People

Human trafficking is a serious problem in Myanmar, with victims being trafficked to countries such as Thailand, Malaysia and Singapore, as well as other regions throughout East Asia, the Middle East and North America. The COVID-19 outbreak and the February 2021 coup have plunged the country into a deep political, socio-economic and humanitarian crisis, resulting in many people seeking work abroad. However, these individuals often face tough labour conditions and exploitation by traffickers and employers. Myanmar has a long history of exploitation and debt-bondage, with some justifying these as essential socio-economic practices predating the colonial era. Human trafficking networks target minority groups, such as the Rohingya people of the Rakhine state, most aggressively. Family-based criminal networks play a particularly strong role in the human trafficking market, but fake recruitment agencies and criminal gangs are also actively involved. Corruption also contributes to the human trafficking market, with reports of government officials being complicit in sexual exploitation and forced labour activities.

Myanmar is also a major source country for human smuggling operations in South East Asia and the Greater Mekong Subregion. The 2021 coup and subsequent military attacks have resulted in new migration patterns, displacing thousands of people and creating a resurgence in the market for smuggled individuals, with these people being at risk of human rights violations as they are trafficked across borders into Thailand or India. Ethnic armed organizations (EAOs) play a key role in providing these services, with allegations that people smuggling networks have been assisted by senior officials in Thailand. Tens of thousands of people who opposed the change in government are also under threat, leading to a further increase in people smuggling across these borders.

Reports from businesses in Shan state indicate that paying protection fees to multiple EAOs is common. Such incidents have been increasing following the coup, with payments demanded for passage of goods and people.

Trade

Myanmar serves as both a source and destination for arms trafficking. Since the 2021 coup, the situation has worsened, with both the supply and demand for arms increasing among new and existing groups opposing the military government. Several larger armed groups are capable of producing weapons, which they have used for their own troops as well as supplying other groups opposed to the military government. Local groups, largely made up of young people, have started producing their own small arms, including guns, landmines, and small bombs and mortars. In response, Thai authorities have increased border vigilance to prevent arms dealers from smuggling military-grade weapons from Thailand to Myanmar. Thai police have also reported Chinese-made weapons believed to be intended for Myanmar. The tri-border area between Bangladesh, India’s Mizoram, and northern Rahkine is one of the primary crossroads for the proliferation of arms.

Counterfeit goods are significant in Myanmar. The former government was working to improve its intellectual property rights protection laws to attract investment, but the military coup and international isolation impeded these efforts. Counterfeiting levels are assumed to have returned to where they were previously. Myanmar is also a destination for counterfeit goods from India, including fake COVID-19 vaccines that have had harmful effects on community health. Counterfeit cigarettes and tobacco products produced in northern Myanmar are sold across borders into China, Thailand and other countries in the region.

The illicit trade of excise goods, particularly tobacco, continues to thrive, with Myanmar both a source and transit country for smuggled tobacco. Tamu, a significant transit hub, has become a base for top smuggling syndicates responsible for the transport of branded cigarettes. Tobacco smuggling is a profitable commodity due to high local demand, low production costs, high cigarette taxes and lower associated risks when compared to smuggling drugs and counterfeit currency. Investigative journalists have reported alcohol smuggling activity into Myanmar from Thailand facilitated by the armed forces. The military government is also understood to be responsible for the worsening situation in the country, which has seen an increase in smuggling activities following the reintroduction of trade restrictions for many goods.

Environment

Myanmar, which boasts one of the largest forested areas in South East Asia, is facing an unprecedented level of deforestation. Its illicit teak market is among the top ten in the world, with the situation relating to this illicit trade only having worsened since the military coup. Environmental activists have reported seeing a growing number of timber-laden trucks passing through Hkamti, a highly forested area in the north-west between India's border and Kachin State, en route to Shan State in the north. This region serves as a transit hub for the timber trade, with Nongdao and Ruili in China’s Yunnan Province as final destinations. China and India are the biggest importers of Myanmar’s wood, accounting for almost half of the country’s timber trade. The entity regulating all of Myanmar’s harvesting and sales of wood has been sanctioned by the US and EU. The main actors driving this market are Myanmar’s military, local businesspeople, EAOs and militias, as well as actors based in China.

