On November 10, 2014, the U.S. Department of State and the U.S. Department of Commerce finalized the coordinated implementation of export control reforms related to satellites, spacecraft, ground systems and related hardware that had been sought for industry for over a decade. These changes open new international sales opportunities for U.S. manufacturers of space technology.
Since 1999, U.S. satellite system and component manufacturers had faced significant hurdles in pursuing overseas sales of their products. In that year, the Defense Authorization Act moved essentially all satellite products from Export Administration Regulations (EAR) control to International Traffic in Arms Regulations (ITAR) control. ITAR is administered by the State Department, EAR by the Commerce Department. This move had the effect of virtually eliminating the opportunity for U.S. companies to export satellite technology. Since then, many manufacturers have focused exclusively on U.S. government and commercial sales strategies, and have regarded efforts at international sales as a fruitless exercise.
The reforms of 2014 do not reverse the 1999 decisions. Rather, they create a new, more flexible, but more complex international sales environment. Certain items that were moved to the United States Munitions List (USML) in 1999 remain under ITAR control today. Many other items have been moved to the Commerce Control List (CCL).
Sixteen critical items remain on the USML, including control moment gyros,
mechanical cryocoolers, active vibration systems, certain orbit adjust thrusters, antennas with particular capabilities and optics with particular properties. Services remaining on the USML include satellite integration and launch services, integration of any satellite to a launch vehicle and launch failure analysis.
Items transferred to the CCL include commercial communications satellites, lower-performance remote sensing satellites, planetary rovers and planetary probes. For these systems, ground control systems, training simulators, test equipment, certain non-critical software, and non-critical technology and know-how for development, production, installation, operation and maintenance are now also on the CCL. Thousands of parts and subsystems for satellites and payloads not explicitly on the USML have been moved, including radiation-hardened microelectronics.
Under ITAR, all proposed exports, irrespective of the destination, fall under the same license review process within the State Department. Under EAR, items may be exported to some countries without an export license, exports to other countries will require an export license, and export to a small number of countries may still be prohibited.
The aerospace industry lobbied heavily for satellite export reform for many years; now Congress and the Obama Administration have responded. With these changes, much has been written about the increased complexity of export compliance, and how industry can address that challenge. No one is addressing the need for new sales strategies. The critical and urgent need is to develop new, high potential international sales strategies; for some, it is the challenge of considering international sales for the first time. What is the
international competitive landscape today? Which markets will be easiest to penetrate? Are there opportunities for international partnerships? Where
should we start?
An effective new sales strategy – whether it is in support of this new international sales opportunity or any growth-oriented sales objective – should include a served markets analysis, an independent competitive assessment, an independent forecast assessment and ongoing, actionable strategy support. To learn more about how Fairmont’s extensive strategy services can address your satellite systems and components sales growth objectives, contact Bob Lindberg at email@example.com or 757-636-6301.
Fairmont continues to help clients understand and explore areas of opportunity within defense, space, and adjacent commercial markets. We would welcome exploring these areas alongside you as you consider these opportunities and how they align with your interests.