Global Taxes

Brazilian liftoff: new space regulation and its impact on licensing and launching in Brazil

Monday 13 December 2021

Adriana Simões
Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, São Paulo
adriana.simoes@mattosfilho.com.br

Marcelle Fazzato Lopes
Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, São Paulo
​​​​​​​marcelle.lopes@mattosfilho.com.br

Introduction

In recent years, much has been discussed about space. Since 1950, several government  initiatives have explored space through studies and launches, but last year was the first in which private entities began to explore it commercially. Given recent events, a new chapter of the space age is expected to begin.

To follow the development of the aerospace industry, Brazil has adopted initiatives for its progression. Last year and this year, the Brazilian Space Agency (BSA) published two public calls for companies interested in conducting orbital or suborbital launches using the Alcântara Space Centre (ASC) in northeastern Brazil. Additionally, Amazônia-1 – the country’s first fully designed, integrated, tested and operated satellite for observing the Earth – was launched this year from India.

More recently, the BSA published Ordinance No 698 instituting the Brazilian Space Regulation, Parts 1 and 2. The new rules provide for standards regarding, respectively, the operator’s licence for space launch activities in Brazilian territory and the concession of launch authorisations by the BSA. Besides aligning Brazilian standards for space activities with internationally accepted rules, the newly published regulation seeks to replace outdated rules, such as the previous regulation on space launch operation authorisation, enacted in 2002.

This article will explore the key points of the new regulation and the trends for the development of space law in Brazil.

General provisions

Besides the specifics that will be further explored, the operator’s licensing and launch authorisation processes share similarities. For example, both may bring restrictions or conditions pertaining national security or foreign policy interests. Furthermore, in both cases, the qualification procedures may only be carried out by electronic means.

Also, considering the inspection of the procedures is an attribution of the BSA, the public authorities may have access to sensitive information of the interested parties. Therefore, the Brazilian standards for the launch authorisation establish a commitment to keep all commercial information confidential. Concerning the operator’s licence, the confidentiality extends to multiple information obtained as a result of the inspections, and the BSA undertakes not to disclose it to third parties.

Finally, administrative penalties may be applied if space activities are carried out in disagreement with the applicable rules. Sanctioning procedures must be handled according to the due process of law, considering that it may lead to warnings, temporary suspension or revocation of the appropriate licence or authorisation. The interested parties may also appeal to the president of the BSA from decisions applying penalties or denying the grant or modification of a licence or authorisation.

Operator’s licensing process

The rules regarding the operator’s licence and the process for its obtainment – from application to issuance and inspection – seek to enable the execution of space activities and launches in Brazilian soil to be carried out by private legal entities, whether individually or by association or consortium.

Companies interested in obtaining an operator’s licence, valid for five years and renewable for equal and successive periods, must be headquartered or have representatives in Brazil, and must show evidence of its tax and labour regularity in the country. Moreover, such companies must prove their ability to perform space launches, as well as qualification of their technical staff, by providing certificates or other documents that enable such verification.

The documents presented to the competent authorities shall be authenticated and provided in their original language, along with a sworn translation into Brazilian Portuguese, if needed. The documents’ verification will be carried out by a licensing special commission and, after examining the files and writing an opinion on the matter, the procedure will be submitted to the president of the BSA. The licence may be issued up to thirty calendar days after the homologation of a technical note by the commission.

Launching authorisation requirements

Although the operator’s licence enables the execution of space activities and launches, it does not allow the interested party to conduct space launch operations itself, such as the flight, pre- and post-flight land operations and re-entries. To obtain this allowance, a new administrative procedure for an act called launch authorisation must be carried out, and specific rules may apply to such a course of action.

The regulation on the launch authorisation may apply for private launch operations: (1) from Brazilian territory carried out by Brazilian companies or foreign companies with representatives in the country; and (2) from other nations carried out by Brazilian companies.

The operator’s licence is a condition precedent to the application for and acceptance of a launch authorisation, which is issued for an indefinite term, while the parameters for the authorised launch(es) remain unchanged. The launch itself must be conducted while the operator’s licence is valid, and it is subject to BSA’s control and inspection.

Moreover, the obtainment of an approval of political review is a condition precedent to the issuance of the launch authorisation, for purposes of attesting the lack of risk to Brazilian national security, to international obligations assumed by Brazil and to the interests of the country’s foreign policy. Thereby, the interested party must submit an application carrying: (1) the model, type, configuration and description of the vehicles; (2) identification of foreign property of the applicant; and (iii) flight profile, among others.

Regarding the risks of the operation, the launch authorisation holder must get insurance covering damage to third parties and to the public launch centre’s infrastructure. The liability for damages arising from the space launch is solely attributed to the authorised party and is governed by the international treaties and conventions signed by Brazil, as well as other applicable rules.

The operator is responsible for ensuring the public and property security during the launch or re-entry and must comply with the regulatory requirements and the information presented in the application for the launch authorisation, under penalty of revocation of the act or other appropriate measures. The Brazilian regulation also provides for strategies to mitigate the operational risks, establishing safety criteria and risk assessment mechanisms.

If needed, and subject to the analysis and acceptance by the BSA, the launch authorisation can be transferred to third parties carrying a valid operator’s licence. The receiver must also comply with the authority’s requirements and the duties, obligations and charges assumed by the original holder.

It is worth mentioning that the new rules are inspired by, and even reproduce to some extent, the Federal Aviation Administration (FAA) Part 450 (Launch and Reentry Licensing Requirements) and Part 420 (License to Operate a Launch Site). According to the new standards, as a rule, the compliance with FAA’s Part 450 means a compliance with the Brazilian regulation on the matter.

Final considerations

As mentioned, recent events show Brazil’s commitment to developing its space potential. An important factor in the equation – the existence of modern legal regulation – has been improved, with the new standards for operator’s licences and launch authorisations putting Brazil in a good position in relation to its global peers.

Further advances are needed and expected in the future. Besides having legal standards aligned with the best practices around the world, Brazil needs to improve its infrastructure to make space activities attractive, in a country that already hosts the ASC and its advantages regarding geography, climate condition and local air traffic.

We are hopeful that the initial steps on the progression of space law around the globe, already affecting Brazil, will expand even more and create new opportunities for the development of the industry. The sharing of experiences, as this article intends to enable in respect of Brazil, seems to be a first – and important – step in this trend.