The Department of Commerce’s Bureau of Industry and Security (BIS) has published three rulemaking initiatives — a final rule, an interim final rule, and a proposed rule — to advance ongoing efforts in promoting U.S. leadership in space and to protect U.S. national security and foreign policy interests. The Department of State’s Directorate of Defense Trade Controls (DDTC) also issued a proposed rule concurrent with that from BIS. Together, these rulemaking actions effectively remove license requirements for spacecraft and related items to certain allied countries, reduce and otherwise clarify space-related license requirements in other instances, move certain controlled commodities from the United States Munitions List (USML) to the Commerce Control List (CCL), and propose a new license exception for commercial space activities.
A brief background and summary of these rules is provided below.
Ongoing Efforts to Promote U.S. Commercial and Technological Leadership in Space
Since 2019, the Departments of Commerce and State have worked closely with top aerospace industry and interagency representatives to propose several space-related amendments to the Export Administration Regulations (EAR). The agencies’ stated aim has been to support more robust international partnerships, improve the consistency and clarity of the EAR as it relates to space export controls, and ensure that U.S. policies are not putting U.S. industries at a comparative disadvantage.
Following this same trajectory, the National Space Council (NSpC) met on December 20, 2023, to discuss U.S. leadership in space, strategies to broaden international space partnerships, and U.S. commercial interests in space. The Council subsequently tasked Commerce and State to conduct a review of space export controls to “enable a globally competitive U.S. industrial base while protecting our national security and foreign policy interests.”
The three rulemaking initiatives announced by BIS this week are part of this ongoing effort to promote U.S. commercial and technological leadership in space.
Removal of License Requirements for Certain Spacecraft and Related Items for Australia, Canada, and the United Kingdom
BIS published a final rule amending the EAR to remove license requirements for certain spacecraft and related items for export and reexport to Australia, Canada and the United Kingdom. The commodities subject to this amendment include remote sensing or space-based logistics, assembly, or servicing items classified under Export Control Classification Numbers (ECCN) 9A515 and 9E515. Spacecraft and related items under these ECCNs had previously been subject to a worldwide licensing requirement.
This rule is meant to help foster a globally competitive U.S. space industrial base and facilitate collaboration with close allies, considering the close relationship between the United States and these three allied countries, including important space-related commercial and technological collaborations. Additionally, Australia, Canada, and the United Kingdom are members of the National Technology and Industrial Base (NTIB) — an international partnership of people and organizations engaged in national security and dual-use research and development, production, maintenance, and related activities. By easing license requirements for space-related exports to close allies, BIS aims to broaden and strengthen U.S. commercial interests in space.
Revisions to Space-Related Export Controls
In conjunction with the rule described above, BIS is requesting comments on an interim final rule (IFR) further reducing export controls for certain space-related exports. This IFR makes two major changes by (1) reducing license requirements on less sensitive items to reflect close relationships with certain countries, and (2) making refinements and clarifications to existing controls.
First, this IFR reduces license requirements for less sensitive parts, components, accessories, and attachments “specially designed” for use in or with certain spacecraft and related items under ECCN 9A515.x when those items are destined for close allies (including, but not limited to, Australia, Canada, and the United Kingdom). The goal of this change is to simplify license requirements for less sensitive exports bound for U.S. allies, while maintaining stricter controls for more sensitive items, which will be moved to the new 9A515.w category.
Second, consistent with the goal of enabling a globally competitive U.S. space industrial base, the IFR clarifies and refines certain aspects of the CCL concerning software, technology, and related items for spacecraft under ECCNs 9A004 and 9A515, including by:
- Reducing license requirements for certain spacecraft and other space-related equipment under ECCNs 9A004.v, .x, and .s;
- Specifying that the Space Act Agreements (SAA) — to which the National Aeronautics Space Agency (NASA) is a party — meet the criteria under License Exception GOV;
- Clarifying that shipments or transmissions to launch platforms and facilities located in international waters are treated as exports/reexports to the countr(ies) the platform or facility is owned by, controlled by, or being operated on behalf of;
- Adding paragraph (e) to License Exception GOV for ECCN 9A004 for necessary exports/reexports to Russia for launch to the International Space Station (ISS); and
- Adding license requirements for exports/reexports to China, Russia, or Venezuela for certain spacecraft and other space-related equipment under ECCN 9A004.y.
