SINGAPORE: Singapore does not condone businesses deliberately using their association with the country to circumvent or violate the export controls of other nations, said Second Minister for Trade and Industry Tan See Leng on Tuesday (Feb 18).
He was responding to parliamentary questions from Members of Parliament Yip Hon Weng (PAP-Yio Chu Kang), Ms Joan Pereira (PAP-Tanjong Pagar) and Associate Professor Jamus Lim (WP-Sengkang) over US export controls of advanced semiconductor chips, and Singapore’s approach to such measures.
The questions had been filed after news reports that said intermediaries in Singapore were involved in the illegal movement of Nvidia chips to China.
While Singapore does not have legal obligations to enforce the unilateral export controls of other countries, it expects all companies operating in Singapore to take into account such regulations if applicable, said Dr Tan, who is also Manpower Minister.
"Their international business activities should be conducted transparently. We certainly do not condone businesses deliberately using their association with Singapore to circumvent or violate the export controls of other countries," he said.
Singapore Customs also works closely with foreign counterparts, including those from the US, to address concerns and to facilitate investigations when appropriate.
The US Commerce Department is reportedly looking into whether DeepSeek – the Chinese company whose artificial intelligence (AI) model’s performance rocked the tech world – has been using US chips that are not allowed to be shipped to China.
Dr Tan said that regarding the questions raised about Nvidia chips which are subject to US export controls, the Singapore government is scrutinising the issue carefully and will continue to do so.
"So far, our checks indicate that physical delivery of products sold by Nvidia to Singapore represent less than 1 per cent of Nvidia’s overall revenue," said Dr Tan.
"These are mainly deployed in Singapore for major enterprises and the Singapore government."
The remainder of Nvidia’s revenue billed to business entities in Singapore did not involve physical shipments into Singapore, he added.
Nvidia's recent quarterly statement stated that Singapore accounts for about 22 per cent of its revenue, making it the second-biggest buyer of its chips after the US.
The company also said that "most shipments associated with Singapore revenue were to locations other than Singapore, and shipments to Singapore were insignificant".
Dr Tan further clarified in response to supplementary questions over Singapore accounting for about 22 per cent of Nvidia's quarterly revenue that this percentage reflects the location where the tech firm's customers receive their bill, which is independent from the physical location the goods are delivered to.
The minister explained that it is common practice for global companies to centralise the billing for goods and services in their hubs, and most of Nvidia's revenue billed to companies here did not involve physical shipments into Singapore.
Dr Tan said in his parliamentary reply that if a company in Singapore is engaged in deceptive or dishonest practices to evade export controls, it will be investigated and dealt with under Singapore laws.
"It is in our national interest to secure access to leading edge technology and to maintain the integrity of our business environment," he said.
Within Singapore, the transfer and brokering of strategic goods and technology is governed by the Strategic Goods (Control) Act. That legal framework is aligned with other major multilateral export control regimes, including those imposed by the United Nations Security Council.
However, US export controls on advanced semiconductor chips are unilateral and fall outside of those multilateral regimes.
On questions about the economic impact on Singapore arising from these US controls, Dr Tan said there is "limited impact" to Singapore's ability to manufacture and export chips.
Current technology controls imposed by the US are aimed at a narrow subset of advanced semiconductor chips, while Singapore’s semiconductor industry focuses on producing mature node chips, which are used globally in appliances, automotives and industrial equipment, he said.
Dr Tan noted that while the previous US administration had introduced an AI diffusion rule in January aimed at managing access to Nvidia H100 graphics processing units or equivalent GPUs on a country-level basis, the details have not been finalised by the current US government.
Nvidia's H100 family of GPUs dominate the data centre chip market for AI.
According to a report, the framework creates a three-tiered system of countries with varying levels of access to AI technology. Tier One countries are key allies with unrestricted access, Tier Two are countries that will have controlled access through licensing programmes. Tier Three consists of arms-embargoed countries, such as China, Russia, and North Korea, that have existing export restrictions on AI chips.
Singapore, like around 150 countries, has been classified as Tier Two.
Dr Tan said Singapore's objective is to ensure "adequate access" to AI compute by both local and international companies that operate in Singapore.
"We will continue to work with companies based in Singapore to facilitate their access to advanced semiconductor chips and technologies from all the major source countries. We will also continue to engage the US administration to address their concerns," he said.
Following Dr Tan's reply, Assoc Prof Lim said that he had initially posed his question to the Ministry of Foreign Affairs (MFA) and asked if an MFA minister could respond to questions that "call for ... a foreign policy approach".
