Technology Transfer Issues and International Space Cooperation International

Technology Transfer Issues and International Space Cooperation International Space University Summer Session Program 2002 Policy & Law Team Assignment

Rationale for Project • There are benefits to global cooperation for space projects • Large scale cooperation on sensitive technologies is very difficult in current regulatory environment • Few studies have examined problem at international and national levels Ease of technology transfer problems could improve international space trade

Outline F • Introduction ü Legal Framework ü Technology Transfer Environment Changes ü Consequences • International Agreements • International Programs • Summary & Recommendations

Legal framework 1. International ü Missile Technology Control Regime (MTCR) 16 April 1987 – 33 States ü Wassenaar Arrangement 12 July 1996 – 33 States 2. Regional ü E. U Code of Conduct 8 June 1998 ü E. U Common Control Regime 22 June 2000 ü Framework Agreement (France, Germany, U. K, Italy, Spain, Norway) 27 July 2000 3. National ü US - International Traffic in Arms Regulation (ITAR) – revised in 1992 ü EU - export controls remainly national governmental matters discussed at intergovernmental level

International Technology Transfer Framework MTCR Brazil Wassenaar Agreement Canada ITAR USA Do. D NTSA Boeing Russia Ukraine Legend: Japan Chile Australia Turkey Common Control Regime European Union Framework Agreement Germany Norway Spain France U. K. Italy Portugal SSTL Netherlands Israel Code of Conduct Binding Text State studied Corporation Non Binding Text Governmental Body Nigeria India Singapore Vietnam China

Technology Transfer Environment Changes Cox Committee Report Discovery of un-authorized data being transferred to China as part of the failure investigation for a Long March launch failure carrying a US satellite Strom Thurman 1998 Defense Bill rider Satellite technology transfer authority moved to ITAR control under State Department Iran Non Proliferation Act Prohibits US Government from transferring funds to the Russian Space Agency (RSA) for ISS activities if it is determined that RSA is transferring technology to Iran

Consequences ü ASIA - A Singaporean telecom firm terminated a $450 million satellite-based mobile telephone system contract with a U. S. company (Source: AIA, May 8, 1999 ) ü CHINA - The U. S. government suspended a TAA in December for a U. S. satellite company to build a Chinese satellite (Source: Aviation Week & Space Technology, May 24, 1999) ü EUROPE - Exasperated spacecraft builder turned to suppliers in Europe and Japan while waiting for State Dept License for more than $l 50 million worth of electronic modules for European commercial satellites (Source: Aviation Week & Space Technology, May 24, 1999)

Outline • Introduction F • International Agreements – Bilateral Agreements – Comparative Analysis • International Programs • Summary & Recommendations

Bilateral Agreements Cooperation involving: 1. The United States ü U. S. -Israel 3. ESA & European States ü ESA-China ü France-Italy 2. Russia & Ukraine ü Russia-Australia ü Russia-Europe ü Ukraine-Israel ü France-India 4. Asian States ü China-Iran ü India-Malaysia

U. S. -Israel Memorandum of Agreement - 16 August 2001 ü Biomedical satellite by students ü Development by NASA’s Glenn Research Center & Israel’s Sorq Nuclear Research Center about atomic oxygen and UV radiation in space ü Research on using GPS for earthquake monitoring & other geophysical projects ü Integration of Mediterranean-Israel Dust Experiment camera on the US Shuttle ü Biomedical experiments for the ISS èNon academic research excluded from TAA

Russia-Australia Memorandum of Agreement - 10 March 2001 ü Design and building of rocket launch site at Australia’s Asia-Pacific Space Centre ü USD $52 million investment to upgrade airport and spaceport facilities to launch Aurora rockets in Australia ü Cooperative transfer of information and technology è MOA does not include non-civil technology transfer

Russia-Europe • Agreement with EADS - 4 April 2001 ü Satellite Navigation Systems • Agreement with EC – 3 October 2001 ü Environmental & Navigation Satellites ü Launch vehicle development • Agreement with ESA – 16 November 2001 ü Euro-Russian launcher cooperation: Advanced liquid propulsion, atmospheric re-entry technologies & Reusable launchers èTechnology transfer only includes “absolutely necessary” satellite technology