Myanmar’s location in the Golden Triangle region has made it a key source and transit country for South East Asia’s wildlife trade, with the Mong La market being a hub for the pangolin trade and tiger poaching. Myanmar also struggles with irregular, illegal and unreported fishing. Wildlife markets are primarily concentrated around the Myanmar-Thailand and Myanmar-China borders, with illegal activities often conducted in the open. The most traded items are live animals, including civet and pangolin, with sales of live mammals and their body parts seeing the greatest growth. In addition, anecdotal reports suggest that wildlife poaching has increased in rural areas as traditional livelihoods are impacted by the ongoing conflict. Despite the ban on social media by the military authorities, wildlife traders are reported to have largely circumvented it through virtual private networks, with many transactions occurring over the internet.

Myanmar is a major source country for mineral resources and precious stones. The jade and gemstone sector is reported to be one of the military’s most important sources of funding. This is also the case for paramilitary groups. The untraceable nature of jade and its subjective value makes it an ideal vehicle for off-book military funding and patronage politics. This is a worrying trend since most of the world’s rubies and jade come from Myanmar, with much of the latter smuggled to China. Reports indicate a surge in illegal rare earth mining following the 2021 coup, suggesting unscrupulous operators are exploiting the unrest and lack of international oversight as an opportunity for resource exploitation. Other concerns include increases in gemstone mining and illicit gold mining, which have led to river erosion and the destruction of farmland.

Drugs

Myanmar is a major player in the global drug trade. It is the world’s second-largest producer of opium, accounting for a quarter of the global supply, and the largest producer of heroin in the region. The opium trade is concentrated in the regions along the Myanmar-China and Myanmar-Thailand borders. These areas, characterized by a weak rule of law, poverty, food insecurity and conflict, create an environment that enables the drugs trade to flourish. The socio-economic crisis brought on by the COVID-19 pandemic has only exacerbated the situation, leading to an increase in opium cultivation, particularly in the Shan state. Opium and heroin production generate substantial profits for Myanmar.

While cocaine is limited in availability due to the economic conditions within the country, it arrives in small quantities on international flights transiting through the Middle East and South East Asian air hubs. The domestic cannabis market is moderate, with supply coming from India and Thailand in small shipments, and profits are primarily accrued to domestic actors driven by domestic demand. By contrast, Myanmar is a major source country and global epicentre for synthetic drugs, particularly methamphetamine and crystal methamphetamine, with much of it produced for export. Since the 2021 coup, there has been a surge in the drug from Myanmar’s laboratories, with organized crime thriving in this area given the instability across the country. The lack of law enforcement and the complicity of the military government with criminal activities has led to a flood of narcotics into Myanmar’s neighbouring countries. This oversupply has pushed drug prices down. Thailand, the main route for Myanmar’s methamphetamine to the Asia-Pacific region, has tightened security along its border, leading to trafficking shifting eastward, with drugs now moved through Laos.

Cyber Crimes

Since early 2021, Myanmar has experienced various cybercrimes, including hacking, distributed denial-of-service and malware attacks, allegedly used for political purposes following protests in the country against the military coup. Several government agencies and news outlets have been targeted.

Financial Crimes

Financial crimes in Myanmar, particularly illegal gambling and online scams, are linked to human trafficking, with domestic gangs, foreign actors and state-embedded actors all involved in these illicit activities. Major hubs for these criminal markets include the Shwe Kokko new city project and the Kokang region. The proliferation of online scams in Shwe Kokko is facilitated by the convergence of interests between insurgent groups controlling the area and the Myanmar military. Meanwhile, the economy of the Kokang region depends heavily on illegal gambling, largely targeted at Chinese nationals. Despite increased crackdowns by Chinese law enforcement, casino operations in the area continue to grow. Myanmar is also a key node in the global financial crime network, with completely unregulated fintech being used to facilitate money transfers and the exchange of fiat currencies for cryptocurrency. Additionally, illegal SIM card distributors in Thailand are part of a vast and complex network responsible for call centre scams that reach various countries in the region, including Myanmar. Criminals often pose as state officials representing the police so as to convince victims to pay them fees and provide their national ID card and bank account details. Some of the gangs behind these scams are led by Chinese and Taiwanese nationals collaborating with Thai citizens.

Criminal Actors

State-embedded actors are the primary criminal actors in Myanmar, with the Tatmadaw (the military government) becoming increasingly reliant on illicit economies to finance its operations following the coup. To control the territory and the illicit economies generated by the exploitation of natural resources, the army has allied with organized militias and mafia groups, which provide financial support through illicit activities. In exchange for their aid, the leaders of these groups are given free rein to conduct a range of illicit business activities, as well as special access to the military-controlled economy, enabling them to establish corporate conglomerates across Myanmar. Currently, the Tatmadaw faces armed resistance from loosely organized local defence groups, urban resistance and some EAOs. One-third of Myanmar’s territory, mostly border regions, is controlled by EAOs, which are heavily involved in drug markets, arms trafficking and the illicit jade trade. These groups are also known to engage in extortion along smuggling routes, or in their controlled territories, and some are involved in kidnapping activities.

