Space Law

Space Law: The Commercial Space Race Begins

Space law is the body of law governing space-related activities, encompassing both international and domestic agreements, rules, and principles. Parameters of space law include space exploration, liability for damage, weapons use, rescue efforts, environmental preservation, information sharing, new technologies and ethics. SpaceX, in May 2020, became the first private company to send humans to space. What this implies is hard to say. A recent article in the Harvard Business Review sees the sky, or should I say heavens, as the limit. With a healthy interplay between public and private investment, international co-operation and a rule of law suited to this harsh environment, it suggested that NASA’s prediction, in their 1977 report ‘Long-Term Prospects For Developments In Space’, that extra-terrestrial economies could one day out-strip terrestrial ones, was not so far-fetched. The Artemis Accords, signed in 2020 by the directors of 10 national space agencies, also indicates a shift in space law that better accommodate commerce.

Space-for-space economy

An important distinction made in the Harvard Business Review article was between a space-for-earth economy and a space-for-space one. The space-for-earth economy uses space to deliver benefits to those on earth. The use of satellites for telecommunications, internet infrastructure, or earth observation capabilities and national security. The real shift will be when companies are able to offer services in space for use in space – the space-for-space economy. However, creating such a market will require the existence of consumers beyond the stratosphere. Which may not exist for some time. In the meantime private companies will have to rely on public contracts. Hopefully, being able to supply to government space agencies will enable and invigorate supply to future commercial markets. Here are some examples of work being done:

  • SpaceX hopes to support transportation for large numbers of private space travellers. Currently their space-for-space transport solutions have been for government bodies (NASA) only. But with future decreases in the cost of launching spacecraft, SpaceX could be instrumental in putting people into space and creating the demand necessary for a space-for-space economy to develop.
  • Made In Space, Inc. is currently exploring high-quality fibre-optic cable, manufactured in zero-gravity for sale on earth. The company also recently received a $74 million contractto 3D-print large metal beams in space for use on NASA spacecraft. Such construction capabilities will be essential in a developing space-for-space economy.
  • In February 2020, Maxar Technologies was awarded a $142 million contractfrom NASA to develop a robotic construction tool that would be assembled in space for use on low-Earth orbit spacecraft. Such tools will be just as useful for a future private sector.
  • In 2015 Argotec and Lavazza collaborated to build an espresso machine that could function in the zero-gravity environment of the International Space Station. Such luxuries will be crucial for the development of an economy in space, even if for the moment they are mostly publicity stunts.
  • In 2010, Planetary Resources, Inc.and Deep Space Industries, were set up with space mining as their objection (lunar mining). Both failed because the lack of a space-for-space economy made the cost of extracting minerals to be brought back and sold on earth too high to be viable. The natural resources known to exist on the moon will, if a space-for-space economy develops, become big business.

Space law

In what legal system is this commercial activity taking place? Space law is by its nature extra-terrestrial and extra-territorial. Accordingly, its usage is governed by an extensive international legal framework, under the aegis of the United Nations (UN), made up of treaties, agreements and conventions governed by international law, which may be implemented into national law. The Artemis Accords have reinforced many of these frameworks and laid the groundwork for more commercially orientated space law.

The Artemis Accords

The Artemis Accords are named after the NASA project which aims to send the first woman and another man to space by 2024. They are an international agreement for cooperation in the civil exploration and use of the Moon, Mars, comets, and asteroids for peaceful purposes, and are grounded in what is often considered the foundation of space law, the Outer Space Treaty of 1967. The stated purpose of the Artemis Accords is to "provide for operational implementation of important obligations contained in the Outer Space Treaty and other instruments." The provisions:

  • Affirm that cooperative activities under these Accords should be exclusively for peaceful purposes and in accordance with relevant international space law.
  • Confirm a commitment to transparency and to share scientific information, consistent with Article XI of the Outer Space Treaty.
  • Call for a commitment to use reasonable efforts to utilize current interoperability standards for space-based infrastructure, and to establish standards when they do not exist or are inadequate.
  • Call for a commitment to take all reasonable efforts to render necessary assistance to personnel in outer space who are in distress.
  • Specify responsibility for the registration of objects in space.
  • Call for a commitment to publicly share information on their activities and to the open sharing of scientific data.
  • Include an agreement to preserve outer space heritage, which they consider to comprise historically significant human or robotic landing sites, artifacts, spacecraft, and other evidence of activity, and to contribute to multinational efforts to develop practices and rules to do so.
  • Include an agreement that extraction and utilization of space resources should be conducted in a manner that complies with the Outer Space Treaty and in support of safe and sustainable activities. The signatories affirm that this does not inherently constitute national appropriation, which is prohibited by the Outer Space Treaty. They also express an intent to contribute to multilateral efforts to further develop international practices and rules on this subject.
  • The Accords provide for the announcement of "safety zones", where operations of other nations or an anomalous event could reasonably cause harmful interference.
  • Include a commitment to mitigate space debris and to limit the generation of new, harmful space debris in the normal operations, break-up in operational or post-mission phases, and accidents.

