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Trends and climate

Trends

Have there been any recent changes in the enforcement of anti-corruption regulations?

In general, the Turkish anti-corruption regime focuses on petty corruption cases. That said, Roche, a recent prominent case against a corporation – which was initially dismissed in 2013 due to the expiry of the statute of limitations – was overturned by the High Court of Appeals to be adjudicated again before the competent courts.

Roche stemmed from employee information regarding the difference in medicine prices at public and private hospitals, leading to criminal charges against 18 defendants for bid rigging and abuse of duty. In 2016 10 defendants, including the company’s former general manager and former managers of the Social Insurance Institute, were sentenced to imprisonment. According to the High Court of Appeals, as the crimes which were central to the case were punishable by a prison sentence of over 10 years, the case should have been heard before higher criminal courts, rather than the first-instance criminal courts. 

Legislative activity

Are there plans for any changes to the law in this area?

Although there is no clear-cut agenda to reform anti-corruption law, on April 30 2016 the Prime Ministry published Circular 2016/10 on Increasing Transparency and Strengthening the Fight against Corruption in the Official Gazette, which could provide insight into possible reforms. The circular follows the Strategy on Increasing Transparency and the Fight against Corruption, which was promulgated to be enforced between 2010 and 2014. The new action plan attached to the circular will run from 2016 to 2019.

The action plan is organised into three chapters:

  • anti-corruption prevention measures;
  • penalty enforcement measures; and
  • enhancing social awareness measures.

The action plan’s anti-corruption prevention measures include:

  • conducting political ethics studies;
  • reviewing anti-corruption legislation and the effectiveness of its enforcement regarding work that cannot be undertaken by people who leave public service;
  • enforcing the Public Officials Ethics Council’s code of ethics for public service professionals;
  • increasing the ombudsman’s effectiveness;
  • establishing a single-window system for Customs, which aims to increase the use of technology in the customs service; and
  • reviewing the Public Procurement Law in light of EU legislation.

The action plan prescribes the following penalty enforcement measures:

  • reviewing the authorisation system regarding investigations into public officials; and
  • preparing regulations regarding the protection of whistleblowers in the public and private sectors and non-government organisations.

The primary measures aimed at enhancing social awareness include:

  • increasing the influence of ethical behaviour principles in the Ministry of National Education’s curriculum; and
  • supporting social actions in the fight against corruption.

Further, in 2016 Turkey ratified the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, almost 10 years after signing it in March 2007. According to the convention, signatories must establish financial intelligence units that exchange information which may be relevant to the processing or analysis of information. Turkey has already appointed the Financial Crime Investigation Board as its financial intelligence unit to manage asset-freezing requests by foreign countries and requests that it makes to other countries.

Legal framework

Authorities

Which authorities are responsible for investigating bribery and corruption in your jurisdiction?

Public prosecutors – acting under the authority provided to them by the Criminal Code 5237 and the Criminal Procedure Law 5271 – are the main authorities that investigate issues relating to bribery and corruption. That said, certain administrative authorities also undertake corruption investigations that fall under their remit. The Financial Crimes Investigation Board aims to prevent money laundering and the financing of terrorism and occasionally engages in corruption investigations linked to its primary activity. The Prime Ministry Inspection Board has the authority to inspect the finances and alleged corrupt practices of public and private institutions on behalf of the prime minister and with the prime minister’s authorisation. Bid-rigging complaints are investigated by the Public Procurement Authority before they are investigated by the judiciary. 

Domestic law

What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction?

The primary law applicable to corruption is the Criminal Code 5237, which entered into force on June 1 2005 and criminalises bribery, embezzlement, fraud, bid rigging and other forms of corruption, such as the negligence of supervisory duty and the unauthorised disclosure of business secrets. The following legislation also applies to corruption issues:

  • Criminal Procedure Law 5271;
  • Law 657 on Public Officers;
  • Law 628 on the Declaration of Property and Fight Against Bribery and Corruption;
  • Regulation 90/748 on the Declaration of Property;
  • the Regulation on Ethical Principles for Public Officers and Procedures and the Principles for Application;
  • Law 5326 on Misdemeanours;
  • Law 6415 on the Financing of Terrorism;
  • Law 5549 on the Prevention of Laundering the Proceeds of Crime;
  • the Regulation on Compliance Programmes Regarding Obligations on Laundering the Proceeds of Crime and the Prevention of Financing of Terrorism; and
  • the Regulation on Precautions Regarding the Prevention of Laundering the Proceeds of Crime and the Financing of Terrorism.

