the core objective of this paper is to beware ourselves of what are the practices that must be avoided in practical world in Pakistan as to stay legal and avoid fraudulent practices in both private and government sector. Also in lieu of the current National Action Plan, NAB is very active in bringing the culprits within the framework of law.

1. NAB and Corruption in
Business in Pakistan
by:
Asad Khalid
Ayesha Majid
Bilal Sarwar
Huma Zafar
Maaz Junaid Khan
2016

2. 1
Contents
Significance........................................................................................................ (M.Bilal Sarwar) 2
Introduction........................................................................................................ (M.Bilal Sarwar) 2
Constitution under which NAB was established. ................................................ (Ayesha Majid) 3
Authority of NAB ................................................................................................ (Ayesha Majid) 4
After amendment of 2009 .................................................................................... (Ayesha Majid) 4
Code of Conduct for Business in Pakistan............................................................ (Ayesha Majid) 5
Constitutional Issues…………………………………………………………......(Ayesha Majid) 6
Procedure of Assessment of Cases .........................................................................(Asad Khalid) 6
Prosecution..............................................................................................................(Asad Khalid) 9
Corruption Perception Index (CPI) .............................................................(Maaz Junaid Khan) 10
Effectiveness of NAB ..................................................................................(Maaz Junaid Khan) 11
How NAB improved Pakistan’s CPI ..........................................................(Maaz Junaid Khan) 13
Prominent NAB Cases .......................................................................................... (Huma Zafar) 13
Conclusion ....................................................................................................... (M.Bilal Sarwar) 15
References............................................................................................................. (Huma Zafar) 16

3. 2
Significance
We chose this topic because after we are done with our education, we will be part of the world
involving monetary instruments and their exchange. So the core objective of this paper is to
beware ourselves of what are the practices that must be avoided in practical world in Pakistan as
to stay legal and avoid fraudulent practices in both private and government sector. Also in lieu of
the current National Action Plan, NAB is very active in bringing the culprits within the
framework of law.
Introduction
The fourth military coup in 1999 replaced the Ehtesab Bureau with the National
Accountability Bureau (NAB), with enactment of National Accountability Bureau
Ordinance (No XVIII of 1999) (NAO) with a retrospective effect, taking cognizance of
offences as far back as 1985. With the aim of eradicating “corruption and corrupt practices
and hold[ing] accountable all those persons accused of such practices…”. The necessity for
establishing the NAB with its wide-ranging powers is justified in the Preamble to the Ordinance.
. It is charged with the responsibility of elimination of corruption through a holistic approach of
awareness, prevention and enforcement. It is headquartered in Islamabad having regional offices
in seven other cities namely Karachi, Lahore, Peshawar, Quetta, Rawalpindi, Multan and Sukkur.
NAB was created on the lines of ACAs of Hong Kong and Singapore. It has peculiar
features that defy criminal procedure codes norms, such as shifting the onus of proof on the
accused and making the accused testify against himself. It attained the status of the supreme
anti-corruption authority and came into the field with full force having wide powers, stiff
procedures and harsh punishments for anyone, in the public or private sector. Until 1999 and
prior to the formation of the NAB, the FIA was the primary accountability institution at the
Federal level. It still operates as an Anti-Corruption Authority, but with curtailed jurisdiction.

4. 3
The NAO and the NAB have jurisdiction that extends to the whole of Pakistan and
overrides all other corruption related laws and no court can grant bail to a person accused
of an offence by the NAB. Being a statutory body, the NAB has a very strong and
independent legal setup. The provisions of its enabling law (NAO, 1999) has an overriding
effect.
Constitution under which NAB was established.
Primary laws to deal with corruption in Pakistan are;
 The Pakistan Penal Code (PPC) 1860,
 The Prevention of Corruption Act (PCA), 1947
 The National Accountability Ordinance (NAO), 1999(amended in 2005 &
2009).
Two Anticorruption Authorities (ACAs) i.e. the National Accountability Bureau (NAB)
and Federal Investigation Agency (FIA) work at the Federal level and four Anti-Corruption
Establishments (ACEs) operate at Provincial level are empowered to investigate into various
cases of public sector.
Accountability Courts are established under the NAB Ordinance and deal with cases sent
by the NAB. The Central and Provincial Special Courts set up under the Criminal Law
Amendment Act 1958 deal with the cases sent by FIA and ACEs respectively.
Various authorities like Public Procurement Regulatory Authority (PPRA) through Public
Accounts Committees (PACs). The Office of the Auditor General of Pakistan, and Office of
the Wafaqi Mohtasib (Ombudsman) of Pakistan too are empowered to check executive acts.
The present accountability drive aims at deterring corruption by prosecuting high profile cases of
corruption in every segment of the society. A serious attempt is being made to curtail the

