Malaysia’s path to the Strategic Trade Act

ABSTRACT

In 2010, six years after news broke that the A. Q. Khan nuclear smuggling ring was making components for Libya’s nuclear program a short distance from Kuala Lumpur, Malaysia adopted comprehensive export controls. Because Malaysia, like many developing and middle-income countries, had little to gain in security terms from such controls and potentially much to lose economically, its decision to introduce them seems puzzling. Drawing on a series of interviews with Malaysian officials and civil society, this article contributes to a growing literature on states’ nonproliferation policies by exploring that puzzle. The article considers the existing literature that purports to explain why states impose export controls and identifies three plausible factors behind Malaysia’s decision to do so: international norms, side payments, and political leadership. The article then details Kuala Lumpur’s development of export controls and assesses the role of each factor. Consistent with recent studies of the international nonproliferation order, the article concludes that Malaysia’s decision to introduce export controls was driven mainly by the promise of political and economic side payments from external actors, especially the United States, and by domestic changes in political leadership.

KEYWORDS:

• export controls
• Malaysia
• strategic trade control
• dual-use goods and technology

Acknowledgments

The author would like to thank Dr. Hoo Chiew Ping of the Universiti Kebangsaan Malaysia for her support, the interviewees for their contributions, and Daniel Horner and the two anonymous reviewers of the Nonproliferation Review for their suggestions. The author is grateful to the Asia New Zealand Foundation for a research grant to carry out this project.

Notes

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41 Kassenova, “1540 in Practice,” p. 10.

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47 International Institute for Strategic Studies, Nuclear Black Markets: Pakistan, AQ Khan and the Rise of Proliferation Networks: A Net Assessment (London: International Institute for Strategic Studies, 2007), p. 77.

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49 Raymond Bonner and Wayne Arnold, “‘Business as Usual’ at Plant that Tenet Says Was Shut,” New York Times, July 2, 2004, <https://www.nytimes.com/2004/02/07/world/business-as-usual-at-plant-that-tenet-says-was-shut.html>.

50 Alexander Montgomery, “Ringing in Proliferation: How to Dismantle an Atomic Bomb Network,” International Security, Vol. 30, No. 2 (2005), p. 153.

51 Raymond Bonner, “Malaysian Company Tied to Nuclear Trade Network,” New York Times, May 2, 2004, <https://www.nytimes.com/2004/02/05/world/malaysian-company-tied-to-nuclear-trade-network.html>.

52 Catherine Collins and Douglas Frantz, Fallout: The True Story of the CIA’s Secret War on Nuclear Trafficking (New York: Simon & Schuster, 2011), p. 262.

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54 Sydney Morning Herald, “Malaysia Will Not Act.”

55 Associated Press, “US Urges Malaysia to Tighten Controls to Curb Proliferation,” reprinted in Taipei Times, February 20, 2004, <http://www.taipeitimes.com/News/world/archives/2004/02/20/2003099442>.

56 Malaysian Royal Police Office, “Press Release by Inspector General of Police in Relation to Investigation on the Alleged Production of Components for Libya’s Uranium Enrichment Programme,” February 20, 2004, <https://www.iranwatch.org/library/government/malaysia/royal-police-office/press-release-inspector-general-police-relation-investigation-alleged-production-components-libya's>.

57 Associated Press, “US Urges Malaysia to Tighten Controls.”

58 Asian Export Control Observer, “Malaysia Not to Sign Additional NPT Protocols,” June 2004, p. 4.

59 Sheldon Simon, “A WMD Discovery in Malaysia and Counter-Terrorism Concerns in the Rest of Southeast Asia,” Comparative Connections, Vol. 6, No. 1 (2004), pp. 59–67.

60 Mohamed Kareem, former strategic trade controller, Malaysia, interview with author, Putrajaya, Malaysia, April 17, 2018; Jamal Ibrahim, director, Nuclear Power Programme Development, Prime Minister’s Department, Malaysia, interview with author, Putrajaya, Malaysia, April 21, 2018.

61 Nuclear Threat Initiative, “Malaysia Joins Container Security Initiative,” September 3, 2004, <https://www.nti.org/gsn/article/malaysia-joins-container-security-initiative/>; P.T. Bangsberg, “Malaysia Port Gets U.S. Customs Agents,” Journal of Commerce, August 18, 2004, <https://www.joc.com/maritime-news/malaysia-port-gets-us-customs-agents_20040818.html>.

62 William Case, “How’s My Driving? Abdullah’s First Year as Malaysian PM,” Pacific Review, Vol. 18, No. 2 (2005), pp. 137–57.

63 Case, “How’s My Driving?” p. 150.

64 Sydney Morning Herald, “Malaysia Questions Bush Allegations,” February 13, 2004, <https://www.smh.com.au/national/malaysia-questions-bush-allegations-20040213-gdicl0.html>.

65 The Star, “Probe Firm without Fear or Favour, PM Tells Police,” February 6, 2004, <https://www.thestar.com.my/news/nation/2004/02/06/probe-firm-without-fear-or-favour-pm-tells-police>.

66 Agence France-Presse, “US Shielding PM: Malaysian Party,” reprinted in Dawn, June 3, 2004, <https://www.dawn.com/news/352992/us-shielding-pm-malaysian-party>.

67 Ahmad Kamil Jaafar, Growing up with the Nation (London: Marshall Cavendish, 2013); Ogilvie-White, “Non-proliferation and Counter-Terrorism Cooperation in Southeast Asia.”

