Dear Readers,

Welcome to the Summer 2026 edition of The Vanguard. In our last issue, we surveyed the litigation trends shaping commercial space in 2026 and flagged space resource utilization as one of the most consequential and least‑mature areas of risk. This edition takes that thread further.

Our Featured Insight is a comparative legal analysis of the two most significant frontier resource regimes facing American industry today: commercial space resource utilization and deep seabed mining. They are not analogies of convenience. Both regimes share a common architecture, with a Cold War‑era multilateral treaty declaring the resources of a global commons to be the heritage of mankind, a U.S. domestic statute authorizing private activity notwithstanding international ambiguity, and recent executive action accelerating the American approach. The legal questions in both regimes remain unresolved at the international level, but the U.S. framework is well established and operative. Companies are building real businesses within that framework, and the analysis that follows is intended to support practical planning rather than to relitigate first principles.

As I have written previously on the deep seabed mining regulatory regime, the United States has long maintained that its citizens may explore for and recover seabed mineral resources beyond national jurisdiction under domestic law, even though the United States is not a party to the United Nations Convention on the Law of the Sea. The 2015 Space Resource Exploration and Utilization Act takes an analogous, though doctrinally distinct, posture for outer space resources. The structural parallels, and the differences that practitioners regularly blur, are the subject of this edition.

Our regulatory and case law sections cover the most consequential developments since our last issue, including NOAA’s certification‑stage progress on the first DSHMRA applications in a generation, BOEM’s proposed American Samoa mineral lease sale, the ISA’s July session and the first contractor litigation against the ISA at the International Tribunal for the Law of the Sea, the FAA’s completion of the Part 450 transition, the advancing FY 2027 NDAA, the suspension of CMMC Phase II, and the accelerating U.S.–Korea shipbuilding partnership.

As always, we welcome your feedback and the opportunity to discuss how Nelson Mullins can support your team.

Best regards,

Jeffrey H. Perry
Partner and Chair, Aerospace, Defense, & National Security Practice

Featured Insight

From Seabed to Space: Two Frontier Resource Regimes Under U.S. Law

Two industries that appear, on first inspection, to have little in common are converging on the same set of legal questions. Companies seeking to recover polymetallic nodules from the abyssal plains of the Pacific and companies preparing to harvest water ice from the lunar south pole confront a remarkably similar legal landscape: a multilateral treaty drafted before commercial activity was technically feasible, a domestic statute authorizing U.S. nationals to proceed, and an executive branch increasingly willing to accelerate that domestic path.

This Featured Insight maps the parallels between the two regimes, identifies the divergences that matter for diligence and deal structuring, and explains why the U.S. framework is the right reference point for practical planning even while the international debate continues. The thesis has two parts. First, recovery of resources in global commons spaces is a coherent regulatory category, and the lessons learned in deep seabed mining are directly relevant to commercial space resource activity, and vice versa. Second, the two regimes diverge in one critical respect that practitioners should not blur: the seabed regime is, by design, a mining regime that creates exclusive contractual rights to defined tracts, while the space resources regime is, by design, not. That distinction reflects careful U.S. statutory craftsmanship, and getting it right matters.

I. The Common Architecture

Both regimes rest on three legal layers. The first is a foundational multilateral treaty. For the deep seabed beyond national jurisdiction, that treaty is the United Nations Convention on the Law of the Sea (UNCLOS), which entered into force in 1994 and which declares the mineral resources of the seabed beyond national jurisdiction to be the common heritage of mankind, administered through the International Seabed Authority (ISA). For outer space, it is the 1967 Outer Space Treaty (OST), the foundational instrument of international space law. Article I provides that the exploration and use of outer space shall be carried out for the benefit and in the interests of all countries and shall be the province of all mankind. Article II prohibits national appropriation of outer space and celestial bodies by claim of sovereignty, by means of use or occupation, or by any other means. The 1979 Moon Agreement extends a more restrictive common‑heritage regime specifically to celestial bodies, but the United States, Russia, China, and other major spacefaring nations are not parties. The shared international legal concept underlying both treaties is res communis, the doctrine, derived from Roman civil law, that certain things (the high seas, the air, outer space) belong to no nation and cannot be subject to exclusive sovereign appropriation. The doctrine is the legal water in which both regimes swim. Whether res communis bars sovereign-authorized private activity in those spaces is the central interpretive question, and the U.S. answer is no.

