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Department of Commerce and Department of Defense Sign Memorandum of Agreement to Strengthen U.S. Defense Industrial Base

defense

Department of Commerce and Department of Defense Sign Memorandum of Agreement to Strengthen U.S. Defense Industrial Base

The United States Departments of Commerce (DoC) and Defense (DoD) have signed a Memorandum of Agreement (MOA) to expand collaboration to strengthen the U.S. semiconductor defense industrial base. The agreement will increase information sharing between the Departments to facilitate close coordination on the CHIPS for America’s incentives program, ensuring that their respective investments position the U.S. to produce semiconductor chips essential to national security and defense programs.

The MOA is a crucial step forward in implementing the bipartisan CHIPS and Science Act, a key part of President Biden’s Investing in America agenda. The MOA will advance this agenda to strengthen manufacturing and supply chains here at home, solidify America’s global leadership, and protect long-term national security.

By aligning priorities and decision-making, the MOA will enable a more synchronized approach to promoting a robust and resilient semiconductor supply chain. Specific areas of consultation identified in the MOA include sharing information on the semiconductor needs of the Defense Industrial Base, the investment priorities of DoD and each military service, the existing and planned investments to sustain mature and legacy chip capabilities for current defense programs, and funding to support emerging technologies that are critical to future U.S. national security programs.

The MOA will also facilitate collaboration on potential investment applications to ensure DoC and DoD are making complementary decisions that maximize federal investments under the CHIPS Incentive Program and DoD Defense Production Act and Industrial Base Analysis and Sustainment funds.

air defense

Air Defense System Market: Top Trends Boosting the Industry Expansion through 2026

The global air defense system market size is poised to expand at a substantial CAGR during the forecast period. With several countries across the world seeking to track, detect, intercept, and neutralize every kind of airborne threat from combat jets, missiles, and UAVs effectively, numerous industry leaders have been providing cutting-edge defense solutions including radars, jammers, warning systems, and decoys to protect against a wide range of threats.

The following seven factors have been aiding the expansion of the  global air defense system industry outlook:

C-RAM air defense systems in the Asia Pacific

The C-RAM or Counter Rocket, Artillery, and Mortar systems is poised for considerable demand through the next few years, stimulated by the efficiency of these systems in intercepting missiles at the same time, raising timely alarms for protecting the operating bases.

By 2026, the overall Asia Pacific air defense system market is expected to accrue over $13 billion, thanks to the high demand for these systems. The high firing range of over 2,000 meters offered by new solutions such as Centurion C-RAM has been promoting the adoption of these systems.

Rising concerns regarding aerial attacks in China

The Chinese industry for air defense systems has been prospering on account of the rising number of aerial attacks from enemy nations. The market share from the segment is projected to grow at a 4% CAGR through 2026.

In view of the growing number of intercontinental missiles, China has been boosting its combat preparedness. For instance, recently, in February 2021, China successfully conducted a mid-course antiballistic missile mechanical test, which is known to be the fifth land-based ABM technical test that is publicly announced by China. This demonstrates the maturity and higher reliability of the Chinese defense ministry.

Growing adoption of weapon systems in Asian countries

The countries in Asia have been embracing weapon systems such as missile launching systems and turret systems due to the development of the latest automated weapon systems including drones and missiles. The Asia Pacific air defense system market forecast has been receiving considerable impetus from the unavoidable necessity to protect one’s nation.

The segment is expected to surge at a 3% CAGR through the forecast years, pushed by the integration of advanced technologies such as accurate target location, GPS tracking, and real-time information updates offered by industry players in their products such as UAVs and decoys.

Land-based air defense systems to see higher adoption in Europe

The land-based air defense systems are set to command a considerable market share through the forecast times, pushed by the real-time updates offered by these systems during battles. Growing at a high CAGR, the segment was estimated to hold a staggering 70% of the overall European air defense system market share.

Russia and Germany particularly have been aggressively focusing on the development of advanced air defense systems through robust R&D activities. The growing deployment of land-based missiles across military and homeland security has been accelerating the expansion of the industry share in the region.

U.K. and EU likely to collaborate as threats from China and Russia loom large

In the wake of the economic problems faced by the United Kingdom and the European Union, experts opine that the two powers are likely to unite against enemy aggression and mounting military pressure.

