INVESTIGATION, PROSECUTION AND ADJUDICATION AGAINSTILLICIT PROPERTY OF PUBLIC OFFICIALS IN NEPAL
Gokul Banstola＊

I. INTRODUCTION
Good governance is a key to sustainable development and social well-being of a nation. However,corruption is considered as a strong constraint of good governance towards the way of prosperity. Corruption
is spread throughout the world in different forms. The corruption perception index shows that more than
two-thirds of countries in the world score below 50 out of 100. At least 6 billion1 people around the world arewitnessing rampant corruption. Therefore, corruption is a global problem, and the entire world is trying tocombat corruption through various institutional and policy measures.

II. CURRENT SITUATION OF CORRUPTION IN NEPAL
Naturally, Nepal is one of the most beautiful countries in the world. It has a wide range of geographicaland cultural diversity which is unique and incredible itself. But economically Nepal is known as one of theleast developed countries. Corruption, no doubt, is one of the causes of Nepalʼs underdevelopment2.
Even though corruption is a criminal offence in Nepal, all forms of corruption, like bribery, embezzlement,
fraud, extortion, illicit enrichment etc., are present. Nepotism and favouritism have been rooted in Nepali
society and the public sphere. Almost all spheres, i.e. the executive, legislative, judiciary, political parties, nongovernmental organizations, and the private sector, are perceived to be suffering from corruption.
Transparency Internationalʼs Global Corruption Barometer (GCB) Survey Report 2013 is evidence of theabove-mentioned statements. In a 2011 survey, the total percentage of respondents saying “corruption
increased a lot in Nepal” was 62.8 percent. This figure rose to 72 percent3 in 2013. The GCB survey also
revealed political parties (90%) as highly corrupt institutions in Nepal, followed by public officials (85%), police(80%), and parliament (79%), the judiciary (77%), business (54%), Non-Government Organizations (46%), themilitary (43%) and the media (33%). Based on daily bribery experiences of the people, other corrupt
institutions in Nepal include customs, land revenue, judiciary, and tax revenue4.
Revenue leakage, misappropriation of public funds, damage or loss to public property, bribery, fake andfalsified documents, breaching of laws and procedure and illicit enrichment, etc. are the common current
prevalent corruption tendencies in Nepal5. The bitter truth is that no sectors/areas escape the grip ofcorruption in the country. The table presented below also supports that corruption is a fact.

Under Secretary, Commission for the Investigation of Abuse of Authority, Nepal.
https://www.economist.com/graphic-detail/2018/02/22/ /corruption-is-still-rife-around-the-world2
Corruption in Nepal: An Anthropological Inquiry Madhusudan Sharma Subedi, Central Department of Sociology/
Anthropology, Tribhuvan University Kirtipur. Nepal.
3
Global Corruption Barometer survey report 2013, www.transparency.org
4
Institutional Strategy of the Commission for the Investigation of Abuse of Authority (2014-2019).
5
Based upon yearly reports of CIAA.
＊
1

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Table-1
Corruption Perception Index and Nepalʼs status
S. No.

Year

Score

Rank

1

2017

31

122

2

2016

29

131

3

2015

27

130

4

2014

29

126

5

2013

31

116

Source: Transparency International Corruption Perception
Index reports, www.transparency.org

