People

Human trafficking remains a significant problem in Nepal, with women and girls being trafficked for sexual exploitation to India, the Middle East, Malaysia, and other countries, and Nepali men being subjected to forced labour in various industries. The problem is compounded by fraudulent recruitment schemes, arranged marriages, weak pre-departure screenings, poverty, and lack of employment opportunities. Nepali children and transgender people are also vulnerable to sex trafficking. The lack of strong government policy and monitoring bodies has resulted in thousands of Nepali people losing their lives during the construction of FIFA World Cup football stadiums in Qatar. There have also been reports of police members and political party leaders involved in sex trafficking, and of some police officers continuing to arrest and fine victims of sex trafficking. Traffickers use social media and mobile apps to recruit victims. Indigenous populations, minority groups, and lower castes are the most vulnerable.

Human smuggling is on the rise in Nepal, with fraudulent migration schemes and discrimination against women in the government’s labour-migration policies contributing to the problem. Smugglers operate through a well-networked structure, and Nepali smugglers are involved in almost all cases of smuggled Nepalis. Although the US and Europe are common destinations, the routes to these countries are circuitous and varied. Smuggled people are predominantly male and largely unskilled but with good levels of education. Nepali women are also being smuggled for sex work to countries like Iraq, Oman, Kyrgyzstan, and Tajikistan. The dynamics of human smuggling in Nepal and the South Asian region are largely rooted in political instability, economic disparity, environmental factors, deep poverty, and food insecurity. Government officials are reportedly accepting bribes to include false information in Nepali identity documents or to provide fraudulent documents to prospective workers, which allows unscrupulous recruiters to evade recruitment regulations.

Extortion is a prevalent criminal activity in the country, carried out either by youth wings of political parties or organized criminal groups for economic and political gain. Extortion cases also occur within the tourism industry, targeting visitors.

Trade

Arms trafficking and illegal firearm possession are notable issues in Nepal. The illegal firearms used in Nepal are usually cheaper improvised firearms, and there has been an increase in the use of these weapons in violent crimes such as murder, robbery, and extortion. Criminals and political groups are proliferating and reportedly offer protection to each other. Trafficked weapons in Nepal primarily come from India, and to a lesser extent from China. The porous border between Nepal and India has fuelled cross-border criminality, particularly the illegal trafficking of small arms and the unchecked movement of criminals between the two countries. There are also weapons used in the Nepalese Civil War from 1996 to 2006 which continue to circulate in the country.

Counterfeit goods are becoming increasingly common, with domestically produced and imported fake products flooding the market. These products range from food and drinks to electronics and even mountaineering equipment. Complaints about counterfeit products have been increasing in recent years, and weak regulatory mechanisms in the country and rising demand for brand-name goods are cited as contributing factors. This is causing concern for foreign companies looking to enter the Nepali market.

The introduction of higher excise tax on tobacco products has further exacerbated the illicit trade of tobacco products in the country. The porous border between Nepal and India is leading to a free flow of tobacco products, including banned chewing tobacco, into Nepal, as tobacco products are cheaper in India.

Environment

Forests make up a significant portion of Nepal’s land, but the country has struggled with illegal and unsustainable timber and fuelwood harvesting, overgrazing, encroachment, and infrastructure development, which have been the main drivers of deforestation. Since the 2020 ban on timber collection, transportation, and sales in community forests, timber smuggling has increased, particularly in the Chure region, and the black-market price of illegal timber has risen. Smugglers of timber are often residents who live near community forests along the Nepal-India border. Nepali timber is smuggled to China. Non-forest timber products such as orchids, mushrooms, caterpillar fungus, and sandalwood are also illegally exported to China.

Nepal is a transit and source country for illicit fauna products, predominantly rare and endangered species, usually feeding into the large Chinese market. The economic impact of the COVID-19 pandemic lockdown forced villagers to seek alternative sources of income, including poaching and wildlife smuggling. Chinese smugglers have become increasingly involved in Kathmandu’s wildlife trafficking trade, probably linked to increased investment by China in Nepal’s hotel and tourism sectors, among others. Fauna crimes in Nepal are driven by a multitude of factors, including poverty, lucrative financial rewards from illicit wildlife products in black markets, porous borders, lack of conservation awareness, and poor law enforcement for its prevention. Profits are accrued by domestic and international actors.

