People

Although driven primarily by local demand, the US human trafficking market accrues profit both domestically and internationally. Foreign criminal networks dominate the market, with most victims coming from Mexico, Honduras or the US. Vulnerable groups include homeless youth, minors in the child welfare and juvenile justice systems, non-citizen workers, disabled individuals, LGBTQ+ individuals, drug addicts, indigenous women and girls, and victims of domestic violence. Internet and social media platforms have largely replaced traditional sex trafficking recruitment venues.

There is a highly consolidated human smuggling market along the US–Mexico border, where various domestic and foreign criminal actors, as well as both US and Mexican officials, facilitate the smuggling of people into the US. While Mexican nationals remain the largest group of migrants smuggled into the US, many others hail from Honduras, Guatemala and El Salvador. Smuggling of migrants from countries such as Ecuador, Brazil, Nicaragua, Venezuela, Haiti and Cuba, mainly linked to declining socio-political circumstances after the COVID-19 pandemic, has also increased in recent years. Human smuggling costs have risen, and victims are increasingly susceptible to various forms of exploitation, including drug trafficking. Before the reversal of restrictive COVID-19 policies, many asylum seekers were forced to remain in unsafe areas of northern Mexico under threats of violence and extortion by local criminal groups.

Even though extortion and protection rackets are conducted by both domestic and transnational crime groups operating in the US, these criminal activities are not pervasive in the country, with only limited and sporadic instances reported in recent years.

Trade

The US arms trafficking market is large and considerable, with the country serving as both a source and destination for difficult-to-purchase firearms, including machine guns. Guns that are trafficked within and across state lines contribute significantly to domestic violence, but the scope of the market is also transnational. The US, for instance, is a major source of illicit foreign weapons and ammunition in Brazil and is responsible for a large portion of the arms seized in Mexico. Weapons sourced from the US often end up in the hands of armed gangs, drug traffickers and terrorist organizations abroad, sparking controversial debates over the links between arms proliferation, criminal violence and global terrorism. In recent years, the increasing severity of gun violence has reignited the gun control debate and further polarized partisan divides, with a record number of domestic gun-related deaths, including suicides, homicides and mass shootings.

Counterfeiting crimes cause significant financial losses to the US economy, with billions of dollars in annual damages. The increase in counterfeit imports through online platforms, and easy access to US-based consumers via international shipping companies has led to a surge in illicit products circulating within the country. The majority of intellectual property-infringing products are imported from Asia, mainly China, followed by Turkey and Vietnam. Counterfeit luxury goods, including watches, jewellery, handbags, wallets and consumer electronics account for most of the counterfeit products seized in the US.

While the US imposes excise taxes on various goods and activities, there is little evidence of significant illicit trade of excise goods, except for cigarettes. Some states experience black- and grey-market sale of cigarettes due to excessive taxes, leading to the transportation of tobacco products between low-tax and high-tax states and various Native American tribal lands. New York has the highest rate of inbound illicit cigarette traffic, followed by California, Washington, New Mexico and Minnesota. On the other hand, New Hampshire witnessed the highest rate of outbound illicit cigarette traffic, followed by Idaho, Virginia, Wyoming and North Dakota. Cigarette smuggling is a significant national issue that presents challenges at sub-national, national and global levels.

Environment

In the US, plant poaching has increased significantly, and recent reports show that poaching of dudleya plants in California has caused severe environmental damage. Despite being at risk of extinction due to Asian demand, the CITES-protected ginseng root has not been classified as endangered by US authorities. Poaching-related clashes have resulted in fatalities, and although rare, some poachers face prison sentences. While the US is not known for widespread illicit logging, it imports wood from countries with high rates of illegal logging, including Latin American timber and Honduran mahogany.

Wildlife crime is a significant problem in the US, which serves as a source, transit and destination for the illegal trade of wildlife and wildlife-derived products. The illegal trade involves both domestic and foreign-sourced animals and products, and the lack of a comprehensive strategy to combat the trade domestically means that high-value wildlife products often end up in the hands of unsuspecting consumers. Wildlife exploitation has caused significant environmental damage, leading to the loss of indigenous species and habitats. The market for wildlife trafficking in the country continues to be a lucrative criminal enterprise worth billions of dollars annually.