III. ANTI-CORRUPTION AGENCY AND LAWS TACKLING ILLICTENRICHMENT IN NEPAL
Illicit enrichment is defined in the United Nations Convention against Corruption (UNCAC) as “asignificant increase in the assets of a public official that he or she cannot reasonably explain in relation to his
or her lawful income6”.
A. Commission for the Investigation of Abuse of Authority
The Commission for the Investigation of Abuse of Authority (CIAA, henceforth) is an apex constitutional
body mandated with controlling corruption involving public responsibility. All arrangements for its
independence and competency are also managed by the Constitution. There is one chief commissioner andfour other commissioners. All commissioners are appointed by the President for six years on therecommendation of the Constitutional Council. They may be removed from their responsibility if a motion of
impeachment is passed by a two-thirds majority of the members of the House of Representatives. It is aunique anti-corruption agency and the first agency established in the SAARC region which is acting as
ombudsman, investigator and prosecutor.
B. Laws Relating to Illicit Enrichment
1. The Prevention of Corruption Act, 2002
Section 20 of this Act criminalized illicit enrichment as an offence of corruption, resting the burden of
proof on the suspect. According to this provision, In case the statement of property submitted in accordancewith prevailing laws by a public servant deemed to have held a public office in accordance with prevailinglaws seems to be incompatible or unnatural or in case he maintains an incompatible or unsuitable lifestyle or
it is proved that he has given someone a donation, gift, grant, present or has lent money beyond his capacity,
he shall prove the sources from which he has acquired such property, and if he fails to do so, such property
shall be deemed to have been acquired in an illegal manner.
2. Commission for Investigation of Abuse of Authority (CIAA) Act, 1991
The CIAA is empowered by this act to search, seize, and suspend the suspects from their posts. The
CIAA has the right to arrest and hold the suspect in custody for a maximum of six months with thecompetent courtʼs consent. It may obtain details of financial transactions and even stop the fixed real estate of
the suspect. In addition, it may seize the accusedʼs passport.
3. Illegal Property Investigation Procedure, 2018
The illegal property investigation procedure is a new document issued by the CIAA incorporated andupdated with different practices, norms and verdict of court to make the investigation scientific, evidencebased and reliable. This is a detailed guideline to investigate upon the complaints received by the CIAA
against illegal property earning by any public position holders. The procedure covers the norms related to6

United Nations Convention against Corruption, United Nations Office on Drugs and Crime.

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calculation of income and expenditures of suspects during the investigation process.

IV. INVESTIGATION, PROSECUTION AND ADJUDICATION OF ILLICITENRICHMENT CRIMES
A. Investigation
The CIAA is mandated to investigate corruption matters committed by persons holding public officebased on received complaints. There are other anti-corruption agencies authorized to investigate in theirrespective area, as permitted by relevant laws; however, the crime of acquiring property illegally by public
officials can be investigated only by the CIAA.
The CIAA has been receiving a large number of complaints relating to various irregularities and earningof illicit property through complaints lodged by any person, or it obtains information via its own source. The
investigation procedure is basically divided into two stages:
1. Preliminary Inquiry
During the preliminary inquiry, the complaints are analysed with regard to their merit and the first-handavailable evidence. At this stage, the “Special Investigation Division” works with an aim to collect most of thepossible evidence. For this purpose, the CIAA may write to any concerning agencies to send any relevant
information and details of a concerned suspect which may be useful in investigation. One major document, theannual property details form, is collected from concerned agencies. After receiving necessary documents arecollected, a brief report is prepared.
2. Detailed Investigation
When the Commission deems it necessary to conduct an investigation upon findings, a preliminary inquiry
investigation officer is designated. The investigation officer collects further evidence, makes all necessaryinquiries and analyses the findings. Upon the completion of the specified procedures, a report is submitted to
the Commission. Such report shall be reviewed by the Commission and a decision to this effect shall be taken.
B. Prosecution
The CIAA is the only authorized institution to prosecute in the Special Court against illicit earnings ofholders of public posts. Based upon the recommendation of the investigator, the Commission decides whether
to prosecute. If a charge can be proved on the grounds of the collected evidence, the Commission prosecutesin the special court; otherwise the case is disposed of. On behalf of the CIAA, the Special Government
Attorney Office pleads at the Special Court as well as the Supreme Court.
C. Adjudication
The Special court is mandated to adjudicate all the corruption cases filed by the CIAA at the trial level.
This court has the same status of the appellate court. So the Supreme Courts have appellate jurisdiction overthe decisions of this court. The table presented below is a summary of complaints received and resolved by
the CIAA.

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Table-2
Complaints Received and Resolved by the CIAA
S.No.

