Anti-bribery compliance in Turkey
Corruption is a global phenomenon that affects international commercial dealings. Corruption is a worldwide issue that costs money and lives. It is frequently regarded as a problem that mostly affects poor nations. However, while the harm it causes is magnified in poorer countries, corruption knows no national borders and can be found anywhere. Corruption was still a major global issue in 2020. According to the World Economic Forum, "nearly half of all workers in the EMEA region (Europe, the Middle East, and Africa) and India believe bribery and corruption are acceptable in an economic downturn." Corruption, bribery, theft, tax evasion, and other illegal financial flows cost developing countries $1.26 trillion annually." Corruption can take various forms; it's a legal word that encompasses bribes and other comparable offences.
Turkey is justifiably regarded as an economic and commercial hub for the EMEA region, as well as an important market for many global corporations, as a rising market. On a scale of 0 to 100, Turkey scored a score of 40 in Transparency International's Corruption Perceptions Index in 2017 "from 0 ("very corrupt") to 100 ("very clean"). As this number is closer to the bottom of the scale and because Turkey's anti-corruption measures and regulations are still in progress, international corporations that are actively operating in is constantly evolving Turkey should make every effort to stay informed about the anti-corruption climate in the area
According to Transparency International's 2016 Corruption Perception Index, Turkey is the 75th least corrupt country out of 176 countries. Turkey was ranked 13th in the G20 on this index, which assesses perceptions of corruption in the public sector. This is obvious evidence that corruption in Turkey is on the rise, and Turkey should take quick action to combat the rising tide of corruption. Even though Turkey's legislative landscape addressing anti-corruption and anti-bribery has changed dramatically in the last two decades, and Turkey has made significant steps to align its domestic laws with international standards, Turkey's position has continued to decrease for the third consecutive year.
Turkey has passed up-to-date anti-corruption legislation and signed and ratified all territorially applicable international anti-corruption treaties, notably the OECD Anti-Bribery Convention, to stay up with recent international advancements in this field. The Turkish Criminal Code No. 5237 (Criminal Code), which forbids bribery, malversation, malfeasance, and embezzlement, is the principal domestic legislation that applies to acts of corruption. Apart from the Criminal Code, there are a few other laws that deal with corruption prevention, such as the Turkish Criminal Procedure Law No. 5271, the Public Official Law No. 657, and Law No. 5326 on Misdemeanors.
Turkey has rectified the Council of Europe Convention on the Laundering, Search, Seizure, and Confiscation of Proceeds of Crime and the Financing of Terrorism in 2016. Furthermore, to increased transparency and strengthening the battle against corruption, the Prime Minister of Turkey published circulars to increased transparency and strengthening the fight against corruption. Circular outlines several precautions intended at enhancing prevention as well as several precautions targets to enforcement of sanctions to strengthen the main to combat corruption. Furthermore, the Circular includes several provisions aimed at raising social consciousness. The Circular's directions and precautions are primarily intended to govern the principles of ethical behaviour for public officials and to prevent them from breaking the rules.
Turkey also took part in several international anti-corruption programs as a member of the Group of Nations against Corruption, which monitors member states' adherence to the Council of Europe's anti-corruption criteria. As a result, Turkey's anti-corruption laws were changed to conform to international standards in this area. As a result, Turkey has
- increased punishments for bribery;
- criminalized directly or indirectly offering, promising, or asking bribes;
- criminalized bribery of foreign public officials;
- broadened the extent of the definition of "foreign public officials";
- broadened the extent of the definition of "foreign public officials" and
- imposed administrative liabilities on corporations whose representatives committed the offence of bribery or persons acting on their behalf
Only real people are currently regarded as the main perpetrators of a crime under the Criminal Code, as Article 20 of the Criminal Code expressly stipulates that criminal accountability is personal and that no criminal consequences may be applied against formal entities. The Criminal Code embraces the notion of "personal criminal culpability," which has been contested and argued throughout the years, albeit no appropriate revisions have been adopted. Furthermore, the Turkish judicial system does not recognize non-prosecution or deferred prosecution agreements, nor does it recognize compliance programs as mitigating circumstances.
