- Germany lodged a formal protest against Nepal, calling corruption charges against two German passport-printing companies unsubstantiated and lacking concrete evidence.
- The German government warned of international arbitration and financial consequences if Nepal cancels existing contracts with Veridos GmbH and Muehlbauer ID Services.
- Berlin criticized the legal action for damaging corporate reputations and requested safety for technical staff arriving in Kathmandu next week.
- The controversy involves allegations of political pressure on Nepal’s anti-corruption authority and could strain bilateral relations and future foreign investment.
Kathmandu, Nepal: The German government has lodged a strong diplomatic protest with Nepal, expressing serious concern over corruption charges filed against two German companies involved in Nepal’s passport printing project.
On Thursday, Germany’s Federal Foreign Office summoned Nepal’s Chargé d’Affaires in Berlin, Sagar Prasad Phuyal, to hand over a formal note of protest. The German government described the allegations against its companies as “unsubstantiated” and objected to a lack of evidence in the case filed by Nepal’s anti-corruption authority.
According to high-level sources, the protest letter specifically refers to cases filed against Veridos GmbH, a German state-owned company, and Muehlbauer ID Services GmbH, a private firm. The German government stated that although corruption charges have been registered, the charge sheet submitted to Nepal’s Special Court does not contain concrete proof to support the accusations.
The letter reportedly asserts that the companies have not engaged in any corrupt practices. It also criticizes the legal action taken against their employees, arguing that the proceedings have damaged their international reputations.
Furthermore, Germany has warned Nepal against canceling the existing passport printing contract, cautioning that such a decision could lead to severe legal and financial consequences. These include international arbitration and compensation claims for business losses and reputational damage.
Additionally, the German government informed Nepal that technical staff from the companies are scheduled to arrive in Kathmandu next week to initiate the operational phase of the project. It urged Nepal to ensure the safety and security of its personnel.
The controversy stems from an ongoing investigation by the Commission for the Investigation of Abuse of Authority (CIAA), which has filed corruption cases against representatives of the German firms as well as officials from the Department of Passports and the Ministry of Foreign Affairs.
Under the procurement agreement, Muehlbauer ID Services was awarded the contract for pre-enrollment, enrollment, and data management systems, while Veridos was responsible for the personalization, quality control, and packaging of the passports.
The CIAA has charged several individuals, including foreign representatives and the companies' Nepali agents. The alleged financial irregularities amount to billions of rupees across separate contract packages.
The case has been further complicated by allegations of political pressure. Reports suggest that aides to Prime Minister Balen Shah summoned CIAA officials to the Office of the Prime Minister and Council of Ministers earlier this month, pressuring them to initiate legal action regarding the passport tender. Following the incident, two officials were reportedly arrested, and the case was subsequently filed in the Special Court.
The issue has now evolved into a sensitive diplomatic matter, raising concerns about governance, legal procedures, and Nepal’s investment climate. Analysts warn that the dispute could affect Nepal’s credibility in international procurement processes and strain its bilateral relations with Germany, a key development partner.
As legal proceedings continue and diplomatic engagements intensify, the outcome of the case is expected to have significant implications for Nepal’s institutional integrity and its relationship with foreign investors.
