Commercial communications satellites were caught in a tug-of-war between the Commerce and State Departments regarding export control authority for most of the 1990s. (credit: Boeing)

A short history of export control policy

by Ryan Zelnio
Monday, January 9, 2006

This is the first of two essays taking a look at the effects of the United States policy concerning the export of commercial satellites and all technology pertaining to space development. This essay deals with the history of export policy and how it came to be as it is today, governed by the State Department as part of the International Traffic in Arms Regulations (ITAR). The next essay will focus on the effects of this policy on the US commercial satellite manufacturing industry.

The policy surrounding the export of commercial satellites (primarily communications satellites, or comsats) has revolved around giving jurisdiction to export between the Department of Commerce and the Department of State. Under the Commerce Department, comsats fell under the dual-use controls, while under the State Department they were on the munitions list. There are three distinct periods of time when the jurisdiction was different: pre-1992, 1993 to 1996, and from 1996 to 1999.

Pre-1992

Prior to 1992, all items related to satellite manufacturing were controlled by the State Department as munitions and were subject to ITAR approval. In 1988, increased demand for launch services led President Ronald Reagan to sign a deal with China to launch US built comsats. This deal included provisions to ensure that China would charge prices that would be comparable to other launch providers. Under this agreement, nine launches would occur through 1994.

After the crackdown of the Chinese government at Tiananmen Square in Beijing, President George H. W. Bush imposed economic sanctions on China but waived these sanctions for the launch of three comsats. In February 1990, the Congress passed the Tiananmen Square sanctions law (P.L. 101-246) to suspend certain programs and activities relating to the People’s Republic of China. This law also suspended the export of US satellites for launch from Chinese-owned vehicles.

In November 1990, President Bush ordered that dual-use items be removed from the State Department’s list of munitions unless national security issues would be jeopardized. This order was made to bring the US controls in line with the industrial (dual-use) list maintained by the Coordinating Committee for Multilateral Export Controls, a multilateral export control arrangement. Commercial satellites were included in this list at the behest of multiple industry groups and due to the fact that the US was the only country in the world to control communications satellites as munitions items. In October 1992, State issued a directive transferring some comsats to Commerce but it imposed restrictions if the satellite contained any items that might exceed certain military characteristics. These items ranged from anti-jamming capabilities to antennae that can point 200 nautical miles (370 kilometers) or less to kick motors that can be restarted. Additionally, ground stations, supporting equipment, and technology assessments were kept under the jurisdiction of State.

1993–1996

In September 1993, an interagency group, the Trade Promotion Coordination Committee, wrote a report urging the administration to review dual-use items, such as comsats, still on the munitions list to expedite their move to Commerce.

In 1995, State created an interagency body, Comsat Technical Working Group, to review export controls on comsats and narrow the definition of what are the military-sensitive technologies that are of interest to national security. This group recommended in a report in October 1995 that State narrow its list of military-sensitive technologies but denied the transfer of comsats to Commerce. The Secretary of State agreed with these findings and implemented them.

Unhappy with this outcome, Commerce appealed to the National Security Council and President Clinton. In March 1996, after many interagency meetings, President Clinton ordered that comsats be transferred to Commerce. To accommodate State’s concerns, he issued an executive order in December 1995 that required Commerce to refer all export licenses to the Departments of State, Defense, Energy, and the Arms Control and Disarmament Agency. A majority vote of these five agencies would decide licensing conditions. By October of 1996, all jurisdiction over comsats was transferred to Commerce.

1996–1999

Two launch failures of the China’s Long March rocket would once again bring change to US export policy: the January 1995 failed launch of the Long March 2E rocket carrying Hughes-built Apstar 2 spacecraft and the February 1996 failed launch of the Long March 3B rocket carrying Space Systems/Loral-built Intelsat 708 spacecraft. The satellite manufacturers and China worked together to create an analysis of the failure of both these launches. This analysis was required to fulfill insurance requirements and was reviewed by the Department of Commerce. Commerce determined that the export of the analysis to the insurers and China fell under the license Commerce issued in February of 1994 and allowed its transfer to China.

This analysis created a major controversy, as it was unclear whether Commerce had the authority to approve such an export. A congressional review determined that these launch failure reviews were conducted without required Department of State export licenses, and communicated technical information to the PRC in violation of ITAR. This investigation led to the inclusion of a provision in the Strom Thurmond National Defense Authorization Act in 1998 in that returned control of all satellites and related technologies to the Department of State. This was accomplished by the removal of said items from the Commerce list of dual-use items in the Export Administration Regulations and placing them on the State Department’s United States Munitions List, controlled under section 38 of the Arms Export Control Act. In addition, a provision was added that the President must certify to Congress 15 days in advance that any transfer of satellite technology to China would not harm US launch companies and/or help Chinese missile technology.

In January of 2002, Space Systems/Loral agreed to pay the US government $20 million to settle the charges of the illegal technology transfer and in March of 2003, Boeing agreed to pay $32 million for the role of Hughes (which Boeing had acquired in 2000) in the export violation. In addition to that, the company has had the export of its satellite, Chinasat-8, blocked for launch in China from 1998 to the present day.

Ryan Zelnio (ryjaz@yahoo.com) is a follower of space policy and works in the commercial satellite manufacturing industry. Any opinions expressed are his alone and not necessarily reflective of his employer.

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