On September 5, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule imposing significant new export controls on quantum computing, cryocooling systems, semiconductor equipment, and additive manufacturing technologies. These controls are meant to align U.S. regulations with recent regulations adopted by several close U.S. allies and are intended to address national security concerns related to the proliferation of sensitive technologies. BIS is currently accepting comments on the interim final rule until November 5, 2024.
Key Technologies and ECCNs
The rule introduces new Export Control Classification Numbers (ECCNs) covering several critical technologies, as well as related software and technology:
- Cryocooling Systems (ECCN 3A904): Controls cryogenic cooling systems providing cooling power ≥600 μW at or below 0.1 K (-273.05°C) for periods exceeding 48 hours, as well as two-stage pulse tube cryocoolers rated to maintain temperatures below 4 K (-269.15°C) and provide cooling power ≥1.5 W at or below 4.2 K (-268.95°C). Certain quantum computing components, including low temperature complementary metal oxide semiconductor (CMOS) integrated circuits and parametric signal amplifiers are controlled by ECCN 3A901.
- Quantum Computing and Components (ECCN 4A906): Targets quantum computers based on physical qubit counts, with controls imposed for systems with 34 or more qubits depending on their C-NOT error rate.
- Semiconductor Equipment: Targets semiconductor manufacturing and testing equipment critical for advanced chip production.
- ECCN 3B903: Covers Scanning Electron Microscopes (SEMs) for high-precision imaging of semiconductor devices, including SEMs with stage placement accuracy below 30 nm and laser interferometry positioning.
- ECCN 3B904: Covers cryogenic wafer probing equipment designed to test devices at ≤4.5 K, handling wafers ≥100 mm. This ECCN regulates semiconductor fabrication tools with dual-use potential in quantum computing and other sensitive applications.
- Gate All-around Field-Effect Transistor (GAAFET) Technology (ECCN 3E905): Controls technology for the development or production of integrated circuits or devices, using GAAFET structures. 3E905 does not apply to vertical GAAFET architectures, g., those used for 3D NAND. GAAFET technology is used for production or development of high-performance computing chips that can be used in supercomputers.
- Additive Manufacturing: New ECCNs control the export of certain 3D printing technologies that may contribute to dual-use capabilities.
Licensing Policy
The new controls impose worldwide licensing requirements. There is a presumption of approval for exports to countries within Country Group A:1 and a presumption of denial for destinations in Country Groups D:1 and D:5, such as China and Russia. BIS will conduct case-by-case reviews for other countries, based on risks to national security and regional stability.
For certain quantum technologies, there is a 60-day delayed compliance period for exports to A:1 destinations, giving exporters time to adjust internal procedures and file license applications.
License Exception IEC
The interim final rule introduces the License Exception Implemented Export Controls (IEC), which allows streamlined exports to countries with comparable export control regimes. Eligibility varies on an item-by-item basis depending on whether the country has implemented equivalent controls for the specific items. Countries benefiting from IEC include Italy, Japan, the UK, and others aligned with U.S. regulations. The list of eligible countries is subject to change as countries adopt new controls, and is available here for exporters to review.
Deemed Exports
The rule also introduces licensing exceptions for deemed exports of certain newly controlled items. Foreign nationals from D:1 or D:5 countries will be eligible, but their employers will face strict reporting obligations, including annual updates on foreign employees and notification of terminations.
This rule also includes grandfathering clauses, which would allow certain foreign employees and contractors of companies in the United States who currently have access to certain controlled technology or software to have continued and future access to such technology and software that would otherwise require a license. There is an exception from this grandfathering clause for GAAFET technology specified in ECCN 3E905 to foreign persons whose most recent country of citizenship or permanent residency is a destination specified in Country Group D:1 or D:5.
GAAFET General License (GL):
A new General Order No. 6 creates a GL which authorizes exports, reexports, and transfers of GAAFET technology to certain end users in Country Groups A:5 and A:6. The GL also authorizes deemed exports or deemed reexports of GAAFET technology to currently employed foreign employees or contractors, if those individuals are not considered to be a prohibited person and their most recent country of citizenship or permanent residency is included in Country Groups D:1 or D:5. General Order No. 6 establishes an annual reporting requirement for the GAAFET-related exports under the GL.
Impact
The September 2024 BIS interim final rule imposes stricter export controls on quantum computing, semiconductor equipment, cryocooling systems, and additive manufacturing technologies. Both U.S. and foreign companies operating in these sectors will need to re-evaluate and update their compliance programs to meet the new requirements. Businesses can take advantage of the comment period, open until November 5, 2024, to provide feedback on the rule’s impact, suggest clarifications, or propose adjustments to its scope. Engaging in this process offers stakeholders an opportunity to influence the final regulations and address any operational challenges before the rule is fully implemented.
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