People

Human trafficking is a continuing concern in Bhutan, which functions as both a source and destination country for labour and sex trafficking. Bhutanese nationals, as well as Nepali and Indian migrant workers, have been subjected to coercion and exploitation within the domestic market. Bhutanese women have also been trafficked to countries such as Iraq and Oman under deceptive employment arrangements, often after paying high recruitment fees. In addition, citizens have faced exploitative conditions in Japan and Malaysia through fraudulent labour schemes. The closure of drayangs (entertainment venues) has shifted trafficking patterns, prompting illicit recruitment agencies to move operations online. Documented cases of forced labour include domestic work and construction, particularly affecting those seeking employment abroad.

Human smuggling is not widespread in Bhutan, though some cross-border movement does occur. The porous Bhutan–India border and the relatively closed border with China allow for certain migratory patterns, such as the movement of Tibetan exiles. While the criminal market is closely linked to human trafficking, specific data on human smuggling in Bhutan and neighbouring countries is lacking. Limited documentation and border vulnerabilities create opportunities for smugglers to exploit gaps in oversight and facilitate the illicit movement of people under false pretences.

Extortion and protection racketeering are infrequent, with only a handful of reported incidents in recent years. Some actors in Bhutan’s transport and logistics sector have allegedly been subjected to unofficial ‘facilitation fees’ imposed by intermediaries along trade corridors between Bhutan, India and Bangladesh. While these reports suggest informal coercion, the extent of organized criminal involvement is unclear due to limited documentation and reliance on anecdotal evidence.

Trade

Arms trafficking is not prevalent in Bhutan, though its proximity to regions with active illicit arms markets poses potential risks. In the past, weapons linked to Nepalese Maoist insurgents were smuggled into Bhutan through India, and there have been occasional seizures of firearms and explosives near the Bhutan–India border, including rifles and grenades. Such incidents have declined in recent years. However, concerns remain about the potential for trafficking through Bhutan’s porous borders, particularly in areas where cross-border criminal networks operate.

The trade in counterfeit goods continues in Bhutan, involving both locally produced and imported items, particularly from India and China. Commonly counterfeited goods include pharmaceuticals, soft drinks, clothing, electronics and mountaineering equipment. Informal marketplaces and digital platforms appear to facilitate this trade, helping traffickers evade detection.

The illicit trade in excise goods, such as tobacco and alcohol, has fluctuated in recent years. A reintroduced tobacco ban in 2022 initially led to a surge in legal imports, suggesting a temporary dip in illicit activity. However, tobacco smuggling persists, driven by efforts to avoid high import taxes. Bhutanese liquor is also smuggled into India, though some operations have been disrupted by enforcement efforts along the border. In response, traffickers have increasingly turned to informal courier services and private vehicles to transport excise goods, complicating enforcement and regulatory oversight.

Environment

Flora-related crime remains a concern, with illegal logging and the unauthorized harvesting of non-timber forest products ongoing. Bhutanese and Indian criminal groups have been implicated, and there are indications that some state-affiliated actors may also be involved. Despite efforts to curb the illegal timber trade, cross-border trafficking, particularly into India, is a problem. The illegal collection of medicinal, aromatic and ornamental plants is also significant. High demand has led to over-exploitation, pushing many species towards extinction and placing them in endangered categories.

Fauna-related crime includes poaching and the illegal wildlife trade, with Bhutan acting as both a source and transit country. Endangered species such as tiger, elephant and pangolin are trafficked despite existing legal protections. There have also been reports of transboundary trafficking of wildlife parts, with organized criminal groups exploiting Bhutan’s remote terrain to smuggle contraband. Conservation efforts and stricter enforcement have contributed to an increase in the wild tiger population. However, Bhutan continues to be affected by pervasive wildlife crime, with sustained demand underpinning the trade.

Non-renewable resource crime, particularly gold smuggling, is also prevalent, with Bhutan serving as a transit point for shipments into India. This is partly due to disruptions along traditional smuggling routes through Myanmar. Smugglers have adapted their methods, concealing gold paste in clothing to evade detection. While increased security measures have led to multiple arrests, the country’s open border with India makes it vulnerable. There is also evidence that illicit traders use Bhutan’s border regions to move other valuable minerals, taking advantage of weak regulatory oversight.

Drugs

Cannabis is both cultivated and consumed in Bhutan, with plants growing in the wild in certain districts. Although a licensed cannabis farm was established in 2023, broader legalization is not expected soon. Bhutan also serves as a transit point in the regional cannabis trade, while cannabis resin products have increasingly appeared in illicit markets, suggesting the country’s role in the trade may be expanding.

While heroin use has been recorded in Bhutan, there have been no major seizures in recent years, and trade remains limited. Some reports indicate that raw opium is consumed domestically, but heroin trafficking appears minimal. Nonetheless, Bhutan’s geographic position between major narcotics-producing countries has raised concerns about its potential as a transit route for regional heroin flows.

