The Export Certainty Principle
Einstein famously said, “God does not play dice with the universe.” In other words, he believed that the universe is deterministic, not leaving everything to chance. It turns out, however, that the universe is indeed probabilistic, and also that Einstein isn’t the only person bothered by uncertainty. According to Robert Friedman and Paul Stimers of the 2,300-attorney law firm Holland & Knight, companies exporting emerging technologies, including quantum technologies, are also averse to uncertainty.
Fortunately, the US recently published interim rules on export controls, alleviating much of the uncertainty for these companies. These rules cover componentry, equipment, and certain key aspects of quantum technologies, including advanced semiconductor tech, additive manufacturing tech, and certain kinds of quantum tech, including cryogenics. Mr. Friedman and Mr. Stimers have not heard any controversy yet over what’s on the list, perhaps because people seem to realize it could’ve been worse.
According to Mr. Friedman and Mr. Stimers, people actually seem to like the new export controls, at least from a certainty point of view. The rules recognize that the US is not the leader all by itself and that we need to be part of a team. There need to be allies “inside the fence” that we can collaborate with. They say that this is a watershed moment for export controls around all emerging technologies; not just quantum technologies, showing us what they will look like and what they will do. There is also appreciation that these export controls are being introduced relatively early, as introducing them late would be too risky.
Accommodations
The Wassenaar Arrangement involves a multilateral group of governments trying to create non-legally binding export controls. Unfortunately, Russia is a member of that group, and Russian influence creates problematic outcomes. The US, therefore, recognizes the need to collaborate with like-minded allies. Quantum companies are monitoring the global licensing requirements, and it is important that US companies avoid unnecessary constraints and regulations. To that aim, the interim rules include the following features welcome by industry:
- An Implemented Export Controls (IEC) license exception has been introduced for countries with export controls similar to those of the US Commerce Department. Licenses are required for sending certain technologies to countries without analogous export controls.
- In many cases, a general license allows continued collaboration between companies and their subsidiaries in other countries, grandfathering in the existing subsidiaries.
- Foreign entities in the US might need a license within the US, but the rules do not immediately impede commerce. Certain existing foreign national employees are grandfathered in, depending on the technology at issue.
- So as to not impede business on day one, the rules include a 60-day delayed implementation for those provisions impacting the quantum industry. Companies are granted some time to get the licenses they need where they need them.
Conclusion
The new export controls provide a roadmap for companies in emerging tech, including quantum tech, to know how new rules will be implemented. Fortunately, the rules accommodate the realities of global commerce and acknowledge that adjusting to them will take time. Mr. Friedman and Mr. Stimers say that people generally consider the rules reasonable, recognizing that quantum tech has security implications. The rules could’ve been worse, with no grandfathering, no grace period, and more restrictions, but at least the dice have been put away and exporters know what’s coming.
