People

Nepal is a significant source, transit and destination country for human trafficking. Victims are frequently trafficked to India, Western Asian countries, Malaysia and the US. Although migration is common in Nepal, restrictive immigration policies – such as age-based bans on women seeking foreign employment – push many into informal channels, increasing their risk of exploitation. The market is closely tied to the abuse of people from marginalized caste and gender groups, who are exploited for sexual labour, domestic work and manual or bonded labour, both within the country and abroad. Trafficking for illicit organ sales also occurs, particularly in India, where Nepalese victims are coerced into this trade. Children are trafficked through orphanages, fuelling cycles of exploitation that include sex tourism and forced labour in carpet factories. The movement of Rohingya refugees from Bangladesh into Nepal further reflects the growing trend of trafficking into the country. Government responses remain weak, undermined by corruption among officials who accept bribes from smugglers and fail to enforce laws.

Nepal is a major transit, source and destination country for human smuggling. Its open 1 800-kilometre border with India serves as a key corridor, but authorities are poorly resourced and often compromised by corruption. Smuggling networks operate transnationally, moving people from Nepal to the US, Europe, Australia and Africa via circuitous routes through Central America and the Gulf states. Nepalese men, in particular, are smuggled into Russia to fight alongside Russian forces in the war against Ukraine, lured by false promises of citizenship and high salaries. This criminal market in Nepal is intertwined with human trafficking networks and certain segments of the legal labour market across South Asia, particularly in India. The situation is further exacerbated by the involvement of corrupt state actors and the limited resources available to law enforcement agencies. Although it is not one of the most dominant criminal markets in the country, extortion and protection racketeering persist. Once linked to armed insurgencies, extortion has declined following government crackdowns. However, it continues within trade unions, business cartels and political institutions, particularly outside the Kathmandu Valley. Entrepreneurs and business owners report ongoing demands for illegal payments in order to continue operating.

Trade

Despite reduced demand following the Maoist insurgency (1996–2006), Nepal remains a transit country for arms smuggling, primarily serving Pakistan-based syndicates transporting weapons into India. Most illicit arms are small weapons, such as locally crafted, unregistered country-made pistols, trafficked through the Terai region. Bribery and weak border control allow the trade to continue. Reports suggest that illegal arms rentals are increasing, with criminal groups preferring to lease rather than purchasing weapons. Despite the proliferation of mafia-type networks, the actual use and trafficking of arms within Nepal remains relatively insignificant, especially when compared to other countries. Nepal’s porous borders also support a thriving counterfeit market, including medicine, alcohol, clothing and beauty products. Corruption among border and customs officials enables this trade, with India and China the primary source countries. Fake pharmaceuticals pose serious public health risks, while counterfeit food and beverages are widely accepted in local markets. Limited consumer awareness and lax regulation of intellectual property laws help entrench this market. The illicit trade in excise goods is well established in Nepal, with the smuggling of cigarettes and alcohol causing notable losses in tax revenue. The country’s borders with India and China serve as key corridors for these goods. In addition to a domestic market for contraband cigarettes and alcoholic beverages, Nepal also functions as a transit hub, facilitating the movement of e-cigarettes from China into India following India’s ban. The trade is enabled by corrupt customs practices, and the use of counterfeit excise stamps by manufacturers is a common tactic to evade taxation.

Environment

Despite strict protection laws, the illicit trade in orchids and medicinal herbs remains prevalent in Nepal, driven by high demand from India and China for traditional medicine. Smuggling persists largely undetected, particularly along routes to China, while overharvesting in regions like Salyan has made even common plants scarce. Additionally, cases such as the 2023 illegal logging incident in Rautahat highlight corruption at the local level, including the involvement of forest user committee members, further undermining conservation efforts. Deforestation caused by illegal logging has led to severe environmental degradation. Despite successful anti-poaching efforts, Nepal remains a transit country for wildlife trafficking, particularly rhino horns, tiger bones, and pangolin scales, which are smuggled into China and India. Wildlife crime is linked to drug trafficking, and marginalized communities often engage in poaching as a means of survival. Nepal’s flagship species have increased in number, but wildlife smuggling networks remain active. The illicit trade in exotic animals has also emerged as a growing concern, with species smuggled into Nepal for private collectors. Illegal sand mining, stone extraction and gold smuggling are consolidated and politically protected. Environmental damage from sand mining has displaced communities and disrupted river ecosystems. The northern border with China is a major conduit for gold smuggling into India, with politicians directly implicated in the trade. Smuggling operations continue to expand, with reports of organized networks using fraudulent documents to bypass scrutiny. India’s reduction of gold import duties in 2024 widened the price gap with Nepal, further fuelling cross-border smuggling. A major smuggling case uncovered at Tribhuvan International Airport led to a broader investigation linking Chinese nationals and digital payment platforms to the illegal trade.

