First Significant Changes in Over a Decade to US Export Controls on Space-Related Items and Activities

Executive Summary

• For the first time since 2014, the U.S. government released rules that would significantly update U.S. export controls related to space launch vehicles, spacecraft and other space-related hardware, technology, software and services.
• The rules were published on October 23, 2024, in four related parts: an ITAR proposed rule and an EAR proposed rule that add, reduce and reorganize classification controls and add new exemptions and exceptions, as well as an interim final rule and a final rule that facilitate space-related collaboration with U.S. allies.
• DDTC and BIS are accepting comments on the two proposed rules and the interim final rule until November 22, 2024. DDTC identified 17 distinct topics on which it is seeking public feedback, ranging from input on specific technical questions (e.g., thermal protection systems); to seeking input on what technologies are used, or will be used in the next five years, in civil applications; to ensuring clarity around the various new USML entries and the large number of newly defined terms in the new rules.
• DDTC and BIS will appear at a public meeting to discuss the new rules on November 6, 2024. Interested parties can register here to participate and submit questions for public briefing to space.commerce@noaa.gov.
• Companies in the space industry should carefully review the updates against their current and planned products and activities (including supply chain and sourcing plans; international development, design, and production collaborations; non-U.S. engineering talent acquisition and employment; access of non-U.S. investors and owners to key technology; international customers; and cross-border operational activities, including all phases of launch, space operations, and re-entry) to ensure it is clear how they will be regulated under the new rules, and consider participating in the rulemaking process to the extent that there are areas of concern.

Background

U.S. export controls on space-related items were last significantly revised in 2014. Since then, the industry has continued to evolve towards a wider range of public-private partnerships and purely commercial activities, including greater private launch volume, space tourism and various types of private commercial spacecraft, new manufacturing technologies, commercial spacecraft re-entry, on-orbit logistics and service activities, and deep space exploration. Existing export controls do not address now-common questions and issues related to the emerging technologies and activities, presenting fundamental challenges for the U.S. government, industry, and allies associated with ensuring U.S. leadership in space.

Recognizing these challenges, the National Space Council, the U.S. government body responsible for coordinating interagency space policy and regulation, called for a review of export controls affecting commercial space activities in 2018. Specifically, Space Policy Directive-2 directed the Bureau of Industry and Security (BIS) and Directorate of Defense Trade Controls (DDTC) to develop recommendations to revise the controls to, among other things, protect national security, public safety; and foreign policy interests, and encourage American leadership in space commerce. On March 8, 2019, the departments of Commerce and State published advanced notices of proposed rulemaking (ANPRM) seeking input on potential revisions to satellites and spacecraft controls under the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR). On December 20, 2023, the National Space Council reiterated its direction to the U.S. government to “conduct a review of space export controls to enable a globally competitive U.S. industrial base while protecting our national security and foreign policy interests.”

According to the departments of State and Commerce, the new rules are a direct response to the objectives identified by the National Space Council involving space-related export controls. In summary, the new rules covered the following key points:

ITAR Proposed Rule

The proposed rule released by DDTC (the ITAR Proposed Rule) updates the ITAR in several significant ways. First, it updates USML Categories IV and XV and makes conforming changes in other USML categories. The changes largely are structural and organizational, but they also include limited substantive changes adding, altering, or eliminating controls on certain items. Second, it updates and adds a significant number of space-related definitions in the ITAR. Third, it adds new space-related license exemptions.

A. USML Updates

USML Category IV

The following are examples of items added or changed in USML Category IV.

