A recent development with the effect of tightening movement of U.S. originated AI chips has come in the form of the Ministry of Investment, Trade and Industry’s (“MITI”) recent announcement.
This announcement provides that all exports, transshipments, and transit of high-performance AI chips of U.S. origin now require a Strategic Trade Permit (“STA Permit”) under section 12 of the Strategic Trade Act 2010.
Key points of the announcement:
- Catch-All Control provision: Section 12 requires individuals or companies to notify the relevant authority at least 30 days before exporting, transhipping, or bringing in transit any item not expressly listed in the Strategic Items List, if the individual or company knows or have reasonable grounds to believe the AI chips will be used wholly or in part, for or in connection with restricted activity.
- Directive No. 1/2025: MITI issued guidance requiring:
- 30-day advance notification to the Strategic Trade Secretariat (“STS”) if there is knowledge or reasonable suspicion of misuse.
- STA Permit application, which must include a re-export license from the U.S. and product classification from the manufacturer.
- Affected AI Chips: Applies to AI chips which are detailed in Annex I of Directive No. 1/2025.
- Enforcement & Compliance:
- Non-compliance may result in severe penalties, including fines and imprisonment.
With this development, investors are urged to ensure compliance before engaging in such trade activities.
More resources on this topic can be found in the links below:
- Link to the announcement.
- Link to Directive No. 1/2025.
- Media Reports:
- https://www.thestar.com.my/news/nation/2025/07/14/malaysia-tightens-export-controls-on-us-origin-ai-chips
- https://theedgemalaysia.com/node/762445
- https://www.freemalaysiatoday.com/category/nation/2025/07/14/malaysia-tightens-rules-on-export-of-us-ai-chips
- https://www.straitstimes.com/asia/se-asia/malaysia-tightens-domestic-oversight-on-us-chip-movements-as-a-negotiation-tactic-over-tariffs
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