Among foreign actors, Chinese groups heavily control and influence the illicit trades in Myanmar, collaborating with local criminals. They are involved in the opium, synthetic drug, jade, wildlife and timber trades, as well as arms trafficking and marriage trafficking operations. Chinese firms are reported to partner with armed groups in illicit activities. These firms are burgeoning in ‘special economic zones’ owned and operated by Chinese business networks, and engage in gambling, money laundering, cryptocurrency crimes and criminal networks. These firms claim to be associated with China’s Belt and Road Initiative and flaunt connections with key Chinese government agencies, despite having links to criminal networks or actors involved in illicit activities.

In relation to criminal networks, Myanmar has a long history of armed rebel groups, government-backed militias and small insurgent groups involved in various illicit business activities. These groups have become dominant players in these activities and have attracted investment from foreign criminal groups. Grassroots civil defence forces have emerged throughout the country to oppose the military government, many of which are not affiliated with the National Unity Government (NUG) or the People’s Defence Force (PDF), and use their knowledge of the geographic terrain to stretch the Tatmadaw’s resources.

The Tatmadaw maintains a complex web of business interests, generating profits and laundering its illicit money through companies allegedly owned by senior military leaders. Militia allies are rewarded with the right to develop what are largely criminal business empires, such as in the illicit online gambling market. Chinese actors allied with military elites also benefit from the country receiving licenses to develop projects in extractive industries. Business associations have been established to build influence and corrupt elites. Criminal actors have invested significantly in real estate, particularly in the main cities of Yangon and Mandalay, also setting up companies involved in whatever businesses they can obtain licenses for. People lured by false promises of good salaries are forced to work as scammers, and those who refuse are blackmailed, tortured or forced to pay large sums of money as compensation.

Leadership and governance

The conflict in Myanmar has been classified as an intrastate armed conflict, with no clear resolution in sight. The diversity of actors and EAOs involved in the conflict makes the situation extremely complex. The February 2021 military coup has led to significant civil unrest, with protests and resistance movements arising throughout the country. Among these is the PDF, a resistance army that has gained support from both civil society and ethnic minority groups. While some EAOs have used the situation to gain greater autonomy over their own administration, others are simply protecting their ethnic kin from Tatmadaw attacks. The Tatmadaw’s increasingly aggressive strategy has resulted in the incineration of villages and the bombing of state capitals, forcing hundreds of thousands to flee.

These dynamics have made Myanmar one of the most corrupt countries in the world. In fact, the military government has controlled a large portion of the economy for a considerable period, directing contracts to private sector companies owned or directed by officials and their spouses. The country’s limited transparency mechanisms have been dismantled under the military government, whose political leadership has no legitimacy for the majority of the population. Its style of governance is described as ad hoc, erratic and predominantly based on security concerns. Most of its policies are believed to have further aggravated the socio-economic and humanitarian crisis the country has been facing since the coup.

The international community, including the US, UK, Australia, Canada and the EU have imposed various sanctions against Myanmar due to institutional corruption, human rights abuses and the suppression of pro-democratic movements following the coup in 2021, including arms and trade embargoes, asset freezes, travel bans and investment restrictions. Despite ratifying all relevant international treaties, Myanmar is becoming more isolated and reliant on illicit economies due to international sanctions. China has blocked UN efforts to address the crisis, while Russia has become a key security partner to the military government.

After the 2021 military coup, lawlessness has emerged in Myanmar’s communities as the army orders the police to take repressive actions, negating their law enforcement role, and as local administrative and service infrastructure deteriorates under attack by warring forces.

Criminal justice and security

The military government has taken control of the judicial system since February 2021, leading to the removal of existing safeguards against arbitrary arrest and detention. Martial law has been declared in many townships, allowing military tribunals to impose death sentences on civilians, and resulting in a dramatic rise in political prisoners, including human rights activists. The increase in political prisoners has contributed to overcrowding in prisons, with inmates subjected to inhumane conditions, including torture and poor hygiene, and deprived of medical treatment.