National framework – UK

The UK has some of its own space law. The UK Outer Space Act 1986 sets out the UK's obligations under the various international treaties and principles covering the use of outer space. This Act also covers entities in certain of the UK's overseas territories and the Channel Islands, as well as the Isle of Man, and requires all those seeking to launch or procure the launch of a space object, operate a space object or undertake any activity in outer space, to obtain a licence. Licensing and other powers are conferred on the Secretary of State for the Department of Business, Energy and Industrial Strategy (BEIS), who carries out these powers through the UK Space Agency (UKSA). The UKSA was launched in April 2010, bringing all UK civil space activities under one single management. The UKSA began operation as a full executive agency on 1 April 2011.

The Space Industry Act 2018 is space law intended to make provision for space activities including vertical launches and suborbital activities in the UK. The UK government intends that licences under it, including for launch and sub-orbital activities, will be granted by 2021. Secondary legislation will be enacted to cover specific aspects of the Act, including licensing and insurance requirements.

Liability

The status and liability of commercial use of outer space, including the moon and other celestial bodies, is not very clear under the existing space law regimes. According to Article VI of the Outer Space Treaty 1967 and Articles II and III of Liability Convention 1972, the country in which the launch of the spacecraft takes place is liable for any activities in outer space. Even in the case of non-governmental activities, the launching state is liable. The possible litigation relating to the commercial activities are mainly the financial consequence of damage caused and also the technical complications that private entities face in case of supply of defaulted parts to national space agencies.

Legal status of resource exploitation

No nation claims ownership of any part of the Moon's surface, and the international legal status of mining space resources is unclear and controversial.

Russia, China, and the United States are party to the 1967 Outer Space Treaty (OST), which is the most widely adopted treaty, with 104 parties. The OST treaty offers imprecise guidelines to newer space activities such as lunar and asteroid mining, and it therefore remains under contention whether the extraction of resources falls within the prohibitive language of appropriation in the treaty. Although its applicability on exploiting natural resources remains in contention, leading experts generally agree with the position issued in 2015 by the International Institute of Space Law (ISSL) stating that, “in view of the absence of a clear prohibition of the taking of resources in the Outer Space Treaty, one can conclude that the use of space resources is permitted”.

Seeking clearer regulatory guidelines, private companies in the US prompted the US government, and legalized space mining in 2015 by introducing the US Commercial Space Launch Competitiveness Act of 2015. Similar national legislations legalizing extra-terrestrial appropriation of resources are now being replicated by other nations, including Luxembourg, Japan, China, India and Russia. This has created an international legal controversy on mining rights for profit. James R. Wilson, a legal expert stated in 2011 that the international issues "would probably be settled during the normal course of space exploration." In April 2020, U.S. President Donald Trump signed an executive order to support moon mining.

The final frontier

With the huge commercial potential that space offers comes the huge mobilisation required for its realisation. More than a little bit of luck will be needed to see dreams realised in the near future. Three things are certain: the private sphere will need invigoration by both government contracts/investment and their willingness to deregulate, such as allowing private space travellers to take on more safety risks than government funded ones; a vigorous upholding of the rule of law will create a bedrock for competitiveness; and a transcendence of geopolitical divides will ensure safe and unimpeded economic development.

Whilst the Artemis Accords have introduced some co-operation between nations on the question of how to regulate activity in space, it lacked two signatories: China and Russia; and failed to clarify whether, under space law, resource extraction could constitute national appropriation of areas in space.

EM law specialises in technology law. Get in touch if you have any questions on the above.


EM Law Brexit

Brexit - Protecting Your Business

Despite this, the chances of the UK leaving the EU without an agreement is still a serious possibility because the agreement will need parliamentary approval. So what are the consequences of a no-deal Brexit and what can you do to minimise disruption to you and your business if it does happen? Our team at EM Law can help mitigate the risks you may be facing with Brexit - please get in touch if you need any help.

