International Opportunities for San Diego
Aerospace/Defense/UAV Companies
April 28, 2015
AUVSI Lindbergh Chapter
Presented by Julie Osman, Senior International Trade Specialist
U.S. Commercial Service, U.S. Department of Commerce
U.S. Commercial Service
The U.S. Commercial Service (Global Markets) is an agency of the
U.S. Department of Commerce’s International Trade Administration
Our mission:
 To promote the export of goods & services from the U.S.,
particularly by small- and medium-sized businesses
 To help U.S. businesses find relevant timely market intelligence
and qualified international partners
 To promote foreign direct investment into the U.S.
Our Network &
What it can do for you
• 1800 International Trade Specialists with
country and industry expertise in more than
100 U.S. cities and 150 offices in 70 countries
ww (& State Dept partner posts)
We can...
• Locate international buyers, distributors, representatives
• Help you to enter new markets faster and more profitably
• Provide expert help at every stage of the export process
Products & Services
• Market Intelligence
• Customized Partner Services
• Due Diligence Reporting
• Trade Advocacy
• Trade Shows
• Trade Counseling & Support
www.export.gov –
Portal to USG Export Info
A collaborative effort with the 19 Federal Agencies that offer export assistance and
services, managed by the DOC/International Trade Administration
Information available:
• International Sales & Marketing
• International Finance
• International Logistics
• Licenses & Regulations
• Trade Data & Analysis
• Trade Problems
Market Intelligence
• Free Market Research Library: www.export.gov
• Country/industry specific reports and analyses prepared by American
Embassy/Consulate staff (customized research also available)
• Country Commercial Guide – “How to do Business” reports
• www.export.gov/industry – “A&D” Research, Events, Leads, News
• 2015 WW Aerospace Resource Guide – 177 page industry analysis,
37 countries covered with info on market entry, demand, best export
prospects, barriers, trade events, associations, resources, etc.
Aerospace Industry Segmentation –
Statistical Analysis/Research
•
•
•
•
•
•
•
•
•
•
•
•
Commercial/Business Aircraft
Helicopters
UAVs, Components & Payloads
Aircraft and Engine Parts
Aircraft Interiors
Airport and Ground Support Equipment
Aviation Services
Maintenance and Spare Parts
Airborne Equipment and systems
Pilot and Navaids
Composite Materials
Spacecraft, Satellites and Parts
Customized Partner Services
(For Fee Programs)
• Gold Key Matchmaking Service
• International Partner Search
• Single Company Promotion
Gold Key Matchmaking
•
In country on site appointments scheduled/arranged for
you with vetted potential trading partners before you
travel overseas. Accompanied by a post representative
•
Often engage SAO representative
(MilGroup/ODC/OMC) to facilitate introductions and
meetings (also FMS POC)
•
Customized market and industry briefings provided in
advance with our Commercial Officers and Commercial
Specialists at American Embassies and Consulates
•
Post-meeting debriefing with our staff and assistance in
developing appropriate follow-up strategies
•
Help with accommodations, in country transportation,
interpreter service, clerical support, etc.
International Partner Search
•
U.S. company provides background on the company, products and/or services to
be promoted, market specific information
•
The Commercial Service utilizes our network of international contacts to interview
potential partners and provide the U.S. company with a list of pre-qualified
candidates
•
Save valuable time and money by working only with pre-qualified international
candidates that are interested in selling your products and services.
•
Obtain high-quality market information on the marketability and sales potential for
your products and services.
Single Company Promotion
SCP provides support and official sponsorship for a U.S. company event in a specific
market under the auspices of the American Embassy or Consulate, e.g.
• Product launches
• Technical seminars
• Networking receptions
A typical event might include a 3 hour program with an introduction by a U.S.
Government official, followed by a detailed company presentation and Q&A session,
followed by a networking reception.
Held in a well recognized location, such as a hotel or in some cases, the U.S.
Ambassador’s residence
International Company Profile
Background/credit check performed by American Emb/Consulate on potential trading partner:
•
Management details
•
Business activities
•
Product/service lines
•
Financial condition
•
Credit-worthiness
•
Trading experience
•
Market coverage
•
Business connections in the target country
The Advocacy Center
Housed at the U.S. Department of Commerce, the Advocacy Center
coordinates USG resources and authority to level the playing field on behalf of
American business interests as they complete against foreign firms for specific
international public contracts, both civilian and defense sales.