5. 4
corruption of private sector, government organizations and politicians. While striving to achieve
the objective NAB is constantly guided by National Priority of Economic Revival.
Authority of NAB
 Under NAO the chairman NAB or any authorized officer may call for information from
any person during inquiry/ investigation in connection with the provisions of the
Ordinance.
 The Chairman NAB or an officer authorized by the Federal government may request a
Foreign State to have the evidence taken/ obtained, freeze assets, confiscate articles, and
transfer such evidence or articles or assets to Pakistan and transfer the person in custody
to Pakistan
 The bank and financial institution are to take notice of unusual or large transaction, which
have no apparent economic or lawful purpose and shall be referred to Chairman, NAB.
Failure to do so is punishable with imprisonment extending to 5 years or with fine or
both.
 Once the Chairman NAB initiates investigation no accused person shall transfer or create
any charge on any property, and such transfer shall be void. The contravention is
punishable for up to 3 years imprisonment and fine not exceeding the value of the
property
 NAB can launch investigation against all sitting or former members of the public,
politicians and government officials, including the Chief Minister of a province or Prime
Minister, former President or the Governor of a Province.
After amendment of 2009
Its jurisdiction extends to all sitting or former members of the public, politicians and
government officials, including the Chief Minister of a province or Prime Minister, former
President or the Governor of a Province. Special provisions of 'voluntary return' and 'plea
bargain' were incorporated, which helped in bringing back the looted wealth to
Government's treasury. It can seek information from any organization/department during

6. 5
investigations and has extra ordinary powers to seize assets of an accused even at the inquiry
stage. Code of conduct for business in Pakistan.
Code of Conduct for Business in Pakistan
Companies can be held civilly liable under the Prevention of Corruption Act and the
National Accountability Ordinance. Facilitation payments and gifts are prohibited but are
common practice. Pakistan does not ensure integrity in state bodies and is unable to prevent
corruption despite strong institutional and legal frameworks. Entities have to operate under the
following laws;
 The Prevention of Corruption Act and the National Accountability Ordinance
(NAO) serve as principal corruption laws in Pakistan. NAO contains a passage stating
that unexplained assets are seen as corruption and the responsibility to present proof that
the assets were legitimately obtained rests with the accused. The NAO criminalizes both
public and private sector corruption. Sets the maximum penalty for corruption at 14
years rigorous imprisonment (implying hard labor) with a fine and confiscation of assets
acquired through corruption in the name of the accused or the accused's
dependents/beneficiaries. Facilitation payments and gifts are prohibited. Companies are
held civilly liable and the ordinance is conjoined by Prevention of Corruption Act 1947
 Money laundering is criminalized by Anti‐Money Laundering Ordinance. Promulgated
in order to provide for prevention of money laundering and forfeiture of property derived
from, or involved in, money laundering. Under the Ordinance, the Financial Monitoring
Unit (FMU) was created, serving as Pakistan's FIU and in charge of handling Suspicious
Transaction Reports.
 Public procurement is regulated by the Competition Act, which prohibits anti‐
competitive practices such as collusion, abuse of market dominance, deceptive marketing
and harmful mergers and acquisitions.
 The Freedom of Information Ordinance guarantees any citizen access to public
records.