The synthetic drug trade in Bhutan is also limited, though trafficking of pharmaceuticals and codeine-based cough syrups has been noted, particularly along the Bhutan–India border. Drug-related arrests have also increased, with young people the primary offenders. Recent trends suggest that traffickers may be shifting to alternative smuggling routes to evade law enforcement. While the broader Bay of Bengal region has seen an uptick in synthetic drug trafficking, Bhutan is not currently considered a significant destination, transit point or source country.

Cocaine does not appear to have a significant market in Bhutan. Some reports suggest that foreign nationals visiting the country have occasionally been found in possession of small quantities, but large-scale distribution is not evident. Cocaine use is mostly limited to affluent social circles and the tourism sector.

Cyber-dependent crimes

Cyber-dependent crime is on the rise in Bhutan, with ransomware and malware attacks, as well as cryptocurrency fraud, becoming more frequent, with a notable attack occurring in 2024. While individuals are the primary targets, public institutions have also been affected, with attackers deploying malware to infiltrate government-associated systems.

Financial Crimes

Financial crime is not uncommon, particularly within public services and the business sector. Common offences include embezzlement, abuse of function, and corruption, which remains a persistent challenge. Bhutan is also increasingly exposed to cyber-enabled scams targeting citizens via digital payment platforms and fraudulent online schemes. Additionally, the country has been identified as a transit point for counterfeit Indian rupees, with reports indicating cross-border movement via informal routes.

Criminal Actors

There is no evidence of mafia-style groups operating in Bhutan. Criminal networks, on the other hand, are active, particularly along the country’s borders, despite the overall low crime rate. These groups engage in human trafficking and smuggling, illegal logging, poaching and the illicit trade in tobacco and counterfeit goods. Their activities are concentrated in major cities and border areas, such as Paro and the capital Thimphu, and they typically operate with low levels of violence. The networks frequently cooperate with actors from neighbouring countries, including India, Pakistan, Nepal and Bangladesh.

There is limited evidence of organized criminal actors operating within Bhutan’s state institutions. However, concerns persist about corruption and illicit influence due to the country’s deeply entrenched power structures. Experts note that elite members of Bhutanese society often enjoy de facto protection from scrutiny and law enforcement.

Foreign actors, particularly from India and China, play a notable role in Bhutan’s illicit markets, especially in illegal logging, timber smuggling and wildlife trafficking. Indian mafia-style groups, in collaboration with local communities and corrupt law enforcement officials, are reportedly involved in large-scale logging operations, exploiting Bhutan’s extensive forest cover. While Indian and Nepali actors remain the most influential, there are growing concerns about the involvement of Chinese businesspeople and traders in illicit activities.

Bhutan’s private sector remains relatively small, with much of the economy dominated by state-owned enterprises. Nevertheless, criminal activity involving private-sector actors has been documented, particularly in the tourism and antiquities trade. Some businesses have been implicated in wildlife trafficking, using regulatory loopholes to facilitate the illicit trade in endangered species and cultural artefacts. Corruption in infrastructure projects, especially those linked to Bhutan’s hydropower exports, is also a concern, with reports suggesting that mismanagement and opaque financial practices may create opportunities for illicit gain.

Leadership and governance

Bhutan demonstrates relative political stability, although governance challenges persist. Democratic consolidation has progressed, with credible elections and efforts to strengthen institutions. However, concerns remain regarding media censorship, discrimination against minorities and restrictions on political participation. The return to power of the People's Democratic Party in 2024 brought renewed focus on economic development and reform, though nepotism, corruption and clientelism continue to hinder progress. While the government has expressed a commitment to good governance and the rule of law, local media frequently report on favouritism in public administration, undermining public confidence. In terms of cybersecurity infrastructure, Bhutan took important steps in early 2024 with the introduction of facial biometrics for authentication, which is being progressively integrated into government services and is expected to extend to sectors such as finance, education and healthcare.

Transparency and accountability measures exist in Bhutan, though their effectiveness varies. The Royal Audit Authority and the Public Accounts Committee play key roles in overseeing financial integrity, but tangible progress has been limited. Anti-corruption laws are in place, and proposed amendments to the Anti-Corruption Act signal official recognition of ongoing challenges. However, concerns persist over the handling of high-profile misconduct cases and perceptions of impunity among officials. Nepotism and clientelism continue to shape governance, heightening corruption risks across sectors. A legal framework to guarantee public access to state budget information has yet to be fully enacted. Limited investigative capacity and inconsistent enforcement further undermine institutional oversight, allowing misconduct to persist at various levels of government.

Bhutan actively engages in international cooperation to combat organized crime. The country participates in regional and multilateral initiatives such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, with a focus on counterterrorism and drug trafficking. In February 2023, Bhutan acceded to the United Nations Convention against Transnational Organized Crime and its Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children. Since then, Bhutan and the UN Office on Drugs and Crime (UNODC) have collaborated closely to strengthen multi-stakeholder efforts to combat organized crime through training programmes and policy dialogue on transnational crime. Bhutan also engages actively in the South Asian Association for Regional Cooperation (SAARC), contributing to regional peace and development by hosting SAARC meetings and supporting initiatives such as the SAARC Development Fund. However, cross-border enforcement efforts remain hampered by porous borders and limited surveillance capacity. Institutional mechanisms exist to align Bhutan’s policies with international standards, though implementation is often constrained by limited resources.

