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Defense Trade Advisory Group Review of Proposed Bills for Transfer of Satellites and Related Components from the USML to

Defense Trade Advisory Group Review of Proposed Bills for Transfer of Satellites and Related Components from the USML to CCL. Plenary Session - Washington, DC July 26, 2012. Working Group Members. Dale Rill, Working Group Co-Chair, Honeywell International Inc.

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Defense Trade Advisory Group Review of Proposed Bills for Transfer of Satellites and Related Components from the USML to

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  1. Defense Trade Advisory GroupReview of Proposed Bills for Transfer of Satellites and Related Components from the USML to CCL Plenary Session - Washington, DC July 26, 2012

  2. Working Group Members • Dale Rill, Working Group Co-Chair, Honeywell International Inc. • Joy Robins (Speicher), Working Group Co-Chair, Space Systems/Loral, Inc. • Lisa Bencivenga, Lisa Bencivenga LLC • Greg Bourn, Finmeccanica North America • Dennis Burnett, EADS North America, Inc. • Brooke Butler, Globaleyes • Dava Casoni, University of Southern California, Institute for Creative Technologies • Rebecca Conover, Intel Corporation • Steve Cope, Avion Solutions, Inc. • Kim Depew, GE Aviation • Alfred Furrs, Johns Hopkins University Applied Physics Laboratory • Greg Hill, DRS Technologies, Inc. • Jeremy Huffman, Huffman Riley Kao PLLC • Sal Manno, Inmarsat, Inc. • Michael Miller, University of Central Florida, Office of Research and Commercialization • Terry Otis, Otis Associates, LLC • Bill Schneider, International Planning Services, Inc. • Sam Sevier, DTAG Co-Chair, Sam Sevier LLC • Debbie Shaffer, Southwest Research Institute • Bill Wade, DTAG Co-Chair, Raytheon Company

  3. Discussion Agenda • Purpose • General Comments • Specific Parts of the Review • Overall Assessment

  4. DTAG Task - Purpose • Review two proposed pieces of legislation • House Bill amendment to the FY 2013 National Defense Authorization Act (NDAA) • Senate Bill 3211 • Both proposed Bills grant the authority to move satellites and related components and technology from the U.S. Munitions List (USML) to the Commerce Control List (CCL)

  5. General Comments • Considered the Fiscal Year 2010 “Report to Congress” Section 1248 of the NDAA – “Risk Assessment of the United States Space Export Control Policy • Took note of the new definition of “Specially Designed,” as published in the Department of State and Department of Commerce proposed rules

  6. General Comments • DTAG members support the return of the authority to the President to determine whether satellites and related components and technology are controlled under the USML or CCL • The tasking team compared the language in the House and Senate Bills and analyzed the potential impact to industry and academia, and to the USG with respect to direct or indirect effects • The DTAG review process and methodology included reviewing each relevant section of the proposed Bills to include the House Bill Subtitle E, Section 1241 – 1247 and Senate Bill 3211 Sections 1 – 6

  7. Overall Assessment • DTAG concurs with the proposal to move certain satellites to the CCL • Parts of the Bills need clarification to better understand the intent of certain language (e.g. definition of satellite, enumeration of all items “to the extent practicable,” applicability to just USML XV or all USML categories) • The House version appears more restrictive and burdensome for the USG and industry • The Senate version appears to uphold existing authorities of the President • The 1248 Report by DoS/DoD appears to establish a strong foundation or baseline that supports the implementation of transferring certain satellites to the CCL • Reporting could potentially be onerous on the USG and/or industry/academia • Industry drift - Technology advancements/maturation - Foreign availability

