Weekend Edition Nº165 by eulawlive

Nº165

DECEMBER 2

2023

SPECIAL ISSUE

THE COUNTDOWN TO THE EUROPEAN SPACE REGULATION EDITED BY ALDO SANDULLI

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Introduction. The Growth of Space Regulation in Europe Aldo Sandulli European Union and National Space Regulation: Outer Space Between Market and Security Aldo Sandulli ESA as an International Organisation Marco Ferrazzani EU Space Law and Role of EUSPA Ezio Villa Security Dimensions of Space Economics and Finance Jana Robinson Investing in Space: The Consequences of Regulation (EU) 2019/452 for Foreign Investors Andrea Capurso Space and Innovation. Public Procurement Tools Elisabetta Tatì Charting the Course Towards Law, Governing Colonies in the Space. A Venture in Legal Futurism Jakub Handrlica

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Introduction

The Growth of Space Regulation in Europe Aldo Sandulli 1 In this third decade of the 21st century we are witnessing a huge expansion of European space regulation both at European Union and national level. The 2021 Regulation (Regulation EU 2021/696)2 and the 2023 Joint Communication on SSSD (10th March 2023)3 are important signs that EU outer space policies are being expanded. The European framework is in balance between the market access of private actors and investors and the security and protection of data and strategic infrastructure. In particular, the security of outer space infrastructures is focusing the attention of the European institutions, despite the lack of European competences for the security and legal order issues: in fact, the road that allows the European regulator to intervene in the sector is given by the passe-partout of space infrastructures. The Member States are also experiencing a period of great political interest in space regulation: France and Luxembourg already have national regulations (and they recently amended them); the governments of Italy and Spain are working hard to quickly have a national space regulation. Here, too, the balance is struck by the balance between economic activities and the major issues of security and defence, with the topics of cybersecurity and technological innovation that are central in this sector.

The security of outer space infrastructures is focusing the attention of the European institutions, despite the lack of European competences for the security and legal order issues

1. Full Professor of Administrative Law, Department of Law, Luiss University. 2. Regulation (EU) 2021/696 of the European Parliament and of the Council of 28 April 2021 establishing the Union Space Programme and the European Union Agency for the Space Programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013 and (EU) No 377/2014 and Decision No 541/2014/EU, (OJ 2021 L 179, p. 69). 3. Joint Communication to the European Parliament and the Council, European Union Space Strategy for Security and Defence, JOIN/2023/9 final.

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This great focus on space regulation also implies a different way of studying these areas of studies. The sector was once the monopoly of scholars of international law. Today the subject is also studied by European Union and private and public law scholars. In particular, topics of administrative law are increasingly relevant: for instance, authorisations for economic space activities or innovative procurement and public-private partnerships in the space sector are becoming an important part of European and national space regulation. Therefore, not only is the area of study being extended, but also the way of studying the themes of space regulation is changing and deepening. In the following special issue, which is the outcome of the workshop perfectly organised by the Italian Embassy in Prague on 26 June 2023, we try to provide a synthesis of the two topics described above. On the one hand, the growing importance of European spatial regulation, with an actor, the European Union Agency for the Space Programme (EUSPA), who joins the European Space Agency (ESA) with increasingly important tasks. On the other hand, security issues that, due to the ongoing geopolitical transformation, are gaining great importance, particularly in the areas of new technologies and space defence. We have tried to remain firmly anchored to reality and regulatory discipline, but certainly talking about these issues sometimes forces us to make a leap into the future: the final contribution of this special issue represents an interesting and smart ‘venture in legal futurism’, as the title of the paper says. A future probably not too far away, if we assume that, in a few years, we will have the first mining concessions on the Moon.

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European Union and National Space Regulation: Outer Space Between Market and Security Aldo Sandulli 1 In many Member States of the European Union, a national law on outer space is currently discussing in the political debate or in Parliament. In France, the French Space Operation Act (FSOA) 2008 law was strongly amended last year. In Luxembourg, a law was adopted in 2017 and amended in 2020. In Germany, the debate on the adoption of a national law has been going on for more than a decade. In Spain and Italy, proposals have recently been submitted to their Parliaments to adopt a national law. In particular, the current Italian government has announced within the year the presentation of a national law on outer space. Why is there now an urgent need in Europe for EU Member States to adopt a national law on space? To gain a proper understanding of this prospects and explore its contents, we must contextualise it within the rapidly changing European scenario, which is influenced by two major transformations. On the one hand, there have been significant technological advances leading to the involvement of private economic players in space missions and viewing space as both a market and an economic phenomenon. In fact, the space economy is experiencing significant development and will continue to do so in the coming decades, thus requiring regulatory support for both public and, above all, private investments. In the last ten years, nearly two thousand companies operating in the space sector have invested about three hundred billion dollars. The space economy currently accounts for 0.35% of world GDP. In the coming decades, raw material extractions on the Moon could guarantee huge revenues. This has led to a profound change in the subjects that carry out the missions. Alongside the traditional space agencies, protagonists for decades of space exploration (NASA, ESA, ROSCOSMOS, CNSA), are emerging new public institutions (among others, Isro, the Indian Space Research Organization; Jaxa, the Japanese Space Agency; UKSA, the United Kingdom Space Agency; Isa, the Israelian Space Agency) and private actors (Space X, Blue Origin, ABL Space Systems, Rocket Lab, Relativity Space, Stratolaunch, Virgin Galactic). On the other hand, a geopolitical shift is underway, resulting in a rapid decoupling between the USA and China. This phenomenon reinforces the idea that two dominant world blocs are emerging, with a possible return to a Cold War situation. All this could weaken the discipline of international and global law, while regional regulatory frameworks such as that of Europe are gaining strength and issues such as the strategic autonomy of the European Union are gaining in importance. The escalation of tensions between the two blocs that are forming worldwide focuses attention on the areas of defence and national security. And a new and extended concept of economic security is also emerging, with security issues drilling and penetrating into the traditional ones of the economy and the market. These issues, however, can no longer be dealt with at 1. Full Professor of Administrative Law, Department of Law, Luiss University.

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the level of individual States, but need to be dealt with at supranational level by developing common EU policies. This leads to a difficult legal problem of compatibility of the new political needs with the titularity of competences in the field of outer space (security and defence exclusive competences of the Member States: Article 4(2) TEU).

Let us focus on Europe. We might start from the fact that, for nearly half a century, the primary and virtually exclusive, player in Europe has been an international institution, an international agency, namely the European Space Agency (ESA). It is widely recognised that the ESA operates independently, also encompassing States outside the European Union, including Switzerland, Norway, and the United Kingdom. Notably, the Canadian Space Agency maintains a special cooperative relationship with the ESA, while also engaging in collaborations with the Russian and Chinese Space Agencies. In addition, the ESA conducts its activities with funding provided by its member States and ensures a fair return on investment to companies within those States. So, the ESA operating environment resides within the realm of international law and its policy is the use of space for purely peaceful purposes. Indeed, the ESA has adeptly navigated these legal waters for over four decades, until the significant geopolitical shifts of recent years. Regarding space law in the European Union, the point of reference is Article 189 of the Treaty on the Functioning of the European Union. It states that ‘[t]o promote scientific and technical progress, industrial competitiveness and the implementation of its policies, the Union shall draw up a European space policy’. As part of this objective, the Union has formulated a ‘European space programme’, but it does not include any harmonisation of the laws and regulations of the member States. The article also establishes that ‘The Union shall establish any appropriate relations with the European Space Agency’.

