Balancing Innovation and Security: New U.S. Quantum Export Controls Announced
Earlier this month, the United States Department of Commerce’s Bureau of Industry and Security (BIS) unveiled an interim final rule (IFR) to herald a new wave of export controls on select emerging technologies and related components. In an accompanying press release, the Department of Commerce specified its intent, declaring that the new IFR “strengthens [U.S.] international relationships with like-minded countries and ensures that U.S. export controls keep pace with rapidly advancing technologies that pose serious threats to our national security when in the wrong hands.”
The form and substance of the IFR, which places significant emphasis on quantum technologies, offer some long-awaited clarity on the U.S. government’s strategy for regulating quantum technology commerce. Emphasis on harmonization in accordance with select countries that “have implemented equivalent technical controls” signals a preference for plurilateral controls that facilitate cooperation among countries adopting similar practices. Meanwhile, the establishment of new categories of controlled technologies, including semiconductor, quantum, and additive manufacturing technologies and components, indicate an expanding scope of perceived national security risks from innovation. This complex new framework for regulating highly specific technology groups across different types of actors proposed in the IFR reflects the difficulty of balancing policies that foster innovation with those that safeguard national security and rapidly adapting technology scopes to match the pace of innovation.
Evolution of Dual-Use Technology Export Controls
Policymakers have adopted export controls as governance tools to restrict the spread of technologies that could undermine national security. Although export controls have historically been applied to military-specific technologies, in recent years, they have also been employed to manage the dispersion of “dual-use” technologies – or technologies with both civilian and military applications. However, the application of export controls to dual-use technologies is particularly challenging because there is a fine line between restricting the transfer of military technologies and impeding the sale of civilian technologies. While the former protects against national security risks, the latter could stifle economic security, hinder research and development necessary for innovation, and limit broader access to necessary technologies.
Quantum Technologies: The Frontier of Export Controls
Quantum technologies, distinguished by their application of quantum phenomena such as superposition and entanglement, have received scant attention in previous dual-use export controls. In 2018, the BIS issued an Advanced Notice of Proposed Rulemaking (ANPRM), which identified quantum technologies as one potential category of emerging technologies that could be subject to future controls. This prompted concern from private sector members that premature controls could hamper innovation progress. However, the subsequent ruling following that ANPRM specified only a very narrow scope of technologies based on capabilities in particular use-cases. While the scope of those controls could apply to certain types of quantum sensors, they neither explicitly nor broadly encompassed quantum technologies.
The newly announced IFR, however, heralds an era of increased scrutiny over quantum technology trade. Although they are still at a relatively early stage of innovation, quantum technologies promise to transform activities across diverse industries and have thus generated interest from public and private sector actors seeking to establish leadership in the technology to reap economic benefits. However, quantum technologies have also been linked to emerging technologies that could disrupt national security, sparking concern over potential negative implications for quantum technology diffusion. For example, quantum computers could bust standard encryption methods, while quantum sensors could afford improved surveillance and detection capabilities necessary to track critical military targets. In these broad brush strokes, the challenges of navigating quantum technology governance are not dissimilar from those imposed by other dual-use technologies. However, given the nascent stage and immense platform quantum technologies have received, they are likely to be central to international technological competitions, making them the frontier for modern export control strategies.
Key Points of Tension in the New Controls
In light of these competing economic and security considerations, the IFR indicates three key points of tension that policymakers are grappling with as they begin to establish governance strategies for quantum technologies:
Sustaining a robust workforce that is immune to technology leakage: The IFR affirms that foreign talent and international collaboration are necessary to boost quantum technology R&D, though it identifies leakage of information and knowledge, along with technologies and components, as a potential national security risk. To balance these considerations, the IFR modifies existing regulations to afford certain foreign persons in the United States the ability to access and work on controlled technologies.
Leveraging support from multilateral regimes and international partners while also mitigating national security risks: The IFR defines two new categories, adopting plurilateral in addition to multilateral controls. Although multilateral controls establish broad consensus, they can be difficult to reach without compromising core elements particular to unilateral national security considerations. To ensure that key sources of concern for individual countries are addressed, the new controls establish a precedent for plurilateral controls with “like-minded countries.” Although this limits the number of countries adopting controls, the incentives to be exempted from these restrictions – and retain access to technologies – could induce new countries to adopt similar controls.
Promoting economic security and restricting national security implications: In an effort to tackle a pervasive issue with dual-use technology export controls, the recent IFR clarifies specific components and parameters for technologies of national security concern rather than broad controls, such as, for example, controls over all quantum computing technologies. Furthermore, it permits those components to be transferred to countries with similar policies on a licensing system. While looser than coverall export controls, these adaptations will offload the onus to industry members to receive appropriate licenses for commerce and CFIUS to review allowed transfers.
Moving Forward
In addition to signaling intent to regulate quantum technology trade, the recent IFR also reflects broader trends in technology and trade governance. To ensure buy-in from the private sector (and thereby increase the saliency of the controls), policymakers must carefully balance the promotion of beneficial applications of new technologies while also preventing the new technologies from compromising national and global security. As the new export controls under the IFR come into effect, rules and regulations may need to be adapted to reflect the ever-changing innovation ecosystem. This will require that policymakers monitor both the impact of the controls on national security and economic innovation and maintain awareness of the progression of R&D on quantum technologies. For the time being, given that the IFR is still an interim ruling, the substance and framework in the new regulations are also open for comment by industry experts.