Gold and silver smuggling have risen in Nepal because of the government’s raised import duties on precious metals and the high demand for gold. Nepal serves as a transit and destination country for gold smuggling as it lies between India and China, the world’s two largest consumers of gold. Gold is smuggled into Nepal from Dubai, Thailand, and Hong Kong across the Chinese border or from the Tribhuvan International Airport in Kathmandu, and is then transported to India using land routes, where it is sold for higher prices. Nepali workers returning to Nepal are used as gold carriers in exchange for better wages, and racketeers and their agents divert remittance from the Gulf, Middle East and South Korea, where a large number of Nepalis work. The government has passed harsher punishments, but a lack of proper equipment and expertise continues to pose challenges in curbing illegal activities. The extraction of stone, sand, and gravel from rivers and land is another major non-renewable resource industry in Nepal, but compliance with regulations by businesses is poor and corruption is rampant.

Drugs

Heroin production and trade are limited in Nepal, with no processing laboratories detected so far. The opium produced in the country is not manufactured into high-value products but mainly sold raw. The primary purchasers of Nepal’s opium are Indian traders. Heroin consumption is also limited, with the drug mostly transiting to India, China, Thailand, Hong Kong, Singapore, and other East Asian countries.

While the heroin trade has remained stable in recent years, Nepal has become a transit hub for cocaine trafficking into other countries, particularly India. The number of cocaine drug traffickers in Nepal is growing. Domestic use of cocaine remains low, and is mainly limited to the tourist industry and elite social circles due to its high price. Foreign nationals from Africa, Eastern Europe, and South America are the primary smugglers caught trafficking cocaine through the country. Despite the increase in cocaine trafficking, the volumes seized do not indicate a substantial level.

Nepal is mainly a transit country for the illegal trade of cannabis, but several districts are becoming important centres for cultivation. In 2021, a bill legalizing cannabis was introduced in Parliament, receiving support from some politicians because of its potential as a cash crop and for creating employment opportunities. The wider global decriminalization, legalization, and commercialization of cannabis may have contributed to an increase in production and use of cannabis in Nepal. Cannabis resin is trafficked from Nepal to India and Europe.

Regarding synthetic drugs, Nepal is a trans-shipment country for opiates and methamphetamines produced in South and South East Asia. Although consumption rates of synthetic drugs are lower in Nepal than other countries in the region, there has been an increase in use among young people. Law enforcement has limited capacity to monitor and control criminal activity related to the synthetic drug trade.

Cyber Crimes

The rate of cybercrime in Nepal increased during the COVID-19 pandemic because of the widespread use of social media and low levels of cyber-security awareness, as well as the government’s limited capacity to protect its information and communications technology infrastructure. Ransomware, privacy leaks, and social media-related crimes are among the most common incidents.

Financial Crimes

Financial crimes such as fraud and tax evasion are widespread in Nepal, involving both Nepali and foreign nationals. In recent years, Nepali politicians, business leaders, and members of society have been charged and convicted of such crimes. The Department of Revenue Investigation in Nepal has filed lawsuits against hundreds of people for tax evasion and foreign currency misuse, which are often linked to the use of fake value-added tax receipts. Despite technological advancements in the tax regime, financial irregularities persist at provincial and local levels, more than at the federal level.

Criminal Actors

Criminal networks have been increasingly active and influential in the country’s criminal environment. Although criminal networks are typically small and lack the hierarchical or networked structures seen in other countries, their activities are facilitated by networks of corruption within the police force and by porous borders, which allow for cross-border smuggling of illegal goods such as arms, wildlife products, and antiquities. Individually, the scope of their activities may be limited, but collectively, these criminal networks have a considerable impact on the country’s economy, governance, and social stability. Corruption among state-embedded actors is rampant at all levels of the state, with current and former members of the army implicated in rhino poaching, and political parties’ youth wings engaged in extortion activities. Lack of monitoring of corruption cases and inefficient enforcement of regulations have allowed these actors to continue their involvement in criminal markets.

