Space Cases

French space company set to get high-tech export license despite U.S. probe into its illicit sales to China

March 23, 2012

According to U.S. officials, the State Department is set to issue new export licenses for sensitive U.S. satellite technology to a French company currently under investigation for illicit transfers to China, despite expected opposition from Republicans in Congress.

The department notified Congress this week that it plans to issue export licenses worth $125.3 million to 31 companies in Europe, Canada, and Israel, including the French company Thales Alenia Space, along with its U.S., Italian, Spanish, and Belgian subsidiaries.

Thales has been under investigation for several years for selling restricted technology without a license prior to export. The company contends the devices it sold, which originated in the U.S., contained no sensitive weapons system technology.

The new satellite exports feature transfers of defense goods, including technical data and defense services for development, assembly, and testing of the Iridium NEXT satellite constellation.

Separately, the department also recently notified Congress that it plans to approve export licenses worth $263.4 million to companies in Hong Kong and Thailand as part of the AsiaSat 6 commercial communications satellite program.

That export will involve a technical assistance agreement between Space Systems/Loral Inc. and the Asia Satellite Telecommunications Co. Ltd., and Thailand’s Thaicom.

The sale of restricted defense satellite technology to Hong Kong appears to involve transfers of technology to China, which controls the former British colony.

The State Department claims that Thales recently reached an agreement with the State Department to provide information on past sales that are the subject of the licensing compliance investigation, U.S. officials say.

No other details on the agreement or the information could be learned.

The Obama administration is currently engaged in a major export control reform that U.S. security analysts say could lead to the compromise of sensitive space- and military-related technology to countries such as China, which has maintained close military relations with Iran and North Korea.

The new exports of satellite technology include companies in Belgium, Canada, France, Germany, Israel, Italy, Netherlands, Spain, Sweden, and the United Kingdom.

The main U.S. company involved is Virginia-based Orbital Sciences, which currently has 66 satellites and plans to boost the number to 81 under the export plan.

The plan to allow sensitive exports to Thales is expected to draw opposition from Congress, which has been pressing the State Department to sanction the company.

The Free Beacon first reported Feb. 9 that Thales Alenia Space chairman Reynald Seznec was asked by the State Department to turn over information on U.S. technology contained in the Spacebus 4000 satellites.

International Traffic in Arms Regulations (ITAR) require companies selling goods that contain sensitive U.S.-origin technology to obtain a U.S. export license.

Thales has claimed that its Spacebus 4000s were built without controlled U.S. technology and did not need export licenses.

Until recently, Thales has refused to cooperate with the State Department investigation.

A State Department official declined to comment on the plans for new export licenses. The official said the department continues to look into U.S. exports to Thales Alenia Space (TAS) to determine whether U.S. defense articles regulated under ITAR were incorporated by Thales in its ‘ITAR free’ variants of the Spacebus 4000 series of satellites.

"State officials have been meeting and corresponding with TAS officials and continue gathering information with an eye toward resolution of this matter," the official said.

Spokesmen for Thales Alenia Space did not return telephone calls or emails seeking comment.

Three senior House Republicans wrote to Secretary of State Hillary Clinton Dec. 19 saying the Thales-China satellite sales appeared to be illegal.

The letter was sent by Republican Reps. Ileana Ros-Lehtinen (Fla.), chairwoman of the House Foreign Affairs Committee; Michael R. Turner (Ohio), chairman of the House Armed Services strategic forces subcommittee; and Frank R. Wolf (Va.), chairman of the House Appropriations subcommittee on commerce.

The lawmakers asked when the department plans to sanction the company, including a denial of any licenses for further controlled technology.

In response, the State Department’s legislative affairs assistant secretary, David S. Adams, wrote to Ros-Lehtinen on March 15 that the department agrees that export control enforcement is critical to space security and national security.

The letter also indicated that consideration of pending license applications would not preclude "future administrative action against [Thales Alenia Space]."

Adams letter also said the company is claiming that a 1980 French law prohibits the company from providing the information sought by the department.

China has been blocked from unlicensed access to sensitive satellite technology since the 1990s, when U.S. aerospace companies Loral and Hughes improperly provided space technology that the Pentagon said had improved China’s strategic missiles. Both companies were fined for the illicit cooperation.

Security officials are concerned that the Obama administration plan to loosen export control will be used by China’s rapidly growing space warfare program.

China has several anti-satellite weapons systems, including ground-launched missiles that can destroy satellites and lasers that can disable satellites.

Published under: China , France , Satellites