Particulars

1

Fiscal Year
2013/142014/15

2015/162016/172017/18

Total number of complaints received

22,602

31,213

24,691

19,58019,4882

Total number of resolved complaints

12,892

21,648

16,694

11,861

12,4003

No. of complaint of illicit enrichment

2,060

2,591

1,083

606

425

4

Total cases filed in court

168

303

144

154

192

5

Cases of illicit enrichment filed

2

2

7

11

4

6

Success rate on total prosecution

80%

80%

81%

60%

NA

Source: CIAA Annual Reports 2013-2017

V. BEST PRACTICES OF ANTI-CORRUPTION MEASURES IN NEPAL
The following are some of the mechanisms and practices in use in Nepal that are worth mentioning.
Independent constitutional agency (CIAA) for investigation and prosecution;
Distinct special court for adjudication of corruption cases/crime;
Burden of proof is on the defendant in illicit enrichment cases;
Additional punishment for high-ranking officials who commit corruption offences;
Imprisonment is mandatory for almost all corruption offences.
During the investigation and prosecution of corruption cases, the following rights of the suspect arevalued with due respect.
No arrest or custodial detention without informing the arrestee of the grounds of arrest andprovision of a detention slip;
No custodial detention for more than 24 hours without the order of adjudicating authority;
Right to consult a legal practitioner;
Right to be presumed innocent until proved guilty of the offence;
Right to privacy;
Right against torture;
Right to fair trial by independent, impartial and competent court;
Right of the person during taking of a statement:- Right to remain silent,- Right not to incriminate themselves,- Provide interpreter if necessary.

VI. MAJOR CHALLENGES REGARDING CORRUPTION CONTROL IN NEPAL
Corruption control is not an easy job; hence it is challenging itself. Major challenges regarding the control
of corruption in Nepal are as presented below:
A. Political Commitment and Full Support
Lack of political support is a challenge. Even though the political parties publicly express commitment forcontrolling corruption, the behaviour has not been exactly the same in practice. Here are some otherexamples: about 83.2 percent of the participants in a survey thought that corruption in Nepal was caused by
the lack of political commitment7. The CIAA can investigate and prosecute the political people holding public

7

Tek nath Dhakal and Ratna raj niroula, “Prevalence of corruption and its challenge for improving governance in Nepal.”180

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positions, so it is difficult to get real support from them. The post of chief commissioner has been repeatedly
vacant in the history of the CIAA. It shows lack of political commitment to corruption control.
B. Legal/Political Transition and Instability
After a decade long conflict, the adoption of a constitution by a Constituent Assembly, restructuring thestate to federal system, and the election of all levels of the federal government were completed. The numberof complaints received by the commission against the local level of government is increasing. On the other
hand, there is still contradiction among the constitution and some legal provisions. There is a need to amend
the existing laws as well as to build new laws. In this situation, ending the legal and political transition andgetting stability and a comfortable environment remains challenging.
C. Limited Jurisdiction of the CIAAThe CIAA is a major anti-corruption institution of the nation, but a new constitution of Nepal narrowly
restricted the jurisdiction of the CIAA. The constitutional bodies and judges, Nepalese army, policy decisionsof the cabinet and the corruption in the private sector are outside of the CIAAʼs authority. It is anotherchallenge to control corruption within the nation with limited jurisdiction.
D. Limited Mandate by Other Laws
The new constitution of Nepal has not given the right to investigate improper conduct. In the present
situation, after the removal of the improper conduct from the Commissionʼs jurisdiction, the challenge has
been added to the Commission, because the majority of the corrupt practice starts with improper conduct. It
is not easy to separate improper conduct and corruption. This limited mandate is an obstacle in the strategic
campaign of zero tolerance against corruption.
E. Mindset of Other Stakeholders
The general mindset of other state agencies seems to be that the CIAA is the only responsible agency forcontrolling corruption. But corruption control is a common responsibility of the whole nation. Sometimes the
CIAA is not getting whole-hearted cooperation and support from other institutions as expected due to thatmindset which is unfavourable to control corruption.
F. Nature of Nepalʼs Economy
The economy of Nepal has not been completely formalized. Even informally various economic activities
are going on. On the other side Nepalʼs law has not made a compulsory provision to each individual and public
official for maintaining a strict record of all income and expenditures. This situation also added the challenge
to investigation especially investigation of illicit property.
G. Protect and Maintain the Rights of Suspects
If there is any prosecution until the court adjourns, no person is guilty. But when someone is prosecuted,
the Nepalese society views that he/she is guilty so the suspect will lose social reputation. Even if the courtsays not guilty, someone cannot restore his or her reputation. Under this condition there is a challenge for the
CIAA to balance between protecting and maintaining the rights of suspects and investigation andprosecution.
H. Open Border and Relation to India
There is about 1750 km of open border between Nepal and India. There are linguistic and culturalsimilarities as well as family relations of people between the two neighbouring countries. People of the twocountries can easily cross international borders without visas or any registration. In this situation it is easy tohide illegally acquired assets in India. This is a big challenge to uncover the property when investigating illicit
enrichment cases.
I. Gaining Public Confidence
The CIAA is blamed sometimes for not focusing on the big corruption cases based on the expectations of
the people. On the other hand, large numbers of complaints received daily in the CIAA are the proof of publictrust in the CIAA. Maintaining this belief by bringing all corruption cases to the scope of investigation andbeing successful is also another challenge.

