U.S. Threatens Thales Alenia Space over “ITAR-Free” Satellite

Posted by at 7:27 pm on February 13, 2012
Category: ChinaDDTC

China W3C LaunchReuters has obtained a copy of a State Department letter to Congressional staff on the simmering feud between the State Department and Thales Alenia Space over the W3C satellite that Thales sold to the Chinese and which the Chinese have launched. Thales has claimed, but the State Department refuses to believe, that the W3C satellite was “ITAR-free” and could be shipped to China without violating the U.S. embargo on exports to China of satellites and other space vehicles.

The State Department’s efforts to investigate whether U.S. components or technology were incorporated into the W3C satellite, in contravention of the claim that it is “ITAR free,” have been stymied by Thales’s invocation of a French blocking statute which forbids French companies from supplying documents or information to be used in foreign governmental investigations. According to the Reuters report, the State Department letter to Congress acknowledged that the blocking statute would make Thales unable to comply with its investigative requests but nevertheless suggested that the result might be a blanket ban on exports by U.S. companies to Thales.

Needless to say such an action barring exports to Thales would deal a heavy blow to Thales and to the bottom lines and jobs at U.S. suppliers to Thales. Such a ban could force Thales to revamp many of its product lines and would certainly strain French-American relations, not to mention the possibility that the Congressional cafeterias would revert to serving freedom fries and freedom vanilla ice cream again. Worse yet, ordinary Americans might have to start referring to some of their dogs as freedom poodles and certain hairstyles as freedom twists.


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Copyright © 2012 Clif Burns. All Rights Reserved.
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While I see the point of what the US Government is trying to achieve, I sometimes wids US enforcement folk would look in a mirror.

If all the details of this story were turned around and it was a US company under suspicion from a French company, how willing would the company or the USA Government be for the US company turning over all their information so the French could be comfortable that the US company had not done the wrong thing?

Comment by Nujje G on February 13th, 2012 @ 8:58 pm

Not being a lawyer, I don’t understand what gives the US State Dept. the legal authority to demand that a foreign company, selling its own product to a third country, prove that it didn’t employ US technology. And how can the US compel a foreign entity to violate the laws of its home country?

Comment by Motorcyclist on February 13th, 2012 @ 9:26 pm

Motorcyclist: The State Department extends its jurisdictional reach over defense articles extra-territorially under the International Traffic in Arms Regulations(ITAR). To demand that a foreign entity comply with U.S. regulations and ignore their own domestic laws, some might call “chutzpah”! To avoid this, certain foreign countries have enacted “blocking statutes” to preclude the intrusion of U.S. law into their domestic jurisdiction.

Comment by Carol A. Kalinoski on February 14th, 2012 @ 9:40 am

Freedom underwear twisting. The US is right here. There is no way the French made a complete satelite without any US origin hardened component, and if they did, its really interesting to see HOW they made it……

Comment by Alon on February 14th, 2012 @ 10:53 am

In deed interesting – can the US impose their laws on other sovereign states? As a German, I feel that US laws go very far here.

Comment by Martin on February 15th, 2012 @ 5:50 am

Interestingly enough the reescalation of the Thales investigation is happening concurrent to the congressional push for relaxing export control to stimulate the US satellite industry…coincidence? I think not! What else can we do to regain market share on commercial satellite? Too bad there’s no malfunctioning accelerator involved in this case.

Comment by LC on February 15th, 2012 @ 4:17 pm

Ms. Kalinoski: With respect, no matter what the well-intended folks at DDTC think, the ITAR does not trump the AECA, the Constitution or international law. The American Law Institute’s Restatement of the Foreign Relations Law of the United States is a better guide than the curiosity of the folks at DDTC as to the extent of US subject matter or personal jurisdiction. It is one thing for DDTC to demand verification of the delivery and use of items which it affirmatively can document to have been licensed, its quite another for DDTC to insist that a foreign firm, especially from our oldest allied country, open its books and records and show its bills of materials in order to prove a negative.

I reckon its been so long since the Trans Siberian Pipeline affair that there is another generation of Foggy Bottom bureaucrats that require proof that they are not Masters of the Universe.

Comment by Hillbilly on February 16th, 2012 @ 12:03 pm

    It should be added that State/DDTC is being pressured, at least in part, into this position by certain folks on the Hill (and we all know who they are) who actually do believe that the U.S. has universal and unlimited jurisdiction and has the right to demand this sort of information.

    Comment by Clif Burns on February 16th, 2012 @ 1:54 pm

Alon: The US may be right here – then again the US may not be right. The point being discussed is the US Government presumption that US law can be and should be enforced anywhere and anytime that suits its purpose on the day.
If the US Government needed French technology to meet its operating goals, I doubt that they would give a thought to the French Government’s opinion on whether they could or could not?
The only way for the US to really protect its technology is to close up shop and keep it in the hands of US persons only. This would of course mean that the dollar would suffer and it would now rely on US persons doing the right thing. My reading of commentaries on US controls is that it is US persons that get caught violating them more often than we non US types.

Comment by Nujje G on February 16th, 2012 @ 6:22 pm

Nujje G: I have worked on projects with Airbus, Alenia and other NATO and major non-NATO ally partners. In my experience, US defense contractors observe non-US export control programs. Some non-US export control agencies, such as the German BAFA and the UK ECO, are more transparent and easier to understand and to comply with than others (such as the Italian agency). BAFA and ECO often require end-user certificates and proof of delivery, which US companies provide.

US controls on commercial items largely parrallels the EU Dual Use regulation which is essentially a compilation of the lists from the multilateral export control regimes (of which the US is a member), to which individual member states can add controls. The difference is that the US has many unilateral controls on items and technology that the multilateral organizations do not find worthy of control, and US enforcement agencies emphasize punitive actions whereas European agencies are more likely to resort to a “tap on the shoulder” at least in the first instance. There is considerable cooperation among US and foreign enforcement authorities through customs cooperation treaties.

Comment by Hillbilly on February 17th, 2012 @ 11:05 am

W3C has been launched from China but for an Eurpean cutomer (Eutelsat)
Of course, no ITAR part inside . We don’t laugh with American Law in French .
Dispute is about Industrial reasons and Space industry is critical for all Government.We understand that our US competitor are acting on Congress for commercial resons.
US people are always our best Friends and we hope for a good end.

Comment by Thales boy on February 22nd, 2012 @ 3:48 pm