Article 252 of the Criminal Code criminalises direct and indirect domestic bribery, foreign bribery and private-to-private bribery. Although leniency is possible for real persons involved in domestic bribery, this is not applicable to the bribery of foreign public officials. Before 2003, bribing foreign public officials was not a crime under Turkish law. In 2003 the previous Criminal Code was amended so that offering, promising or providing benefits to foreign public officials was also considered bribery. The provision regulating bribery in the Criminal Code was amended in July 2012 to broaden the amendment’s scope. Under the revised provision bribery is committed if:

  • a benefit is provided, offered or promised directly or through intermediaries; or
  • the respective individuals request or accept such a benefit directly or through intermediaries.

International conventions

What international anti-corruption conventions apply in your jurisdiction?

Turkey has ratified the following European and international anti-corruption conventions: 

  • the Council of Europe Criminal Law Convention on Corruption of January 27 1999 (signed on September 27 2001 and ratified on March 29 2004);
  • the Council of Europe Civil Law Convention on Corruption of November 4 1999 (signed on September 27 2001 and ratified on September 17 2003);
  • the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism of November 8 1990 (signed on March 28 2007 and ratified on February 18 2016);
  • the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of December 17 1997, including the OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (signed on December 17 1997 and ratified on July 26 2000);
  • the United Nations Convention against Transnational Organised Crime of November 15 2000 (signed on December 13 2000 and ratified on March 25 2003); and
  • the United Nations Convention against Corruption of October 31 2003 (signed on December 10 2003 and ratified on November 9 2006).

In addition to the multilateral treaties above, Turkey has been a member of the Group of States against Corruption since January 1 2004 and the Financial Action Task Force since 1991.

Specific offences and restrictions

Offences

What are the key corruption and bribery offences in your jurisdiction?

The main corruption and bribery offences under the Criminal Code 5237 are as follows:

  • Bribery – under Article 252, anyone who directly or indirectly provides a benefit to a public official (or a person designated by a public official), so that the public official realises or does not realise an action regarding his or her official duty, will be punished with four to 12 years’ imprisonment.
  • Fraud – under Article 157, anyone who deceives a person through fraudulent acts and obtains a benefit for himself or herself or others to the detriment of others will be punished with one to five years’ imprisonment and a judicial fine calculated for up to 5,000 days (as of 2016, a judicial fine per day is determined between TRY20 and TRY100).
  • Embezzlement – under Article 247, public officials who embezzle (for themselves or others) goods that were transferred to them in relation to their duties or that they are obliged to protect and monitor will be punished with five to 12 years’ imprisonment.
  • Laundering of criminal proceeds – under Article 282, anyone involved in a crime that is punishable by six months’ imprisonment or more who transfers the proceeds of the crime abroad, subjects them to various transactions to conceal their source or creates the impression that the money was legitimately obtained will be punished with three to seven years’ imprisonment and a judicial fine calculated for up to 20,000 days.
  • Bid rigging – under Article 235, anyone who conspires to rig bids in an auction for the purchase, sale or lease of goods or services carried out on behalf of public entities will be sentenced to three to seven years’ imprisonment.

Hospitality restrictions

Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?

In general, hospitality expenses might be considered as bribes under Turkish law and any individual who provides or accepts gifts or expenses could be punished as such.

The rules regarding hospitality for public officials are established in the Regulation on Ethical Principles. According to Article 29 of Law 657 on Public Officers, public officials are prohibited from:

  • accepting or requesting gifts directly or indirectly; and
  • accepting gifts or borrowing money from business owners with the aim of providing benefits.

The Public Officials Council of Ethics is authorised to determine the scope of the ban on accepting gifts and request a list of gifts received by general directors and high-level public officials at the end of each calendar year. Under Article 15 of the Regulation on Ethical Principles for Public Officers and Procedures and the Principles for Application, the ban on accepting gifts includes travel and accommodation expenses, as well as scholarships – which may be considered to be hospitality payments – received from parties that have a relationship with the institution in which the public official serves. Accordingly, in 2009 the Public Officials Council of Ethics found that companies paying the accommodation expenses of public officials who participated in company meetings were in breach of the ban on accepting gifts. 

Facilitation payments

What are the rules relating to facilitation payments?

Unlike the US Foreign Corrupt Practices Act’s anti-bribery provisions, the Criminal Code 5237’s relevant provisions provide no exceptions regarding facilitation payments. Offering or providing facilitation or grease payments is a crime in Turkey. 

Liability

Scope of liability

Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction?

Both individuals and companies can be held liable under Turkish anti-corruption rules. However, while individuals can be held criminally liable, legal persons cannot. Instead, the Criminal Code 5237 provides that if a bribe provides a legal entity with an unlawful benefit, the following measures may be imposed:

  • the invalidation of the licence granted by a public authority;
  • the seizure of the goods used in the commitment of or that are the result of a crime by representatives of a legal entity; or
  • the seizure of pecuniary benefits arising from or provided for the committing of a crime.