Drugs

Nepal functions primarily as a transit country for heroin, trafficked from Afghanistan through India en route to Hong Kong and other international destinations. Although some domestic use exists, the local heroin market is limited. Loose border controls facilitate the unimpeded flow of heroin, although the quantities seized remain low. In contrast, cocaine trafficking is less prominent, with Nepal occasionally used as a transit point for shipments to India and Hong Kong. Seizures are minimal, and domestic consumption is largely confined to select groups. Nepal has a longstanding cannabis culture, with resin exported to India, the US and Canada. Cultivation has shifted from the Terai region to the inner hill areas. Debates around legalization continue, but current regulations remain restrictive. Illegal cross-border trade with India continues to thrive. There are growing indications of synthetic drug use and trafficking, with Nepal acting as a transit point for precursors used in amphetamine production. Methamphetamine, MDMA and LSD are becoming more prevalent, and authorities are struggling to address the online drug trade. Digital marketplaces and social media platforms facilitate illegal sales, compounding the challenge.

Cyber-dependent crimes

Cybercrime in Nepal is on the rise, with hacking cases increasing sharply. While no organized cybercrime groups have been identified within the country, government websites have been targeted in recent years by Paradox Cyber Ghost and the Lazarus Group and others. Nepal remains a target for foreign cybercriminals, including Chinese nationals. Attacks on government institutions and other critical sectors continue to expose vulnerabilities in the country’s cybersecurity infrastructure.

Financial Crimes

Nepal experiences widespread embezzlement, tax evasion and financial fraud. These offences, carried out by private, state-affiliated and foreign actors, span a range of illicit activities, including banking fraud, lottery scams, and schemes involving public funds and foreign employment opportunities. Embezzlement is particularly pervasive, with repeated reports implicating government officials and associated networks in the misappropriation of funds. Gaps in financial regulation have enabled high-profile financial crime, and law enforcement is ill-equipped to respond effectively.

Criminal Actors

Nepal does not have large, hierarchical mafia-style groups akin to those found in other countries. However, various occupational mafias, including the sand, crusher and bus mafias, operate in ways that resemble organized criminal enterprises. These groups exert significant control over their respective industries, often relying on intimidation and political connections to maintain their influence. While they lack formal hierarchies, they function through established networks that facilitate illicit activities such as resource exploitation and extortion. Some gang leaders have transitioned into politics, leveraging their influence for protection and power. Prominent figures have been elected or endorsed by political parties, illustrating the blurred lines between organized crime and governance. In the Terai region, small armed groups have consolidated into more powerful factions, often affiliated with political actors. However, violent activity linked to these groups has declined in recent years. Criminal networks in Nepal are diversified in their operations, engaging in a range of illicit activities including human trafficking, drug smuggling, wildlife trafficking and extortion. These groups are widespread, with notable activity in urban centres and along the porous border with India, where smuggling and illicit trade thrive. They maintain extensive transnational links, particularly in trafficking and smuggling operations. While some are colloquially referred to as mafias, they lack the rigid hierarchies typical of traditional organized crime syndicates. The nexus with political actors is well documented, and broader ties to state-embedded actors have enabled illegal activities, including gold smuggling and the extraction of non-renewable resources. State-embedded actors play a pivotal role in facilitating organized crime in Nepal. Their influence is particularly evident in sectors such as illegal mining, where illicit operations are managed with little scrutiny. Corruption within the state apparatus is deeply entrenched, with officials implicated in crimes ranging from embezzlement and money laundering to human trafficking and gold smuggling. Since the 1990 political transition, the systemic integration of criminal elements into political and bureaucratic structures has led to the widespread infiltration of public institutions. More recently, many senior government figures have been linked to organized crime, yet enforcement bodies appear reluctant to prosecute. This impunity has allowed state-embedded actors to expand their influence, further undermining Nepal’s regulatory framework and deepening corruption at all levels of governance.

