On October 17, 2024, the Commerce Department’s Bureau of Industry and Security (BIS) released three rules—one Final Rule, one Interim Final Rule, and one Proposed Rule—to reduce controls on a variety of less sensitive space-related items, thereby ensuring the U.S. space industrial base remains globally competitive while also bolstering the U.S. international space partnerships. Concurrently, the State Department’s Directorate of Defense Trade Controls (DDTC) issued a Proposed Rule to complement the BIS Proposed Rule. All four rules stem from the December 2023 meeting of the National Space Council within the Executive Office of the President, which crafts space policy and strategy to advance U.S. leadership in space while protecting U.S. national security and foreign policy interests.

The Final Rule

Effective October 23, 2024, the Final Rule published by BIS amends export control policy to maintain “regional stability” by exempting Canada, Australia, and the United Kingdom from the worldwide license requirement to export or reexport spacecraft and related items classified under sections of Export Control Classification Number (ECCN) 9A515 and ECCN 9E515—items that involve remote sensing or space-based logistics, assembly, or servicing. As the Final Rule explains, this carve-out is intended to facilitate greater space-related collaboration with Canada and AUKUS, the trilateral security partnership between Australia, the United Kingdom, and the United States.

The Final Rule is the latest change to U.S. export control policy easing trade barriers previously faced by Australia and the United Kingdom. BIS implemented an interim final rule in April 2024 easing licensing requirements for exporting, reexporting, or transferring (in-country) defense-related dual-use items to or within AUKUS so the security pact’s member countries would enjoy the same licensing treatment enjoyed by Canada (see Update of April 18, 2024), and DDTC instituted a similar interim final rule in August 2024 so AUKUS would benefit from a license exemption covering defense articles akin to the licensing carve-out provided to Canada (see Update of September 16, 2024).

The Interim Final Rule

The Interim Final Rule (IFR) amends the Export Administration Regulations (EAR) in four major ways. First, it overhauls the layout of ECCN 9A515, which controls “spacecraft and related commodities.” For example, the IFR downgrades the “reasons for control” for certain items classified under that ECCN. In particular, items classified under ECCN 9A515.x will now be controlled for National Security Column 2 (NS2) and Regional Stability Column 2 (RS2) purposes, which are much less restrictive policy control categories than the prior NS1 and RS1 reasons. However, the IFR notes, certain items presently classified under ECCN 9A515.x that do not warrant such a downgrade will be reclassified under a new ECCN, 9A515.w, or moved altogether to ECCN 9A004.y. As noted by a subsequent press release, these various downgrades will remove “license requirements for exports of certain spacecraft components to over 40 allies and partners worldwide, reducing licensing requirements for the least sensitive components for most destinations, and broadening license exceptions to support additional National Aeronautics and Space Administration (NASA) cooperative programs.”

The IFR also adds portions of ECCNs 9D515 and 9E515 to the list of items the EAR identifies as exempt from its regulatory scope. Consequently, certain space-related software and technology will not be subject to the EAR when shared (“released”) in furtherance of a “standards-related activity.” As the IFR acknowledges, failing to allow U.S. participation in the development of international standards related to these software and technologies “would be detrimental and counterproductive to U.S. commercial spacecraft development and national security interests [because it] would cede the development of international standards to foreign actors that may not only disregard U.S. commercial and national security interest, but actively work to destabilize them.”

Third, the IFR expands the scope of License Exception GOV, which authorizes exports and reexports of certain items without prior authorization from BIS if sent for “international nuclear safeguards,” “U.S. government agencies or personnel,” “agencies of cooperating governments,” “international inspections under the Chemical Weapons Convention,” and “the International Space Station.” Specifically, the IFR adds that exporters can avail themselves of License Exception GOV when exporting or reexporting items pursuant to a “Space Act Agreement” to which NASA is a party.

The final major change implemented by the IFR addresses the export implications related to a new phenomenon for the aerospace community: launching items from floating platforms or facilities in international waters, which the IFR surmises “will likely increase in the future.” Accordingly, the IFR amends the EAR’s control policy on end-user and end-use “[r]estrictions on certain exports to and for the use of certain foreign vessels or aircraft” with a new descriptive note. This note seeks to clarify that a shipment or transmission of items to a launch platform or facility in international waters does constitute an “export” or “reexport,” and specifically to the country or countries (of the person) that own, control, or operate the platform or facility.

Although the IFR goes into effect October 23, 2024, BIS seeks public comments to further clarify and refine space-related revisions to the EAR. Comments must be received no later than November 22, 2024, and should be filed using the federal rulemaking portal (www.regulations.gov) under Docket BIS-2024-0031, and refer to RIN -694-AJ87 in all comments.

BIS Proposed Rule

The Proposed Rule promulgated by BIS updates various phrases espoused in certain ECCNs to clarify their scope, especially to conform to the changes of the DDTC Proposed Rule, which demotes certain space-related items from U.S. Munitions List to the Commerce Control List. 

In addition, the BIS Proposed Rule introduces a new license exception: the Commercial Space Activities License Exception (License Exception CSA). This new license exception would authorize exports, reexports, and transfers (in-country) that are entirely within the scope of an “official space agency program,” meaning—at least for the present moment—NASA’s Lunar Gateway program, NASA’s Mars Sample Return program, the Nancy Grace Roman Telescope program, the Orion spacecraft program, the Commercial Low Earth Orbit Development program, and the Habitable Worlds Observatory program. Standard export control restrictions—e.g., the items cannot be sent to a proscribed end-destination or end-user, or for a proscribed end-use— continue to apply.

Comments on the BIS Proposed Rule must be received no later than November 22, 2024. Comments may be submitted electronically via the Federal government eRulemaking portal at https://www.regulations.gov. Electronic submission of comments should be posted on Docket ID: BIS-2018-0029, and refer to RIN 0694-AH66 in all comments.

DDTC Proposed Rule

The Proposed Rule released by DDTC in concert with BIS suggests two major updates to the International Traffic in Arms Regulations, which governs the export, reexport, and transfer (in-country) of military items.

First, the DDTC Proposed Rule advocates updating U.S. Munitions List (USML) Categories IV (Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines) and XV (Spacecraft and Related Articles). While some of these revisions add to both categories, this Proposed Rule primarily removes certain space-related defense articles “that no longer warrant designation on the USML”; according to DDTC, these items—for example, spacecraft capable of docking with or refueling other spacecraft, providing life sustaining operations as space stations or space hotels, or catching and removing space debris—are more appropriately governed by the EAR as dual-use items. In fact, to underscore the changes to USML Category IV, the DDTC Proposed Rule also recommends changing the category name to: “Launch Vehicles, Rocket Systems, and Other Weapons (e.g., Bombs, Torpedoes, and Mines).”

The DDTC Proposed Rule also recommends adding four new licensing exemptions “to promote U.S. industrial base participation in civil space activity commensurate with [U.S.] national security and foreign policy goals.” The first license exemption would authorize certain transfers of defense articles and defense services when conducted entirely within the scope of “an official U.S. government agency space program.” The second license exemption would authorize certain transfers of defense articles and defense services “supporting space launches,” such as certain transfers of electrical connectors and the transmission of space launch vehicle telemetry and radiofrequencies. The third license exemption would authorize certain transfers of “manned spacecraft for space tourism or in support of fundamental research,” so long as those spacecrafts are limited to suborbital trajectories and do not result in the transferring of the spacecraft’s ownership or control to a foreign person. And, finally, the fourth license exemption would authorize certain transfers of defense articles when they are incorporated into spacecraft that are subject to the EAR.

Comments on the DDTC Proposed Rule must be received no later than November 22, 2024. Comments may be submitted electronically via the Federal government eRulemaking portal (https://www.regulations.gov) under Docket No. DOS-2024-0035. Alternatively, comments can be sent to DDTC via email at DDTCPublicComments@state.gov that includes “RIN 1400-AE73” in the subject line of the email.