Space legal issues concerning second-hand satellite market

One of the opportunity with on-orbit services would be the development related to the creation of a second-hand satellite market; for this new Space Law article, let us study the space legal issues concerning second-hand satellite market. Life-extended satellites represent enough value so they can be sold to new customers, to developing countries as an example. A second-hand market would represent additional potential customers for satellite maintenance.

ESA’s project of reusing GEO satellites

A few years ago, ESA engineers had proposed a technique to enable a digital satellite radio service for European drivers, without the need to launch a single new satellite into orbit. It promised to be much cheaper to set up than U.S. satellite radio, because it required no new expensive satellite launch. Instead, the proposal was to reuse existing TV satellites nearing the end of their operating life. Once in position, almost thirty-six thousand kilometres away in space, TV satellites will remain in orbit forever, but their useful life amounts to fifteen years or less. Onboard thrusters must keep each satellite pointed precisely in geostationary orbit so they stay lined up with fixed-position Earth-based receivers.

However, once the thrusters’ propellant runs out, the satellites drift out of correct orbit, and are left useless for TV broadcast applications. But further life can be squeezed from a low-propellant TV satellite switched over to mobile digital radio broadcasting, where precision position control is less important. Most thruster propellant is expended correcting satellite attitude in the north-south direction. But if station-keeping is limited to the east-west axis, then, satellite lifetime could be extended by some five years. The satellite’s position would oscillate across the sky by a few degrees. But vehicle-mounted digital radio antennas would keep track of the satellite as it moves, just as they would maintain contact with it as the car bearing the antenna moves across the landscape.

In-orbit transfer of ownership

Let’s focus on Satellite Ownership Transfers and the Liability of the Launching States. A space object may be sold/bought while in outer space. There is no objection by principle to a transfer of registration. The case we are studying is about the original State of registry entering into an agreement with the transferee state, such that the latter is grated jurisdiction over the transferred space object. The original State of registry would have to remove the space object from its national registry and for the transferee state to register the object on its own national registry. That is what happened with both the satellites AsiaSat 1 and 2. The two satellites were removed from the registry of the United Kingdom of Great Britain and registered on the national register of China (technically, it was not a transfer of ownership, but a State succession). The deregistration and reregistration of assets being transferred while in outer space simply included a list of administrative requirement for such transfers.

Let’s recall that the Article VIII of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (entered into force on October 10, 1967) states that “A State Party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body. Ownership of objects launched into outer space, including objects landed or constructed on a celestial body, and of their component parts, is not affected by their presence in outer space or on a celestial body or by their return to the Earth. Such objects or component parts found beyond the limits of the State Party to the Treaty on whose registry they are carried shall be returned to that State Party, which shall, upon request, furnish identifying data prior to their return”.

Article VI of the aforementioned Treaty enounces that “States Parties to the Treaty shall bear international responsibility for national activities in outer space, including the Moon and other celestial bodies, whether such activities are carried on by governmental agencies or by non-governmental entities, and for assuring that national activities are carried out in conformity with the provisions set forth in the present Treaty. The activities of non-governmental entities in outer space, including the Moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty. When activities are carried on in outer space, including the Moon and other celestial bodies, by an international organization, responsibility for compliance with this Treaty shall be borne both by the international organization and by the States Parties to the Treaty participating in such organization”.

A space object may be sold/bought while in outer space. There is no objection by principle to a transfer of registration. The property is transferred, including the rights and obligations which are connected to property in every legal system. The responsibility for “national activity” according to article VI of the 1967 OST is transferred because it is related to a fact: the link of nationality of the operator. This activity must be authorised and continuously supervised by the “appropriate State”. The liability of the launching State(s) is unchanged as it is related to the time of the launch. The State of the new owner can register and have jurisdiction and control over the object if it is a launching State because of article II of the 1976 Registration Convention (if it is not, it cannot).

Article II of the aforementioned Convention states that “1. When a space object is launched into Earth orbit or beyond, the launching State shall register the space object by means of an entry in an appropriate registry which it shall maintain. Each launching State shall inform the Secretary-General of the United Nations of the establishment of such a registry.

2. Where there are two or more launching States in respect of any such space object, they shall jointly determine which one of them shall register the object in accordance with paragraph 1 of this article, bearing in mind the provisions of article VIII of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, and without prejudice to appropriate agreements concluded or to be concluded among the launching States on jurisdiction and control over the space object and over any personnel thereof.

3. The contents of each registry and the conditions under which it is maintained shall be determined by the State of registry concerned”.

Transfer of ownership of a satellite does not affect the liability regime. Let’s remember that Responsibility concerns national activities whereas Liability concerns the launching State(s), which are “jointly and severely liable”. In this case, Ownership will not have any impact on the Liability. The identification of the launching States is the key to solve the questions of liability in respect of the on-obit transfer of ownership of a satellite However, scope of the launching States is not clear. What about if a state whose national owns a satellite launched from outside its territory shall be regarded as a launching State? Or if a state of registry not concerned with the actual launching shall be regarded as a launching State?

The “original” launching State stays liable even if it cannot in practice have any control over the satellite. Therefore it must control or even block every change of ownership to a foreign person. The State of the “national activity” is responsible according to Article VI of the 1967 OST but cannot register it, cannot have jurisdiction and control over it even if it must authorise and supervise this activity.

While registration is irrelevant to the liability, it is useful to find a launching State especially when the procuring State specifies its name as that of a launching State. However, considering State practice, making a formula of finding a launching State based on the registration would not be a solution. Then, it has to be noted that it is the assured protection of potential victims, not the identification of a launching State itself that counts. Taking note of that prerequisite, it has to be underlined that furnishing information to the UNSG is as useful as registration as far as the identifying the situation concerning a satellite is concerned.

Concluding remarks concerning second-hand satellite market

Helped by the various kinds of information provided, Governments can ensure that its national will assume third party liability through national legislation in line with the U.N. Treaties on Outer Space as well as the 2004 Application of the concept of the “launching State” and the 2007 Recommendation on enhancing registering space objects. Information provision concerning the multilateral transaction and national legislation will be the solution with respect to the on-orbit transfer of a satellite. This is what can be said concerning space legal issues concerning second-hand satellite market.