Meanwhile, foreign criminal actors, particularly high-level Chinese and Indian brokers, dominate criminal markets such as wildlife and drug trafficking in Nepal. Chinese nationals lead most criminal activities in Nepal, including cyber-dependent crimes, money laundering, human trafficking, and wildlife smuggling. The private sector is also a significant factor in criminal activity, and often operates in collaboration with government officials as well as foreign elements. Many companies involved in the extraction of stone, sand, and gravel operate without proper licences and oversight, often because of their affiliation with politicians. Mafia-style groups in Nepal comprise traditional criminal organizations and newer groups affiliated with political parties. These groups engage in a wide range of criminal activities such as extortion, racketeering, drug trading, sex work, and human smuggling, and are connected to the labour-migration industry and infrastructure investments. Even though their activities have been increasing in recent years, these groups’ influence is limited compared to other criminal groups active in the country.

Leadership and governance

Nepal faces notable governance challenges that have contributed to poverty and economic stagnation. These challenges include structural issues, lack of resources, and political instability because of ethnic and class-based tensions. Although some improvements were made during the COVID-19 pandemic, governance remains weak, with high levels of perceived corruption and a lack of institutional capacity for effective regulation. Nepal’s multi-ethnic and multi-religious population makes it difficult for a single party to foster broad political consensus, resulting in a high turnover of governments. Political parties and their youth wings reportedly engage in criminal activities such as extortion, creating insecurity to garner votes and favourable outcomes. Corruption is widespread in state-spending audits, public procurement, conflict of interest rules, asset declarations, and campaign financing. Nepalese officials have been accused of large-scale corruption related to permits and approvals, procurement, and contract rewards, while bribes are common when accessing public services. Despite a comprehensive legal anti-corruption framework, enforcement of regulations is weak.

Although Nepal has ratified several treaties and conventions related to human rights and transnational crime, the country has very few institutionalized mechanisms for mutual legal assistance in criminal matters or bilateral law enforcement cooperation. However, the country continues to collaborate with its counterparts at the regional level and on a bilateral basis with an aim to combat transborder organized crime, including arms and human trafficking and illegal wildlife trafficking as well as international terrorism. Nepal’s organized crime legislation addresses various forms of human trafficking, and its legislation for narcotics prevention and control was recently updated with the aim to support collaboration and partnership among stakeholders. However, the overall legislative framework for organized crime is outdated and has significant gaps.

Criminal justice and security

Nepal’s judicial system has been plagued by corruption, with judges frequently accepting bribes for favourable rulings, which leads to the public’s lack of trust in the judiciary. The resolution of commercial disputes is a cumbersome process that can take years to complete, and companies do not have much faith in the ability of the courts to challenge government regulations or to settle disputes. The vulnerability of courts to political pressure, bribery, and intimidation is more pronounced in lower-level courts, and government adherence to Supreme Court rulings, including human rights cases critical of the government, is not consistent. The prison system in Nepal is overcrowded and unsanitary, with inmates experiencing poor conditions including deprivation of natural light, ventilation, food, and hygiene facilities.

Since the civil war, the police force in Nepal has struggled to maintain law and order, particularly in rural areas, with low morale, underpayment, and widespread corruption among lower-level officials. Top police officials wield considerable power and can establish a system of clientelism, further promoting corruption. Moreover, Nepali police lack necessary training and resources to investigate complex cases involving organized crime.

Nepal shares a long, porous border with India and China, and has ongoing territorial disputes with both, which have resulted in tensions. The border is also a trans-shipment point for drugs, and weak border controls have fuelled cross-border criminal activities, including the trafficking of people, small arms, contraband goods, and counterfeit currency. Terrorist groups are also exploiting these conditions.

Economic and financial environment

Nepal’s weak regulatory environment and lack of economic stability have made the country an easy target for money laundering. Although improvements have been made to the country’s anti-money laundering regime, there are still major deficiencies, including a lack of digitized data and detailed information on banks’ customers.

Nepal is one of the poorest and least developed countries in the world, and its economic growth has been adversely affected by political uncertainty, conflict, and natural disasters. The focus on political transition and the attainment of peace has disrupted efforts to achieve economic and other reforms that would improve the investment climate, stimulate growth, and create more private-sector jobs. Although improvements have been made in the realms of financial inclusion and access to credit, many deficiencies persist, such as difficulties in contract enforcement, lack of open and credible evaluation and due-diligence processes, and the difficulties of starting a business in the country. Furthermore, high levels of corruption have a major negative impact on the investment climate in Nepal. Nepal’s economy also suffers from shadow or informal economic transactions, which happen through informal debt and money-transfer markets. Additionally, the country’s poor regulatory capacity has contributed to inconsistencies in market forces, with this informal sector making up a great percentage of the country’s workers.

Civil society and social protection

The Nepalese government has attempted to support victims of organized crime, especially those affected by human trafficking, but there are still significant gaps in support frameworks and their implementation. The government has approved a regulation to enhance protections for victims of crime, including the right to seek compensation, but the overall mechanisms for victim-witness protection, as well as the practices of police and justice officials, remain inadequate. The lack of sufficient and effective witness protection legislation allows perpetrators of all forms of criminal activity to operate with impunity. The government’s provision of treatment and rehabilitation services for people who use drugs remains poor, and privately-operated programmes are unaffordable to many. Treatment at these centres have also been described as physically and mentally abusive.

The government has implemented measures to prevent human trafficking by funding local anti-trafficking committees and conducting public awareness campaigns. Also, it offers free skill certification for returned workers to ensure their employability and has updated its Foreign Employment Information Management System platform to effectively register data on returning workers. The government’s success in tackling the illegal wildlife trade has culminated in multiple years of zero poaching of the country’s flagship species. However, measures to prevent the country from being used as a transit point in the transnational illegal wildlife trade have been largely unsuccessful thus far.

Nepal’s constitution and laws provide for freedom of expression and association, but journalists, NGOs, and political activists have reported government restrictions on media freedom and raised concerns about the legal framework for civil society. Although NGOs play an active role in the political landscape and have successfully raised awareness about human trafficking, they face challenges in communicating their agenda to national organizations and political actors because of government corruption and institutional cronyism. There are several independent media outlets operating in Nepal, with general political alignment resulting in bias towards certain parties. Defamation and libel are criminalized, leading to self-censorship among journalists, and some have faced harassment and threats. Government restrictions on private media have included deportation of foreign journalists and limited issue of media-related visas, but internet content remains uncensored.

People

Malaysia is a destination country for forced labour and sex trafficking, with the majority of victims being foreign workers. The prevalence of forced labour is highest in industries such as agriculture, including palm oil plantations, construction, electronics, garment production and rubber products. Despite allegations, the government has not investigated these issues or allocated a bigger budget to increase the number of labour inspectors. Corruption also poses a significant obstacle to anti-trafficking efforts, as some officials profit from exploiting foreign nationals and colluding with traffickers. With the COVID-19 pandemic, there has been an increase in this type of crime on the internet. Traffickers use fraudulent recruitment practices to lure women and girls from South East Asia, Nigeria and Rohingya refugee camps in Bangladesh to Malaysia for commercial sex.

Due to extreme labour shortages and high demand for workers to fill ‘3D jobs’ (dirty, dangerous and demeaning), human smuggling is prevalent in Malaysia. Criminal networks bring labour forces illegally from less-developed countries, and South East and South Asian nationals are smuggled as far as the Middle East, Europe, North America and Australia. Additionally, state-embedded actors have been involved in human smuggling, fuelling corruption and affecting the public sector, thereby limiting the capacity to identify victims. In Malaysia, victim protection programmes do not apply to people who have been smuggled unless there is proof that they are being exploited sexually or exploited for forced labour or as organ donors, resulting in them becoming victims of human trafficking.

Extortion cases involving housing developers, construction site managers, contractors and other employers have been on the rise in Malaysia. Gangs running extortion rackets are increasingly targeting public projects and private companies in the Klang Valley. They demand payment from the head or manager of a project, including business owners, as a ‘fee’ for protection services to ensure the project is not disrupted.

Trade

Malaysia’s geographic location has favoured the smuggling of small arms and light weapons into the country in recent years. The Strait of Malacca, historically an important trade route, is now also used for criminal activities such as drug trafficking, human trafficking and cigarette smuggling, as well as arms trafficking. Small arms and light weapons are often smuggled across the Thai and Kalimantan borders or on boats from Indonesia and are used for illegal activities such as drug trafficking and armed robberies. Firearms remain easily accessible through purchasing or rental services, and illicit firearms have been seen at rallies throughout Malaysia. Corruption among law enforcement officers who claim to have lost their firearms has also contributed to the problem. Police suspect that firearms smuggling is being carried out at the Thailand–Malaysian border for the benefit of Islamic State cells, which are believed to be planning attacks in the country.

Counterfeit goods are a significant problem in South East Asia, particularly in countries such as Malaysia and Thailand, which play a significant role in manufacturing and repackaging fake products for international markets. The region is vulnerable to counterfeiting due to its proximity to China, the world's leading source of counterfeit products. The market for counterfeit goods includes a wide range of products, from luxury brands to pharmaceuticals, food products, automotive parts and cigarettes. Counterfeit medicines are also a significant issue.

Illicit tobacco trade, particularly in ‘illicit whites’, is a rampant issue in Malaysia. This is due to a combination of law enforcement pressure in Singapore and uncoordinated policy decisions in Malaysia, which drive cigarette smuggling. In addition, high taxation on alcoholic beverages and cigarettes in Malaysia has led people to obtain both products from illicit sources. During the COVID-19 pandemic, the illicit tobacco trade saw a decrease, but it has risen again since the lifting of restrictions.

Environment

Illegal logging and deforestation have been significant issues in Malaysia. A significant portion of the logging is linked to the palm oil industry, which has been accused of engaging in illicit activities. Corrupt government officials and economic groups have been implicated in these crimes. State-embedded actors involved in illegal logging have been difficult to combat, with corruption identified as a major problem in Sabah and Sarawak, where two-thirds of the remaining natural forests are located. Despite tough laws in place, few loggers face serious consequences for breaking the law, and criminal networks are sometimes involved in forced labour and abuse within the forestry sector. Environmental activists and indigenous communities have called for stricter regulations on the palm oil industry and a ban on the export of unprocessed logs.

Wildlife trafficking is major issue in Malaysia, and the country is one of the top 10 hubs for wildlife smuggling in the world. It is home to a diverse range of animals and is a source and transit country for internationally trafficked wildlife products, such as ivory, rhino horn, pangolins, tigers and tiger parts, birds, reptiles and Testudines. The Thailand–Malaysia border crossings are often used to smuggle pangolins and ivory into China and Vietnam. Despite efforts to combat this crime, it is likely that state-embedded actors and major, highly organized Malaysian networks are involved. Malayan tigers and hornbills are among the animals most at risk of extinction due to poaching and trafficking.

Illegal gold mining continues to be a persistent problem in Malaysia, despite government efforts to crack down on it. The country has also been the site of illegal bauxite and iron mining, but the government ban has significantly reduced these activities. The Malaysian government has launched a task force to tackle illegal mining activities, but neither the COVID-19 pandemic nor law enforcement has stopped illegal miners from operating in forest reserves.

Drugs

Malaysia is a significant transit country for the transportation of heroin and other illegal narcotics in Asia and Oceania. The country acts as a hub for transporting these substances to other countries, such as Indonesia, Singapore, China, Japan, Korea, New Zealand and Australia. Pakistani syndicates and transnational criminal networks are among the actors involved in the illicit heroin trade in Malaysia. Due to COVID-19-related border and transportation controls, heroin traffickers have shifted to maritime routes through the Andaman Sea and the Strait of Malacca to ship drugs from Myanmar and Thailand. Malaysia is also involved in the cocaine trade, primarily as a transit country. Nigerian syndicates are involved in trafficking multiple drugs, including cocaine, using Malaysia as a transit point. Although the death penalty is still in force for drug trafficking, Malaysia is still considered a ‘softer’ option for transit compared to some other countries.

Malaysia is a moderate market for cannabis as its usage is low and is decreasing. The drug enters on small fishing boats through remote mangrove forests and is then distributed through a peer-to-peer network and online. Canada and the US are among the six most frequent countries of origin, as the demand for high-quality cannabis is increasing. Cannabis also flows into the country from Laos, and there is a concern of cannabis coming into the country from Thailand, which decriminalized it in 2022. Regarding the synthetic drug trade, the number of methamphetamine users in Malaysia is reaching or surpassing that of heroin users, and the country has become an attractive destination for international drug trafficking syndicates. Methamphetamine shipments come from various countries, including China, Myanmar, Thailand, the US, Laos and Nigeria. Even though the primary destination of this drug is Malaysia, the country is also a transit point for other destinations such as Indonesia, Japan, the Philippines, other countries in Asia and Australia. Malaysia is also known for its ecstasy (MDMA) laboratories, as it is the second most common country of origin for the drug in Asia. However, the production of methamphetamine has been declining, while the emergence of new psychoactive substances has been on the rise in the country.