Foreign actors also play a significant role in Nepal’s organized crime landscape. Indian nationals are the most frequently apprehended group, largely due to the open border with India, which facilitates transnational crime such as human trafficking, narcotics smuggling and wildlife poaching. Chinese actors are prominent in gold smuggling and the illicit wildlife trade. There has also been a marked increase in the arrest of Western nationals for crimes related to child exploitation, often targeting Nepal’s most vulnerable communities. Historically dominated by Indian criminal networks, Nepal’s illicit markets have become increasingly international since 2006, with actors from China, Europe, Bangladesh, Africa and Latin America now active. These foreign groups often collaborate with Nepalese criminal networks and state-embedded actors, leveraging political connections to shield their operations while exploiting citizens at the community level. The private sector is also deeply entangled with organized crime, particularly in industries such as mining and foreign employment. Human trafficking and smuggling are frequently linked to private enterprises, with many companies exploiting weak regulatory oversight to engage in illicit activity. Nepal’s economic liberalization has provided openings for both legitimate investors and dubious financial actors, creating an environment in which private businesses often serve as fronts for criminal operations. Corruption in the private sector remains largely unchecked, as anti-corruption laws apply only to public institutions. This legal loophole has enabled private banks and companies to operate with impunity, facilitating money laundering and financial crime. The lines between business, politics and organized crime are increasingly blurred, with corporate figures involved in illegal trades, such as illegal mining, before transitioning into political roles. These dynamics have eroded governance structures and increased the country's vulnerability to organized crime.

Leadership and governance

Nepal’s governance landscape is complex and frequently unstable, characterized by political fragmentation and regular changes in leadership. The current coalition government reflects ongoing struggles to maintain stability, with ten administrations formed in the past decade. Political leadership continues to be undermined by internal rivalries, identity-based politics and limited institutional capacity. While there have been modest improvements in democratic indicators, Nepal’s governance structure remains fragile, with political parties maintaining close ties to illicit economies. Youth wings, notably the Young Communist League of the Communist Party of Nepal (Maoist Centre), have been implicated in extortion and influence-peddling, further eroding state resilience. Government efforts to combat organized crime are uneven: while there has been strong commitment to tackling wildlife trafficking, coherent national strategies to counter human smuggling, money laundering and drug trafficking are lacking.

Government transparency and accountability also face serious challenges. Systemic corruption persists, with political elites often implicated in illicit financial activity. Although the commission for the investigation of abuse of authority has made some progress, its efforts remain largely confined to lower-level bribery cases and rarely target high-profile political corruption. The pervasive presence of middlemen, known as bichaulia, in governance further undermines public trust, with elected officials frequently linked to organized crime networks, including allegations of involvement in gold smuggling and human trafficking. Weak enforcement of financial disclosure laws and poor oversight of campaign financing contribute to an opaque political environment.

Although Nepal has ratified several international conventions, enforcement is hampered by limited resources, corruption and bureaucratic inefficiencies. International cooperation is relatively robust in areas such as wildlife crime, but remains inadequate for addressing broader transnational organized crime. Nepal’s membership in the South Asian Association for Regional Cooperation and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation offers avenues for regional engagement, though both institutions are generally considered weak. Mechanisms for mutual legal assistance and extradition are underdeveloped, with few joint investigations into human trafficking and smuggling cases. While Nepal collaborates effectively with INTERPOL and foreign agencies on wildlife crime, broader law enforcement cooperation is inconsistent.

Nepal’s legal framework for addressing organized crime includes laws criminalizing human trafficking and smuggling, as well as provisions for preventive measures. However, these laws are fragmented and lack effective implementation mechanisms. Efforts to align national legislation with international standards, particularly the Palermo Protocol, have progressed slowly. Despite ongoing reforms, significant gaps persist in areas such as labour migration, cybercrime and arms trafficking.

