Satellite Industry Faces Scrutiny Over Technology Transfer Allegations

Strategic Insights -

The Select Committee on U.S. National Security and Military/Commercial Concerns With The People's Republic of China released a report on May 25, accusing Hughes Space and Communications and Loral Space and Communications of illegally transferring sensitive US launch technology to China. The report found that the companies shared missile design information and know-how with the Chinese, aiding the reliability of their rockets for both civilian and military purposes. The alleged technology transfer occurred after each launch failure, when US satellite builders analyzed the causes and recommended improvements to the Chinese rockets without required State Department export licenses.

Key Takeaways:

  • The Cox Committee report accused Hughes Space and Communications and Loral Space and Communications of illegally transferring sensitive US launch technology to China.
  • The report found that the companies shared missile design information and know-how with the Chinese, aiding the reliability of their rockets for both civilian and military purposes.
  • The alleged technology transfer occurred after each launch failure, when US satellite builders analyzed the causes and recommended improvements to the Chinese rockets without required State Department export licenses.
  • Hughes allegedly committed significant infractions after 1993 and 1995 launch failures, sharing guidance control technology with the Chinese in 1996.
  • Loral officials denied the allegations, claiming that they did not transfer sensitive information to the Chinese and followed government regulations.
  • The Lott Amendment, passed as part of the Defense Department authorization bill, requires the president to notify Congress whenever a waiver is granted to a US satellite manufacturer for a launch in the People's Republic of China.
  • The amendment also authorizes the DoD to suspend an overseas launch campaign at any time for purposes of national security and creates more reporting requirements for the CIA, DoD, and the State Department.
  • The amendment directs the president to negotiate a bilateral agreement with China to adhere to the missile technology control regime.

Statistics:

  • Three failed launches of US-built satellites by the Chinese were analyzed by US satellite builders as part of the accused technology transfer.
  • The launch failures occurred in 1993, 1995, and (undated).
  • The report found that technology transfer occurred after each launch failure.
  • 10 recommendations for US satellite launches were issued by the Cox Report, including shifting licensing authority for US satellite exports from the Commerce Department to the State Department.
  • Additional funding of $2 million is needed for the State Department to hire more licensing officers and upgrade the existing computer system.

Sources:

  • Senate Select Committee on U.S. National Security and Military/Commercial Concerns With The People's Republic of China, "Select Committee Report on U.S. National Security and Military/Commercial Concerns With The People's Republic of China"
  • Lott Amendment, as part of the Defense Department authorization bill (S. 1060)
  • Satellite Industry Association, as quoted by Clay Mowry, Executive Director
  • Cox Report, as quoted by Christopher Cox, Representative (R-Calif.)