This article is a comparative legal analysis, which points out the adaptability of the legislation in Turkey and the international agreements on corruption and bribery, whereas also points out the differences of the legislation between Turkey, India and United States of America on the contemplated subject.
Corruption damages Turkey, as well as other countries in the world. It threatens the political and economic stability; general peace and welfare, foreign investment inflow and establishment of the rule of law. In achieving her goal of becoming an EU member state, Turkey has taken certain actions in the combat against corruption and bribery. This article summarizes the legislation applicable for combating against the corruption and bribery under Turkish Law in comparison with the laws in other countries. Both general and specific legislation have been promulgated such as Turkish Constitution, Turkish Penal Code, Public Officials Law, Law on Declaration of Assets Combating Bribery and Corruption and Regulation on Ethical Conduct in addition to the international agreements such as Convention on Combating Bribery of Foreign Public Officials and Criminal Law Conventions on Corruption, in order to achieve such goal.
I. International Agreements:
Business life has become global and much more competitive in the last three decades, and thus in the fight against corruption international agreements have become much more important. No one can deny the fact that bribery and corruption kill the fair competition in business. Especially for certain multi-national companies with strong capital existence, bribing is the easiest way to jump over the real market competition and to gain certain advantages in making profits. International market has identified this problem and directed the countries enter into special treaties in order to solve the problem.
First and the foremost, Organization for Economic Co-operation and Development (“OECD”) opened the Convention on Combating Bribery of Foreign Public Officials (“OECD Convention”)for signature on December 1997 in Paris. The 34 OECD member countries and six non-member countries (Argentina, Brazil, Bulgaria, Colombia, Russia and South Africa) have adopted OECD Convention. Turkey ratified the OECD Convention on July 26, 2000 and enacted the Law No. 4782 in order to amend its existing legislation to be compatible with the Convention. The goal of the OECD Convention is, as stated in its preamble, to combat “the widespread phenomenon in international business” called “bribery”. The very same preamble explains the reason the bribery phenomenon is so serious by stating that the bribery “raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions.”
On the other hand, another convention to which Turkey is a party is the Council of Europe Criminal Law Convention on Corruption, which was open for signature on January 27, 1999 and entered into force on July 1, 2002. All 46 member countries of the Council of Europe and 5 non-member countries (Belarus, Canada, Holy See, Japan, Mexico, USA) Turkey signed the Criminal Law Convention on Corruption on September 27, 2001 and ratified it on January 14, 2004.
Criminal Law Convention on Corruption’s practical goal was to co-ordinate penalization of corrupt practices in integrity with the signature countries at a local level. . The “Group of States against Corruption” (“GRECO”), which is the main authorized body for monitoring the compliance of the signature countries with the organization’s anti-corruption standards, was established in 1999.
Turkey has ratified both of the foregoing international treaties, and as stated above, the national legislation has been harmonized especially with the recent Turkish Penal Code in this respect.
The Turkish Republic is defined as a democratic, secular and social state of law in the Constitution. The definition of the Constitution has many reflections on shaping the state phenomenon. The principle of equality is one of these reflections. The preamble of the Constitution suggests that every citizen is entitled to enjoy the fundamental rights or freedoms according to equality and social justice principles. Under the Constitution, everyone is equal before the laws without any prejudice in terms of language, race, color, sex, political opinion, faith, religion, sectarian and other similar reasons. The Constitution further prohibits providing privilege to any person, family or a group and class. Consequently, government bodies or administrative authorities are bound to take actions or enter into transactions within the boundaries of the principle of equality.
2. Turkish Penal Code:
Turkish Penal Code designates the act of bribery, as a crime only with respect to the public officials. There is also another type of criminal offense, in addition to bribery; which is corruption.
A. Offense of Corruption:
Article 250 of the Turkish Penal Code states that a public official will be imprisoned for a term between five (5) to ten (10) years , if he/she compels a person to provide benefit for the public official himself/herself or to another one by abusing its power. The existence of compelling is accepted by law, only when the person feels obliged to provide benefit for a public official or to another one pointed by that public official in order for a transaction to be fulfilled more smoothly which was supposedly done without any interference in normal circumstances.
Therefore, the legal consequences of the act of corruption can only be implemented on a public officer.
B. Offense of Bribery:
The act of Bribery is arranged under article 252 of the Turkish Penal Code. The Penal Code defines bribery as, providing benefit to a public officer or someone else pointed by a public officer in order for an act to be performed or not to be performed by the public officer on the execution of his/her assignment. The party, conducting the act will be punished with an imprisonment of four (4) to twelve (12) years. It is also important to state that the public officer is subject to the same punishment, if the offense of bribery is realized.
Furthermore, the punishments will be applicable as if the crime is completed, if the parties agree upon the bribe, even if the benefit with the bribery is yet to be enjoyed. Therefore, the actual transfer of money or another benefit is not an element of bribery offense.
In fact, offering bribe from one of the parties is enough to constitute the crime in terms of the offering party, even if the counterpart does not accept the offer. In that case, the length of the imprisonment for the offering party will be halved. The agents of the contemplated act will be treated as the principals. According to article 37 of the Turkish Penal Code, the persons who are in abetment to a crime or the third real or legal persons who benefit from the crime will be punished like the offender of the same crime. In case of legal person offenders, their individual representatives will be subjected to the punishment.
