(7) CONSOLIDATED TREATIES & INTERNATIONAL AGREEMENTS CURRENT DOCUMENT SERVICE: UNITED STATES STATE DEPARTMENT DOCUMENT NUMBER: 93-177 AGREEMENT BETWEEN THE UNITED STATES AND RUSSIA REGARDING INTERNATIONAL TRADE IN COMMERCIAL SPACE LAUNCH SERVICES Signed at Washington September 2, 1993. Entered into force September 2, 1993. CTIA DOCUMENT NUMBER: 7363.000 The Government of the United States of America and the Government of the Russian Federation (hereinafter the "Parties"), Recalling the contributions of all space-faring nations in developing space launch industries, Taking note of the importance of access to space for peaceful purposes, Recognizing the utility of developing multilateral principles for government involvement in commercial space launch activities, Bearing in mind that the Russian space launch sector is in the process of transition to operation based on market principles, and Desiring to facilitate early Russian entry into the international commercial space launch market in a manner that encourages market-oriented reform in the Russian economy, including its space-launch sector; permits Russian entities to offer commercial space launch services to international customers at fair and reasonable prices, consistent with market principles; and does not disrupt the international market for commercial space launch services, Have agreed as follows: ARTICLE I DEFINITIONS For the purposes of this Agreement, 1. "Commercial space launch services" means the commercially offered or provided services to launch into space any spacecraft or satellite, including but not limited to communications satellites, for an international customer; 2. "Russian space launch service providers" means any entity, or agent or instrumentality acting on its behalf, permitted by the Government of the Russian Federation to provide commercial space launch services or the space launch vehicles for such services. 3. "International customer" means: any person; or any kind of corporation, company, association, venture, partnership, or other entity, whether or not organized for pecuniary gain, or privately or governmentally owned or controlled; or any governmental body, excluding the Government of the United States of America and the Government of the Russian Federation; or any intergovernmental organization or quasi-governmental consortium, including but not limited to INTELSAT, INMARSAT and their respective legal successors, that is the ultimate owner or operator of a spacecraft or satellite to that will deliver the spacecraft or satellite to orbit for use by such ultimate owner or operator. 4. "Contract" means (i) to agree or commit to the provision of commercial space launch services such that a launch is effectively removed from competition in the international market, or (ii) any such agreement or commitment. 5. "Comparable commercial space launch services" means commercial space launch services offered to launch a spacecraft of the weight class that is the subject of a launch competition, taking into consideration specific factors that may be considered when evaluating the price, terms and conditions of such services, including, but not limited to, intended orbit, risk management, financing, satellite lifetime on orbit and integration costs. 6. "Inducements" means any incentive offered or provided to influence the purchase of commercial space launch services, including, but not limited to, the provision of any resources of commercial value unrelated to the launch service competition as well as offers to participate under favorable conditions in the implementation of defense and national security policies and programs, and development assistance policies and programs. 7. "Unfair business practices" includes the making of any offer, a payment, a promise to pay, a promise or offer of anything of value or to authorize the payment of anything of value, or any promise to make such payment, to any official, individual, or any other entity for the purpose of obtaining or retaining business for or with, or directing business to, any person; including making payment to a person while knowing that all or a portion of the payment will be offered, given or promised, directly or indirectly, to any official, individual or any other entity for the purposes of obtaining or retaining business. 8. "Geosynchronous earth orbit" means an orbit approximately 19,400 nautical miles (35,900 kilometers) above the surface of the earth at the equator in which a payload completes one Earth orbit in a 24-hour period, holding a fixed position relative to the Earth. 9. "Geosynchronous transfer orbit" means a temporary orbit used to reposition a spacecraft or satellite into a geosynchronous Earth orbit. 10. "Low earth orbit" means and orbit approximately 100 to 1,000 nautical miles (185 to 1,850 kilometers) above the surface of the Earth. 11. "Principal payload" means an telecommunications satellite or, in the absence of a telecommunications satellite, any other spacecraft or combination of spacecraft. ARTICLE II SCOPE This Agreement applies to commercial space launch services for launches to geosynchronous earth orbit or geosynchronous transfer orbit. Except for the pricing provision set forth in Article V, paragraph 2, this Agreement applies to commercial space launch services for launches to other orbits and suborbital launches. Nothing in this Agreement applies to launches of payloads for military purposes or for use in the non-commercial, civilian space programs of either Party, including programs using spacecraft or satellites made by and primarily for the use of members of the Commonwealth of Independent States and which are executed in accordance with existing cooperative agreements. ARTICLE III GENERAL PRINCIPLES 1. The Parties shall endeavor to ensure the application of market principles to international competition among providers of commercial space launch services, including the avoidance of below-cost pricing and unfair trade practices. 2. Neither Party shall engage in practices that distort competition among providers of commercial space launch services, including, but not limited to: a. the provision of grants or subsidies that distort the production or operation costs for supplies of commercial space launch systems; b. the provision of inducements to international customers or potential international customers for commercial space launch services; c. the offering of additional services such as insurance or reflight guarantees except on a par with prevailing rates and practices in international markets for comparable risk; d. the provision of government-supported financing for commercial space launch vehicles or services except in accord with the terms of the OECD's "Arrangement on Guidelines for Officially-Supported Export Credits." 