Criminal justice and security

Nepal’s judiciary is widely regarded as being highly politicized, with frequent allegations of corruption and undue political influence over judicial appointments. Supreme Court rulings, particularly those concerning human rights and corruption, are not consistently enforced, and political interference in judicial processes is common. The justice system suffers from severe backlogs, with thousands of unresolved cases and insufficient judicial staffing, further eroding public confidence. Pretrial detention is often excessively long due to procedural delays, in some cases exceeding the potential sentence for the alleged offence. Nepal’s prisons are reportedly overcrowded and marred by serious human rights violations. Drug abuse, gambling and gang violence are widespread within the system, with powerful inmates exercising control over fellow detainees. Corruption among prison officials enables illegal activities, including forced labour and sexual exploitation. Although the government has introduced prison reform initiatives, implementation remains limited.

Law enforcement efforts in Nepal are hindered by corruption, underfunding and inadequate training. While the police operate several specialized bureaus – including units for cybercrime, narcotics and human trafficking – these divisions are understaffed and lack technical expertise. The anti-human trafficking and wildlife crime control bureaus have made notable progress, but other agencies continue to face capacity constraints.

Border security remains weak, particularly along the open border with India, which facilitates the trafficking of drugs, arms and people. Corruption among border officials further exacerbates challenges. Nepal’s territorial integrity remains vulnerable due to unresolved border disputes with India and China. The Indo-Nepal border is particularly porous, enabling high levels of cross-border smuggling and illicit trade. The lack of modern equipment and the reliance on manual checks at security posts have contributed to security lapses. High-profile cases have highlighted inefficiencies in border control, prompting authorities to focus on improving security measures and enhancing surveillance and detection technology to address these vulnerabilities. Although measures to strengthen border controls have been discussed, implementation has been limited.

Economic and financial environment

With weak regulatory oversight and a high volume of informal financial transactions, Nepal is at high-risk for money laundering. Its open border with India facilitates illicit financial flows, including hundi (an informal remittance transfer system) and unregulated debt markets. While the remittance economy is a crucial lifeline, informal channels continue to undermine regulatory oversight. Recent legislative amendments to address money laundering, along with proposed reforms to align with the Financial Action Task Force recommendations, reflect the government’s effort to avoid grey-listing. However, enforcement is limited, and financial institutions continue to face challenges in monitoring and reporting suspicious transactions. Inconsistent policies, bureaucratic inefficiencies and widespread corruption are characteristic of Nepal’s economic regulatory environment. Although the country has made some progress in improving its investment climate, political instability and regulatory unpredictability continue to deter foreign investment. Organized crime is not explicitly cited as a major economic threat by international financial institutions, though illicit markets such as human trafficking and contraband smuggling do affect Nepal’s financial sector.

Civil society and social protection

Victim and witness support mechanisms in Nepal remain inadequate, with major gaps in legal protection and service provision. While some frameworks have been established, such as the Crime Victims Protection Act, enforcement is weak, and many victims struggle to access support. Survivors of human trafficking encounter significant barriers in securing legal assistance, financial compensation and rehabilitation services. In terms of support for drug users, Nepal began implementing a new Narcotics Prevention and Control National Master Plan in 2023. The plan emphasizes coordinated action among stakeholders and aims to reduce drug-related infections and enhance treatment and rehabilitation services, among other goals. The witness protection system is virtually non-existent, leaving victims vulnerable to intimidation and retaliation. Prevention efforts against organized crime are similarly limited, with a focus on prosecution rather than proactive strategies. Although Nepal has implemented harm reduction programmes for drug users and awareness campaigns to combat human trafficking, these initiatives lack sustained government commitment. NGOs and civil society organizations play a critical role in prevention, but their reach is constrained by limited funding and political interference.

Nepal has a relatively strong civil society sector, with numerous NGOs engaged in tackling human trafficking, environmental crimes and corruption. However, government oversight and bureaucratic restrictions frequently hinder their operations. Journalists also contend with growing threats, self-censorship and state surveillance. Financial pressures and declining advertising revenue have further weakened the sustainability of independent media. Rural and marginalized communities remain underserved by traditional outlets, limiting their access to critical information on crime and governance. Social media has become a powerful tool for exposing corruption and organized crime, often filling gaps left by mainstream media.