Ukraine-Israel Memorandum of Agreement - 22 January 2001 ü Communications & Imaging satellite services ü Launch of Israeli satellites on Ukrainian rockets ü Cooperation in scientific development, joint space systems and use of national space systems for commercial purposes è Technology clause limited to communication and remote sensing for civil applications

ESA-China Cooperation Agreement - 9 July 2001 ü US$ 7 millions ESA funding of instruments & dataacquisition services for China’s 2 Double Star satellites ü Comprehensive space cooperation ü Solar-terrestrial phenomena measurements to be coordinated between Double Star & Cluster è Transfer clause applies only for scientific cooperation on Double Star and Cluster

France-Italy Agreement - 26 January 2001 ü 6 dual-use satellites ü Pathfinder for a pan-European civil & military EOS ü Italian access to France’s 2 Helios-2 0. 5 m resolution military satellite & Spot-5 civil EOS ü Merge designs of France’s Pleiades & Italy’s Cosmo-Skymed è Transfer clause for military EOS more stringent than civil EOS

France-Indian Space Research Organization (ISRO) - CNES Cooperation Agreement - 9 May 2001 ü Joint tropical atmosphere research mission with Megha Tropiques satellite ü Satellite for launch on India’s Polar Satellite Launch Vehicle with French Proteus bus è Transfer clause specifically limits transfer to “necessary information” for mating of launch vehicle with Proteus bus

China-Iran Small Multi-Mission Spacecraft SMMS Program 4 September 2001 ü Providing smaller nations (e. g. Iran, Thailand & Pakistan) autonomous capability in space imaging ü SMMS bus design to become standard for other Asia. Pacific cooperative satellites è Technology transfer limited to SMMS bus design

India-Malaysia Joint Development Agreement – 16 May 2001 ü Joint satellite system built by Antrix (India) & Binariang Satellites (Malaysia) ü Malaysia’s Astronautic Technology will build the Small Payload Orbit Transport satellite, to be launched by Antrix aboard Indian launch vehicles è Transfer clause limited to information required for mating of satellite with launch vehicle

Comparative Analysis of International Technical Assistance Agreements

Criteria for Comparison 1. Fundamental Criteria a) b) c) National Interest Arms Control Laws Export Laws 2. Proposal Process a) Criteria for Proposal 3. National Protection a) Selection of Foreign Entity b) Protection of National Markets 4. Miscellaneous a) Dispute Resolution & Opt-out Clauses b) Funds Management

1 (a) Scope of National Interest Activities must Activities cannot • Be more cost-effective than US-only missions • Enable missions that cannot be done unilaterally • Be for the benefit of US citizens • Be sensitive to US commercial space exploration • Be against States’ Constitutions • Be against “national security, national interest, public order and welfare” International cooperation Cooperation terminated if is subject to “national interests and public welfare” • Government for executive, non-disclosed reasons • Against “national interests and public welfare” • US has a positive but more restrictive approach to TAAs • US specifies commercial development of space as a “national interest”

1 (b) Arms Control Regulations • Spacecraft are "Defense Articles" on Munitions List • ITAR applies to all spacecraft, equipment, data and services • TAA required even if 100% public domain information • Spacecraft are “Defence Articles” under national laws • International participation to comply with national Arms Control Laws and EU Arms Control policies • Spacecraft are “Defence Equipment”. • Subject to Arms Control Laws • International participation subject to approval from the Ministries of the Interior and Defence • International participation agreements subject to national Arms Control Laws • No specific requirement for spacecraft systems • All States subject technology transfers to national Arms Control Laws • Only US requires TAA on public-domain information

1 (c) Export Barrier Regulations • Foreign entities subject to export laws • Proposal to discuss • Grounds of request for TAA or export license • Schedule implications Cooperation terminated if: • Foreign entities subject to export laws • Government for executive, non-disclosed • EU export laws apply to EU and non-EU reasons members, unless otherwise negotiated • Against “national interests and public welfare” • US, EU and Russian/Ukrainian export laws with regard to TAAs are similar