What is a no-deal Brexit?

As stated in Article 50, there will be a no-deal exit if the UK and the EU fail to reach a withdrawal agreement. If there is no withdrawal agreement, there will be no transition period, and EU law will stop applying to the UK at 11pm (UK time) on 29 March 2019. While it may seem easier to wait and see how everything works out, putting a plan in place now could make a big difference to how your business copes with the changes to come.

Movement of goods

The key concern for most businesses will be ensuring that they are legally permitted to continue to supply their products and services or can continue to be supplied with the products and services that they need for their business. If the UK leaves the EU without a deal there would be immediate changes to trading with the EU. The free circulation of goods between the UK and EU would cease and the UK would fall back on World Trade Organisation (WTO) rules. There would be no preferential tariffs, goods would have to meet each jurisdiction’s regulatory requirements, and the UK and the EU would treat each other as ‘third countries for services.’ The cost and administrative burden of doing business with the EU is therefore likely to rise. The exact nature of how your business should prepare for this will differ depending on the nature of the business’s operations.

For goods entering the UK from the EU an import declaration will also be required, customs checks may be carried out and any customs duties must be paid. Businesses exporting goods to the EU will be required to follow customs procedures in the same way that they currently do when exporting goods to a non-EU country. Businesses should consider registering for a UK EORI number, ensuring that their International Terms and Conditions of Service reflect that they are now an exporter, and using a customs procedure. A customs broker, freight forwarder or logistics provider can advise whether one of these procedures would be suitable for your business.

Movement of people

If the UK leaves the EU without a deal, there will also be consequences for the free movement of people. If you are a British passport holder, you will be considered a third country national under the Schengen Border Code and will need to comply with different rules to enter and travel around the Schengen area. According to the Schengen Border Code, third country passports must have been issued within the last 10 years on the date of arrival and have at least 3 months validity remaining on the date of intended departure from the last country visited in the Schengen area. If you plan on travelling to the Schengen area after 29 March 2019, it is worth checking that your passport complies with the new validity rules.

Despite departure day being less than 5 months away, for those who don’t have British passports, the future is less clear. When asked recently what would happen in the event of a no-deal, the government was unable to answer whether free movement of people would immediately cease on 29 March 2019.

Contracts

Brexit planning is likely to identify specific aspects of existing contracts that need to be risk assessed or amended. There will also be implications for new contracts being negotiated to continue after Brexit. For example, definitions or clauses defined by reference to the EU will need to be amended. Contractual terms also commonly include references to EU legislation and this will need to be able to be interpreted to include that EU legislation incorporated into UK law.

Rather than relying on force majeure or material adverse clauses in your contract, you should consider including express provisions that cover specific consequences of Brexit. A bespoke Brexit clause has the advantage of being capable of being drafted to cover a wide range of potential future relationship outcomes.

If your business-critical suppliers are over-exposed to currency risk or price increases, they may also try and pass these onto you, re-negotiate their terms, or be unable to fulfil their obligations. You should check whether your existing contract gives you the right to adjust pricing to cater for the effects of tariffs and inflation.

Data Protection

If the UK leaves the EU without an agreement in place, there would be no immediate change in the UK’s own data protection standards. This is because the Data Protection Act 2018 would remain in place and the EU Withdrawal Act would incorporate the GDPR into UK law to sit alongside it.

Transfers of personal data from the UK to the EU would continue without interruption. In recognition of the unprecedented degree of alignment between the UK and the EU’s data protection regimes, the UK would continue to allow the free flow of personal data from the UK to the EU.

However, the framework governing transfers of personal data from the EU to the UK would change on exit. In the event of a no deal Brexit, the UK will cease to be part of the EU. For data protection purposes, it will be a ‘third country’ and be subject to the same restrictions that apply to any other non-EU country. The European Commission has stated that if it deems the UK’s level of personal data protection essentially equivalent to that of the EU, it would make an adequacy decision allowing the transfer of personal data to the UK without restrictions.

However, given that this adequacy decision is not certain, it may be wise to identify an alternative legal basis for those transfers. For the majority of businesses, the most relevant alternative legal basis would be adopting EU-approved model contractual clauses for the transfer of data. Either way, this is something to start thinking about now.

If you have any questions around Brexit or would like us to carry out a quick health check on your business please contact Neil Williamson.