The arrest of 122 Chinese nationals by the Nepal Police in December last year reveals that groups committing major financial frauds are moving to South Asia from their traditional haunts in Southeast Asia.
The December 23 raids last year by Nepal’s police were the biggest in over a decade and led to the detention of 122 Chinese nationals for overstaying their visas. The raids followed intelligence that the Chinese nationals were involved in “illegal activities” including “banking fraud.”
According to reports the accused had been paying inflated rent to the house owners and lived in large groups. The police carried out the raids across five locations across Kathmandu and seized a large number of mobile phones and passports at the spot and confirmed that most of their visas had expired.
On December 29, the police investigation revealed that the gang had been operating more than a dozen private companies registered under different names to hide their activities and had hired over a 1000 fellow Chinese nationals for its operation, according to Kantipur TV, a leading national Nepali television network.
Southeast Asia connections
After the arrests, Geng Shuang, the spokesperson for the Chinese Foreign Ministry, in a media briefing said, “We will continue to work with Nepal to enhance cooperation in law enforcement and other fields, fight cross-border crime and facilitate friendly exchange.”
According to Kathmandu Police, an additional 700 Chinese nationals live illegally in Nepal. “We could not catch most of them as they might have run away. We are still on high alert,” said Uttam Raj Subedi, the head of Metropolitan Police Range [Kathmandu].
Beijing has been trying to crack down on groups who commit cyber fraud and are carrying out online gambling activities in China while living in other southeast Asian countries like the Philippines, Malaysia, Cambodia, Vietnam and Laos. On December 20, the Filipino authorities arrested 342 Chinese nationals from a gambling operation. Likewise, in August, Cambodia banned online gambling under pressure from the Chinese government.
With mounting pressure from China on many Southeast Asian nations, these groups have migrated to Nepal. According to Subedi the Chinese don’t trouble the locals and they operate out of offices in Kathmandu and target fraudulent scams in China. However, the primary issue is the misuse of tourist visas and few of them are here without a passport as well, he added.
In August last year, Kathmandu Police had caught five Chinese citizens who were stealing money from ATMs and recovered Rs 12.60 million (around $10,000). The police investigation shows that they have found traveling between Kathmandu and Cambodia regularly.
While the nature of crimes is different, both these groups were well-equipped technically, stated Subedi, adding that these groups had strong connections with the mastermind groups in southeast Asian countries.
In 2019, 280 Chinese nationals were deported to over their illegal stay. It accounted for two-thirds of the total foreigners guilty of immigration offenses. So far, the Chinese intruders have been found smuggling gold, animal parts, foreign currency, expensive herbs, drugs. They have also engaged in human trafficking, hacking of ATMs and other cybercrimes.
Hemanta Malla, a former deputy inspector general of Nepal Police, said that while traditionally, Indian criminals have posed a challenge to Nepal’s security apparatus, but the crime trends show that Chinese nationals committing online fraud pose a national security threat.
The movement of Chinese fraudsters and online gambling operators from Southeast Asian countries to Kathmandu has indicated that Nepal’s law enforcement agencies are ill-prepared to tackle them, Malla said. “While Nepal has its own limitations, the immigration system needs to be strengthened,” he said.
After Indians, the Chinese are the biggest tourists in Nepal. Till September, Nepal saw an increase of 8.9% in the footfall of Chinese tourists, according to the Nepal Tourism Board. The number of Chinese citizens having business visas in Nepal is higher than citizens of other countries. The police estimate that some of them might be doing illegal things here and able to hide in the hilly nation.
Apart from the ‘Visit Nepal 2020 initiative’, which is an initiative designed to increase tourism in Nepal, the local tourism industry in Nepal is expecting a surge of Chinese tourists after President Xi Jinping’s visit in October,. He was the first Chinese president to visit Nepal since 1996. China’s presence in the Himalayan kingdom is also actively discouraged by India, which views Nepal as an ally and a buffer state against China.
However, the arrest of the Chinese nationals involved in illegal activities has put pressure on the government authorities on finding effective ways to monitor them.
“As we are receiving an increasing number of Chinese tourists, the numbers of illegal activities are also on a high. We should arrange a proper monitoring system and tighten the immigration system,” security expert Geja Sharma Wagle told Asia Times. For Nepal, keen to attract huge investments, immigration and illegal online activities from its soil is a tricky issue since it looks on China as a major infrastructure provider and investor.