A formal agreement is anticipated between the two as the threats posed by Moscow and Beijing have been escalating. This collaboration might prove to be favorable for the advancement of the European air defense system market, as the unit is expected to spawn newer designs with enhanced interoperability and integration.

Requirement of latest anti-aircraft systems in North America

The deployment of anti-aircraft systems in the North American region has been rising constantly. The segment accounted for more than 86% of the total North American air defense system industry share during the past and is slated to register a significant growth rate through 2026.

These systems play a vital role along the primary line of defense, ensuring that aerial attacks are prevented. Apart from boosting their in-house production capacities, several industry players have been importing these systems from other nations, while others have been engaging in international collaborations to enhance their product offerings.

Development of next-generation systems by the U.S.

According to recent reports, the U.S. is likely to deploy mobile short-range Avenger air defense systems for protecting its troops in Iraq and Syria. The Avenger air defense system is designed to provide optimal protection to infantry against drones, helicopters, low-flying aircraft, and cruise missiles.

Earlier last year in January 2020, the U.S. troops in Iraq possessed no air defense systems. They were subjected to a retaliatory attack by Iran in the form of a drone strike. The development of new air defense systems has been a key focus of the military since then, fueling the North American air defense system market size. Similarly, in collaboration with Israel, the U.S. has been developing an advanced interceptor, Arrow weapon system, which is expected to be one of the first to intercept ballistic missiles.

Boeing, L3Harris, Hanwha Corporation, Rafael, General Dynamics, Lockheed Martin, Kongsberg Gruppen, General Dynamics, Northrop Grumman, BAE Systems, and Rheinmetall AG are some leading air defense system manufacturers in the international landscape.

defense

U.S. Sanctions Turkey’s Defense Procurement Entity Over Its Purchase of Russian Missile System

The U.S. Department of State (“State Department”) announced the imposition of sanctions on Turkey’s Presidency of Defense Industries (“SSB”) pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”). The U.S. is sanctioning SSB over its procurement of the S-400 surface-to-air missile system from Russia’s Rosoboronexport (“ROE”). SSB is Turkey’s primary defense procurement entity and ROE is Russia’s main exporter of arms. As a result of Turkey’s actions, the U.S. is imposing full blocking sanctions on four SSB officials along with certain non-blocking CAATSA sanctions on the SSB entity.

CAATSA Section 231 requires the President to impose at least five sanctions from the menu of twelve available sanctions authorized under CAATSA Section 235 on any person determined to have knowingly engaged in a significant transaction with the defense or intelligence sectors of the Russian government. ROE is listed on the State Department’s List of Specified Persons (the “LSP”) and recognized as being a part of the defense sector of the Russian government, therefore the State Department determined that CAATSA required the imposition of sanctions on SSB.

The State Department and U.S. Department of Treasury (“Treasury Department”) have selected the following sanctions from CAATSA Section 235 to impose on SSB:

-“a prohibition on granting specific U.S. export licenses and authorizations for any goods or technology transferred to SSB (Section 235(a)(2));

-a prohibition on loans or credits by U.S. financial institutions to SSB totaling more than $10 million in any 12-month period (Section 235(a)(3));

-a ban on U.S. Export-Import Bank assistance for exports to SSB (Section 235(a)(1));

-a requirement for the United States to oppose loans benefitting SSB by international financial institutions (Section 235(a)(4)); and

-imposition of full blocking sanctions and visa restrictions (Section 235(a)(7), (8), (9), (11), and (12)) on Dr. Ismail Demir, president of SSB; Faruk Yigit, SSB’s vice president; Serhat Gencoglu, Head of SSB’s Department of Air Defense and Space; and Mustafa Alper Deniz, Program Manager for SSB’s Regional Air Defense Systems Directorate.”

Although CAATSA Section 235 gave the State and Treasury Departments the discretion to impose full blocking sanctions on SSB, they chose not to do so and instead only imposed those blocking sanctions on the four previously-identified SSB senior officers.

In order to effectuate these sanctions, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) added SSB to its new “Non-SDN Menu-Based Sanctions” list with designations specifying the above-listed non-blocking, menu-based CAATSA Section 235 sanctions. Additionally, OFAC added the four individual SSB officers to its Specially Designated Nationals and Blocked Persons (“SDN”) list. As a result, all of their property and interests within U.S. jurisdiction are blocked and U.S. persons are prohibited from conducting transactions with them without an OFAC license.