The illegal market for gold in the US is primarily sourced from Latin America, including countries such as Venezuela and Colombia, and smuggled into the country through small planes, charter jets or by using fraudulent paperwork. The gold is sold to American or foreign refiners who then sell gold bars to multinational corporations. Criminal actors, both domestic and foreign, participate in the trade of other valuable metals, minerals and stones, including silver, copper, coal, emeralds and uranium from countries such as Mexico, Colombia, Peru and Guyana. Despite a ban on Venezuelan gold by Caribbean islands like Curaçao and Aruba, the trade continues through other Latin American countries with little regulation or enforcement from US law enforcement officials. Gold is classified as a commodity rather than a monetary instrument, which hinders US law enforcement officials from combatting money laundering linked to illegal gold flows.

Drugs

The heroin trade is pervasive in the US, and closely connected to fentanyl, which had led to an increase in opioid addictions and a major public health crisis. Mexican mafia-style groups have a significant influence over the market, controlling smuggling routes and collaborating with US-based criminal networks to transport heroin throughout the country. Although Mexican-sourced heroin dominates the market, heroin from Colombia and Afghanistan also enters the country via sea and air. The US heroin trade also fuels territorial violence, has been linked to an increase in children in foster care programmes, and contributes to the transmission of diseases such as Hepatitis C and HIV through shared syringes. Despite a decrease in identified heroin trafficking offenders and heroin seizures, opioid-related deaths in the US have increased in recent years.

The US has a large and consolidated cocaine trade that is dominated by Colombian criminal groups for supply, Mexican networks for transportation, and US-based gangs for retail distribution. Most cocaine smuggled into the US comes across the US–Mexico border. Although cocaine consumption has declined slightly due to the increased availability of cheaper drugs such as opioids, drug overdoses remain a common threat, especially as cocaine is increasingly mixed with fentanyl or other synthetic opioids. The increase in cocaine production and availability in recent years has made Colombian-sourced cocaine the primary driver of the US cocaine trade, followed by Peru.

The cannabis trade in the US is among the top 10 worldwide, but its legality varies across state lines, making it difficult to assess the market's criminality. While some states permit both the medical and personal use of cannabis, others only allow medical use or prohibit it entirely, resulting in a fragmented and developing legal framework that engenders uncertainty for law enforcement officials and hinders state initiatives to combat cannabis-related crime. The majority of domestically circulating cannabis is illicitly produced by US-based drug trafficking organizations and state-licensed local growers, while foreign-sourced marijuana is also trafficked into the US from Mexico, Canada and the Caribbean. However, Mexican and Caribbean-sourced marijuana is considered inferior in quality to both US and Canadian-sourced marijuana.

The US synthetic drug trade is one of the largest in the world and poses a significant threat to public health and national security. Synthetic opioids such as fentanyl dominate the market, with a major share of drug overdose deaths involving this drug. Mexican drug cartels import raw materials from Asia to produce and traffic fentanyl, along with counterfeit versions of popular drugs like Adderall and Valium. Mexican-sourced methamphetamine is also commonly consumed, but a crackdown on precursor chemicals has led to dangerous reformulation by Mexican drug cartels. The emergence of a new synthetic opioid called isotonitazene is also a concern. Despite US law enforcement efforts to combat the synthetic drug trade, dark web fentanyl transactions and traditional drug trafficking routes continue to pose challenges.

Cyber Crimes

The US is considered to be at high risk for cyber-dependent crime as compared to other countries. Among the most commonly committed cyber-dependent crimes are ransomware attacks, hacking and personal data breaches, which result in annual losses of billions of dollars. Ransomware attacks have targeted larger sums of money and impacted critical infrastructure sectors such as the defence industrial base, food and agriculture, government facilities and information technology. Russian-based ransomware gangs are the most aggressive attackers of US enterprises, and the rise in ransomware attacks can be attributed to poor corporate security measures and a thriving ransomware-as-a-service industry. Reports indicate that a significant number of affected companies have paid ransoms, but over half were able to recover their lost data. Emerging scams involving non-fungible tokens and cryptocurrencies such as bitcoin also constitute a significant threat.

