Friendly Benefits: Lifting Space Export Controls

You know who your friends are. You’ve known them for a long time, you understand each other, and more importantly, you trust each other.

Well, countries also have friends. Perhaps national friends have similar foreign and national security policies rather than similar hobbies. Maybe country friends are aligned financially with their friends rather than you both getting what you think are horrible haircuts so It got cold then. It is important that these countries trust their friends as much as you do.

Based on this trust, allies can build relationships that create economic opportunities. Last month, the US, UK and Australia were putting the final touches to their AUKUS agreement to reduce or remove barriers to the exchange of large amounts of defense items and technical data. In the October 2024 Space Rules, we now see Australia, Canada and the UK removing export license requirements for certain spacecraft.

We are examining and discussing these rules in a four-part series of blog posts, the third of which we present here. The summary in Section 1 is the same as our other articles, but the remainder delves into the EAR rules that remove many of the barriers to exchanging spacecraft and related technology with certain allies.

1. October 2024 Space Rules

On October 17, 2024, the U.S. agency that regulates exports to the space industry (1) issued four new regulatory notices, each of which should reduce the compliance burden and potential disruption that space and satellite companies have faced in the past (October 2024 space regulations). All regulations appear to be designed to modernize U.S. export regulations and maintain the global competitiveness of the U.S. commercial space industry, as follows:

1. Rules that eliminate or exempt defense export control items, including:
   • Uncontrolled spacecraft capable of docking with commercial space stations, as well as spacecraft with autonomous collision avoidance capabilities
   • Provides limited exemptions for certain space agency programs, space tourism and basic space research projects
2. Rules to reduce and clarify commercial controls on certain items, including:
   • Reduced controls on Export Control Classification Number (ECCN) 9A515.x, a collective designation for space-related parts, components and accessories
   • Clarify export control rules for spacecraft and launch vehicles
   • Clarify controls on vehicles launched in international waters
3. The rule, which is the subject of this blog post, removes export license requirements for certain spacecraft to Australia, Canada and the United Kingdom.
4. Rules that add new export license exceptions for Commercial Space Activities (CSA).

We welcome you to read each rule via the link provided above. However, for those of you who can bear to wait (and don’t mind our prose), we’ll be providing a summary of each new rule over the course of the week.

Please see below our overview of the third Space Rule of October 2024, in which BIS eliminates license requirements for certain spacecraft exports to Australia, Canada or the United Kingdom. This final rule was published on October 23, 2024, and is currently in effect.

2. Eliminate global licensing requirements for certain spacecraft

Under the new final rule, certain spacecraft capable of imaging asteroids, stars, and other planets, or capable of monitoring the Earth’s surface for fire damage, crop health, or marine environmental conditions, will no longer require a license to be exported to our country. Friends in Australia, Canada or the UK. These spacecraft are crucial as we look at our planet from above and many other planets from our little corner of the universe.

Additionally, we can now more freely share with our friends spacecraft that provide services to other spacecraft, such as docking, delivery, refueling or maintenance. These service vehicles will become increasingly important as the number of space stations launched by the government and private sector proliferates. These space stations will need supplies, repairs and services, and demand for spacecraft that can provide these things will almost certainly increase. Such spacecraft can now be produced and exchanged between friends (ie without permission from Australia, Canada or the UK).

For a complete list of products that can now be exported without a license from the CANAUKUS Group (we welcome your suggestions for more attractive names for the trading group), we recommend that you check out ECCN 9A515.a.1, .a.2, .a . 3, .a.4, .g and ECCN 9E515.f.

3. Strengthen the Space Group

In justifying this regulatory change, BIS acknowledged the close ties and collaborative efforts in the space and defense sectors, noting that all three countries participate in the National Technology and Industrial Base (NTIB). NTIB is a framework designed to integrate the industrial and technological resources of member countries to support mutual defense and space exploration objectives.

As we described in a previous blog post, we expect that countries will increasingly join together to form distinct blocs in which internal export barriers will be reduced or eliminated, while external controls will remain consistent. Under such an arrangement, trade can flourish within a circle of friends without sacrificing the security of control over key items from the outside world. As control over other parts of the spacecraft industry decreases (which we will discuss in Parts 1 and 2 of this series), the regulatory movement to keep us friends becomes increasingly evident.

4. Current status of the rules

DDTC’s proposed rules mainly revise ITAR USML categories IV and XV and were published in the Federal Register on October 23, 2024. DDTC must receive comments on the proposed rule by Friday, November 22, 2024.

BIS issued revisions and additions to its space-related export controls, which are detailed in the IFR, final rule, and proposed rule. The IFR and final rule become effective on October 23, 2024. BIS must receive comments on the IFR and proposed rule by Friday, November 22, 2024.

5. More to come

This is the third of four blogs, with a fourth coming this week.

We will continue to monitor these developments and expect to see additional adjustments and guidance in the future. Of course, we will keep our readers updated.

You are welcome to submit questions and comments via the author’s contact information.

footnote

(1) The U.S. Department of State’s Bureau of Defense Trade Controls (DDTC) promulgates and implements the International Traffic in Arms Regulations (ITAR), and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) promulgates and implements the Export Arms Traffic Regulations (EAR).