Recent actions by the Singapore and US governments following DeepSeek's alleged use of restricted artificial intelligence (AI) chips signal more robust enforcement of export controls. Not only is Singapore stepping up its enforcement efforts, but the United States and Singapore may be looking to enhance cooperation on enforcement as well. For US and international companies operating in Singapore, these developments may herald heightened scrutiny, enforcement actions, and penalties for export control violations.
DeepSeek Allegations
On January 20, 2025, DeepSeek, a Chinese technology firm, launched an AI-powered large language model that rivaled US models. This announcement surprised international observers in part because DeepSeek said it trained the model using Nvidia's H800 chips, which are less powerful than Nvidia's cutting-edge AI chips that are subject to US export controls. In response, the US House Select Committee on the CCP released a report alleging that DeepSeek bypassed US export controls on AI chips by using restricted Nvidia graphic processing units (GPUs) supplied via Singapore-based third parties. US Secretary of Commerce Howard Lutnick further warned that "Nvidia's chips, which [DeepSeek] bought tons of, and they found their ways around, drive their DeepSeek model. It's got to end."
Singapore's Enforcement Actions
Following the DeepSeek allegations, the Singapore government has taken several steps that indicate that it may strengthen enforcement against companies operating in Singapore that circumvent or violate export controls and that it may do so in conjunction with US authorities.
On February 1, Singapore's Ministry of Trade and Industry (MTI) issued a statement responding to concerns that Singapore-based intermediaries were involved in the circumvention of US export controls. After noting Nvidia's explanation that "there is no reason to believe that DeepSeek obtained any export-controlled products from Singapore," MTI stated that it "expect[s] US companies, like Nvidia, to comply with US export controls and our domestic legislation." MTI added that Singapore's customs and law enforcement agencies will continue to work closely with their US counterparts on these issues.
On February 18, Second Minister for Trade and Industry Tan See Leng told the Parliament that Singapore is scrutinizing the alleged circumvention of Nvidia chips and underscored that "if a company in Singapore is engaged in deceptive or dishonest practices to evade export controls that it is subject to, we will investigate and take the appropriate action in accordance with Singapore laws." With respect to cooperation with the United States, Second Minister Tan said that Singapore's customs authorities "work[] closely with its foreign counterparts, including those from the US, to address their concerns and facilitate their investigations where appropriate, and to the extent our law permits."
On February 27, Singapore charged three individuals for suspected customs fraud related to the importation of computer servers. Specifically, these individuals are alleged to have listed Malaysia as the final destination of US servers potentially containing Nvidia chips, when in fact the final destination may have been elsewhere. Though Minister for Home Affairs and Law K Shanmugam indicated that this case was "unrelated" to the DeepSeek allegations, he touted the "longstanding, good cooperation" between Singapore and the United States to gather information about the suppliers and discern whether the servers are subject to US export controls. News media, however, reported otherwise—that this enforcement action may have in fact been related to the alleged supply of controlled Nvidia chips from Singapore to DeepSeek.
On April 4, MTI and Singapore's customs authority subsequently issued a joint advisory notice advising companies to take affirmative steps to ensure compliance with export controls on advanced semiconductors, semiconductor manufacturing equipment and AI-related technologies. Specifically, the notice encouraged companies to take the following steps to "mitigate the risk of inadvertent violations":
- "Implement a robust internal compliance programme,"
including "Know Your
Customer (KYC) practices and end-user screenings to ensure that business transactions are made with legitimate customers or end-users that adhere to relevant export control regulations" - "Engage appropriate legal expertise, where necessary, for international business activities involving controlled technologies"
The focus of the joint advisory notice was export controls adopted by both Singapore and third countries. With respect to third countries, the notice stated pointedly: "The Singapore Government does not condone businesses deliberately using their association with Singapore to circumvent or violate the export controls of other countries. This applies to all our trading partners."
In addition to issuing the joint advisory, MTI has stated that Singapore will consider adopting measures to ensure that Singapore-based companies can continue to access advanced semiconductors from the United States once the Commerce Department begins enforcing new US export controls related to AI. As WilmerHale previously noted, while the United States' new Framework for Artificial Intelligence Diffusion (Diffusion Rule) became effective on January 13, 2025, the Commerce Department has indicated that it will not enforce the rule until May 15, 2025, after a public comment process concludes. WilmerHale's detailed analysis of the Diffusion Rule is available here.
US Export Control Policy
Singapore's actions described above dovetail with the Trump Administration's heightened focus on export control enforcement.
The Trump Administration has indicated that export control enforcement, particularly against Chinese companies and exports involving critical technologies subject to US export controls, will be a top priority for the Department of Commerce's Bureau of Industry and Security. Secretary Lutnick stated that the Department of Commerce will pursue a "dramatic increase" in enforcement and fines. The Trump Administration also reportedly launched an investigation into DeepSeek's alleged use of Singapore-based intermediaries to obtain Nvidia chips.
Additionally, the United States has taken steps to persuade other US trading partners in the region to strengthen export control enforcement capabilities. For example, Malaysia's Trade Minister Zarful Aziz stated that the United States has requested that Malaysia "monitor every shipment that comes to Malaysia when it involves NVIDIA chips."
Conclusion
The expanded enforcement activities of Singapore and the United States could have significant implications for companies operating in Singapore—especially those that regularly engage with Chinese entities or operate in strategic sectors, such as semiconductors, biotechnology, AI, or other advanced technologies. Companies operating in these sectors should consider taking steps to ensure their compliance with applicable export controls, including analyzing their supply chains, conducting regular end-user diligence, and monitoring risks of diversion of controlled goods to China.
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