For nearly half a century, the primary and virtually exclusive, player in Europe has been an international institution, an international agency, namely the European Space Agency (ESA)

In accordance with Article 189 of the Tfeu, Regulation (EU) 2021/6962 was enacted to establish the European Space Programme and the European Union Agency for the Space Programme (EUSPA). This regulation marks a significant evolution in EU space policy and law. The direction taken by the European Union was therefore to work on infrastructures that are related to space-based scientific innovation for dual use, such as satellite constellations and data protection systems (alongside the improvement of systems that have long been developed, such as Galileo, Copernicus, Egnos, there are new infrastructures: Govsatcom, SSA, Iris2). With the development of space policies within the European Union, the landscape undergoes a profound transformation, considering the emerging geopolitical order and the need to formulate shared policies among member States.

2. Regulation (EU) 2021/696 of the European Parliament and of the Council of 28 April 2021 establishing the Union Space Programme and the European Union Agency for the Space Programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013 and (EU) No 377/2014 and Decision No 541/2014/EU, (OJ 2021 L 179, p. 69).

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With the development of space policies within the European Union, the landscape undergoes a profound transformation, considering the emerging geopolitical order and the need to formulate shared policies among member States

It is clear that Euspa fulfils its competences by being subject to the principles and rules of European Union law. This means that, if a public procurement were to take place and one of the participants had to appeal to the court, the European Court of Justice would decide by applying European Union law. However, it is also necessary to consider whether the concept of economic security (that is now emerging in the new geopolitical and legal framework) could also lead to changes in the way the market operates, whereas we are talking about a sector to be considered excluded from the normal rules of competition and the market. The first step to evaluate concretely the different legal regime of the European Union space competences will be that of the tender for the concession contract for the realisation of the constellation of satellites of the Eu called Iris² (Infrastructure for Resilience, Interconnectivity and Security by Satellite). The public-private partnership between the Commission and the private sector will ensure joint investment in the design, development, implementation and operation of government and commercial infrastructure and its use. The main objective of Iris² is to provide Member States with guaranteed access to extremely secure, sovereign and global connectivity services that meet their operational needs, such as critical infrastructure protection, surveillance and support for external action or crisis management, as well as military applications. A few months ago, a large group of European space and telecommunications operators has formed a partnership to respond to the European Commission’s call for tenders for the future European satellite constellation Iris2. The resilience of the legal regime of the European Union will therefore soon be put to the test of the decades-long ‘ecumenical’ way of solving economic and entrepreneurial issues in the space sector.

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The resilience of the legal regime of the European Union will therefore soon be put to the test of the decades-long ‘ecumenical’ way of solving economic and entrepreneurial issues in the space sector

In the coming years there will be a great expansion of the regulation of the external area both at the European and at the national level of the Member States, for reasons relating both to the space economy and space security or, rather, to the economic security in outer space

It has recently been adopted a Joint Communication of 10 March 2023 on European Union Space Strategy for Security and Defence (SSSD).3 In this communication space is seen as a strategic domain and a way for increasing resilience and implementing EU space assets. The communication also envisages taking into account the possibility of adopting an EU space regulation, of creating a Centre to share and analyse information and data (ISAC), of guaranteeing autonomous EU access to space in the long term and EU Technological Sovereignty, of maximising the use of space for security and defence purposes. The transformations within Eu space law have a huge and direct impact on the space law of the Member States. This intricate and complex setting, with its geopolitical, economic and institutional dimensions, makes it imperative to rapidly approve a national space law. In particular because Article 189 TFEU excludes the possibility of harmonisation by the EU and therefore the construction of some basic rules of the sector must necessarily go through national regulation. Such legislation should be designed to achieve three primary objectives. Firstly, it must establish the framework governing the relations between international, supranational, and national space institutions, and in particular clarifying the national governance of space, above all the delineation between political institutions and technical authorities. Secondly, it should ensure legal certainty for both large economic players (including public, mixed, and private entities) intending to invest in the sector and for small and medium-sized enterprises seeking to introduce innovations. The regulatory framework should be designed to promote investment and not deter potential stakeholders from engaging in the sector. Thirdly, the law should clarify, of course, the national administrative legal framework governing the relationship between public authorities and businesses. This clarification should take into account the international and European regulatory context, defining the boundaries within which private economic initiatives in the sector can operate. This regulatory framework should strike a balance by establishing necessary public constraints without intimidating businesses or discouraging investment. From what has been said above, it is to be expected that in the coming years there will be a great expansion of the regulation of the external area both at the European and at the national level of the Member States, for reasons relating both to the space economy and space security or, rather, to the economic security in outer space.

3. Joint Communication to the European Parliament and the Council, European Union Space Strategy for Security and Defence, JOIN/2023/9 final.

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ESA as an International Organisation Marco Ferrazzani 1 The European Space Agency (hereafter ‘ESA’) is an intergovernmental organisation with a mission to foster the development of space exploration and activities through institutionalised cooperation within Europe. Besides possessing all the attributions of a space agency, ESA also finds legitimacy as an European institution2 which aims to strengthen the European space industry by mobilising resources amongst the ESA Members. As described in the preamble to the ESA Convention: “The States parties to this Convention, CONSIDERING that the magnitude of the human, technical and financial resources required for activities in the space field is such that these resources lie beyond the means of any single European country[...]. The main impetus is hence to pool financial and technical resources in order to enable Europe to be a major actor in space activities. Accordingly, the preamble to the ESA Convention recognises that the exploration and use of outer space are resource-intensive, and that European cooperation among Member States is, thus, a political choice. The purpose of ESA is to provide for and promote, for exclusively peaceful purposes, cooperation among European States in space research and technology and their space applications, whether for scientific purposes or operational space application systems (Art. II, ESA Convention). Such cooperation shall be achieved through four lines of action: a. by elaborating and implementing a long-term European space policy; b. by elaborating and implementing space activities; c. by coordinating the European space programme and national programmes; and d. by elaborating and implementing an appropriate industrial policy. ESA is therefore mandated to be operative in the fields of space policy, space activities, and space coordination. ESA shall use and promote space transport systems developed through its programmes or by a Member State; ESA shall make its facilities available to any Member State for the latter’s national space programmes; and ESA shall provide assistance to Member States outside its own programmes but within its purpose. ESA is, therefore, not only a space agency according to the meaning used by space-faring States but is also: a facilitator of national programmes; an integrator of national programmes; and the creator, coordinator, and manager of European space programmes”.3

1. Senior Legal Counsel, European Space Agency. 2. ESA and EU officially signed on 22 June 2021 the Financial Framework Partnership Agreement (FFPA). It represents an EU investment of almost Ꞓ9 billion in the period of 2021 to 2027. 3. ESA Legal Services Department ‘The European Space Agency as a mechanism and an actor of international cooperation’ (2018) A/ AC.105/C.2/2018/CRP.20.