The second layer is U.S. domestic law authorizing private activity. For the deep seabed, the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA), codified at 30 U.S.C. §§ 1401 et seq., authorizes the National Oceanic and Atmospheric Administration (NOAA) to issue exploration licenses and commercial recovery permits to U.S. citizens for activity in areas beyond national jurisdiction. Congress passed DSHMRA as an interim measure pending the conclusion and U.S. ratification of an international regime, and the statute has now served as the authoritative U.S. framework for more than four decades. For outer space, Title IV of the U.S. Commercial Space Launch Competitiveness Act of 2015 (P.L. 114‑90), known as the Space Resource Exploration and Utilization Act of 2015 and codified at 51 U.S.C. §§ 51301 et seq., provides that any U.S. citizen engaged in commercial recovery of an asteroid or space resource shall be entitled to the resource obtained, including the right to possess, own, transport, use, and sell the resource, in accordance with applicable law, including the international obligations of the United States. Luxembourg, the United Arab Emirates, and Japan have enacted analogous statutes.

The third layer is executive action. On the space side, Executive Order 13914 of April 2020, “Encouraging International Support for the Recovery and Use of Space Resources,” formally adopted the U.S. policy position that outer space is not a global commons in the property‑law sense and that U.S. citizens should have the right to engage in commercial recovery and use of space resources. That policy was operationalized later in 2020 through Section 10 of the Artemis Accords, which 70 nations have now signed. On the seabed side, Executive Order 14285 of April 2025, “Unleashing America’s Offshore Critical Minerals and Resources,” directs NOAA to expedite review and issuance of DSHMRA exploration licenses and commercial recovery permits in areas beyond national jurisdiction. Within weeks, The Metals Company’s U.S. subsidiary filed the first DSHMRA application in decades. In December 2025, the Executive Order on Ensuring American Space Superiority directed agencies to favor commercial solutions for lunar surface activities, including in‑situ resource utilization, and to use flexible authorities such as Other Transaction Authorities and Space Act Agreements. The pattern across the two regimes is parallel: domestic statutory authority, executive acceleration, and a U.S. interpretive position that the underlying treaty permits the activity.

II. Different Tools, Same Core Question

In both regimes, the question is whether sovereign‑authorized private activity in a res communis space is consistent with the underlying treaty. The United States has taken meaningfully different doctrinal positions in the two contexts, and in each case the U.S. position is supported by the text of the relevant treaty and consistent U.S. practice.

In the deep seabed context, the United States is not a party to UNCLOS, and the U.S. position is that DSHMRA permits issued in areas beyond national jurisdiction are consistent with customary international law and the high seas freedoms preserved by UNCLOS. The relevant common‑heritage provisions of Part XI are not binding on the United States as customary law. NOAA, in its January 2026 final rule, articulated this position clearly: while the United States views the LOSC provisions relating to traditional uses of the oceans as reflecting customary international law binding on all States, the United States does not consider Part XI of the LOSC or the 1994 Agreement relating to Part XI to reflect customary international law.1 That is the operative U.S. position, and Executive Order 14285 acts on it.

In the outer space context, the United States is a party to the OST, which makes the question one of treaty interpretation rather than customary international law. The U.S. position, articulated through Executive Order 13914, codified in the 2015 Act, and elaborated in Section 10 of the Artemis Accords, is that the recovery and use of space resources does not inherently constitute national appropriation under Article II. The legal mechanism deployed to reach that result is worth understanding. Rather than asserting a right to mine in the traditional property sense, the 2015 Act is engineered to authorize the recovery of personal property, analogous in the U.S. framing to fish harvested from the high seas, through the activity of “use” permitted by Article I of the OST. The statute deliberately avoids language that would create or recognize a real‑property interest in any portion of a celestial body. That drafting choice is a deliberate response to Article II, not a gap.

This distinction matters and is the central divergence between the two regimes. The seabed regime, both under UNCLOS and under DSHMRA, is unambiguously a mining regime that confers exclusive rights to defined tracts of seabed for defined durations. ISA exploration contracts assign specific blocks within the Clarion‑Clipperton Zone, and DSHMRA permits do the same. The space resources regime, by contrast, is not a mining regime in the property‑law sense. It confers no real‑property interest in any tract of the lunar surface, in any asteroid, or in any subsurface deposit. It authorizes an activity and recognizes ownership of the resource once reduced to possession. The Artemis Accords’ concept of “safety zones”, areas of operational coordination rather than territorial exclusion, is a deliberate attempt to provide functional protection for ongoing activity without crossing the Article II line.