However, it does not imply that companies are entirely acquitted when it comes to anti-corruption. As stated, companies can be held civilly or administratively accountable under Turkish law. As a result, under Law No. 5326 on Misdemeanors, firms whose corporate organs or agents commit bribery or bid-rigging (among other forbidden acts mentioned under the relevant article) for the advantage of the company while working within the scope of the corporation's activities face administrative fines. Corporations can also be subjected to a variety of security measures. Furthermore, corporations can be subjected to a variety of security measures, including
- the revocation of a license issued by public authority,
- seizure of commodities utilized in the failure to comply with the law (or that result from) or crime perpetrated by the legal entity's representatives, or monetary/financial benefits stemming from (or provided for) the commission of the crime.
Turkey has signed international accords such as the United Nations Convention Against Corruption and the Organisation for Economic Co-operation and Development (OECD) to promote sustainable economic growth and trade to combat corruption. Turkey is a founding member of both the OECD and the G20. The OECD Anti-Bribery Convention encourages sanctions against bribery in international business transactions carried out by firms located in member countries. Its goal is to reduce political corruption and corporate crime in developing countries by encouraging penalties against bribery in international business transactions carried out by firms located in member countries.
Turkey has also demonstrated its commitment to combat corruption by joining international organizations such as the Financial Action Task Force (FATF), the Group of States Against Corruption (GRECO), the International Anti-Corruption Academy (IACA), and the Open Government Partnership Initiative (OGPI) (OGPI). As a result, the majority of anti-corruption measures were enacted with the help of these international organizations, and the strategy was vital enough that a commission and an executive council on increasing transparency and strengthening the battle against corruption were established to carry it out.
Considerable progress was accomplished within the scope of this approach, such as the establishment of an ombudsman institution and the completion of the Supreme Court of Public Accounts Law. Unfortunately, the majority of the steps outlined in the first strategy were never implemented, and Turkey was heavily chastised for it. The Turkish Penal Code (TPC) was amended in 2012 by Law. No. 6352, which broadened the scope of the offence to include both direct and indirect giving and receiving. The OECD Working Group reported in 2019 that Turkey has yet to pass legislation to address long-standing suggestions, including reforming its laws on legal person liability for bribery. Turkey has yet to pass legislation to address long-standing suggestions, including reforming its laws on legal culpability for bribery of foreign public officials, according to the OECD Working Group in 2019.
Furthermore, the current study expressed concern over Turkey's low level of foreign bribery enforcement that despite the size of the country's economy and geopolitical importance, there has not been a single foreign bribery conviction in Turkey in the 16 years since the Convention's coming into force.
Turkish Anti-Bribery Legislation
Bribery is primarily criminalized and outlawed under Turkish law, according to the Criminal Code. However, when it comes to anti-corruption regulations, there is no civil enforcement. Acts of corruption can only be prosecuted under criminal law. Bribery is defined in Article 252 of the Turkish Criminal Code (TCC) as "a benefit illegally obtained directly or through an intermediary by a public official, or another person pointed out by a public official to execute, or not to do, a task-related fulfilment of the official's duties."
The person who offers the bribe can be charged with a sentence of 4 to 12 years in prison. As a result, both the person who offers the bribe and the public official who accepts it will be penalized. The same article's second clause likewise punishes the public official who receives bribes. So not only is the individual attempting to bribe guilty, but so is the official. Surprisingly, bribery is considered to have occurred when a consensual agreement to exchange a benefit has been reached. The third clause of Article 252 states that a promise or agreement to this advantage is sufficient and that the actual benefit (money) exchange is not required to commit bribery.
Article 252 Clause 8 of the TPC, which was amended in 2012, states that not only legal persons, but also public entities, corporations, businesses, or organizations operating in the capacity of public entities, foundations functioning within the body of public institutions, public benefits associations, cooperatives, and publicly traded joint-stock companies, are also covered by the law. This implies that it is not limited to natural persons. Bribing foreign public officials became illegal with the 2004 amendments. This illustrates a shift in perspective, with the scope of the essay being purposely enlarged to include foreigners as well.
