Combating bribery can be rather challenging in a different or remote jurisdiction than one's own. Foreign companies, or investors, doing business in Turkey may be exposed to such challenges, be subject to a stack of different regulations or regulatory regime and face a higher risk of bribery. At the very least, the burden of prevention can be heavier than in their own countries and cultures.
Turkey is party to many anti-corruption treaties, including the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the UN Convention against Corruption and the Council of Europe Criminal and Civil Law Conventions on Corruption. In addition, Turkey has amended its anti-bribery and anti-corruption legislation to include bribery of foreign public officials. The meaning of "public official" is broadened to align Turkish legislation with the requirements of international conventions or treaties. There is a visible effort by the Turkish Government to join the fight against bribery on a global scale: today, its anti-bribery legislation is not less comprehensive than that of other developed countries.
The OECD Anti-Bribery Working Group's latest Phase 3 Report criticised Turkey for its low level of enforcement and recommended Turkey to improve its efforts in detecting and investigating allegations of foreign bribery. This criticism is a hint of the Turkish authorities' reluctance to deter, detect and prosecute domestic and foreign bribery when read in conjunction with other indicators. Namely, Transparency International's Corruption Perceptions Index (CPI) ranked Turkey 66 out of 168 countries in 2015. Turkey's upcoming CPI ranking for the year 2016 does not promise any raise at this stage. Recently, Open Government Partnership's (OGP) Steering Committee resolved that Turkey would be designated as inactive in OGP for having failed to deliver a National Action Plan since 2014. The situation with OGP is yet another manifestation of Turkey's lack of determination in implementing and enforcing measures to prevent domestic and foreign bribery versus its good faith in partaking in global initiatives such as OGP for a more transparent, accountable and open government. Considering the state of emergency declared in July 2016, and extended for an additional period of three months, one may argue that the detection and prosecution of foreign bribery is currently not one of Turkey's top priorities.
As to domestic bribery, the scene is also a little stark: the handling of the corruption allegations that emerged in late 2013 marked a milestone in Turkey's stance against corruption and bribery. Despite the public opinion affirming that bribery and corruption are among the major problems of the country according to reliable surveys, only few cases are brought to trial. This may be partly linked to the fact that some forms of bribery are not recognised as such in Turkey: a considerable number of participants in a survey are confused about the corrupt nature of holiday and New Year gifts as well as donations to foundations, associations or public institutions made upon public officials' request in order for the latters to perform their public duty. There is common belief that bribery is integral to doing business in Turkey and even multinational corporations with well-established and robust compliance policies face difficulties in refusing the demand. The demand-side of bribery considers itself immune to prosecution and the supply-side seems to aversely abide by the "rules" to compete in the market.
The foregoing scenery leads to one key takeaway: Despite the satisfactory anti-bribery and anti-corruption legislation in place, Turkey's anti-bribery scene has practical flaws that necessitate extra layers of care and attention for multinational companies to meet their domestic and international anti-bribery compliance obligations. Due to the wide jurisdictional application of the FCPA and UKBA combined with the ingrained risks of the Turkish market, foreign companies are recommended to be thorough in their risk assessment, alert against disguised forms of bribery, and to closely observe the provision of employee trainings and implementation of codes of conduct.
You may find further information regarding our crisis management, compliance and investigations practice, here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.