Article 254 of the Turkish Penal Code suggests a system called “effective remorse”, in which a person who gives or receives a bribe, but then informs the competent authorities about the fact before initiation of an investigation, shall not be punished. Furthermore, in the event that a public officer receives a bribe but turns over the entire bribe to the investigation authorities, then he/she will not be punished. On the other hand, paragraph 4 of the foregoing article suggests that the “effective remorse” provision will not be applied, if one of the parties is a foreign public officer.
If the public officer receiving the bribe is a judge, a notary public or a sworn financial consultant; the punishment of the crime will be increased by one third of the length of the actual imprisonment penalty.
This provision is applicable to the representatives of the (i) companies having a public entity status, (ii) companies established with the partnership of the public entities or the professional organizations having a public entity status, (iii) foundations operating within the public entities or the professional organizations having a public entity status, (iv) voluntary organizations working for the public interest, (v) cooperatives, and (vi) joint-stock companies, shares of which are publicly traded.
The entities who benefit from a bribery will also be punished with certain security measures such as invalidation of the license granted by a public authority and seizure of pecuniary benefits arising from or provided by the commitment of bribery offense.
Turkey is one of the signature countries of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and lawmakers in Turkey enacted the recent Turkish Penal Code in 2005 accordingly. It is stated in article 252 of the Turkish Penal Code that this provision will also be implemented in case the following persons were provided, proposed or promised to benefit directly or indirectly or the following persons demanded or accepted it, for an activity to be done or not to be done by the public officer regarding the execution of his/her assignment; (i) elected or appointed public officers in a foreign country; (ii) Judges, members of the Jury or other officers serving in an international, supranational or foreign state jurisdictions; (iii) members of the international or supranational parliaments; (iv) including but not limited to the persons operating a public activity for a foreign state in a public institution; (v) foreign arbitrators or citizens employed within an arbitration process applied for the resolution of a dispute and (vi) officials and representatives of an international or supranational organization established with an international agreement.
3. Public Officers Law:
The Public Officers Law regulates the conducts of public officers in general. Bribery and corruption being defined as under Turkish Penal Code, there are also disciplinary consequences against public officers who conduct such crimes. According to article 131 of the Public Officers Law, the criminal proceeding can neither postpone nor prevent the disciplinary proceedings implemented on public officers because of the same act. For a public officer, gaining benefit relating to the assignment of the person is a disciplinary act which requires a punishment of halting the rank improvement of the person for one (1) to three (3) years.
4. Law on Declaration of Assets and Combating Bribery and Corruption:
Law No. 3628 is the fundamental legislation for preventing the corruption in Turkey. It requires certain public officers to disclose their assets on a regular basis. According to article 2 of the Law No. 3628, the public officers who are required to disclose their assets include; (i) officers elected via elections and members of the council of ministers, (ii) Notary Publics, (iii) High officers of the Turkish Aeronautical Association and the Turkish Red Crescent, (iv) Public Officers working in certain public entities such as ministries, municipalities, provincial special administrations and state economic enterprises, (v) presidents of political parties, executives of foundations, cooperatives and unions, sworn financial advisors, (vi) real persons who publish newspapers together with the higher employees of newspapers. Under the law, any asset (money, stock shares, gold, jewelry, properties and receivables, etc.) the value of which exceeds the value of the total salary for five (5) months of such person is required to be declared. Persons, who are required to disclose assets, must also disclose assets of their spouses and children.
Under Law No. 3628, public officers cannot receive gifts. Pursuant to Article 3 of the Law No. 3628, if a public officer receives a gift value of which exceeds such official’s ten (10) months salary from a foreign individual, legal entity or from a foreign country public officer, such public officer is obliged to deliver the gift to the entity for who she/he works.
Law No. 3628 was amended with the Law No. 5176 in order to provide additional measures for the supervision of such process. Public Officials Ethical Board is authorized to check the accuracy of the asset disclosures to be made by public officers. Requested information from the relevant persons and entities shall be disclosed to the Ethical Board within thirty (30) days following such request.
Law No. 3628 requires that a judge must conduct investigation during an allegation of corruption hearing of a public officer regarding the relation between the declared earning and total assets of the official. According to the Turkish Court of Appeal’s established resolutions, such investigation must to include the properties and bank accounts of that public officers’ elementery family.
5. Regulation on Ethical Conduct:
As a part of European Union Harmonization Process, Turkish Parliament enacted the Regulation on Ethical Conduct in order to increase the transparency in the state offices. The Regulation touches on the Prohibition of Acceptance of a Gift or Taking an Advantage of a Status. According to the article 15 of the Regulation, gift is defined as “every kind of property or benefit with or without an economic value and accepted directly or indirectly and whatsoever has a possibility to affect the neutrality, performance, decision or the conduct of the assignment”. Therefore, public officers are prohibited to accept gifts for themselves, their relatives or other third persons or corporations from the real or legal entities conducting a business, service or self-interest relationship with the public officer himself/herself.
