U.S. recommends relaxing satellite export controls

The Defense and State Departments on Wednesday released a joint report recommending that Congress ease export controls on satellites that have become less militarily sensitive to allow American companies to better compete in the world market.

A substantial number of commercial satellite systems and components have become less critical to national security over the last 15 years, according to the White House, as they transition from military to predominantly civilian uses. The White House says relaxing U.S. export controls on such items to reflect their "decreased sensitivity" will allow the government to facilitate trade with allies and close partners while focusing its resources on controlling the most sensitive items.

Officials from the State, Defense and Commerce Departments have spent months painstakingly combing through the entire U.S. Munitions List to identify "critical" items that truly warrant the State Department's strict export controls. Their overarching goal: streamlining exports by moving the rest of the items onto a less restrictive list controlled by the Commerce Department. The payoff from the overall export-control overhaul could be huge for defense contractors, who currently need to go through State's unwieldy licensing process. Some perspective: The State Department processes about 14,000 licenses per year; after the transition, it expects to handle fewer than 7,000.

American manufacturers have long complained that the 1970s-era export-control process overly restricts items that have no real military value--or are so readily available from other countries that it strangles their ability to compete in the global economy. This week's recommendations are meant to boost the U.S. satellite industrial base. Current satellite export controls have disadvantaged the U.S. space industry and its supplier chain, the White House said. In 1995, the U.S. held 73 percent of the worldwide shares of satellite exports; by 2005, only 25 percent. Companies that may benefit from implementing the recommendations of the report, Bloomberg reports, include Northrop Grumman Corp., Honeywell International Inc., Communications Holdings Inc., and others.

House Foreign Affairs ranking member Howard Berman, D-Calif., used the release of the report to highlight his legislation with Don Manzullo, R-Ill., authorizing the president to remove commercial satellites and related components from the U.S. Munitions List and transfer them to the less restricted Commerce Control List - while blocking satellite sales to countries like Iran, North Korea and China.