Financial Crimes

Financial crimes have become an increasingly pressing issue in the US. A growing number of citizens are falling victim to fraud and collectively losing billions of dollars each year. Imposter and shopping scams are among the most common types of fraud. Business email compromise schemes and identity fraud have also seen an uptick in recent years. While states like Georgia, Maryland, Delaware, Nevada and Florida have reported the highest number of scam complaints, California has experienced the greatest financial losses from these crimes. One contributing factor to the prevalence of financial crime in the US is the differing financial regulations among states, which have allowed some states to become offshore destinations for foreign tax evasion. Delaware, Nevada, Wyoming and South Dakota are considered among the riskiest states in this regard. Tax evasion is estimated to reach over a trillion dollars in annual losses, with tax revenue accounting for a smaller percentage of GDP than at most other times in recent US history. In 2021, wealthy corporations were responsible for over half of the unpaid tax revenue in the US.

Criminal Actors

Smaller criminal networks and gangs, particularly those specializing in drug trafficking, reportedly receive the most attention from US investigators and prosecutors. There are tens of thousands of active criminal gangs across the country. Criminal networks and gangs often collaborate with foreign drug trafficking networks and employ high levels of violence to carry out their operations. Private sector actors in the US are known to be heavily involved in financial crime, including tax evasion and corrupt schemes, which are difficult to detect and are often tied to political corruption. While corruption in the US private sector is relatively low, it poses a significant risk to the economy and society as a whole, with potentially devastating consequences for public trust and confidence in key institutions.

Mafia-style groups continue to be active criminal actors in the US. A variety of mafias are still operational in the country, with an estimated several thousand associates based there. They exert territorial control over areas such as New York, southern New Jersey and Philadelphia. In addition, mafia-style groups continue to operate in Chicago and other places, sometimes forming alliances with other criminal enterprises. These groups engage in drug trafficking, money laundering and healthcare fraud targeting Medicare. Members of these groups have easy access to weapons and carry arms openly. Mafia-style groups are also linked to labour racketeering, extortion and union-related corruption schemes. Outlaw motorcycle gangs have been involved in mafia-style killings. Foreign criminal groups also have a significant influence on various criminal activities in the US, including drug and human trafficking, cybercrime and election interference. Central American criminal organizations dominate the drug trafficking market, but Mexican, Dominican and Colombian-based groups also have a share. Asian criminal groups control the trafficking of cannabis, MDMA and precursor chemicals. In addition to drugs and human trafficking, foreign actors also play a significant role in cybercrime.

Evidence directly linking state-embedded actors to organized criminal markets – on either domestic or transnational levels – remains elusive. In fact, corruption in the public sector, public procurement and tax administration sectors of the US economy is relatively uncommon. However, the proliferation of locally-based corruption among US officials – especially in relation to transnational criminal activity along the US–Mexico border – is an increasing concern.

Leadership and governance

Recent challenges, including the COVID-19 pandemic, exposed structural problems in the federal government and emphasized the differences in strength of local and state governing bodies. Along with domestic issues, the US faces external conflicts, nuclear tensions with North Korea and Iran, trade- and Taiwan-related tensions with China, and foreign influence campaigns from Russia and China. The political scene is polarized, making it difficult for any government to implement its agenda, and posing a risk to the local and global economy due to the politicization of the debt ceiling. Against this backdrop, however, the US has proven to be capable of addressing the organized crime situation in the country, with evidence indicating that the state is sufficiently robust to meet the challenge. Nevertheless, organized crime continues to be a significant problem, with ongoing challenges to governance due to deep political divisions over anti-corruption strategies. Although the current government has launched initiatives to address transparency and accountability issues, several legislative reforms remain pending.