Assistance may include:
• Visits to key foreign officials by high-ranking U.S. officials
• Direct support from U.S. officials stationed overseas
• Communication with foreign decision-makers
Trade Shows/Trade Missions
•
International Trade Shows
– U.S. pavilions put you in the best international trade shows with access to thousands
of buyers
– one-on-one meetings with potential buyers
•
International Buyer Program (IBP)
– U.S. Department of Commerce selects leading domestic trade shows to promote
through its global network of offices and contacts
– U.S. Commercial Service staff in our Embassies and Consulates abroad recruit and
bring delegations of qualified buyers, prospective representatives and distributors to
domestic trade shows
– U.S. Commercial Service staff then facilitates meetings between buyers and
exhibitors
•
International Trade Missions
– Opportunity to meet with distributors, government and industry officials, prospective
customers, and American Embassy officials
Upcoming Aerospace/Defense
Trade Events 2015-16
Domestic - AUVSI Unmanned Systems Conference and Trade Show
(Atlanta – May 2015), NBAA (Las Vegas – October 2015)
International – IDEF (Turkey - May 2015), Paris Air Show (France June 2015), DSEI (UK - September 2015), Korean Aerospace and
Defense Exhibition (Korea – October 2015), Defense and Security
(Thailand – November 2015), Dubai Air Show (UAE – November 2015),
Unmanned Systems Canada (Canada – November 2015), Gulf
Defense & Aerospace Exhibition (Kuwait – December 2015),
Singapore Air Show (February 2016), India Aviation (India – March
2016), FIDAE (Chile – April 2016), Farnborough International Air Show
(UK - July 2016)
UAV Market – Global Applications
Military – ISR, Combat Operations, Battle Damage Assessment/Target
Designation, Weapon Delivery
Homeland Security – Border/Maritime Security, Fire Fighting, Police
Operations and Investigations, Disaster Management, Search and
Rescue, Anti-Poaching, Traffic Monitoring, Humanitarian Relief
Civil and Commercial – Agriculture, 3D Mapping, Oil & Gas Monitoring,
Mining and Utilities Inspection, Climate & Pollution Tracking, Wildlife
Research & Survey, Photography, Media, Retail, Cargo Delivery,
Hobbyists
Global UAV Market – Industry Overview
•
Global UAV market is expected to grow to $8.3B USD by 2018, and $114.7B USD by
2023 (MarketsandMarkets)
•
Global UAV spending will grow substantially from current worldwide expenditures of
$6.4B USD annually to over $91B USD within the next 10 years (The Teal Group)
•
U.S. is the preeminent leader in the industry in terms of technology, expenditure,
production and usage, but Israel, a close 2nd in R&D, design/manufacturing, is the
number 1 exporter of UAVs in the world
•
Other very strong and growing players in the market : Canada, EU nations, and
China/India//South Africa (all exporting)
UAV Market – Regional Snapshots
•
Canada – The country has a very well established and growing indigenous industry,
as both producer/user of military and civil/commercial systems. It is a leader in
technology and solutions, and is the 3rd largest ww exporter. Over 300 companies
are engaged in the UAV industry. Canada is actively using systems in
maritime/arctic research - mapping/survey, agricultural applications and oil/gas
monitoring.
•
Asia/Pacific – While no other regional nation has the (military or civil/commercial)
technology, private and public funding, or speed of UAV delivery that China has,
many countries, e.g. India, Japan, S. Korea, Taiwan, Singapore and Indonesia, are
developing robust domestic unmanned systems programs. Asia/Pacific is also a
very strong growth market for civilian/commercial UAVs. Restrictions on unmanned
flights through civil air space are much less than those in the U.S. or even Europe.
UAV Market – Regional Snapshots
•
Europe – Several NATO nations (i.e. Norway, Germany, UK, France) are important
manufacturers/users in the UAV market, but over the next 5 years investments in
defensive UAVs will decrease or flat line, while civil and commercial opportunities are
increasing. Non NATO countries are slowly moving into the military (pending budget)
and homeland security UAV market. These countries are also seeing a big surge in
the commercial side of the industry.
•
Russia – The country is comparatively behind in developing advanced UAVs, despite
costly R&D programs, but it is a heavy user. It has relied heavily on Israel for
systems, and is now collaborating with EU/Israeli manufacturers on new technology
to punt the domestic industry.
UAV Market – Regional Snapshots
•
Middle East – Israel is by far the largest producer, and a world design/technological
leader in the military/civil industry. UAE is developing a strong indigenous base, and
is the largest UAV operator and user nation in the Arab world. Other major military
and homeland security users are Saudi Arabia, Egypt and Iraq. These countries
import mainly from China and South Africa.
•
Latin America – Most nations’ interest in UAVs focuses primarily on border security
operations against organized crime/drug trafficking. Main buyers/users of both HALE
and MALE systems (from Israel) are Brazil - also developing strong domestic
manufacturing base, Argentina, Bolivia, Venezuela and Mexico. There is also a
growing interest in agricultural applications.
•
Africa – South Africa is the only country on the African continent with UAV
manufacturing capability, and is becoming a world player and exporter.