International objections to both regimes exist and warrant attention without changing the operative analysis. The ISA Secretary‑General has characterized U.S. unilateral seabed mining authorizations as a “dangerous precedent”, and the ISA Legal and Technical Commission in its March 2026 session asked sponsoring nations to clarify their positions on TMC subsidiary arrangements. As of April 2026, 40 countries have announced opposition to deep‑sea mining. In the space context, the COPUOS Working Group on Legal Aspects of Space Resource Activities continues to develop recommended principles, and the EU and several Member States continue to call for COPUOS‑led frameworks rather than bilateral arrangements. For the present, these objections do not displace U.S. domestic authority. The United States has duly enacted statutes, an executive branch acting within its delegated authority, and a coherent interpretive position. 70 Artemis Accords signatories and four states with parallel space resource statutes have adopted compatible approaches. International consensus, if and when it crystallizes, will be shaped in significant part by U.S. practice in the interim.

The practical implication is straightforward: commercial activity is proceeding under domestic authorization, the U.S. legal position is sound, and counterparties seeking to leverage international ambiguity in commercial negotiations should be met with substantive responses rather than accommodation.

III. Where the Regimes Diverge

The shared architecture should not obscure five important divergences that affect deal structuring, diligence, and litigation risk.

• Property versus activity. This is the most important divergence and the one most often missed. DSHMRA and the ISA framework confer rights with respect to defined tracts of seabed, with exploration licenses and commercial recovery permits covering specific blocks. The 2015 Act, by contrast, confers no interest in any portion of any celestial body. It authorizes a U.S. citizen engaged in commercial recovery to possess, own, transport, use, and sell the resource obtained, but only the resource, and only once it has been reduced to possession. Diligence on a DSHMRA permit therefore looks much like diligence on a mineral lease, while diligence on a space resource right looks more like diligence on a fishing license. Confusing the two produces mispriced risk in either direction.

• Institutional infrastructure. The ISA is a fully constituted international organization with a Mining Code, a Legal and Technical Commission, and 31 issued exploration contracts. The Outer Space Treaty has no analogous institution. The U.N. Committee on the Peaceful Uses of Outer Space (COPUOS) is a deliberative body, not a regulator, and has not produced a binding instrument since the 1979 Moon Agreement. The Hague Space Resources Governance Working Group has produced influential soft‑law instruments (notably the 2019 Building Blocks for an International Framework on Space Resource Activities), but no binding regime. The absence of a counterpart international institution in the space context means that opposition to U.S. policy has fewer procedural channels, but also that U.S. operators have less institutional cover when disputes arise.

• Domestic regulatory authority. DSHMRA assigns clear authority to NOAA, and the Outer Continental Shelf Lands Act assigns clear authority to BOEM. The space side is more fragmented. The FAA licenses launch and reentry under Part 450 (now the sole regime as of March 2026), the FCC licenses radio frequency use and orbital slots, NOAA’s Office of Space Commerce licenses commercial remote sensing, and the Office of Space Commerce is now developing a presumption‑of‑approval framework for authorizing novel commercial space activities. The FAA has stated on the record that it does not at present have statutory authority to authorize space resource activities themselves.2 This is a regulatory gap that Congress and the Department of Commerce are actively working to address, and prudent operators should engage on the pending Office of Space Commerce framework to shape how that gap is closed.

• Sovereignty and jurisdiction. The deep seabed beyond national jurisdiction is a horizontal commons. The OST extends to all of outer space, including all celestial bodies. Neither regime contemplates exclusive economic zones, but their geometries differ in legally consequential ways. The small size of mineral‑rich asteroids, for example, raises questions about whether sustained extraction would amount to de facto appropriation of the asteroid itself, a problem that has no clean analog in the seabed context. American counsel should be ready to address these geometric realities in operational planning.

• Commercial maturity. Deep seabed mining technology has been demonstrated at pilot scale, and commercial recovery is on the near horizon, with multiple DSHMRA applications progressing through NOAA review. Space resource activity remains pre‑commercial, with NASA’s Commercial Lunar Payload Services (CLPS) missions expanding on the initial in‑situ resource utilization demonstration flown in 2025. The seabed regime is therefore the leading indicator. How U.S. courts, U.S. agencies, and international bodies treat commercial recovery in the Clarion‑Clipperton Zone over the next 24 months will shape expectations for lunar and asteroid activity in the late 2020s and early 2030s. Participants in the space sector should watch the seabed sector closely, not because the regimes are identical, but because they are encountering analogous political headwinds at different points along the same curve.

