Treasury is increasing its focus on financing for militant groups routed through Southeast Asia, including through fundraising efforts and illicit sales of Iranian oil.
The official told reporters the United States was trying to prevent Malaysia from becoming a jurisdiction where the Palestinian militant group Hamas could both fundraise and then move money.
The official said the United States saw Iranian oil being transferred near Singapore and throughout the region.
US trying to prevent Malaysia to be jurisdiction where Hamas can move money
Nelson told reporters the United States was trying to prevent Malaysia from becoming a jurisdiction where the Palestinian terrorist group Hamas could both fundraise and then move money.
He said the United States saw Iranian oil being transferred near Singapore and throughout the region.
Last December, Treasury imposed sanctions on four Malaysia-based companies it accused of being fronts supporting Iran's production of drones.
The official also said sanctions and export controls against Russia were seeing progress, saying the Russian oil price cap was reducing Moscow's capacity to profit from oil sales while preserving the stability of global energy markets.
Singapore is a major shipping hub. Insurance and other maritime service providers operating in Singapore have warned of evasion of the price cap on Russian oil, complaining that it is difficult to confirm that paperwork promising oil is bought at or below the $60 cap is accurate.