State Department’s Directorate of Defense Trade Controls (“DDTC”) is responsible for issuing and administering export licenses under the U.S. International Traffic in Arms Regulations (“ITAR”).  DDTC issued the following notice on December 14, 2020 explaining how it will implement the new export licensing restrictions which are now applicable to SSB under these new CAATSA sanctions:

“[E]ffective immediately DDTC will not approve any specific license or authorization to export or re-export any defense articles, including technical data, or defense services where SSB is a party to the transaction. This prohibition does not apply to temporary import authorizations or to current, valid, non-exhausted export and re-export authorizations. However, the prohibition does apply to new export and re-export authorizations – including amendments to previously approved licenses or agreements and licenses in furtherance of previously approved agreements. This sanction does not apply to subsidiaries of SSB; however, licenses submitted to DDTC which name subsidiaries of SSB are still subject to a standard case-by-case review, including a foreign policy and national security review. We are not imposing a prohibition on U.S. Government procurement from SSB as part of this action.”

The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) is responsible for issuing and administering export licenses under the U.S. Export Administration Regulations (“EAR”). BIS also issued its own notice on December 14, 2020 which generally stated BIS “has implemented a policy of denial for export license applications to [SSB].”  However, BIS’s notice did not address whether these new CAATSA sanctions would affect existing BIS export licenses issued for SSB or transactions with SSB subsidiaries under the EAR.

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Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

military end user

Unpacking U.S.-China Sanctions and Export Control Regulations: The China “Military End Use” and “Military End User” Rule and the Department of Defense List

This is the second in a series of articles by Eversheds Sutherland partners Jeff Bialos and Ginger Faulk explaining the legal and regulatory impacts of certain recent US sanctions and export control actions targeting various Chinese entities. Each article explains the regulatory context of the recent rules. Recognizing that this is a highly charged political topic, the article does not condone or promote any governmental actions discussed here but is only explanatory in nature.

As part of the overall realignment of US national security strategy toward China, the US government has taken a series of actions this year to target the Chinese military sector through sanctions and export controls imposed against a range of Chinese companies. The recent promulgation of the expanded China “military end-use” and “military end user” rule mark an expansion of a longstanding US policy to bar certain exports of US “dual-use” goods and technologies that can contribute to China’s military capability. This, combined with the recent release by the Department of Defense of a list of companies considered to be “owned or controlled” by the Chinese military – pursuant to a 20-year-old law – signals increased US government pressure on China and its firms that are viewed as instruments of the Chinese government. These rules together threaten to limit significantly the availability of “dual-use” US goods and technology to Chinese companies on the list.

Unpacking the China “Military End User” Rule

A recent amendment to the Export Administration Regulations (EAR) targeting a broader range of “military end-uses” and “military end-users” in China is designed to curtail exports and re-exports of a range of US origin “dual-use” technology, software, and goods to China’s private sector but only where the private sector end-user is determined to support the Chinese military. Per the US Commerce Department, the new rule “will require increased diligence with respect to the evaluation of end-users in China, particularly in view of China’s widespread civil-military integration.”

Previously, the rule applied only when the item was intended for military end-use, e.g., incorporation into a military end-item. The new rule now expands this approach beyond exports for military end-use, and now requires an export license for exports or transfers of listed items to China if the item is intended entirely OR in part for a “military end-user” in these countries. Under this expanded control, the rule potentially proscribes exports and re-exports not only to the military (e.g., the Peoples Liberation Army (“PLA”)) but also to police, national guard, intelligence organizations and “any person or entity whose actions or functions are intended to support ‘military end-uses.’” In other words, an export of a subject item to a private sector company which also contracts with the Chinese government could be prohibited even if the item itself is neither destined for the military (defined in a traditional sense) nor for a military application.

In addition, the new rule expands the definition of “military end-use” by no longer just restricting exports for “the use, development, production of, or incorporation into” military items, but now also extending to an export that “supports or contributes to the operation, installation, maintenance, repair, overhaul, refurbishing, ‘development,’ or ‘production’ of military items.” A subject item that supports even one of these functions triggers the “military end-use” rule.

The rule also adds products to the scope of the rule under the categories of materials processing, electronics, telecommunications, information security, sensors and lasers, and propulsion. Importantly, now subject to the rule are 5G-capable microprocessors, devices, and components. Finally, the new rule subjects certain exports to China to new country-based licensing controls under a “regional stability” control.

