Intangible Transfers of Technology and Software

Controlling intangible transfers of technology (ITT) and software—including in the context of the Missile Technology Control Regime (MTCR)—is a known challenge, but the growth of the NewSpace industry and advances in emerging technologies make it a particularly timely topic.

This report from SIPRI explores a series of cases of export control violations and cases where the risk of a possible violation was identified involving missile-related ITT or software. The report also develops a typology of violations and identifies associated compliance challenges.

Key challenges emerge from the typology and the analysis of case studies. The increasing reliance on ITT and software by companies in the aerospace and NewSpace sectors and their global supply chains presents one such challenge. Digital transfers of technology and software, including through cloud-based servers, have also become
easier and as a result more common. Despite this, many companies, especially recently established NewSpace and emerging technologies start-ups, lack detailed awareness of ITT and software controls or effective methods of ensuring compliance with such controls.

Compliance is also a challenge among research institutes and especially in academia, where research is being undertaken in fields that are highly relevant to missile development. Actors actively seeking to acquire technology and software to advance their missile programs can take advantage of this. They could also exploit the increasing trend for foreign direct investment (FDI) to access technology by gaining control of or ownership rights over a company.

The report concludes by offering recommendations for the MTCR to strengthen its efforts to address the proliferation risks posed by ITT and software.

[download report]