With the insertion of clause 9, foreign government officials, members of the international parliament, and other foreign authorities are no longer excluded. Bribes paid to or received by them are illegal in Turkey. Foreigners were also included in the bribery laws. As a result, non-Turkish persons and international firms doing business in Turkey may risk bribery convictions or investigations under Turkish law. Foreign nationals may potentially face criminal charges and civil probes under their own country's laws. As a result, foreigners should operate in conformity with both national and international law.
The Turkish Criminal Code scope includes all subjects (natural or legal) and offences that occur and are located inside the Republic of Turkey. This means that anyone doing business in Turkey, regardless of nationality, risks being prosecuted under Turkish law. Bribery is one of the crimes that have extra-territorial implications. Even if the bribe takes place outside of Turkey but has a connection to Turkey, it can be investigated and prosecuted. Even if you are a Turkish citizen living abroad, you cannot escape the nationality principle. You are still accountable for conduct committed while acting in the capacity of a Turkish national.
Article 10 of the Turkish Criminal Code (TCC) applies to an individual who commits an offence while executing an official task in the name of Turkey in a foreign country. Even if he was convicted in another country for the same crime. Crimes punishable by more than a year in prison in Turkey but not in the United States are penalized under Article 11 TCC. Non-citizens have the same rights as citizens under Article 12. If the offence is committed against Turkey while the criminal is on Turkish soil, the perpetrator is punished according to Turkish law. In summary, both international bribery and bribing foreign authorities are covered by Article 252, making both crimes punishable under Turkish law even if the offender has been convicted in a different country, provided there exists a relationship with Turkey.
Clause one of Article 252 of the Turkish Criminal Code (TCC) may impose a sentence in prison ranging from 4 to 12 years for those who commit the act of bribery. This does not imply the company is out of scope; Article 253 of the Turkish Criminal Code (TCC) specifies the penalties that can be imposed on firms in the form of security measures, the legal entity can be fined up to TRY 2 million and/or have its business license revoked. It is no longer permitted to carry on business without a license.
Comparison of Turkish Law & Extra-territorial ABAC Laws
Turkey does not have its own specialized Anti-bribery and Anti-corruption (ABAC) legislation to prevent international bribery, unlike the US Foreign Corrupt Practices Act (FCPA), the UK Bribery Act (UKBA), or France's Loi Sapin II. The UK Bribery Act (UKBA) was passed in July 2011 and applied to both government and commercial bribery, as well as domestic and extra-territorial bribery. It makes it illegal to take and give bribes to foreign public authorities.
In contradiction to Turkish law, UKBA follows the strict accountability theory. This means that businesses and organizations are held legally liable for bribery paid on their behalf. Under Article 7, the Act establishes a different offence, making commercial organizations criminally liable for failing to implement "adequate procedures" to combat bribery. As companies’ risk being prosecuted for crimes performed by linked persons, corporations are under a lot of pressure to adopt a strong control program.
On the other hand, if a corporation or organization can show that it followed all necessary procedures, it will be exempt from prosecution. In this sense, the procedures might be used as a complete defence to show that all required safeguards were followed notwithstanding a specific occurrence of bribery. What constitutes an "appropriate compliance procedure" is not properly defined and unclear. The territoriality principle underpins the Turkish Penal Code. The principle applies to all offences committed within Turkey's jurisdiction, regardless of the perpetrator's nationality. Bribery of foreign public officials is prohibited under the Turkish Penal Code Article 252 Clause 9; however, its enforcement is not similar to that of extra-territorial legislation.
The FCPA, UKBA, and Loi Sapin II all impose strict liability on corporations for the actions or omissions of their employees, agents, and other related entities. Companies that are subject to these laws are expected to implement adequate compliance strategies. Companies are not subject to criminal culpability, according to Article 20 of the TPC, and only limited security measures can be imposed on people. The Turkish Penal Code does not necessitate the implementation of a compliance program. Unlike the UKBA, the Turkish Penal Code does not classify private to private bribery and failure to prevent bribery as separate crimes.