2 (a) Proposal Criteria • All national proposals given priority over foreign proposals No priority for U. S. proposals • Foreign proposals must include: (1)Cost plan for U. S. entities • No requirement for inclusion of cost plan (2)Integrated value of foreign contribution or integrated value foreign entity proposal • All foreign proposals undergo same selection as national proposals. Cost plan required foreign proposals • No specific mention • Although US does not prioritise national proposals, it requires all foreign proposals for TAAs to ‘add value’ to US activities. The EU and Russia/Ukraine have less restrictive criteria with regard to ‘adding value’

3 (a) Public Feedback Upon Selection of Foreign Entity Public comment on potential impact 45 days before entering obligation. [s 126(a) NASA Act (2000)] No requirement for public feedback Public feedback on the value of the contribution 30 days in advance of approval No requirement for public feedback • Only the EU and US require public feedback on international space cooperation before approving TAAs

3 (b) Protection of National Markets Protection of national market economy Protection of Russian-Ukrainian economy Protection of EU economy No mention • National market protection is specifically required for all markets, but TAA clauses in Asian MOUs are silent on the matter

4 (a) Requirement of Specific Dispute Resolution & Opt-Out Clauses • Negotiation before Litigation • Penalties subject to negotiation / litigation • Opt-out clause in cases of national interests concerns • No mention of dispute resolution • Penalties subject to circumstances • Opt-out clause in cases of national interests concerns • Arbitration clauses • Penalties subject to arbitration clauses • No specific mention of opt-out clause • No mention of dispute resolution • Penalty clause for fundamental breach • No specific mention of opt-out clause • Dispute resolution clauses are important in US and EU-based MOUs that give rise to TAAs • Only US and Russia require opt-out clauses in MOUs

4 (b) Funds Management No-exchange-of-funds basis Diffusion of funds permissible only within Russia / Ukraine for market competitiveness purposes • Diffusion of funds permissible within EU Diffusion of funds permissible upon -member states only negotiation • Only US does not allow the transfer of funds with TAAs • Russia/Ukraine and EU allow limited transfers within their respective boundaries

Summary of Comparative Analysis • U. S. procurement policies reduce international cooperation • These technology transfer policies aim to protect U. S. control of technology proliferation • Backlash: chances of international cooperation may be lost due to such policies • Extreme control of technology proliferation may cause a loss of U. S. leverage over other International partners • Such policies may ultimately work against U. S. interest

Outline • Introduction • International Agreements F • International Programs ü International Space Station ü Sea Launch ü Joint Strike Fighter ü Surrey Satellite Technology Ltd • Summary & Recommendations

Program 1 : International Space Station MTCR Wassenaar Agreement Canada ITAR USA NASA Boeing Japan Common Control Regime Holland EADS ESA Framework Agreement Germany Norway Spain France U. K. Italy Russia European Union Inter Governmental Agreement Legend: Binding Text Non Binding Text Code of Conduct State studied Corporation Governmental Body

Characterization of ISS Program • Government-to-Government Partnership with deeply embedded International commitments designed to stabilize political support for all Partners Russia included for non-proliferation reasons • ISS Partner Technology transfer is propelled by a strong National Interest with underlying Foreign Policy Objectives

ISS Technology Transfer Status prior to Strom Thurman Act • ISS Technology transfer controlled by Commerce Department (EAR) Export Administration Regulations • NASA has exception to ITAR as a government agency • ISS IGA Article 19, “… Partners shall make their best effort to handle expeditiously request for authorization of transfers …” • Boeing ISS Policy: ü Requested data is delivered to NASA for hand over to International Partner Ø NASA has delegated authority to determine that the data transfer is necessary and limited to interface definition requirements Ø Delivery of data often occurs same day as requested during the course of Technical Interchange Meetings

ISS Technology Transfer Status After Strom Thurman Act • NASA Policy is unchanged ü NASA (Bob Tucker, Director, Assessments and Technology, NASA HQ ) “NASA fought hard to ensure that the ITAR exemption 125. 4(3) continues to be allowed for ISS. ” • Contractors implement Cautious Policy Changes ü Boeing (Mark Ortiz, ISS International Affairs) “Belief is that the project is unique and the government is willing to allow the exception even though it’s not completely legal. ISS is a tight rope. ” Ø Requests to the State Dept. for clarification occur frequently to avoid the risk of a mistake Ø Increasing pressure applied from Corporate Office to mark all data as transfer controlled. This complicates NASA’s ability to apply the exemption Ø Boeing is applying for TAAs to be conservative even though it may not be required