The US is a signatory to several international treaties and conventions related to organized crime and generally complies with international anti-organized crime regulations. The current administration has increased international cooperation efforts in comparison to the previous one. It rejoined the Paris Climate Agreement and is focusing on extradition treaties, especially given the rise in cybercrime. US–Mexico relations have provided for relatively smooth extradition processes in the past, but tensions have risen due to various incidents involving drug-related charges. However, US authorities have relied heavily on Mexican support to combat irregular immigration along the US–Mexico border. Since the outbreak of the Russia–Ukraine war, the US has collaborated with NATO allies to provide both military and humanitarian aid to Ukraine. The US has a robust legal framework against organized crime, criminalizing various forms and outlining investigation, arrest, prosecution, adjudication and punishment procedures. The current administration has implemented several legal reforms, including repealing previous policies and laws on energy conservation, environmental protections, H1-B visas and other issues. One of the most controversial reforms has been vacating the previous policy of facilitating extrajudicial deportation of smuggled people and asylum seekers throughout the COVID-19 pandemic. Additionally, legislative reform regarding anti-counterfeit legislation has garnered widespread support, with one relevant piece of legislation amended to require online marketplaces to engage in preventative practices such as verifying sellers' identities and screening for counterfeits before sellers' goods appear on the platform. A lack of federal anti-gun legislation, which resulted in an increasing dependence on individual state legislation, has rendered weapons transport across state lines a relatively easy affair. Loopholes in various state-level policies, such as variations on the requirement of background checks for weapons purchases, also render state legislation easy to exploit. These shortcomings resulted in an alarming increase in mass shootings across the US.

Criminal justice and security

Recent years have seen an increasing politicization of the US judicial system, with concerns over partisan judicial appointments and campaign fundraising leading to fears of judicial bias. Both the previous and current administrations have made record-high judicial appointments. Additionally, executive and legislative officials in some states have sought influence over state-level judiciary affairs, which has narrowed judicial independence. Issues impacting the US judicial system and leading to high incarceration rates include deficiencies in the parole system, funding shortages for public defence, racial bias and the imposition of minor offence-related court fees. Despite that, there is a sufficient framework to respond to major organized crime issues. The US currently has the largest known prison population worldwide, with millions of individuals incarcerated or in pre-trial detention in federal or state prisons. The extensive use of plea bargaining and overcrowding in US prisons are also raising concerns, although efforts have reportedly been made by the Biden administration with regards to overincarceration. The use of the death penalty has declined significantly over the years.

A number of agencies working within the Department of Justice and the Department of Homeland Security focus on organized crime at the federal level. A Department of State bureau also specifically focuses on organized crime, and the US is one of few countries in the region that has a federal agency specifically focused on guns, the Bureau of Alcohol, Tobacco, Firearms and Explosives. Moreover, the Department of Justice - via both the Federal Bureau of Investigation (FBI) and the National Cyber Investigative Joint Task Force - leads US efforts to combat cybercrime. However, while state and local law enforcement agencies receive more resources, which may indicate the prioritization of fighting organized crime, issues such as unqualified leadership, poor candidate screening and weak staff training continue to be a concern. Police killings, which have racial disparities, have eroded public trust in law enforcement officials. Police brutality rates have remained consistent since George Floyd's death, and efforts to reform the US law enforcement system have been limited.

The US shares land borders with Canada and Mexico; the border with Mexico is a significant challenge for the country’s territorial integrity due to its proximity to multiple transnational criminal markets. Customs and Border Protection officials monitor hundreds of land, sea and air points of entry, but their efficacy has been called into question as criminal networks continuously circumvent US border regulations. The US is considered the most cyber-capable country worldwide in terms of both hacking and digital defence. The country's increasing reliance on technology has expanded the number of potential hacking targets, and the growing brazenness of geopolitical adversaries, including Russia, China, Iran and North Korea, makes the US highly vulnerable to cyber-attacks. Moreover, the internet of things has led to an increase in targeting of the government through an uptick in crimes such as spying on government agencies, stealing sensitive information from public and private sector entities, stealing intellectual property and destroying computer equipment.

