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THAILAND’S ILLEGAL TRADE: NARCOTICS TRAFFICKING AND MONEY LAUNDERING ON THE RISE

BANGKOK, THAILAND - Thailand has long been a hub for illicit trade, with narcotics trafficking and money laundering generating billions of dollars in illicit financial flows each year. Despite efforts to crack down on the industry, organized crime groups and corrupt officials continue to thrive, exploiting loopholes in laws and regulations.

Rise of Methamphetamine Seizures

Methamphetamine seizures have reached an all-time high, with over 1 billion pills seized in 2021 alone. The Asia-Pacific drug trade is estimated to be worth $61.4 billion annually, with Thailand ranking first in East and Southeast Asia for drug-related arrests and seizures.

The country’s reliance on traditional law enforcement operations has led to little progress in shrinking the narcotics trade, particularly during the pandemic when supply gluts and instability along the Thai-Myanmar border created opportunities for illicit suppliers to enter the market. Organized crime groups have proven highly resilient to tightened border patrols, adopting new tactics to capitalize on the repercussions of the pandemic.

Counterfeit Covid-19 Products

Pandemic-related government lockdowns and travel restrictions contributed to long-term unemployment and reduced purchasing power, increasing the trade and consumption of illegal drugs. Thailand’s strained vaccine supply chain and slow rollout created an opening for illicit suppliers to enter the pharmaceutical market to meet increasing demand. Criminal syndicates preyed on Thailand’s poor and sick by pushing counterfeit Covid-19 products through social networks.

Exploiting Loopholes in Laws

Drug traffickers have grown more creative in exploiting loopholes in Thai customs laws, either buying meth powder from large networks and pressing tablets themselves or acquiring “pre-precursors” that are legal for normal commercial use but allow crime syndicates to bypass stringent chemical controls.

Weak Law Enforcement Cooperation

Drug syndicates have also capitalized on weak law enforcement cooperation along the border, a symptom of corruption and lack of capacity. Despite orders from the central government, there has been weak enforcement of official checks and controls along the northern border of Thailand.

Money Laundering Activities

Money laundering activities are pervasive due to the country’s highly centralized governance and fiscal system and non-existent tax system.

Economic Opportunities for Illicit Trade

The combination of isolated terrain with a multitude of problems, including a pandemic and migration crisis, has led to a lack of trust in institutions and economic opportunities for many Thais. This has created an environment where illicit trade can flourish, often at the expense of legitimate businesses and individuals.

Hope on the Horizon

However, there are glimmers of hope:

The Thai government’s introduction of a decriminalization law to combat the illegal cannabis market could prove a useful strategy in reducing reliance on illicit cultivation or chemical precursor trading.
Allowing farmers to monetize the plant as either a medical commodity or cash crop could provide economic benefits and reduce poverty.

International Cooperation

Concerted efforts between Thailand and the wider ASEAN community, with support from key partners like the United States, are needed to combat illicit markets before they become irreversibly entrenched in local economies.

SOURCES

The Center for Strategic and International Studies (CSIS) Southeast Asia Program
The United Nations Office on Drugs and Crime (UNODC)
The Royal Thai Police
The National Narcotics Control Board of Thailand