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A wide range of legal and ESA internal administrative tools have been implemented to carry out the political and institutional mandates described above. The ESA Convention is the prime source and overarching structure for a wide variety of acts, many of which contain legal obligations among ESA Member States. The ESA Council regularly adopts Resolutions, Recommendations, Rules and Regulations, including: financial, staff, procurement, and security regulations; general clauses and conditions for ESA contracts; rules on information, data, and intellectual property; and rules on arbitration. It also approves mandatory activities. All these regulatory acts and documents are publicly available.4 Following this constitutive approach and being aware that the Vienna Convention on the Law of Treaties is applicable to treaties between States, it can be stated that the ESA system is engaged in the generation of new treaty law. A ‘treaty’ is defined as an ‘international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation’ (Article 2(1)a, Vienna Convention on the Law of Treaties).5 This provision contains a widely accepted definition of the term ‘treaty’, which, as suggested by the International Court of Justice (ICJ), reflects customary international law.6

It can be stated that the ESA system is engaged in the generation of new treaty law

In the case of setting up an optional programme, the legitimated parties are those ESA Member States that have reached the relevant agreement (the ‘Programme Declaration’). Programme Declarations are concluded under the framework of the ESA Convention, which, in its Annex III, stipulates the legal conditions for their formation, execution, and termination. The Council, as an organ of the ESA, can only: accept (the principles of) such a programme ex-ante (when it verifies that the scope and objectives are in accordance with the ESA Convention); take note of the Programme Declaration once it is submitted to it as information; and approve the related ESA implementing rules․ Such rules cover the execution of the 4. See here. 5. Adopted 22 May 1969, 1155 U.N.T.S. 331 (VCLT). 6. See e.g., Cameroon v Nigeria (Equitorial Guinea Intervening), 2002, ICJ Rep 24.

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programme, which is undertaken by the ESA and not by the Participating States. Programme Declarations for ESA optional programmes are international agreements, and they may also be seen as treaties, as per Article 2(l)a VCLT. The actual legal qualification of the instrument does not change the assertion that Programme Declarations contain mutual commitments and legal obligations between States member of the Organisation. ESA has concluded several international agreements, including international treaties, with third parties. These have included agreements with ESA Member States and other subjects of international law, including States (represented through governments, governmental agencies, or other institutions competent to enter in a respective agreement) and intergovernmental organisations (Article XIV, para.1, of the ESA Convention). In such situations, ESA becomes a contracting party and assumes legal rights and obligations. It is thus bound as an organisation along with its Member States. As such, ESA can be an actor of international cooperation, which holds the legal capacity to acts as a party to and/or a creator of international commitments and acts. This capacity comes as the necessary complement to the Agency’s intergovernmental mechanism.

As such, ESA can be an actor of international cooperation, which holds the legal capacity to acts as a party to and/or a creator of international commitments and acts. This capacity comes as the necessary complement to the Agency’s inter governmental mechanism

The establishment of international agreements - treaties, implementing agreements, memoranda, and/or exchanges of letters with legally binding provisions - is facilitated under the umbrella of the ESA Convention. Due to their ratifications of the ESA Convention, Member State representatives are empowered, by their national laws, to conclude international acts within the ESA framework. Thanks to the ESA’s inter-governmental mandate and its effective and clear legal system, it is possible to create, modify, re-arrange, add to, or terminate a European space programme, without going through the ratification or incorporation processes foreseen at the national level. This allows for flexible decision making, which is indispensable in the context of space activities undertaken in cooperation. While legitimacy for such acts derives directly from the ESA Convention, political legitimacy is further enhanced by the fact that the Council meets not only at delegate -level but often also at the ministerial level. In Council meetings held at the ministerial level, governments of ESA Member States are represented at the highest political level, which allows them to exercise their decision-making competences and commit to the financial contributions of States.

The legal and contractual capacity of inter-governmental organisations is widely accepted in national jurisdictions, especially in those of the Member States of the ESA. In the context of the ESA, this acceptance is directly rooted in the acceptance, through ratification, of the ESA Convention by its Member States, which in Annex I, Article I clarifies that ‘[ESA] shall in particular have the capacity to contract, to acquire and dispose of movable and immovable property, and to be a party to legal proceedings. It is through this capacity that ESA can fulfil its purposes of implementing space activities and programmes as well as its industrial policy, through the power to enter into industrial contracts.

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The above-described legal order and institutional work of ESA is powerful and effective for the competences and attributions to create and run space programmes of ESA as an International organisation of States. However, ESA is not provided with the legal authority to issue regulatory acts creating regulatory obligations directly applicable to space activities that are not ESA programmes within each Member State. So, ESA cannot and should not be seen or qualified as a European regulatory Agency, but rather as a European forum of cooperation for programme definition, funding, management, and relative industrial policy. Several ESA programmes have contributed to the development of technological capacities and industrial competences that are today the force of Europe as a Space actor, by maturing the level of European made technology and even more by maturing the essential ‘standards and best practices’ that make the quality and success of our space products: launchers, satellites, ground stations and users terminals. In this view the results of ESA programmes, public procurement contracts and space missions, yet continue to provide Europe with an indispensable advantage to shape experience that is the prerequisite for a regulator to assess the time and need for legislative intervention, to promote the sector, to decrease the level of risks investors, to guarantee a level playing field when the space market will be mature for market regulations at international level. ESA will be ready and uniquely placed to accompany and assist national and EU regulators, when they will exercise specific legislative and regulatory competences, as provided in their respective legal orders. The ESA’s Legal Counsel and the team, the Legal Services have a two-fold function: (i) to advise the Agency on legal aspects of international activities; and (ii) to represent and defend the Agency in all institutional and jurisdictional instances.7

ESA cannot and should not be seen or qualified as a European regulatory Agency, but rather as a European forum of cooperation for programme definition, funding, management, and relative industrial policy