Cyber Crimes

Malaysia is experiencing a significant increase in cybercrime, with a sharp rise in reports of hacking and other digital crimes. Losses from cybercrime affect both individuals and businesses across the country. The rise in this type of crime is attributed to several factors, including the rapid growth of Malaysia's digital economy and the increasing adoption of digital technologies by individuals and organizations. To combat cybercrime, the Malaysian government has taken several measures, including establishing a dedicated agency for cyber-security, implementing cyber-security laws and regulations and increasing public awareness campaigns on digital safety and cyber-security best practices. Despite these efforts, cybercriminals continue to evolve their tactics and techniques, making it challenging for law enforcement agencies to keep up. Therefore, cyber-security remains a top concern for Malaysia, and efforts to strengthen the country's digital defences continue.

Financial Crimes

Financial crimes remain a severe issue in Malaysia, with customer fraud, bribery and corruption and asset misappropriation often named as common and disruptive crimes. To address these issues, Malaysian authorities have introduced new security measures in banks aimed at curbing the threat of financial crimes. However, despite these efforts, there has been a surge in online phishing/malware distribution and moderate levels of online fraud reported in recent years. Additionally, Malaysia remains vulnerable to the misappropriation of government funds.

Criminal Actors

Malaysia is currently facing an increasing problem with organized crime, with authorities identifying several active mafia groups in recent years. These groups are estimated to have tens of thousands of members throughout the country, and tensions between them have led to turf wars and a rise in violent crime, particularly related to drug trafficking and gambling. Smaller criminal networks are also involved in a range of illegal activities, including human trafficking and smuggling, fauna crimes, cigarette smuggling, pyramid schemes and cybercrime. These groups are often decentralized, ties among their members are loose and they operate outside of any hierarchical command structure.

Foreign criminal organizations dominate fauna crimes, the drug trade and human trafficking in South East Asia, with Chinese Triads being one of the largest and most dangerous groups. In Malaysia, they are more likely to be involved in sex work, loan sharking and pirated goods, while Nigerian syndicates collaborate with local gangs in drug trafficking. Chinese Triad networks in the country are run as businesses and make deals with authorities who often turn a blind eye to their activities. The synthetic drug trade, primarily in methamphetamines, involves multiple foreign networks, including Taiwanese groups and Australian outlaw motorcycle gangs.

State-embedded actors and corrupt officials are believed to be enabling human trafficking and fauna crimes in Malaysia, often through bribery and corruption. Criminal gangs also have a presence in the political arena and can influence officials to commit crimes with impunity. Corruption is also reportedly a significant issue across the private sector in Malaysia, involving bid rigging, corporate fraud and bribes. Private sector executives reportedly pay bribes to counterparts across both the private and public sectors to get work done. Additionally, procurement fraud in the private sector is perceived as a significant issue.

Leadership and governance

Recent Malaysian governments have been described as resistant to reform and accused of restricting political freedoms. In 2021, a state of emergency was declared, allowing the prime minister to rule by decree amid rising COVID-19 cases, which was criticized as an attempt to avoid a no-confidence vote. After a period of political turbulence, a new government was elected with a two-thirds majority in Parliament. However, the electoral framework has weakened the legitimacy of elected officials, and political instability has hindered the adoption of a firm state strategy against crime, which is further complicated by the fact that corruption has infiltrated the highest levels of political elites.

Although Malaysia ranks better than neighbouring South East Asian countries in terms of transparency, corruption continues to undermine the trust of Malaysia’s population. Despite an increase in corruption-related convictions against civil servants, corruption remains endemic, and the government's efforts to combat it have been described as insufficient. The lack of independent oversight regarding state-affiliated companies and investment funds has created conditions conducive to corruption. Malaysia has a dedicated government agency to combat corruption, but it has received extensive criticism from the public and is perceived as being partial and under the control of the prime minister.

Malaysia has been actively participating in efforts to combat transnational crime in South East Asia, particularly in the areas of drug, wildlife, timber and arms trafficking. The country has ratified most of the treaties regarding organized crime, but it has failed to do so with special protocols against human smuggling and the illicit manufacturing and trafficking of firearms. Malaysia has a robust legal framework for addressing organized crime, with numerous pieces of legislation against crimes that affect the environment, cybercrime, falsified medical products, the obstruction of justice, participation in an organized criminal group, human smuggling, terrorism, trafficking in cultural property and trafficking in persons. The government has implemented community-oriented policing, which relies on a partnership between the police department and the community to identify, reduce, eliminate and prevent problems related to public safety and order. However, enforcing effective strategies, particularly regarding human trafficking, remains a challenge.