7. 6
Constitutional issues
The creation of powerful anti-corruption commissions has already raised significant constitutional
issues in a number of Commonwealth countries. For example, the case of Gachiengo and Kahura
v Republic where the High Court of Kenya ruled the Kenya Anti-Corruption Authority
unconstitutional on the basis that it was contrary to the principle of the separation of powers for
the body to be headed by a serving High Court judge.
In Wali and Others v Federation of Pakistan (the NAB case), the Supreme Court of Pakistan
was faced with a plethora of constitutional petitions attacking the constitutionality of the National
Accountability Bureau Ordinance. The case raises issues concerning the separation of powers
and independence of judiciary, violation of the fundamental rights of freedom of trade,
business or profession, security of the person, safeguard from illegal arrest and detention,
protection against retrospective punishment, freedom of movement, equality of citizens and
other rights guaranteed by the Constitution.
Procedure of Assessment of Cases
The operational procedures comprise of following stages:
a. Receipt of complaints:
Section 18 of the NAO stipulates that NAB can take cognizance on receipt of a
complaint from the appropriate government department or agency, member of the public
or on its own accord.
b. Preliminary examination / probe (Complaint Verification):
The complaint is examined by relevant experts in order to determine the nature of the
offence and the possibility of taking cognizance under the NAO.
c. Combined Investigation Team (CIT):

8. 7
For investigation judiciously and transparently, the concept of Combined Investigation
Team (CIT) is implied and enforced in NAB. It consist of a Case officer supervising a
team of at least two Investigation officers and a Legal consultant. The team is further
reinforced by experts of various fields, depending upon the nature of the case. The
Experts provide prompt and specialized opinion to the Investigators, during the case
proceedings.
d. Inquiry:
During this stage, sufficient evidence is collected to incriminate the accused. If accused
is a government servant, concerned department is informed. Accused is offered the option
of Voluntary Return (VR) at this stage.

9. 8
e. Investigation:
Investigation is authorized after scrutiny of evidence and discussion with experts
(financial as well as legal).The investigator prepares report based on evidence. The
process entails interviewing of accused, recording of witness statements, collection and
examination of evidentiary material. The option of Plea Bargain (PB) is available to the
accused at this stage.
f. Arrest of accused:
Section 24 of NAO empowers Chairman NAB to issue Warrant of Arrest of accused. In
order to execute arrest following tools are also adopted;
 Placement on Exit Control List (ECL)
 Issuing of Red Notice
 Extradition through INTERPOL
g. Priority of cognizance of cases:
Cases are prioritized by adopting a priority matrix. Priority is assigned on the basis of
gravity of offence, the profile of accused and amount of corruption money involved.
h. Decision making process:
In the course of enforcement operations and legal proceedings, the prime decisions of
authorization/ closure of inquiry/ investigation, accepting / rejection of PB/VR
application and reference filing are being taken in the Executive Board, chaired by
Chairman NAB or Regional Board chaired by DG Region.

10. 9
i. ECL:
At any stage of the case, name of an accused is placed on ECL through Ministry of
Interior on request of NAB. This is to prevent the accused from fleeing. Names are
removed from ECL after disposal, closure of case or discharge of complete liability
through Voluntary Return or Plea Bargain.
j. Freezing of assets:
Sec 12 of NAO empowers NAB and Court to freeze property, assets and bank accounts
of the accused person.
Prosecution
Prosecution is one of the most vital and integral Division along with Operation Division that
operate like two wheels of chariot under NAO, 1999 for logical conclusion of cases. After
thorough investigation of the cases by the Operation Division, the baton is passed to Prosecution
for legal vetting of investigation report and filing of Reference in the Accountability Court
subject to prior approval of the Chairman NAB. To ensure transparency and neutrality of the
investigation of cases and filing of references, an independent office of Prosecutor General
Accountability (PGA) has been established within NAB under section 8 of NAO, 1999. The
President of Pakistan, in consultation with the Chairman, may appoint any person, who is
qualified to be appointed as a Judge of The Supreme Court, as PGA. The PGA, with the
approval of Chairman may appoint Special Prosecutors to conduct prosecution of cases and to
appoint advocates to institute or defend cases, appeals, petitions, applications and all other
matters before any court or tribunal including the High Courts and Supreme Court in matters
arising out 39 of or relating to proceedings under this Ordinance. The Prosecution Division is
entrusted with the important responsibility of prosecuting an accused in the Accountability
Court.

