The Ministry of Investment, Trade and Industry (Miti) has announced the immediate enforcement of a Strategic Trade Permit requirement for all exports, transshipments and transits involving high-performance artificial intelligence (AI) chips of United States origin. The move, aimed at addressing regulatory blind spots, forms part of a broader commitment to uphold Malaysia’s international obligations.
In a formal statement, Miti confirmed that the measure is instituted under Section 12 of the Strategic Trade Act 2010 (STA 2010), known as the Catch-All Control provision. This provision compels exporters to notify authorities a minimum of 30 days in advance should they intend to export, transship or transit any item not listed under the Strategic Items List (SIL), where there is knowledge or reasonable suspicion that the item could be misused or linked to 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 SIL of the STA 2010,” said the ministry.
Miti reinforced Malaysia’s zero-tolerance policy toward the circumvention of export controls or participation in illicit trade. It emphasised that individuals or entities found in breach of the STA 2010 will be subject to strict legal action.
The ministry underscored that Malaysia remains committed to facilitating investment and trade aligned with international standards and multilateral commitments. It also cautioned that all operating entities must adhere to international obligations to avoid potential secondary sanctions that could impact their commercial interests.
“Malaysia will not tolerate any misuse of its jurisdiction for the purposes of illegal trade,” Miti affirmed, reiterating its resolve to ensure a secure, transparent, and rules-based trading environment.
Stephen Innes, Managing Director of SPI Asset Management, commented that while the new directive does not directly disrupt Malaysia’s growing AI and data centre ecosystem — which continues to be underpinned by infrastructure expansion, strategic cloud partnerships and local talent — it signals an era of enhanced compliance oversight.
“If you want to play in the AI sandbox, you now need to watch your sourcing, disclosure and compliance trail more carefully,” Innes told Bernama.
He added that although multinational tech firms may absorb the regulatory shift with relative ease, smaller local enterprises and startups could face headwinds without strong legal frameworks in place. Malaysia’s established role in chip testing and packaging may, however, buffer the broader industry from serious operational disruption.
“This law forces the industry to mature quickly in terms of compliance infrastructure. The upside is that it may accelerate Malaysia’s push toward more transparent, globally integrated standards,” he said.
Echoing a similar sentiment, economist Professor Geoffrey Williams observed that the regulatory update represents a more cooperative stance compared to previous trade negotiations.
“This will deliver a much better chance of lowering the 25% reciprocal tariffs and is better than taking a belligerent stance. It is a closer win-win engagement,” Williams said.
He noted that the United States has voiced concern over potential rerouting of AI chips to China via third-party countries within ASEAN, in contravention of US export restrictions. Malaysia’s move, therefore, signifies a key step in the direction of harmonised regional controls.
“Getting better coordinated regulation across ASEAN is a positive response to address US concerns, and Malaysia is playing a key role in this,” Williams added, noting that the measure is unlikely to affect the country’s legitimate data centre and AI operations, aside from clamping down on illicit activity.
-The Star
