is based and played a key role in getting that language attached to the House version of the NDAA.

“Treating commercial satellites and components as if they were lethal weapons, regardless of whether they’re going to friend or foe, has gravely harmed U.S. space manufacturers,” Berman said. “U.S. national security depends upon these manufacturers for our own defense needs; if they can’t compete in the international marketplace due to onerous restrictions, they can’t innovate and cannot survive.”

Rep. C.A. Dutch Ruppersberger (D-Md.) said the reform legislation is long overdue. “By treating satellites and even the nuts and bolts that hold them together as lethal weapons, we are turning our backs on American innovation,” Ruppersberger said in a Dec. 19 statement. “For too long, the makers of American satellites and their parts have gotten weaker as their foreign competitors get stronger.”

While supportive of the satellite export reform measure, the White House earlier this year expressed opposition to language in the House version of the bill that it said would saddle it with onerous congressional reporting requirements. According to industry and congressional sources, those reporting requirements are eased somewhat in the conference version of the bill.

Nevertheless, congressional notification will be required when the president makes a determination that a certain type of satellite or component should be moved from State’s U.S. Munitions List to the Commerce Department’s Commerce Control List. The president also must submit to Congress a determination that the removal of any satellite-related item from the Munitions List is in the national security interests of the United States.

The new law keeps in place an effective ban on exports of satellites and related components to China, North Korea and countries that are considered sponsors of terrorism. The 1998 law that transferred all satellite technology to State was driven in large part by allegations of unauthorized technology transfers that were taking place in the course of launching U.S.-built commercial satellites on low-cost Chinese rockets.

Under the new law, the president will still be able to waive the ban on satellite exports to China and others on a case-by-case basis if the export in question is in the U.S. national security interest and if Congress is notified. However, any proposed export satellites or related items to countries subject to a U.S. arms embargo would be met with a presumption of denial.

No president has sought such a waiver since the passage of the 1998 law.

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