Heightened Due Diligence Obligations for Exporters of Goods, Software and Technologies

Significantly, the new “military end user” rule imposes a broader obligation on US exporters to identify potential military links of Chinese counterparts and assure against diversion of technology to the Chinese military. It places the burden on US exporters to not only (i) determine the end-user of subject items, even if those items are transferred to a third country, but also to (ii) evaluate and determine whether the identified end-user would be considered a “military end user” by virtue of potential links with Chinese military agencies. This applies to exports of all subject items (e.g., 5G devices and certain electrical components, among others) regardless of how the export in question will ultimately be used.

In practical terms, this means enhanced due diligence to identify potential military affiliations of Chinese and third-country customers, distributors, procurement agents, and other intermediaries with respect to all dual-use exports to China. It also means re-evaluating technology sharing arrangements between US companies and Chinese joint venture partners such as commercial partners, research institutes, and academic institutions.

Note, the EAR controls apply not just to US goods and equipment but also foreign manufactured goods and equipment that incorporate US-origin content. The “dual-use” items that are subject to the military end-user rule are listed by category at Supplement No. 2 to the EAR 15 CFR Part 744 and include certain controlled materials and materials processing equipment, telecommunications equipment and software (e.g., 5G technologies), sensors and laser technology, and marine and space vessels. So, technology and software companies in any country whose products rely on these US technologies face a binary choice: either to police China business partners for even tangential connections to the military sector or divorce their China supply chains and technology/software flows from the US.

The PLA/DoD List

Similarly, on June 25th, 2020, the US Department of Defense (DoD) issued a list of 20 “communist Chinese military companies” operating in the US that meet the criteria of section 1237 of the National Defense Authorization Act (“NDAA”) for FY 1999. Eleven new additions to the list were issued on August 28, 2020. [1] Companies on these lists include massive Chinese state-owned companies in the aerospace, construction and engineering, chemical, electronics, nuclear, telecommunications, and other sectors. The issuance of this list and the Commerce Department’s new end-user” rules are connected in that this list of companies is likely to guide determinations under the EAR “military end user” rule and the direction of future US-China sanctions actions. The DoD List may be a natural place for the US government to start in identifying Chinese “military end-users” subject to further restriction. Thus the implications for US technology partnerships with Chinese companies in these are potentially quite significant.

In 1999, Congress enacted a provision authorizing the DoD to issue a list of “communist Chinese military companies” operating in the US that are “owned or controlled by the People’s Liberation Army” and are “engaged in providing commercial services, manufacturing, production or exporting.”

On June 24, 2020, nearly 22 years later, DoD finally issued the list. This was in response to a letter sent by a bipartisan group of Senators to Secretary of Defense Mark Esper requesting that DoD issue the list as a tool to confront China and its stated strategy of “military-civilian fusion” to achieve its national objectives. The DoD compiled the list of companies that support the Chinese military as the basis for subsequent US policy actions to address the competitive Chinese threat. The specific risks under consideration included: 1) the transfer of “dual-use” technology to these companies that could, in turn, be used for military purposes given their relationships with the PLA; and 2) the supply chain risks associated with the participation of these companies in US supply chains (e.g., through providing equipment such as semiconductors). Such supply chain risks include the risks that such Chinese firms could introduce malevolent software into US products or use its equipment as a basis for surveillance (i.e., espionage).

It should be recognized that the companies on the DoD List by no means encompass the universe of Chinese government-owned or controlled companies, as there are numerous such state-owned or controlled companies not on the DoD List. Rather, the focus is on companies considered to be owned or controlled by the PLA itself. Further, the term “control,” as used in this context, appears to be broad in scope and seems to be utilized by DoD to reach companies that have some significant engagement with the PLA (i.e., where it might be the case that the PLA supervises or directs some functional activity or area at the company). In this regard, there are at least several companies on the DoD list not generally considered to be government-owned or controlled, let alone PLA owned or controlled in a traditional sense—a small number of which are publicly traded. Thus, in these circumstances, the “control” must relate to some functional areas of engagement.  For example, in the case of Huawei, the control might arguably relate to the idea that the PLA can direct Huawei to utilize its platforms and equipment for surveillance or other activities.

