Bill of law on the exploration and use of space resources

On Friday 11 November 2016, the Luxembourg Government revealed the preliminary legal and regulatory framework for space resources utilisation activities in Luxembourg.

The bill of law consists of two main components dealing respectively with the ownership of space resources and the authorisation regime for the exploration and use of such resources.

In summary, the proposed bill of law contains the following provisions:

• Space resources are capable of being appropriated in accordance with international law (article 1) by analogy with the rules governing the high seas and the possibility which exists to explore the resources of the latter without appropriating the high seas as such.

• The exploration and use of space resources (for commercial purposes only) is possible exclusively on the basis of a ministerial authorisation granted to an operator (on a personal and non-transferable basis) with respect to a specific mission (and not generically as in the case of a business license) and for a limited period of time, although it can be renewed (articles 2, 3 and 5).

• Authorisation may be granted only to legal persons existing under Luxembourg law in the form of a société anonyme (S.A.) or a société en commandite par actions (S.C.A.) (article 4). However the shareholders of the operator may be Luxembourg, foreign, natural or legal persons.

• The central administration of the operator must be located in Luxembourg (article 7 (1)).

• The identity of direct or indirect shareholders holding a qualifying holding (within the meaning of the law of 5 April 1993 relating to the financial sector) in the operator or, in the absence of a qualified holding, the identity of the 20 largest shareholders must be communicated to the competent ministry. The authorisation may be refused if the quality of the shareholders (article 8 (1)) or of the members of the management body (article 9 (1)) is unsatisfactory.

• At least two persons must be responsible for the management of the operator and must be empowered to effectively determine the direction of the business activity (article 9 (2)).

• Any change in the operator's management body must be communicated to the competent ministry beforehand (article 9 (3)).

• The authorisation shall also be subject to proof of an adequate financial basis to cover the risks relating to the mission which is the subject of the application for authorisation (article 10 (1)).

• The operator must appoint an independent auditor. Any change of independent auditor by the operator shall be subject to the prior approval of the competent ministry (article 11).

• The authorisation is accompanied by a book of obligations (article 12) the content of which will be determined by the operator and the government on a case-by-case basis. The ministers responsible for issuing authorisations are responsible for the ongoing supervision of missions (article 14).

• The operator which is granted an authorisation for a mission is fully responsible for any damage caused during the mission, including during all preparatory works and duties (article 15).

• The granting of an authorisation for a mission does not dispense with the need to obtain additional approvals or authorisations (especially the business license) (article 16).

The proposed legislation is expected to enter into effect in early 2017.

in collaboration with Blazej Gladysz, Associate, Corporate Law, Mergers & Acquisitions; Master's degree in Space & Telecommunications Law