Langkawi, Malaysia's duty-free 'Jewel of Kedah,' is promoted as a tropical escape, but its proximity to Thailand makes it a convenient crossing point for smugglers operating on the water.

Waves break along Cenang Beach as the sun drops over the Andaman Sea, washing Langkawi’s white sand in gold. Tourists sip fresh coconuts beneath rows of bright umbrellas, gazing out at the “Jewel of Kedah”: a duty-free archipelago long sold as one of Malaysia’s premier tropical escapes. Out on the water, meanwhile, small boats traverse the 8km (five miles) of open water that separates Langkawi from Thailand’s Koh Tarutao. On fast boats, the crossing takes a matter of minutes. No navigation...