What Malaysia can do to align with Washington s chip export curbs

KUALA LUMPUR – While Malaysia lacks the legal framework to enforce export controls on prized artificial intelligence (AI) chips on behalf of the US, it can help break up chip smuggling operations in other ways, according to analysts and trade officials.

Kuala Lumpur can react to tip-offs from Washington and take action against the parties involved.

Conversely, it can supply information to the US and, in the case of AI chips, to the likes of tech firm Nvidia whose powerful processing units are the most sought after in the industry. This would allow controls and sanctions to be implemented within the US against errant entities.

A top government source told The Straits Times that it is common for the authorities in Malaysia to act on credible information from other jurisdictions, including the US, and assist in curbing illicit activity.

“If the US tells us a company is circumventing its controls, even if it is specifically not a crime in Malaysia, it is usually the case that they will be engaged in falsifying Customs or income declarations,” the official said on condition of anonymity due to the sensitivity of such diplomatic arrangements.

“As long as we cripple the operations, Washington will be happy.”

Former deputy international trade and industry minister Ong Kian Ming confirmed that this was a possible line of action, similar to how Singapore had charged three men in February and March for fraud in misrepresenting who was the final user of the Nvidia chips they had secured.

“What I think the US is hoping for, is for us to hand over or make public information on entities selling to China, then they will block these entities. Nvidia, too, will remove you as a customer to abide by US rules,” said Dr Ong, now a Malaysian Investment Development Authority