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. Last Updated: 07/27/2016

Sanctions Threat Irks Aerospace Industry

Russian officials voiced bewilderment and frustration Thursday over U.S. threats to bar Russian rockets from launching American satellites to punish Russia for alleged exports of missile and nuclear know-how to Iran.

"All these threats are absolutely ungrounded," Yury Milov, deputy director of the Russian Space Agency, or RKA, said in a telephone interview Thursday.

Not only would the loss of U.S. satellite launches seriously hurt the cash-starved Russian space industry, but the United States would be shooting its own satellite industry in the foot if it cut the use of Russian rockets, Milov said.

The U.S. government said Wednesday that it will either cut the number of launches or ban them altogether when it sets the quota for Russian rockets for the next year unless Moscow acts to stop its missile and nuclear technology from being leaked to Iran.

Russian diplomats reacted rapidly to the accusations. Foreign Ministry spokesman Vladimir Rakhmanin categorically denied Russia was giving Iran military assistance and called U.S. attempts to link these accusations with space cooperation "far-fetched."

The sanctions threat came as a shock to Russia's two biggest rocket makers - the Moscow-based Khrunichev Space Research and Production Center and the Samara-based Progress plant.

"I don't really understand what we have to do with all these rumors" of ballistic missile technologies and components being smuggled across the Russian-Iranian border, said Konstantin Lantratov, spokesman for the state-owned Khrunichev center.

Khrunichev manufactures Proton rockets, which are set to put nine U.S. satellites into orbit this year, including the Telstar 6 craft that has already been shipped to the Baikonur Cosmodrome in Kazakhstan to be launched Jan. 30.

Each launch is priced at about $70 million and "any losses will hit us hard," Lantratov said.

Khrunichev is the most prosperous of Russia's space flagships, but its fortunes depend largely on Western orders, which have included not only Proton launches, but also U.S.-funded construction of a key module for the International Space Station.

Washington has repeatedly accused Russian companies of involvement in Iran's alleged ballistic and nuclear weapons programs, but has produced no evidence.

Last January, RKA chief Yury Koptev announced that the Federal Security Service, or FSB, had thwarted some attempts by Russian organizations to sell ballistic-missile technology to Iran, but he refused to elaborate.

The FSB, which is the main successor to the KGB, maintains that it keeps a watchful eye on all Russian organizations that possess such technologies or produce any dual-use goods.

"They [Americans] never produce any evidence because there could be none," one serviceman at the FSB's central staff said in a phone interview Thursday.

"In this case they base their actions on some kind of impressions they have had, just like they bomb Iraq because some pilot reported he believed he was targeted by a radar," said this counterintelligence officer, who asked not to be named.

The quota of U.S. satellites launched by Russian-made rockets has already been set at 16 for this year, compared to only four last year, said RKA spokesman Konstantin Kreydenko. This includes the nine by Proton rockets and six by Soyuz rockets made by Progress.

Progress deputy director Vyacheslav Vershigorov said in a phone interview he "can only hope" that the United States will not impose any sanctions that would terminate a major source of revenues for his plant. A Soyuz rocket is scheduled to launch a Globalstar satellite next month.

The space agency's Milov said the threatened sanctions would affect not only Russian companies, but also such U.S. aerospace behemoths as Lockheed Martin.

In 1994, Lockheed Martin co-founded the International Launch Service joint venture together with Khrunichev and Moscow-based Rocket Space Corporation Energia to market launches of Protons and U.S.-made Atlas rockets in the West.

In addition to losing hefty fees for mediating launches of Russian-made rockets, Lockheed Martin and other U.S. aerospace companies would also have to turn to more expensive U.S.-made rockets if Proton launches are banned.

In addition to being cheaper, Proton is also the only rocket capable of putting a satellite into a geostationary orbit, except for the U.S.-made Titan-4 rocket, which the U.S. government does not allow to be used for commercial launches, according to Milov.

"It [the sanctions threat] is going to fire back" at the U.S. space industry, Milov said.

Nikolai Nosatenko, deputy director of the Moscow region-based NPO Mashinostroyenia, agreed.

"All these embargoes do not only contradict the concept of a global free market, which Americans have been always preaching, but also deal a heavy blow to Americans too," said Nosatenko, whose enterprise has designed and manufactured SS-19 Stiletto ballistic missiles. NPO Mashinostroyenia is currently trying to market launches of satellites by converted SS-19s, both in the United States and Europe.

In addition to sanctions, Russian rocket launches of U.S. satellites are also endangered by Moscow's failure to clinch the so-called Technical Safeguards Agreement with the United States.

The lack of such an agreement, which is meant to prevent unauthorized technology transfers on both sides, reportedly may prompt the U.S. side to cancel launches of more Globalstar satellites by Soyuz rockets planned for later this year.

Russian diplomats drafted and sent a package of proposals on the agreement to their U.S. counterparts one month ago, Foreign Ministry spokesman Vladimir Komolov said.

Unfortunately, Komolov said, the U.S. side has rejected some of these proposals.

Komolov acknowledged that the slow-paced bureaucratic game may have had a negative impact on Russian rocket launch companies' efforts to win orders from Western satellite operators.