Commerce eases satellite exports to MTCR partners; South Korea a key focus

Commerce eases satellite exports to MTCR partners; South Korea a key focus
South Korea’s 3-stage KSLV II, or Nuri, rocket launcher

South Korea’s 3-stage KSLV II, or Nuri, rocket launcher. (Korea Aerospace Research Institute)

SATELLITE 2023 — A new, “subtle” loosening in US policy regarding export licensing for satellites and satellite components will have “major business implications” for American satellite firms looking to hawk their wares to friendly foreign nations, according to a top Commerce Department official.

The change, in which the US is more likely to allow the licensing of sat-related tech to dozens of countries that are members of the Missile Technology Control Regime (MTCR), “will open the door to potentially hundreds of millions of dollars in new exports of US satellite and satellite components,” Commerce Department Deputy Undersecretary Don Graves said Wednesday, during a speech first revealing the shift at the annual Satellite 2023 conference in Washington.

The clarification, he said, was made to recognize “the growing space cooperation environment.”

Under the MTCR, established in 1987 to constrain the spread of nuclear capable missiles, members pledge, on a voluntary basis, to impose strict export controls on “rockets and unmanned aerial vehicles capable of delivering a payload of at least 500 kg to a range of at least 300 km and on equipment, software, and technology for such systems,” according to a State Department fact sheet.

The US government, Graves explained, has had “policies about providing support or encouragement to foreign space launch vehicles, as the technology is the same used in missile programs. Implementing those policies has often led to restrictions being applied to commercial satellites and satellite components planned for launch on space launch vehicles we did not support or encourage.”

The new policy does not change the restrictions for exports of rockets or drones with that capability, which are designated by the MTCR as Category 1 systems. Nor does it allow firms to export missiles and satellite tech to countries who are not members of the MTCR, or are on sanctions lists such as Russia and North Korea.

Rather, license applications for exports of satellite-related tech and know-how to MTCR member countries “will now be reviewed on a case-by-case basis — not with a presumption of denial — even if the launch vehicle is one that the United States does not encourage,” Graves said.

That “do not encourage” policy, the Commerce official explained, applies to all but the original MTCR signatories — besides, the US, Canada, France, Germany, Italy, Japan, the United Kingdom — and India, which was granted an exception to the rule in 2005.

The shift, although unannounced, actually was agreed for satellite components in December, the official noted, after a long delay due to an interagency disagreement between Commerce, that wanted to change the policy, and the State Department, that did not. An agreement between the two agencies on the export of full-up satellites was finally reached about a week ago, the official said.

South Korea, which is one of the 35 MTCR partners, will be a key beneficiary of the policy shift, a Commerce Department official told Breaking Defense.

Seoul’s military in December tested a solid-fueled rocket, and in April contracted with US firm SpaceX to launch five new, mostly home-grown spy satellites between this year and 2025 — no doubt with a keen eye on both rival North Korea and China.

According to Space News, four of those satellites will use synthetic aperture radar (SAR) and the fifth will rely on an electro-optical camera to provide intelligence, surveillance and reconnaissance. While European satellite maker Thales Alenia Space has been assisting in the Korean satellite development, US firms have been barred exporting hardware, software or intellectual capital to Seoul due to the government’s self-imposed MTCR rules.

“So now, if I’m Company X from the US, I can expect I can apply for a license to export a whole satellite to this other country, say Korea, for launch on the KSLV. And that’s not going to be met with the policy of denial, like a blanket policy, right now. It will be considered on a case-by-case basis,” the official said.

The KSLV is South Korea’s indigenous launch vehicle series. The latest version, the KSLV-II or the Nuri, was developed by the Korea Aerospace Research Institute and is the first with all three rocket stages to have been provided domestically.