IV. Practical Implications for Investors, Operators, and Counterparties

For companies operating in either sector, and increasingly for those operating in both, the structural parallel suggests several practical points.

• Diligence the international legal exposure as a discrete risk, then price it accurately. Whether the asset is a DSHMRA permit or a resource right under the 2015 Act, the international legal status of the underlying authorization is a separable diligence item. The U.S. position is sound, but counterparties in jurisdictions taking a different view (some EU member states, the U.K. on certain questions, non‑Accords signatories) may attempt to leverage that disagreement in commercial negotiations. Counsel should be prepared to engage on the merits rather than concede the point as a negotiating courtesy.

• Structure offtake and financing arrangements within the U.S. legal framework. Long‑term offtake contracts and project finance documents should operate within the U.S. regime, with representations, warranties, and risk allocations calibrated to the strength of that regime. Lender concerns about international legal risk are real but manageable through standard documentation, including governing‑law clauses, dispute resolution provisions, and indemnities sized to the actual rather than the imagined risk.

• Build the regulatory record proactively. In both regimes, the U.S. agencies (NOAA for the seabed, the FAA, FCC, Office of Space Commerce, and Department of Commerce for space) operate within statutes that contemplate iterative rulemaking. Operators that engage early through public comment, technical demonstrations, and voluntary disclosure will shape the rules they later operate under. Operators that wait will be governed by rules written for someone else.

• Anticipate domestic litigation alongside international objections. Environmental groups have used NEPA challenges to slow FAA launch authorizations and will use the same tools against DSHMRA permits and any future agency authorizations of in‑space resource activities. Pre‑litigation engagement on environmental review records, including robust Environmental Impact Statement processes, is increasingly determinative of project timelines. Operators should also expect coordinated litigation strategies involving foreign governments and NGOs, and should plan their U.S. defense accordingly.

• Recognize the convergence of investor bases. Patient capital aligned with U.S. national security priorities (sovereign‑adjacent funds, defense primes, specialized infrastructure investors, and family offices with policy alignment) is increasingly active in both sectors. The same diligence frameworks, CFIUS considerations, and outbound investment compliance issues apply across both, and the same investor relationships that fund seabed activity are increasingly funding space resource activity.

V. Looking Ahead

The next 18 months will be unusually consequential for both regimes. On the seabed side, NOAA is processing the first DSHMRA applications in a generation. NOAA determined TMC USA’s consolidated application to be in substantial compliance in March 2026 and in full compliance in May 2026, followed by a determination of certification, with the remaining review process, including a draft Environmental Impact Statement, expected to conclude by the first quarter of 2027. The American Metal Resources and SeaX exploration license applications proceeded to public hearings in April 2026, and the extended public comment period closed in May 2026. In June 2026, NOAA published notice of a fourth exploration license application, from American Deep Sea Minerals, Inc., covering an area in the South Penrhyn Basin of the South Pacific, the first published U.S. application outside the Clarion‑Clipperton Zone; the public hearing was held in July 2026, and the comment period closed in early August 2026. At its July 2026 session, the ISA Council again failed to finalize its exploitation regulations and, notwithstanding the parallel U.S. filings, extended an exploration contract held by a TMC subsidiary; in June 2026, TMC subsidiaries NORI and TOML initiated proceedings against the ISA before the International Tribunal for the Law of the Sea challenging the fairness of the ISA’s non‑compliance inquiry. Congress has introduced legislation to codify Executive Order 14285 (H.R. 3803; S. 2860). Within national jurisdiction, BOEM has proposed the first competitive Outer Continental Shelf mineral lease sale for deep‑seabed critical minerals (PACM‑1, offshore American Samoa), to be held in November 2026, with additional sales contemplated for the Northern Mariana Islands and Alaska. On the space side, CLPS landings planned for the second half of 2026 will expand commercial in‑situ resource utilization demonstrations. The Office of Space Commerce’s presumption‑of‑approval framework, now branded the Space Commerce Certification, is expected to open to initial applications in the coming months. The 65th session of the COPUOS Legal Subcommittee in April 2026 advanced the Working Group on Legal Aspects of Space Resource Activities, but the American position, that the existing four core space treaties provide an adequate framework, remains the operative one for U.S. operators.

