Lao and Chinese security forces have detained 771 people in a special economic zone in the country’s northwest, ahead of a deadline for online scam operations to cease their operations inside the zone.
The Golden Triangle Special Economic Zone (GTSEZ), located in Bokeo province close to the borders between Laos, Myanmar, and Thailand, has long been notorious for a range of illicit and criminal activities, including online fraud operations that rely overwhelmingly on trafficked labor.
Citing the Lao Ministry of Public Security, Radio Free Asia (RFA) reported yesterday that the joint Chinese-Lao law enforcement operation began in the zone on August 12. Among the 771 people detained were 275 Lao, 231 Burmese, and 108 Chinese, as well as people from the Philippines, India, Indonesia, Ethiopia, and Vietnam.
“Most of them are just workers who were hired to work at the centers,” RFA quoted a ministry official as saying. “It’s a form of human trafficking because they were lured to come to the SEZ to work at stores or restaurants, but later they were forced to work as scammers.” The report stated that the Chinese nationals were handed over to their own authorities, while the other foreigners were sent to their “respective embassies.”
The raids began just days after the Lao government ordered online scammers operating in the GTSEZ to “completely shut down by August 25.” From this date, local media reported last week, a special task force will lead the war against illegal activities within the zone, and will have the authority to arrest business operators who continue to run unauthorized scam centers.
The GTSEZ is just one of an archipelago of Chinese-dominated enclaves and “zones of exception” nestled in the jurisdictional interstices of mainland Southeast Asia, “safe havens where state interference [is] minimal.” These have provided the supportive infrastructure for a spectrum of criminal activities. The GTSEZ is controlled by the Chinese-born businessman Zhao Wei, who in 2018 was sanctioned by the U.S. government for his involvement in “drug trafficking, human trafficking, money laundering, bribery, and wildlife trafficking.” Since then, substantial evidence suggests that the GTSEZ has diversified into hosting online scamming operations, which have grown rapidly across the region, particularly in Myanmar, Cambodia, and the Philippines.
An investigation into the GTSEZ published this week by Bloomberg documented both the breakneck pace of construction in the zone, and its involvement in online fraud schemes, “where teams of operators, many of them victims of human trafficking, persuade online marks to move their savings into fraudulent crypto-trading schemes.”
As Richard Horsey of the International Crisis Group told Bloomberg, “The GTSEZ business model is to provide the infrastructure. They create that ecosystem so that criminal businesses can come in, lease the premises they need, hire the armed security they need, and get whatever they want.”
It is unclear whether this month’s raids, and the Lao government’s ultimatum to scam operators, will spell the end of the scamming epidemic in the GTSEZ. This is not the first raid within the zone. An earlier RFA report stated that Lao and Chinese authorities had carried out nine raids as of last week, arresting and deporting 1,389 people involved in scam operations, including 1,211 Chinese nationals.
The fact that Chinese security officials have been involved in these raids suggests a seriousness of intent, at least where Chinese criminals and victims are concerned, but whether they will proceed from the trafficked scam workers to the kingpins enslaving them is unlikely. Online scammers have shown themselves to willing and able to shift jurisdictions quickly in response to official crackdowns. And as I wrote last week, the GTSEZ maintains its own security force and previous attempts to crack down on criminal activities there have never been more than partial. As the Bloomberg investigation put it, the Lao government’s 2007 lease agreement with Zhao has “essentially made him the sovereign ruler of 39 square miles of rural Laos.”
This has made the GTSEZ structurally oriented toward the abetting of criminal activity. As long as this “zone of exception” remains in place, criminal activities of one kind or another will almost certainly continue to flourish, with negative impacts on the region as a whole. Meanwhile, the scam syndicates will simply resume their activities in more accommodating jurisdictions.