Latest news with #StrategicTradePermit
The Star
15-07-2025
- Business
- The Star
Miti requires permit for US-made AI chip exports
KUALA LUMPUR: The Investment, Trade and Industry Ministry (Miti) has imposed an immediate requirement for a Strategic Trade Permit on all exports, transshipments and transits of high-performance artificial intelligence (AI) chips of US origin, as part of efforts to close regulatory gaps. Miti said the new measure falls under Section 12 of the Strategic Trade Act 2010 (STA 2010), known as the Catch-All Control provision. It mandates individuals or firm to notify the authorities at least 30 days in advance if they intend to export, transship, or transit any item not listed in the Strategic Items List (SIL), where there is knowledge or reasonable suspicion that the item may be misused or involved 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 SIL of the STA 2010,' Miti said in a statement yesterday. Miti said Malaysia takes a firm stance against any attempt to circumvent export controls or engage in illicit trade. Any individual or company found violating the STA 2010 or related laws will face strict legal action. 'While Malaysia supports investments and trade that align with international best practices and multilaterally agreed commitments, all entities operating in the country are expected to comply with applicable international obligations to avoid secondary sanctions on their businesses,' it said. Miti reaffirmed its commitment to maintaining a safe, secure, transparent and rules-based trading environment, and said it will not tolerate misuse of Malaysia's jurisdiction for illicit trade activities. Commenting on the development, SPI Asset Management managing director Stephen Innes said the new export control does not directly hinder Malaysia's ongoing AI and data centre expansion efforts, which are driven by infrastructure investment, cloud partnerships and local talent. However, it does signal tighter regulatory oversight. 'If you want to play in the AI sandbox, you now need to watch your sourcing, disclosure and compliance trail more carefully,' he told Bernama. Innes said while multinational technology firms are likely to view this as a manageable hurdle, smaller local players or startups could face some challenges without the benefit of robust legal support. On the chip industry itself, he said Malaysia's core strength in testing and packaging means it may be spared the brunt of disruptions. '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 added. Meanwhile, economist Professor Geoffrey Williams said the changes in regulations showed a more cooperative approach from the tariff talks, which is a good sign. Williams said this indicated that both sides are listening to each other and responding quickly. '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,' he said. Williams said the United States has been concerned that AI chips are being sent to China through third countries in Asean, in breach of the US embargo. 'Therefore, getting better coordinated regulation across Asean is a positive response to address US concerns, and Malaysia is playing a key role in this,' he said, adding that this would have no significant effect on data centre and AI operations in Malaysia, except to restrict illicit activities.
The Star
15-07-2025
- Business
- The Star
Miti's AI chip export rule to have no impact on data centres
KUALA LUMPUR: MIDF Amanah Investment Bank Bhd believes that data centres will not be affected by the Ministry of Investment, Trade and Industry's (MITI) latest directive on artificial intelligence (AI) chips. The ministry has issued a directive which requires all exports, transshipments and transits of high-performance AI chips of United States (US) origin in Malaysia to obtain a Strategic Trade Permit (STP). In a research note today, the investment bank said the import of US-made advanced AI chips for use in domestic servers does not fall under the scope of the new rules unless the data centre operators intend to move the chips out of Malaysia. "There is zero impact from this directive in our opinion, as far as data centres in Malaysia are concerned. This is not an additional red tape that could delay the process of setting up a data centre in Malaysia,' it said. MIDF noted that since the beginning of the year, it has consistently reiterated that most new data centres are AI-ready, though some may eventually be used for non-AI purposes. The investment bank said the directive primarily addresses the movement of AI chips out of Malaysia, which it views as a prudent move by MITI to prevent suspected smuggling of chips into China through intermediaries. "This shows Malaysia's willingness to take responsibility for the movement of US-origin AI chips out of the country by stepping up its enforcement,' it added. MIDF said negotiations between Malaysia and the US will likely focus on regulatory enforcement, end-user monitoring, and the seriousness in addressing violations of the control measures. "MITI's latest directive covers all these. It is hoped that this will be able to placate the US when negotiating the restrictions of AI chip exports under Trump's refashioned AI Diffusion Rule,' it said. It added that speculation is growing around a possible shift from the current three-tiered country system to a licensing regime based on government-to-government agreements. This could mean that firms headquartered in the US or its close allies may no longer be restricted by the current seven per cent AI computing power limit for countries outside Tier 1, which allows for more AI capacities to be planned in countries such as Malaysia. "Regardless of the changes from Biden's rescinded Framework of AI Diffusion to the new rule being rewritten by the Trump administration, MIDF believes the essence remains, which is to contain China's AI advancement and ensure that US AI chips are not used to train Chinese AI models,' noted MIDF. - Bernama
The Sun
15-07-2025
- Business