Notably, being listed on the DoD list has no direct and immediate legal consequences for the listed companies. However, the law does make it easier for the president to impose sanctions. Once a company is on the section 1237 list, the president can impose the full array of economic sanctions without any additional finding, including prohibitions on US persons doing business with that company, export restrictions, and the like. Note also that the president can also impose an import ban on companies on the DoD list upon declaring an international economic emergency – an action that, if undertaken, is not subject to challenge in federal courts.

Further, as noted above, the recent listings of Chinese companies on the DoD List are likely to lead to additional export control restrictions on the named parties under the new Commerce rule that requires licenses, and establishes a “presumption of denial” policy, for exports, re-exports, or transfers (in-country) of certain products and technologies to Chinese “military end-users.” Since this new rule defines “military end-users” to include any “person or entity whose actions or functions are intended to support ‘military end uses,” it is reasonably likely that Commerce will find that parties listed on the DoD list would be considered a military “end-user,” and as such, any license applications for covered products and technologies will be subject to a presumption of denial.    

Finally, the list is a tool that can generally build pressure on China. In releasing the list, DoD officials observed that “As the People’s Republic of China attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical … We envision this list will be used as a tool for the US government, companies, investors, academic institutions and like-minded parties to conduct due diligence with regard to partnerships with these entities….”

In conclusion, while the DoD/PLA list itself has no direct legal effect, in combination with the EAR’s military end-user rule, it signals a US desire to limit the availability of “dual-use” American technologies to these companies. To comply with the rule exporters and re-exporters of the listed US technologies must conduct heightened diligence of Chinese SOE end-users and will require a US export license where an end-user also uses, develops or produces items for the Chinese military. This places the impetus on the Chinese companies to demonstrate to US exporters and to the US government that, as applicable: 1) there is sufficient separation between subsidiaries with defense-related operations and those engaged in purely commercial activities; or 2) for those with purely commercial operations, they are not providing US-based dual-use products or technologies to support China’s military.

In some circumstances, it also means that Chinese companies on the list may be forced to look elsewhere (outside of the United States) for the equivalent non-US technologies and products and restructure their supply chains accordingly. Notably, the US position places it as an outlier among allied Western governments. If the US has a new President in 2021, we would expect to see a more multilateral approach on these and other China-related trade issues.

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[1] Both lists are available here.

Jeffrey P.  Bialos, partner at Eversheds Sutherland, assists clients in making multi-faceted business decisions, structuring transactions and complying with complex regulatory requirements. As former Deputy Under Secretary of Defense for Industrial Affairs, he brings deep experience in defense, homeland security and national security matters, including antitrust, procurement, export controls, industrial security and the Foreign Corrupt Practices Act.

Ginger T. Faulk, partner at Eversheds Sutherland, represents multinational companies in matters involving US government regulation of foreign trade and investment. She has extensive experience advising and representing global companies, counseling clients in matters arising under US sanctions, export controls, import and other national security and foreign policy trade-related regulations.

drones market

THAT BUZZING IS THE SOUND OF FREEDOM: THANK THE DEFENSE INDUSTRY FOR THE RISE OF DRONES IN LOGISTICS AND TRANSPORTATION

The demand within the global drone logistics and transportation industry is rising at a stellar pace in recent times. The need for aviation and military drones has created a juggernaut of possibilities for growth within this market. Moreover, new applications of drones have come to the fore across several industries. This trend has paved way for increased investments to flow into the global drone logistics and transportation market.

That’s the conclusion of a recent review by Transparency Market Research (TMR), which decoded some of the leading factors pertaining to the growth of unmanned aerial vehicles (UAVs). According to TMR, the importance of aerial inspection of terrains for a multitude of industries has driven market demand. Technological enhancements in the structuring and functionalities of UAVs have additionally impelled demand.

The TMR review is not confined solely to logistics and transportation, as it also delves into the relevance of drones across military, aviation, construction and entertainment sectors.

Advancements in Military Technologies. The use of drones in the defense sector has gathered momentum in recent times. The need for increased surveillance and reconnaissance in the military industry has played to the advantage of the vendors operating in the global market. Increasing anarchy among regional territories has also generated humongous demand within the global drone market, which can therefore count on increased revenues in the years to follow.

