House to Debate Change to Export Rules for Commercial Satellites

The House will continue debate today on the FY2013 National Defense Authorization Act (NDAA), H.R. 4310, turning its attention from general debate to a long list of amendments.

One of those many amendments (click on “amendments” tab) could change the export control environment for commercial satellites.  Amendment 152, offered by Representatives Adam Smith (D-WA), Howard “Buck” McKeon (R-CA and chairman of the House Armed Services Committee), Dana Rohrabacher (R-CA), and Kevin McCarthy (R-CA and House Majority Whip) would authorize the President to remove commercial satellites and related components from the U.S. Munitions List (USML).  The Administration would have to submit various determinations and reports, and exports to certain countries are prohibited, but in essence the amendment would restore to the President the authority to make the decision on whether commercial satellites are governed by the USML or the Commerce Department’s Commerce Control List (CCL).   Congress took away that authority in the FY1999 National Defense Authorization Act in the wake of the “Loral-Hughes” controversy where Congress found that those companies had assisted China in developing missile capabilities by helping them determine why several Chinese launches of U.S.-built communications satellites failed.  

China is on the list of countries to which exports of commercial satellites still would be prohibited.  The others are Cuba, Iran, North Korea, Sudan, Syria, and “any other country with respect to which the United States would deny the application for licenses and other approvals for exports and imports under section 126.1 of the International Traffic in Arms Regulations” or ITAR.

The amendment comes in the wake of a long-awaited report from the Departments of State and Defense — the “section 1248 report” — on the national security implications of moving commercial satellites and their components from the USML to the CCL.  The U.S. commercial communications satellite industry has been arguing stridently for more than a decade to ease export controls for their products arguing that European competitors are benefitting by making “ITAR-free” satellites that are not subject to U.S. export control regulations.