- The Sun
MSIA: Miti move shows Malaysia's seriousness in complying with international trade obligations
KUALA LUMPUR: The trade permit imposed for US origin high-performance artificial intelligence (AI) chips reaffirms Malaysia's commitment as a trusted hub for managing advanced technology exports, transshipments, and transits. In stating this, Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said the measure sent a strong signal of Malaysia's seriousness in complying with international trade obligations, including the US export controls. 'The trade permit makes it clear that the government will not tolerate any abuse of exports, transshipment, or illicit trading,' Wong told Bernama when asked to comment on the current measures announced by the Ministry of Investment, Trade and Industry (Miti) on Monday. He added that many Malaysian firms have already taken proactive steps, including internal audits, to ensure they adhere to local and global regulations. 'We in Malaysia, both the private sector and government, take this very seriously. We want to make sure everything is fully compliant.' However, Wong said there is a need for greater clarity from the government on specific reporting obligations under the strategic trade permit. 'We need to know what needs to be reported and what constitutes notification to authorities. Once this is clear, companies can incorporate any additional steps needed to meet compliance,' he said. Miti on Monday announced that, effective immediately, all exports, transshipments, and transits of US-origin high-performance AI chips would be subject to a Strategic Trade Permit under Section 12 of the Strategic Trade Act 2010 (STA 2010), also known as the Catch-All Control provision. Under the provision, individuals or companies are required to notify authorities at least 30 days in advance if they intend to export, transship, or transit any unlisted item that may be suspected of being misused or involved in restricted activities. Meanwhile, Pacific Research Center of Malaysia principal adviser Oh Ei Sun said the move would not affect local data centre or AI development projects, as it pertains primarily to the transshipment or export of US-made chips, not their import into Malaysia for domestic use. 'I would not say Malaysia's industry lacked transparency before this. But the US is now taking this issue very seriously, and we are acting accordingly because we value our overall relationship with the US,' he said.
New Straits Times
15-07-2025
- Business
- New Straits Times
No evidence of AI chip smuggling, says Tengku Zafrul
KUALA LUMPUR: Malaysia has found no evidence to support allegations of high-performance artificial intelligence (AI) chip smuggling into the country, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz. He said the Investment, Trade and Industry Ministry (Miti) is working closely with the Customs Department, Malaysian Communications and Multimedia Commission, police and industry players to investigate the matter. "We have not found any evidence. We've also engaged with the United States (US) and major tech companies to ensure full cooperation. If there is any evidence, we will take action. But the investigation is ongoing," he said at a press conference on the ministry's second-quarter 2025 performance report card. Tengku Zafrul dismissed claims that millions of chips were involved, saying the concern may have been amplified by Malaysia's rising demand for AI chips, driven by rapid growth in data centres. "One cannot deny that demand for AI chips in Malaysia has surged. I think that has raised some red flags, especially as Malaysia becomes a dominant player," he said. On Monday, Miti announced that all export, transfer, and transit activities involving high-performance AI chips from the US are now subject to a Strategic Trade Permit, effective immediately. The move is in line with Section 12 of the Strategic Trade Act 2010, which allows for catch-all controls. The ministry said Malaysia will not tolerate any abuse of export controls or illicit trade activities.
The Sun
15-07-2025
- Business
- The Sun
MITI's AI chip export rule has no impact on Malaysia data centres
KUALA LUMPUR: MIDF Amanah Investment Bank Bhd has clarified that Malaysia's data centres will remain unaffected by the Ministry of Investment, Trade and Industry's (MITI) latest directive on artificial intelligence (AI) chip exports. The new rule mandates a Strategic Trade Permit (STP) for all exports, transshipments, and transits of US-origin high-performance AI chips in Malaysia. However, MIDF emphasised that domestic data centres using these chips will not face additional restrictions unless they plan to move the hardware out of the country. 'There is zero impact from this directive in our opinion, as far as data centres in Malaysia are concerned. This is not an additional red tape that could delay the process of setting up a data centre in Malaysia,' the investment bank said in a research note. MIDF highlighted that most new data centres in Malaysia are already AI-ready, though some may later be repurposed for non-AI applications. The directive primarily targets the movement of AI chips out of Malaysia, which MIDF views as a strategic measure to prevent unauthorised exports, particularly to China. 'MITI's latest directive covers all these. It is hoped that this will be able to placate the US when negotiating the restrictions of AI chip exports under Trump's refashioned AI Diffusion Rule,' MIDF added. The bank also noted potential shifts in US export policies, including a possible move from a three-tiered country system to a licensing regime based on government agreements. This could relax current computing power limits for non-Tier 1 nations like Malaysia, allowing greater AI capacity planning. Regardless of policy changes, MIDF believes the core objective remains unchanged: restricting China's AI development by preventing US chips from being used in Chinese AI training models. - Bernama