Companies operating in either sector, and the investors, lenders, and counterparties supporting them, should treat these regimes as adjacent categories of legal risk that share architecture and political dynamics while diverging on important doctrinal points. The treaty regimes are different, the U.S. domestic statutes are doing different doctrinal work, the institutional infrastructures are different, and the maturity curves are different. What ties them together is the underlying U.S. posture: that sovereign authorization of private activity in a global commons, within the four corners of duly enacted statutes and applicable treaties, is the operative legal framework. The United States has worked under that posture in the seabed context since 1980 and in the space context since 2015, and the practical question for operators is no longer whether to operate within it but how. Counsel who can speak credibly to both regimes will be best positioned to assist in answering that question.

Jeffrey H. Perry advises leading aerospace and defense companies, investors in physical assets, and resource recovery businesses on corporate transactions, financings, and strategic matters from Nelson Mullins’ Atlanta and Washington, D.C. offices. He is recognized as a leading authority on the U.S. and international regulatory regimes governing deep seabed mining and has written extensively on the subject, including “Deep Seabed Mining Emerges from the Depths” (December 2012) and “Deep Seabed Mining: The Next Wave — U.S. Seabed Mining Regulatory Regime” (April 2013), each originally published in the King & Spalding Energy Newsletter (Energy Law Exchange).

Endnotes

1.   Deep Seabed Mining: Revisions to Regulations for Exploration License and Commercial Recovery Permit Applications, 91 Fed. Reg. 2642 (Jan. 21, 2026) (final rule). The cited U.S. position is articulated in the agency response to comments in the rule preamble.

2.   U.S. Commercial Space Launch Competitiveness Act Incorporation, 89 Fed. Reg. 76714, 76721 (Sept. 19, 2024) (FAA final rule stating that “[t]he FAA does not have statutory authority to regulate space resources”).

Regulatory & Policy Updates

• DSHMRA Application Activity Accelerates: Following Executive Order 14285 (April 24, 2025), NOAA has received more than ten seabed mining applications in areas beyond national jurisdiction. NOAA published a final rule in January 2026 establishing a consolidated exploration license / commercial recovery permit application process under DSHMRA. TMC USA’s consolidated application progressed from substantial compliance (March 2026) to full compliance and a determination of certification (May 2026), with a draft Environmental Impact Statement to follow and the remaining review targeted to conclude by Q1 2027. NOAA has also determined exploration license applications from Deep Sea Rare Minerals, American Metal Resources (AMR), and SeaX to be in substantial compliance; the extended public comment period on the AMR and SeaX applications closed in May 2026, following virtual public hearings held in April 2026. In June 2026, NOAA published notice of American Deep Sea Minerals, Inc.’s exploration license application covering an area in the South Penrhyn Basin of the South Pacific (public hearing held July 2026; comment period closed early August 2026), the first published application outside the Clarion‑Clipperton Zone. Deep Sea Minerals Corp. separately announced in early June 2026 that NOAA had determined its U.S. subsidiary’s CCZ exploration license application to be in substantial compliance.

• BOEM Proposes First OCS Critical Mineral Lease Sale (PACM‑1): In July 2026, the Bureau of Ocean Energy Management announced the Proposed Leasing Notice for the American Samoa Outer Continental Shelf Pacific Mineral Lease Sale 1 (PACM‑1), the first competitive U.S. lease sale directed at deep‑seabed critical minerals, including polymetallic nodules and ferromanganese crusts. BOEM proposes to hold the sale in November 2026 through an ascending oral auction, following a 60‑day review period for the Governor of American Samoa and publication of a Final Leasing Notice at least 30 days before the sale date. Interior has signaled additional OCS mineral lease sales for the Northern Mariana Islands and Alaska. Territorial opposition is building: Guam has banned mineral extraction from its territorial seabed and authorized its port authority to deny entry to vessels tied to unlawful mining operations, and the Governors of Guam and the Commonwealth of the Northern Mariana Islands have asked Congress to halt federal mineral leasing in the Marianas region.

