US Needs to Improve Export Control Licensing Processes, Space Industrial Base Says

The U.S. should update its export control process, specifically around licensing, to better boost the competitiveness of the space industrial base, government officials and industry representatives said. Some in industry said U.S. companies often face burdensome licensing requirements compared with foreign competitors, which hurt their standing in global markets.

“The domestic regulatory framework with respect to export controls and licensing often serve as a hindrance to innovation, are cost prohibitive, and are generally uncoordinated across government,” the U.S. Space Force, Defense Innovation Unit, the National Aeronautics and Space Administration and the Air Force Research Laboratory said in a report this week. The report, which aggregated the thoughts of more than 300 experts and officials as heard during the State of the Space Industrial Base conference this spring, said U.S. export control regimes lack “agility” and resources. “Today, commercial innovation cycles are rapidly overtaking regulatory oversight timelines and the various regimes need to be re-thought or considerably reformed to match the pace of innovation.”

Current export control procedures were “designed in a previous era,” the report said, when technology was “slower to develop, disseminate, and be exploited.” To catch up, the U.S. should modernize its export control regulations to better “align with the pace of technological innovation.” This would lead to a more “coordinated and streamlined decision making processes” for export controls and investment screening efforts both domestically and internationally, the report said.

During the conference, industry officials said “many” advanced commercial launch vehicles and satellites are forced to wait in high bays or warehouses “for months” as the U.S. mulls export licensing decisions. Several industry representatives “reported little meaningful progress on licensing,” the report said, “and stated they face significant difficulty in competing with international remote sensing companies who are not bound to the same restrictions imposed in the U.S.” The companies also said they face “additional strategic risk” by developing technologies they can’t export and sell “when international competition doesn’t face the same hurdles.”

The report said the U.S., including the Commerce Department, is working to improve communication with industry surrounding its licensing process. Commerce is specifically looking to provide industry with more transparency “when it comes to export control licenses and approvals,” the report said. “However, while these efforts are welcomed, several industry stakeholders highlighted that the domestic regulatory framework often serves as a hindrance to innovation, is cost prohibitive, and is generally uncoordinated, under-resourced, and bureaucratic across government.”

Industry also stressed the importance of regular State Department reviews of the International Traffic in Arms Regulations, adding that the agency should treat space as a “priority export activity” through faster license reviews. “The list of restricted exports needs to be constantly reviewed and updated on a one-to-three-year cadence to ensure that the technology does require controls,” the report said. “If a company believes their technology is dual use, or commercially available, a two-page white paper should be adequate to force an expedient export review.”