Added

• A new paragraph (a)(13) is added to specifically enumerate and control loitering munitions.
• A new paragraph (a)(16) is added to specifically enumerate and control hypersonic glide vehicles and specially designed parts and components therefor.
• Paragraphs (b)(1) and (2) were expanded to from “fixed launch sites and mobile launcher mechanisms” to “launch systems and equipment” and to include a specially designed parts and components catch-all, while updates to the related paragraph (c) will be set forth in a separate rulemaking.
• A new paragraph (e) is added in Category IV, containing a variety of existing controls from (h), for the purpose of streamlining and modernizing the USML.
• A new paragraph (f) is added in Category IV to control test equipment for certain rockets, missiles, space launch vehicles (SLVs) and missile seekers—specifically, test equipment specially designed for articles described in paragraph (a)(1) or (2) or (e)(7) of USML Category IV. DDTC notes in the preamble that testing software and “protocols” directly related to rockets, missiles, SLVs or missile seekers are described in USML Category IV(i). The word “protocols” is not currently defined in the ITAR and is not part of the proposed definitions in the rule.
• The paragraph (h)(18) catch-all control (parts and components specially designed for non-nuclear warheads) is expanded to control non-electronic radiation hardened parts and components specially designed for certain systems, as well as parts and components specially designed for underwater launch.
• Paragraph (h)(22) (radomes, sensor windows and antenna windows) is updated and expanded to include embedded antennae.
• Paragraph (h)(29) (umbilical and interstage electrical connectors) is updated and expanded to include electrical connectors specially designed for hostile nuclear radiation environments.
• Paragraph (h)(31) is added to Category IV to control turbo pumps specially designed for Category IV(d) propulsion systems.

Changed

• The rule changes the title of USML Category IV from “Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines” to “Launch Vehicles, Rocket Systems, and Other Weapons (e.g., Bombs, Torpedoes, and Mines).”
• The rule replaces the term “power plants” with “propulsion systems” in paragraph (d) and removes propulsion systems described in Cat. XV or XIX.
• The rule deletes note 2 to paragraph (d) that clarifies that this paragraph does not control thrusters for spacecraft, instead incorporating a statement in the chapeau to paragraph (d) that it covers “propulsion systems not otherwise described in USML Category XV or XIX.”
  • Controls on heat shields for re-entry vehicles or warheads are moved from (h)(8) to (e)(3) and expanding the items controlled from heat shields to “thermal protection systems.” A Missile Technology (MT) designation is added along with a catch-all control for specially designed parts and components therefor. (Other changes related to Category XV(e)(19) spacecraft heat shields are described below.)
• The existing provision applies to all re-entry vehicle or warhead heat shields, while the new control applies to heat shields usable for articles described within paragraphs (a)(14) through (17) of USML Category IV (kinetic kill vehicles, post-boost vehicles, hypersonic glide vehicles, and “unmanned atmospheric re-entry vehicles not otherwise described in USML Category IV”).
• The rule moves the control for re-entry vehicles from paragraph (h)(17) to new paragraph (a)(17), includes a statement in (a)(17) that the entry only applies to “unmanned atmospheric re-entry vehicles not otherwise described in USML Category IV or XV,” and deletes the note to paragraph (h)(17) that states that the paragraph does not control spacecraft.
• The rule adds an MT designation to paragraphs (d)(5) and (6), air-breathing engines operating above Mach 4 and pressure gain combustion/detonation propulsion systems, “based on an assessment that the described articles are also described in the Missile Technology Control Regime Equipment, Software, and Technology Annex.”
• Paragraph (h)(16) is modified to control “igniters” generally that are designed for Category IV-controlled items, eliminating the control from igniters for amateur rocket motors.
• Paragraph (h)(25) (fuzes) is modified to control only those fuses not already described in (e)(6) (parts and components specially designed for safing, arming, fuzing and firing (SAFF) systems).

USML Category XV

The following are examples of items added, changed, or removed in USML Category XV.

