Based on an inspection conducted by the Independent Authority Against Corruption (IAAC), a violation was identified in which a public official failed to reasonably explain that certain assets were acquired through lawful income. In response, the internationally recognized practice of an “Unexplained Wealth Order” has been applied.

Public official ‘A’ was unable to provide a substantiated explanation for the lawful source of MNT 45,000,000 used to purchase a “Toyota Lexus RX-450” vehicle. This constitutes a violation of Article 7.1.8 of the Anti-Corruption Law, as established by the declarant’s own explanation and other supporting evidence.

Within the framework of reviewing asset and income declarations of public officials, there are cases where the conduct does not meet the elements of the criminal offense of “Illicit Enrichment” under Article 22.10 of the Criminal Code, but still constitutes a violation under Article 7.1.8 of the Anti-Corruption Law. This includes situations where a public official cannot reasonably explain assets or income exceeding six months’ salary as having been lawfully obtained.

Accordingly, the IAAC filed a request with the court to confiscate the MNT 45,000,000 that public official ‘A’ could not justify as legally acquired income and to transfer it to state ownership. The Court of First Instance for Disctrict Criminal and Civil Proceedings reviewed the case and, based on Article 22.5 of the Law on Courts, Article 33.2 of the Anti-Corruption Law, and Article 4.1(3) of the Law on Violations, ruled that the MNT 45,000,000—currently held in the deposit account for seizures and damages of the IAAC—be transferred to the state budget.

In international legal practice, the confiscation of assets and income that cannot be reasonably explained as lawfully acquired—without delay and through civil or criminal proceedings—is known as an “Unexplained Wealth Order”. This mechanism is most commonly implemented in countries with common law legal systems.