Malaysia Announces License Requirement for Shipments of Advanced American AI Chips
All shipments of U.S.-origin advanced AI semiconductors will require an export license from the Malaysian government when moving through Malaysia, the country announced July 14, a move that further aligns Malaysia with U.S. efforts to prevent the diversion of sensitive chips to China.
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Malaysia’s Ministry of Investment, Trade and Industry said the announcement, which is “effective immediately,” will require all “exports, transships and transits” of those “high performance” chips to first obtain a strategic trade permit from Malaysia. Those chips are currently not listed on Malaysia’s Strategic Items List, and the new license requirement will help the country “close regulatory gaps” while it reviews whether they should be added.
Malaysia didn’t say whether the U.S. explicitly asked the country to require licenses for these chips, but the announcement comes after U.S. officials urged South East Asian nations, including Malaysia (see 2505220040 and 2503270019) and Singapore [see 2504040027), to do more to prevent their country from becoming a transshipment hub for illegal exports of advanced Nvidia chips to China. Commerce Secretary Howard Lutnick also said earlier this year that the U.S. wanted to persuade more American trading partners to impose similar export licensing rules by working those commitments into trade deal negotiations (see 2503180041).
In addition to the new license requirement, Malaysia noted that exporters and other businesses are required to notify the government at least 30 days before exporting or transiting any item “not expressly listed” on the Strategic Items List if the exporter has "reasonable grounds" to suspect those items will be used for a “restricted activity.”
The ministry said it’s prepared to significantly penalize violators. “Malaysia stands firm against any attempt to circumvent export controls or engage in illicit trade activities by any individual company, who will face strict legal action if found violating" the country’s Strategic Trade Act or other similar laws.
Malaysia added that it supports trade “aligned with international best practices” and multilateral forums, and “all entities operating in the country are expected to comply with relevant international obligations that are applicable to their operations to avoid any secondary sanctions on their business.” The country “will not tolerate the misuse of Malaysia’s jurisdictions for illicit trading activities.”