7. For more information see here.

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The Legal Counsel advises the Director General, the Director General’s cabinet, and all of the various departments of the Agency. As a result, a crucial aspect of the Legal Counsel’s competences (activities) involves the provision of legal advice to other delegated bodies, such as those set up by the Council. Thus, we participate in elaboration of space programme texts and the conclusion of international agreements to ensure ESA’s compliance with regard to other international commitments and relations. The Legal Counsel also delivers highly delicate advice to inter-ministerial meetings, essentially contributing to meetings that are vital to the functioning and organisation of governmental work. In principle, the competences of the Legal Counsel extend beyond the area of public international law. Indeed, it is often the case that the reasoning offered in an opinion or produced in a memorandum of the Legal Counsel will cover three or even four legal dimensions: international law, administrative law of the Agency, EU law, and internal (national) laws. In litigation before judicial bodies, the Legal Counsel acts as the representative of the Agency. Although these disputes are much less frequent than other issues, they are particularly serious and are often delicate. As far is reasonable in the interest of ESA, possible and desirable, we seek amicable dispute settlement, a solution that often proves to be fastest and the most certain for claimants. The Legal Counsel also heads the delegation of the agency to the biannual meetings of the Committee of Legal Counsels of Coordinated Organisations (COLA), which gathers the Legal Counsels/Heads of legal departments of International Organisations belonging to the European System of Coordination: the Council of Europe, NATO, OECD, ESA, EUMETSAT, ECMTWF, and CERN․ The Legal Counsel also has the task of ensuring the progress of internal ESA procedure: from the signature of an agreement to its publication in the official records of the Agency, we oversee the granting of authorisation to sign agreements and the procedures before the Council where its authorisation for approval or ratification is required. The roles of the Legal Counsel may by no means substitute those of ESA’s political decision makers. Their role is merely to advise and clarify the rules and identify the legal risks emanating from the execution of decisions taken, so to supervise the coherence of the legal politics in external relations. While guarding the objectivity of the Legal Counsel’s advice, he or she must take into consideration the concrete legal implications of authoritative legal opinions that remain on record.

The wielders of legal and institutional skills have found the appropriate tools, which, until a new formula proves to be more successful, have served Europe well up until today

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The European Space Agency was established by its Member States who concluded a treaty in 1975, almost 50 years ago, where the preamble calls for ‘a single European space organisation’. ESA has since delivered on a range of expectations: from the scientific community’s quest for more knowledge, to politicians’ desire for a more integrated Europe, and the business community seeking to develop industrial and operational capabilities. All of this has been made possible thanks to hard-working scientists, engineers, and lawyers, who have crafted and progressively refined a magic formula of balanced interests and respectful cooperation. The wielders of legal and institutional skills have found the appropriate tools, which, until a new formula proves to be more successful, have served Europe well up until today. The institutional function and everyday tasks of the ESA Legal Counsel contribute to the goals and programme objectives of ESA, promoting an adapted, yet rigorous professional role, which is continuously relied upon by the Member States and the top management of this unique International Organisation. In conclusion, based on experience, my wishes go to this organisation and to all colleagues and followers who will undertake common work to achieve a European success story.

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EU Space Law and Role of EUSPA Ezio Villa 1 The European Union is a key player in the space sector, with a scope of action encompassing satellite navigation, earth observation, and secure connectivity systems and services. The European Union Space infrastructure and services have an increasingly important security and defence dimension. On 10 March 2023, the European Commission in the person of the High Representative of the Union for Foreign Affairs and Security Policy, released a Joint Communication to the European Parliament and the Council on the ‘European Union Space Strategy for Security and Defence’ (hereinafter ‘EU SSSD’). The EU SSSD focuses on the need and the initiatives to increase the resilience and protection of space systems and services within the EU, enhancing the collective capability of the EU to counter any attacks and threats endangering its security interests and promoting the development of dual-use space capabilities, for defence applications. In this frame the EU SSSD proposes the creation of a EU Space Law inter alia to regulate security aspects of space activities.

The EU SSSD focuses on the need and the initiatives to increase the resilience and protection of space systems and services within the EU

It also identifies a specific role for the European Union Agency for the Space Programme (hereinafter ‘EUSPA’ or ‘the Agency’) in the following areas: i) Operating as space security monitoring and operations centre for the European Union Space Programme as well as security accreditation authority for all security sensitive infrastructures and services of the European Union Space Programme; ii) supporting the Commission in the establishment and operation of an Information Sharing and Analysis Centre (ISAC). iii) contributing to bolster the technological sovereignty of the EU space sector, while enhancing the protection of the infrastructures and supply chains. iv) Managing the provision of governmental services (for further details on the key issues of the Strategy, see the dedicated section on the European Commission website).

1. Head of the Legal and Procurement Department, European Union Space Program Agency.

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Part of the above tasks have already been entrusted and are currently managed by EUSPA pursuant to the Space Regulation for some of the components of the Space Programme (Galileo and EGNOS): Regulation (EU) 2021/696 of the European Parliament and of the Council of 28 April 2021 establishing the Union Space Programme and the European Union Agency for the Space Programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013 and (EU) No 377/2014 and Decision No 541/2014/EU [Space Regulation]. Others are expected to be entrusted pursuant to the IRIS2 Regulation (IRIS2 Infrastructure and Services): Regulation (EU) 2023/588 of the European Parliament and of the Council of 15 March 2023 establishing the Union Secure Connectivity Programme for the period 2023-2027 [IRIS2 Regulation]. It follows from the above mentioned legislation and from the EU SSSD the prominent role of EUSPA in the field of security accreditation of space components (see Space Regulation, supra note 2 at Article 29. Additionally, IRIS2 Regulation, supra note 3 at Article 27), security monitoring, operational security, provision of governmental services. This role is expected to be confirmed and expanded in the frame of a possile EU Space Law initiative to encompass all the Union relevant space infrastructure and services. In this context, the attribution to the Agency of specific regulatory and enforcement powers might also be considered by the legislator.

The attribution to the Agency of specific regulatory and enforcement powers might also be considered by the legislator

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Security Dimensions of Space Economics and Finance Jana Robinson 1 As of May 2023, there are more than 5,400 active satellites in orbit, and almost 3,000 of those are commercial. Some experts predict over 100,000 active satellites by 2030.2 This, together with a significantly greater number of public and private actors in space, will lead to much greater pressure to keep the space environment viable and safe for commercial, civilian, and military activities. Future space leadership will require an ability to forge durable partnerships – both between the public and private sectors, as well as among nations. Indeed, space partnerships have gained greater prominence in the operational, political, and strategic competition presently underway among the major space powers. In the U.S., private investors, such as Elon Musk, Jeff Bezos and Richard Branson, have boosted interest in commercial space opportunities on the part of venture capital and private equity investors, now seemingly more willing to absorb the sizeable risks related to space activities. Europe has adopted a number of measures to support new investment in start-ups, as well as early and mature space companies (e.g., via the European Investment Fund, the European Space Fund, etc.).

Space partnerships have gained greater prominence in the operational, political, and strategic competition presently underway among the major space powers

1. Managing Director of the Prague Security Studies Institute. 2. Irene Klotz, ‘Burgeoning Satellite Industry Paving way to $1 Trillion Space Economy,’ Aviation Week, Aug 24, 2021.