Economic and financial environment

The global dominance of the US dollar makes it highly vulnerable to money laundering, given the sheer magnitude of global financial transactions flowing through US banking institutions. These transactions involve crimes such as fraud, drug trafficking, human smuggling, human trafficking and corruption. In recent years, large-scale reforms aimed at increasing the country’s AML capacity have been implemented. However, the Financial Crimes Enforcement Network, which is the world's leading AML watchdog, has been underfunded and overstretched, lacking adequate capacity to effectively combat money laundering. It is estimated that approximately one quarter of all funds laundered worldwide are made through US-based financial institutions. Although most US states have robust anti-money laundering legislative frameworks, money laundering risks tend to vary by state.

While economic regulatory capacity is not lacking in the US, the political will to empower and encourage adequate oversight remains a challenge. Despite an increase in GDP per capita after the pandemic, mounting consumer prices due to the great resignation, chip scarcity and problems with the global supply chain drove an uptick in inflation throughout 2022, reaching a 40-year high. The US is the largest economy in the world, but increasing government overspending and the politicization of the debt ceiling pose serious risks to the national and global economy.

Civil society and social protection

There have been increasing efforts made to support crime victims and witnesses in recent years, and numerous victim and witness support programmes exist across the country. However, the most common ones are still operated by non-profit and faith-based organizations, followed by governmental organizations. The US federal Witness Security Program provides 24-hour protection to all witnesses, and there have been no reports of witnesses who follow programme guidelines ever being harmed or killed while under its protection. National media efforts have also increased the effectiveness of US-based victim and witness support services.

Efforts by the US government to prevent organized crime faced challenges during the previous administration, but they are recovering. The focus of the anti-drug trafficking strategy has shifted toward a preventative healthcare approach, with increased investment in addiction treatment and alternative pain medication. However, critics are calling for more extensive public awareness campaigns to prevent drug-related issues. The authorities have also sought to limit both the domestic production and foreign import of opioids through counter-narcotic assistance to source countries, legal restrictions on the medical prescription of opioids and rehabilitative approaches toward opioid consumers. In terms of cybersecurity, the US is developing federal- and state-level preventative initiatives in response to an increased number of cyber-attacks, especially ransomware.

Civil society actors provide a significant portion of available victim and witness support services in the US. While legislation grants widespread freedoms to NGOs pursuing their respective civic or political agendas, labour unions lack similar freedoms and have significantly declined in strength. Republican-led states have also passed problematic electoral laws that have rendered voting more difficult and raised risks of greater partisan interference in election management, vote counting and certification. The country boasts a robust tradition of press and media freedom. However, several chronic issues remain, despite some advances by the current administration. In particular, online harassment of journalists, particularly women and minorities, threatens their safety and quality of life. Public distrust in the media reached unprecedented levels due to issues such as media polarization, fuelling of dangerous conspiracy theories, the disappearance of local news outlets and the weakening of journalism by social media and other digital platforms. The residual impact of widespread polarization, misinformation and the incitement of violence has led to lingering erosion of societal cohesion and politics, as well as violent uprisings.

People

Human trafficking remains a significant issue in the Philippines, despite government efforts to fight it. Filipino nationals are trafficked for labour and sexual exploitation, both domestically and internationally. Labour is a key export, with recruitment especially focused on impoverished women and children. The use of the internet and social media has exacerbated human trafficking activities, particularly with respect to online child abuse material. The COVID-19 pandemic has worsened poverty and vulnerability, leading to an increase in minors being trafficked for forced labour in a number of industries. Adults are also affected, as women are coerced into sexual exploitation through Philippine offshore gaming operators (POGOs) and workers are exploited there for forced criminality. Although the government has taken steps to prevent the activities of POGOs, many businessmen and supporters of the current government are closely tied to these operations, inhibiting measures taken by the government. Domestic ‘sex tourism’ and online pornography continue to grow, with children being especially vulnerable to exploitation.

Human smuggling in the Philippines is closely linked to human trafficking, with the country serving mainly as a source for labour migration and human smuggling to other South East and East Asian countries, as well as the US, EU and the Gulf region. The COVID-19 pandemic has caused many Filipino nationals to fall victim to human smuggling rings in search of better economic opportunities. Individuals are also frequently recruited online through social media platforms and local networks, with promises of employment opportunities abroad. Corrupt government officials and immigration agencies are reported to be involved in human smuggling and trafficking operations, facilitating the departure of overseas Filipino nationals and assisting in the production of false documents.

