The rule takes immediate effect and applies even if the chips are not officially listed as restricted items, under the “Catch-All Control” provision of the Strategic Trade Act 2010 (STA).

This means that individuals or companies must notify the authorities at least 30 days in advance if they plan to handle US-origin AI chips.

“This initiative serves to close regulatory gaps while Malaysia undertakes a further review of the inclusion of high-performance AI chips of US origin on the strategic items list of the STA 2010,” Miti said in a statement.

Miti also reiterated that Malaysia would not allow the country to be used for illicit trading operations.

“Malaysia stands firm against any attempt to circumvent export controls or engage in illicit trade activities by any individual or company, who will face strict legal action if found to be violating the STA 2010 or related laws,” it said.

Miti’s move followed reports that the US commerce department plans to stop China from getting Nvidia’s advanced AI chips by blocking shipments through third countries like Malaysia and Thailand.

Washington’s concern over the smuggling of AI chips into China grew in January, when it began investigating whether countries like Singapore were being used as transit points.

Attention turned to Malaysia after Singapore’s then home affairs and law minister K Shanmugam said on March 3 that the servers with Nvidia chips exported to Malaysia could have been meant for a different final destination.

However, investment minister Tengku Zafrul Aziz said local investigations found no evidence that they had arrived at the Malaysian data centre to which they were purportedly sold.