Key Findings • The ISS experience shows a trend of increasing nationalism ü It is doubtful that the International systems integration performed during the 90’s could be accomplished in today’s environment ü There are indications that this may be only a short term trend Examples: Ø ITAR exemption for Institutions of Higher Learning adopted March 29, 2002 (22 CFR Parts 123 and 125) Ø Challenges have been raised to the accuracy of the Cox Report implying that it was an over reaction. Ø Informal consideration is being given to moving ISS Technology Transfer fully under the Department of Commerce Again

Conclusion Government Partnerships Programs with strong national interest will provide opportunities to develop international relationships that can be leveraged for future commercial ventures.

Outline • Introduction • International Agreements • International Programs F ü International Space Station ü Sea Launch ü Joint Strike Fighter ü Surrey Satellite Technology Ltd • Summary & Recommendations

Program 2 : Sea Launch MTCR Wassenaar Agreement ITAR USA NASA Common Control Regime Framework Agreement Norway Boeing Russia Ukraine Legend: European Union Code of Conduct Binding Text Country Corporation Non Binding Text Governmental Body

Sea Launch The Concept ü Launch commercial satellites to orbit from a platform at sea Partnership ü ü US Russia Norway Ukraine Boeing Commercial Space Company (40%) RSC Energia (25%) Kvaerner Maritime a. s (20%) PO Yuzhmash (10%) / KB Yuzhnoye (5%) Benefits ü Modern, accessible, user-friendly payload processing. ü Automated (affordable) launch-vehicle processing, ü Optimized performance -- launching from best point on Earth's surface. ü Affordable, reliable, new-generation launch vehicle. ü Superior facilities and amenities of a U. S. home port "launch site. “

Technology Transfer Policies (1) ITAR Part 123(2)(3)(4) – Licenses for the Export of Defense Articles DSP Licenses Office of Defense Trade Controls [Department of State] ü DSP-61: Application for Temporary Import of Defense Articles Ø Sea Launch vessels / -foreign launch vehicles/ Ø foreign made spacecraft Ø foreign fuels ü DSP-73: Application for Temporary Export of Defense Articles Ø Sea launch vessels to launch site / Ø support equipment on U. S. Munitions List (e. g. , night vision goggles) ü DSP-5: Application for Permanent Export of Unclassified Defense Articles Ø U. S. manufactured spacecraft/-U. S. fuels and oxidizers

Technology Transfer Policies (2) ITAR - Technical Assistance Agreements (TAA) ü Aerospace Operations Aerospace technology transfer control plan ü Marine Operations Marine technology transfer control plan ü Others Ø customer specific agreements obtained to support an individual customer’s needs Ø activity specific agreements activities not authorized by other agreements (e. g. , launch failure analysis, TAA required)

Technology Transfer Policies (3) Technology Transfer Safeguard – Consistent with MTCR ü US-Ukraine 1994: Mo. U on the Transfer of Missile Equipment and Technology MTCR Agreement on Cooperation in the Aerospace Sector 1997: Satellite Technology Safeguard Agreement Associated with Launch Vehicles, Missile Equipment and technical Data ü US – Russia 1993: Agreement to comply with the MTCR 1999: Technology Safeguard Agreement - among US, Russia and Kazakstan ü US-Norway 1991: Agreement to comply with the MTCR

Key Findings ü Flight History 7 successful flights / 1 flight failure / 87. 5% performance rate ü Key elements for Success - Keep balance between Financial and Security Interests - Cooperate by giving their component, not by designing of component - Conclude Technology Safeguard Agreement ü Key issues - - Possibility of technology transfer during the investigation of cause of launching failure Defense Technology Security Agency (DTSA) of Do. D needs the prior review of technical data intended for meetings, telecoms, presentations and correspondence delay launching In 1998, Boeing agreed to pay $10 million for not abiding by export regulations in its dealings with Russia an Ukraine

Conclusions Step for Success. . ü Cooperate by components, not by integration of technologies to avoid technology transfer ü Conclude Technology Safeguard on bilateral level with a member of MTCR to meet the requirements of ITAR ü Get the prior review of technical data intended for meetings, telecoms, presentations and correspondence of DTSA Sea Launch System manufacturing and deployment locations

