More On The 1248 Report

With the Defense and State departments having released their report this week recommending that it would be in the national security interests of the United States for the president to regain his authority to determine whether satellites and related items can be transferred from the U.S. Munitions List (USML) to the Commerce Control List (CCL), Inside U.S. Trade goes into further detail on that document. Here's an excerpt from the story:

The 44-page report to Congress -- also known as the Section 1248 report, after the section in which it is mandated in the 2010 National Defense Authorization Act -- recommended that only certain types of satellites be transferred to the CCL, where they will be subject to a greater range of export license exceptions. The report also recommended that China and other embargoed countries be excluded from the benefit of any relaxed controls on satellites and related items.

In addition to asking Congress to pass legislation returning the authority over satellites to the president, the report also called on Congress strengthen the Defense Department’s authority over the monitoring and oversight of launch activities of private companies that are of higher risk to U.S. national security. Moreover, it asked Congress to pass legislation to allow the administration to require industry to reimburse the government for those oversight activities.

Industry groups have long complained that U.S. satellite exports have suffered and that the U.S. space industrial base has eroded since 1999, when Congress, responding to the illegal transfer of satellite launch technology to China, decided to place all satellites under the strict controls of the USML.

The report is expected to spur legislation that will partially reverse those congressional restrictions, which would also allow the administration to proceed with its broader export control reform initiative when it comes to satellites. The ability of the president to determine the export control status of satellites is important because, as part of the reform effort, the administration is seeking to transfer thousands of items from the USML to the CCL, where they will be exempt from export license requirements if shipped to closely allied countries.

It will likely take a number of days at least for congressional members to decide, based on the report, whether they will sign onto legislation already introduced in the House and a companion bill that is forthcoming in the Senate, according to industry sources.

House Foreign Affairs Committee Ranking Member Howard Berman (D-CA), along with Rep. Don Manzullo (R-IL), introduced bipartisan legislation last year that would return authority over satellites to the president, but also contains restrictions for China and state-sponsors of terrorism. Senator Michael Bennet (D-CO), said yesterday that he is drafting legislation in his chamber to address the 1248 report's recommendations.

The report's release follows two days of intense briefings in on Capitol Hill, where officials from State, Commerce, Defense and the intelligence community presented a united front on this issue when meeting with congressional staff.

"This is really unprecedented in export control, all the agencies together and agreeing on an approach," said Lou Ann McFadden, chief of the Strategic Issues Division at the Defense Technology Security Administration. She spoke at an April 18 press conference at the National Space Symposium, where the release of the report was announced.

When asked whether legislation is likely to pass this year, Deputy Assistant Secretary of Defense for Space Policy Greg Schulte said at the same press conference that administration officials would "continue our discussions with members and their staff on the best way to allow for necessary legislation."

"We know that a number of members and a number of senators have expressed interest in supporting legislation," he said. However, another senior administration official last week expressed doubts that legislation could get through Congress this year due to the political constraints of an election year (Inside U.S. Trade, April 13).