Help Me, Help You… Space Industry Changes in EAR and ITAR

Background: Why These Changes Matter

Recently(ish), space-related changes have been made—and are still in the process—to the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR), with regards to categories IV and XV and classification 9A, C, D and E515 in the EAR.

Remember the initial idea of change (Advanced Notice of Proposed Rulemaking) being started one year prior to COVID? Ugh, yes, everyone hates that word… COVID, however, that’s when these proposed changes started getting bounced around.

Several interested government entities gathered to solicit comments to “ensure that the Commerce Control List (CCL) describes these items clearly, captures those items in normal commercial use, accounts for technology developments, and implements the national security and foreign policy objectives of the United States.” Their stated goal was for the Bureau of Industry and Security (BIS) to seek comments “on ways to thoughtfully streamline export control regulations for both the U.S. commercial space industry as well as our international partners, and to lower administrative burden, decrease regulatory compliance costs, and increase exports, thereby bolstering the U.S. commercial space sector.” (March 8, 2019, 84 FR 8485 and 84 FR 8486.)

The effort got underway, but then—BOOM—COVID hit, halting progress across industries for several years. Only recently have agencies and organizations begun returning to a more normal pace of work.

On December 20, 2023, the Vice President of the United States (VPOTUS) directed the U.S. Government to “conduct a review of space export controls to enable a globally competitive U.S. industrial base while protecting our national security and foreign policy interests.” This directive sparked comments from government entities as well as public companies, and by October 23, 2024, it led to the release of the EAR final rule, an interim final rule, the proposed rule, and the Department of State (DoS) ITAR proposed rule.

I would venture to say the space industry welcomed the changes and would likely send a big thank you to the federal government for relaxing the regulations, while still quietly hoping that even more positive, permissive changes are on the way.

Here’s the BIGGIE of the Space Industry:

Making the most impact for U.S. commercial space industries and government entities like the National Aeronautics and Space Administration (NASA) is 89 FR 84770, the Revision to Space-Related Export Controls, which has several parts to the interim final rule (IFR):

1.  Reducing requirements for less-sensitive items to better facilitate collaboration.

“Changes to 9A515.x and 9A004.v and .x, as well as the new 9A004.s, shift the license requirement from National Security (NS1) and Regional Stability (RS1) to NS2 and RS2,” essentially eliminating the license requirement for exports to 40 Wassenaar countries.

a. The new ECCN 9A515.w stems from 9A515.x items that still warrant higher-level NS1 and RS1 controls.

2.  Adding additional .y items to:

a. 9A004: Adds paragraphs .y.1 through .y.63

b. 9A515: Adds paragraphs .y.7 through .y.74

c. 9A604: Adds .y.1 for “Parts” and minor “components” for landing leg assemblies.

d. Removes license requirements for the least sensitive and most commercially available items, like space-grade plugs and connectors, to all countries except those subject to certain sanctions and embargoes, by adding them to .y entries.

e. Identifies items that would otherwise be within the scope of 9A004.s or .x, 9A515.x, or 9A604.x, but that have been identified through interagency-cleared CCATS (per §748.3(e)) or otherwise determined by Commerce, State, and Defense as warranting control in 9A004.y, 9A515.y, or 9A604.y.

3.  Adding ECCNs 9D515 and 9E515 to exclusions from license requirements when the release is for a “standards-related activity.”

a. Specifically, in §734.10 (Patents and standards-related activity), this IFR adds paragraph (b)(1)(iv) to reference:

     (1) “Software” classified under ECCN 9D515 (other than 9D515.d or .e)

     (2) “Technology” classified under ECCN 9E515.a, .b, or .f (limited to technology for 9A515.a.4)

b. This includes software and technology for space-based servicing, assembly, and logistics, which are crucial for advancing commercial spacecraft flight safety.

c. Barriers to U.S. participation in the development of these standards would be detrimental and counterproductive to U.S. commercial spacecraft development and national security interests.

4.  Clarifications to spacecraft and related items on the CCL:

a. Addition of Note 5 to 9A004 to specify that items operating on other celestial bodies (such as rovers) are treated as if operating on Earth for classification purposes. A similar Note 6 is added to 9A515.3

b. Addition of 9A004.r for in-space habitats, excluded from 9A515.a.

c. Removal of ECCN 9A604.a and .b to clarify the jurisdictional control status of certain thermal batteries.

5.  Specifying the BIS determination that Space Act Agreements with NASA meet the criteria for License Exception GOV:

a. Clarification on shipments to launch platforms in international waters by adding Note 1 to §744.7(a), specifying that shipments to such platforms are considered exports or reexports to the country that owns, controls, or operates the platform.

b. Addition of License Exception GOV eligibility for ECCN 9A004 when needed in Russia on short notice for launch to the International Space Station (ISS). Specifically, this IFR adds a sentence to §746.8(c)(2)(ii) stating that License Exception GOV under §740.11(e) may overcome the license requirements in §746.8(a)(1) and (2) for ECCN 9A004.

So many words, right? What does it all mean?

It means that the EAR and ITAR are now allowing the space industry to export more space-related commodities to international partners — to keep innovation and exploration moving forward, to keep the space transportation industry moving forward, to keep space scientific research moving forward — without needing a license.

Of course, there are still exceptions, caveats, and carve-outs to understand (stay tuned for next month’s blog where we’ll break those down). But overall, the message is:
Thank you, federal government… and please, may we have some more!

Need help navigating the new space-related export control changes or making sure your company’s compliance procedures are up to date? Schedule a no-charge consultation with one of our experts! We’ll help you assess your risk, review your documentation, and strengthen your compliance strategy.