Print PDF

Practice Areas

Spacecraft Systems Moved to Commerce Control List; Input Sought on Effect on Satellites

Tuesday, May 13, 2014
Sandler, Travis & Rosenberg Trade Report

Two export control agencies believe that regulatory changes announced this week could have “substantial national and economic security benefits,” particularly for the civil and commercial satellite industry. These rules implement the authority recently returned to the president by Congress to determine which satellites and related articles are controlled on the U.S. Munitions List.

Changes Made. The Bureau of Industry and Security has issued an interim final rule adding to the Export Administration Regulations export controls on spacecraft systems and related items that the president has determined no longer warrant control on the USML. Concurrently, the State Department’s Directorate of Defense Trade Controls has issued an interim final rule revising USML category XV (spacecraft and related articles) to describe more precisely the articles warranting control in that category.

New export control classification numbers 9A515, 9B515, 9D515 and 9E515, as well as existing ECCNs, will control items being moved to the CCL. New ECCN 9A515 applies to spacecraft, ground stations, and specially designed parts, components, accessories and attachments. New ECCN 9B515 applies to related test, inspection and production equipment and specially designed parts and components. New ECCN 9D515 applies to related software, and new ECCN 9E515 applies to related technology.

The DDTC rule revises USML Category XV, amends paragraph (i) of USML Category IV regarding spacecraft-launch vehicle integration and launch failure analysis services, makes conforming edits to ITAR §124.15 regarding special export controls for satellites and satellite launches, and amends ITAR §120.10(b) to add telemetry data to the list of exclusions from technical data.

DDTC states that spacecraft that have commercial end-use with capabilities above specified thresholds will still be controlled on the USML. The agency did not accept recommendations to move certain spacecraft off the USML based on the rationale that established commercial end-use alone should determine export jurisdiction. Instead, it is revising the USML using (to the greatest extent possible) the principle of control based on article capability, believing this to be the better standard for protecting technologies of importance to national security.

Schedule of Changes. The rules will be implemented in two stages. On the first effective date, June 27, the controls on radiation-hardened microelectronic circuits in Category XV(d) will be deleted from the USML and microelectronic circuits will be removed from USML Category XV(e). In addition, the ITAR controls on software and technical data directly related to such microelectronic circuits will be removed from USML XV(f). The EAR will simultaneously create ECCNs 9A515.d and .e to control radiation-hardened microelectronic circuits and 9D515.d and .e and 9E515.d and .e to control software and technology specially designed for or required for such radiation-hardened microelectronic circuits. All changes in the EAR outside the CCL needed to give effect to these new controls will also become effective as of June 27.

On the second effective date, 180 days after May 13 (approximately Nov. 13), the remainder of USML Category XV will be revised and the remaining changes in this rule will become effective, including the revisions to several non-9x515 ECCNs, the rest of ECCN 9A515 to provide the controls in paragraphs .a, .b, .x and .y, adding ECCN 9B515, and the rest of ECCNs 9D515 and 9E515 to control software and technology specially designed for or required for the remaining items that become subject to the controls of the 9x515 ECCN simultaneously with the amendments to the rest of USML XV.

Comments Sought. BIS is seeking public comments by approximately Nov. 13 on the changes to the EAR and the continued applicability of USML Category XV of the ITAR to commercial and civil spacecraft. In particular, BIS seeks comments on the continued application of USML controls to civil and commercial communications satellites, civil and commercial remote sensing satellites, commercial space launch vehicles, human spaceflight and academic or scientific satellites and other spacecraft. BIS would like to study if controls can and should be revised to allow continued control of spacecraft with uniquely military or intelligence related capabilities on the USML while allowing most, if not all, civil, commercial and scientific spacecraft to be shifted to the CCL. BIS also seeks comments on whether the new controls described in this rule are clear and, if not, how they could be revised to help ensure understanding of and compliance with the controls.

DDTC will accept comments on paragraphs (a)(7) and (e)(11) of USML Category XV and ITAR §124.15. Any revisions made by DDTC to the ITAR as a result of such comments may necessitate further revisions to the EAR, including to the new license documentation requirements for the export of satellites for launch.

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines