ThalesAleniaSpace Replacing U.S. Components on Russia-Bound Satellite

By Robert Wall 

PARIS--U.S. and European sanctions against Russia haven't been a major headache for most Western companies yet, but they are sending some executives scrambling for ways to avoid getting snarled up in them.

The latest example: One of Europe's leading satellite makers is replacing U.S. components from a Russia-bound spacecraft to avoid running afoul of American sanctions against Moscow.

ThalesAleniaSpace, a Franco-Italian joint venture, is building a commercial telecommunications satellite for Russia. The satellite, the Yamal-601, is being purchased by Gazprom Space Systems to provide communications links over a region spanning from Europe to southeast Asia.

The U.S. and European states have announced a series of sanctions against Russia, including the transfer of some so-called dual-use items that could have commercial as well as military usage. ThalesAleniaSpace wasn't certain its satellite would have fallen under the sanctions restrictions, but since some of the parts are American, "we prefer to be cautious," said Jean-Loïc Galle, chief executive of the partnership.

"There have been some new rules concerning U.S. export regulations toward Russia. We had to take this into account," Mr. Galle said.

The partnership is owned in equal parts by France's Thales SA and Italy's Finmeccanica SpA.

The company replaced U.S. components with European ones on the Gazprom spacecraft without delaying delivery plans, Mr. Galle said.

Export of sensitive equipment related to aerospace has been a hot-button trans-Atlantic issue, as many Western companies rely on Russian rockets for things like satellite launches. Russian rockets currently provide the only means for astronauts to access the International Space Station.

Inmarsat PLC expects to launch its next Boeing-built Global Xpress satellite on a Russian-built Proton rocket by early next year, once the commercial booster has been cleared to resume flying after a May accident, said Inmarsat Chief Executive Rupert Pearce.

The Pentagon is taking measures to wean itself of dependence on Russian technology. The Atlas V rocket used to launch U.S. spy satellites and sold by United Launch Alliance, a joint venture of Lockheed Martin and Boeing, uses a Russian-built engine, the RD180. Since tensions with Russia have escalated, the Pentagon has been considering other options.

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