Article 43/A of the Law on Misdemeanours stipulates that if (among others) bribery or bid rigging is committed by a legal person’s representative or by persons discharging duties within the legal person’s scope of activities even though they are not a representative, the legal person will be punished with an administrative fine of between TRY15,804 (approximately $5,500) and TRY3,161,421 (approximately $1,000,000).

Further, both individuals and legal persons can be held civilly liable for their corruption-related actions which cause damage to other individuals or entities.

Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances?

As the Criminal Code 5237 regulates indirect bribery, intermediaries – such as agents, distributors and consultants – may also be held criminally liable. The Criminal Code’s main bribery provision explicitly provides that those who communicate the bribery to a counterparty, mediate a bribery deal or mediate the provision of a bribe will be punished as joint-perpetrators.

Foreign companies

Can foreign companies be prosecuted for corruption in your jurisdiction?

As the Criminal Code 5237 does not recognise corporate criminal liability, foreign companies cannot be held criminally liable under Turkish law. The prosecution of real persons working for foreign companies or the imposition of penalties are applicable to foreign companies if the territoriality threshold stipulated in the Criminal Code is met. The main principle stipulated under the code is that Turkish law applies to crimes committed in Turkey. If an act has been partially or completely perpetrated in Turkey or the consequences of the crime took place in Turkey, the code is applied. Foreign companies and their employees will be prosecuted under Turkish law if the crime satisfies these jurisdictional rules.

Article 252 of the Criminal Code (the main article on bribery) further clarifies that an ex officio investigation and prosecution will be conducted into the bribery of foreign public officials if:

  • it is committed overseas by a foreign national;
  • it is committed in relation to a dispute to which Turkey, a public institution in Turkey, a private legal person incorporated pursuant to Turkish law or a Turkish citizen is a party regarding the performance or non-performance of an activity concerning these institutions or persons; and
  • the perpetrators are in Turkey.

The ex officio investigation will examine which party:

  • provided, offered or promised the bribe;
  • accepted or requested the bribe or accepted the promise or offer of a bribe;
  • mediated the offer or promise of a bribe; and
  • received a benefit due to the relationship.

Whistleblowing and self-reporting

Whistleblowing

Are whistleblowers protected in your jurisdiction?

Turkish law does not provide statutory protection to whistleblowers or require companies to have whistleblower procedures. When an employee reports suspicious conduct within a company, the company’s response will be evaluated under the general principles of employment law. As such, if an employee reports irregularity, his or her employment agreement should not be terminated on that ground. Without a valid reason for termination, the employee may initiate a re-employment lawsuit within a month of the termination date. In order to prevent, deter and mitigate any possible retaliation regarding whistleblowers, companies are advised to regulate these issues internally.

Self-reporting

Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?

As legal persons cannot be held criminally liable under Turkish law, leniency for bribery is not regulated for legal persons. Instead, real persons can benefit from leniency if someone who has accepted a bribe informs the competent authorities of this fact before the relevant authority discovers it. Leniency is also shown to real persons who inform the relevant authorities of previously undetected acts of bribery, including their:

  • agreement to accept a bribe;
  • bribing of a public official or agreement with a public official regarding a bribe; or
  • complicity in a bribery-related crime.

However, leniency from prosecution is not applicable to persons who bribe foreign public officials.

There are no laws, precedents or guidelines regarding how authorities should treat the self-reporting and cooperation of legal persons during a criminal or administrative investigation. That said, companies are advised to cooperate with authorities during investigations to the extent that they do not exceed the authority granted to them by law.

Dispute resolution and risk management

Pre-court settlements

Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements?

Turkish criminal enforcement does not provide for dispute resolution apart from litigation. 

Defences

Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction?

Under the Criminal Code 5237, bribery can include “any benefit”. Therefore, in addition to making pecuniary payments, paying donations, covering a public official’s travel expenses or providing any gift or benefit can also be considered bribery. Turkish law makes no exception for facilitation payments, grease payments or customary payments.

What other defences are available and who can qualify?

The Criminal Code provides no defence for bribery.

Risk management

What compliance procedures and policies can a company put in place to assist in the creation of safe harbours?

Under Turkish law, there is no requirement for companies to have compliance programmes. However, companies are advised to establish compliance procedures to detect and deter possible corruption risks. This is especially advised for multinational companies, as their compliance procedures may be different than their employees’ understanding of corruption. For example, in the context of Turkey’s culture of providing gifts, multinational companies may choose to adopt more comprehensive gift-giving policies or possibly prohibit this practice. Therefore, companies are advised to:

  • provide training to their employees regarding corruption and the resulting penalties; and
  • establish compliance policies to be adhered to by top-level executives and employees alike.