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Building space infrastructure internationally with their technologies, equipment, and services is a substantive component of both China’s and Russia’s ‘ground-based space race’

China and Russia long ago grasped the strategic potential represented by the merits of seeking to control the space sectors of foreign partners as a means of growing their global influence. China’s Belt and Road Initiative, Made in China 2025, China Standards 2035 – and Russia’s regional and global outreach through its space sector – have served to multiply their power and influence abroad, and, often times, ended up limiting the freedom of action of the countries targeted by vertically-integrated ‘partnerships’ scheme. Pursuant to extensive research, PSSI has identified Chinese and Russian partnership arrangements with more than 80 countries.3 Building space infrastructure internationally with their technologies, equipment, and services is a substantive component of both China’s and Russia’s ‘ground-based space race’. The preferred vehicles for attracting space aspirants into their infrastructure fold are business transactions concluded with their state-controlled enterprises. To advance their strategic goals, however, China and Russia repeatedly circumvent or outright violate internationally accepted norms. China has, for example, routinely been accused of industrial espionage,4 intellectual property theft,5 extortionary practices and heavily subsidised pricing and financing.

From a security perspective, China and Russia represent the greatest threat to Europe and its allies. Accordingly, it seems logical to also scrutinise the economic and financial (E&F) dimensions of their international activities. As referenced above, China uses its command economy to seek to manipulate the global financial system to serve its funding, lobbying, and other strategic needs. Of special interest to our Institute is the external sources of funding for these companies, beyond the heavy subsidies and otherfinancial support provided internally by the Chinese Communist Party and the country’s state banks (e.g., China Construction Bank, Industrial & Commercial Bank of China, etc.). In short, there are a number of publicly traded Chinese space companies that are raising funds and trading on mainland exchanges (notably Shanghai and Shenzhen) as well as overseas capital markets, including those of the U.S. and Europe (e.g., Beijing BD Star Navigation Company, Beijing Aerospace Changfeng Co. Ltd., etc.). However, Chinese space companies in search of capital are not limited to the issuance of publicly traded equities and bonds. Not only do Chinese companies invest hundreds of billions of dollars into Western companies via Chinese state-backed investors,6 but Western private equity investments also play a pivotal role across various stages of development of Chinese space companies (e.g., venture capital, growth equity, buyout funds, etc.).

3. Robinson, Jana & al. ‘Strategic Competition for International Space Partnerships and Key Principles for a Sustainable Global Space Economy,’ Prague Security Studies Institute, January 2022. 4. Wu, Chu, ‘Tensions Mount over China’s Industrial Espionage in US’ Voice of America, 2022. 5. Wray, Christopher, ‘Responding Effectively to the Chinese Economic Espionage Threat,’ FBI. Federal Bureau of Investigation, 2020. 6. Agnew, Harriet, ‘Asset Management: China Cosies Up To Private Equity,’ Financial Times, June 4, 2023.

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To provide a sense of scale, the private equity industry has grown over the past three decades from a niche financial services sector to an asset class of some $12 trillion as of June 2022.7 Its rapid growth has turned it into an important – and less transparent– conduit for global capital flows, which China has seized on. The Chinese government views private equity as an attractive alternative to public equity offerings that dilute shareholder value and potentially undermine complete corporate control. Beijing may see such private equity deals as less likely to attract unwanted U.S. and allied governments’ attention when compared with high-profile public offerings. Accordingly, the missing regulatory piece of this puzzle has to do with the funding side of Chinese and Russian space companies and commerce. In the U.S., there have been two Presidential Executive Orders which state that U.S. investors holding the securities (stocks and bonds) of Chinese Military Industrial Companies (CMICs) constitutes a ‘national emergency’.8 That would include virtually all Chinese space companies, given that the entire space sector is under the control of the People’s Liberation Army (PLA). It means that in the U.S., all such companies could be subject to American capital market sanctions, including delisting, deregistration and outlawing the holding by American persons of these companies’ securities. This issue needs to be urgently addressed in Europe as well or risk serious negative consequences for our own space sectors and those of prospective foreign partners. This is not only relevant from the ‘investor protection’ perspective, but also from a national security and human rights perspective, as Article 7 of China’s National Intelligence Law requires, on demand of the CCP, the weaponization of Chinese companies for espionage, military activities, and other strategic purposes. The bottom line is that tens of millions of European investors are, albeit unwittingly, funding these malign Chinese and Russian space companies with their retirement and investment euros, often the same companies that will soon be –or are already– competing with European firms in emerging global space markets. If we in Europe fail to address this issue now –for fear of estranging China and/or not wishing to legitimate this new security risk category in the public and private equities markets– it could mean the loss of Europe’s competitiveness in a number of strategic space activities, foreign space sectors and other commercial markets.

The missing regulatory piece of this puzzle has to do with the funding side of Chinese and Russian space companies and commerce

The bottom line is that tens of millions of European investors are, albeit unwittingly, funding these malign Chinese and Russian space companies with their retirement and investment euros

7. McKinsey & Company, ‘McKinsey’s Private Markets Annual Review,’ McKinsey & Company, accessed March 22, 2023. 8. Executive Order 13959 of November 12, 2020 and Executive Order 13974 of January 13, 2021.

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Investing in Space:

The Consequences of Regulation (EU) 2019/452 for Foreign Investors Andrea Capurso 1 The protection of critical technologies and infrastructures in the European Union (EU) depends on the openness of the internal market to foreign direct investments (FDI). More takeovers, acquisitions and technology transfers by foreign investors means less autonomy, integrity and control for national governments. In light of this, several EU Member States – twenty-one as of October 2023 – have set up domestic screening regimes. The latter consist in scrutiny and approval processes that need to be completed before certain investment-related actions by foreign individuals or entities will be allowed, beyond those applicable to local individuals or entities.2 These processes are centered on the risks or threats that the investment can bring to ‘national security’, sometime replaced or paired with similar concepts such as ‘public order’ or ‘essential national interests’. As it can be imagined, different Member States have set up different rules and procedural obligations, depending on their needs and their interpretation of ‘national security’. However, due to the high degree of integration within the EU, FDIs in one Member State could pose risks to security or public order in another Member State, or in the whole Union. This may happen in cases where the target company of a FDI has subsidiaries in multiple Member States, or if it sells goods or services that may affect national security in more than one Member State. For this reason, as of October 20, 2020, a new regulation is in place: Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union (the ‘Regulation’).3 The latter does not create an EU-level FDI screening mechanism, but rather establishes two novelties in the legal frameworks of Member States. First, it creates a procedure for the European Commission and national authorities to share information and views. Second, it sets forth some minimum requirements for existing (and prospective) national screening regimes, with the aim to facilitate their alignment. 1. Attorney at law, PhD Candidate in International Space Law at LUISS University Faculty of Law. 2. Voon, Tania & al., ‘How International Investment Law Constrains Foreign Investment Screening’, in Journal of World Investment & Trade, Vol. 24, 2023, p. 76. 3. Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (OJ 2019 L 79l, p. 1).

