Joint Committee on Statutory Instruments Forty-Seventh Report


Memorandum from the Department of Trade and Industry


1.  The Committee has requested that the Department submit a memorandum on the following point:

    Regulation 2 increases the fee payable on an application for a licence under the Outer Space Act 1986 from 1000 (prescribed in 1989) to 6500. Explain the reason for this substantial increase.

2.  Space activities are regulated by international law and in particular by the United Nations Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and other Celestial Bodies 1967 (known as "the Outer Space Treaty") and the Convention on International Liability for damage caused by Space Objects 1972 (known as "the Liability Convention"). Under these treaties Governments are responsible for activities carried out by their citizens in outer space and liable for damage caused by them, whether the activity originates from national territory or not.

3.  In order to regulate such activities by UK citizens, and in particular to protect HMG from possible liability, the Government has powers under the Outer Space Act 1986. These are exercised by the British National Space Centre (BNSC), an inter-departmental body led by DTI which co-ordinates HMG's interest in civil space. "Outer space" is not defined precisely but in the UK is taken to mean any area beyond airspace. The Civil Aviation Authority regulates airspace.

4.  In practice, BNSC receives 6 or 7 applications for licences every year from UK companies seeking undertake space activities. These typically involve companies planning to procuring the launch of a new satellite or take control of an existing satellite. BNSC undertakes a number of legal, financial and technical checks using expert advice from DTI lawyers and accountants and the Defence Evaluation and Research Agency (DERA) to ensure that the proposed activity is safe, financially sound and that there are adequate insurance arrangements in place.

5.   When the original licence fee of 1000 was introduced in 1989, BNSC had limited experience of the costs involved. The complexity and frequency of licence applications has since increased and, based on the experience of issuing 30 licences, BNSC estimates that the typical cost to the Government of processing each application is about 6200. A breakdown of costs is at Annex A. This has been calculated in accordance with Treasury guidelines for recovering costs and the fee set at 6500 to take into account inflation over the next two-and-a-half years. It is intended to review the fee again after five years.

6.  Companies which are regularly involved in activities regulated by the Act were consulted and did not offer evidence that their competitive position would be in any way affected. This is not surprising given that the cost of the projects licensed under the Act so far has ranged from 2m to over 150m. Given that the impact on business is expected to be negligible, a Compliance Cost Assessment was not carried out. The fees do not apply to educational institutions carrying out activities for teaching or research purposes.

2nd November 1998

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