People

Malaysia faces human trafficking challenges due to its geographic location, dependence on foreign labour and regional migration dynamics. The country is a source, transit point and destination for human trafficking, with victims originating from across Asia and Africa. Malaysia’s economy relies heavily on foreign workers, and the high cost of work permits has created a market for criminal groups to traffic people for cheap labour, especially in construction and domestic work. Victims include vulnerable populations such as Rohingya refugees in Indonesia and Bangladesh, as well as children. Malaysians are also vulnerable to forced labour. Cases of this have been reported in the palm oil and sex industries. Malaysians are also trafficked abroad, having been lured by fake job offers, only to be forced into low-paid work or exploited for forced criminal activities – particularly in cyber scam centres in Cambodia and Myanmar.

Malaysia is a transit, destination and source country for human smuggling. Migrants arrive from Thailand, the Philippines, Indonesia, Bangladesh, Nepal and other parts of Asia. Some Malaysian nationals also use smuggling networks to seek work abroad. High migration costs and complex legal processes push migrants to rely on smugglers, often with the help of corrupt officials who accept bribes at border checkpoints and airports. The smuggling market is driven by demand for cheap labour in industries such as construction and domestic work, as well as the profitability of the sex trade. Many refugees, including Rohingya fleeing refugee camps, violence and persecution, have also been smuggled into Malaysia.

Extortion and protection racketeering remain sporadic, with fewer organized cases than in the past. Criminal gangs target small businesses and public projects, demanding payments to prevent disruptions. Loan sharks continue to exploit financial vulnerabilities by offering illegal high-interest loans. However, a lack of comprehensive data on this market makes it difficult to assess its true scale and impact.

Trade

Malaysia remains a limited but strategic trans-shipment point for arms trafficking, with sporadic cases reported. Weapons are often smuggled alongside drugs and counterfeit goods, primarily through the Thai and Borneo borders and by boats from Indonesia. Small arms, including craft-made weapons, are trafficked and commonly used in organized criminal activities. Although Malaysia was previously linked to arms trafficking networks in South Asia, there is no recent evidence of such connections.

Malaysia is also a key hub for the production and distribution of counterfeit goods, with imports originating from China and Bangladesh. Common counterfeit items include luxury apparel, electronics and pharmaceuticals. Local demand is high, driven by consumers seeking cheaper alternatives and tourists buying counterfeit souvenirs. These products are widely available in physical markets and online, including through e-commerce sites and social media platforms.

The illicit trade in excisable goods – particularly alcohol and tobacco – remains entrenched in Malaysia, driven by high excise taxes and rising living costs. The country has one of the highest rates of the illicit cigarette trade, with most products supplied from Vietnam and Indonesia. Although recent data suggests a slight decline in illegal cigarette sales, the reduction is marginal. Smuggling routes include the Malaysia–Thailand border and shipping lanes in the South China Sea. Local criminal networks, foreign nationals and some state-embedded actors are involved. The trade is linked to other criminal markets and results in significant tax revenue losses.

Environment

The illicit flora trade in Malaysia is well-established, and the country is considered high risk for illegal deforestation. Trafficked species include Merbau wood, agarwood used in perfumes and rare orchids. Despite enforcement claims, illegal logging persists – particularly in Sabah and Sarawak, where deforestation has increased in recent years. The private sector, especially palm oil and timber companies, plays a significant role. In Sabah, logging companies have created numerous informal roads, making it easier for illegal loggers to transport timber. Malaysia is also a destination country for illegally harvested timber products. Foreign nationals have been documented harvesting agarwood, and state-embedded actors have allegedly enabled illegal logging operations.

Malaysia’s illicit fauna trade is well-organized, involving local and foreign poachers, middlemen and criminal syndicates. Trafficked wildlife includes pangolins, porcupines, tigers and helmeted hornbills. Illegal, unreported and unregulated fishing is also a concern. Wildlife is trafficked into Malaysia from South Africa, as well as from Malaysia to Hong Kong. The Sulu-Celebes Sea serves as a key trafficking route, with Malaysia acting as both a source and transit hub. Online wildlife trafficking has been documented, particularly in Sarawak, and legal loopholes continue to enable the laundering of illicit wildlife.