Added

• Paragraph (a)(14) is added to control spacecraft capable of non-cooperative grappling or docking, moving and reducing controls previously contained in paragraph (a)(12).
• Paragraph (a)(15) is added to control spacecraft capable of in-orbit construction of other defense articles.
• Paragraph (a)(16) is added to control spacecraft capable of deploying multiple other spacecraft into different orbits.
• Paragraph (e)(16) is modified to include all star trackers rather than just those that are “space qualified.”
• Paragraph (e)(18) is expanded to include all payloads funded by the Department of Defense and specially designed parts and components therefor.
• A new paragraph (e)(22) is added to control technology that that “facilitate[s] the signature reduction of in-orbit spacecraft observations” while excluding technology used to minimize ground-based light pollution.

Changed

• Paragraph (a)(12) is modified to alter more general controls on “inspection or surveillance” spacecraft to a more specific control on “spacecraft designed either to image other spacecraft with an angular resolution better than (less than or equal to) 4 mrad or to monitor, follow, and collect signals from other spacecraft.”
• The rule updates or institutes thresholds for certain controls based on performance parameters, narrowing the scope of controls on (a)(7)(i) radar remote sensing capabilities, (e)(13) remote sensing capabilities, (e)(1) antennae, (e)(2) optics and (e)(13) gyroscopes.
• The scope of controls on (e)(11)(iv) electric (ion) propulsion systems is similarly narrowed via performance thresholds, and the relevant provision is moved to (d) along with the other spacecraft propulsion system paragraphs.
• Paragraphs (e)(3) (focal plane arrays), (e)(4) (cooling systems), (e)(5) (vibration suppression systems) and (e)(15) (oscillators for radar) are modified to replace the “space-qualified” condition with a “specially designed” criterion.
• Paragraph (e)(19) covering “[s]pacecraft heat shields or heat sinks specially designed for atmospheric entry or re-entry, and specially designed parts and components therefor” was moved to new paragraph (c)(4) and expanded to cover “thermal protection systems not otherwise described in [new] paragraph (e)(3).” The entire entry is now MT controlled.

Removed

• Paragraph (a)(2) is modified to eliminate controls on satellites/spacecraft that can autonomously track ground vehicles and aircraft.
• Paragraph (a)(10) is deleted, eliminating the control on spacecraft that can autonomously perform collision avoidance.
• Paragraph (a)(12) is modified to remove controls on spacecraft capable of servicing other spacecraft or docking with other spacecraft while in orbit.

Other USML Categories

The ITAR Proposed Rule also made space-related changes in other USML categories. For example, Category XI is also updated to control electronic parts and components capable of operating at temperatures over 125°C and specially designed for spacecraft described in Category XV and Category XIII is modified to control materials “specially designed for underwater launch of missiles or hostile nuclear radiation environments.”

B. Definitions

The ITAR Proposed Rule adds definitions for a variety of space-related terms, including “spacecraft,” “excluded NASA spacecraft,” “spacecraft housekeeping data and output” and “amateur rocket,” among others.

For example, the ITAR has defined for the first time the word “spacecraft.” In the rule, “spacecraft” is defined as vehicles, satellites, and other craft designed to operate at least 100 kilometer (km) over the Earth’s mean sea level. However, the definition specifically excludes objects solely intended to operate either within a spacecraft, in a spacecraft’s immediate proximity for a short time or on a celestial body; it also excludes articles launched suborbitally or atmospherically from celestial bodies other than Earth and any objects described in USML Category IV. The current language of ITAR, in contrast, does not define “spacecraft” at all.

The rule defines “excluded NASA spacecraft” as either the International Space Station, specially designed parts and components for the International Space Station, or the James Webb Space Telescope. Such items are categorically excluded from Category XV(a) controls.

“Spacecraft housekeeping data and output” is defined as information about the status or specifications of a spacecraft or a spacecraft payload (or the components of either). DDTC offers examples such as the science output of a payload, in the form of images or field measurements; spacecraft position information; and operation status information pertaining to a spacecraft’s power, currents and voltages.

