Space-Based Solar Power

a public discussion sponsored by the Space Frontier Foundation

ITAR (which I hate with a passion) Slammed by the Economist

Posted by Coyote on August 22, 2008

In my humble opinion, the greatest impediment standing in the way of greater business opportunity and international partnerships for the American space industry are our export laws contained in the International Traffic in Arms Regulation (ITAR), which I hate with a passion!

It is important for us to understand how ITAR (WIHWAP) can affect our space industry, because space-based solar power is such a huge undertaking that international partnerships will be required not only for construction, but also for ownership and development of an international customer base.

The Economist published an article yesterday criticizing ITAR (WIHWAP). The AIAA Daily Launch (an email news service for members of the American Institute of Aeronautics and Astronautics–you are a member, aren’t you?) described the article this way:

Economist: U.S. export rules handicap space industry.

The Economist (8/21) editorialized that “the zealous application of the export rules is the American space industry’s biggest handicap,” noting critics who say the system “fails to distinguish between militarily sensitive hardware that should be controlled and widely available commercial technologies.” The Economist cited several examples of “American components and satellites…suffering” on the international market “because of the cost and delays in doing business with the firms that make them,” and added that in the past “the State Department ignored such complaints.” However, “there are signs of change,” including “small adjustments” to the administration of ITAR regulations and “a promise that licensing decisions would be taken within 60 days of an application.” Additionally, “work is also afoot to update the munitions list, which contains the set of military technologies that must be protected.” The Economist concluded, “Such change is overdue.”

Here is the link to the Economist article, which is titled: “Gravity is not the main obstacle for America’s space business. Government is.” Please give it a good read.

What are your thoughts on the issues raised in the article? How can we ensure that the export control environment is conducive to the types of partnerships space-based solar power requires?




2 Responses to “ITAR (which I hate with a passion) Slammed by the Economist”

  1. I share your concerns. From a civil aviation point of view, the effect of this rule is to expand the range of civil aircraft parts that are considered to fall within the State Department’s export jurisdiction.

    This distinction is important to anyone who exports aircraft parts, because many non-ITAR aircraft parts (those subject to Commerce Department export jurisdiction) may often be exported without a license, but an exporter almost always must register and obtain a license to export anything that is considered to fit within the scope of the State Department’s ITARs (items described or referenced via the sometimes vague descriptions of the US Munitions List). The State Department is notoriously slow to issue export licenses. Deciding which regulatory regime applies to an export of certain civil aircraft parts can be difficult.

    The rule was developed in response to proposed legislation from Congressman Manzullo, and was supposed to moot the need for legislation by clarifying the scope of the State Department’s jurisdiction. The State Department did this by issuing new language that will include parts that were not previously included within their jurisdiction.

    The New State Department regulations makes an alarming confusion between the phrase “standard equipment in an aircraft” and the notion of “standard parts.” It states that “A part or component is not standard equipment if there are any performance, manufacturing or testing requirements beyond” industry specifications and standards. The State Department explicitly states that “In determining whether a part or component may be considered as standard equipment and integral to a civil aircraft (e.g., latches, fasteners, grommets, and switches) … a part approved solely on a non-interference/provisions basis under a type certificate issued by the Federal Aviation Administration would not qualify. Similarly, unique application parts or components not integral to the aircraft would also not qualify.”

    This seems to suggest that a part that is approved under a STC/PMA combination based in part on a “no-technical-objection letter” from the OEM (a fairly common approach in civil aviation) would not be considered standard equipment under the new definition! This is a significant change!

    The language of the rule also makes it clear that any item that is not based on a “civil aviation industry specification [or] standard” is not standard equipment. This is a clear confusion between the intent of the original Export Administration Act, which was meant to exclude normal aircraft equipment, and the much more limited category of standard parts (which are excluded from the PMA requirement under 14 C.F.R. 21.303(b)). The only thing that these two categories ought to have in common is the use of the word “standard.”

    This rule will be a nightmare for aerospace companies seeking to export their parts, if it is interpreted to permit the State Department to extend jurisdiction over all non-SME parts that are not manufactured as standard parts. It would mean that civil aviation manufacturers companies that had been aggressive in obtaining Defense Department approval to sell their parts as replacements for military corollary parts could be penalized for doing business with the Defense Department by being required to obtain State Department approval for export of the otherwise civilian parts.

  2. Coyote said

    Jason Dickstein: We can take heart that Mr Joe Rouge, the Director of the National Security Space Office, is working with various players in government and industry to make needed adjustments to ITAR (WIHWAP!). Two stories. First, I asked a senior member of the European Aeronautic Defence and Space company (EADS) how ITAR had effected their ability to partner with US companies. He said, “It’s been good for our business! We were denied the opportunity to buy American, so we built the manufacturing capabilities in Europe, creating jobs, and now we are the World leader in the market.” Second, without a doubt our closest ally in security matters is Great Britain. We both enjoy our special relationship and want it to continue. We are developing the Joint Strike Fighter (F-35) together. However, due to ITAR (WIHWAP!) the Brits were excluded from several technical discussions, and questions came up from mid- to low-level bureaucrats whether or not we could actually sell certain components to our very good British allies and partners! This caused serious problems with the entire program because we are in a very mutual partnership. Very reliable rumour has it that the Prime Minister not only demarched the US twice on this, but PM Blair actually met with President Bush face-to-face to try to resolve this issue. I hope this silliness was resolved very quickly to everyone’s satisfaction.



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