Memorandum from the Department of Trade and Industry
1998 (S.I. 1998/2032)
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
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
interest in civil space. "Outer
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
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