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It is through this second feature that the European legislator has decided to include the aerospace sector among the ones that have to fall under the scope of application of screening mechanisms (Article 4 of the Regulation). What is the consequence of this inclusion? What has changed from a legal perspective for investments in space companies within the EU? The literature on the matter tends to focus on the perspective of national or European authorities, this contribution, however, takes a different point of view: it looks at the position of foreign investors, who can now invest in space companies in the EU only within a system of mandatory procedural obligations and under the risk of arbitrary governmental interventions. Exactly three years since the entry into force of the Regulation, almost all Member States include the aerospace sector under the scope of application of their FDI screening regime. Italy, France, Germany, Belgium, Luxembourg, Spain – among the others – have provided to their governmental authorities the power to screen FDIs that target space companies in their territory. The consequences for foreign investors are twofold. One concerns the phase before the activation of the screening mechanism, the other regards the phase after.

Exactly three years since the entry into force of the Regulation, almost all Member States include the aerospace sector under the scope of application of their FDI screening regime

Starting with the first one, it is evident that any foreign investor who is interested in the European space sector has to address the following preliminary question: how wide is the scope of application of the relevant screening regime? In other terms, which space companies can fall under the scrutiny of the government? It is clear that an investment decision may change depending on whether the deployment of capital in a company involved in space operations triggers the activation of the screening system or not. Obviously, the answer is self-evident if the target-company is, for example, the contractor for operational services of a national or EU satellite program. A foreign takeover of the company Spaceopal Gmbh, main contractor for operational services of the EU’s global satellite navigation system Galileo, needs to be screened before completion. However, the matter becomes more uncertain when the investment is targeted towards a small or medium enterprise (SME) involved in the supply chain of space services. Imagine a SME that produces microelectronic products used – inter alia – by companies in the space launchers sector.

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In this case, what guidance can be found in the Regulation? Article 4, titled ‘Factors that may be taken into consideration by Member States or the Commission’, provides some clarifications on the basic elements behind screening mechanisms, with the aim to improve the transparency for investors considering making FDIs in the Union. Thus, a foreign investor may look at its ‘status’ (e.g., whether it is directly or indirectly controlled by the government), and at the type of investment (e.g., whether it enables effective participation in the management or control of a company). But even if both conditions are present, this would not be enough to trigger the screening system in a case where the targetcompany does not fall under the relevant sectors or if the operation cannot justify the grounds for screening. On this regard, Article 4 provides little clarifications. It indicates that aerospace technologies and infrastructures are relevant sectors. It then establishes that screening powers may be used when the effects of the FDI are likely to affect national security or public order. Based on these factors, it is impossible to predict whether an operation like the one on a SME mentioned above is free from scrutiny and approval processes. The European legislator has preferred not to constrain Member States with specific conditions, establishing in Article 3(2) that Member States “shall set out the circumstances triggering the screening”. The result was far from optimal. For example, Italy has implemented the obligation of Article 3(2) in its screening regime (Law Decree n. 21/2012) using formulations that render any predictability virtually impossible. Among the conditions that can trigger the activation of the screening process, there is ‘the strategic relevance of the assets and undertakings targeted by the operation’ as well as ‘the suitability of the company setup resulting from the operation to guarantee the integrity of national security, of the defense system, of the security of information related to military and international interests of the State’ (Article 1(2), Law Decree n. 21/2012). How can these assessments be made by a foreign investor? The consequence is an unsustainable use of the whole mechanism. Instead of being linked to special situations that may be considered an actual threat to national security, the notification to the government for approving the FDI has become an ‘obligatory’ step in any investment of any nature. According to the Italian annual report on the use of screening powers for the year 2022, the number of notifications to the government in 2019 were 83. In 2022, they arrived at more than 600.

It is impossible to predict whether an operation like the one on a SME mentioned above is free from scrutiny and approval processes

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The common approach nowadays is: if in doubt, notify!

The regulation has missed an opportunity to establish some common key elements that would have facilitated the functioning of the system and the capacity of foreign investor to avoid or adjust in advance an operation that is likely to be screened

In addition, foreign investors are pressured to notify – even if they may be exempted – due to the significant sanctions that can result from a missed notification, as it was shown in the transaction between Alpi Aviation srl and Mars (HK) Information Technology Co. Limited of 2022. In other terms, the common approach nowadays is: if in doubt, notify! All this has undermined the principle of improved transparency for foreign investors, which was at the base of the Regulation as expressed in the Preamble (see para. 13 et seq.). Moreover, it has produced an overloaded system at the national level, with the risk of leaks exactly where the risk is higher for the space sector: in the industrial context of SMEs, which are more vulnerable and attractive to foreign investors. In view of this, it can be said that the Regulation could have done more on this regard. It has missed an opportunity to establish some common key elements that would have facilitated the functioning of the system and the capacity of foreign investor to avoid or adjust in advance an operation that is likely to be screened. It is necessary now to address the second consequence of the Regulation. One of the objective of the European legislator was to ‘lay down the essential elements of the framework for the screening of foreign direct investments by a Member State to allow investors, the Commission and other Member States to understand how such investments are likely to be screened’ (recital 15).

This principle has been enshrined in Article 3 where, among the various elements, it states at paragraph 5: ‘Foreign investors and the undertakings concerned shall have the possibility to seek recourse against screening decisions of the national authorities’. With this obligation, the European legislator centered one of the pivotal aspects of FDI regimes. It is evident how the justiciability of a screening measure is of considerable importance for a foreign investor when it decides to deploy its capital in a foreign territory. Prior to the completion of the FDI, foreign investors may have to create new subsidiaries in the territory of the host-State and conclude deals with the target company, spending time and money on negotiations and notarial acts. However, the costs related to these efforts can be frustrated by the government’s intervention to block or condition the finalization of the investment. What can the foreign investor do against a measure that it considers unjust? Can it ask for compensation?

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Since screening decisions are the fruit of national security concerns, there is a concrete risk that in certain jurisdictions they may be exempted from judicial review

Since screening decisions are the fruit of national security concerns, there is a concrete risk that in certain jurisdictions they may be exempted from judicial review (as is the case for Presidential decisions on FDIs in the USA), rendering all the costs mentioned above unrecoverable. Thus, the issue of justiciability is a determining factor in choosing where to invest. The Regulation has the virtue of addressing this issue and explicitly imposing on Member States the duty to envisage a recourse mechanism. There is, however, an aspect that remains untold: what form should this recourse have? It is telling that in the original proposal of the Regulation, the wording used was ‘judicial redress’, while the final text refers to the ‘weaker’ term ‘recourse’. As a result, it seems possible for Member States to preclude access to domestic tribunals and leave foreign investors with only the possibility to present administrative appeals. The lack of a more clear and stringent obligation upon Member States with regard to the aspect of justiciability has the effect of leaving the implementation of Article 3(5) open to divergences between Member States. If in one jurisdiction a foreign investor has the possibility to file a claim in front of a judicial authority and obtain compensation for the damages suffered by a screening decision, while in another jurisdiction this opportunity is limited to a recourse at the end of the scrutiny process in front of the governmental authority, it is clear that the foreign investor will rather invest in the first jurisdiction.