There are high levels of violence between the Tatmadaw forces and anti-military protesters. Military attacks on peaceful protesters have taken place across the country, leading to civilian youth joining armed PDF, with these carrying out guerrilla attacks against military targets. Furthermore, there is growing evidence of the military engaging in crimes against humanity. Hundreds of thousands of people in ethnic minority areas have been forced to flee their homes, and many have been killed, including children. Myanmar is also accused of committing genocide against the Rohingya people.

In September 2021, the NUG declared a people’s war against the military and began efforts to coordinate the shadow government, the PDF and some EAOs. The EAOs are gaining territory, and the PDF continues to expand in size and capability, inflicting significant damage to military forces and local administrations. However, the power gap between the resistance and the military remains significant, with the latter continuing to hold the population centres and attempting to control key areas of natural resources exploitation in order to generate income and run its illegal activities freely.

Economic and financial environment

Myanmar is assessed to have one of the highest risks of money laundering and terrorist financing in the world due to the influence of the military government in illicit commodities. The country has been blacklisted by the Financial Action Task Force for money laundering as it failed to improve its regulatory framework and enforcement. The situation has led the US and EU to impose sanctions on Myanmar, including an embargo on arms, export restrictions on equipment for monitoring communication which might be used for internal repression, an export ban on dual use goods for use by the military and border guard police and a prohibition on military training and cooperation with the Tatmadaw. As a result, US financial institutions can only provide correspondence services to Myanmar banks.

The economic downturn has had a devastating effect on the population, with millions losing their jobs and livelihoods. The price of essential food products has risen, the national currency has plummeted, and public services and the banking system have collapsed. The health and education systems are also in disarray, with many schools closed or with few teachers and students. The economic crisis is projected to leave nearly half of Myanmar’s population in poverty, reversing the country’s progress from 2005 to 2017. Moreover, increasing economic sanctions from the West may force the military government to rely heavily on underground cash flows.

Civil society and social protection

Since the coup, there has been a surge in violence against civilians, especially minority groups. The military government has abolished existing safeguards against arbitrary arrest and detention, resulting in a lack of accountability for offenders. The government’s inability to protect victims, carry out investigations and punish offenders is well documented. Women face employment discrimination, with no explicit legal protections. The LGBTQ+ community is also marginalized, with same-sex sexual activity being criminalized, and individuals facing harassment, extortion, and physical and sexual abuse. The ethnic Bamar Buddhist majority retains a privileged position, while ethnic minority groups such as the Shan, Mon, Chin, Karen and Kachin, as well as non-Rohingya Muslims, face societal discrimination. The deteriorating human rights situation has created a hostile environment in the country, leading to a lack of support for victims and witnesses.

To fill the void left by the government’s service-delivery role in separatist territories, Myanmar’s civil society sector has focused on crime prevention and the protection of victims and witnesses. However, the political crisis severely restricted internet access and press freedom, with licenses revoked for several independent media organizations, and the military using surveillance technology to monitor protesters. Draconian new laws have been introduced to jail and prosecute former senior government officials and punish political protesters, striking civil servants and civil society activists. Ethnic activists and faith leaders, particularly in Chin, Kachin, Karen, Karenni, Mon and northern Shan states, have also been targeted. The military also amended sections of the criminal code and the Electronic Transactions Law to criminalize statements against the military government, resulting in the arrest and forced exile of numerous journalists. The majority of free media outlets have been banned. Political activity on university campuses is constrained and universities lack autonomy. Student unions, historically crucial advocates for human rights, are viewed with suspicion by authorities, and universities have been stormed, with staff suspended or coerced into declaring allegiance to the ruling military government. NGOs have effectively shut down or disbanded, and activists face arrest and prosecution, with family members arrested as a pressure tactic.

People

Russia continues to be a significant source, destination, and transit country for human trafficking. The trafficking of Russian women and children for the purposes of sexual exploitation in Europe, Asia, and North America continues to be extremely prevalent. The internal trafficking of victims from Russia and neighbouring countries also takes place, for the purposes of forced labour, sexual exploitation, and forced begging. Criminal organizations as well as private sector actors are involved in human trafficking, and state-embedded actors are also complicit. Criminal actors commonly use deception and debt bondage to trap trafficking victims. The exploitation of vulnerable communities, such as homeless individuals and foreign nationals, continues to occur. Children transferred from occupied areas of Ukraine to Russia are also at risk of human trafficking.