11. 1
0
Corruption Perception Index (CPI)
The Corruption Perceptions Index measures the perceived levels of public sector
corruption worldwide by taking into consideration various aspects of the country and its
functions. It rates the countries on a scale from 0 (highly corrupt) to 100 (very clean)
.
The Corruption Perceptions Index of the 175 countries around the world are as follows:
As the map above depicts, the darker regions on the map shows a lower CPI score given to the
countries exhibiting more corrupt nations with CPI scores from 0-30. The lighter shades of
yellow depicts higher CPI scores and less corrupt nations.
The Table shows Pakistan’s
Ranking at 126 with a given
Score of 29. The red depicts
The high severity of the corruption
(2014) (2015)

12. 10
Effectiveness of NAB
The CPI 2015 ranking of Pakistan in Transparency International (TI) report has improved from
126 to 117 under its new zero-tolerance policy. NAB’s zero-tolerance strategy has had a major
impact on the improvement in Pakistan’s CPI. NAB prosecuted and recovered over Rs4.5 billion
looted money during the last one year and has recovered a total of Rs265.12 billion to date. Last
year, NAB filed 12 references in the Rs22 billion Modarba scam and recovered more than
Rs1billion involved in the scam and arrested 33 persons accused in the case.
During the last three years, NAB has started disciplinary actions against 83 NAB officials out of
which 60 cases have been charged with 22 major penalties, 34 minor penalties and 4 exoneration
penalties on 22 officials NAB stresses the importance of accountability even within NAB itself
by creation of Internal Accountability Mechanism (IAM) to fight internal corruption.
The table shows the top 20
countries on the CPI list
with USA at a world ranking
of 17 with a rating of 74

13. 11
he graph above shows the number cases under investigation by NAB, the number of finalized cases and
the number of cases that have been authorized actions from July to September 2015
The graph above shows the number of cases by NAB which have had successful recoveries, bank
defaults, and voluntary returns and plea bargains since September 2015.

14. 12
How NAB improved Pakistan’s CPI
NAB has formulated The National Anti-Corruption Strategy (NACS) for eradication of
corruption and corrupt practices and has recovered more than Rs. 265 billion since its beginning.
NAB has received approximately 300,000 complaints in the time period and has authorized and
completed 9662 investigations and has filed 2451 corruption references in respective
Accountability Courts. NAB’s success is greatly due to their new Standard Operating Procedure
(SOP) which has been devised to improve the timelines in order to make it more effective which
allows a maximum limit of 10 months from complaint verification to inquiry to investigation and
finally to a reference in Accountability Court. The Bureau has also established its first Forensic
Science Lab (FSL) dedicated to expedite the process and ensure no stone is left unturned.
Prominent NAB Cases
Hajj Scandal:
This case involved cheating the public at large by depriving a lot of people of the amount
deposited for Hajj by Abdul Aqeel, owner of Aqeel Travel & Tours, Nowshera Cantt. 59 people
initially lodged a complaint against the company on 1st
December, 2008 and that number kept on
growing. Abdul Aqeel deprived them of their money on the pretext of sending them on Hajj, but
he couldn’t procure Hajj visas. An inquiry was launched and records of the company were
collected by an investigation team. Abdul Aqeel was arrested on 17th
December, 2008. Although
on paper only 407 Hajj applicants were registered, he actually received PKR 50.118 Million in
total. Interrogation revealed that the company wasn’t an authorized Hajj group organizer. The
accused stated that he had been defrauded by Kristina Diana & Naveed Sadiq, and he had paid
PKR 24.18 Million to the lady without obtaining any receipt. Her identity couldn’t be traced by
the FIA. Abdul returned a total of PKR 10.8 Million to the applicants. His trial is still in progress
while Naveed has been declared a proclaimed offender.
The reaction of the business community was positive for this case. This case was creating
problems for the travel & tour companies associated with Hajj & Umrah services. People weren’t