Use of Drones in Site Inspections. The construction industry has become a haven of new possibilities and technologies. Drones are extensively used to oversee operations in that sector, with the need to inspect terrains and unexplored lands creating a boatload of possibilities within the market.

UAVs in Logistics and Transportation is Looking Up. Recent drone developments in the sector cited in the TMR review include:

-Rising investments in drones by the likes of Amazon, Walmart, Uber, Google, FedEx and UPS are ushering in technological advancements and design innovations.

-Drone strategies being employed by Uber Technologies Inc., Flirtey, Zipline International, Drone Delivery Canada and Matternet. When it comes to just the latter two, Drone Delivery Canada has agreed to serve Moose Cree First Nation communities, while Matternet and Boeing HorizonX Ventures have partnered in drone delivery as well.

-A Beijing-based online business firm, which since 2016 has operated under an agreement to deliver commercial drones in four main regions spread over China, being online to have built 150 drone delivery services in the southwestern Sichuan region by the end of this year.

-The same firm planning to expand to Japan and Indonesia.

-India’s Zomato, which took over the drone startup TechEagle, developing a hub-to-hub transportation service supported by hybrid multi-rotor drones.

The Bottom Line. The revenue index of the drone logistics and transportation market is projected to improve in the times to come. Learn more about this, including industry challenges, at: https://www.transparencymarketresearch.com/drone-logistics-and-transportation-market.html.

More Drone Developments. Speaking of UPS, the Atlanta-based delivery and logistics giant earlier this year announced a series of new initiatives and partnerships aimed at upgrading its global logistics network that includes the expansion of drone operations in the healthcare sector. An initiative to test drone delivery use cases with Henry Schein, a worldwide distributor of medical and dental supplies, will allow UPS to focus on UAVs for one of its key business sectors. A huge factor in these tests will be ensuring successful deliveries of essential healthcare products to destinations where traditional road transport may be less effective or timely, such as remote communities or areas impacted by a natural disaster, according to UPS.

The UPS Flight Forward subsidiary drone business, which was only formed last year, received a highly-restricted air carrier certification from the Federal Aviation Administration (FAA) that allows for approved UPS drones to fly over people, at night and out of the operator’s line of sight. After granting UPS Flight Forward the special certification, the FAA authorized the company to operate a drone delivery program at WakeMed Hospital in Raleigh, North Carolina. Meanwhile, UPS in February expanded its Flight Forward service to the University of California at San Diego Health. That’s the result of another Mountain View, California-based Matternet partnership. That drone program will be used to transport various medical products between health centers and labs, with the drones following predetermined flight paths within visual line of sight per FAA rules. (Matt Coker)

Thank the Military Again. Yates Electrospace Corp. (YEC), whose Silent Arrow platform is bringing disruptive innovation to the heavy payload, unmanned cargo delivery market, announced the design completion and specifications of a wide-body version of its successful GD-2000 cargo delivery drone. With a full-scale, flight-ready version of the latter having been shown off at the Defense & Security Equipment International show in London in September 2019, the coming out for the GD-2000’s bigger sister is set for the July 20-24 run of the Farnborough International Airshow in the UK (coronavirus willing, of course).

Aliso Viejo, California-based YEC responded to real-time demand from U.S. and allied foreign government Special Operators, including the U.S. Army 160th Special Operations Aviation Regiment (SOAR), for the development of the new wide-body craft. It will be 60 percent larger than the standard Silent Arrow GD-2000, with a  2,000-pound gross weight; a 48-foot wingspan (among four spring-deployed wings that are stowed in a 3.5×3.5×13-foot fuselage); and a 140-cubic-foot cargo bay that can handle up to 1,250 pounds (or five times more weight in life-saving supplies, medicines and tactical cargo than the GD-2000).

“The YEC engineering team used current flight data from the inaugural GD-2000 product line along with extensive computational fluid dynamics analysis to optimize the aerodynamics and glide ratio of this rather massive cargo delivery platform,” says Chip Yates, YEC’s founder and CEO, who noted an accelerated schedule led to the delivery of development units by the end of this past March and the setting of 10 flight test units throughout the second and third quarters of 2020. Don’t be surprised if Yates’ latest creation is a hit: The original Silent Arrow was named one of six “Unmanned Cargo Aircraft to Watch” by Aviation Week & Space Technology magazine in their 2020 Aerospace & Defense issue. (MC)