Highlighting that a much larger share of Nvidia's revenue was billed to Singapore compared with physical deliveries to the country, Assoc Prof Lim asked if the ministry was aware of such "imbalances" and whether they are "positive or negative for the national interest from a foreign policy angle".
Responding to this, Foreign Affairs Minister Vivian Balakrishnan said that Singapore is a transshipment hub and the global headquarters for thousands of international companies, and Singapore's trade volume is three times the size of GDP.
"These unique characteristics are par for the course for the unique role Singapore plays in the global economy," Dr Balakrishnan said.
"There's nothing unusual or unbalanced about that. The nub of the question really whether Singapore is being used by these enterprises and companies to evade unilateral export controls."
He reiterated that Singapore is not legally obliged to enforce unilateral export measures of other countries, but said that it is not in the country's national interest to be "made use of".
"We will not allow them to use that association with us to engage in deceptive or evasive measures to avoid unilateral export measures that apply to them. The point is, the onus is on that company and we will not countenance evasion, deception, false declarations or even misaccounting," he said.
Dr Balakrishnan added that if a trading partner comes to Singapore with concerns, Singapore will facilitate investigations and check if there is any cause for concern.
"We do that in order to protect our own national interests," he said, adding that Singapore also has a need for AI chips.
The AI diffusion rule was published near the end of the Biden administration and is now up for comments, so the situation is still evolving, he said.
"Needless to say, we will continue to engage the major exporting source of these advanced chips to ensure that we have adequate," he said.
He added: "In a world which is bifurcating or fracturing or polarising and divided, it is all the more important for us to play it straight, for me to say the same thing in Beijing and Washington and to be fair. That's why everything that Minister Tan has said applies to all our trading partners."
Nominated MP Mark Lee then raised a question about the economic implications of Singapore being listed as a Tier Two country under new US AI export controls.
Dr Tan said that the new US administration has not commented on their policy or position towards the new rule and the US did not share specific requirements on the tiering requirements, or what would be required for a country to be reclassified to a higher tier.
"We are in consultation with industry players in Singapore to gather feedback on the potential impact of the draft rules on their business activities and this will allow us to better consider appropriate measures to support our companies," he said. "We are also ... engaging the US to address their concerns and to also better understand their approach to the AI diffusion rule."
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He was responding to parliamentary questions from Members of Parliament Yip Hon Weng (PAP-Yio Chu Kang), Ms Joan Pereira (PAP-Tanjong Pagar) and Associate Professor Jamus Lim (WP-Sengkang) over US export controls of advanced semiconductor chips, and Singapore’s approach to such measures.
The questions had been filed after news reports that said intermediaries in Singapore were involved in the illegal movement of Nvidia chips to China.
While Singapore does not have legal obligations to enforce the unilateral export controls of other countries, it expects all companies operating in Singapore to take into account such regulations if applicable, said Dr Tan, who is also Manpower Minister.
"Their international business activities should be conducted transparently. We certainly do not condone businesses deliberately using their association with Singapore to circumvent or violate the export controls of other countries," he said.
Singapore Customs also works closely with foreign counterparts, including those from the US, to address concerns and to facilitate investigations when appropriate.
The US Commerce Department is reportedly looking into whether DeepSeek – the Chinese company whose artificial intelligence (AI) model’s performance rocked the tech world – has been using US chips that are not allowed to be shipped to China.
Dr Tan said that regarding the questions raised about Nvidia chips which are subject to US export controls, the Singapore government is scrutinising the issue carefully and will continue to do so.
"So far, our checks indicate that physical delivery of products sold by Nvidia to Singapore represent less than 1 per cent of Nvidia’s overall revenue," said Dr Tan.
"These are mainly deployed in Singapore for major enterprises and the Singapore government."
The remainder of Nvidia’s revenue billed to business entities in Singapore did not involve physical shipments into Singapore, he added.
Nvidia's recent quarterly statement stated that Singapore accounts for about 22 per cent of its revenue, making it the second-biggest buyer of its chips after the US.
The company also said that "most shipments associated with Singapore revenue were to locations other than Singapore, and shipments to Singapore were insignificant".
Related:
Dr Tan further clarified in response to supplementary questions over Singapore accounting for about 22 per cent of Nvidia's quarterly revenue that this percentage reflects the location where the tech firm's customers receive their bill, which is independent from the physical location the goods are delivered to.
The minister explained that it is common practice for global companies to centralise the billing for goods and services in their hubs, and most of Nvidia's revenue billed to companies here did not involve physical shipments into Singapore.
