Qualms About Quantum: New Export Controls Advanced Tech Aligns US Policies With Allied Countries

Read the interim rule here. 

Continued Efforts to Align Export Controls With Allies

The new IEC rule is the US government’s latest effort to sync its export control polices with that of allied countries. We previously wrote about a proposed rule by the US State Department to strengthen the Australia-United Kingdom-United States (AUKUS) by introducing a new exemption under the International Traffic in Arms Regulations (ITAR), and the final rule went into effect on September 1, 2024. But while Directorate of Defense Trade Controls (DDTC) eased licensing requirements to better align with US allies, BIS is pursuing the same goal but doing the exact opposite: expanding export controls over items related to quantum computing, chipmaking, and additive manufacturing.

Changes to Commerce Control List (CCL)

The new rule adds 18 new Export Control Classification Numbers (ECCNs) and revises nine existing ones on the Commerce Control List (CCL) as follows:

• New ECCNs: 2B910, 2D910, 2E903, 2E910, 3A901, 3A904, 3B903, 3B904, 3C907, 3C908, 3C909, 3D901, 3D907, 3E901, 3E905, 4A906, 4D906, and 4E906.
• 3B001 expanded: paragraphs c.1.a, c.1.c, and q added to ECCN 3B001. Accordingly, the associated software and technology is now also controlled under ECCNs 3D001, 3D002, and 3E001.
• Other ECCNs revised: 2E003, 3A001, 3C001, 4D001, and 4E001.

See below for our list of the newly controlled items, which are described under the new ECCNs plus the expanded 3B001, 3D001, 3D002, and 3E001. These items are subject to worldwide licensing requirements (yes, you read that correctly) for national security and regional stability reasons. License applications will be reviewed under a presumption of approval for destinations in Country Group A:1, a presumption of denial for Country Groups D:1 or D:5, and a case-by-case basis for everywhere else.

Newly Controlled Items

The new ECCNs added to the CCL are as follows:

In addition, BIS also added paragraphs c.1.a, c.1.c, and q to 3B001 (and in doing so, also expanded the scope of the associated software and technology controlled by 3D001 and 3E001, respectively):

c.1. Equipment designed for dry etching as follows:

c.1.a. Equipment designed or modified for isotropic dry etching, having a largest `silicon germanium-to-silicon (SiGe:Si) etch selectivity’ of greater than or equal to 100:1.

c.1.c. Equipment designed or modified for anisotropic dry etching, having all the following:

c.1.c.1. Radio Frequency (RF) power source(s) with at least one pulsed RF output.

c.1.c.2. One or more fast gas switching valve(s) with switching time less than 300 milliseconds.

c.1.c.3. Electrostatic chuck with 20or more individually controllable variable temperature elements

q. “EUV” masks and “EUV” reticles, designed for integrated circuits … and having a mask “substrate blank” ….

ECCNs 2E003, 3A001, 3C001, 4D001, and 4E001 have been updated to contain references to the newly controlled items.

Exceptions, Exclusions, and General Licenses

License Exception IEC

The interim final rule introduces License Exception IEC, allowing exports, re-exports, and transfers of the newly controlled items to countries whose export control policies are sufficiently similar to the United States. The initial list of eligible destinations can be found here. We are unsurprised to see that it consists of close Western European allies, plus Australia and Japan.

Deemed Export Exclusions

To minimize disruption to industry, BIS has excluded certain deemed exports and deemed reexports from the new controls:

• Grandfathering Clause – Foreign persons employees who already have access to newly controlled technology and software and remain employed as of September 6, 2024, will not have to obtain a license. Does not apply to the release of GAAFET technology controlled under ECCN 3E905 to a foreign person whose most recent country of citizenship or permanent residency is within Country Group D:1 or D:5 (but see GAAFET license below). 
• Full exclusion for ECCNs 3D001, 3D002, and 3E001 technology and software related to dry etching equipment controlled by 3B001.c.1.a and c.1. 
• Limited exclusion for ECCNs 2D910, 2E910, 3D001, 3D901, 3D907, 3E001, 3E901, 3E905, 4D906, and 4E906. New licensing requirements do not apply to deemed exports and reexports, unless foreign person’s most recent country of citizenship or permanent residency is within Country Group D:1 or D:5.

Two General Licenses

Two general licenses — one for GAAFET and one for quantum technology — aim to facilitate US collaboration with allied partners in those areas. Both can be found under new General Order No. 6 at EAR Part 736, Supplement No. 1, and both come with annual reporting requirements.

The GAAFET license authorizes the export, re-export, or transfer of GAAFET technology described under ECCN 3E905 to end users in Country Group A:5 and A:6 for the development or production of integrated circuits that began before September 6, 2024. The license also covers deemed exports and reexports to foreign employees who most recently were citizens or permanent residents of D:1 or D:5 countries.

The second general license allows deemed exports and reexports of software and technology for quantum items (described under ECCNs 3D901, 3E901, D906, and 4E906) to foreign persons whose most recent country of citizenship or permanent residency is in D:1 or D:5. This license recognizes that the “United States will continue to rely on foreign talent to fill critical workforce gaps” in quantum information science and technology.