This week of September 16, Paris will play host to the biggest spectacle of the year (sorry, Olympics), the World Space Business Week. Attendees will come from around the world to discuss advancements in commercial space and global satellite infrastructure. However, it will be the representatives of Australian, UK, and U.S. companies that may have the most to talk about.
Recent changes to U.S. export controls will free up Australian, UK, and U.S. (collectively, “AUKUS”) companies to exchange technology, software, parts, components, and equipment related to space and satellites with almost no export control restrictions (ok, well, still some export control restrictions, but a lot fewer restrictions . . . sorry for the bait and switch with that underlining, we just think it’s really important!)
In accordance with the group’s trilateral agreement in September, 2021, the United States has lowered the controls on both its commercial-item export requirements in the Export Administration Regulations (EAR) and defense-item export requirements in the International Traffic in Arms Regulations (ITAR)
The AUKUS Partnership: A New Era in Defense Collaboration
In April 2024, the U.S. Department of Commerce Bureau of Industry and Security (BIS) lifted license requirements, expanded exceptions, and lowered controls on exports for certain end uses or end users. The BIS announcement stated that “many commerce-controlled items, including certain satellite-related items[!!!], will now be eligible for export or reexport to Australia and the UK without a license.” (emphasis obviously added in our excitement).
On September 1, 2024, U.S. Department of State Directorate of Defense Trade Controls (DDTC) published a new ITAR section (§126.7, for those of you keeping score at home) and related changes that make most articles on the U.S. Munitions List (USML—the list of items restricted for export under the ITAR) free from license requirements for export to the Australia and the United Kingdom. The interim final rule is designed to streamline defense trade and enhance technological cooperation between the U.S., Australia, and the UK in areas such as defense articles and services that encompass satellite systems.
The DDTC regulation does keep a few items out of the new free-flowing system. The Excluded Technology List (ETL) specifies a substantial swath of controlled technologies that will still require a license, even for export to Australia or the United Kingdom. Importantly for the space and satellite industry, the list will not exclude from license-free treatment most launch technologies nor satellite and spacecraft technologies that are not classified.[1]
What Does This Mean for the Satellite Industry?
The space industry—and particularly commercial satellites—sit at a nexus of commercial and defense export controls. The resulting tangled compliance obligations can bind companies and overburden legal and compliance resources. Now, BIS estimates that that the lowered controls will result in $7.5 billion dollars in trade that will no longer be subject to licenses. That relief, stretching as it does across the EAR and ITAR, across commercial and defense export controls, will create unique and valuable opportunities for the tri-lateral partners, as well as for many of the countries with which they work closely.
In Paris this week, it may well be the talk of the town.
FOOTNOTES
[1] We note that those statements on the ETL are a summary of what is and is not on there. We cannot recommend enough that you examine the list to check your own export fact pattern and obtain the advice of counsel if you have any uncertainty.