“Amateur rockets,” which are excluded from ITAR controls under the new rule, are defined to, among other things, include only those rockets that “ha[ve] a capacity of no more than five (5) pound of propellant,” a criterion that the current exclusion for certain model and high power rockets did not explicitly include.  While the current exclusion requires that rockets, to be de-controlled, “must be designed to be flown with hobby rocket motors that are certified for consumer use,” it did not define “hobby rocket motor” or include a limit on the weight of propellant a rocket cannot exceed to be de-controlled (though rocket motors containing more than 5 pounds of propellant are controlled and would remain controlled under the new rule).

C. Civil Space-Related License Exemptions

Official Space Agency Activities

The rule creates an official space agency exemption for the transfer of defense articles and the furnishing of defense services “entirely within the scope of an official space agency program.” The exemption applies only to NASA’s Lunar Gateway; the National Aeronautics and Space Administration’s (NASA) Mars Sample Return; the Nancy Grace Roman Telescope; and the Orion spacecraft. It does not apply to any space launch vehicles; for the purposes of producing defense articles offshore or arranging procurement offshore; to classified defense articles or services; to commercial communications satellites launched from Russia, Ukraine or Kazakhstan; or to activities involving significant military equipment manufactured abroad. Further, it does not apply to activities of such a high value that congressional certification is required.

Certain “Space Activities”

This is an exemption that covers several miscellaneous activities. For example, the exemption applies to transfers of certain electric connectors used in spacecraft, so long as the end-use is to connect a launch vehicle to a spacecraft which itself is subject to the EAR, as well as to various services relating to the transmission of launch vehicle telemetry. The exemption also covers activities undertaken in collaboration with foreign persons to operate or use on-orbit defense articles, so long as the activity is either in support of fundamental research, or is in order to geolocate certain radiofrequency transmissions, “including geolocating certain automated information broadcasts, emergency transmissions, and cellular transmissions.”

Space Tourism and Research

The rule also creates a space tourism and research exemption for the export, reexport, and temporary import of manned spacecraft so long as the craft are limited to suborbital trajectories and the activity’s purpose is either space tourism or support of fundamental research. Registration, ownership, and control of the craft must remain with a U.S. person, and the spacecraft’s flight path must be approved by the Federal Aviation Administration (FAA) or a foreign counterpart. The spacecraft may not go to destinations prohibited in § 126.1(d). DDTC notes that the research exemption does not apply to the “engineering development phase of research and development,” only basic and applied research.'

Defense Articles Incorporated into EAR Spacecraft

Lastly, the rule draws from the Note to XV(e) and the Note to XV(e)(17) to create a special licensing provision for defense articles incorporated into spacecraft subject to the EAR. This provision authorizes the transfer of certain defense articles controlled by Category XV—anything listed in subsections (c), (d) or (e)—via a license from BIS, rather than DDTC, so long as the article is incorporated into a spacecraft subject to the EAR. This exemption requires that the article be an “integral part of” the EAR-regulated spacecraft, and the article must remain incorporated into the craft to remain eligible for the exemption.

EAR Proposed Rule

The proposed rule from BIS (the “EAR Proposed Rule”) amends the EAR to conform to the changes that would be made by DDTC’s proposed rule, above, and creates two new EAR license exceptions for particular commercial space activities corresponding to those exempted in the ITAR Proposed Rule.

A. CCL Updates

• The Export Control Classification Number (ECCN) covering spacecraft, 9A515.a, is expanded to include spacecraft that perform a variety of services for other spacecraft, including services performed in orbit. This covers spacecraft specially designed to “service another spacecraft,” released from USML Category XV(a)(12) by the ITAR Proposed Rule.
• The ECCN covering remote sensing components specially designed for spacecraft, 9A515.g, is expanded to control certain space-qualified optics falling below the newly imposed USML threshold.
• Three new ECCN classifications are created within 9A515 to control items previously classed as defense articles which, due to their performance metrics, would now fall below DDTC’s proposed thresholds for USML regulation: ion propulsion systems, gyroscopes, and satellite release mechanisms. Three corresponding new ECCN classifications in 9E515 are also created to control technology required for the development, production or operation of each of these, respectively.
• A new “materials” ECCN is added within 9C515 to control materials, coatings and treatments used to reduce in-orbit signatures when those materials do not fall under ITAR regulations. Like the similar new control in the ITAR Proposed Rule, this control would not apply to materials used to reduce spacecraft brightness to observers on the ground. These items would be controlled for national security column 1 (NS1), regional stability column 1 (RS1) and anti-terrorism column 1 (AT1), with restrictions on certain license exceptions.
• ECCN 9D515 is modified to control software used to model or simulate spacecraft maneuvers, trajectory planning, and debris tracking when incorporated into either a spacecraft or a ground system.
• A variety of other CCL changes are proposed by the Interim Final Rule such as the creation of new 9A004.y and 9A515.y entries, as described further below.