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J. Implementation of International Commitments and Developing Interconnection
Since Nepal is signatory to UNCAC, its implementation is a national obligation, but it does not havesignificant action yet. It is also challenging to bring into light the functional and operational management of
UNCAC. On the other side, corruption is emerging in new forms, colours and the dimensions in thecontemporary world. To overcome this social crime, nations should develop networks, collaboration andcooperation among countries, international organizations and diplomatic agencies. It has also beenchallenging to develop such interconnection and delivery of mutual legal assistance on time.

VII. PROBLEMS REGARDING CORRUPTION CONTROL IN NEPAL
A. Lack of Enough Laws, Legal Provisions and Implementation
The assessment of the National Integrity System Assessment Nepal, 2014 reveals there is significant
variance between law and practice. The legal framework is sound, but it is not implemented consistently8.
There are various weaknesses and lapses in prevailing anti-corruption laws. Prevailing law has not covered
all the possible corruption offences. There is no clear definition of unsuitable lifestyle regarding illicit
enrichment, neither of the legal provisions calculate net worth of a suspect by analysing total assets andliabilities. There is a maximum of two yearsʼ imprisonment if found guilty of illicit enrichment.
B. Lack of Coordination and Collaboration Mechanisms
Mechanisms to exchange information related to corruption among the law enforcement agencies and joint
research system is crucial but there are not such practices yet.
C. Complexity in Investigation
New trends, techniques and methods of corrupt practices are emerging day by day which is a challenge
and problem itself in investigation. To adopt new techniques, technologies and speed up investigation ofcrimes is not easy due to legal and resource limitations.
D. Lack of Capable Human Resources and Capacity Development
The CIAA does not have its own human resources. All personnel are deputed by the government fromvarious disciplines as per the need of the CIAA. The job nature of the CIAA demands various specialized
manpower. Availability of this manpower and capacity development of them is important, but due to the lackof resources, capacity development as per the necessity is not even possible. Frequent transfers and poor
retention of capable human resources is also an issue.
E. Difficulties in Gathering Evidence and Establishing the Case
Corrupt activity is done in secret and by abusing law. A corrupt official tries to hide it as far as possible byusing the loopholes of law and tries to protect oneself. In this situation to collect evidence of corruption is noteasy itself. In the ground of investigation, prosecution is not so difficult, but it is not easy to establish theoffences in court.
F. Time Consuming and Different Verdicts Regarding Similar Issues
Investigating issues related to corruption takes time. Court procedure also consumes a long time to take adecision. Sometimes the court reaches different verdicts in similar cases. That creates confusion as to which
verdict to follow while investigating the corruption cases.