• FAA Part 450 Transition Completed: In March 2026, the FAA announced that the transition to Part 450 launch and reentry licensing was complete. All commercial space licensing now occurs exclusively under Part 450’s performance‑based framework. Operators that successfully transitioned legacy licenses by the March 2026 deadline include Blue Origin (New Shepard), Firefly Aerospace (Alpha), SpaceX (Falcon 9 / Falcon Heavy and Dragon), Rocket Lab (Electron), and United Launch Alliance (Atlas and Vulcan). The FAA has issued 14 Part 450 licenses since 2021. Industry continues to engage the FAA on processing times through the SpARC advisory committee.

• Space Commerce Certification Advances: Responding to Executive Order 14335, “Enabling Competition in the Commercial Space Industry” (August 2025), the Office of Space Commerce released its updated mission authorization proposal, the Space Commerce Certification, in March 2026, defended it before the House Science Committee in July 2026, and announced in late July that it will publish a call for interest for initial applications in the Federal Register. The voluntary certification would serve as a single clearinghouse application circulated to the Department of Defense, the FAA, the FCC, the State Department, and NASA, built on a presumption of approval, with the potential to relieve duplicative licensing requirements for novel in‑space activities such as satellite servicing, commercial space stations, in‑space manufacturing, and lunar operations. Because the Office lacks statutory authority to mandate participation, codification remains a question for Congress.

• Executive Order on Ensuring American Space Superiority Implementation: The December 2025 EO directs a return to the Moon by 2028 and initial permanent lunar outpost elements by 2030. Department of Commerce implementation guidance issued in early 2026 emphasizes commercial‑first acquisition, expanded use of OTAs and Space Act Agreements, and faster spectrum allocation pathways. The EO’s directive to develop pathways for in‑space resource utilization positions ISRU activities at the center of the commercial lunar program.

• COPUOS Legal Subcommittee 65th Session: The 65th session of the COPUOS Legal Subcommittee (April 2026) advanced the Working Group on Legal Aspects of Space Resource Activities toward an initial set of recommended principles. The United States reiterated its long‑standing position that the four core U.N. space treaties provide an adequate legal framework and that prescriptive international rules at this stage would impede commercial development.

• FY 2026 NDAA Implementation: Following enactment in December 2025, agency implementation of the COINS Act provisions, expanded outbound investment notification requirements, and acquisition reform measures (including the raised TINA and CAS thresholds) is now underway. Treasury issued additional FAQs in February 2026 clarifying covered transaction definitions, and DoD has begun implementing the new AI governance requirements for DoD‑wide cybersecurity and AI/ML systems.

• FY 2027 NDAA Advances: The House passed its FY 2027 NDAA (H.R. 8800) in July 2026, and the Senate bill (S. 4784, reported in June 2026) remains pending on the Senate floor. The roughly $1.15 trillion authorization emphasizes acquisition and budgeting reform, reindustrialization of the defense industrial base, and accelerated modernization. House‑passed provisions include reauthorization of the Defense Production Act through 2031. Conference negotiations later this year will determine final provisions affecting acquisition thresholds, industrial base policy, and allied participation in U.S. programs.

• U.S.–Korea Shipbuilding Partnership Accelerates: July 2026 marked an inflection point for Korean investment in the U.S. maritime industrial base. The Korea–U.S. Shipbuilding Partnership Center opened in Washington in July 2026 as the coordinating hub for $150 billion in planned Korean shipbuilding investment, accompanied by 15 agreements among Hanwha Ocean, HD Hyundai, Samsung Heavy Industries, and U.S. shipyards, technology companies, and universities. Hanwha announced a $5 billion expansion of Hanwha Philly Shipyard intended to raise annual capacity from fewer than two vessels to as many as 20, timed to the christening of the third National Security Multi‑mission Vessel, and the U.S. Navy issued requests for information to Korean shipbuilders regarding construction of fleet tankers and destroyers. Congressional cross‑currents remain: the House‑passed FY 2027 NDAA includes provisions restricting Navy procurement of battle force ships and major components built at foreign shipyards, a tension that will shape how allied yards participate in U.S. naval construction and how Korean capital is deployed into U.S. facilities.

• CMMC Phase II Suspended: Reform Review Underway: In July 2026, the Department of Defense announced the immediate suspension of CMMC Phase II, which had been scheduled to make third‑party (C3PAO) certification at Level 2 a condition of award for contracts involving Controlled Unclassified Information beginning in November 2026, together with all pending and future CMMC implementation milestones. Level 2 C3PAO requirements are being removed from active solicitations and contracts. Phase I self‑assessment requirements under DFARS 252.204‑7021, and the baseline safeguarding and incident‑reporting obligations of DFARS 252.204‑7012 and NIST SP 800‑171, remain fully in force. A CMMC Reform Task Force is conducting a 60‑day review, with recommendations expected in September 2026, and the Department’s request for information on program reform closes in mid‑August 2026. Contractors should maintain their compliance programs: self‑assessments and senior official affirmations continue to carry False Claims Act exposure, and prime contractors may continue to impose third‑party assessment requirements by flow‑down.

