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Crackdown in Southeast Asia pushes scam networks to move to Lanka
(AFP) A surge in arrests of suspected foreign scammers in Sri Lanka has authorities concerned that the island is fast becoming a hub for online crime, following sweeping crackdowns in hotspots Cambodia and Myanmar.
Some scam networks forced out of countries in Southeast Asia have simply shifted to new bases, increasingly moving operations to Sri Lanka — an attractive destination due to a relaxed visa regime and reliable, high-speed Internet, officials said.
Since the start of the year, police have arrested more than 1,000 foreigners, mainly from China, Vietnam and India, for alleged involvement in cybercrime, a jump from 430 in 2024 and even fewer last year, spokesman Fredrick Wootler said.
Last month, Sri Lankan customs officials intercepted nine Chinese nationals attempting to smuggle used mobile phones and laptops in the hundreds, raising suspicion they were to be used in large-scale fraud operations.
Fraud compounds where scammers lure Internet users into fake romantic relationships, cryptocurrency investments and betting platforms have flourished across Southeast Asia.
Initially largely targeting Chinese speakers, the criminal groups behind the compounds have expanded operations into multiple languages.
Those conducting the scams are sometimes willing con artists, and other times trafficked foreign nationals forced to work.
Officials said the networks operating in Sri Lanka target people across Asia, including in India, Vietnam and the Philippines, but there are growing concerns Sri Lankans could be next.
Authorities are also investigating whether foreign syndicates were involved in a recent cyberattack on the Sri Lankan Treasury that resulted in about US$2.5 million in losses.
China, which has stepped up cooperation with regional governments in recent years to crack down on scam networks, has acknowledged the geographical shift.
Beijing’s embassy in Colombo said illicit activity in Sri Lanka had risen following enforcement actions in Cambodia, Myanmar and the United Arab Emirates.
“The Chinese government attaches great importance to this trend,” the embassy said, pledging closer cooperation with Sri Lankan law enforcement agencies.
The networks displaced from Myanmar and Cambodia, where authorities have stepped up raids and deportations, exploit the island’s 30-day tourist visas for nationals of more than 40 countries, including India and China, while others can easily apply for permits online.
Criminal gangs are setting up in rented spaces ranging from luxury villas to office complexes.
Police have begun warning property owners against renting villas and apartments to suspected scam operators, saying they could face prosecution for aiding criminal activity.
Wootler said the vast scale of these operations has become clearer over the past few weeks, with police “getting a lot of calls on a daily basis.”
In a single night this week, “we carried out five raids” in the coastal Galle and Matara districts, netting 192 Indian suspects and 29 Nepalis, Wootler added.
Another 280 foreign suspects were arrested last week near Colombo, and 135 Chinese nationals were apprehended in March at a single scam center.
The expansion of criminal networks mirrors a broader regional crisis.
A UN report issued this year estimated that at least 300,000 people have been trafficked into scam compounds across Southeast Asia.
While Sri Lankan officials said they have not identified foreigners being trafficked into the country, dozens of Sri Lankans have been rescued from scam compounds abroad over the past year.
Wootler said authorities were doing all they could to tackle the growing problem, deporting foreigners who overstay their visa and ensuring those who engage in online crime are “punished by our courts.”
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Unions resist tripartite EPF management plan
… warn of dire consequences
A group of trade unions and civil society groups has requested President Anura Kumara Dissanayake to abandon his government’s controversial plan for the proposed tripartite management of the EPF.
The group has told the President: “We strongly object to the government’s plan to transfer the EPF to a tripartite board—jointly promoted by the Employers’ Federation of Ceylon (EFC), International Monetary Fund (IMF) and the International Labour Organisation (ILO)—and to increase the investments of those funds within private equity and debt markets.