VIII. A CASE STUDY ON CORRUPTION: MINISTER FOUND GUILTY ON
CORRUPTION CHARGES
A. Introduction
There was a young and popular Nepali political leader who had been holding different public positions
during different time periods. His family background was a simple farming family. He was in a high-level
public post from June 1991 to September 2002 in different capacities. At the first time, he was an advisor to
the then Prime Minister. Later, he was elected as a member of parliament and also appointed as a cabinet
minister of the government.

8

National Integrity System Assessment Nepal 2014, Transparency International Nepal

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B. Complaint and Investigation
The Commission for the Investigation of Abuse of Authority (CIAA) had received a complaint on
September 2002 against him alleging that he was living at an unreasonably high standard of living by earning
illegal assets, i. e. corruption. The CIAA started an investigation designating an investigation officer on
October 24, 2002. During the investigation interesting facts relating to him were revealed.
Before being appointed to a public post, his bank balance was quite nominal: just Nepalese Rupees (NPR)
22000. 00. But when he was in public position his bank balance increased unexpectedly to 9. 191 million
Nepalese rupees. In addition to this, he acquired fixed assets (land and a house) of 8.485 million. Apart fromthese; he purchased vehicles worth NPR 2.463 million. While he was taking important public posts, his and hiswifeʼs bank balances increased. He bought land and cars, built modern houses. Finally it was found that hecollected a total of NPR 24 million 332 thousand (24,332,664.78 NPR). Out of this amount, the CIAA found that
only 3.5 million Nepalese Rupees (NPR 3,524,618) was obtained from legal sources. He had collected vast
property within about 11 years, which was quite impossible to earn by legal means by holding such public
post in Nepal.
C. Some Facts Revealed by the Investigation
Before holding public posts, his bank balance was only NPR 22 thousand, but from June 1991 to July
1994, within a three-year period, he deposited cash in the amount of NPR 4.04 hundred thousand in
his and his wifeʼs bank account.
He purchased real estate worth more than 8.55 million rupees while he was a cabinet minister of thegovernment, and he purchased land worth NPR 53 million when he was a member of the parliament.
During the period of 7 years 10 months while he was in a public position, he deposited 8.755 million in
his and his wifeʼs bank account.
The CIAA filed a case against him and his wife before the Special Court claiming that he had earned NPR
20.8 million illegally, i.e. by corruption.
D. Judgement of the Special Court
After filing the case by the CIAA, the Special Court give its verdict on June 2007. The court decided that
he had total property of NPR 11.263 million, and he was found to have legal property of NPR 10.557 million.
The Special Court found only NPR 706,139 illegal. So the claim of the CIAA was not approved by Court. In
connection with the decision taken by the special court, the CIAA had appealed before the Supreme Court
disagreeing with the verdict of the Special Court.
E. Supreme Courtʼs Verdict
The Supreme Court pronounced its decision in March 2012. The Court held that under the Corruption
Prevention Act, the culprit earned unlawful property worth NPR 8.409 million which is unrealistic and illegal,
and the fact that the source could not be satisfied. The income claimed by the defendant did not appear to bereliable. The Court decided against him to be imprisoned for a term of one and half years and also imposed apenalty of NPR 8.409 million.
The decision of the Supreme Court seems to have raised serious questions on the decision of the special
court and ordered to take necessary action against the concerned Judges of the Special Court.
While being the final decision from the Supreme Court, the culprit was the incumbent Minister ofgovernment of Nepal. Even after he was found guilty of corruption by the Supreme Court of Nepal, his
political party had decided to continue him in his position as the president of his party. After the final decisionof the Supreme Court he claimed that he was being sentenced for his political activities and not for the crimes
he committed.
F. Conclusions
After the final verdict of the court, the culprit was sentenced to jail, his property earned by illegal sources
was confiscated and he had to pay a penalty. Thus, due to his involvement in corruption, an emerging politicalleader not only got punished but was also penalized such that he was ineligible for any public posts in the183

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future as per the existing law of Nepal9.