• CFIUS and Outbound Investment Coordination: Treasury’s CFIUS program continues to expand mandatory filing categories for transactions involving critical technologies, sensitive personal data, and real estate near military installations. Under the COINS Act, the existing Outbound Investment Security Program remains in effect while Treasury develops implementing regulations, due by early 2027, that will expand covered technologies (including hypersonic systems and high‑performance computing) and extend countries of concern beyond China.

• Export Control Tightening on Emerging Technologies: BIS and DDTC continue to refine controls on advanced semiconductors, quantum computing components, and dual‑use AI models. Voluntary self‑disclosure incentives remain emphasized, and aerospace and defense companies should consider proactive review of cross‑border data flows and technical assistance arrangements.

Recent Case Law & Enforcement Highlights

• First Major DSHMRA Determinations in a Generation: NOAA’s substantial and full compliance determinations on TMC USA’s consolidated application (March and May 2026, respectively), followed by a determination of certification in May 2026, and substantial compliance determinations on applications from Deep Sea Rare Minerals, American Metal Resources, SeaX, and Deep Sea Minerals Corp.’s U.S. subsidiary, represent the first significant DSHMRA activity in decades. Federal Register notices triggered statutory public comment periods that frame any subsequent permit‑stage litigation. Environmental groups have signaled intent to challenge the consolidated review process under NEPA.

• ISA Pushback on U.S. Unilateral Action: At its March 2026 session, the ISA Legal and Technical Commission recommended that the ISA Council request information on agreements sponsoring nations may have entered into outside the ISA framework, citing a TMC USA exploration contract. The ISA Secretary‑General characterized U.S. unilateral seabed mining authorizations as a destabilizing precedent. At its July 2026 session, the ISA Council received the Legal and Technical Commission’s final non‑compliance report concerning TMC subsidiary contracts (NORI and TOML, sponsored by Nauru and Tonga), yet extended an exploration contract held by a TMC subsidiary while again failing to finalize its exploitation regulations. In June 2026, NORI and TOML initiated proceedings against the ISA before the International Tribunal for the Law of the Sea challenging the fairness of the non‑compliance inquiry. No legal action has been initiated against U.S. operators in any forum with jurisdiction over DSHMRA activity.

• FAA Environmental Assessment Litigation: Following the September 2025 dismissal of conservation group challenges to FAA environmental assessments for Starship operations at Boca Chica, additional NEPA‑based actions targeting other launch sites and operators remain in active litigation or pre‑suit posture. Plaintiff strategies increasingly focus on cumulative effects and climate analyses. Industry continues to argue, with growing judicial receptivity, that environmental analyses for high‑cadence launch operations are entitled to substantial deference.

• CFIUS‑Ordered Divestiture of Sensitive Technology Assets: The January 2026 Presidential divestiture order in a digital chip business acquired by foreign entities reinforces the trend of post‑closing CFIUS interventions in technology transactions. Aerospace and defense buyers should reassess pre‑signing CFIUS strategy on transactions involving critical technologies.

• FCA Cybersecurity Enforcement: The DOJ’s Civil Cyber‑Fraud Initiative continues to produce settlements involving alleged misrepresentation of compliance with DFARS cybersecurity clauses. With CMMC Phase II third‑party requirements suspended, FCA exposure continues to center on self‑assessments and senior official affirmations under the Phase I framework, alongside the baseline DFARS clauses.

• ITAR/EAR Voluntary Disclosure Outcomes: DDTC and BIS continue to treat timely voluntary self‑disclosures as significant mitigators in enforcement matters. Recent resolutions emphasize the importance of comprehensive technical data and employee mobility controls in aerospace and defense businesses with cross‑border operations.

• Bid Protest Trends: Following the Supreme Court’s denial of certiorari in the Percipient.ai protest in January 2026, the Court of Federal Claims’ narrow interpretation of “interested party” standing remains in place. GAO’s FY 2025 statistics show continued effectiveness rates above 50%, with technical and price evaluation challenges driving most sustains.