Russia is also a key hub for human smuggling. Irregular migrants are smuggled from Iran through Azerbaijan and Georgia into Russia. Non-regional human smuggling of certain ethnic communities, such as Afghans, Chinese, Koreans, and Vietnamese, also takes place. It is also possible that Russia serves as a source country for irregular migrants being smuggled to the Baltic countries, Belarus, and Ukraine. There is evidence that Russia’s invasion of Ukraine prompted thousands of Russians to flee the country in fear of political persecution as well as to avoid being drafted into the military. Many are seeking refuge in the US, facilitated by Russian and Uzbek-speaking smuggling networks operating in Türkiye, Central America, and Mexico. Russia also plays a significant role as a transit country. The intensity of crimes associated with the smuggling market varies, but smuggled people are routinely subject to abuse, intimidation, coercion, and physical violence. Russians tend to be the leading regional facilitators of human smuggling into Europe, followed by Belarusians and Ukrainians.

Extortion in Russia is well entrenched and intrinsically connected to the operations of local criminal groups. Extortion and the payment of protection money are also common features of doing business in the country. Racketeering is also prevalent, carried out not only by criminal groups but also by actors operating in the legal economy.

Trade

Russia is not only the world’s second largest licit arms exporter, supplying major powers such as India and China, it is also host to a rampant and expanding illegal arms market. The armed conflict in Ukraine created new flows of arms trafficking in and out of the country, with a significant percentage of the total number of weapons exported from Russia emanating from black and grey markets. There are also concerns over illegal arms entering mainland Russia through its occupied regions, which has resulted in a substantial increase in crime committed with firearms in recent years. Although a lack of data makes is difficult to assess the situation in Donetsk and Luhansk, it is reported that there is a proliferation of illicit arms in these areas. Following the invasion of Ukraine and the imposition of international sanctions, Russia has been reportedly receiving munitions and military hardware sourced from Iraq with the help of Iranian weapons smuggling networks. In general terms, developments in the war in Ukraine are expected to have huge implications for the direction and volume of international arms trafficking.

The trade in counterfeit goods is widespread in Russia. An estimated 40% of all handbags, clothing, and accessories sold are thought to be counterfeit. Russia is not only a destination but also a source country for counterfeit goods sold worldwide. The control of this trade has become even more challenging with the rise in e-commerce. Moreover, because of the war in Ukraine and the consequent Western sanctions, the Russian state has authorized counterfeit Western goods in retaliation, enabling Russian companies to register trademarks confusingly similar to well-known international brands without legal consequence. The illicit trade in excise goods, the most common being alcohol and tobacco products, is also pervasive in the country, owing to high excise taxes, a lack of prosecution, as well as Western sanctions. The sale of contraband tobacco products and alcoholic beverages smuggled from countries in the Eurasian Economic Union is widespread, causing both health risks and extensive losses in tax revenue.

Environment

Russia has the largest area of forests and plantations in the world, and much of the country’s woodlands continue to be under threat from illegal deforestation and corruption. As a result, Russia is an important source country for the illegal timber trade in both Asia and Europe. Timber illegally logged in Russia is transported to China, from where it is sold to South East Asian countries. Organized crime groups, enabled by alliances with corrupt officials, are heavily involved in these activities, which continue to be highly profitable, as demand from China increased following the COVID-19 pandemic. Motorcycle gangs armed with axes and chainsaws are also complicit within the wider supply chain.

Russia also continues to be an important source, transit, and destination country in the illegal wildlife trade. While tigers, bears, wolves, and wildlife parts and products are systematically trafficked from Russia to China, other exotic species are also trafficked into Russia to supply a growing domestic demand. Poaching, as well as illegal, unreported and unregulated (IUU) fishing, is rampant across the Kamchatka, Far East, Dagestan, Volgograd, and Astrakhan regions, occurring on an industrial scale. This includes the IUU fishing of sturgeon carried out for the purpose of harvesting caviar. The trade of animals such as snakes and chameleons, illegally bred in nurseries in Russia, is growing, with local demand driving the market. Organized crime groups have established extensive networks and distribution channels for the illegal wildlife market and have forged ties with corrupt elements within environmental and law enforcement agencies. Reports indicate that rural residents, who are often amateur hunters, are also involved in poaching.

