Australia has imposed strict export controls on quantum computing technology for the first time, exposing local industry to onerous new rules and harsh criminal offences that threaten the future viability of R&D.
The move, which comes as the AUKUS nations unlock billions of dollars in licence-free defence trade, has prompted an outcry from Australia’s quantum sector and calls to wind back the decision.
It is also another blow to a sector that is still reeling from a controversial near-$1 billion investment by the federal and Queensland governments in Californian startup PsiQuantum.
In a preemptive strike to control the supply of the nascent technology, the federal government last Friday added quantum computing as a regulated dual-use technology on the Defence and Strategic Goods List (DSGL).
Quantum computers with 34 or more qubits and error rates below a certain threshold are captured under the DSGL’s dual-use technology list, which until now made no reference to quantum technology.
The inclusion of quantum computers puts Australia on the same page as countries like the United Kingdom, France and the Netherlands, which have imposed similar rules as quantum computers move closer to practical use.
But with most quantum computers currently too small or highly prone to errors, experts overseas have questioned the point of limiting the exchange of the technology with export controls.
For Michael Biercuk, the founder and chief executive of quantum startup Q-CTRL, including quantum computing on the DSGL “before the relevant technology exists” is “tremendously concerning”.
“There’s no sensible reason to do this. It hurts the community, it’s expensive to comply with and it’s going to slow the local sector down for no reason,” he told InnovationAus.com.
Among his concerns is the addition of new penalties earlier this year to prevent the sharing of sensitive technology listed on the DSGL with non-AUKUS nations and individuals, including within Australia.
The new offences, which were enshrined in law in March but are yet to come into effect, enable licence-free defence trade with the United States and the UK from September, overriding the the International Traffic in Arms Regulations (ITAR) scheme.
But with strict liability for all export control violations making even an accidental offence an open and shut case, Australia’s regime is far more punitive than that of its partners, Mr Biercuk said.
“The fact that there isn’t a basic criminal defence against accidental or unintentional violations of the deemed export rule in a fast moving research-driven field means that this doesn’t look like a viable area of R&D for us in Australia.”
Companies will now need to audit their staff to understand their citizenship, potentially violating anti-discrimination law, as well as put in place controls to prevent information sharing in areas that were previously just research.
External parties such as consultants and lawyers, who may assist companies with the publication of open literature or patents, will also need to go through the same validation process.
While some exemptions do exist, including a last-minute concession to the research sector for fundamental research, this will have no bearing on quantum companies as they build commercial products, he said.
“Building compliance with an international team structured under the old regime is now a huge burden and companies like ours have to evaluate whether we can even continue hiring in quantum computing in Australia, given the extreme personal risks to staff.”
Other industry sources who spoke to InnovationAus.com on the condition of anonymity agreed that the inclusion of quantum computing on the DSGL will result in more work and overheads.
Mr Biercuk added that while the sector has been bracing for the changes for some time, the sector had not been consulted on the “fundamental changes” to the Defence Trade Controls Act (DTCA) that brought about the three new offences.
“Defence just announced last week that they would be unilaterally adding new controls on quantum computers – but the associated consultation took place before the major changes to legislation in the last year, meaning they will apply under a totally new regime.”
The Department of Defence, which has been criticised for not consulting with industry on previous changes to the DTCA, did not respond to a request for comment in time for publication.
InnovationAus.com understands that countries party to the Wassenaar Arrangement, one of the four key multinational export controls regimes, have been discussing the issue for some time.
But at a briefing just one day before the US signed off on changes to ITAR and quantum computing was added to the DSGL, Defence officials did not indicate that the inclusion of quantum computing was imminent.
Mr Biercuk is urging Defence to bring Australia’s scheme into line with that of the UK, ensuring “symmetry in the regimes and that Australia is not unilaterally applying the most punitive export controls regime among the partners”
“This is existential for us – the regulations are so poorly crafted and the policy so punitive and risky that we have no choice but to speak out. Otherwise Australia risks losing the opportunity it has at its fingertips just through the unintended consequence of poor and unnecessary regulations.”
The Tech Council of Australia, which is behind the Australian Quantum Alliance, did not respond to a request for comment. InnovationAus.com understands it was made aware of the changes ahead of Friday.
Update: January 22, 2024
In a statement after publication, Defence said the controls would ensure “Australian maintains its competitive edge in this field”, while providing partners with “confidence that Australia adequately controls these technologies”.
“The controls associated with these technologies do not ban their export or collaboration – rather, in certain instances, permits for such activities may be required,” a spokesperson told InnovationAus.com.
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