Anti-Corruption & Compliance Enforcement and Legislation Developments in 2019


In this article, we review the developments in 2019 about anti-corruption and compliance matters concerning Turkey from both national and international perspectives.  

Latest Development in EU-Turkey Relationship

The European Commission has published “Turkey 2019 Report” as part of 2019 Communication on EU Enlargement Policy.[1] The shortcomings and recommendations to make progress in the fight against corruption are among the topics underlined in the report. The European Commission especially raises concern about the lack of an independent/centralized anti-corruption authority and specialized prosecution office while remarking the deficiencies caused by dismantled and uncoordinated law enforcement agencies. Furthermore, according to the report, investigation and prosecution of high-level corruption cases are prone to undue influence from the executive and the requirement for prior authorization from superior official as regards to the commencement to investigation into public officials provides unfair legal protection. With regards to anti-corruption enforcement, the Commission maintains that the sentences passed for corruption do not have a deterrent effect and in some offences convicts can benefit from deferred sentences.

OECD Central Office in Istanbul and Foreign Corruption Enforcement

In Official Gazette dated 30 October 2019 a law approving the Memorandum of Understanding executed between Turkey and the OECD dated 31 May 2018 regarding establishment of a Centre in İstanbul was enacted.[2] The Centre will act as a hub for regional program, build capacity in designing and implementing policies and conduct policy research. The main policy focus areas of the Centre will be competitiveness, entrepreneurship, trade, public governance, investment, innovation, human capital development, connectivity, infrastructure development and green growth. While the Center is expected to make a major contribution to Turkey’s relations with the OECD and neighboring countries in 2020, it should also be noted that 2019 was marked as a year with a warning given by the OECD to Turkey regarding foreign bribery enforcement framework.[3] Considering that the sanctions for legal persons are not sufficiently effective, proportionate and dissuasive regarding foreign corruption and there has not been one foreign bribery conviction in Turkey over the last 16 years, the OECD declared in March 2019 that it will send a high-level mission to Ankara in 2020 unless Turkey takes concrete action by October 2019. On 1st October Turkey has submitted a report [4] explaining the actions taken for each recommendation given by the OECD; however the assessment to be made by the organization is yet to be seen.

Financial Action Taskforce (“FATF”) report published in December 2019

FATF published its Mutual Evaluation Report[5] in which Turkey has been warned to be added to the grey list if shortcomings are not addressed such as the need to improve measures for freezing assets linked to terrorism and proliferation of weapons of mass destruction. In a list of 11 effectiveness measure, Turkey is deemed to need “major” or “fundamental” improvements in nine. The report states that Turkish investigators have been heavily focused on financial crimes directly related to failed coup since 2016 while the fight against money laundering in other cases is quite negligible.

New Trial Procedures Brought By Judicial Reform Package

Judicial Reform Package has been subject to many debates over the last year. The first step taken towards implementation of the Package was the Law No. 7188 which made some critical amendments to the criminal procedure. Among other modifications, two new trial procedures have been introduced to Turkish criminal justice system: “Accelerated Trial Procedure” and “Simple Trial Procedure”. The accelerated trial procedure shall only be applied for crimes listed in the relevant article with the consent of the suspect before a lawyer. A new regulation about the details of the procedure has entered into force on January 1st, 2020. The simple trial procedure shall only be applicable for crimes that require a judicial fine and/or imprisonment of 2 years or less. For further details regarding these two procedures and other amendments please go to following article: https://gun.av.tr/insights/articles/some-new-regulations-brought-by-the-judicial-reform-package .

Foreign Corrupt Practices Act (FCPA) Enforcement in 2019

The year of 2019 witnessed a burst of activity in FCPA. Among other jurisdictions which have extraterritorial application regarding foreign corruption, FCPA enforcement authorities set a new record last year. Companies indicted with FCPA charges made all time high 2.9 billion US dollars payment to resolve FCPA cases. It can be clearly stated that during the last decade the average amount of an FCPA resolution was much higher than the one in previous decades. Moreover, last year two new companies (Ericsson with over 1 billion US dollars[6] and MTS with the amount of 850 million dollars[7]) have joined to the list of 10 biggest FCPA cases of all time based on the amount paid[8]. Last but not least, it is noteworthy for our jurisdiction that Microsoft [9] and Fresenius’ [10] FCPA resolutions mentioned anti-bribery charges related to conducts in Turkey.

[1] To see the report, please visit the following link: https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20190529-turkey-report.pdf
[2] To see the Code and Turkish/English/French versions of the Memorandum of Understanding, please visit the following link: https://www2.tbmm.gov.tr/d27/2/2-1412.pdf
[3] To see OECD announcement, please visit the following link: https://www.oecd.org/turkey/turkey-s-foreign-bribery-enforcement-framework-needs-to-be-urgently-strengthened-and-corporate-liability-legislation-reformed.htm
[4] To see the report, please visit the following link: https://one.oecd.org/document/DAF/WGB(2019)38/en/pdf
[5] http://www.fatf-gafi.org/countries/#Turkey
[6] For Department of Justice press release of the case, please go to following link: https://www.justice.gov/opa/pr/ericsson-agrees-pay-over-1-billion-resolve-fcpa-case
[7] For press release of this case published by SEC please see the following link: https://www.sec.gov/news/press-release/2019-27
[8] As of 07.01.2020, to see the list please go to the following link: https://fcpablog.com/2019/12/09/ericsson-jolts-the-fcpa-top-ten-list/
[9] For press release of this case published by SEC please see the following link: https://www.sec.gov/enforce/34-86421-s-0
[10] For press release of this case published by DOJ please see the following link: https://www.justice.gov/opa/pr/fresenius-medical-care-agrees-pay-231-million-criminal-penalties-and-disgorgement-resolve

First published by ILO - White Collar Crime Newsletter, in 10.02.2020

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