The illicit trade in non-renewable resources includes petroleum products and rare earth elements (REEs). Reports suggest a possible emerging illicit economy for REEs, with foreign nationals arrested for unauthorized mining. Investigations into bribery among officials highlight corruption risks in the mining sector. Petroleum smuggling is also a concern, with trans-shipment operations allegedly using Malaysia’s coastline to bypass international sanctions. Authorities have detained ships conducting illegal ship-to-ship oil transfers off the coast, though the origins of the ships remain unclear. Covert domestic sales of liquefied natural gas and petroleum persist, with authorities seizing illegal stockpiles.

Drugs

Malaysia functions as a key transit hub for heroin trafficking, with organized crime syndicates controlling distribution networks. Although the country is not a producer, its proximity to the Golden Triangle Special Economic Zone facilitates heroin smuggling, primarily through border regions. Heroin seizures have increased slightly in recent years, and international cases have linked shipments from Malaysia to Australia and Singapore. Heroin is also among the most commonly used drugs domestically. While the full scale of the market remains unclear, Malaysia continues to play a significant role in regional heroin trafficking. The cocaine trade is less established than that of heroin, largely due to Malaysia’s distance from major cocaine-producing regions. Seizure data shows a decline in cocaine interceptions in recent years. The trade is primarily transnational, with routes connecting to South America and large shipments often concealed in items like seafood and beans. Local consumption exists but is limited, and is mainly concentrated among wealthier social groups. Criminal networks – including foreign actors – control the trade, and in some cases, human trafficking victims have been exploited as drug mules.

The cannabis trade in Malaysia is primarily driven by organized criminal networks involved in cultivation, distribution and smuggling. Although domestic cannabis seizures have declined in recent years, the trade remains active. Cannabis is smuggled from neighbouring countries and sold locally, particularly among youth. The market is widespread and partly influenced by cannabis legalization in Thailand. While significant, the cannabis market in Malaysia is smaller than that for synthetic drugs. However, the full size and value of the market remains unclear due to limited data. Malaysia’s synthetic drug trade involves sophisticated transnational syndicates, with methamphetamine being the primary drug trafficked – mostly from Myanmar. Malaysia functions as both a source and a transit country, with trafficking routes to Australia, Japan and the Philippines. Seizures have generally increased in recent years. Large ecstasy shipments suggest that Malaysia is increasingly being used as a transit hub for substantial drug flows originating in Europe. Although local production of methamphetamine and ketamine has declined, domestic demand remains high. Overall, the synthetic drug market appears to be growing, raising concerns about public health.

Cyber-dependent crimes

Cyber-dependent crimes in Malaysia have expanded and evolved alongside technological advances and increased digitalization. The country ranks high globally for the number of data breaches, with cybersecurity firms blocking thousands of attacks daily. Common crimes include malware attacks, ransomware, phishing and data breaches targeting both businesses and individuals. Highly skilled hackers often sell stolen data on social media platforms and dark web forums. Annual financial losses from cybercrimes are in the tens of millions of dollars, though many victims do not report incidents.

Financial Crimes

Financial crimes are widespread in Malaysia, including tax evasion, embezzlement and financial fraud, all of which contribute to significant tax revenue losses. Key actors include government officials and private-sector actors. Government contracts and procurement processes are exploited, with officials awarding lucrative contracts to favoured companies, resulting in substantial losses of public funds. In recent years, there has been a sharp rise in online fraud, particularly credit card and investment scams.

Criminal Actors

Mafia-style groups, often referred to as ‘secret societies’ due to their covert nature, remain prevalent in Malaysia. They maintain a significant social presence and are known within local communities, particularly lower social classes. Some groups have reportedly formed alliances with one another, though leadership structures are not always clearly defined – individual leaders often operate independently. Gang membership is sometimes identifiable through symbols like tattoos or clothing. Violence levels vary among groups. Some rely on intimidation and low-level violence, while others regularly engage in extreme violence. These gangs also exert transnational influence, with activities that extend beyond Malaysia’s borders. Despite limited law enforcement data, their effect on local communities and broader societal structures remains substantial.

Malaysia also hosts more fluid criminal networks that are involved in a range of illicit markets, including drug and human trafficking, cybercrimes and wildlife trafficking. The synthetic drug trade, in particular, is run by sophisticated criminal networks with ties to organized crime groups across East and South East Asia, as well as Australia and New Zealand. Malaysian nationals play key roles in these networks, with connections extending to countries such as Thailand and Laos. Wildlife trafficking similarly links Malaysia to South Africa and Hong Kong. While there is limited evidence of direct political influence by these groups, their strong local presence and transnational connections make them a major criminal force in the region.

