Financial Crimes Thrive in Bhutan Amidst Human Trafficking, Illicit Trade, and Cyber Fraud
Bhutan, known for its stunning Himalayan landscape and unique cultural heritage, is facing a growing problem of financial crimes, human trafficking, illicit trade, and cyber fraud. Despite the country’s efforts to maintain a low crime rate, these hidden criminals seem to be thriving in the shadows.
Children: A Vulnerable Population
The kingdom serves as a hotbed for human trafficking, where children under 14 are legally allowed to work, increasing their vulnerability to domestic servitude, forced labor, and sexual exploitation. Human traffickers exploit Bhutanese victims within the country and send them abroad for forced labor, especially to Iraq and Oman.
Illicit Markets and Smuggling
Arms Trafficking
Though Bhutan has a minimal arms trafficking market, the illicit arms market in northeast India suggests the existence of smuggling routes for the arms trade. However, a more significant concern is the circulation of counterfeit goods, including those domestically produced and imported from China and India.
Tobacco Products
One of the most prevalent forms of illicit trade is in tobacco products, which have been banned since 2004. The demand for tobacco remains high, leading to smuggling operations worth millions of dollars every year.
Environment
Local tribes in Bhutan are suspected of collaborating with India’s timber mafia and corrupt Bhutanese officials to engage in large-scale illicit logging and tree smuggling. Despite extensive conservation efforts, illegal logging is rampant in areas like Gelephu, Samtse, Paro, and the Manas National Park.
Illegal Wildlife Trade
Bhutan’s porous borders make it a source and transit country for the lucrative caterpillar fungus trade and illegal wildlife trade, involving endangered species like tigers and leopards.
Drugs
Bhutan mainly operates as a transit country for regional drug trade, particularly cannabis. Wild cannabis grows freely in certain areas, while processed cannabis is traded within the country and consumed.
Synthetic Drugs
Synthetic drugs have also been reported in urban environments, although there is minimal evidence of heroin or cocaine trafficking.
Cyber Crimes
The increase in digital transactions and online activities during the COVID-19 pandemic has resulted in an uptick in cybercrimes, such as:
- Ransomware attacks
- Website defacements
- Compromised social media accounts
Financial Crimes
Corruption
As Bhutan’s economy grows and the tourism industry flourishes, financial crimes have become increasingly prevalent. While the public sector has relatively low instances of corruption, nepotism and favoritism remain issues.
Infrastructure Development
Infrastructure development, such as export hydropower sales, and loans are vulnerable to fraud.
Criminal Actors
A hive of organized criminal networks is active in Bhutan, involved in:
- Illicit gold smuggling
- Drug trafficking
- Human trafficking
- Timber smuggling
- Wildlife poaching
Foreign organized crime groups and mafia-style groups, as well as Chinese businesspeople and traders, contribute to the foreign actor criminal network.
Leadership and Governance
Bhutan has made strides in improving governance and politics, but the overall levels of organized crime remain relatively low. While the government is not known to have taken a strong stance against organized crime, they do actively combat corruption and monitor state spending through independent institutions like the Anti-Corruption Commission.
However, progress in combating financial crimes has stalled due to a decline in investigation and detection, with too few proactive investigations being pursued.