BIS is soliciting comments on all aspects of this interim final rule. Comments are due no later than November 22, 2024, and may be submitted via the Federal rulemaking portal at regulations.gov, docket number BIS-2024-0031.
Proposed Revisions to Space-Related Export Controls, Including Addition of License Exception for Commercial Space Activities
Finally, BIS has issued a proposed rule with two major changes to space-related export controls: (1) conforming export controls of spacecraft and related items under the EAR with changes to the International Traffic in Arms Regulations (ITAR) administered by the Department of State; and (2) adding a new license exception for certain Commercial Space Activities (CSA). Building on the final and interim final rules discussed above, this proposed rule is in response to the directive from the NSpC to update space-related export controls to better enable a globally competitive U.S. space industrial base; it is further informed by a 2023 survey of organizations affiliated with NASA, NOAA, and the broader U.S. Civil Space Industrial Base (CSIB) regarding the export controls of these agencies.
First, in conjunction with State’s parallel proposed rule to amend the ITAR, certain space-related commodities, including spacecraft capable of docking with other spacecraft or catching space debris, will be moved from USML Categories IV (Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines) and XV (Spacecraft and Related Articles) to the CCL. This change would lessen export controls for certain commodities because of more generally available license exceptions under the EAR and less stringent license requirements. This change will have the practical effect of:
- Modifying ECCN 9A515 by adding requirements to ensure appropriate controls will be in place for any spacecraft related items moved from the USML to the CCL, including by expanding controls on spacecraft involved in proximity services or debris removal, broadening controls on space optics and thrusters; and introducing controls for thrusters, gyroscopes, and satellite release mechanisms;
- Adding ECCN 9C515, which will control “materials” used to reduce spacecraft signatures, such as blankets and films, not covered by USML or ITAR; BIS clarifies that no list-based exceptions would be available for this “material;” and
- Amending ECCN 9D515 and 9E515 for further clarification and conformity with other changes to the EAR.
Notably, this proposed rule does not propose any changes to ECCN 9A004, but BIS welcomes public comment on whether any additional changes to ECCN 9A004 should be made, including whether changes should be made to ECCN 9A004 to remove references to items paragraphs in 9A004 that are otherwise subject to the ITAR or classified under ECCN 9A515.
The DDTC proposed rule updates USML Categories IV and XV, adding items such as technologies that facilitate the signature reduction of in-orbit spacecraft observations and electronic parts and components capable of operation at temperatures in excess of 125° C and specially designed for spacecraft. The proposed rule also removes certain space-related defense articles and services no longer deemed to warrant inclusion on the USML, such as those related to human spaceflight preparations.
Second, BIS is proposing a new license exception for CSA, which mirrors new exemptions proposed by DDTC to be made available for defense articles and services under the ITAR. These exceptions would allow easier authorization of exports, reexports, and transfers of items for use in official space agency programs, space tourism, and fundamental research activities that do not pose national security risks. These exceptions should also provide companies with greater flexibility in exporting certain items under the EAR or ITAR for authorized activities that promote U.S. commercial and technological interests in space.
BIS and DDTC are soliciting comments on all aspects of their proposed rules, which are due no later than November 22, 2024. Comments on the proposed rules may be submitted via the Federal rulemaking portal at regulations.gov under respective docket numbers BIS-2018-0029 and DOS-2024-0035.
Conclusion
Through these rulemaking initiatives, BIS and DDTC are working to further U.S. leadership in space by lessening space-related export controls for certain items and to certain U.S. allies and by clarifying and refining other aspects of the EAR and ITAR. These revisions are aimed at enabling a globally competitive U.S. space industrial base, and companies are advised to look for opportunities to understand and take advantage of this evolving regulatory landscape.
Contact us if you have questions about these new developments or are interested in submitting comments on the interim final or proposed rules.