State-embedded actors in Malaysia engage in illicit markets both directly and as facilitators. Corrupt officials, including police officers, enable human smuggling and trafficking through bribery and the issuance of falsified documents. Corruption further exacerbates the recruitment and exploitation of migrant workers, with civil servants involved in extortion, abduction and abuse – perpetuating systemic exploitation. Civil servants have also been involved in illegal logging, mining and money laundering through corrupt practices. Meanwhile, financial crimes such as embezzlement and tax evasion have involved individuals at the highest levels of government, including former prime ministers and officials within state-owned enterprises.

Transnational criminal networks involving foreign actors play a significant role in Malaysia’s organized crime landscape, using the country as both a destination and transit point for various illicit activities. These include oil smuggling, illegal mining and wildlife trafficking, with foreign nationals from Cambodia, Vietnam and Thailand participating. Additionally, human trafficking and smuggling operations often involve coordination between foreign agents and local criminals. Drug trafficking is also a major concern, with producers and traffickers from Myanmar, Africa, Europe and South America moving drugs in and out of Malaysia, affecting both domestic and regional drug markets.

Private-sector actors are also influential in Malaysia’s organized crime landscape, particularly in financial crimes, natural resource exploitation and human trafficking. Collusion between the private sector and state actors is common, especially in sectors like mining, where bribery and abuse of power are widespread. Bribery alone is estimated to be worth billions of dollars. Criminal groups also launder money through casinos and online gambling platforms, taking advantage of the lack of regulation. In industries reliant on migrant labour, forced labour and exploitation occur. Illegal logging, particularly involving palm oil and timber, is facilitated by private-sector involvement.

Leadership and governance

The Malaysian government has taken a strong stance against organized crime and implemented laws to combat it. However, concerns remain about the enforcement of these laws, particularly regarding the prosecution of officials implicated in criminal activities. While overall crime has declined, organized crime – especially human trafficking, drug smuggling and cybercrimes – continues to rise. Although Malaysia has passed anti-corruption legal frameworks, challenges persist in areas like corruption and accountability. The independent Malaysian Anti-Corruption Commission has faced criticism over its effectiveness, with several investigations failing to lead to convictions. While public trust in the government has been weakened by high-profile corruption scandals, recent anti-corruption efforts and increased public reporting have resulted in modest improvements. Notably, progress has been made in enhancing public access to budget and procurement data, with the goal of boosting transparency.

Malaysia actively participates in regional and international efforts to combat transnational organized crime, including drug, wildlife, timber and arms trafficking. The country has ratified several major UN conventions, such as the UN Convention against Transnational Organized Crime and the UN Convention against Corruption. However, it has yet to sign specific protocols on migrant smuggling and firearms trafficking. Malaysia maintains extradition treaties with multiple countries and has strengthened law enforcement cooperation, particularly with Australia and neighbouring South East Asian nations. It also works with regional organizations such as the Association of Southeast Asian Nations (ASEAN) and the Asia Pacific Group on Money Laundering to address challenges related to border security and organized crime.

Domestically, Malaysia has a comprehensive legal framework to address organized crime, targeting activities such as human and drug trafficking, cybercrime and wildlife crime. While laws like the Anti-Trafficking in Persons Act and anti-poaching regulations exist, enforcement remains inconsistent, with challenges in identifying trafficking victims and curbing illegal fishing. New measures are being implemented to strengthen efforts against smuggling, counterfeit goods and cybercrime, including stricter regulations on alcohol and tobacco. Malaysia’s National Anti-Financial Crime Centre combats financial crimes, and while anti-drug laws are strict, there have been recent moves to reduce the use of mandatory death penalties. Still, gaps remain, particularly in the regulation of online gambling, data protection and arms trafficking enforcement.

Criminal justice and security

Malaysia’s judiciary lacks a dedicated unit for organized crime, and specialized expertise in related laws is limited. Only a few judges are trained in anti-trafficking law. Judicial independence has historically been compromised by executive influence, and issues such as prolonged detention without judicial review – especially for migrants – persist. The prison system faces challenges including overcrowding, abuse and criminal gang activity. However, gangs do not control the facilities. While high-profile corruption convictions have strengthened public trust in the judiciary, subsequent case dismissals have undermined confidence in the integrity of the legal system.