Russia’s abundant natural sources, including oil, natural gas, valuable metals, and minerals, continue to be exploited, largely by private sector actors owned by corrupt officials and organized crime groups, often acting in cooperation. Oil and gas reserves are largely controlled by state-affiliated corporations, leaving little room for organized crime involvement. However, the illegal trade in minerals and oil has increased significantly since the onset of the Russia–Ukraine conflict. Most of the illicit activity surrounding non-renewable resources in Russia involves corrupt state contracts. The top actors in this criminal market are bound in a complex entanglement of family and friendship connections that can be traced to the highest levels of government. The presence of Russian gold-mining operations and private military companies in West Africa, as well as the country’s relations with governments in the region, raises concerns that this sector could be an avenue to raise funds and launder gold to evade sanctions. There are also schemes involving the illegal trade of coal from occupied Ukrainian territories, specifically Donbas, to the self-proclaimed state of Abkhazia.

Drugs

Russia has long been a transit hub for heroin destined for the EU, with international criminal networks, in collaboration with European and Turkish traffickers and Central Asian criminal networks, being active in the market. The drug is mainly sourced from Afghanistan and enters Russia through Central Asia or the South Caucasus. This industrial-scale heroin trafficking through Russia or by Russian-based groups in the Middle East and Central Asia generates colossal revenues, which are ploughed into other criminal activities and used to corrupt police as well as judicial and political structures. However, sanctions and the closure of the passage through Ukraine has had a substantial impact on Russia’s role in the trade of heroin in the region.

Cocaine consumption, meanwhile, has increased in Russia, especially among young people. While demand for the drug was traditionally concentrated in a few large cities, such as Moscow, Sochi, Kazan, and Saint Petersburg, its availability across the country has increased in recent years. Cocaine is smuggled out of South America, mainly from Ecuador, and most arrives through the port of Saint Petersburg, after intermediate stops in Europe or Africa. Both Russian-based and foreign criminal networks, such as Ecuadorians, Serbs, and Lithuanians, are involved in the trafficking of cocaine into Russia by air or by land, using mules. The use of conventional dealers seems to be preferred to the use of the dark web in the domestic trafficking of cocaine. However, as for the heroin trade, the current situation has had an impact on the cocaine market, making transportation, also across borders, more difficult.

There is a mature and comprehensive national cannabis market in Russia, developed not only by considerable local demand but also demand among the legal and irregular migrant populations living in the country. While some cannabis is grown domestically – in grow houses as well as in fields in the Caucasus and Far East – most is smuggled in from the Middle East and North Africa, often by sea. The market involves multiple actors, both domestic and foreign. Illicit cannabis trade is increasingly carried out online to protect the anonymity of suppliers and clients.

The demand for synthetic drugs in Russia is steadily increasing, especially among young adults and Russian soldiers in Ukraine, owing to low production and purchase costs, as well as increased access to drugs and drug precursors used in local production. In addition to locally produced substances, synthetic drugs, especially methamphetamine, have also been smuggled into the country from the Czech Republic, Slovakia, the Baltic States, China, Iran, Belarus, and Ukraine. However, because of the impact on supply routes caused by Western sanctions, synthetic drugs smuggled from European countries have largely been replaced by Chinese imports and domestic production. The synthetic drug market is the largest drug market in the country, and its supply chain accommodates both local and foreign criminal actors. Similar to the cannabis trade, most of the distribution continues to be carried out online.

Cyber Crimes

Cyber-dependent crime is extremely prevalent in Russia. Cybercriminal groups are reportedly permitted to operate in the country with no fear of prosecution or imprisonment, and have been known to support the Russian government in the war against Ukraine. Moreover, it is reported that most of the money obtained through ransomware attacks worldwide is transferred to Russian-linked hacker groups. Although ransomware continues to be a significant threat to corporations around the world, the focus of these groups and individual Russian-backed hackers is reported to be cyber warfare, increasing denial of service attacks, destructive malware affecting critical infrastructure, and strategic geopolitical attacks such as data wipers. Although cybersecurity authorities in countries such as the US, Canada, and the UK have issued warnings about the potential increase in malicious cyber activity from state-sponsored or Russia-aligned cyber actors and groups, it has also been suggested that the capabilities of such groups are in fact limited to ineffective cyber weapons that cause minimal damage and are comparatively easy to contain and defend against. Following the declaration of war against Ukraine, government departments, aviation services, and online payment services in Russia also became major targets for cyber-attacks, at an unprecedented scale.

