October 14, 2019

October 14, 2019

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U.S. Government Announces Significant Changes to Export Controls on Spacecraft and Satellites

The U.S. Government has issued changes to its export controls on spacecraft and satellites. The changes will become effective later this year, resulting in the migration of a large number of equipment, parts, components, software, and related technology and services now regulated under the Department of State’s International Traffic in Arms Regulations (ITAR) to the jurisdiction and licensing authority of the Department of Commerce’s Export Administration Regulations (EAR). The changes may in the long run reduce some export compliance obligations, but initially will create a burden on manufacturers and exporters to re-evaluate product classifications for individual space and satellite related items including hardware, software and technology.

Under the new rules, a number of spacecraft with civil applications, particularly certain commercial communications satellites, and their parts and components will transition to the licensing authority of the Department of Commerce. Most of the changes take effect on November 10, 2014, with certain products migrating to the EAR on June 27, 2014.

Although the changes theoretically result in the reduction of U.S. government export controls on most commercial satellites and other spacecraft, significant restrictions remain. For example, most items migrating to the EAR will still require export licenses, and some commercial spacecraft that exceed specific performance parameters will remain subject to the licensing requirements of the ITAR. In addition, all exports to China of migrating space-related items and technical data will be subject to a policy of denial, while all items that remain under the licensing jurisdiction of the ITAR will continue to be subject to the U.S. arms embargo against China.

As the revised controls come into effect over the next six months, companies engaged in the manufacturing and/or exporting of spacecraft and related items should conduct a thorough assessment of their product classifications, as well as existing export authorizations, procedures, and compliance programs. At a minimum, we recommend that manufacturers and exporters of space and satellite related goods, software, technology and services follow these compliance steps:

  • Conduct a self-classification of all space and satellite-related goods, software, technology and services to determine the appropriate control regime under the new regulations, whether ITAR or EAR;

  • Depending upon results of the company’s product self-classification, determine whether ITAR registrations should be maintained;

  • Review existing ITAR export authorizations (licenses, agreements, exemptions) to determine (1) whether existing authorizations will remain valid; (2) whether new

  • EAR export authorizations must be obtained; or (3) whether the underlying items no longer require specific U.S. government export authorization; and

  • Refresh export controls training to educate employees with export compliance functions about these significant changes.

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About this Author

Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney
Shareholder

Kara Bombach assists companies to lawfully export goods, technology and services around the globe. She places significant emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Sudan), entities and individuals....

202-533-2334
Cyril Brennan, Greenberg Traurig Law Firm, Washington DC, International Trade Law Attorney
Shareholder

Cyril (Cy) Brennan focuses his practice on international trade regulation and compliance, with an emphasis on U.S. export controls and economic sanctions. Cy handles matters regarding the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), U.S. sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s anti-boycott regulations. In addition, he represents clients before the Committee on Foreign Investment in the United States (CFIUS), and advises clients on the Foreign Corrupt Practices Act (FCPA), the foreign direct investment reporting requirements of the Bureau of Economic Analysis (BEA), and other trade and investment-related regulations in the context of mergers and acquisitions.

Concentrations

  • Export controls and economic sanctions

  • Committee on Foreign Investment in the United States (CFIUS)

  • Anticorruption compliance

  • Foreign direct investment reporting

  • Regulatory due diligence

  • Foreign ownership, control or influence (FOCI)

202-533-2342