The Royal Malaysian Police once managed specialized units focused on organized crime, but they have since disbanded. There is currently no comprehensive body responsible for combating crime, though there are proposals to re-establish such units. The government has allocated substantial funds to improve public order and security, but coordination between law enforcement bodies remains inconsistent. Malaysia has taken steps to curb the trade in counterfeit goods, including stricter enforcement of intellectual property laws and police raids. However, limited resources and counterfeiters’ sophisticated tactics hamper enforcement. In 2024, law enforcement intensified its efforts to combat smuggling, leading to significant confiscations of drugs, firearms and other contraband. This crackdown reflects Malaysia’s commitment to tackling illegal activity at both national and border levels. Despite international intelligence sharing, public trust in law enforcement is low, with concerns about corruption, misconduct and human rights violations. The country continues to address human trafficking through dedicated agencies, though enforcement challenges persist.

Malaysia faces significant challenges in securing its borders, particularly along its land and maritime boundaries with Brunei, Indonesia and Thailand. These areas are hotspots for transnational crimes such as smuggling and human and drug trafficking. Remote, forested areas complicate surveillance efforts, and corruption among immigration officers remains a concern. In response, the country has pursued infrastructure improvements, including by installing closed-circuit television systems and electric fences, while increasing regional collaboration with neighbouring countries through joint patrols and information sharing. Despite these efforts, weak security and ineffective law enforcement persist, particularly along the Malaysia–Thailand border. Malaysia has also proposed building a border wall and reintroducing special border zones to address smuggling and illegal trade. On cybersecurity, Malaysia has implemented a national cybersecurity strategy, but the country continues to experience a high volume of cyberattacks in the region.

Economic and financial environment

While Malaysia is not a regional hub for money laundering, it faces risks due to its porous borders, strategic location and developed financial system. The government has made progress in combating anti-money laundering through the implementation of legal frameworks targeting illicit financial flows. However, concerns persist, particularly with the increased use of casinos, financial institutions and cryptocurrency, as well as a rise in suspicious transactions linked to online gambling.

The country is working to strengthen its regulatory framework, including with reforms to ensure that public procurement is transparent and subsidies are competitive. Still, issues like corruption, the close ties between politics and business and a large informal economy remain. Financial crimes with loan sharks and online scams have proliferated, although the government has been cracking down on these.

Civil society and social protection

Malaysia’s efforts to protect victims of organized crime have yielded mixed results. Progress has been made in identifying human trafficking victims, providing services and allowing mobility. However, some victims of forced labour are deported without proper identification. While there are certain legal frameworks that provide some safeguards for witnesses, systemic weaknesses, such as the requirement for whistle-blowers to disclose personal information, remain. Efforts to address cybercrime and decriminalize drug use are ongoing, but social stigma persists towards drug users and victims of gender-based violence. Malaysia maintains a strict, punitive approach to drug use and trafficking, including imprisonment, fines, mandatory caning for male offenders and the death penalty for trafficking large quantities. Recent reforms have introduced judicial discretion in capital cases, reflecting a gradual shift towards rehabilitation, though penalties for simple use remain severe.

Malaysia has made notable strides in crime prevention through initiatives like the Malaysian Crime Prevention Foundation and community policing programmes. It has adopted the ASEAN Plan of Action to combat transnational crime and improve anti-trafficking measures. Malaysia has also implemented wildlife crime training and introduced mandatory rehabilitation for drug users. Even so, the country faces constraints in addressing transnational and organized crime. Efforts to improve governance, such as whistle-blower protections and anti-corruption initiatives, face criticism due to confidentiality concerns and implementation gaps.

Civil society remains active but faces limitations due to government control over NGOs, which leads to self-censorship. Activists and government critics – particularly those addressing sensitive issues like organized crime – have faced criminal charges, intimidation and police interference. Although Malaysia has laws restricting freedom of expression, which can carry long prison sentences, the country has made progress in safeguarding media freedom in recent years. While media outlets are diverse, state media continue to dominate. The right to assembly is protected but can be restricted for security reasons.