BIS and DDTC issue rules to amend U.S. space-related export controls

On October 17, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security and the State Department’s Directorate of Defense Trade Controls issued rules to modernize space-related export controls that aim to reduce license requirements and clarify existing controls on these items. The rules are intended to support the U.S.-space industrial base’s ability to compete on the global stage while strengthening U.S. international space partnerships and protecting U.S. national security and foreign policy interests. The rules are scheduled to be published on October 23, 2024. Two of the rules are being issued in final or interim final form, with immediate effective dates, while the other two are proposed rules. Our team is available to assist with any questions or concerns.

High-level overview of the rules

On October 17, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) issued rules to modernize space-related export controls by reducing license requirements and clarifying existing controls on these items.

BIS issued one final rule, one interim final rule, and one proposed rule. The final rule and interim final rule are effective upon publication (scheduled for October 23, 2024) and BIS is accepting comments to the proposed rule until November 22, 2024. In its press release announcing the rules, BIS emphasized that these updated controls will further U.S. innovation and technology leadership while protecting U.S. national security and foreign policy interests. These rules follow the extensive review beginning in December 2023 by the National Space Council that focused on strengthening U.S. international space partnerships and promoting U.S. policy interests in this industry.

In conjunction with the BIS proposed rule, DDTC also issued a proposed rule scheduled for publication on October 23, 2024 with comments accepted until November 22, 2024. This proposed rule revises U.S. Munitions List (USML) Categories IV and XV, adds items that warrant control on the USML, and removes items that no longer warrant control on the USML. The DDTC proposed rule also adds Civil Space-Related License Exemptions and Special Licensing Provisions.

BIS rules

BIS released a Final Rule to amend the Export Administration Regulations (EAR) by removing controls for certain spacecraft and related items for exports and reexports to Australia, Canada, and the United Kingdom. The Final Rule eliminates the license requirement for these spacecraft and related items, which involve remote sensing or space-based logistics, assembly, or servicing when exported or reexported to Australia, Canada, or the United Kingdom.
BIS also released an Interim Final Rule (IFR) to amend controls for spacecraft and related items under the EAR. The IFR reduces license requirements on less sensitive items, makes refinements and clarifications to existing controls, and broadens license exceptions to support National Aeronautics and Space Administration (NASA) cooperative programs. Notably, the IFR removes license requirements on certain spacecraft parts and components controlled under Export Control Classification Number (ECCN) 9A515.x for a group of more than 30 U.S.-allied countries, thereby eliminating the need to use License Exception Strategic Trade Authorization (“STA”) for such exports.
BIS also released a Proposed Rule to amend controls for spacecraft and related items under the EAR that would conform to proposed changes to the International Traffic in Arms Regulations (ITAR) referenced in the DDTC rule below. The rule proposes changes to ECCN 9A515, 9D515, and 9E515, and the addition of ECCN 9C515. This rule also includes a new license exception for certain Commercial Space Activities (CSA) for official space agency programs and space tourism and research. The rule is scheduled for publication on October 23, 2024, with comments due to BIS by November 22, 2024.

DDTC rule

DDTC released a Proposed Rule to amend the ITAR by revising USML Categories IV and XV, adding items that warrant control on the USML, and removing items that do not warrant control on the USML for certain space-related defense articles. This rule also introduces three new licensing exemptions related to certain official space agency programs, certain space activities, space tourism and research, and authorizes licensing by BIS of certain defense articles in USML Cat. XV that are incorporated into EAR spacecraft. These license exemptions and licensing authorization are intended to promote U.S. industry participation in civil space activity while furthering U.S. national security and foreign policy goals. The rule is scheduled for publication on October 23, 2024, with comments due to DDTC by November 22, 2024.