68 Report by Malaysia Prepared Pursuant to Operative Paragraph 4 of Security Council Resolution 1540 (2004), S/AC.44/2004/(02)/35, United Nations Security Council, 2010, <https://documents-dds-ny.un.org/doc/UNDOC/GEN/N04/594/24/PDF/N0459424.pdf?OpenElement>.

69 Peter Keong, Ministry of International Trade and Industry, interview with author, Putrajaya, Malaysia, April 18, 2018.

70 Kareem interview.

71 Nik Mahmod, International Islamic University Malaysia, interview with author, Kuala Lumpur, April 22, 2018.

72 Keong interview; Kareem interview.

73 Kareem interview.

74 Reuters, “UPDATE 1-Malaysia Scomi Names Managers; CEO in U.S. Probe,” April 17, 2009, <https://www.reuters.com/article/scomi/update-1-malaysia-scomi-names-managers-ceo-in-u-s-probe-idUSKLR21744520090417>.

75 Periasamy Gunasekaran, “Port Security in a Developing Country—Pre and Post 9/11 Terrorist Attacks: A Case Study on Port Klang in Malaysia,” PhD diss., University of Greenwich, 2012.

76 Kareem interview.

77 Keong interview.

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80 Sodhy, “Malaysia–US Relations,” p. 30.

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85 Sutter, “The Obama Administration and US Policy in Asia.”

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87 Razak, “U.S.–Malaysia Defense Cooperation.”

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89 David Pine, former New Zealand ambassador to Malaysia, interview with author, Christchurch, New Zealand, January 6, 2018.

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96 James Keith, “Potential and Relevance in Malaysia,” speech at Carnegie Endowment for International Peace, Washington, DC, February 27, 2009, quoted in Stephanie Lieggi and Richard Sabatini, “Malaysia’s Export Control Law: A Step Forward, but How Big,” Nuclear Threat Initiative, May 9, 2010, <https://www.nti.org/analysis/articles/malaysias-export-control-law/>.

97 Kareem, “Implementation and Enforcement of Strategic Trade Controls in Malaysia,” p. 108.

98 Kareem interview.

99 Kareem, “Implementation and Enforcement of Strategic Trade Controls in Malaysia,” p. 105.

100 Kareem interview.

101 Ronald McCoy, International Physicians for the Prevention of Nuclear War Malaysia, interview with author, Kuala Lumpur, April 19, 2018.

102 Gunasekaran, “Port Security in a Developing Country,” p. 195.

103 Keong interview.

104 Keong interview.

105 Keong interview.

106 US Department of State, “Remarks [by Secretary of State Hillary Clinton] with Malaysian Foreign Minister Anifah Aman,” Kuala Lumpur, November 2, 2010, <https://2009-2017.state.gov/secretary/20092013clinton/rm/2010/11/150321.htm>.

107 Lim Lee, “Obama Congratulates Najib on His Stance on Weapons of Mass Destruction,” The Star, April 13, 2010 <https://www.thestar.com.my/news/nation/2010/04/13/obama-congratulates-najib-on-his-stance-on-weapons-of-mass-destruction>; Borneo Post, “Malaysia and US Agree to Strengthen Nuke Treaty,” April 14, 2010, <https://www.theborneopost.com/2010/04/14/malaysia-and-us-agree-to-strengthen-nuke-treaty/>.

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109 Department of Statistics Malaysia, “Statistics of Foreign Direct Investment in Malaysia, 2020,” June 18, 2021, <https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=322&bul_id=WjJ6NU94Z3haUHEzcUxMaEdVbVVBQT09&menu_id=azJjRWpYL0VBYU90TVhpclByWjdMQT09>.

110 Lee, “Obama Congratulates Najib.”

111 Todd Perry, “Reducing Proliferation Risk through Export Control Outreach: Assistance Providers’ Use of Maturity Model-Based Approaches,” Strategic Trade Review, Vol. 5, No. 7 (2019), pp. 5–24.

112 Mohamad Mahathir, speech to International Nuclear Conference, Kuala Lumpur, October 15, 2002, <https://www.pmo.gov.my/ucapan/?m=p&p=mahathir&id=1183>.

113 US Government Accountability Office, Nonproliferation: US Efforts to Combat Nuclear Networks Need Better Data on Proliferation Risks and Program Results (Washington, DC, 2007), pp. 13-14, <https://www.gao.gov/assets/gao-08-21.pdf>.

114 Kareem interview.

115 Mark J. Valencia, “The Proliferation Security Initiative: Should Malaysia Join?” Maritime Studies, No. 142 (2005), pp. 14–16.

116 Rebecca Davis Gibbons, “American Hegemony and the Politics of the Nuclear Nonproliferation Regime,” PhD diss., Georgetown University, 2016.

117 Chafetz, “The Political Psychology of the Nuclear Nonproliferation Regime;” Solingen, Nuclear Logics.

118 Lawrence Scheinman, ed., Implementing Resolution 1540: The Role of Regional Organizations (New York: United Nations Institute for Disarmament Research, 2008), <https://unidir.org/sites/default/files/publication/pdfs//implementing-resolution-1540-the-role-of-regional-organizations-339.pdf>.

119 Ogilvie-White, “Non-proliferation and Counter-Terrorism Cooperation.”

Additional information

Notes on contributors

Paul Winter

Paul Winter holds a PhD in politics and a master’s degree in international studies from the University of Otago. In 2016 he conducted postgraduate research as a Fulbright Scholar at Georgetown University, and he is a recipient of a Freyberg Scholarship. His previous publications focused on international security, nuclear proliferation, and statistical modeling. He currently works for the New Zealand government.