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This can produce a different flow of FDIs in the space sectors of different Member States. In more general terms, it can create leaks in the uniformity and coherence of screening mechanisms in the EU, favoring the growth of space companies in States that have the means and the will to set up the necessary instruments for protecting foreign investors and leaving behind the ones that do not. Even though the Regulation is not directed specifically at space activities, it affected the way in which the space sector of the EU grows, attracts investments, and enhances the international cooperation with extra-EU space actors. When a foreign investor or a foreign space company intends to expand their business and invest abroad, they need to be aware not only of the national legislation on space activities, but also of the legal framework on screening investments. A decision to invest in the space sector a Member State rather than another depends on them.

Even though the Regulation is not directed specifically at space activities, it affected the way in which the space sector of the EU grows, attracts investments, and enhances the international cooperation with extraEU space actors

The Regulation has tried to ensure that this regulatory factor has a limited impact on the uniform development of the European space industry and on the overall security of the Union. In front of the challenge to strike a balance between the openness of the EU and the right of Member States to safeguard their national interests, it can be said that the European legislator has been only partially successful. Both under the aspect of predictability and of justiciability, the Regulation has improved the respect of the rule of law in national screening systems, but it has produced undesirable consequences that could have been avoided with a clearer and stronger approach. For now, it can be concluded that the new framework on space investments in the EU has had an impact on the sector. The long-term effects are yet to be seen. But it is already clear that the future of the space industry is inevitably connected to the rules on FDI screenings. In this game between protectionism and openness, the final score depends on the capacity of the EU and its Member States to correct the deficiencies that are already emerging from their screening regimes, so as to safeguard not only their security but also the applicability of the rule of law to foreign investors.

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Space and Innovation

Public Procurement Tools Elisabetta Tatì 1 Technological development through the space sector needs to be managed and protected not only for ‘security’ reasons, such as through the regulation of foreign direct investments, but also for other public objectives, such as competition and economic development, mission-oriented research and innovation, and sustainable development goals. Public administrations can support internal innovation through the public procurement market and especially through space administrations. In the European Commission’s recent Guidance on Innovation Procurement,2 the first example given is from the space sector: ‘Using the innovative procurement of EU space-based applications by public authorities at national, regional and local levels can greatly contribute to the implementation of the green deal and the digitalization of the interaction between companies/citizens and public administrations. It has also a considerable potential for cross-border cooperation’. At the same time, private entities and companies are necessary allies of space administrations in the provision of innovative goods and services. The rules governing public-private negotiations will inevitably come into play: ‘There are many fields of application for space-based data and services provided by the EU space programme in which procuring innovative solutions is the most effective approach to stimulate digital and green transition as market forces alone would not deliver’3 The functioning of public procurement in the sector can be considered a best practice for the implementation before time of (innovation) public procurement, a discipline that is still living adjustments4. One of the critical issues in the adoption of innovation procurement solutions by contracting authorities is the inability of public authorities to anticipate their innovationneeds. This risk is reduced for space administrations, which have a broader and longer tradition of experimentation in the field. In other words, it is less likely that these particular contracting authorities will decide not to use the instruments of (innovation) public procurement to fulfil its institutional objectives.

1. Junior Research Assistant in Administrative Law, Luiss University. 2. COM(2021)4320. 3. Ibid. 4. cfr. SEC(2007)280, Guide on dealing with innovative solutions in public procurement. 10 elements of good practices; COM(2007)799, Precommercial Procurement: Driving innovation to ensure sustainable high quality public services in Europe; DG GNECT, F – Digital Single MarketF3 – Digital innovation and Blockchain, Benchmarking of R&D procurement and Innovation Procurement Investments in countries across Europe, October 10, 2020; COM(2021)4320, Guidance on Innovation Procurement.

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One of the critical issues in the adoption of innovation procurement solutions by contracting authorities is the inability of public authorities to anticipate their innovationneeds

Consequently, it is not surprising that the predominant method of financing in the Regulation (EU) 2021/696,5 establishing the Union Space Programme and the European Union Agency for the Space Programme (EU Space Regulation) is (innovation) procurement.6 The Parliament and the Council have allocated EUR 14.88 billion in current prices for the period from 1 January 2021 to 31 December 2027. Most of this amount is earmarked for the Galileo and EGNOS programmes - EUR 9 billion, then for Copernicus - EUR 5.421 billion, and finally EUR 442 million for SSA and GOVSATCOM.7 The following sections focus on the parts of the regulation relating to public procurement and other financial tools (Chapter I, II and III, Title III). In procurement procedures for the purposes of the EU’s space programme, the contracting authority acts in accordance with a number of principles (Art. 14(1), to be read in conjunction with Art. 24).

5. Regulation (EU) 2021/696 of the European Parliament and of the Council of 28 April 2021 establishing the Union Space Programme and the European Union Agency for the Space Programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013 and (EU) No 377/2014 and Decision No 541/2014/EU, (OJ 2021 L 179, p. 69). 6. Luka Orešković & Sonja Grgić, ‘The New EU Space Regulation: One Small Step or One Giant Leap for the EU?’, Croatian Yearbook of European Law and Policy, No. 17 (2021), p. 90. 7. EU Space Regulation, Art. 11(1).

