Govt enforces export controls on US-origin AI chips under strategic trade law

THE Government has placed immediate restrictions on the export, transhipment and transit of high-performance artificial intelligence (AI) chips originating from the United States, with the Ministry of Investment, Trade and Industry (MITI) confirming the enforcement of new controls under the Strategic Trade Act 2010 (STA 2010).

In a statement issued on Monday, MITI announced that such transactions are now subject to a Strategic Trade Permit, as authorised by Section 12 of the STA’s Catch-All Control provision.

This provision requires individuals or companies to notify authorities at least 30 days before engaging in trade involving items not explicitly listed under the Strategic Items List (SIL), should there be any grounds to suspect potential misuse or involvement in restricted activities.

“This initiative serves to close regulatory gaps while Malaysia undertakes further review on the inclusion of high-performance AI chips of US origin into the Strategic Items List,” said MITI.

The ministry warned that any individual or company found in breach of the STA 2010 or associated regulations would face firm legal action. It also stressed that Malaysia remains committed to international standards of trade governance and will not permit its jurisdiction to be used for circumventing export controls or illicit activity.

“Malaysia will not tolerate the misuse of its jurisdiction for illicit trading activities,” the ministry stated. “MITI remains committed to preserving a safe, secure, transparent, and rules-based trading environment with all its trade partners.”

While encouraging investment and lawful commerce aligned with global norms, MITI reminded all entities operating in Malaysia to comply fully with international obligations applicable to their sectors, particularly to avoid exposure to secondary sanctions.

This latest measure signals Malaysia’s intention to tighten oversight in sensitive technology sectors and reflects a broader international push to prevent the proliferation of dual-use goods—particularly those with potential military applications—amid increasing geopolitical concerns surrounding advanced AI technologies. - July 14, 2025