B. License Exception for Commercial Space Activities (CSA)

The EAR Proposed Rule includes a license exception known as CSA that contains two subsections corresponding to two of the four exemptions in the ITAR rule: (1) official space agency programs and (2) space tourism and research. Under the “official space agency program” portion of the exception, no item subject to the EAR will require an export license so long as the transfer is “entirely within the scope of an official space agency program.” Official space agency programs include both those covered in the similar ITAR exemption (Lunar Gateway, Mars Sample Return, Nancy Grace Roman Telescope and the Orion spacecraft), and the Commercial Low Earth Orbit Development program and the Habitable Worlds Observatory.

Similarly, an export license is not necessary under license exception CSA for transfers of manned spacecraft and related parts and components for the purposes of space tourism and research. To qualify for this provision, the same conditions must be met as under the ITAR Proposed Rule: the spacecraft must be limited to suborbital trajectories, the purpose of the activity must be space tourism or support of fundamental research, control of the spacecraft may not be transferred to a foreign person and the spacecraft’s destinations must be approved by the FAA or a foreign counterpart.

The same restrictions apply to both provisions. The license exception is not available for any export, reexport, or transfer (in-country) if any entity on the Entity List is a party to the transaction; if a license is required under the EAR’s end use or end-user regulations; if the destination is a country listed in Country Groups D:1, D:4 or D:5; or if the purpose of the transaction is to establish offshore procurement arrangements or offshore production of certain items. Additionally, the exception will not be available for any transfer of certain “radiation-tolerant hardware.”

New EAR Rules on Working with Allies

A. Australia, Canada, and the U.K.

On April 19, 2024, BIS published an interim final rule that removed certain space-related export license requirements for Australia and the U.K., more closely aligning those requirements with existing requirements involving Canada. The new final rule builds upon that interim final rule by further relaxing requirements involving the licensing of spacecraft to Australia, Canada and the U.K., including totally eliminating controls on particular space-related items. BIS notes that it has not denied a license application for any item affected by this rule in over five years and that these are countries with which the U.S. collaborates closely on both defense industrial base issues and space projects.

The previous iteration of export controls for particular space-related items—including spacecraft classified in 9A515.a.1–a.4, as well as items controlled in 9A515.g and 9E515.f—imposed a special worldwide licensing requirement, instead of using the usual Country Chart and the control reasons that govern the rest of 9A515 and 9E515. The EAR Final Rule exempts Canada, Australia and the U.K. from the worldwide licensing requirement. It thus eliminates any license requirement for exporting remote sensing spacecraft or spacecraft designed for space-based logistics, assembly or servicing other spacecraft (or technology required for the development, production or installation of those spacecraft), so long as the craft are destined for one of those three countries.

B. Other Allies

The EAR Interim Final Rule significantly reduces restrictions related to supply chain activities involving offshore procurement of spacecraft parts and components from a wide range of allies. First, the rule creates a 9D515.x software control and a 9E515.x technology control as counterparts to 9A515.x, clarifying that software specially designed for, and technology required for, the development, production and operation of such items is subject to controls.