Foreign Corrupt Practices Act
The United Kingdom Bribery Act has a broader scope than the Foreign Corrupt Practices Act (FCPA). The Foreign Corrupt Practices Act (FCPA), like the UKBA, targets US officials doing business internationally. The legislation was passed to make it illegal for certain types of people and businesses to pay foreign government officials to help them get or keep business. Bribing does not have to involve monetary exchange, as it does with the UKBA and TCC. Bribery can be taken in the form of anything of value. Bribing foreign officials has been illegal for far longer than the newly created UKBA and subsequent TCC revisions. Since its inception in 1977, the FCPA has encompassed corrupt foreign practices.
Similar to UKBA, the FCAP targets parties with a nexus to the United States. Even if they are beyond US boundaries, the Act's nationality concept applies to all US persons, citizens, and businesses who engage in a corrupt foreign activity. Due to the territoriality concept, foreigners (natural or legal persons) committing bribery within US boundaries are likewise protected under this Act. The FCPA, like the TCC and UKBA, includes parties who receive bribes that are punished by law, whether they are foreign officials, natural persons, or legal entities.
Protection for Whistle-blowers is Insufficient
Whistle-blower protection is not sufficient “Reporting” is probably the most crucial aspect of detecting corrupt acts, and it can be assisted by easily available methods that protect a whistle-blower’s identity and safety. It's crucial, especially in high-profile instances involving prominent people involved in wrongdoing. Only a safe and legally secure atmosphere can inspire potential whistle-blowers to denounce corrupt practices and offer evidence to law enforcement agencies, both in the commercial and governmental sectors. The Witness Protection Law is riddled with problems and hence falls short of providing enough and sufficient protection in anti-corruption legislation.
As the scope of the Witness Protection Law is confined to offences punishable by solitary confinement for life, life imprisonment, or imprisonment for ten years or more, as well as offences committed as part of criminal activity, whistle-blowers cannot stay anonymous or benefit from witness protection programs. Under the current circumstances, it is reasonable to conclude that the private sector is not sufficiently regulated in terms of money laundering and that, as a result, support for other organizations fighting corruption has remained constant.
There are no dedicated public prosecutor offices or courts that deal solely with corruption cases. Furthermore, numerous judges, prosecutors, and police personnel have been removed in recent years as a result of various major investigations conducted in Turkey. In the end, this depleted the personnel resources of public and judicial organizations tasked with combating corruption.
In these situations, establishing an independent anti-corruption organization under the UN Anti-Corruption Convention can be extremely beneficial in terms of successfully implementing and coordinating anti-corruption policies as well as developing information about how to prevent corruption.
In today's global market, companies need to be aware of all applicable international rules. Anti-bribery and anti-corruption (ABAC) are still a major issue in today's society, and it's prominent on the compliance agenda for businesses. It is critical for multinational corporations operating in Turkey, as well as Turkish enterprises operating in other countries, to be aware of local legislation and extra-territorial ABAC rules. Although Turkey still has room for improvement in terms of combating international bribery and corporate liability, bribery sanctions for people representing corporations are harsh.
To minimize the danger of being subject to local and extra-territorial anti-bribery regulations, companies operating in Turkey need a risk management plan and a thorough legal examination of the applicable laws. As a consequence, developing an effective compliance program with effective controls is a proactive strategy for multinationals and local companies operating in Turkey to reduce risks. Even though the research indicated that bribery is on the rise in Turkey and that the Turkish government is not doing enough to combat corruption, foreigners may still face bribery charges in Turkey due to the breadth of the bribery laws.
Furthermore, even if a foreign individual is convicted of bribery in another nation, the Turkish bribery act allows that person to be punished in Turkey. As we discussed earlier in this essay, there are many different national and international laws that deal with bribery. To sum up, firms and individuals conducting business in Turkey and abroad must comply with both national and international anti-bribery regulations to avoid criminal prosecution and/or civil investigations.