IX. THE WAY FORWARD
A. New Laws and Improvement in Existing Laws
New laws are necessary concerning whistle-blower and witness protection. Legal provisions are also
required for corruption control in the private and non-governmental sector. Not only to control corruption,
laws and policy regarding integrity development should also be made and enforced.
The property declaration system is mandatory under present law, but its effectiveness should be
reviewed. The present cabinet ministers declared their property, but it became spicy news in Nepali media
entitled “Poor ministers, rich wives10”.
B. Implementation of UNCAC
Nepal should take necessary arrangements to implement UNCAC and other international obligations.
C. Coordination and Collaboration
Effective coordination and cooperation among law enforcment and investigating agencies are necessary.
That is also essential for close collaboration and networking among civil society, media and individual
citizens. Information sharing systems among law enforcement agencies and financial information units is
another requirement to overcome present rampant corruption.
D. Human Resources Development
Manpower with high morale is an important factor for controlling corruption. Capable and smart humanresources with high integrity are required for investigation. The Commission should have a concrete plan andresources to develop the capacity of human resources.
E. Effective Investigation
Success in corruption cases depends on investigation. Investigation should be technology based andevidence based. Use of new technology and equipment in investigation makes better results. The Commission
should give more emphasis on the use of technology for effective investigation.
F. Emphasis on Promotional and Remedial Activities
The Commission should focus on promotional activities as well. Creating an atmosphere that stops
corrupt activities is more important than investigating, prosecuting and taking action. It is crucial eventhough it is not easy task. Awareness and civic education programmes should be conducted frequently.

X. CONCLUSION
Corruption is a social as well as a criminal offence. As mentioned in the preamble of UNCAC, corruption is
no longer a local matter, but a transnational phenomenon that affects all societies and economics. Anticorruption laws, institutions and policies have been set up to combat corruption, but it is increasing day byday.
Corruption in Nepal is rampant. Lack of political commitment and low priority, long transition period, lackof strong coordination mechanisms with stakeholders and lack of adequate awareness are some causes ofincreasing corruption in Nepal.
There is no single prescription to control corruption. Combating corruption is not possible in isolation andrequires a holistic approach. Focus on preventive as well as promotional measures along with punitive
measures should be adopted simultaneously to combat corruption. The criminal justice system regarding
References:
The Charge sheet filed by CIAA to the Special Court
The Final judgments by Supreme Court, www.supremecourt.gov.np/
http://www.nepalmonitor.com/2012/03/corruption_in_nepal_.html
10
myrepublica.nagariknetwork.com/news/poor-ministers-rich-wives
9

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corruption has to be strong and effective.
References:
The Constitution of Nepal,
The Prevention of Corruption Act, 2002 A.D
Commission for Investigation of Abuse of Authority Act, 1991
Institutional Strategy of the Commission for the Investigation of Abuse of Authority (2014-2019)
Developing Jurisprudence on Illicit Enrichment: Kumar Chudal http://nkcs.org.np/nja/elibrary/pages/view.
php
Corruption in Nepal: An Anthropological Inquiry Madhusudan Sharma Subedi Central Department of
Sociology/ Anthropology, Tribhuvan University Kirtipur. Nepal
TeknathDhakal and Ratna raj niroula, Prevalence of corruption and its challenge for improving governance in
Nepal.
United NationsConvention against Corruption, United Nations Office on Drugsand Crime, Vienna
NJA Law Journal, National Judicial Academy, Nepal, Different volumes
https://www.unodc.org/unodc/en/treaties/CAC/
http://www.lawcommission.gov.np/
https://myrepublica.nagariknetwork.com/news/poor-ministers-rich-wives/
https://www.transparency.org/
https://www.economist.com/graphic-detail/2018/02/22/ /corruption-is-still-rife-around-the-world
National Integrity System Assessment Nepal 2014, Transparency International Nepal

185