Financial Crimes

The most common forms of financial crime in Russia are embezzlement and the misappropriation of public funds, crimes related to corruption and the abuse of power, fraud in the financial sector, and tax evasion. Most of the country’s wealth is held by oligarchs who have profited from corruption without facing any consequences. With a decrease in income being one of the socio-economic consequences of the COVID-19 pandemic, Ponzi schemes have become more prevalent in the country. Moreover, the increased popularity of contactless payments and online money transfers has resulted in a rise in phone scams, with criminal groups impersonating police or bank officials to gain access to victims’ personal financial information. The criminal groups carrying out these phone scams are reportedly often based outside Russia.

Criminal Actors

A complex and varied ecosystem of criminal actors continues to operate within Russia. State-embedded actors engage in and facilitate criminal markets in the country, with collusion occurring at the political, economic, and business level. Most of the major criminal markets are controlled by mid- to high-level members of the security forces, under the tacit supervision and control of high-level political elites, both at the local and federal level. Additionally, the state deals with large and violent criminal groups by allowing some crime bosses to operate, both in the black market and legitimate business, on the condition that they do not draw public attention to their operations through violence. Private sector actors, specifically corporations owned by Russian oligarchs known to have close links with the state, are involved in tax evasion, through the use of offshore companies or collusion with tax inspectors, and corruption schemes, in which the government is overcharged in public procurement projects in exchange for kickbacks offered to state officials.

Most criminal networks emerged from mafia-style gangs that expanded by incorporating other groups and adapting to a more decentralized and flexible form of organization. Some of these groups exhibit extremist characteristics, and in addition to being involved in general and hate crimes also take part in organized crime, especially arms trafficking. Many of the leaders of these criminal networks are also now acting as businesspeople under the protection of the Russian state. Most of the mafia-style groups active in Russia continue their operations confined to particular cities or regions. Modern so-called ‘thieves in law’ are becoming increasingly adept at integrating themselves into non-criminal communities and participating in the licit economy. These criminals also hold considerable sway over illegal markets within prisons. Russian mafia-style groups also carry out various criminal activities in other parts of the world, such as money laundering in Cyprus and the Cayman Islands, financial scams in New York, and car theft rings in Europe.

Several foreign criminal groups continue to operate in the country. Azerbaijani organized crime groups are concentrated in the market squares and hotels of large cities and are often active in extortion and protection racketeering, while Georgian gangs are especially active in extorting from their own diaspora communities. Central Asian gangs operate primarily in labour trafficking, but also in drug trafficking, particularly opiates and marijuana. Chinese organized crime groups are involved in a variety of criminal markets, including human trafficking, the production and trade of counterfeit goods and non-renewable resources, and flora and fauna crimes, especially in Russia’s Far East and Central regions. Chinese organized crime groups are also the main suppliers of synthetic drugs and the precursors for their manufacture. The extent of the connections between local gangs and those in Europe has declined markedly, but there is still considerable involvement from elsewhere in Eurasia.

Leadership and governance

Power in Russia’s authoritarian political system is concentrated in the hands of President Vladimir Putin. With loyalist security forces, a subservient judiciary, a controlled media environment, and a legislature consisting of the ruling party and pliable opposition factions, the government is able to manipulate elections and suppress genuine dissent, activities which were reportedly observed during the recent elections. Although the government frequently asserts that combating organized crime is a national priority, it rarely demonstrates this through its actions. In fact, it is rampant corruption that facilitates the links between state-embedded actors and organized crime groups. Moreover, ties to criminal entities are also present in the multiple conflicts Russia is currently engaged in, such as the war in Ukraine. The invasion of Ukraine, combined with the Western sanctions imposed on Russia, has created a condition of fragility in the country. Corruption remains a common problem within all areas of the state. Corrupt schemes have also been widespread during the war in Ukraine – for instance, a new regulation waives the obligation to submit income declarations for military personnel and bureaucrats relocated to occupied Ukrainian territories. Even though anti-corruption has been identified as a top priority by the state, transparency and accountability in the day-to-day workings of the government are still limited, with decisions being adopted behind closed doors by small, overly influential groups. It has been reported that Western sanctions have driven the state to end many of the initiatives that were enabling some level of transparency.

The Russian Federation is a signatory to almost every relevant international organized crime treaty. Its cooperation in combating transnational crime covers drug trafficking, arms trafficking, fraud and theft, money laundering, human trafficking, and human smuggling. Nevertheless, the Russian government is also occasionally obstructive when it comes to international cooperation, particularly in corruption cases involving high-ranking state officials and their assets abroad. Moreover, there was a sudden cease in law enforcement cooperation between Russia and Western countries following the aggression against Ukraine. Cooperation between Russia and non-aligned or neutral countries, however, is being maintained. At the national level, Russia has a robust legal framework pertaining to organized crime, which is regularly revised to address specific criminological concerns, to deal with confusions and contradictions, and for political reasons. Despite its comprehensive regulatory framework, the Russian state continues to allow criminal activities that align with its political interests to operate with impunity, indicating preferential treatment in the enforcement of these policies.