3. The Parties, including their agents and instrumentalities, shall not engage in unfair business practices to secure contracts to provide commercial space launch services. Each Party shall also endeavor to ensure that any entity or organization, subject to its jurisdiction whether or not owned or controlled by that Party, shall not engage in corrupt business practices to secure contracts to provide commercial space launch services. ARTICLE IV QUANTITATIVE LIMITS 1. During the term of this Agreement, Russian space launch service providers may contract with international customers to provide commercial space launch services for the launch of up to eight (8) principal payloads (in addition to the INMARSAT 3 satellite) to geosynchronous earth orbit or geosynchronous transfer orbit, except that the Russian space launch service providers may not conduct more than two (2) such launches in any twelve-month period. The Russian Federation will ensure a proportionate distribution of contracts by Russian space launch service providers withing any two-year period. 2. Up to four launches of principal payloads to geosynchronous earth orbit or geosynchronous transfer orbit may consist of two principal payloads on a single launch vehicle. The Parties shall jointly evaluate each such launch on a case-by-case basis and, taking into account the current situation in the international commercial space launch market, may decide by mutual agreement to treat that launch as a single principal payload for the purpose of Article IV, paragraph 1. 3. During the term of this Agreement, Russian space launch service providers may contract to provide commercial space launch services for up to three (3) launches of satellites to low earth orbit for the Iridium system. 4. In the course of consultations under Article VII, paragraph 1, the Parties shall consider jointly on a case-by-case basis and decide by mutual agreement on proposals by Russian space launch service providers for commercial suborbital launches and additional commercial launches to orbits other than geosynchronous earth orbit, geosynchronous transfer orbit, and low-earth orbit for the Iridium system, where there are competing comparable commercial space launch services. ARTICLE V PRICING 1. The contractual terms and conditions, including the price, of commercial space launch services offered or provided by Russian space launch service providers to international customers shall be comparable to the terms and conditions, including prices, for comparable commercial space launch services offered by commercial space launch services providers from market economy countries, including the United States. 2. A bid or offer by Russian space launch service providers to provide commercial space launch services at a price more than seven and one-half (7.5) percent below the lowest bid or offer by a commercial space launch service provider from a market economy country, including the United States, shall require special consultations between the Parties under Article VII, paragraph 2, of this Agreement. ARTICLE VI TECHNOLOGY CONTROLS 1. Notwithstanding any other provision of this Agreement, the Parties shall negotiate and conclude prior to each launch a satisfactory technology safeguards agreement for each payload subject to a United States export license. Such technology safeguards agreement will be intended to facilitate the issuance of United States export licenses and shall include requirements relating to the control of the transfer of missile technology. 2. Any application for a United States export license will be reviewed on a case-by-case basis consistent with United States laws and regulations. Nothing in this Agreement shall be construed to mean that the United States is constrained from taking appropriate action with respect to any United States export license. The United States will use its best efforts to assure, consistent with United States laws and regulations, authorization and completion of technology transfers subject to this Agreement. ARTICLE VII CONSULTATIONS 1. The Parties shall hold regular consultations on an annual basis to review and examine implementation of the Agreement and market developments in commercial space launch services. 2. The Parties shall hold special consultations on an urgent basis, prior to the conclusion of a contract for commercial space launch services if possible, at the request of either party, if that Party has reason to believe that such contract or pending contract is inconsistent with the terms of this Agreement. 3. If, after consultations provided for under this Article, either Party determines that the provisions of this Agreement have been violated by the other Party, each Party reserves its right to take any action permitted under its national laws and regulations. 4. If, in the course of the annual reviews provided in paragraph 1 of this Article, the Parties agree that the market for commercial space launch services has developed more favorably than anticipated and if each Party is satisfied with the other Party's compliance with terms of this Agreement, the quotas set forth in Article IV of this Agreement may be increased, by written agreement of the Parties. ARTICLE VIII INFORMATION EXCHANGE 1. The Parties shall exchange all information, including prices, terms and conditions offered for commercial space launch services, that is necessary to monitor implementation of the Agreement and carry out regular and special consultations. Such information shall be provided promptly, in any case no later than 30 days after receipt of a request by the other Party for such information, except that such information need not be provided prior to bids for commercial space launch services. 2. Parties shall protect the confidentiality of information exchanged, shall not use any such information for pecuniary gain and shall not release such information to third parties. ARTICLE IX TERM AND REVIEW 1. This Agreement shall enter into force upon signature and remain in force until December 31, 2000. 2. The Parties shall review the implementation of this Agreement after three years from its entry into force. Following such review, the Parties may, by mutual written agreement, terminate this Agreement. 3. Either party may request negotiations to amend the terms of this Agreement to take account of developments in the international market for commercial space launch services and progress in the transition of Russia's space launch sector to a market basis. 4. Any contract entered into pursuant to this Agreement will continue to be subject to the provisions of this Agreement even if the duration of the contract extends beyond the expiration date of this Agreement. Termination of this Agreement will not affect contracts entered into pursuant to this Agreement. DONE at Washington this second day of September, 1993, in duplicate in the English and Russian languages, both tests being equally authentic. FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA: FOR THE GOVERNMENT OF THE RUSSIAN FEDERATION: