The report “Transnational Crime in Southeast Asia: A Growing Threat to Global Peace and Security” analyses the growing threat posed by transnational organised crime in Southeast Asia, with a particular focus on China’s role and impact on the region.
Overview of the situation in Southeast Asia
The report highlights how criminal networks operate in Southeast Asia, particularly using so-called scam compounds – large-scale fraud centers based on forced labor. These networks exploit technological advances and regional weaknesses to circumvent laws and expand their activities. Countries such as Myanmar, Cambodia and Laos are at the center of these criminal activities, which focus primarily on online fraud and illegal gambling.
Pig-Butchering
Pig butchering is a fraudulent method that first emerged in China in 2018 and gained significant traction during the COVID-19 pandemic. Originally, these scams primarily targeted Chinese citizens who were lured into fake cryptocurrency investment opportunities. The concept is based on building victims’ trust over time – often in the form of a romantic or friendly relationship – and then luring them into fraudulent platforms through supposedly safe investments. The scammers manipulate victims into putting more and more money into the “investments” until their financial resources are completely exhausted. The perpetrators, who are often forced laborers held in captivity, work in large scam centers in countries such as Myanmar, Cambodia and Laos, which are beyond the reach of Chinese law enforcement.
Money laundering
Criminal networks use modern technologies such as social media, artificial intelligence, cryptocurrencies and blockchain to lure potential victims, handle the financial aspects of the scams and launder the proceeds of their crimes. The use of cryptocurrencies is a central part of these operations as it allows the scammers to transfer victims’ funds quickly and anonymously. Scam victims are tricked into converting their funds into cryptocurrencies such as Tether and transferring them to fraudulent platforms controlled by the perpetrators. By using complex blockchain technologies and compromised crypto wallets, the money is obscured and integrated into the formal economy. These techniques make it much more difficult for law enforcement to identify and stop the scammers as the transactions are often conducted in regions that are difficult to access legally.
She Zhijiang
She Zhijiang was originally a businessman closely linked to Chinese state and quasi-state institutions who spearheaded the major “Yatai New City” project along the Thai-Myanmar border. Officially marketed as part of the Belt and Road Initiative (BRI), the project later turned out to be a gigantic platform for illegal gambling and online fraud. She, who had already been wanted by Chinese authorities since 2014 after generating millions of dollars from illegal financial dealings, used his connections and influence to gain protection and support for his criminal activities. After the project was briefly halted following a change of government in Myanmar, it was resumed after the 2021 military coup and quickly became one of the largest centers for online fraud in Southeast Asia. Despite his arrest in Thailand, She remains a prominent player in these networks, and his connections to the highest circles in China and Southeast Asia illustrate the interrelationships between crime and state actors.
Zhao Wei
Zhao Wei is the founder of the Golden Triangle Special Economic Zone (GTSEZ) in Laos, a notorious hub for transnational crime that includes illegal gambling, drug trafficking, and human trafficking. Strategically located on the border with Myanmar and Thailand, the GTSEZ takes advantage of the region’s lax legal regulations to serve as a hub for various illicit activities. Zhao Wei, who has close ties to the Chinese government and local elites in Laos, has effectively built the zone as a quasi-autonomous area where state authorities have little influence and the zone’s laws are dictated by criminal networks. Despite international sanctions and pressure from human rights groups, the GTSEZ remains a thriving center of criminal activity, posing a significant threat to regional stability.
A Cook-Koi
Wan Kuok-Koi, also known as “Broken Tooth”, is a well-known Macau crime boss and leader of the Hongmen Association, an organization that originally began as a secret society and has evolved into a transnational criminal network. The Hongmen Association is known for its criminal activities ranging from illegal gambling to drug and human trafficking to money laundering. Wan Kuok-Koi has managed to forge close ties with the Chinese Communist Party, giving the organization additional protection and influence. The Hongmen Association has expanded its activities throughout Southeast Asia, using its connection to the Chinese government to promote and protect its illegal businesses. This collaboration with state entities makes the organization a particularly dangerous threat to regional security and underscores the challenges posed by the intertwining of state and criminal interests.
The role of China
China plays a central role in these criminal networks. On the one hand, many of the criminal activities are of Chinese origin and aimed at the Chinese market, and on the other hand, the criminal groups often operate with links to Chinese nationals or institutions. China’s strict laws against gambling have led to these activities being relocated to neighboring countries where they can continue under less strict control.
The Chinese approach is ambivalent: on the one hand, the Chinese government tries to prevent criminal activities that affect Chinese citizens, but on the other hand, there are cases in which state actors benefit from the activities or at least tolerate them, as in some cases they are linked to China’s economic initiatives such as the Belt and Road Initiative.
Impact on the stability of the Asian region
The report examines the impact of transnational crime on the stability of the Asian region and describes how these activities severely undermine the political and economic fabric.
The criminal networks, which mainly originate from China, have become deeply rooted in Southeast Asia and contribute significantly to the normalization of criminal activities in the region. These groups benefit from weak governance, corruption and inadequate legal certainty, which leads to the destabilization of the affected countries.
Myanmar in particular has been affected by an explosion in criminal activity, especially since the military coup, ranking the country as one of the most affected by organized crime in the Global Organized Crime Index. Similarly, Cambodia ranks near the bottom of the World Justice Project’s Rule of Law Index, indicating an extremely weak rule of law.
The proliferation of modern slavery, large-scale fraud, human trafficking and money laundering not only impacts the Asian region itself, but also poses a global threat. Criminal networks exploit weaknesses in governance to gain power over local elites and undermine state authorities. This creates a vicious cycle in which the influence of organized crime continues to grow and the stability of the region is increasingly at risk.
Recommendations of the report
The report makes several recommendations to combat the growing threat posed by these criminal networks:
- International cooperation: A coordinated international effort is needed to destabilize and dismantle the criminal networks. In particular, cooperation between the United States and China is crucial, as both countries are heavily affected by these criminal activities.
- Strengthening regional capacities: The affected Southeast Asian countries should be strengthened in their law enforcement capacities. This includes improving both national legislation and international cooperation.
- Holistic approach: A comprehensive approach is recommended that addresses not only the symptoms but also the causes of criminal activity. This includes combating corruption, strengthening governance and promoting economic stability in the affected countries.
- Public relations and prevention: It is proposed that the United States and other affected countries launch extensive awareness campaigns to inform the public about the risks of online fraud and better protect potential victims.
- Technology and data analysis: The use of advanced technologies to track criminal activity and assist law enforcement is seen as crucial. Better data and effective information sharing could significantly improve the enforcement of existing laws.
The report stresses the urgency of considering transnational organised crime in Southeast Asia not only as a regional problem but as a global threat to peace and security that requires a coordinated international response.
Latest articles by lawyer Jens Ferner (specialist lawyer for IT & criminal law) (Show all) Tags: order processing, threat, fraud, Bitcoin Cash, Blockchain, Chainlink, China, Dash, Ethereum, gambling, cryptocurrency, Litecoin, Monero, organized crime, Ripple, Tether, Zcash
