To Know the Road Ahead Ask Those Coming Back - The Asian Crime Century in review at 100
The Asian Crime Century briefing 100
To mark the 100th Asian Crime Century briefing, here are observations of the key aspects of recent organised crime expansion based on the analysis of two years of writing from the Asian Crime Century. In 2025, the Asian Crime Century will discuss what is coming in the future. Thank you for reading the Asian Crime Century.
Online fraud is an epidemic in Asia that has spread globally
The online fraud epidemic in Asia has developed in the past four years with huge numbers of reports of victims of online or telephone fraud, victims trafficked to South East Asian countries to work in fraud call centres, and arrests of gangs across the region. Cambodia, Myanmar and the Philippines have been operations centres for the frauds, as well as the destinations for Asians lured by advertising for high paying overseas jobs but then trafficked into human slavery. The United Nations estimated that over 100,000 people had been trafficked into online fraud centres in Cambodia and Myanmar.
Myanmar remains a key hub for online fraud centres operated by organised crime groups. In Karen state warlord Saw Chit Thu, the commander of the Karen Border Guard Force that operated under the auspices of the Myanmar army, has facilitated Chinese criminals to base fraud centres in the region. These Chinese organised crime groups continue to operate crime factories using forced labour and mass human trafficking.
The lack of awareness of the risk amongst poorly educated young Asians is a key reason for the continued fraud epidemic. The frauds initially targeted victims in Asia, but they have become so successful as an operating model for criminal groups that they have spread their focus to other parts of the world. Law enforcement agencies are struggling to combat the huge problem, because it is transnational and the criminal groups involved are highly mobile as they utilise IT systems that can be based anywhere.
Online fraud will be turbocharged even further with the increased utilisation of technologies such as AI and deepfakes
As new technologies are increasingly used across Asia there is growing use of some to conduct fraud and extortion. The increasing use of generative AI to create realistic digital images such as ‘deepfakes’, as well as expanding unregulated cryptocurrencies for illicit payments, have the potential to create a tsunami of new age fraud and extortion driven by new technologies.
The use of generative AI for fraud is not unique to Asia and it is growing around the world. But in Asia there is a transnational organised crime infrastructure that has generated billions of dollars in criminal proceeds in the past decade and has enabled the development of a resilient criminal infrastructure that national law enforcement agencies cannot defeat. This criminal infrastructure has been established in Cambodia, Myanmar, and the Philippines, and made use of banking facilities in financial centres such as Hong Kong and Singapore. Whilst there is growing enforcement action against parts of this transnational organised crime infrastructure, the massive proceeds of crime have already been diverted into other legitimate investments that can be used to mask new criminal ventures using new technologies such as AI.
Online illegal betting and gambling is a huge revenue stream for organised crime groups that is globalising groups to become multinational corporate crime businesses
Illegal betting in Asia has been a core business of transnational organised crime groups in the region for decades as the profit margin and relatively low operational risks involved in the business make this an attractive means of revenue generation for criminals. Local illegal betting operators expanded during the 1990s in parallel with the growth of the Internet, mobile telecommunications, and televised sports (especially football), with many of them progressing from being national criminal groups to be transnational groups. Changing patterns of national law enforcement, sometimes with an international impact, have forced the expanded transnational illegal betting operators to move their bases of operations to countries where laws are less enforced.
Increased wealth, access to the Internet, and interest in sports such as football have fuelled a parallel interest in betting on racing and other sports in huge population areas of Asia. As many countries in Asia have strict limitations on legal betting, there is a continually growing illegal betting market across the region. The illegal betting market has not only included the expanding national illegal bookmakers whose business grew to become international from the 1990s but also international operators, some linked to organised crime groups.
Key markets in Asia for illegal betting are China (where legal market limited to the Welfare and Sports Lotteries), including Hong Kong (which in itself has a significant illegal betting market of up to USD2 billion in turnover), Cambodia (where online sports betting is illegal), Indonesia and Malaysia (where in both countries gambling is illegal under Sharia Law), and Thailand (where only state lotteries and horse racing betting is legal). The illegal betting market dominates Asia, and provides a huge revenue stream for Asian organised crime groups in these countries as well as a channel for money laundering across the region. This situation looks certain to continue.
AML systems and global policies are a huge financial cost but have failed to effectively counter globalised money laundering but have instead had an adverse impact on ordinary customers (businesses and individuals)
Former Secretary General of INTERPOL Jurgen Stock has stated that around US$2 trillion to US$3 trillion of illicit proceeds of crime are channelled through the global financial system each year. Stock assessed that only 2 to 3% of criminal assets are traced and confiscated by law enforcement agencies, meaning that well over 95% of the proceeds of crime are retained by criminals. Laundering the proceeds of transnational organised crime is a business that is largely unencumbered by enforcement action by the authorities or action by banks and financial institutions.
