The Uncertainty of Space Industry Regulations

Space

The space industry is relatively young, and the legislative framework in this area is still under development.

International space regulation belongs to international public law. Through the general and special rules regulating the industry, participants, of the space sector, including countries, intergovernmental organizations, and private space companies (SpaceX, Virgin Galactic, Boeing, Firefly Aerospace, etc.) have a framework for functioning.

Agents of Modern Cosmic Relations

Members of space treaties are exclusively governments and intercontinental institutions, which are permitted to conclude regulatory legal acts based on sovereignty, their rights as sovereign powers, and juridical equality.

Although private enterprises engaged in space exploration are a big part of the industry, in reality, they cannot be considered full-fledged actors in the global space legal system. As a matter of fact, relevant legislation was developed half a century ago when it was not assumed that private companies would be able to compete with government programs.

Basic Principles to Guide the Space Industry

The United Nations Committee on the Peaceful Uses of Outer Space was established as the Cold War space race made the global community concerned about the use of space for military aims. Since 1958, the committee has made numerous contributions to outer space regulations, and the UN has played a central role in establishing a framework for international cooperation in space and developing rules for the sphere.

The first space-related intergovernmental legal document was signed 55 years ago, in 1966. It outlined the rights and obligations of governments in the investigation and use of space. With its signing, a new era in intergovernmental law began, and as of the beginning of 2021, 110 countries have signed this convention.

In the 60s and 70s, the Committee on the Peaceful Uses of Outer Space adopted four main conventions: rescue of astronauts, mandatory registration of launched objects, responsibility for damage, and exploration of the Moon.

Today, space regulations are critical to several popular areas of space activities, the most prominent being remote sensing, satellite communications, and global satellite navigation systems.

Remote Sensing

Artificial satellites orbiting the Earth are commonly used for monitoring the Earth’s surface. Monitoring activities, i.e., remote sensing, must fit within the framework of international legal principles. UN General Assembly Resolution 41/65, Principles Relating to Remote Sensing of the Earth from Outer Space, includes 15 principles of remote sensing. The focus of this resolution is that remote sensing activities must be beneficial for all countries, especially developing ones.

Satellite Communications

Nowadays, satellite communications is the largest sector of the space economy and is also the most commercialized, with practical use cases. Due to their complexity, undertakings in this area are subject to a range of regulations, the Outer Space Treaty being one of them. The norms developed by the International Telecommunication Union and WTO principles apply as well.

Navigation Systems

The countries are increasingly using global navigation satellite systems (GNSS), GLONASS, GPS and BeiDou. They have a wide range of applications, both for civilian and military aims. Navigation systems are complex, so regulations pertaining to them stem from different bodies and relate to various aspects such as military use, radio frequencies, and access to information.

Military Regulations

The space industry has provided for rather ambiguous inventions. On one side, discoveries in this area have led to numerous developments without which modern society cannot imagine living. Some of the technologies developed are pretty dangerous; and, if they fall into the wrong hands, it can lead to unforeseen catastrophic consequences.

The Missile Technology Control Regime

The Missile Technology Control Regime (MTCR) was created in 1987 to manage and prevent the proliferation of weapons of mass destruction (chemical, biological, and nuclear). Initially, seven states took part; their number increased to 35 by 2021.

This regime does not provide for official punishment in the case of MTCR violations. However, US authorities have adopted a law under which they can impose sanctions against any country for violating MTCR rules. Moreover, a similar package of sanctions has already been imposed on the People’s Republic of China.

International Traffic in Arms Regulations (ITAR)

The International Traffic in Arms Regulations is a US regulatory regime. This regime imposes restrictions on trade in military and related goods. ITAR maintains a “United States Munitions List,” which is constantly updated. The International Traffic in Arms Regulations is aimed at ensuring that foreign citizens (non-US residents) don’t obtain items on the United States Munitions List. The punishment for violation is monetary fines and sanctions.

European Union Export Controls

EU export controls prevent the sale and proliferation of weapons of mass destruction and the means of their delivery, facilitating regional security, peace, and stability. Additionally, they ensure respect for human rights and international humanitarian law.

In the summer of 2019, representatives of the European Security Council announced their intention to tighten control on the export of dual-use goods. They tightened the licensing process for such goods and submitted a new system of export controls (EU GEAs).

Rules Made to Be Broken

The rules for space industry actors accepted by the global community allow for containing the unregulated expansion of potentially dangerous technologies. Still, several resonant violations of the above rules have occurred in recent years. Let’s recall a few scandals.

American Company Aeroflex

At the end of 2009, Aeroflex voluntarily confessed to violating ITAR for over 10 years. The company disclosed several cases of mislabeling of items since 1999:

  • Between 2001 and 2003, Aeroflex supplied more than 100 integrated circuits that were applied in the Spacebus 4000. As a result, these circuits were at the disposal of the PRC, damaging the national security of the United States.
  • Between 2005 and 2006, bypassing ITAR, Aeroflex supplied prohibited goods to the UAE. As a result, they were used by the Indian government on the satellites Resourcesat-2, GSAT-5, and Oceansat-2.

Aeroflex was fined $8 million by the American government.

Record Fine for ZTE

Chinese smartphone and telecommunications equipment manufacturer ZTE has pleaded guilty to illegally supplying dual-use goods to Iran during a trial in the USA.

The company was accused of illegally supplying American goods and equipment to Iran while violating export controls regulation. In addition, managers of the IT giant were convicted of perjury and obstruction of justice.

ZTE has managed to resolve the claims by US authorities. One of the preconditions of the agreement is an admission of guilt; the company will also have to pay a fine in the amount of $892 million. Besides that, the manufacturer faces another $300 million fine if it violates the arrangement with the US Department of Commerce within seven years.

Rocket Factory Augsburg Issue

Rocket Factory Augsburg (RFA), a space startup based in Germany develops a rocket based on a kerosene/LOX engine. As experts claim, no company can independently produce such an engine from scratch without external help. Moreover, their idea changed after they involved experts from the Ukrainian Yuzhnoye State Design Office who have significant experience with liquid-propellant rocket engines.

Yuzhnoye and RFA started negotiations in 2018 and ultimately signed the contract. However, it refers to dual-use technology under MTCR 1 and falls under the Law of Ukraine “On State Control over International Transfers of Military and Dual-Use Goods,” and the State Service of Export Control of Ukraine has not yet approved it. Without permission, such an instance of technology transfer is deemed illegal in terms of MTCR. Though the case seems to have no substantial negative consequences, it violated the regime.

UK Retirees

In 2018, three subjects of the crown — Iris Attwater, Paul Attwater, and Alexander George — caused some controversy in the UK. It turned out they illegally exported to Iran dual-use and military goods (parts for Russian and American fighter aircraft) for six years, between 2010 and 2016.

The married couple received a sentence of six months’ imprisonment, and Alexander George will spend two and a half years in jail.

Conclusion

International and national laws were created to prevent the proliferation of weapons of mass destruction and to clarify the rules of the game for those engaged in space exploration. But we can see that people tend to break these rules. We can also see that most violations result in fines but do not lead to severe consequences. But what if they did?

This is a difficult and controversial question, and answering it requires an integrated approach. If the international community wants to prevent the flaunting of such violations, then perhaps we need new, tougher rules.