Extortion and protection racketeering are widespread issues in the Philippines, with petty extortion being carried out by those in positions of authority. Criminal groups in some regions are also known to extort small businesses. Sexual extortion – or sextortion – is a growing problem in the Philippines, enabled by high technology and the cyber domain. Criminal gangs control the sextortion industry in the country, with reports suggesting that the Philippines may serve as a base for organized groups engaged in the activity.

Trade

Arms trafficking in the Philippines continues to be a significant problem, as the country’s porous borders allow traders to move between licit and illicit sectors. Legally manufactured arms find their way into the illicit market, with most of them being domestically produced or leaked from government stockpiles. The cottage industry of homemade weapons in Danao, Cebu, also contributes to the illegal arms trade. Some affiliated militias of the military allegedly undertake the illicit domestic trade of imported weapons, which are used by various violent non-state armed groups in the country. Corruption among border forces at official entry points along the country’s vast sea border also enables this trade. Despite this, violent deaths have been declining for years, gun laws are stricter and actively enforced, as authorities seize thousands of firearms each year. However, the recent presidential and local elections saw weapons changing hands as candidates did not only rely on official government security.

Illicit trade is a widespread problem in the Philippines, with corruption among customs officials a significant driver. The country is a source, transit and destination country for counterfeit goods, including fake whiskey and liquor, shampoo and soap, fake designer clothing and counterfeit diplomas. The COVID-19 pandemic has led to an increase in counterfeit medicines, making the Philippines a hotspot for counterfeit drugs in the region. Despite law enforcement raids, counterfeit sellers are becoming bolder in openly discussing the illicit nature of their products. The Philippines has also been facing a problem of illicit trade of excisable goods, mainly tobacco products. The increase in excise tax on tobacco has led to a rise in demand for cheaper illegal products, resulting in an increase in seizures of illicit cigarettes in recent years. Despite efforts made, illegal cigarette labelling sites have been uncovered and raided, indicating that the Philippines might also be a source of contraband cigarettes. As a result, lawmakers are considering giving more power to enforcement agencies to intensify their efforts and increase penalties for illegal traders.

Environment

Illegal logging and flora trafficking remain significant issues in the Philippines, leading to deforestation and endangerment of animal species. The Sierra Mountain range, Palawan and Samar Island are the main hotspots for flora crimes. The illicit logging industry is composed of two sectors: commercial-scale logging, which exports wood to other countries; and small-scale logging, carried out by local communities in survival mode. Corruption and the difficulty in policing vast forest areas contribute to the ongoing problem. While the Philippine government has made some efforts to combat illegal logging, weak governance and poverty continue to pose significant challenges.

Wildlife trafficking is also rampant in the Philippines, making it one of the most valuable markets for this crime globally. The COVID-19 pandemic has exacerbated the issue, as reduced controls and fewer law enforcement officials have worsened some spheres of wildlife trafficking, including bird, pangolin, porcupine, sea turtle and giant clamshell trafficking. Social media networks have become a primary hub for the illicit wildlife trade. Although there have been seizures, prison sentences in the Philippines are low. Furthermore, officers have little training to detect wildlife trafficking. Bird trafficking, particularly of the myna and parrot, has worsened during the pandemic. There is also evidence of an increase in giant clamshell seizures, potentially as a replacement for elephant ivory. Although illegal, unreported and unregulated fishing has improved, the Philippines remains vulnerable due to low maritime security.

The Philippines is a top producer of non-renewable resources, such as gold, copper and nickel. However, illegal mining continues to operate in different regions, putting communities at risk. Some of these communities have called for a halt to illegal mining in regions such as Rizal and Mindanao, but politicians have often ignored these claims. The practice is unlikely to flourish without the participation or tacit approval of local strongman-politicians, who rely on it as a means to enhance their authority. The symbiosis between local politicians and illegal mining is tacitly allowed by the central government. At the same time, joint extraction regimes are breaking up due to the government’s efforts to rationalize the mining sector and attract more investments. Indeed, the expanding presence of large mining companies in the country is changing the dynamics of local politics.