  8. Analysis of the Bills – “House Sections” 1241 - 1247

  9. Analysis of the Bills – “House Sections” 1241 - 1247

  10. Analysis of the Bills – “House Sections” 1241 - 1247

  11. Analysis of the Bills – “House Sections” 1241 - 1247

  12. Analysis of the Bills – “House Sections” 1241 - 1247

  13. Analysis of the Bills – “House Sections” 1241 - 1247

  14. Analysis of the Bills – “House Sections” 1241 – 1247

  15. Analysis of the Bills – “House Sections” 1241 - 1247

  16. Analysis of the Bills – “House Sections” 1241 - 1247

  17. Analysis of the Bills – “House Sections” 1241 - 1247

  18. Analysis of the Bills – “House Sections” 1241 - 1247

  19. Analysis of the Bills – “House Sections” 1241 - 1247

  20. Analysis of the Bills – “House Sections” 1241 - 1247

  21. Analysis of the Bills – “House Sections” 1241 - 1247

  22. Analysis of the Bills – “Senate Bill” 3211 Section 1- 6 • Section 1: This Act may be cited as the ‘‘Safeguarding United States Satellite Leadership and Security Act of 2012’’. • Section 2: AUTHORITY TO DETERMINE APPROPRIATE EXPORT CONTROLS FOR SATELLITES AND RELATED ITEMS. Notwithstanding any other provision of law, the President is authorized to determine the appropriate export controls of satellites and related items and transfer such items based on national security and foreign policy objectives from the jurisdiction of the International Traffic in Arms Regulations (22 C.F.R. part 120 et seq.) to the Export Administration Regulations (15 C.F.R. part 730 et seq.), consistent with the procedures in section 38(f) of the Arms Export Control Act (22 U.S.C. 2778(f)). • Observations & Impact • Returns the authority to the President to determine whether satellites and related components and technology are controlled under the USML or CCL • “Satellites” not defined • Supports procedures set forth in section 38(f) of the Arms Export Control Act (AECA)

  23. Analysis of the Bills – “Senate Bill” 3211 Section 1- 6 • Section 3. PROHIBITION ON TRANSFERS TO THE PEOPLE’S REPUBLIC OF CHINA. • No satellite or related item made subject to the jurisdiction of the Export Administration Regulations pursuant to section 2 may be transferred, directly or indirectly, to the Government of the People’s Republic of China or any entity or person in or acting for or on behalf of the People’s Republic of China or launched in the People’s Republic of China or as part of a launch vehicle owned, operated, or manufactured by the Government of the People’s Republic of China. • Section 4. PROHIBITION ON TRANSFERS TO STATE SPONSORS OF TERRORISM AND NORTH KOREA. • No satellite or related item made subject to the jurisdiction of the Export Administration Regulations pursuant to section 2 may be transferred, directly or indirectly, to— • (1) North Korea, Cuba, Iran, Sudan, Syria, or any country that is designated by the Secretary of State as supporting international terrorism under section 6 of the Export Administration Act (50 U.S.C. App. 2405(j) (as continued in effect pursuant to the International Emergency Economic Powers Act; 50 U.S.C. 1701 et seq.)), section 40 of the Arms Export Control Act (22 U.S.C. 2780), or section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371); (2) any entity or person in or acting for or on behalf of such a country; or (3) as part of a launch vehicle owned, operated, or manufactured by the government of such a country. • Observations & Impact • Concerns related to specifically listed “prohibited countries” in legislation rather than deferring to the authority of State (AECA), Commerce (EAA) and Treasury (OFAC) - Same as House Bill

  24. Analysis of the Bills – “Senate Bill” 3211 Section 1- 6 • Section 5. RULE OF CONSTRUCTION REGARDING PRESIDENTIAL WAIVER AUTHORITY. Nothing in this Act shall be construed as removing or limiting the waiver authority of the President under part 126 of the International Traffic in Arms Regulations (22 C.F.R. part 126), as in effect on the date of the enactment of this Act. • Section 6. RULE OF CONSTRUCTION REGARDING SPECIAL EXPORT CONTROL AUTHORITIES. • Nothing in this Act shall be construed as removing or limiting existing authorities of the President under section 1514 (a) and (b) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105–261; 22 U.S.C. 2778 note) with respect to defense articles that remain subject to the jurisdiction of the International Traffic in Arms Regulations or to otherwise take such actions as are necessary to implement requirements for improving national security controls in the export licensing of satellites, launch vehicles, and related items. • Observations & Impact • Provides authority under the AECA • Upholds existing Presidential authority

  25. Overall Assessment • DTAG concurs with the proposal to move certain satellites to the CCL • Parts of the Bills need clarification to better understand the intent of certain language (e.g. definition of satellite, enumeration of all items but where practicable, applicability to just USML XV or all USML categories) • The House version appears more restrictive and burdensome for the USG and industry • The Senate version appears to uphold existing authorities of the President • The 1248 Report by DoS/DoD appears to establish a strong foundation or baseline that supports the implementation of transferring certain satellites to the CCL • Reporting could potentially be onerous on the USG and/or industry/academia • Industry drift - Technology advancements/maturation - Foreign availability

  26. Questions?

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