Further, the importance of third-party due diligence in emerging markets must be emphasised, as companies could be liable for the corrupt acts of third parties acting within the scope of their obligations to the company.

Record keeping and reporting

Record keeping and accounting

What legislation governs the requirements for record keeping and accounting in your jurisdiction?

Under Turkish law, there is no requirement for companies to have compliance programmes. However, companies are advised to establish compliance procedures to detect and deter possible corruption risks. This is especially advised for multinational companies, as their compliance procedures may be different than their employees’ understanding of corruption. For example, in the context of Turkey’s culture of providing gifts, multinational companies may choose to adopt more comprehensive gift-giving policies or possibly prohibit this practice. Therefore, companies are advised to:

  • provide training to their employees regarding corruption and the resulting penalties; and
  • establish compliance policies to be adhered to by top-level executives and employees alike.

Further, the importance of third-party due diligence in emerging markets must be emphasised, as companies could be liable for the corrupt acts of third parties acting within the scope of their obligations to the company.

What are the requirements for record keeping?

Commercial books and other records should be kept in Turkish. Information to be recorded in commercial books should be complete, correct and updated regularly.

In addition to the commercial books and records, as per Article 66 of the Commercial Code, all merchants should have an inventory when they open their business which lists their immovable properties, receivables, debts, cash and other assets completely and in a correct manner. Following the opening of a business, a merchant should prepare an inventory at the end of each year.

As per Article 82 of the Commercial Code, all merchants should keep the following for 10 years:

  • their commercial books;
  • their inventory;
  • their opening balance sheets;
  • their financial statements;
  • their annual activity reports;
  • their commercial letters received; and
  • their documents that constitute the basis of the information recorded in their commercial books.

Reporting

What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations?

There is no obligation to self-report under Turkish law. The leniency procedures stipulated under the Criminal Code 5237 are applicable to real persons.

Penalties

Individuals

What penalties are available to the courts for violations of corruption laws by individuals?

The main corruption and bribery offences under the Criminal Code 5237 are the following:

  • Bribery – under Article 252, anyone who directly or indirectly provides a benefit to a public official (or to a person designated by a public official), so that the public official realises or does not realise an action regarding his or her official duty, will be punished with four to 12 years’ imprisonment.
  • Fraud – under Article 157, anyone who deceives a person through fraudulent acts and obtains a benefit for himself or herself or others to the detriment of others, will be punished with one to five years’ imprisonment and a judicial fine calculated for up to 5,000 days (as of 2016, a judicial fine per day is determined between TRY20 and TRY100).
  • Embezzlement – under Article 247, public officials who embezzle (for themselves or others) goods that were transferred to them in relation to their duties or that they are obliged to protect and monitor will be punished with five to 12 years’ imprisonment.
  • Laundering of criminal proceeds – under Article 282, anyone involved in a crime that is punishable by six months’ imprisonment or more who transfers the proceeds of the crime abroad, subjects them to various transactions to conceal their source or creates the impression that the money was legitimately obtained will be punished with three to seven years’ imprisonment and a judicial fine calculated for up to 20,000 days.
  • Bid rigging – under Article 235, anyone who conspires to rig bids in an auction for the purchase, sale or lease of goods or services carried out on behalf of public entities will be sentenced to three to seven years’ imprisonment.

Companies or organisations

What penalties are available to the courts for violations of corruption laws by companies or organisations?

Both individuals and companies can be held liable under Turkish anti-corruption rules. However, while individuals can be held criminally liable, legal persons cannot. Instead, the Criminal Code 5237 provides that if a bribe provides a legal entity with an unlawful benefit, the following measures may be imposed:

  • the invalidation of the licence granted by a public authority;
  • the seizure of the goods used in the commitment of or that are the result of a crime by representatives of a legal entity; or
  • the seizure of pecuniary benefits arising from or provided for the committing of a crime.

Article 43/A of the Law on Misdemeanours stipulates that if bribery or bid rigging is committed by a legal person’s representative or by persons discharging duties within the legal person’s scope of activities even though they are not representatives, the legal person will be punished by an administrative fine of between TRY15,804 (approximately $5,500) and TRY3,161,421 (approximately $1,000,000).

Further, both individuals and legal persons can be held civilly liable for their corruption-related actions which cause damage to other individuals or entities.

Law stated date

Correct as of

Please state the date as of which the law stated here is accurate.

October 28 2016.