Drugs

The Philippines has a relatively low consumption of heroin and other opiates due to the availability of cheaper illegal drugs. Nonetheless, it is a regional trans-shipment and destination point for illegal drugs, including heroin. The country faces a problem of drug smuggling across its borders, with this taking place using containerized cargo shipments and mail services. The reporting of recent seizures suggests that the Philippines may be increasingly becoming a transit point for cocaine in the region, despite not being a major consumer of the drug.

Cannabis is widely used in the Philippines and constitutes the majority of the total weight of drugs seized. Domestic cultivation is the main source of the drug, but the country is not considered to be on any international routes for cannabis. There has been an increase in reports of airport and customs arrests of imported marijuana for medicinal purposes. A growing movement is promoting the use of cannabis for medical treatment, and attitudes appear to be changing. Organized criminals may find trading in synthetic drugs more profitable, leaving cannabis production and distribution to petty criminals.

The Philippines is a major source, transit and destination country for synthetic drugs, particularly methamphetamine or ‘shabu’. The main source of methamphetamines is China, but domestic production is also important, with Chinese organized crime groups playing a role in this supply chain. Precursor chemicals smuggled into the country mainly come from China and Vietnam. The COVID-19 pandemic has increased the use of digital platforms and the dark web for drug trafficking, especially for synthetic drugs. Efforts to counter the narcotics trade in the country are undermined by systemic corruption at all levels of state institutions.

Cyber Crimes

The Philippines is at critical risk of cybercrime and has become a hub for it, posing a threat to national security, the private sector and the government. The country experienced an increase in cybercrime during the COVID-19 pandemic, ranking among the most affected countries worldwide in terms of the number of cyber-attacks and threats. In the private sector, over half of medium and small businesses in the country have experienced cyber incidents in recent years. Cybercriminals have used ransomware and distributed denial-of-service attacks against government institutions as a means to attack political and media opposition. Even major media outlets have fallen victim to politically motivated cyber-attacks.

Financial Crimes

Financial crimes are a major issue in the Philippines, with their frequency having increased during the COVID-19 pandemic. In recent years, trillions of Philippine pesos have been lost due to illegal withdrawals. Many of these crimes are linked to cybercrime, including phone scams, card game scams, taxi and pyramid scams. The Philippines has one of the highest numbers of cybercrime victims related to financial crimes, which include fraudulent schemes and other illicit activities that have arisen in conjunction with the increase in online transactions. Tax evasion is also a significant contributor to overall financial crime in the country, with some national stores and prominent personalities involved in such illegal activities. Furthermore, the Philippines has gained notoriety for illegal cryptocurrency-related schemes, with these promising high returns but putting both Filipino and foreign investors at risk.

Criminal Actors

There is evidence of widespread links between organized crime, politics and state institutions in the Philippines. Clan-based political patronage drives corruption and its connection to power is reported to have increased in recent years. The majority of the legislative body is also reported to be controlled by these actors. Some of these powerful groups are involved in criminal activities, with the lines between them and mafia groups blurred. Some political clans have even emerged from mafia-style groups that entered politics to preserve their illicit enterprises or protect themselves from competitors. Others originally gained their wealth and influence from landholding or control of key industries but have evolved into mafia-style groups. These actors often resort to violence.

Criminal networks in the Philippines are loosely organized and are mainly involved in the drug market, car theft and swindling. Some of these gangs are reported to have re-emerged in late 2020 and 2021 following the elections. This is not uncommon as criminal networks proliferate during the uncertainties of the electoral process. While some of these gangs have specific modus operandi, they remain loosely organized and structured.

Foreign actors involved in organized crime in the Philippines, especially Chinese triads and networks, are widespread, due to the corruption and inefficiency of anti-crime agencies. They primarily engage in drug and human trafficking. The influence of the private sector is found to be moderate and there are no recent reports of major organized criminal activities involving private sector actors.

