Looking at Anti-Bribery Legislation in Turkey and Beyond
Prepared by: Berat Turan
Corruption is a widespread phenomenon in international business transactions all over the World. In accordance with corruption perception index 2014 results, published by Transparency International, Turkey is ranked 64 among 175 countries as most corrupted countries. The index also revealed that Turkey's score of tackling corruption in 2014 were decreased from 50% to 45 % from 2013. This is a clear indication that corruption in Turkey is rising and Turkey should take immediate further steps to tackle the increasing number of corruptions.
In Turkey, the most common form of corruption is bribery. In terms of legislation, Turkey's legislation on bribery is still in the process of development. Until 2004, the bribing of foreign public officials was not considered a crime. The new Turkish Criminal Code (2004) brought a change to that; amendments and implementations of international treaties have extended the scope of liability. In certain ways, Turkish legislation regarding bribery is even more strict that the UK Bribery Act (2010) and the US Foreign Corrupt Practices Act (1977).
These different legislations, both domestic and extra-territorial, can target own nationals as well as foreigners in or out of the country's territory. In this article, we aim to explain how bribery is regulated under Turkish laws comparing with the international treaties such as the UK Bribery Act and the FCPA.
Local Legislation in Turkey
Under Turkish law, the sanctions for acts of bribery are mainly criminalised and prohibited by the Criminal Code. There is no civil enforcement when it comes to the regulation of anti-corruption issues. Criminal law is the only source for criminalising acts of corruption.
First of all, the Turkish Criminal Code (hereafter: TCC) defines bribery in article 252 as: "a benefit illegally secured directly or through intermediary by a public official or another person pointed out by a public official to perform, or not to perform, a task regarding the performance of the official's duties."
The person offering the bribe can be charged with 4 to 12 years of imprisonment. The second clause of the same article, condemns also the public official who accepts the bribery. So not only is the person attempting to bribe guilty, the official himself is guilty too.
Interestingly, the act of bribery is deemed to have been committed when a mutual agreement to exchange a benefit has been made. The third clause of the Article 252 determines that a promise or agreement to this benefit suffices, the actual benefit (money) exchange is not needed to fulfil the crime of bribery.
Clause 8 extends the scope of the article to public entities, corporations or organisations in the character of public entities, foundations acting within the body of public institutions, public benefit associations, cooperatives and open joint stock companies. This means it does not restrict itself to just natural persons.
By the 2004 changes making the bribing of foreign public officials became a crime too. This shows that there was a shift in view and the scope of the article was purposefully broadened to include foreigners too. With the addition of clause 9, public officials appointed in a foreign country, members of international parliament, or other foreign officials are now no longer an exception. Bribes made to or by them, are punishable under Turkish law.
The bribery rules extended to include foreigners. So that, non-Turkish citizens and foreign companies, whom are doing business in Turkey can also face conviction or investigation of bribery under Turkish legislation. Foreigners may also face criminal prosecutions and civil investigations under their own legislation. It is, therefore, foreigners should to act in accordance with both national and international legislation.
The scope of the TCC extends to include all subjects (natural or legal) and offences that are located and take place within the Republic of Turkey. This means that any person doing business in Turkey, regardless of their nationality, can face conviction under Turkish laws. Bribery falls into the category of crimes that have extra-territorial reach. When the bribe, even if it occurs outside of Turkey, but has a relation to Turkey, it can be subject to investigation and prosecution.
Even when you are abroad as a Turkish citizen, you cannot escape the nationality principle. You are still liable for acts done as and to a Turkish national. A national who commits an offence in a foreign country while performing an official duty in the name of Turkey, is subject to trial under article 10 TCC. Even if he has been convicted for that act in another country.
Article 11 TCC makes crimes that are punished with more than a year imprisonment in Turkey, but are committed abroad, also punishable. Article 12 determines the same for non-citizens. If the committed crime causes injury to Turkey and the offender is on Turkish territory, then he is punished according to Turkish laws.
In short, foreign bribery and bribing foreign officials are included within the scope of article 252, making both acts punishable by Turkish law, as long as there is a relation with Turkey, even in the event that the offender has been convicted in a different country.
The first clause of article 252 can sentence the person committing the act of bribery to a prison sentence ranging from 4 to 12 years. This does not mean the company is out of the loop; article 253 determines the punishment for companies to be executed in the form of security measures; the legal entity can be charged with a fine of up to TRY 2 million, and or have its business licence cancelled. Without its licence, it is no longer allowed to continue its activities.
International Legislation (Conventions and Regulations signed and incorporated by Turkey)
Aside from national legislation, Turkish citizens and foreigners residing in Turkey are subjected to international legislation. Turkey has been a member country of the OECD since 1961. The OECD Convention on Combating Bribery was drafted in 1997 and has since then been implemented and enforced by Turkey by making several amendments in its Criminal Code.
OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997)
Turkey has signed and implemented the OECD Convention on Combating Bribery of Foreign Public Officials in respectively 1997 and 2000. These OECD anti-bribery rules are the first and only international anti-corruption instrument that establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions.
