Turkey: White Collar Crime: The Worldwide Rise in Corruption Monitoring

As a result of the increasing international focus on the fight against corruption, more and more countries are joining multinational treaties and introducing strict domestic anti-corruption regulations. Similarly, compliance with and enforcement of the US Foreign Corrupt Practices Act ("FCPA") has become more important for US and non-US companies alike, especially in the past five years. Globalized commerce and the development of global markets have induced even small companies to list themselves internationally, and subjected more companies than ever to the FCPA's restrictions.

International sensitivity to the fight against corruption – as evident from the level of overseas implementation and effect of the FCPA and international treaties such as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ("OECD Convention") – has deeply affected Turkey's approach to and treatment of corruption issues.1 White collar crimes regulated under the Turkish Penal Code ("TPC") – after amendments in 2005 in line with the OECD Convention – can be listed mainly as follows: bribery; fraud in tender; fraud in performance of obligations; laundering of the proceeds of an offense; abuse of trust; using a valueless bond; theft and qualified theft by deception; bankruptcy by deception and reckless bankruptcy; disseminating false information about companies or co-operatives; forgery of official documents; forgery of private documents; establishing crime organizations in order to commit offenses; failure to disclose criminal activity; alteration, concealment or destruction of evidence; disclosure of confidential documents or information relating to commerce, banking or private customers; restriction of supply of goods and services; and offenses concerning data processing systems. In Turkey, tougher penalties and more leniency options are being introduced, encouraging not only whistleblowing but also self-disclosure, leading to a race between the accomplices to crime – legal entities and their employees – to self-disclose. Leniency for some offenses listed above (such as bribery, laundering of the proceeds of an offense, bankruptcy by deception and reckless bankruptcy, etc.) is a novelty that the newly enacted TPC introduces.

Despite Turkey's newly introduced laws, regulations, and legislative amendments in line with the OECD Convention, as the OECD Working Group's Report2 noted, no corruption case has yet to be discovered through whistleblowing in Turkey. The OECD Working Group also commented that private and public sector employees receive insufficient training in the detection of foreign bribery in Turkey.

The FCPA is in many ways similar to the OECD Convention, mainly prohibiting bribery of foreign officials and introducing preventive measures to accomplish this end. The FCPA's anti-bribery provisions basically prohibit both US companies and foreign companies listed on a US stock exchange – and any officer, director or employee thereof – from underhandedly paying or offering to pay, directly or indirectly, money or anything of value to a foreign official, or any foreign political party or official thereof, to obtain or retain business or direct business for any person. The FCPA does not define the term "anything of value." However, in practice it is interpreted broadly, and depending on the subjective elements of each specific case, cash payments, gifts, meals, drinks, discounts and even transportation fees can be construed as "of value." The FCPA's "Books and Records and Internal Control Provisions" mainly require companies to keep their books, records and accounts accurate.

In Turkey, neither legislation nor legal precedent specifies any permissible value for the gifts, meals or other benefits that a government official may receive. A benefit that is intended to persuade the government official to perform or not perform an action in violation of his official duties will be deemed bribery. In this respect, if the desired action is intended to facilitate or speed up an action that is legal, and that the official should perform as part of his official duties, then there is no crime of bribery. The Regulation on Ethical Conduct of Government Officials,3 by contrast, provides some examples of lower-value benefits which would not fall within the scope of the prohibition. In the event of any dispute, courts decide whether the aim of the benefit or meal is to persuade the government official to carry out actions that – within the scope of his duties – he should not, or whether the benefit affects the government official's duties in some other way.

As seen from some recent high-profile examples – the Siemens and Deniz Feneri cases, as well as the older examples of Enron, Worldcom, etc. – such discovery may trigger investigations, not only in such entity's main jurisdiction, but in multiple jurisdictions worldwide. As observed from last year's experience alone, the increase in white collar crime-related matters – including corruption-related practice – signals the urgent need for companies in various sectors to obtain greater and more sophisticated legal assistance on the compliance of their market activities with the rules and standards of not only Turkish laws and regulations but also others, such as the FCPA and similar statutes.

Footnotes

1. Turkey accepted the OECD Convention on 26 July 2000 and the related implementing legislation in Turkey came into force on 11 January 2003 with Code No. 4782, published in the Official Gazette dated 11 January 2003 and numbered 24990.

2. Working Group on Bribery in International Business Transactions, 7 December 2007 (Country Reports on Implementation of the OECD Convention).

3. Regulation on Ethical Conduct of Government Officials, published in the Official Gazette dated 13 April 2005, numbered 25785.

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.

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