The private sector is spending large amounts on financial crime compliance, but the impact on deterring or preventing money laundering is questionable. In 2021, Lexis Nexis assessed that the annual costs of financial crime compliance across all financial institutions amounted to almost US$214 billion. Around US$192 billions of this total was spent in Europe and the USA, illustrating the greater cost of financial crime compliance in Western countries, whilst in Asia the annualised cost of financial crime compliance was assessed to be only US$12 billion. Asia has half of the best performing banks, but only a tiny percentage of bank financial crime compliance costs.
There should be serious questions asked at the most senior levels of banking about why so much is being spent on financial crime compliance for so little impact based on the obvious expansion of transnational organised crime, particularly from Asia. Asia suffers from some of the fastest growing transnational organised crime problems, which are increasingly generating huge amounts of proceeds of crime that are laundered around the world, yet the impact of Anti-Money Laundering systems is negligible.
Chinese organised crime groups have internationalised after being displaced from the PRC and also attracted to new business opportunities on the Belt and Road Initiative that have facilitated Chinese businesspeople “going out” from China
In the first two decades of the 21st century, Chinese organised crime groups and some Triad societies started to expand more quickly to parts of South East Asia. The expansion of the Belt and Road Initiative has contributed to this growth, with Chinese business people going out to other parts of the world.
From 2001, when China joined the World Trade Organisation, Chinese companies and business people “Going out” was encouraged. This has included criminals seeking business opportunities. They have operated casinos, online betting and gambling, sexual services and online fraud from the Philippines, Cambodia, Laos, Vietnam, and Myanmar, largely to cater to Chinese nationals who were able to travel outside of their country and eager to spend money.
Myanmar became a key destination for Chinese organised crime groups to shift their operations. There are now huge “crime factories” in border areas where people are trafficked to work in slavery or bondage, industrial scale fraud is conducted, and online betting and gambling as well as sexual services. The wheel has turned again in 2024 as pressure from the Chinese authorities has displaced Chinese organised crime groups within Myanmar, but these groups are resilient and have learnt to be mobile and transnational with their operations.
Chinese organised crime groups have been leaders in the development of transnational financial crimes such as online fraud and online illegal betting / gambling, and consequently have emerged as money launderers supporting other national or ethnic criminal entities (such as Latin American drug cartels)
Money laundering around the world has surged because of the need to deal with the huge increase in proceeds of crime from Chinese and other organised crime groups. Chinese money laundering is now evident in most developed countries around the world. This expansion of Chinese money laundering is partly due to the growth of the ‘Belt and Road Initiative’ (BRI), the infrastructure and investment strategy launched in 2013. The international business connectivity facilitated by the BRI has also fuelled international organised crime connectivity.
The BRI has facilitated “Trade-based money laundering” (TBML), which involves disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimize their illicit origins. An increase in trade means consequent growth in TBML activities including opportunities for newer and more innovative black-market exchange schemes to launder proceeds from drug trafficking in the European Union.
The BRI has boosted the long existing trade in counterfeit and illicit products from China and enabled the established Chinese criminal gangs active in those businesses to introduce the additional business line of underground banking and money laundering. This growing international underground banking system is part of informal payment systems amongst Chinese communities often referred to by the Chinese term ‘fei qian’ or ‘fei chien’, meaning flying money, which relies on a trusted network of transfer agents. The network of Chinese money agents has grown in the past several decades as restrictions on the movement of money out of China has led to a demand from wealthy Chinese for informal methods.
There is no natural national leader to coordinate international collaboration to counter transnational organised crime in Asia.
The growth of transnational organised crime in Asia, and also of Asian criminal groups expanding outside of the region, has challenged law enforcement agencies that are naturally focussed on national crimes and problems. There is no law enforcement agency in Asia that currently has the capacity, international outlook, and political neutrality to project a leadership role in combatting transnational organised crime in the region.
The authorities in China are not trusted because of their international pursuit of political dissidents as well as their loyalty to national ideology above the rule of law. Taiwan has law enforcement agencies with great insight into Chinese organised crime and triads (Chinese secret societies), but is excluded from membership of INTERPOL and other collaborative international organisations. Other major economic powers in Asia, such as Japan and Korea lack the political capital to take a leadership role. Australia has highly competent law enforcement agencies with long international experience, but they are relatively small and the country is distant from mainland Asia. Singapore is a candidate that can bridge the divide between Chinese and Western law enforcement agencies as well as deal collaboratively with Asian agencies, but is a small state with a relatively small police force.
A new collaborative law enforcement platform involving multiple Asian nations is urgently required to provide a more cohesive response to growing transnational Asian organised crime. 2025 is the year to establish such a platform and a leader is urgently needed.
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The next Asian Crime Century briefing will be in January 2025.