New U.S. Export Controls: Safeguarding Critical Technologies While Supporting Global Innovation

Key Highlights:

• U.S. Tightens Export Controls: To safeguard national security, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) has introduced new export controls targeting quantum computing, advanced semiconductor manufacturing, and additive manufacturing technologies.
• International Collaboration: The controls align with international partners, ensuring a coordinated global response to prevent adversaries from exploiting these critical technologies.
• License Exception for Trusted Partners: A new License Exception Implemented Export Controls (IEC) streamlines exports for countries adopting equivalent controls, promoting innovation while maintaining security.
• Targeted Technologies: The rule covers cutting-edge technologies, including quantum computers, advanced semiconductor manufacturing equipment, Gate All-Around Field-Effect Transistor (GAAFET) technology, and metal additive manufacturing systems.
• Opportunity for Industry Feedback: BIS is inviting public comments within 60 days, allowing industry stakeholders to contribute to the final rule and help balance security needs with technological advancement.
• Broader Strategy Against Global Threats: The new controls are part of a broader effort to degrade the military capabilities of adversarial nations and ensure that advanced technologies are not misused for destabilizing purposes.

In a significant move to safeguard national security and maintain technological leadership, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has introduced new export controls on key emerging technologies.

?Announced on September 5, 2024, these controls reflect an international effort to curb the misuse of quantum computing, advanced semiconductor manufacturing, and other critical technologies that pose security risks if accessed by adversarial nations.

?The interim final rule (IFR) establishes worldwide export restrictions on several high-tech items, including:

• Quantum Computing: This covers quantum computers, related components, materials, software, and associated technologies.
• Advanced Semiconductor Manufacturing Equipment: Specifically targets tools critical for producing cutting-edge chips, which are vital for advanced computing systems.
• Gate All-Around Field-Effect Transistor (GAAFET) Technology: These chips are essential for supercomputing applications.
• Additive Manufacturing for Metal Components: Encompasses 3D printing equipment designed for producing metal and metal-alloy components, which can have military and industrial applications.

This regulatory step follows broad technical agreements with international partners, reinforcing a unified front against technology misuse. The new rule also introduces a License Exception Implemented Export Controls (IEC) , allowing easier export procedures for countries that adopt similar controls. This initiative aims to maintain innovation while preventing hostile entities from weaponizing these advanced technologies.

Alan Estevez , Under Secretary for the Bureau of Industry and Security, highlighted the need for global collaboration to ensure export controls keep pace with technological advancement. By coordinating efforts with international allies, the U.S. ensures that these restrictions are not just national but part of a broader, globally enforced system. According to Estevez, this approach makes it "significantly more difficult for our adversaries to develop and deploy technologies that threaten our collective security."

Thea Rozman Kendler , Assistant Secretary of Commerce for Export Administration, emphasized the flexibility built into the new controls, ensuring the U.S. can respond quickly to emerging threats. The IEC license exception will streamline exports to countries that meet equivalent control standards, fostering innovation while safeguarding security.

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Implications for Industry and Innovation

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As part of the new measures, companies involved in quantum computing, semiconductor manufacturing, and additive manufacturing must comply with tighter regulations on international sales and transfers of technology. A key feature of the rule is its license exception for deemed exports, which governs the transfer of controlled technology to foreign nationals within the U.S. This is designed to ensure ongoing research and development are not unduly disrupted while maintaining robust oversight.

Businesses affected by the new controls are encouraged to review the IFR and provide feedback during the 60-day public comment period. This opportunity allows the industry to shape final regulations that balance security concerns with the need for technological progress.

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A Broader Strategy Against Global Threats?

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This move is part of a larger strategy by the BIS and the U.S. government to restrict access to sensitive technologies that could enhance the military capabilities of hostile nations. The BIS has been leading a coalition of over 38 countries in crafting export control measures that degrade these nations' military capabilities while addressing illegal diversions of dual-use technologies.

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Such regulations are undoubtedly crucial for protecting national security in an era when emerging technologies pose both opportunities and risks. However, the implementation of these controls raises several considerations that need to be addressed to ensure a balanced approach that fosters both security and innovation.

?One significant aspect of the rule is the introduction of the License Exception Implemented Export Controls (IEC), which allows for streamlined exports to countries that implement equivalent controls. This is a positive step toward maintaining international cooperation, but there are practical challenges associated with determining what qualifies as "equivalent" controls in various jurisdictions. “The IEC exception is a useful mechanism for fostering collaboration with trusted partners, but clarity on what constitutes 'equivalent controls' is essential to avoid confusion,” I emphasize. “Businesses need precise guidance on compliance to navigate these regulations effectively, especially in international contexts where regulations differ.”

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Another critical area is the regulation of deemed exports—the sharing of controlled technologies with foreign nationals within U.S. borders. This provision is vital for preventing technology leaks, but it also poses a challenge for industries reliant on global talent, especially in R&D sectors like quantum computing and semiconductors. “We must ensure that deemed export controls are enforced in a way that doesn’t hinder scientific collaboration or innovation. Providing more flexibility, such as additional general licenses for R&D purposes, would allow institutions to comply with regulations without stifling their work,” I argue. “Striking the right balance here will be key to maintaining the U.S.’s competitive edge in emerging technologies.”

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The new controls on quantum computing, while necessary, also require careful implementation. Given that this field is still evolving, the danger is that overly restrictive measures could stifle progress, especially in international research collaborations. Quantum computing holds enormous potential, but its development relies heavily on international collaboration. Controls must be flexible enough to allow pre-competitive research to continue, especially with allied nations so that the U.S. can remain a leader in this space.

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Another concern lies in the burden these controls place on small and mid-sized enterprises (SMEs), which may not have the resources to navigate the complex compliance landscape.

“Larger corporations often have compliance departments dedicated to navigating export regulations, but SMEs are at a disadvantage,” I warn. “BIS should consider offering targeted compliance assistance to SMEs, including educational programs and perhaps even compliance support grants, to help smaller companies adjust without being overwhelmed.”

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Finally, the need for global coordination cannot be overstated. While the U.S. leads the charge on export controls, the effectiveness of these measures depends on their widespread adoption. Diverging standards among key nations could undermine the collective security effort.

?Global cooperation is crucial. The U.S. must continue to push for harmonized export control measures across major technology-producing regions, particularly in Europe and Asia. Without this, gaps in the regulatory framework could be exploited by adversarial nations.

As the U.S. tightens its export controls on critical technologies, how can we ensure that these regulations effectively protect national security without hindering the global collaboration and innovation that drive technological progress?

Thank You

Malak Trabelsi Loeb

Disclaimer: The insights herein represent the views and opinions of the author and do not necessarily reflect the official policy or position of any organization or institution the author is managing, a part of, or associated with. The information provided in this article is for general informational purposes only and should not be construed as professional advice or used as a substitute for consultation with professional advisors. The author makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information contained in this article. Therefore, any reliance on such information is strictly at your own risk.

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