“While the EFC and the government jointly project this plan as a ‘modern governance framework’, it poses a serious threat to the EPF’s financial stability, fiduciary conduct, and returns to workers’ life savings, with severe consequences for broader macroeconomic stability. Rather than replacing the corruption existing in the public sector, this tripartite framework paves the way for a corporate takeover of the EPF. Through this, the fund is exposed to unlawful business practices such as insider trading using internal information of EPF investments, conflicts of interest and corporate bailouts of unstable private companies.
“Sri Lanka’s corporate sector has a tremendously negative track record, which you alluded to during your victorious election campaign in 2024. This was recently unravelled by the multi-billion-dollar illicit capital flight through trade misinvoicing, which your administration is now actively working to curb in the imports sector.
“The recent banking sector fraud exceeds Rs. 13 billion; widespread corporate tax evasion destabilised the fiscal position (Sri Lanka Auditor General’s Department Annual Reports) and consequently inflated the tax burden on the general public. The EFC has found it convenient to remain silent about these crimes, possibly assuming that their silence would preserve their social standing. Considering this inherent corruption within Sri Lanka’s corporate sector and its disregard to the living standards of the general public, there is no realistic basis to integrate corporate interests to actively manage the EPF. The corporate sector of Sri Lanka has not developed sufficiently on technical and ethical grounds to safely entrust the largest retirement savings pool in the country. The EPF is a captive fund that has no mechanism for the owners to divest if the management is corrupt. This further increases the possibility of corporate fraud when the management of the fund is jointly held with the corporate sector.
“Furthermore, during the recent public discussion with trade unions, Deputy Minister of Finance Dr. Anila Jayantha pointed out that the domestic debt restructuring (DDR) would inflict a loss of Rs. 600 billion to the EPF. Our independent calculations—formally submitted as an affidavit to the Supreme Court approved by the Federation of University Teachers’ Associations in 2024—reveal that nominal loss alone is Rs. 634.4 billion. When factoring in foreclosed reinvestment returns, the true loss skyrockets to Rs. 1,711 billion, wiping out 48% of the fund’s projected gross income for the 2023 – 2028 period. Under the pretext of safeguarding the banking system, this colossal robbery preserved high yields on government bonds held by commercial banks and high-net-worth individuals, subsequently reaping them astronomical profits. Now, the exact same plunder is rearing its head again disguised as a tripartite committee.”
“The main arguments supporting our resistance and viable alternatives for optimising EPF management directly under the Central Bank of Sri Lanka (CBSL), are outlined below.
“Objections to the government’s tripartite proposal:
1. The “International best practice and conflict of interest fallacies”
The government holds that tripartite management of pension funds is the “international best practice” and that there is a “conflict of interest” in CBSL managing the EPF. They are key pillars justifying government’s tripartite proposal.
These two positions are shockingly misleading given that four of the five largest pension funds in the world, in Norway, Japan, the U.S., and Singapore, are managed directly by state bodies or central banks. Therefore, ‘international best practice’ in pension fund management is the exact opposite of what the government and the IMF are proposing. We hence reject these baseless positions.
2. Corporate captivity and bailouts
It is clear that the EFC is desperately pushing for this proposal at a time of global uncertainty, to cushion the effects of the crisis and maximise gains. Under corporate influence within the proposed tripartite board, the private conglomerates can use the multi-trillion-rupee EPF to continue their unstable commercial operations without having to risk their own capital or savings to do so. This will severely erode the financial stability of the EPF and its returns.
3. Risk of front running
“Because the EPF is a colossal fund, its investment decisions can alter asset prices. This creates immense monetary value for the information generated by its investment decisions. Corporate representatives on the proposed tripartite board will be perfectly positioned to use this information to trade ahead of the EPF (front-running), buying assets cheaply and dumping them onto the EPF at inflated prices for guaranteed corporate gain, resulting in a reduction of returns to the EPF.
4. Unavoidable loopholes
“Presence of a separate group of investment analysts, trade union representatives and government officials within the proposed tripartite structure cannot prevent pre-market corporate access to EPF’s investment decisions. Investment proposals made by the analysts has to be first approved by the proposed tripartite committee, making it impossible to prevent corporate access to insider information on EPF investments.”
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