At the national level, Bhutan’s legal framework addresses a range of criminal activities, including human trafficking, drug offences and financial crime. Recent legislative amendments aim to strengthen protections against organized crime. For instance, lawmakers developed the National Cybersecurity Strategy (2024–2029) as a comprehensive framework to safeguard Bhutan’s cyberspace. The strategy outlines clear objectives and actionable measures to effectively address cyber threats and vulnerabilities. Nonetheless, gaps remain, particularly in relation to financial and environmental crimes.

Criminal justice and security

Bhutan’s judicial system operates independently but faces delays and inefficiencies, particularly in cases related to organized crime. Courts adjudicate matters involving trafficking, financial fraud and corruption, but limited resources hinder timely investigations and prosecutions. Legal protections for victims exist but are inconsistently applied, with procedural bottlenecks affecting the delivery of justice. The absence of specialized prosecutorial units for organized crime limits the government’s capacity to effectively address financial and cyber-related offences. Oversight of prison conditions remains restricted, as the government has denied NGOs access to detention facilities in recent years. Reports suggest that political detainees receive inadequate medical care and experience food shortages, raising concerns about conditions.

Law enforcement agencies in Bhutan actively combat organized crime despite resource constraints. The country’s law enforcement has a dedicated Anti-Money Laundering and Organized Crime Unit and frequently collaborates with the UNODC in responding to organized crime. However, reports of corruption among officials have raised concerns about accountability. Bhutanese police have also faced allegations of human rights violations, particularly in their treatment of certain ethnic groups, drawing scrutiny from human rights organizations.

Territorial integrity remains largely intact, with Bhutanese security forces, in cooperation with Indian authorities, monitoring border regions for illicit activity. Nonetheless, smuggling networks continue to exploit surveillance gaps, particularly along the Bhutan–India border. Land disputes and territorial encroachments involving neighbouring countries pose ongoing challenges. No progress has been reported in addressing alleged land grabs and encroachments by the Chinese government, including disputes over the Doklam Pass.

Economic and financial environment

Bhutan has taken steps to combat money laundering. Financial institutions have implemented anti-money laundering (AML) protocols, and regulatory frameworks have been updated to address evolving risks. While some progress has been made, challenges persist due to limited expertise in financial crime investigation and weak mechanisms for confiscating illicit proceeds. Bhutan participates in international AML initiatives, yet concerns remain over financial oversight, particularly in tracking informal transactions and high-risk sectors. The rise of cryptocurrency, along with growing reliance on digital platforms for managing tourism and natural resource revenue, further complicates oversight and highlights the need for stronger regulatory monitoring.

Bhutan’s economic regulatory environment supports trade and investment, but gaps in oversight continue to enable illicit financial activity. Regulatory agencies monitor compliance, though enforcement is weakened by corruption and clientelism. The expansion of Bhutan’s cryptocurrency sector has introduced additional risks, particularly its potential misuse for illicit financial flows. While government-backed crypto mining has positioned Bhutan as an emerging player in digital finance, regulatory safeguards must be strengthened to prevent crypto-related financial crime.

Civil society and social protection

Victim and witness support services in Bhutan have shown signs of slight improvement, with government and NGO initiatives assisting trafficking survivors and other vulnerable groups. The National Commission for Women and Children plays a key role in supporting victims of human trafficking, facilitating repatriation and monitoring well-being. However, services remain limited, particularly for people who use drugs. Minimal effort has been directed towards providing support for this group.

Prevention efforts have expanded, focusing on human trafficking, cybercrime and the trade in counterfeit goods. Bhutan participates in BIMSTEC programmes to combat organized crime and has launched awareness campaigns targeting at-risk populations. The closure of drayangs – entertainment venues associated with exploitative labour practices – reflects a broader efforts to curb trafficking. The government is also increasing efforts to address rising drug-related issues, particularly among youth. Key initiatives include education-based prevention, improved rehabilitation services, and expanding treatment facilities. However, demand-side factors have been insufficiently addressed, and prevention measures continue to focus on narrow demographic groups, overlooking broader systemic vulnerabilities.

The establishment of NGOs in Bhutan is relatively recent, with foreign organizations only recently permitted to operate. The domestic NGO sector remains small and plays a limited role in shaping policy, particularly on environmental protection and issues affecting women and children. This is due to restrictions on political engagement. Civil society organizations addressing concerns related to ethnic Nepalis are not permitted to operate. Bhutan’s media landscape also faces significant challenges, including limited independence and strong state influence. Economic and geopolitical pressures further constrain press freedom. Security laws criminalize activities perceived as fostering ‘misunderstanding or hostility between the government and the people’, which restricts journalistic freedom. State-imposed limitations on public discourse, particularly regarding the monarchy and its policies, and political and regional issues, lead to censorship and the suppression of dissenting views.