- A “Deep Dive” into Space and Export Controls
- March 20, 2013 | Author: Mark L. Jensen
- Law Firm: Sheppard, Mullin, Richter & Hampton LLP - Washington Office
For the last nine months, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) has been collaborating with NASA, the U.S. Air Force, and the National Reconnaissance Office on a “Deep Dive” survey and assessment of the U.S. space industrial base supply chain network. The survey was originally distributed to 9,150 companies and other organizations. Through January 2013, the government had received more than 2,000 responses, which yield a great deal of data about the space industry in the United States.
One of the more interesting results relates to U.S. export controls and the space system. Of those companies that have responded, 70% indicated that they do not use the U.S. export controls system in their space-related business, whether because they do not export outside of the United States or for another reason. Of those that do use the U.S. export controls and space system, 35% indicated that they had lost sales from 2009 to 2012 due to the U.S. export controls system. Many individual respondents noted that U.S. customers wished to avoid products controlled under the International Traffic in Arms Regulations (“ITAR”) altogether.
As we covered in greater detail in May 2012, commercial satellites and related components are the only category of items required by law to be placed on the U.S. Munitions List and the only one of the only dual-use items (i.e., items with both civilian and military applications) controlled as munitions. The “Deep Dive” survey results suggest that at least some companies, universities, and related entities seek to actively avoid ITAR-controlled products or business lines in order to simplify their operating procedures. This may serve to further spur export control reforms generally as a means to improve the economy through increased exports; there may be a particular benefit for those seeking an easing on satellite export controls too.
Of course, apart from collecting information from industry about export controls, the survey may also serve as a means to disseminate information about export controls to the entire field of space-related enterprise in the United States. Although that is not the main purpose of the survey, it is - inherently - another instance of BIS outreach. As we have covered in this blog before, over the past few years BIS has used a variety of means to disseminate information about export controls, using methods ranging from immigration forms for persons in temporary non-immigrant status to “outreach visits”. In both of those cases, there is at least some risk that the knowledge of dual-use export controls conveyed by BIS’s outreach efforts could help establish the knowledge prong necessary to pursue criminal penalties in the case of a violation.
However, a response to a survey, particularly one seemingly geared at increasing exports, seems much less likely to lead to export enforcement. It seems more likely that information about the entire space industry could be used to shape the intermediate steps of export compliance awareness, in an effort to increase comfort with export controls and mitigate a perceived U.S. business disadvantage in comparison to European competitors. In that respect, whatever difficulties are posed by U.S. regulations may also provide a competitive advantage to businesses that are proficient and comfortable with navigating the existing U.S. export controls system. Creating a functional and integrated export controls compliance program can be a challenge, but may ultimately help to foster growth of companies in key areas.