Congressional Research Service, “China: Possible Missile Technology Transfers from U.S. Satellite Export Policy – Actions and Chronology,” September 5, 2001

Summary

Congress has been concerned about whether U.S. firms, in exporting satellites, provided expertise to China for use in its ballistic missile and space programs and whether the Administration’s policies might facilitate transfers of military-related technology to China. This CRS Report discusses security concerns, policy changes, congressional action, and a chronology of major developments since 1988.

Some critics opposed satellite exports to China, while others were concerned that the Clinton Administration relaxed export controls and monitoring of commercial satellites in moving the licensing authority from the State Department to Commerce in 1996. A range of concerns were prompted by New York Times reports in April 1998 that the Justice Department began a criminal investigation into whether Loral Space and Communications Ltd. and Hughes Electronics Corp. violated export control laws. The firms allegedly shared their findings with China on the cause of a rocket’s explosion while launching a U.S.-origin satellite in February 1996. The companies are said to have provided expertise that China could use to improve the accuracy and reliability of its future ballistic missiles, including their guidance systems. At least three classified studies reportedly found that U.S. national security was harmed. Congress and the Justice Department have also investigated Hughes’  review of China’s launch failure on January 26, 1995. Also, the press reports alleged that President Clinton in February 1998 issued the latest waiver of sanctions (for Loral’s Chinasat-8) that undermined the investigation by allowing licenses for the export of assistance similar to that in question.

In the fall of 1998, Congress passed the FY1999 National Defense Authorization Act that transferred licensing authority over satellites back to the State Department (effective March 15, 1999). On December 30, 1998, the Cox Committee unanimously approved a classified report concluding that China’s technology acquisitions over the past 20 years, not only that associated with satellite launches, have harmed U.S. national security. The Senate Intelligence Committee released its unclassified report on May 7, and the Cox Committee issued a declassified report on May 25, 1999. On October 5, 1999, the President signed into law the FY2000 National Defense Authorization Act (P.L. 106-65) inwhich Congress addressed export controls relating to missile technology, satellites, and other issues. In April 2000, the State Department charged Lockheed Martin Corp. with violating export controls, but they agreed in June to a settlement involving penalties of $13 million. On November 21, 2000, the State Department announced anew missile nonproliferation agreement with China that resumed considering satellite export licenses and extension of a bilateral space launch agreement (to expire end of 2001).

Congress may watch for possible legal action or settlements for Loral and Hughes (based on investigations begun in 1997), new Presidential waivers or  licenses for exports of satellites, and review of U.S. policy to export satellites to China. H.R. 1707 (Berman) seeks to shift jurisdiction over satellite exports back to Commerce, and the language was added to the House Export Administration Act (H.R. 2581). The State Department imposed proliferation sanctions on September 1, 2001.

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