Turkey's 'Amendment to the Law Regarding Prevention of Bribery of Foreign Public Officials in International Business Transactions' (Law No: 4782) entered into force on 11 January 2003 to meet the requirements of the OECD Anti-Bribery Convention. This amendment introduced criminal liability for the active bribery of a foreign public official, which was not considered a crime, prior to this law.
Foreigners are not only subjected to the laws of the country where they are currently reside in. The UK Bribery Act and FCPA are examples of legislations with extra-territorial nature; own national laws apply even when you are abroad. For example, if you are an US government official working abroad and guilty of bribery, the FCPA still applies to you; you can be convicted with US law.
UK Bribery Act 2010
The UK Bribery Act (hereafter UKBA) came into force in July 2011 and covers both government and commercial bribery, as well as domestic and extraterritorial bribery. It makes the taking and giving of bribes to foreign public officials an offence.
In contrary to Turkish law, UKBA applies the principle of strict liability. This means that corporations and organisations are criminally responsible for bribes made on their behalf. The Act has introduced a new offence with article 7, making commercial organisations criminally responsible for failing to provide 'adequate procedures' to prevent bribery. This puts a big pressure on corporations to have a strict control policy, since they face the risk of prosecution for acts committed by associated persons.
On the other hand, if a company or organisation can prove that it did and had all adequate procedures in place, it can escape conviction. In that regard, the procedures can be regarded as a full defence to prove that despite a particular case of bribery, all necessary precautions had been taken.
What an 'adequate compliance procedure' exactly is, is not precisely defined and not clear. However, the UKBA has drafted 6 principles in its 'Guidance' written for the Bribery Actwhich we summarise below.
Commercial organisations should keep in mind and follow proportionate procedures, top-level commitment, risk assessment, due diligence, communication and monitoring and review.
These principles are flexible and businesses can determine how they want to apply them. As long as the result is that there is an effective anti-bribery procedure, companies can be relieved from their criminal responsibility.
Foreign Corrupt Practices Act
The UKBA has a wider application than the Foreign Corrupt Practices Act (hereafter: FCPA). Similar to the UKBA, FCPA targets US officials doing business abroad. The act was passed to make it unlawful for certain classes of persons and entities to make payment to foreign government officials to assist in obtaining or retaining business. Similar to the UKBA and TCC, the bribing does not have to consist of a money-exchange. Anything of value can be accepted as bribery. Bribing foreign officers had been a crime for much longer than the newly developed UKBA and recent amendments of TCC. Foreign corrupt practices have been covered by the FCPA since its effectiveness in 1977. Much like the UKBA, it targets parties that have a certain connection to the US. The nationality principle of the Act covers all US nationals, citizens and businesses who engage in a foreign corrupt practice, even if they are outside US borders. Vice versa, foreigners (natural or legal persons) within US borders committing bribery acts, are also covered by this Act, based on the territoriality principle.
Much like the TCC and UKBA, the FCPA also includes parties accepting the bribe as punishable by law, whether it's a foreign official, a natural person, or a legal entity.
Exceptions under the law
In comparison, TCC knows no exceptions or extenuating circumstances for acts related to bribery. In this regard it is more narrow than for example the FCPA, which does not consider facilitating payments to be a form of bribery. The UKBA, like the TCC acknowledges this as an act of crime.
The TCC makes a distinction between the bribing of national public officials and foreign public officials. The former can benefit from effective repentance (etkin pismanlik) as described in article 254. Basically this entails that if any party comes forward before the bribe is discovered, they shall be excused. However, the latter is exempted from article 254 under clause (4): "The provisions of this Article shall not apply to the ones who bribe foreign public officials". The TCC does not allow the same leniency to the bribing of foreign public officials as it does to nationals.
What is important to note here, is that in order to prove the act of bribery, the foreign officials need to have some degree of fault or negligence. Strict liability does not have a place in Turkish criminal law, therefor foreign officials cannot be held accountable for crime acts committed by their subordinates. This complies with the nulla poena sine culpa principle.
FCPA knows a strict liability where no proof of intent is required. Enforcement of the FCPA is carried out by the SEC, and they have a very low threshold for getting into action. The UKBA also acknowledges the principle of strict liability, and can punish organisations for bribery acts committed by associated persons on their behalf. They are excused when they can prove to have applied certain principles as described above.
Much like the UKBA, the FCPA Guidance defines 'reasonable assurances' that can be compared to the principles of the UKBA. Companies have to prove they have a sufficient system of internal control regarding transactions and financial statements
Even though the research result revealed that bribery is rising in Turkey and Turkish government is not taking enough efforts to tackle with corruption in Turkey, with the scope of the bribery rules in Turkey, foreigners, may still face conviction for bribery in Turkey. Furthermore, under Turkish law, even if foreign person is convicted in bribery in another country, that person can also be prosecuted in Turkey under the Turkish bribery legislation.
There are various national and international legislations deal with bribery as we mentioned in this article differ so much from each other. As a conclusion, we have to stress that for companies and individuals are doing business in Turkey and abroad should comply with both national and international bribery legislations not to face of any criminal prosecution and / or civil investigation.