Criminal justice and security

The judiciary in Malaysia is headed by the Federal Court, which is divided into trial and appellate divisions. Historically, the executive government's extensive influence has compromised judicial independence. In fact, the various units tasked with organized-crime-related matters involve government officials and are not considered independent by the public. Existing laws undermine due process guarantees, and the police can detain anyone without judicial review. Pre-trial incarceration does not follow international standards, and prisons are overcrowded and unsafe.

The Royal Malaysian Police have been accused of corruption, misconduct and discrimination, leading to a lack of public trust. Malaysia's primary intelligence agency, the Special Branch, is reported to operate often without checks and balances, and its detainees have no right to lawyers or judicial review. Malaysia does not have legislation governing police use of firearms in accordance with international standards, and efforts to establish an independent oversight body to investigate complaints against the police have been unsuccessful. Although demonstrations are often held, police continue to enforce restrictions on assembly events and investigate participants in allegedly illegal protests.

Malaysia shares its borders with Brunei, Indonesia and Thailand, primarily in remote areas with challenging topography which makes it difficult to carry out extensive surveillance, exacerbating Malaysia's vulnerability to criminal flows such as smuggling, human trafficking and the illicit drug trade. Malaysia has increased border control, patrolling and cross-border collaboration with neighbouring countries to combat illegal activities, but challenges remain. Despite Malaysia's closure of its borders due to the pandemic, illegal activities such as human trafficking and contraband smuggling remained rampant along the Thailand–Malaysia border.

Economic and financial environment

Malaysia's well-developed financial system increases its vulnerability to criminal activities such as corruption, terrorism financing, fraud, drug trafficking, smuggling and tax crimes. Despite this, Malaysia has modern anti-money laundering (AML) legislation and institutional frameworks in place and has made progress in improving its AML implementation by increasing money laundering investigators and prosecutions. However, Malaysia still needs to improve its prosecution of foreign-origin crimes. The country has several agencies regulating money laundering crimes, and its effectiveness in addressing these risks is considered moderate.

Malaysia's economy has been growing steadily, with an average annual growth rate surpassing 5% for almost a decade. The country is expected to become a high-income economy in the coming years. Despite setbacks due to the pandemic, Malaysia's economy is starting to recover, driven by the manufacturing export sector and public initiatives to boost digital investments and construction activity. However, Malaysia needs to upgrade its investment and financial freedom regulations and address issues related to government integrity. The country has a vibrant private sector, but bribery is common, and there is a close connection between political and economic elites, which distorts normal business activity and fair competition.

Civil society and social protection

Although the government offers programmes including counselling, training and medical services for victims of human trafficking, potential victims are still punished with arrest, detention and deportation. Additionally, people who are smuggled are not eligible for the victim-protection programme, which often results in foreign victims being treated worse than Malaysian victims. Malaysia's law protecting whistle-blowers has shortcomings, as there is no centralized management or single authority responsible for providing that protection. The existing system also poses potential risks of leaks of the whistle-blower’s identity within the police system.

Malaysia has made strides in crime prevention by establishing institutions to promote awareness and rehabilitate offenders. The country has implemented campaigns against drugs, mobilizing communities to address local drug problems and increasing access to treatment and rehabilitation services. Although the government has maintained efforts to prevent human trafficking by implementing a national action plan and creating various anti-trafficking programmes, employment law still excludes domestic workers from certain protections, and there is a lack of adequate resources for identifying and enforcing laws against labour trafficking. Additionally, promises to combat the illicit wildlife trade have not been fulfilled.

The media market in Malaysia has been influenced by political pressure and harassment, with private news publications and television stations being controlled by political parties or businesses allied with the government. After the 2018 elections, independent outlets benefited from a reduction in political pressure and harassment, but the new government has placed more pressure on private media. Academic freedom and freedom of assembly are also limited, with disciplinary action taken against instructors and students who espouse anti-government views or engage in political activity. Several NGOs operate in Malaysia and have a strong record of campaigning for electoral, anti-corruption and other reforms. However, they must be approved and registered by the government, which has refused or revoked registrations for political reasons in the past. Several activists have been subjected to police harassment and criminal charges, particularly for speech-related offenses. The relationship between civil society organizations and the government has also been strained, with severe restrictions on NGO activity imposed due to COVID-19.