15. 13
trusting the companies any more. The business community and the public in general breathed a
sigh of relief at the result.
Forex Co International:
The owners of Forex Company were involved in swindling the public at large. The memorandum
of association of the company revealed that none of its objectives were related to accepting
deposits from general public and to make profits out of it. The company offered unrealistic
returns of 4% /month to its portfolio account holders. Another form of investment was a trading
account where investment was made on profit & loss basis with loss up to 10%. One more
investment was an account where profit and loss was completely borne by the client. Through
this methodology alone, the owners earned $174,144 out of the total of $241,225.
Formal investigation was launched on 6th
April, 2004. When the 7 accused were arrested, 5 of
them opted for conviction through plea bargain while 2 are still facing trial. A proportion of the
money has been returned to the affectees in installments whereas 4 of the accused have defaulted
on their payments of the plea bargain. A reference has been filed against them, and only 1 has
paid his full share of his plea bargain.
DHA Valley Scam:
A complaint was submitted by retired Lt-Col Mohammad Tariq Kamal in Sept 2010. The
complaint alleged that the DHA Valley real estate project was being developed on an area
reserved for the proposed Dadhocha Dam. Following the verification of the complaint on June
13, 2011, the bureau authorized an inquiry on July 3, 2012.The former army chief Gen Ashfaq
Parvez Kayani’s brothers and other retired army officials were implicated. The case was later
tried by the Supreme Court and a two-judge bench headed by Justice Jawwad S. Khawaja heard
the petition on July 16, 2015.
According to NAB investigation, those who had paid for plots in DHA Valley found themselves
in an awkward position when, in 2009 DHA transferred all the funds it had been paid (Rs62
billion) to the accounts of Bahria Town, which eventually failed to develop the scheme. Those
cheated out of their money included 110,000 civilians, 41,000 serving and retired military
officers, personals and families of martyrs. The Nab investigation against the perpetrators is still

16. 14
ongoing and their names have been added to the ECL list. The army Chief General Raheel Sharif
has pledged full support of the corps for the investigation.
Conclusion
We choose NAB as our topic because of the importance of this institution for our country. Over
the years it has gone through multiple transformations and has emerged as an institution that can
fight and curb corruption and make doing business safe in Pakistan. It safe guards the rights of
both the general public and the business community. This progress came after setbacks, for
initially NAB was heavily influenced by the politicians, the rich and the ruling elite. Now it has
emerged as a strong independent body that is capable to prosecute people without discrimination
and outside influence. It has many solved high profile business corruption cases under its belt
and it has also been very instrumental in bringing corrupt government officials to justice.
The recoveries made by NAB have not only given relief to the affected people but has also put
billions of rupees back in the national exchequer that was looted by businessmen/women and
also through administrative corruption of government officials. Concrete steps have been taken
not to buckle under undue influence and keep proceedings of cases free and fair. Its laws
provides it with the necessary tools for swift action and prosecution of the culprits. Its steps to
remove corruption from with the institution and prosecution of NAB staff involved in underhand
dealings is also laudable. We think that NAB can and is bringing a change regarding corruption
in Pakistan and in business dealings exclusively, but it needs to stay independent and
uninfluenced to fulfill its purpose.

17. 15
References
http://www.nab.gov.pk/Public_info_material.asp#CASE_STUDIES
http://www.dawn.com/news/1192921
http://www.nab.gov.pk/Prosecution/Prosecution.asp
http://www.nab.gov.pk/Investigation/Investigation.asp
http://www.nab.gov.pk/Inquiries/Inquiries.asp
http://www.nab.gov.pk/Recoveries/Recoveries.asp
http://www.thenews.com.pk/print/100072-Why-NAB-is-feared?src=ilaw
http://tribune.com.pk/story/1024459/dha-city-scam-nab-launches-probe-against-gen-kayanis-brother-
front-page/
http://www.thenews.com.pk/print/95961-Ex-COAS-Kayanis-brother-appears-before-NAB
http://www.dawn.com/news/1232218
http://www.pakistantoday.com.pk/tag/n

18. 16

19. 17