Global UAV Market : Best Prospects for US
companies – systems/components
• Australia*
• Austria
• Canada*
• Czech Republic
• Egypt
• India
• Italy
• Iraq
* Free Trade Agreement in place
•
•
•
•
•
•
•
Netherlands
Saudi Arabia
South Africa
South Korea*
Thailand
Turkey
United Arab Emirates
San Diego Aerospace – UAV Industry
•
San Diego is internationally recognized as a leader in UAV R&D and technologically advanced
systems
•
UAVs comprise the largest segment of SD’s defense manufacturing base (12+% of all DoD
contracting activities), and is a key component of the region’s economic success
•
Military UAS success has driven the growth locally, but the nascent, seemingly limitless,
commercial application sector is gaining momentum and becoming critical as defense
spending decreases
•
San Diego uniquely positioned to benefit from increased demand worldwide for both military
and civil/commercial UAVs
•
Strong new local pool of talent in aerospace from SDSU and UCSD
U.S. Government Export
Controls
• Export Control Reform and Current Status
• U.S. Department of Commerce/BIS
• U.S. Department of State/DDTC
• Major Changes in Regulations To Date
Export Control Reform
•
August 2009 – President Obama directed a broad based interagency review of the
current USG export control system
•
Review determined current system overly complicated and too redundant
•
Result: launch of the Export Control Reform Initiative with the goal of strengthening
national security and US competitiveness by focusing on current threats as well as
adapting to changing economic and technological environment
•
Ultimate Goal – Single Export Control Agency, Single Export Control List, Single IT
Platform, Single Export Enforcement Coordination Center (E2C2 created 11/2010)
Current Status
•
Still operating under multiple USG agencies. e.g.
U.S. Department of Commerce/Bureau of Industry and Security (BIS):
export and reexport of commercial/dual-use items and technology
U.S. Department of State/Directorate of Defense Trade Controls (DDTC):
export, re-transfer, temporary import of defense articles and services
U.S. Department of the Treasury/Office of Foreign Assets Control
(OFAC): financial, embargoes
Department of Commerce/
Bureau of Industry and Security
• Bureau of Industry and Security (BIS) – export control and licensing
branch of the Department of Commerce
• Administers and enforces the U.S. Export Administration Regulations
(EAR) – CFR Title 15, Parts 730-774
• HQ in Washington, D.C. with field offices nationwide
(counseling/enforcement)
• Provides online services and educates through online training and
export licensing seminars
• www.bis.doc.gov Irvine Office #949-660-0144
Department of State/
Directorate of Defense Trade
Controls
• Directorate of Defense Trade Controls (DDTC) – export control and
licensing branch of the Department of State
• Administers and enforces the International Traffic in Arms Regulations
(ITAR) – CFR Title 22, Parts 120-130
• HQ in Washington, D.C. – no field offices
• www.pmddtc.state.gov
• DDTC Response Team #202-663-1282
Aerospace Export Controls
U.S. Export Administration Regulations/Bureau of Industry and Security/Commerce –
Commerce Control List – Category 9: Aerospace and Propulsion (Other Possible
Categories: #3 Electronics, #6 Sensors/Lasers, #9 Navigation/Avionics, etc.)
International Traffic in Arms Regulations/Directorate of Defense Trade Controls/State –
U.S. Munitions List – Category VIII: Aircraft and Associated Equipment (Other Cats)
UAV licensing jurisdiction dependent on # of specific detailed factors, including but not
limited to capability, range, payload, operational altitude, ultimate end-use/end-user, etc.
(Company can submit Commodity Jurisdiction request to USG for determination)
February 17, 2015 – Obama Administration announced new UAV export control policy more careful case by case review of military/defense license apps (details to come)
Major Regulatory Changes
Some Key Milestones (Effective Dates) – Revision & Clarification to
ITAR Categories, some transfer from USML to CCL (600 Series)
•
•
•
•
10/15/13 – Aircraft/related parts, Gas Turbine Engines/assoc eq.
1/6/14 – Surface & Submersible Vessels, Ground Vehicles
6/27/14 – Satellite Components (microelectronic circuits)
7/1/14 – Launch Vehicles, Missiles, Explosives, Military
Training/Personal Protective Eq, Nuclear Articles
• 11/10/14 – Spacecraft and related articles (500 Series)
• 12/30/14 – Military Electronics
Trends/Issues in the UAV Market
• U.S. preeminent player in the global UAV market
• Global UAV market increasing worldwide, and as a result, growth in
electronics, sensors, cameras, associated products/service sectors
• Civil/Commercial market growing exponentially in almost every country
in the world – great opportunities for proactive U.S. companies
• Open airspace, and eased restrictions on line of sight operations, in
many countries allow for even more civil/commercial opportunities
Trends/Issues in the UAV Market
•
Strong competition – Israel, China, and other players in the Asia/Pacific and EU, as
well as Canada, are developing leading edge technology, and products faster than
the U.S., and are exporting
•
Successful international partnerships require time, commitment and money, and the
sales cycle and ROI may be longer
•
Many of the fastest growing markets rate poorly on ease-of-doing business rankings
•
Strict USG export controls (MTCR /Wassenaar restrictions)
•
Foreign end-use, end-user prohibitions, country embargoes/sanctions
Thank you!
Julie M. Osman
julie.osman@trade.gov
858-467-7037