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Firstly, the principle of ‘openness’, i.e., encouraging the widest and most open participation of economic operators, in particular start-ups, new entrants and SMEs, in all the Member States of the Union and throughout the supply chain, including in the case of subcontracting by tenderers; secondly, the principle of ‘effective competition’, i.e., avoiding as far as possible dependence on a single supplier, in particular for critical equipment and services, taking into account the objectives of technological independence and continuity of services; thirdly, the principles of ‘combination’ and ‘additionality’: the possibility of using, where appropriate, several sources of supply in order to ensure better overall control of all the components of the programme, their costs and their timetable (by way of derogation from Art. 167 of the Financial Regulation); fourth, ‘transparency’ in the sense of ensuring compliance with the principles of ‘open access’ and ‘fair competition’ throughout the industrial supply chain, tendering based on the provision of transparent and timely information, clear communication of the applicable procurement rules and procedures, selection and award criteria and all other relevant information allowing a level playing field for all potential bidders, including SMEs and start-ups; fifthly, ‘technological sovereignty’ as strengthening the EU’s autonomy, in particular in the technological field; sixthly, meeting the security requirements of the programme’s components and contributing to the protection of the ‘essential security interests’ of the EU and its Member States; and finally, ‘continuity’ and ‘reliability’ in the provision of public services, while meeting appropriate social and environmental criteria. On these premises, a special type of procurement procedure is based on the so-called ‘conditional stage payment’ (Art. 15). Another result of the procurement procedure can be the “cost-reimbursement contract” (Art. 16). The latter can be used in two different cases: firstly, when the contract has complex features or which include a significant number of technical risks due to the required use of new technology; secondly, when the activities covered by the contract must be started immediately even though an exact fixed price cannot yet be fully determined because of significant risks or because the performance of the contract in question depends on the performance of other contracts. As noted above, these are common features of projects in space-related activities. In order to encourage new entrants, SMEs and start-ups and their cross-border participation, and to achieve the widest possible geographical coverage while preserving the autonomy of the Union (all the principles mentioned above), the Regulation provides that the contracting authority may require the tenderer to subcontract part of the contract, by competitive tendering, to companies other than those belonging to the tenderer’s group, at the appropriate levels of subcontracting. The tenderer must justify any deviation from a request made under the previous condition (Art. 17 (1) (2)). For contracts with a value of more than EUR 10 million, the contracting authority shall ensure that at least 30% of the value of the contract is subcontracted by competitive tendering at various levels of subcontracting to companies outside the group of the main tenderer, in particular with a view to facilitating the cross-border participation of SMEs (Art. 17 (3)). There are other financial instruments that do not fall within the framework of procurement, but are nevertheless relevant for supporting innovation . For example, the Union can cover up to 100% of eligible costs through grants and prizes, although there are some limitations (Art. 18). There is also the possibility of awarding grants for pre-commercial procurement and the procurement of innovative solutions, where the contractor will at least own the intellectual property rights attached to the results, while the contracting authorities would enjoy at least royalty-free access rights to the results for their own use and the right to grant, or require the contractor to grant, non-exclusive licences to third parties to exploit the results for the contracting authority under fair and reasonable conditions without any right to sub-licence (Art. 20). Blending operations can also be conducted (Art. 21), together with cumulative and alternative funding (Art. 22). Joint initiatives are also provided, both as joint grants (Art. 19) and joint procurement (Art. 23).

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In conclusion, it the existence of a vibrant private market capable of responding promptly to competitive tenders cannot be taken for granted

In conclusion, it the existence of a vibrant private market capable of responding promptly to competitive tenders cannot be taken for granted. In fact, traditionally, at least in Europe (less so in the United States), the sector of research ‘for’ and ‘in’ space has often been based on public programmes and funding, with direct entrustment to the few institutional and private actors able to bear the high risk associated with the investment.8 In other words, there was no ‘private’ market. Over time, this latter condition has changed for at least two complementary reasons: on the one hand, the potential of certain technologies for individuals and businesses (such as those related to Earth observation) has become evident; on the other hand, public institutions have recognised the opportunities of mission-oriented research and innovation, whereby a sector with great potential for research and development, such as space, can be used to strengthen the supply-side, in turn, with macroeconomic objectives, affecting the entire industrial chain, and the society as a whole, with technologies capable of improving the well-being and quality of life of citizens, in the direction of sustainable development.

8. Douglas K. R. Robinson & Marianna Mazzucato, ‘The evolution of mission-oriented policies: Exploring changing market creating policies in the US and European space sector’, Research Policy, Vol. 48, No. 4 (2019), pp. 936-948.

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Charting the Course Towards Law, Governing Colonies in the Space. A Venture in Legal Futurism Jakub Handrlica 1 Attention has been so far paid to challenges, which prospective space technologies do imply for EU law. That means, the focus is centred to the European Union as a ‘Union of Composite Administration’. In principle, this a perspective of public law, which is basically and almost entirely focusing on supra-national organisation as a source of power and consequently, as a source of law. However, it must be considered whether the European Union really represents the only source of law, governing human behaviours in the space. Of course, there are legal systems, established by non-EU states, such as China, the United States and India. Also, there is a robust framework of rules, as has emerged under the international space law. As companies like SpaceX, Blue Origins and Virgin Galactic send people into space questions arise regarding governing and regulating private corporations and their prospective distant colonies in the space.2 For the foreseeable future, there will be no way to grow food or be self-sufficient in space on any sort of scale so each of these states would rely on Earth, therefore making it bend to the will of an Earthbound supplier.3 This dependence of any space colonies on an Earthbound supplier makes us believe, that any of these prospective colonies will be governed by the law, as established by Earthbound governments.

For the foreseeable future, there will be no way to grow food or be selfsufficient in space on any sort of scale so each of these states would rely on Earth, therefore making it bend to the will of an Earthbound supplier

1.∗ Professor Jakub Handrlica, Law School, Charles University, Prague, Czech Republic. 2. See Lina Tran, ‘The Private Companies Pioneering the (New) Space Race’, AFAR, October 11, 2022. 3. See Keith Cowing, ‘Growing Food In Space’, SpaceRef, January 6, 2019.

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Historical parallels show, however, that also other scenarios are probable. Companies like SpaceX, Blue Origins and Virgin Galactic do have a crystal-clear historical parallel in private companies, established for colonisation of distant territories in the past. East India Company may serve as a salient example for a private endeavour, governing distant colonies. In the same fashion as SpaceX, Blue Origins and Virgin Galactic, the East India Company has not followed any public interest. They all merely focus on financial profit. The fact is, at the same time, that the East India Company governed its own administrative structures in India by its own legal rules, which were to a large extent beyond any control of the British government. Why should current space companies follow a different path?4 Most probably, prospective colonies in distant space will be in reality governed by law established by these private corporations in the first place. In this respect, a question arises what will be the content of this law? Taking into consideration that financial profit is the key tenet of this space endeavour, one must seriously ask if human rights will be given the same preference as is usual in the law of the Earthbound governments. What will be the relation between the Earthbound governments vis-á-vis these distant space colonies? Will these governments be able to exercise their powers there and to guarantee a minimal standard of rights on these distant colonies? Or will they be on their own?

Most probably, prospective colonies in distant space will be in reality governed by law established by these private corporations in the first place

Currently, communication between Earth and Mars takes anywhere between 3 and 22 minutes depending on where they are in their respective orbits. This means that phone calls are not possible and anything faster than email is not feasible. Since the travel time and communication time is so long, people in space will likely enforce the rules themselves. Consequently, enforcing of law will be most probably beyond the control of the Earthbound governments. This short venture in the legal futurism clearly demonstrates mutual dependence between law and technologies. Firstly, technological advantages of private companies imply also their advantages in establishing prospective rules for the future space colonies. Secondly, technological obstacles in mutual communication between Earth and space directly imply obstacles in law enforcing beyond the Earth. Any dystrophic scenarios may be consequently mitigated by more efforts, states will invest in space technologies. Resignation to space colonisation by states and leaving this endeavour to private subjects will automatically imply emergence of far-reaching private-driven systems of law, which will exist beyond the control of both the European Union and its Member States.

4. Seyon Brown & Larry Fabian, ‘Toward Mutual Accountability in the Nonterrestrial Realms’, International Organization, Vol. 29, No. 3 (Summer, 1975), pp. 877-892.