Security vs. economy

The arrest of a 100 Chinese and Chinese Taipei nationals over the weekend brought into focus a new wave of transnational crime that Sri Lankan authorities have to step up vigilance over.

Late Friday, the Chinese were detained from several houses scattered around the city and its outskirts over an alleged internet currency fraud. It was reported that the suspects were connected in an elaborate scam that hacked into multi-million dollar online accounts and masqueraded as police to blackmail businesses to transfer funds as extortion payments.  

The second string of arrests comes after 17 Chinese were arrested on 24 May for similar offences. Reports indicate that police received the first hints of a larger operation from these arrests that spawned a massive cross-country arrest earlier this year.

In May, Chinese police arrested 482 Chinese nationals from several countries including Sri Lanka who were allegedly involved in a transnational telephone fraud. Chinese police, assisted by Taiwan police, worked with their counterparts in Thailand, Malaysia, Indonesia, Cambodia, Sri Lanka and Fiji to bust a large cross-border telephone scam gang.

Chinese police arrested 482 suspects, including 177 people from the Chinese mainland, 286 from Taiwan and 19 from Thailand and Myanmar, who allegedly were connected with 510 telecom swindling cases, and cheated Chinese victims out of 73 million yuan ($ 11 million) from 2010 to 2011.

Sri Lankan police arrested 17 Chinese including six women who were arrested by the CID in Rajagiriya on charges of having defrauded more than two million dollars from several banks in China. The 100 arrested last week are estimated to have defrauded 2.9 million yuan, showing clear signs of a well-organised and well-funded operation that could be difficult to control.

The arrests take place in the background of deepening ties between Sri Lanka and China. When the war ended in 2009, the most lucrative development was China’s entry as Sri Lanka’s largest funder with US$ 1.2 billion in loans in 2009 and US$ 821 million in 2010. Last year the amount fell to US$ 784.7 million but China remains involved in almost all the large scale projects taking place.

In addition, top officials from both countries regularly exchanged bilateral visits, deepening existing ties.  In September, China’s top legislator Wu Bangguo made a landmark visit to Sri Lanka during which 16 agreements were signed between the two countries, further entrenching ties.  Relations between the two countries are often described as being the best in history despite exchanges since 1955.

Moreover, Sri Lanka is on an aggressive path to push up tourist arrivals from China with the Sri Lanka Tourism Development Bureau hosting a dozen TV crews and writers in December and January to drum up media mileage within China in the run up to popular travel season in February. Reaching the idealised 2.5 million arrival target by 2016 means that Sri Lanka will have to keep its doors open to Chinese nationals but face tough challenges in weeding out the undesirable arrivals.

Balancing security concerns with economic needs is going to have to be a priority for the Government as increasingly liberal visa policies provide new challenges for law enforcement officials.