Criminal justice and security

Although Russia’s judiciary is constitutionally independent, in practice it remains susceptible to a high level of executive interference, with judges’ career advancement being tied to their compliance with the state’s preferences. The judiciary is used to suppress political dissent perceived to be a threat to the interests of political leadership and its allies. Corruption within the judiciary remains a problem, especially in business disputes and low-level organized crime prosecutions. Despite numerous prosecutions of corrupt officials and organized crime group members, senior figures in these areas still appear to be untouchable, unless a political decision is made to pursue them. Prisons in Russia remain overcrowded and unsanitary, and inmates lack access to healthcare. There have also been reports of torture and inhumane treatment in detention centres, as well as in the temporarily occupied territories in Ukraine.

Russia has an extensive law-enforcement apparatus, which has considerable resources at its disposal. Although the country’s considerable size poses a number of challenges, law enforcement is broadly capable of maintaining control. However, in some areas law enforcement is wielded as a political instrument of the state, which decreases its ability to counter organized crime. Extortion by police officers, especially with regards to unregistered migrants, is commonplace, and actions such as this have fuelled nationwide distrust in the policing system. While the invasion of Ukraine has caused multiple threats to Russia’s territorial integrity, the war has not posed any serious challenges to the state’s capacity to control its territory. However, the size of the country continues to affect its ability to protect its borders, especially given the fact that the war is forcing the government to concentrate all its efforts in the west, leaving the rest of the territory without adequate protection in some areas.

Economic and financial environment

Russia is still considered to be at high risk for money laundering and terrorist financing. Criminal elements are known to use Russia’s financial system to launder money by various means, including virtual currencies, precious metals, and real estate, among others. Although Russia has developed a relatively robust AML/CFT legal framework, serious weaknesses in banking supervision and enforcement persist. These weaknesses, combined with political obstacles in the sharing of intelligence between agencies, mean that Russia continues to be a source, destination, and hub for money laundering activities. Moreover, there are allegations of state-sponsored money-laundering schemes facilitated by Russia’s financial intelligence unit, which is under heavy influence of the Russian state.

The Ukraine war has resulted in various sanctions being imposed on Russia and many foreign companies leaving the country, causing problems to do with currency and supplies across different industries. Despite efforts to create a free market – mostly at the expense of legal frameworks such as environmental impact, workers’ rights, and common market access – corruption, clientelism, and state support for its own companies, or those owned by allies, undermine and exploit this environment, specifically in strategic sectors such as energy resources, foreign trade, and manufacturing. There have, however, been efforts to formalize the informal sector by strengthening and modernizing the taxation mechanism.

Civil society and social protection

Russia does have laws that provide protection for victims, witnesses, and other participants in criminal proceedings, but witness protection is undermined by corruption within the agencies responsible for its provision, and support for victims is often plagued by a lack of facilities or poor conditions. Moreover, there is no formal system for the identification of victims and their referral to available services. Charities and other NGOs, which attempt to bridge these shortcomings, are inadequate and increasingly hobbled by laws controlling donations from abroad. Having said that, these organizations remain the primary provider of protection services. Additionally, the government has not attempted to raise public awareness or change negative attitudes towards drug users or victims of human trafficking. Although the country continues to create and operate regional migration centres, with the aim of preventing human trafficking in the region, their effectiveness is unclear. The government provided no funds to NGOs to carry out prevention and awareness campaigns. Moreover, efforts to prevent organized crime have become nominal in recent years owing to the ongoing war against Ukraine.

Civil society organizations have played a significant role in combating organized crime, especially human trafficking and drug use, but increasing persecution by the government has forced many activists and organizations to leave the country to avoid incarceration. In addition, the Russian state continues in its oppressive approach towards civil society organizations that work in the field of human rights, through measures such as ‘foreign agent’ laws and the revoking of licenses for foreign NGOs such as Human Rights Watch, Amnesty International and Memorial International. The media environment is mostly controlled by the state, with just a handful of independent outlets operating online, amid threats of prosecution, bans, and fines, which result in self-censorship or the replacement of their management by individuals favoured by the state.