Article courtesy of the Las Cruces Bulletin, by Todd G. Dickson
Federal regulations that are relics of the Cold War and perpetuated by more recent concerns of terrorism have created a complex world for private spaceflight entrepreneurs, according to Virgin Galactic’s key person for navigating in this world – Bruce Jackson, vice president for trade controls and export.
Jackson talked about hoops the company has to jump through to comply with rules during a High Tech Consortium of Southern New Mexico meeting Friday, Feb. 17. Jackson said the main rules a private spaceflight company such as Virgin Galactic must comply with are the International Traffic in Arms Regulations (ITAR), which is best known in private spaceflight circles. But the company must also comply with other laws and a variety of government agencies, Jackson said. Sometimes, nuanced interpretation of the restrictions can lead to significant fines and even jail time, he said.
Before working with Virgin Galactic, Jackson worked as a consultant for firms that also had to comply with the federal regulations. ITAR falls under the Arms Export Control Act (AECA), and were shaped by fears that technology created for the benign use of transportation could be used for terrorism as were aircraft in the 9/11 attacks.
Because Virgin Galactic’s spaceliner will have a rocket engine, it falls under a category of munitions that has the most restrictive rules. Besides launch vehicles, the “category four” list includes guided missiles, torpedoes, bombs and mines. As a result, Virgin Galactic has had to create a totally independent U.S. company that isn’t allowed to share all its technology information with the British-based Virgin parent company, Jackson said.
Likewise, Virgin Galactic is having to hire many Americans with its British employees restricted in the information they are allowed to know until they have completed the process of becoming U.S. citizens, he said.
So restrictive are the “category four” regulations that any application to the government is done “under the presumption of denial” as the starting point, Jackson said. Even if the information or technology is commonly known, he said they may not be shared with certain countries, such as China, Cuba, Iran, North Korea, Burma, Venezuela, Sudan and Syria.
“These rules (for munitions) were written in the Cold War when there were different realities,” he said.
The company is currently working with federal regulators, he said, on what can be told to passengers for the purposes of giving safety briefings or how much technical information can be released to potential passengers who need that understanding to be assured of the vehicle’s safety.
The rules also limit who can be passengers, he said. Nevertheless, the company has been able to get nearly 500 people from all over the world to put down deposits toward their $200,000-a-ride tickets, totaling about $60 million.
Jackson’s desire is to get the government to provide a unique classification for human suborbital space flights. He said there should be a Congressional study released soon to reassure skeptics about security concerns.
Virgin Galactic has safety as its “north star” and takes security concerns very seriously, Jackson said. The company is working with the New Mexico Spaceport Authority to make sure there is good security at Spaceport America that still allows for more general tourism access. “We don’t want to turn Spaceport America into Fort Knox,” he said.
Getting these issues sorted out now is important to Virgin Galactic as the company works with other spaceports – such as Sweden – for future point-to-point travel, Jackson said. Along with operations, the rules and restrictions can heavily influence the company’s supply chain, he said.
On the positive side, federal officials are eager to work with Virgin Galactic because the company that is working on “the cutting edge” of the private space travel industry, Jackson said. He noted his disappointment that the New Mexico Legislature failed to pass liability protects to the companies providing materials, equipment and other support to operators such as Virgin Galactic.
Jackson said he wants to help the public have a better understanding of these rules and regulations as smaller businesses seek to interact with the spaceport. They can be especially susceptible to inadvertently running afoul of the laws, he said. “A lot of companies believe that just because they’re not under ITAR, they’re in the clear, but that’s always not the case,” he said.
AECA and ITAR were enacted in 1976 during the Cold War with USSR to implement unilateral arms export controls, but enforcement has picked up in more recent years because of information and technology shared with China, especially in terms of satellite technology.
Jackson cited the case of ITT Corp. that had to pay a $100 million penalty for exporting night-vision goggle component parts to China, Singapore and Britain in 2001. He told of another case where companies have gotten in trouble for sharing information with the military arm of a government, such as China, whereas it was OK to share that same information with its industry. This kind of a misunderstanding about the restrictions resulted in University of Tennessee professor J. Reece Roth serving a four-year prison sentence, Jackson said.