Outline • Introduction • International Agreements • International Programs F – International Space Station – Sea Launch – Joint Strike Fighter – Surrey Satellite Technology Ltd • Summary & Recommendations

Program 3 : Joint Strike Fighter MTCR Wassenaar Agreement Canada ITAR USA Do. D Boeing Australia Turkey Common Control Regime Holland Framework Agreement Norway Denmark Italy U. K. Code of Conduct Legend: Binding Text Country Corporation Non Binding Text Governmental Body Israel Singapore

Joint Strike Fighter An international co-operation in combat aircraft • The Joint Strike Fighter a program to define cost-effective, next-generation strike aircraft weapon systems for the U. S. Do. D, British Army and US Allies

Joint Strike Fighter EMD/SDD phase: 2001 -2012 Total budget: 24. 45 B$ (20/4. 45)

Joint Strike Fighter Technology Transfer Policies · JSF has developed a structure for international participation in the (CDP and) EMD-phase. ü Four levels of involvement have been established for participants ü Memoranda of Understanding (MOUs) or Memoranda of Agreement (MOAs) are negotiated for each country that participates as a partner ü A basic framework for Engineering & Manufacturing Development (E&MD) participation has been developed and has been approved by Do. D. Interagency co-ordination with the State Department

Joint Strike Fighter Technology Transfer Policies Four Levels of International Participation • Collaborative Development Partnership (I) MOU 17 -01 -97 ü Full partners within a MOA/MOU framework with the ability to influence requirements • Associate/Limited Partnership (II) ü Limited partner within a MOA/MOU framework. ü Limited participation in specific technologies or core program with limited ability to influence requirements ü Allowed access to JSF project information in order to better understand evaluate the utility of the JSF family of aircraft for their use MOU 17 -06 -02 MOU 24 -06 -02

Joint Strike Fighter Technology Transfer Policies • Informed Partner (III) MOU 20 -06 -02 ü Allowed access to JSF project information in order to better understand evaluate the utility of the JSF family of aircraft for their use MOU 24 -06 -02 ü Unable to influence requirements MOU 28 -05 -02 • Major Participant (IV) MOU 07 -02 -02 MOU 11 -07 -02 ü Country participates as a Foreign Military Sales (FMS) customer ü Country provides the major participant insight through JSF studies, technical assistance and access to predetermined data MOA 23 -09 -99 MOA 20 -03 -99

Joint Strike Fighter Key findings (MOU Framework) MOU on SSD Framework (US and Canada 07 -02 -02) ü Canada puts in $100 million ü Canada has the right to withdraw from MOU ü MOU is bound by national disclosure policies (ITAR) Ø Canada will be given timely access to the JSF electronic project information data Ø Canada will be provided with the project information (scope of the work) in the framework of MOU Ø To disclosure or use the project information each participant has to specify the specific project purposes

Joint Strike Fighter Key findings (TAA Regulation) • • • TAA are strictly based on US ITAR regulations No transfer regulations from The Netherlands Use of technology transferred only for JSF-project under this TAA No classified information transfer possible without DD form 254 No manufacturing rights are provided to partners. A manufacturing license is still needed • Data transfer in both directions in accordance with Proprietary Information Agreement of the CDP Source: TAA in CD-phase 1999

Joint Strike Fighter Conclusions • Co-operation is a success as MOU’s for next phase are signed. Co-operation continues • However ü Licensing process is extremely lengthy (30 up to 270 days) Source: Ashbourne, Centre for European reform, October 2000) ü Up to now the research and development is done in each country and also funded by these countries. Technology transfer was therefore limited. (Source: Personal contact) ü The real challenge is yet to come in the system development and demonstration (SDD) phase

Outline • Introduction • International Agreements • International Programs F – International Space Station – Sea Launch – Joint Strike Fighter – Surrey Satellite Technology Ltd • Summary & Recommendations

Program 4 : Surrey Satellite Technology Ltd MTCR Chile Wassenaar Agreement Turkey ITAR USA Common Control Regime Portugal Thailand Framework Agreement India U. K. Do. D Boeing SSTL France European Union Legend: Disaster Monitoring Constellation Vietnam Nigeria Code of Conduct Binding Text Country Firm Non Binding Text Governmental Body China