Leadership and governance

The government’s unclear stance on anti-crime efforts in the Philippines has raised concerns, with critics citing the police-led war on drugs campaign as lacking a clear strategy and contributing to extrajudicial killings. Reports indicate tens of thousands of civilian deaths, leading to criticism from the human rights community and investigations for crimes against humanity. The capture of state institutions by political clans and other vested interests continues to hinder transparency and accountability, despite a change in leadership in 2022. Concerns also exist about the bloating of intelligence funds, which are not subject to usual audit rules, and the lack of independence among Supreme Court justices.

Regarding international cooperation, the Philippines remains a strong member of regional agreements and cooperation around organized crime. It also strengthened its relationship and collaboration with India and China in recent years. The Philippines has implemented national policies and laws aimed at fighting organized crime, including anti-terror, anti-human trafficking and human rights laws, as well as establishing a new government department to protect overseas smuggled individuals and fight human smugglers and traffickers. The Department of Trade and Industry is working on new approaches to prevent financial crimes and a new national policy is being developed to address cyber-enabled financial crimes. However, a government task force aimed at ending the insurgency has ramped up propaganda against leftist organizations and political parties, putting them at risk of violence.

Criminal justice and security

The judicial system in the Philippines is affected by corruption, inefficiency and lack of accountability from the country’s elite. Moreover, in recent years, there has been a series of murders and threats against judges and lawyers. The country’s militaristic approach to controlling the COVID-19 pandemic has led to overcrowded federal prisons and an increase in prison gang activity. Despite proposals to modernize the prisons and related criminal justice facilities, no action has been taken so far.

Law enforcement in the Philippines remains fragile and fragmented, with law enforcers, especially customs, border and maritime officials, frequently accused of corruption. Some police and military officials are alleged to be implicated in illegal markets such as drug trafficking, arms trafficking and extortion. These officials are described to operate more like another organized criminal group than a state security apparatus. The Philippines has also failed to prosecute officials involved in human trafficking.

The Philippines’ control over its territory and borders remains weak. While new ports were opened in the last two years and strategies are currently being implemented to increase a maritime presence in the defence of the territory, positive outcomes here have yet to be seen. Regional cooperation on the expansion of trilateral patrols against transnational organized crime is currently being discussed, with the possibility of increasing the government’s control over its territory and borders.

Economic and financial environment

The Philippines has long been known as a hub for money laundering, with weak enforcement and widespread corruption allowing for criminal proceeds to be laundered more easily. Despite progress in combatting this crime, challenges remain due to the country’s growing economy and its position along a drug trafficking route. The Philippines has been grey-listed by the Financial Action Task Force for money laundering multiple times for its failure to address strategic deficiencies. Red flags in this area include online sexual exploitation, the offshore online gambling industry, online drug sales and the use of e-commerce for dubious transactions. Money laundering is not considered a stand-alone criminal act in the Philippines, and a predicate crime is required for an investigation to be launched.

The COVID-19 pandemic has had a significant impact on the economy of the Philippines. Owning a business is reported to be difficult, and wages and legally mandated benefits are often ignored by the government. Restrictions on investments exist in several markets and capital markets are underdeveloped. The government has not introduced any new economic policies to address these hardships.

Civil society and social protection

The Philippines has been increasing its efforts to protect trafficked persons and other vulnerable citizens, although rehabilitation programmes for female victims of human trafficking have been criticized for focusing only on perceived victims without addressing underlying conditions. Victim and witness support is largely provided by NGOs, church groups and the private sector, as the government has not allocated sufficient resources or developed a long-term plan to address the issue. The Philippine civil society and media are vibrant, despite journalists being threatened and harassed. Cyber-attacks against media outlets are also on the rise. Although non-governmental organizations are working to protect human trafficking victims, the pandemic has hampered their efforts. Private organizations are seeking to collaborate with the Philippines to combat illegal software use and cybercrime.

Prevention efforts by the Philippines National Police (PNP) have largely relied on the use of force rather than cooperation and joint activities with civil society. This approach has been applied in both the war on drugs and the response to the pandemic. As for organized crime, the PNP has intensified measures such as checkpoints, community awareness campaigns, mobile patrols and police presence.