Wednesday, April 22, 2009

Breaking news on US export control

Let's face it, the subject of America's export control system is hardly the most gripping topic known to humankind. Nonetheless, behind a ten-year wall of byzantine government rules and regulation lies a story about how American jobs and ideas are being throttled in a wall of red tape. Now comes news of a successful legal challenge to the red tape within space export control. The first of its kind, and one that may be followed by others. The full story can be found on today, here.

Because the issue of export control is highly charged, those who speak publicly on this issue are liable to face political criticism. Opponents to the revision of export control legislation believe that the industry simply wants a wholesale shift of space technology back to the weaker controls of the Department of Commerce. However, many of those involved in export control take pains to emphasize that they are not opposed to export control, but are struggling with its implementation.

Sadly, the constraints of publishing in a tightly edited news magazine for busy people is that much of the detail is sliced away in order to assist in comprehension. This is particularly the case with a subject such as export control, which is long on technical detail. So, as I do from time to time, I'm going to be true to the title of this blog and publish some of the overmatter associated with this story for the small number of people who are really, really, really interested in this topic - nl

Marc Holzapfel, legal counsel for Virgin Galactic, via email:
"ITAR has had a broad impact on space companies. But since it is a big catch-all, and also covers non-military projects, it has held innovative companies (and arguably the US economy) back. Any improvement in ITAR that would allow the fledgling private space industry to grow is a helpful step forward.

Bigelow's Commodity Jurisdiction request is indeed such a step. It is basically the State Dept. saying that ITAR was meant to prevent the transfer of military technology -- and everyone agrees that that is an important and necessary goal. But now the State Department is also recognizing that certain companies, like Bigelow, (or Virgin Galactic), want to use space for tourism/commercial purposes, and these companies, or at least their passengers, should not get caught in the tentacles of ITAR. With this CJ, Bigelow will now be able to take non-US citizens, like people from the UK, France, (other than 126.1 countries like China, North Korea, Iran, etc.), into space without having to go through a complicated and time-consuming export approval process. Before, Bigelow would have had to get a separate export license for each non-US citizen it wished to fly.

This is a major development because if you apply Bigelow's CJ more broadly, it means that the ITAR rules are still in place for what they were meant to cover - the transfer of military technology, but it also means that the private space industry that was getting caught in the complex rules and regulations are able to operate for the first time without having to go through the complicated, expensive, and dilatory export approval process.

Everyone agrees that export control over military applications is necessary and the State Department has many able folks who work tirelessly on this issue, often understaffed and underappreciated. But some companies were stuck in the ITAR world just because they had a widget that was space related - and thus, under ITAR, that widget had to be treated as a weapon.

With Bigelow's CJ request, there is a positive glimmer that the private space industry may now not automatically be treated lump sum as military, and can provide its customers with a space experience unfettered by the most egregious aspects of ITAR.

Tim Hughes, chief counsel of SpaceX
"In quick response to your questions: At this point, it's really not clear whether this represents a significant shift in policy that foretells a shift on other parts of ITAR. However, the Bigelow CJ request approval is exciting because it appears to represent a common-sense approach to ITAR whereby hardware and design details remain ITAR-protected, but general engagement by would-be international participants will not be subject to burdensome ITAR-related filings, agreements, and monitoring plans. With respect to planned entrepreneurial space activities and manned missions, ITAR burdens are a bit of an unknown and potentially problematic, so this is quite encouraging. The Bigelow CJ would appear to bode well for commodity jurisdiction requests that may be made by other companies, such as SpaceX, to engage with foreign astronauts with respect to cargo or crewed missions to the International Space Station or private spacecraft."

George Nield, associate administrator for commercial space transportation within the Federal Aviation Authority
"We have not yet seen the commodity jurisdiction ruling, nor was the FAA involved in the review, so I really can't be very specific about what it says or what it will mean for Bigelow Aerospace.

However, to the extent that the U.S. government may now be willing to revise some of its export control restrictions to enable U.S. firms to be more competitive in their efforts to sell aerospace products and services globally, that would be very good news indeed.

I'm sure Mike Gold has told you about the Entrepreneurial Export Control Conference, which is scheduled for April 29 in Washington, DC. I expect that many of the key issues surrounding ITAR will be discussed at that gathering. I know you are trying to file your story by Monday, but we will probably be in a much better position to talk about the impacts of the ruling after it has been released publicly.

Robert Dickman, executive director of the American Institute of Aeronautics and Astronautics
"The ruling has the potential to be a major breakthrough for the personal spaceflight industry. To be successful, the travelers will have to come from around the world. If an explicit approval were required before any non-US traveler were allowed to interact with the flight hardware or participate in any training involving flight space systems, it could make the business unworkable. Even if requests were approved on a case-by-case basis, the time required could easily be so long as to make the process unacceptable to customers.

It remains to be seen whether the decision by Directorate of Defense Trade Controls represents a philosophical shift that will apply more broadly, but we are optimistic that will be the case. Many organizations, including AIAA, have advocated ITAR reform. Without exception, all parties agree that export controls are essential. The issue is what systems should be covered. The recent decision on the Bigelow Aerospace request appears to convey a new willingness to move away the from the very restrictive approach that has been in place for almost a decade.

On April 29, AIAA is hosting a forum with three of the major companies potentially involved in private human spaceflight, Bigelow Aerospace, SpaceX and Virgin Galactic and several senior government officials on ITAR reform. The forum will be at the Capitol Hill Hyatt at 1300, in the Thornton Room. The implications of the recent decision and ways to build on this important first step will be major points for discussion."