Second, the reason for the control on parts and components specially designed for spacecraft and related software and technology classified under ECCNs 9X515.x is downgraded from NS1 and RS1 to NS2 and RS2. Similar changes were made to ECCN 9A004 to align it with these new changes in 9X515, although the changes did not extend to technology and software related to 9A004 items. Under the Commerce Country Chart in Part 738, a license is not required for exports of NS2 and RS2 items for a much wider range of countries than items covered by NS1 and RS1 controls. Of course, exporters must always examine all of the facts of a transaction to confirm licensing requirements (e.g., a license for 9A515.e items destined for India pursuant to Footnote 7 in the Commerce Country Chart). A new 9A515.w is created and reserved, with NS1 and RS1 license requirements, to classify parts and components previously designated 9A515.x that warrant a more restrictive license requirement.

Third, the rule also moves a significant number of items previously controlled under ECCN 9A515.x to 9A515.y, pursuant to an interagency-cleared commodity classification. 9A515.y is only controlled under AT and a regional security control that requires licenses for exports to China, Russia and Venezuela. For instance, spacecraft passenger exercise systems, which would otherwise have fallen into 9A515.x as a part or component specially designed for spacecraft controlled under ECCN 9A515, are classified as 9A515.y.14. Fire suppression systems that would have been designated 9A515.x because they are a component specially designed for a 9A515 or a USML Cat. XV spacecraft, are now classified at 9A515.y.32. A number of other objects, systems and facilities intended for use with manned spacecraft are similarly reclassified, such as spacecraft passenger hygiene systems and safety systems. Similar carveouts were created under the extensive list of new entries in ECCN 9A004.y.

Fourth, the rule revises portions of ECCN 9A604, which deals with EAR-controlled commodities related to ITAR-controlled rockets and missiles. Thermal batteries for items controlled under USML Category IV, classified at 9A604.a and .b, are removed from the CCL because they are themselves subject to the ITAR. 9A604.x is revised to clarify that any items falling into 9A604.y are excluded from the .x category, while 9A604.y.1 is added to identify and control parts and components specially designed for commodities controlled under either 9A604 or USML Category IV. An RS control, requiring licenses for exports to China, Russia and Venezuela, is applied to 9A604.y.

C. Other Miscellaneous EAR Changes

The EAR Interim Final Rule makes other changes to the types of control applying to space-related products. For instance, it reduces the control on a variety of space-related items in ECCN 9A004 from NS1 to NS2; ensures that all of 9A004 requires a license for exports to Russia, China and Venezuela; and clarifies the scope of controls on in-space habitats and parts and components thereof. It also clarifies that all items operating on other celestial bodies, such as rovers, are treated for classification purposes as though they were on Earth, aligning with DDTC’s policy.

The EAR Interim Final Rule also makes clear that Space Act Agreements to which NASA is a party meet the requirements for the License Exception GOV, and creates a new section of the License Exception GOV for 9A004 items to be shipped to Russia for launch to the International Space Station on short notice. It clarifies that shipments of spacecraft and other controlled parts to launch facilities or platforms in international waters are considered an export or reexport to whatever country owns or controls the facility or platform, although it does not clarify the status of a shipment of controlled items to a U.S.-owned platform in international waters.

Finally, the rule expands an existing exclusion from license requirements for “standards-related activit[ies]” to include spacecraft-related software (at 9D515.a, .b, .y) and technology (at 9E515.a, .b, .f). This eliminates license requirements for space-related software and “technology” only when the purpose of the release is the setting of international space-related standards—a project in which the U.S. must participate or else “cede the development of international standards” to potentially hostile foreign actors. To qualify for the exclusion, the relevant technology must relate to spacecraft that provide services to other spacecraft.

