Revising the Regulatory Regime in the 1990s

In the early 1990s NASA took an important step toward formalizing and streamlining its implementation of the export control regulations affecting space collaboration in all its aspects. Two factors converged to encourage these insti­tutional changes. First, the agency and its contractors were under increasing criticism for being lax in enforcing the statutory regulations controlling exports to foreign partners—for example, they allowed Norway to acquire sounding rockets, which fell squarely under the ITAR, through the less stringent “dual­use” provisions of the EAR that regulate the export of items on the Commerce Control List. Second, new policies were needed to deal with the inclusion of the one-time space rival and communist menace, the ex-Soviet Union, as a signifi­cant partner in the International Space Station (see chapter 13). In response to this situation, in 1994/95 NASA replaced its previously fragmented program with a single export control office that handled authorizations required by both ITAR and EAR, to ensure that the different regimes were implemented coher­ently. Second, an interagency Space Technology Working Group agreed that the civil Space Station should be moved from the USML to the CCL, along with commercial communications satellites. Until that time all spacecraft except for comsats were on the USML (but see later). Henceforth (and still today), the ISS could also benefit from the greater clarity, transparency, and flexibility of the EAR over the ITAR.9 This has undoubtedly contributed to its success as a site for international collaboration.

In 1996 President Clinton ordered that the export controls over commercial comsats be placed on the CCL. This settled an ongoing dispute between the Commerce and State Departments that had simmered for almost a decade. In the late 1980s President Reagan had signed a deal with the People’s Republic of China (PRC) authorizing nine launches of American-built comsats on Chinese rockets. The Tiananmen Square sanctions law passed in 1990 (P. L. 101-246) suspended this policy for a few years. However the pressure to secure markets for US manufacturers led to a relaxation in 1992, when the State Department issued a directive transferring some comsats from the USML to the CCL, and so to the jurisdiction of Commerce. This transfer was completed by Clinton’s order in 1996.10 The president was keen to move from a policy of confrontation with the PRC to one of diplomatic and commercial engagement. The sale of supercomputers to China was authorized. Satellite technology for telecommu­nications was removed from the USML, and from the jurisdiction of the State Department, and placed on the Commerce Department’s more lenient CCL. And in summer 1997, at the first US-China summit meeting since the crushed protest in Tiananmen Square in 1989, the president hoped to conclude a nuclear cooperation agreement that would enable American nuclear reactor companies to compete for the Chinese market.

Many in Congress were appalled by this new openness to the PRC. The House’s concern was focused on allegations that two American satellite companies, Hughes Space and Communications International, Inc., and Space Systems/Loral, had illegally transferred sensitive missile technology to the PRC. This had occurred during investigations into three unsuccessful launches of their telecommunications satellites for civilian clients on Chinese Long March rockets. The possibility of such leakage led to the passage of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999.11 This imposed new restrictions on international exchange before the Justice Department had finished its inquiry against Hughes and Loral.

Fear of irresponsible sharing of missile-related technology also led Congress to establish a bipartisan committee chaired by Representative Chris Cox (R-California) to investigate the matter. The political climate was charged: one observer has remarked that “[a] number of Republican leaders went to the floor of the House and Senate and accused the President of treason for allegedly facilitating this transfer of information.”12 The bipartisan committee’s classified report was submitted to the president on January 3, 1999; a declassified version was released on May 25, 1999 (the Cox Report).13 The account that follows deals first with the specific charges against Hughes and Loral, and then with the more general charges made in the Cox Report.

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