This issue dates back to the 1990s, involves China, and the Clinton Administration. Satellites are high-tech toys that are critical to U.S. national security as well as for commercial reasons, we can should sell a lot of them to countries and companies that need them. That said, because they are so cutting edge, the U.S. government needs to monitor and control who buys them. The two federal agencies responsible for monitoring this matter are the Commerce Department and the State Department.
During the Clinton Administration, an interagency review resulted in transferring the control of commercial satellite technologies in March 1996 from the State Department to the Commerce Department. Three years, and several scandals later, (a lot of it involving the transfer of sensitive U.S. technologies to the Peoples Republic of China), the Clinton Administration was forced to reserve course when the Congress required the transfer of commercial satellite technology control back to the State Department.
[Note: I’ve skipped over a lot of history. If you are new to the issue and want to learn more about it, start by reading the Report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China or the “Cox Report“]. You can also Google the following terms: Hughes Loral China satellites.
What’s the issue then? State, Commerce, its all the same right? Not really. Each agency operates pursuant to unique statutes and regulations tailored to its mission. State is supposed to control things that have some form of military application, while the Commerce focuses on items that can both civilian and military application. According to some experts (usually non-lawyers), if your item, service, or technology is falls under the State Department, the controls are tougher. Take it from a practitioner, both sets of regulations are tough and the penalties serious; however, satellite controls are a special beast that require a closer review by policymakers no matter which agency ultimately oversees the control.
In a press release earlier this week, the Satellite Industry Association (SIA) touts the Berman-Manzullo stating the measure will “dramatically improve” the competitiveness of U.S. satellite industries. Given the history of this issue, this statement is not likely to win over national security hawks in the House and Senate, or even some in parts of the Obama Administration. Granted, changes are needed because the U.S. satellite industry is hurting (in fact overseas industries have sprung up claiming ITAR-free satellites and the European Space Agency has a whole division dedicated to this market of avoiding U.S. export controls); however, at its core, I do not think the proposed bill does the U.S. policy debate justice. If it is part of a larger effort at comprehensive reform, then maybe its worth exploring.
Transferring controls of some or all of this technology should not be done hastily. The Obama Administration has been working on reforming the export control system and we hear they are looking at the satellite controls, among many other things. For the Berman-Manzullo approach to work (and it needs some tweaking), the Congress and the Obama Administration should, at a minimum, begin by seriously looking at re-authorizing the Export Administration Act of 1979 in some form (for example, H.R. 2122, a bill do just that was introduced by the Chairman of the Foreign Affairs Committee, Rep. Ileana Ros-Lehtinen (R-Fla.) and could form the basis for further discussion).
You can read Safeguarding United States Satellite Leadership and Security Act of 2011 (HR 3288) here.
