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Focus on Regulation

Commercial Satellites: Report to Congress Recommends the Relaxation of Export Controls

U.S. Capitol BuildingThe Department of Defense and Department of State released a long-awaited joint report to Congress on April 18, 2012 recommending the relaxation of export controls currently applicable to certain types of commercial satellites, satellite components and related systems.  The so-called Section 1248 report, which was mandated by Congress under a 2009 statute, represents another significant development in the Obama Administration’s export control reform effort.  Due to statutory requirements, however, Congress will need to pass legislation before the recommended changes could be implemented.  The prospects for passage of such legislation in this Congress remain unclear, given the short amount of time remaining in the current Congress and other legislative priorities ahead of the Presidential election in November.

The 1248 report recommended that the following types of satellites and related systems no longer be controlled as military or defense-related items under the International Traffic in Arms Regulations (ITAR):

  • Communications satellites that do not contain classified components;
  • Remote sensing satellites with performance parameters below certain thresholds; and
  • Systems and components associated with such satellites and with performance parameters below certain thresholds.

Instead, the report suggests these should be controlled under the less restrictive Export Administration Regulations as commercial/dual-use items on the Commerce Control List (CCL).  At the same time, however, the Section 1248 Report recommends that the following types of satellites and related systems be retained under the ITAR:

  • Satellites with a purely military or intelligence mission;
  • Remote sensing satellites with high performance parameters;
  • Systems and components unique to with such satellites and not common to dual-use satellites; and
  • Foreign launch operation services for both military and commercial satellites.

The report also recommends that the U.S. Government policy of barring satellite exports to embargoed countries, such as China, Iran, and North Korea, be retained, even for commercial communications satellites and associated components that are transferred to the CCL.

Going forward, the Section 1248 report also urges Congress to return to the president the authority to implement these changes to the USML and the CCL – a 1998 law stripped the president of this authority, making space-related items the only dual-use items that are required by law to be controlled under the USML.