Financial Crime World

China’s Influence in Palau: A Hotbed for Organized Crime with CCP Ties

Amidst the geopolitical tensions between China and the West in the Pacific region, the tiny nation of Palau has become a hotspot for organized crime with links to the Chinese Communist Party (CCP).

Illegal Gambling Dens and Questionable Ventures

  • In 2019 and 2020, Palauan authorities detained and deported hundreds of mostly Chinese citizens operating illegal online gambling dens (BBC News, 2020)
  • These latest ventures are just the tip of the iceberg for Chinese influence efforts in Palau

Facilitated by Local Elite and Longtime Chinese Expats

  • Former Presidents Tommy Remengesau, Jr., and Johnson Toribiong are among the prominent locals believed to have welcomed these influential newcomers

The Iceberg: Organized Crime and Criminal Enterprises

Illegal Gambling

  • Tip of the iceberg in Chinese influence efforts in Palau
  • Dismantled in 2019 and 2020

Money Laundering

  • A common enterprise by Chinese criminal organizations

Drug Trafficking

  • Palauan waters and resources targeted by Chinese criminal groups

Human Smuggling

  • Palau’s vulnerability to these tactics has increased as China’s economic and political clout has grown

Valuable Resources Attraction

China’s growing interest in Palau coincides with its efforts to expand its Belt and Road Initiative (BRI) throughout the Pacific, potentially jeopardizing the country’s sovereignty.

Local Authorities’ Fight Against the Criminal Trend

  • Some success in dismantling illegal gambling dens and deporting offenders
  • Chinese criminal organizations continue to find ways to infiltrate Palauan society and politics

The Palauan Experience: A Warning Sign for Other Pacific Island Nations

  • The consequences of failure to act against organized crime and criminal enterprises could be dire
  • Pacific nations must be vigilant against the potential threats posed by organized crime and criminal enterprises

Global Support for Pacific Island Nations

  • Authorities worldwide, including the United States and its allies, must support Pacific island nations in their efforts to combat this threat and preserve their sovereignty

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