Turkey & Anti-Bribery Compliance
A historical comparative legislation analysis
In 2020 corruption is still a huge global problem. According to the World Economic Forum: “across the EMEA region (Europe, the Middle East, and Africa) and India almost half of all workers think bribery and corruption are acceptable if there is an economic downturn. Corruption, bribery, theft and tax evasion, and other illicit financial flows cost developing countries $1.26 trillion per year”. Corruption takes many forms, it is a legal term that includes bribery and other similar crimes.
In order to combat corruption international organizations such as the Counsel of Europe, the United Nations and the OECD have initiated international conventions levelling the playing field and offering guidance to member states on ways to tackle the problem. Turkey is a signatory to The Council of Europe Civil Law and Criminal Law Conventions on Corruption and The United Nations Convention against Transnational Organized Crime. Turkey has also been a member of the Group of States against Corruption (GRECO)
The Organisation for Economic Co-operation and Development (OECD) was founded in 1961 to stimulate sustainable economic growth and trade. Turkey is one of the founding member states of the OECD and G20. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention) is aimed at reducing political corruption and corporate crime in developing countries by encouraging sanctions against bribery in international business transactions carried out by companies based in member countries. Turkey signed the Convention on 17 December 1997 and enacted legislation in the form of the “Amendment to the Law regarding Prevention of Bribery of Foreign Public Officials in International business Transactions” No: 4782 on 2 January 2003, which has extended the scope of the former Turkish Penal Code (law no 765) to include foreign government officials in bribery crime. In 2012 the current Turkish Penal Code (TPC) was amended with law no 6352 extending the scope of the crime to cover both giving and receiving actions either directly or with intermediaries.
In 2019 The OECD Working Group stated that Turkey has still not enacted legislation to address long-standing recommendations, notably to reform its laws on liability of legal persons for the bribery of foreign public officials.
Furthermore, Turkey’s low level of foreign bribery enforcement was seen as a concern in the latest report: “Despite the size of the country’s economy and its geopolitical importance, there has not been one foreign bribery conviction in the 16 years since the entry into force of the Convention in Turkey.”
Turkey's legal system has been developed from continental Europe’s legal systems. For example, The Turkish Civil Code has been modified by incorporating elements of mainly the Swiss Civil Code and Code of Obligations, and the German Commercial Code. The Administrative Code bears similarities with French law, and the Penal Code with its Italian counterpart. In Turkish law, there is no specific anti-corruption and anti-bribery legislation, but crimes are mainly regulated under the Criminal Code. There is no civil enforcement when it comes to the regulation of anti-corruption issues. Criminal law is currently the only source for criminalising acts of corruption.
Bribery is defined in article 252 of TPC as: “illegal benefit provided to a public official or to a third party shown by public official, to perform or not to perform a task in relation to the duty task of the public official.”
Both local and foreign public officials are within the scope of the law. A public official is defined in article 6 of TPC as any person who contributes to the public service by appointment, election or any other way permanently and temporary.
The term “foreign” public official is described in article 252/9 as:
Both giving and accepting bribes are sanctioned with imprisonment from four to twelve years. Accordingly, a person offering a bribe will be punished as well as the public officer receiving it.
A mutual agreement is deemed to be sufficient evidence of committing bribery according to article 252/3 the actual exchange is not needed to fulfil the crime.
With the change to the TPC in 2012, article 252/8 stipulates that not only legal persons but public entities, corporations or organisations in the character of public entities, foundations acting within the body of public institutions, public benefit associations,
cooperatives and publicly traded joint stock companies are also in scope of the crime.
Unlike the US Foreign Corrupt Practices act (FCPA), the UK Bribery Act (UKBA) or France’s Loi Sapin II, Turkey does not have its own dedicated anti-bribery and anti-corruption (ABAC) legislation to combat foreign bribery.
The Turkish Penal Code is built upon the territoriality principle. The principle covers all crimes committed under the jurisdiction of Turkey regardless of the nationality of the person. Bribery to foreign public officials is regulated under article 252/9 of the TPC, however the enforcement of this rule is not comparable with the above mentioned extra-territorial legislation.
Both the FCPA, UKBA and Loi Sapin II regulate a strict corporate liability for acts or omissions of their employees, agents, and other associated entities. Companies falling under the jurisdiction of these laws are required to adopt effective compliance programs. According to article 20 of the TPC, companies are not within the scope of criminal liability, and only some security measures can be applied to individuals.
Adopting a compliance program is not required by the TPC. Private to private bribery and failure to prevent bribery are not listed as separate crimes in the TPC unlike the UKBA.
Each year Transparency International announces The Corruption Perceptions Index (CPI) that ranks 180 countries and territories by their perceived levels of public sector corruption. The CPI is the most widely used indicator of corruption worldwide.
In 2019’s assessment Turkey scored 39 on the CPI, a significant decrease of 10 points since 2012. According to the latest CPI report there is little space for consultative decision-making in the country. Turkey has dropped to the 91st place out of 180 countries. Transparency measurements of political finance and research on the level of inclusion and participation of decision-making processes overlap with the 2019 Corruption Perception Index results. Increasing illegal money flows associated with political finance are also among the prominent findings.
Anti-bribery and anti-corruption (ABAC) is still a major problem in today’s society and a big agenda item in corporate compliance programs. We are still witnessing ABAC enforcement of FCPA, UKBA and relevant laws that not only harm financially but also damage the reputation of big corporations.
In today’s global economy corporations should be aware of applicable global rules. For multinational companies operating in Turkey and Turkish companies operating in other countries it’s important to know the local laws and applicable extra-territorial ABAC laws.
Turkey still has room for improvement in combatting foreign bribery and the liability of corporations, however, the bribery sanctions for individuals representing corporations are severe. Corporations operating in Turkey need a risk management plan and the correct legal analysis of the applicable laws to minimize the risk subject to local and extra-territorial anti-bribery laws. Ergo building an effective compliance program with effective controls is a proactive way to minimize the risks for multinationals and local companies operating in Turkey.