The controversial UNIDROIT space assets protocol was approved during a diplomatic conference in Berlin today, despite widespread industry opposition.
The protocol aims to add space assets to a global registration system for the purpose of recording and…
The controversial UNIDROIT space assets protocol was approved during a diplomatic conference in Berlin today, despite widespread industry opposition.
The protocol aims to add space assets to a global registration system for the purpose of recording and determining priority among creditors’ rights on a first-to-register basis.
But satellite industry trade bodies, ranging from the US-based Satellite Industry Association (SIA) to the Satellite Broadcasting Association of Asia, have strongly criticised the protocol, describing it as unnecessary regulation that will impair space businesses of all sizes around the world.
Last December, nearly 100 trade associations and companies, including start-up and established groups, wrote to UNIDROIT’s Secretary General to express their concerns about the proposed protocol.
“It is disappointing that the Berlin conference moved ahead with a protocol on space asset financing, over the clear and unified opposition of those involved in the actual business of constructing, launching, operating, insuring and financing communications satellites,” said SIA president Patricia Cooper.
The protocol was also approved despite the opposition of four space-faring nations: The US, UK, Canada and Luxembourg.
In announcing the protocol’s approval, UNIDROIT said the measure will play a major role in expanding access to commercial space financing for smaller operators and start-up companies that are in most need of commercial space financing. It said the enhanced legal certainty and transparency will “significantly assist those parties struggling to raise the enormous sums involved in acquiring, launching and operating satellites and other space assets. To this extent, it is to be expected that the new protocol will enhance competition in the commercial space market and provide an invaluable new tool for space finance”.
The approval of the protocol represents the first space law treaty to be adopted in more than three decades, and UNIDROIT claims it is the first ever to deal with perceived problems arising out of private activities in outer space.
There is no appeal process that the satellite industry can take to reverse the new protocol’s approval. However, before it comes into force, a minimum of ten countries must endorse the move. It will also need to be ratified by every country individually, although, because of the nature of the satellite sector, a significant amount of asset-based satellite deals would require registration even if it was only ratified by a few countries.