Program Overview Collaboration & Technology Demonstration ü 1995 France Do. D (Cerise), Chile Air Force (FASat) ü 1997 NASA (Rapid II), USAF (PICOSat) ü 2000 UK Mo. D, Qineti. Q (TOPSat, GEMINI) Technology Transfer & Training (TT&T) ü Academic Education at Surrey University (MSc, Ph. D) ü Training (Seconded to SSTL) ü Ground Station (Installed in Country) ü Micro-Satellites (1 st in UK, 2 nd in Country) ü Technology Transfer

Technology Recipients UK Portugal Turkey Algeria Pakistan S Korea China Malaysia Thailand Singapore Nigeria Chile Vietnam S Africa

Disaster Monitoring Constellation UNISPACE III 1999 DMC was born from recommendations of UN Conference Initiated and run by SSTL Partners Developing Space Countries not on UK sanctioned list Details 7 Earth observation micro-satellites Daily imaging revisit worldwide 100 kg, 686 km orbit, 32 m GSD resolution Total cost per country for TT&T is circa $15 Million First International constellation for Disaster Monitoring

Policy Issues Devolved Responsibility SSTL is advised by the BNSC on acceptable partners before contractual agreements Export License Required from DTi - reviewed by UK Mo. D Government intervention has been minimal License acquisition has not been problematic US Policy TT&T not considered a threat to military technologies No US pressure to limit TT&T (so far) SSTL has lead over US in low cost micro-satellites Growing US interest in cooperation with and influence over SSTL activities

Key Findings Micro Satellite Capability SSTL claims to be capable of 0. 2 m resolution systems ü avoids development due to cost/limitations on customers Primary Driver: Cost Reduction Focus on commercially available and proven technology Use of non commercial amateur radio frequencies New development is ‘in-house’ Avoids radiation hardened circuits Public Domain University of Surrey publishes texts on Integration Know How Reduced Regulation of Technology Transfer

Conclusions Barriers to International Cooperation Technology Transfer is not a major barrier Small size small budget : largest problem Partner states carefully chosen for easier cooperation ü No neighboring countries reduced security issues UK Government Support SSTL has benefited from several ‘awards’ and hands-off approach Future Issues Increasing capability will bring increased risk of regulation

Outline • Introduction • International Agreements • International Programs F • Summary & Recommendations

Benefits of International Cooperation • Permits Cost/Risk Sharing • Allows Market Sharing • Integrates World’s Best Capabilities • Stabilizes Political Support of the Program • Facilitates Monitoring of MTCR Compliance

Current Trend The Future of Space: Globalism or Nationalism? The current trend of National Security interests is pushing the Market toward Nationalism

Long Term Trend The Global Paradigm for Space infrastructure is inevitable. - Increasing availability of Space technology outside US. - Desire to cost share increasingly complex and expensive systems. - National Security solutions becoming software based reducing threat of hardware. Global Paradigm: Motivations: commercial development, space utilization, science, national prestige Industrial Development Paradigm Motivations: industrial development, prestige, science Cold-War Paradigm: Motivation: national prestige, security, science 1950 1960 1970 1980 1990 2000

Conclusions • Government Support Essential • Activities Compartmentalized (Sea Launch/JSF) • Public Domain (SSTL) ü Off the shelf technology and University environment • National Interest Leveraged (ISS/JSF) ü Security, Economy • Extreme Control Backfires (bilateral agreements)

Recommendations for Long Term Growth • Understand the Global Technology. ü Avoid mixing export of globally available technology with national security related technology • Partner’s National Economy priorities must be addressed • Cooperation should support partner industrial, national and regional policies for independent access to space

Policy and Law Team • • • Edward Anderson Patrick Chatard-Moulin Gérardine Goh Atsuyo Ito Nelson Mutai Armine Poghosyan Arthur Scheuermann Yuri Takaya Hiroaki Umehara Johannes van Es • Philippe Achilleas - France • Harry Tuinder - Netherlands • • • United Kingdom France Singapore Japan Kenya Armenia United States Japan The Netherlands • Andrew Aldrin - USA • Marie Diop - France

Questions? The team