Space Jam

A Defense Department report detailing the national security implications of returning to the president the authority to move satellites and related components from the U.S. Munitions List (USML) to the less-stringent Commerce Control List (CCL) must be submitted to Congress in the next three weeks if lawmakers are to have adequate time this year to pass legislation to permit such transfers, Inside U.S. Trade reports this morning, citing a senior congressional aide:

"The window for real constructive legislative action is not very wide," said David Fite, a House Foreign Affairs Committee staff member who works on export control issues for Ranking Member Howard Berman (D-CA).

Many lawmakers will not make up their minds about whether to support legislation that would restore the president's authority over the transfer of items off USML Category XV, which covers satellites and related components, until the so-called "Section 1248" report is released, Fite said at a March 14 forum on export controls at the Satellite 2012 conference.

The report, required as part of Section 1248 of the 2010 National Defense Authorization Act, could be forthcoming soon now that it is in the inter-agency review process, according to Lou Ann McFadden, an official with the Defense Technology Security Administration (DTSA) who spoke at the same forum.

Although McFadden would not assign a specific expected date to the report's release to Congress, she said it is in the final coordination stages. The report will be accompanied by a proposed revision of Category XV and a corresponding rule showing where transferred items will be placed.

Fite encouraged the administration to make the release of the report a "big deal." "This can't be released at 5 o'clock on a Friday afternoon," he said, adding that national security professionals, preferably wearing uniforms, should be publicly involved.

The transfer of militarily less significant items from the USML to the CCL where they will be subject to a broad export license exception is a key part of the administration's export control reform initiative. The reform effort's current goal is to restructure what are viewed as arcane controls that are impacting U.S. commercial trade of items currently on the USML.

Despite an imminent release of the report, Fite acknowledged that it's "almost too late for this Congress" to pass legislation on satellites.

Fite said there will need to be enough time for markups and floor debates in both chambers. Additionally, after passage in each chamber, the two bills would likely have to go through a conference proceeding.

In addition to procedural considerations, Fite signaled that passing such a bill may become more difficult the closer it gets to the November presidential election. Although there is bipartisan support for legislation already introduced in the House, Republican opponents of the reform initiative may be more likely to raise objections to the satellites bill in order to score political points given that the export control reform is a presidential initiative,

Passing such a bill would clear the one legislative hurdle this phase of the president's export control reform effort needs to overcome.

Berman has already introduced a bill, H.R. 3288, that would restore authority over satellites to the president with certain conditions. Fite also said there is a companion bill that will be introduced in the Senate in the coming weeks.

But for any legislation in the Senate will have to overcome opposition from Sen. Jon Kyl (R-AZ), who was closely involved in pushing for the 1999 legislation that moved all satellites, parts and components and related technology from the CCL to the USML.

Control of satellites has been a hot-button issue after a 1999 scandal in which U.S. satellite manufacturers Loral and Hughes Space and Communications were found responsible for the unlicensed export of missile design information to China during the course of an independent investigation to review the failure of a Chinese launch vehicle. This fueled fears that China would be able to further develop the same launch capabilities it could use for a nuclear weapon.

In the wake of that scandal, Congress obtained the authority to determine if Category XV items can be moved off the USML.

Supporters of legislation that restore the president's authority over satellite transfers have said the U.S. space industrial base has lost competitive ground to satellite producers in Europe who can manufacture and export commercial satellites and related parts without the same export restrictions.

Supporters go further to say that this is a national security risk to the U.S. as foreign companies are beginning to "design out" U.S. satellite parts and components that are subject to the International Trafficking in Arms Regulations (ITAR) that govern items on the USML.

This has led at least one European satellite manufacturer, Thales Alenia, to advertise "ITAR free" satellites that do not require customers to undergo the scrutiny of the U.S. export control system because of U.S. content.

Fite said an ongoing State Department investigation into a so-called "ITAR free" satellite that was sold to China without a license even though it still contained U.S.-controlled content has highlighted the national security impact of maintaining too stringent restrictions on commercial satellites.

For more news from this week's Satellite 2012 conference, check out this morning's issue of Inside the Air Force:

Loverro, Shelton Stress ORS Emphasis Will Remain Despite Closure

DOD Asks Congress To Nix Biennial GPS Reporting Requirement

Rep. Ruppersberger Urges DOD To Adopt Space-Launch Competition

Pentagon Takes Key Step Toward Acquiring New SBIRS Satellites