[KUALA LUMPUR] Malaysia has announced immediate restrictions on exports, transships and transits of high-performance artificial intelligence (AI) chips derived from the US.
The Ministry of Investment and Trade and Industry (MITI) said on Monday (July 14) that a strategic trade permit will be required under Section 12 of the Strategic Trade Act 2010 (STA 2010).
The provision, known as “catch-all control,” requires an individual or business to notify the authority 30 days prior to being involved in the export or movement of items not listed on the Strategic Item List (SIL), but is suspected of having a risk of circumventing illegal or restricted use.
“This initiative has helped to bridge the regulatory gap, and Malaysia is doing further reviews on the inclusion of high-performance AI chips of US origin in SIL in STA 2010,” Miti said.
Customs Lecture
The announcement has emerged as one of the key concerns in ongoing tariff negotiations as Malaysia continues to discuss with Washington about a mutual 25% tariff proposal for US exports that are expected to take effect on August 1st.
MITI Minister Tengku Zafrul Abdul Aziz has repeatedly stated that Malaysia is committed to working closely with the US to reach a mutually beneficial agreement, and is firmly in support of national interests and sovereignty.
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The ministry warned that attempts to circumvent Malaysia's export controls or participate in illegal trade would have severe legal consequences. Authorities have reiterated their commitment to endorsing the use of Malaysia's jurisdiction over the flow of unfair technology.
The move reflects an increasing global scrutiny of the advanced semiconductor trade, particularly as Washington strengthens its efforts to prevent sensitive technologies from reaching hostile actors. Countries such as the Netherlands, Japan and South Korea have similarly tightened their export curbs of chip-making equipment and materials.
“Malaysia supports investment and trade in line with international best practices and multilateral agreements, but all entities operating within the country are expected to comply with the relevant international obligations to avoid secondary sanctions,” the ministry said.
US AI Chip Curb
Previous reports show that the Trump administration plans to impose export restrictions on AI chip cargo from Nvidia, aiming to prevent these semiconductors from being converted to China, and has imposed export restrictions on Malaysia and Thailand.
The Commerce Department's draft rules are working to address the risks of transship as part of a broader Trump-era overhaul of Biden-era AI AI export rules, which have been criticized as being overly bureaucratic.
The Malaysian government has launched an investigation into reports that Chinese companies may be training large language models in Malaysia using NVIDIA-equipped servers.