Dr Tan said in his parliamentary reply that if a company in Singapore is engaged in deceptive or dishonest practices to evade export controls, it will be investigated and dealt with under Singapore laws.
"It is in our national interest to secure access to leading edge technology and to maintain the integrity of our business environment," he said.
Within Singapore, the transfer and brokering of strategic goods and technology is governed by the Strategic Goods (Control) Act. That legal framework is aligned with other major multilateral export control regimes, including those imposed by the United Nations Security Council.
However, US export controls on advanced semiconductor chips are unilateral and fall outside of those multilateral regimes.
On questions about the economic impact on Singapore arising from these US controls, Dr Tan said there is "limited impact" to Singapore's ability to manufacture and export chips.
Current technology controls imposed by the US are aimed at a narrow subset of advanced semiconductor chips, while Singapore’s semiconductor industry focuses on producing mature node chips, which are used globally in appliances, automotives and industrial equipment, he said.
Dr Tan noted that while the previous US administration had introduced an AI diffusion rule in January aimed at managing access to Nvidia H100 graphics processing units or equivalent GPUs on a country-level basis, the details have not been finalised by the current US government.
Nvidia's H100 family of GPUs dominate the data centre chip market for AI.
According to a report, the framework creates a three-tiered system of countries with varying levels of access to AI technology. Tier One countries are key allies with unrestricted access, Tier Two are countries that will have controlled access through licensing programmes. Tier Three consists of arms-embargoed countries, such as China, Russia, and North Korea, that have existing export restrictions on AI chips.
Singapore, like around 150 countries, has been classified as Tier Two.
Dr Tan said Singapore's objective is to ensure "adequate access" to AI compute by both local and international companies that operate in Singapore.
"We will continue to work with companies based in Singapore to facilitate their access to advanced semiconductor chips and technologies from all the major source countries. We will also continue to engage the US administration to address their concerns," he said.
Related:
NOT IN SINGAPORE'S NATIONAL INTEREST TO BE "MADE USE OF": BALAKRISHNAN
Following Dr Tan's reply, Assoc Prof Lim said that he had initially posed his question to the Ministry of Foreign Affairs (MFA) and asked if an MFA minister could respond to questions that "call for ... a foreign policy approach".
Highlighting that a much larger share of Nvidia's revenue was billed to Singapore compared with physical deliveries to the country, Assoc Prof Lim asked if the ministry was aware of such "imbalances" and whether they are "positive or negative for the national interest from a foreign policy angle".
Responding to this, Foreign Affairs Minister Vivian Balakrishnan said that Singapore is a transshipment hub and the global headquarters for thousands of international companies, and Singapore's trade volume is three times the size of GDP.
"These unique characteristics are par for the course for the unique role Singapore plays in the global economy," Dr Balakrishnan said.
"There's nothing unusual or unbalanced about that. The nub of the question really whether Singapore is being used by these enterprises and companies to evade unilateral export controls."
He reiterated that Singapore is not legally obliged to enforce unilateral export measures of other countries, but said that it is not in the country's national interest to be "made use of".
"We will not allow them to use that association with us to engage in deceptive or evasive measures to avoid unilateral export measures that apply to them. The point is, the onus is on that company and we will not countenance evasion, deception, false declarations or even misaccounting," he said.
Dr Balakrishnan added that if a trading partner comes to Singapore with concerns, Singapore will facilitate investigations and check if there is any cause for concern.
"We do that in order to protect our own national interests," he said, adding that Singapore also has a need for AI chips.
The AI diffusion rule was published near the end of the Biden administration and is now up for comments, so the situation is still evolving, he said.
"Needless to say, we will continue to engage the major exporting source of these advanced chips to ensure that we have adequate," he said.
He added: "In a world which is bifurcating or fracturing or polarising and divided, it is all the more important for us to play it straight, for me to say the same thing in Beijing and Washington and to be fair. That's why everything that Minister Tan has said applies to all our trading partners."
Nominated MP Mark Lee then raised a question about the economic implications of Singapore being listed as a Tier Two country under new US AI export controls.
Dr Tan said that the new US administration has not commented on their policy or position towards the new rule and the US did not share specific requirements on the tiering requirements, or what would be required for a country to be reclassified to a higher tier.
"We are in consultation with industry players in Singapore to gather feedback on the potential impact of the draft rules on their business activities and this will allow us to better consider appropriate measures to support our companies," he said. "We are also ... engaging the US to address their concerns and to also better understand their approach to the AI diffusion rule."
Continue reading...