Requests for Comments and an Agency Call for Industry Engagement

In the proposed rules, DDTC and BIS responded to comments made in response to the 2019 ANPRMs related to spacecraft and satellites. In connection with the proposed and interim final rule, BIS and DDTC have requested public comments by November 22, 2024. In the ITAR Proposed Rule, DDTC identified 17 specific questions on which it is seeking comments, along with various requests for input from the public throughout the proposed rule, including for suggestions of technologies with both military and civil space applications that should be decontrolled or exempted; criteria to differentiate civil and military variations of similar technologies; clarification and criteria for USML entries; and advantages and disadvantages to controlling or exempting certain technologies. For the EAR Proposed Rule and Interim Final Rule, BIS generally requests recommendations on the specific changes made in the rules and on further amending the EAR to “better enable a globally competitive U.S. space industrial base while continuing to protect U.S. national security and foreign policy interests.”

This is an important opportunity for the private space sector in the United States to engage in shaping U.S. export control rules for the coming decade in a manner that is consistent with the articulated policy goals of the U.S. government. The rules include significant new technical parameters, important changes to legal definitions and the restructuring of existing law. Companies should carefully examine these rules to determine whether they accurately capture and describe space-related items and establish the foundation for U.S. competitiveness and national security in area—space technology and exploration—that is rapidly expanding and changing.

In that regard, and to the point of DDTC and BIS’s strong desire for a high level of engagement and feedback, the public should also look out for unintended consequences of certain proposed changes. For example, in the ITAR Proposed Rule, DDTC deleted the note to the re-entry vehicles USML paragraph that stated that spacecraft are not re-entry vehicles, instead adding a statement in the new re-entry vehicle paragraph that it only covers re-entry vehicles “not otherwise described in USML Categories IV or XV.” However, unlike the current note, the new provision does not explicitly reference spacecraft covered by the EAR. Based on the preamble to the Proposed Rule, it seems like this omission was not intended to suggest that EAR spacecraft (unlike ITAR spacecraft) can be re-entry vehicles, but DDTC could make that point clearer in the final rule with simple edits to new paragraph IV(a)(17) to include a reference to the EAR as in the existing note. This will be critical to reassure the public as it moves forward with developing various spacecraft that can reenter the Earth’s atmosphere in the coming years as part of the growing space economy.

In addition, the agencies’ positions in the comments should be carefully reviewed because they provide interpretations of existing language that may be novel. For example, DDTC stated that the USML entry for separation systems “currently describes all separation systems, including those used to separate satellites from space launch vehicles.” However, the current USML entry for separation systems does not explicitly include systems used to separate satellites from space launch vehicles, and that position is a departure from the language of the Missile Technology Control Regime, which focuses on separation systems for and between rocket stages. This interpretation is one of several examples of unilateral controls that impose additional restrictions on U.S. industry as compared to allied manufacturers of such systems.

Similarly, affected parties could help reconcile any inconsistencies among the new rules. For example, the ITAR exemption for official space agency programs would allow the exemption to apply to exports, reexports, retransfers, and temporary imports, subject to certain restrictions in the exemption, to all countries except those in 126.1. The companion BIS exception prohibits the use of the exception to a longer list of countries: D:1 (NS), D:4 (MT), and D:5 (embargo). This would allow a U.S. exporter to use the exemption to provide ITAR items to a D:1 or D:4 country (e.g., the United Arab Emirates or Saudi Arabia) that is not subject to an arms embargo, but not EAR items to the same country, in connection with one of the four programs (e.g., the Lunar Gateway).

There are numerous examples like these where the intent expressed by the agencies in the preambles may not be fully realized in the drafts and could result in confusion if not addressed in the final rule.

Conclusion

The two proposed rules, as well as the Interim Final Rule and Final Rule, aim to streamline licensing requirements and provide clarity on issues under the ITAR and EAR relating to commercial and technological developments in the aerospace sector. These changes reflect a recognition by the agencies of the wide-ranging and sometimes novel regulatory compliance obligations faced by the private space industry. The rules demonstrate a commitment by State and Commerce to facilitate U.S. innovation in the space industry while balancing national security and foreign policy objectives. Support from the National Space Council also indicates heightened interagency alignment on these issues.