Intelsat 708 was a telecommunications satellite built by the American company Space Systems/Loral for Intelsat. It was destroyed on 15 February 1996 when the Long March 3B rocket failed while being launched from the Xichang Satellite Launch Center in China. The rocket veered off course immediately after liftoff and struck a nearby village, killing at least six people. The accident investigation identified a failure in the guidance system of the Long March 3B. After the Intelsat 708 accident, the Long March rockets greatly increased in reliability and did not experience another mission failure until 2011. However, the participation of American companies in the Intelsat 708 and Apstar 2 investigations caused great political controversy in the United States. A U.S. government investigation found that the information in the report had been illegally transferred to China. Satellite technology was subsequently reclassified as a munition and placed under ITAR restrictions, blocking its export to China. In 2002, Space Systems/Loral paid $20 million to settle charges of violating export controls.
Launch failure
In 1992 and 1993, Space Systems/Loral received licenses from the United States Department of State to launch Intelsat satellites on Chinese rockets. At that time, satellite components were still under ITAR restrictions; they would be transferred in stages to the Commerce Department between 1992 and 1996. The Intelsat 708 satellite was to be launched into geostationary orbit aboard a Long March 3B rocket. On February 15, 1996, the Long March 3B rocket failed during launch, veering off course immediately after liftoff and crashing into a village near the launch site. An enormous explosion destroyed most of the rocket and killed an unknown number of inhabitants. The nature and extent of the damage remain a subject of dispute. The Chinese government, through its official Xinhua news agency, reported that six people were killed and 57 injured. However, American estimates suggest that anywhere between 200 and 500 people might have been killed in the crash; "dozens, if not hundreds," of people were seen to gather outside the centre's main gate near the crash site the night before launch. When reporters were being taken away from the site, they found that most buildings had sustained serious damage or had been flattened completely. Some eyewitnesses were noted as having seen dozens of ambulances and many flatbed trucks, loaded with what could have been human remains, being taken to the local hospital. Bruce Campbell of Astrotech and other American eyewitnesses in Xichang reported that the satellite post-crash was surprisingly intact, along with the opinion that the official death toll only reflects those in the military who were caught by the disaster and not the civilian population. In the years to follow, the village that used to border the launch center has vanished with little trace it ever existed. However, later analysis by The Space Review found that the total population of the village was under 1000, and most if not all of the population had been evacuated before launch, making it "very unlikely" that there were hundreds of deaths.
Investigation
After the launch failure, the Chinese investigation found that the inertial measurement unit had failed. However, the satellite insurance companies insisted on an Independent Review Committee as a condition of providing insurance for future Chinese satellite launches. Loral, Hughes, and other U.S. aerospace companies participated in the Review Committee, which issued a report in May 1996 that identified a different cause of the failure. The Chinese report was then changed to match the findings of the Review Committee. As a result of the investigation, the Long March rocket family improved in reliability and did not experience another mission failure until August 2011. In 1997, the U.S. Defense Technology Security Administration found that China had obtained "significant benefit" from the Review Committee and could improve their "launch vehicles... ballistic missiles and in particular their guidance systems." In 1998, the U.S. Congress reclassified satellite technology as a munition that was subject to ITAR, returning export control from the Commerce Department to the State Department. In 2002, Loral paid $20 million in fines and compliance expenses to settle allegations of violating export control regulations. No export licenses to China have been issued since 1996, and an official at the Bureau of Industry and Security emphasized in 2016 that "no U.S.-origin content, regardless of significance, regardless of whether it’s incorporated into a foreign-made item, can go to China." Intelsat 708 contained sophisticated communications and encryption technology. Members of the Loral security team braved the toxic environment around the crash site to recover sensitive components, returning with complaints of bulging eyes and severe headaches requiring oxygen therapy. They were initially reported by the Defense Department monitor to have succeeded in recovering "the encryption-decryption equipment." It later became clear that the most sensitive FAC-3R circuit boards were not recovered, but, "...were mounted near the hydrazine propellant tanks and most likely were destroyed in the explosion... Because the FAC-3R boards on Intelsat 708 were uniquely keyed, the National Security Agency remains convinced that there is no risk to other satellite systems, now or in the future, resulting from having not recovering the FAC-3R boards from the PRC.".
