Nepal’s passport department is running critically low on booklets—fewer than 45,000 remain—even as half a million passports supplied by a German company sit unused, caught in a legal and political standoff following a corruption case that has now drawn in the German government.

The Commission for Investigation of Abuse of Authority filed charges last week against officials from the Department of Passports and the local representatives of two German firms, Veridos GmbH and Muehlbauer ID Service GmbH, over the electronic passport procurement contract.

The case has left the government unwilling to distribute the passports Veridos has already delivered—even as the French company that has supplied Nepal's passports since 2010, IDEMIA, prepares to exit within days.

With passport applications running at five to six thousand per day, the window for a stopgap is closing fast.

“There is a state of confusion,” a Foreign Ministry official said. “The government has to decide whether to use the passports supplied by Veridos GmbH or procure a few hundred thousand additional booklets from IDEMIA as a stopgap measure.”

The problem the government faces at the moment is that neither option is clean. Using the German passports means distributing booklets supplied by companies under active corruption charges. Returning to IDEMIA—now rebranded as IN Group—requires a fresh agreement with a supplier that has already communicated, informally, that it is wrapping up its Nepal operations. A department official told the Post that they expect a formal notice on Monday.

Foreign Minister Shisir Khanal, who held discussions with the prime minister’s office and the passport department before heading back to Kathmandu from Chitwan, said the German companies have been given roughly three weeks to make their systems ready for passport production and printing.

“If German companies are not able to make the system, passport distribution and printing ready, then we will think of alternatives,” Khanal told the Post.

Muehlbauer has already set up personalisation centres while Veridos has already supplied half a million passports to the department. But more than 100,000 of them must first be sent to the International Civil Aviation Organisation and several countries as specimens of the new Nepali passport design, further shrinking the usable stock.

The corruption case has added an unprecedented diplomatic dimension. After the CIAA named their local representatives as defendants, both German firms lodged complaints with the German foreign ministry. On Thursday, the ministry's deputy director for the Asia-Pacific Division summoned Nepal’s acting ambassador, Sagar Phuyal, to seek clarification on the case, including whether the companies could appoint legal representation and whether the proceedings would affect the passport contract.

Nepal sent a three-page position paper to its Berlin embassy ahead of the meeting. The exchange, contrary to some media reports, was very positive, according to a foreign ministry official who spoke to the Post.

“The Germans inquired about the nature of the case being filed against their companies and expected the time to reach a conclusion. The German officials also wanted to know whether those companies are allowed to appoint legal representatives in court and whether the case will have any impact on the passport procurement contract,” the official said.

“It was a very cordial meeting. They did not hand over any protest [letter] nor any diplomatic note to our diplomat. They rather said these incidents should not affect bilateral relations,” the foreign ministry official told the Post.

Foreign Ministry spokesperson Lok Bahadur Paudel Chhetri also dismissed media reports that Germany had lodged a diplomatic protest over the passport procurement case.

Following the CIAA case filing, the passport department’s outgoing director general, Tirtha Raj Aryal, was among those charged. The foreign ministry has since entrusted oversight of the department to Joint Secretary Dipak BK.