The regulation clarifies the scope of the prohibition with certain examples which are not listed limitations;
i. Welcoming, farewell and greeting gifts, scholarship, voyage tours, complimentary accommodations and gift tokens which are accepted from the ones who have business, service or self-interest relationship with the official;
ii. Transactions made for unreasonable prices compared to the market value;
iii. All kinds of property, clothing, jewelry or food given by the beneficiaries of the services of the public officers.
iv. Loans obtained from third persons conducting business or service relationship with the institution of the public officer.
6. Enough with the Theory:
The reason of the establishment of a state is primarily to make its citizens feel safe, secure and equal. Therefore, justice should be one of the most privileged services of a state to its citizens. However, what is there to realize is that states cannot provide justice only by changing laws. It has a lot to do with the mentality of the state officers, institutions and the citizens themselves. Bribery and corruption are the most critical subjects that destruct the people’s trust to their government and make enormous feelings of inequality and injustice among the society. Therefore, apart from all the legislations, Turkey still has clear problems with the bribery and corruption.
According to the Bribe Payers Index Report 2011 conducted by Transparency International, Turkey is the nineteenth (19.) country among 28 of the world’s largest economies in terms of the score after countries like India, Taiwan and Malaysia.
Furthermore, there have been certain alleged offenses conducted by foreign corporations. Siemens, which is a very well known global multi-national company, has had the massive global corruption scandal in which Siemens was claimed to have made 4283 illegal payments totaling approximately to USD 1.4 billion between 21 March 2001 and 30 December 2007. Siemens Sanayi ve Ticaret A.S., which is wholly owned by Siemens in Turkey, was one of the entities involved in the case regarding the bribery actions. In fact, Siemens had to pay USD 1.6 billion for fines and penalties in total. According to the parliament reports dated April 24, 2010, main opposition party in the parliament tabled a motion of censure on the particular issue of Siemens investigation; however such motion of censure has been rejected in the parliament. Upon the operations of German and United States enforcements, in October 2011 the Turkish Prime Ministry Inspection Board notified Siemens A.S. Turkey of an investigation in connection with alleged bribery in Turkey and Iraq from 1999 to 2007. However, even though there have been fines and penalties against Siemens in countries like Nigeria, Greece, China and Israel; Turkey did not impose any fines or penalties against Siemens yet. According to the news in the media, there have been other corporations having difficulties with the foregoing laws. Roche, a Swiss based multi-national corporation, has been alleged with selling its products to Social Insurance Institution (“SII”) above its normal price, making payments to certain hospitals and doctors in order to improve their sales and therefore providing benefits to its own corporation and its strategic partners in Turkey such as pharmaceutical warehouses . Such allegations have been investigated and Roche has been prosecuted. In the end, these proceedings against Roche were dropped due to prescription. Beyond all the great improvements shown by Turkey in last the years in terms of fighting bribery and enhancing transparency, such incidents affect the image and reputation of Turkey in the international arena adversely.
The Republic of India, a South-Asian country, is the seventh largest country in terms of its area and the second most-populous country with over 1.2 billion people. India is a federal constitutional republic, governed under a parliamentary system. Additionally, Indian economy is the world’s tenth largest by nominal GDP and third-largest by purchasing power parity. In other words, India is a structurally complex, area wise largely and economic wise enormous country. Due to all these reasons and certain other factors, corruption and bribery incidents are quite common in India, even though the government officers are spending efforts to decrease the corruption and they look like somehow making a progress.
India is the 94th country with a score of 36 in the statistics of the corruption perception index, in which it shares its rank with countries like Djibouti, Greece, Moldova, Mongolia, Senegal, Benin and Colombia and which means that India is perceived as a highly corrupted country. Moreover, a 2005 study conducted by Transparency International found out that %62 of Indians had personal experience of bribery or “using a contact” to get a job done in a public office . In the same study conducted in 2008, the percentage decreased to %40 . In fact, this is a step towards transparent public offices. What is the relevant legislation against corruption and bribery in India then?
The primary legislation against the corruption and bribery is the Prevention of Corruption Act, dated 1988 (“PCA”). The PCA defines the acceptance of gratification by any means except for the legal remuneration, “which is paid by their employers in connection with the performance of their duties” . The PCA designates assistance of bribery also as an offence. According to the article 7 of the PCA, imprisonment not less than six months but which may extend to five years and fine is imposed on the public servant taking gratification.
Furthermore, Article 171 B of the Indian Penal Code (“IPC”)suggests that “Whoever (i) gives a gratification to any person with the object of inducing him or any other person to exercise any electoral right or of rewarding any person for having exercised any such right; or (ii) accepts either for himself or for any other person any gratification as a reward for exercising any such right or for inducing or attempting to induce any other person to exercise any such right, commits the offence of bribery” . The definition of the offence of bribery is made under the very clearly. Both parties of the bribery are deemed to be committing the offence of bribery. In fact, article 171 E of the IPC explains that the offence of bribery is punished with imprisonment for a term which may extend to one year, or with fine or both. For instance, bribery by treating such as food or drink is only punished with fine.
On the other hand, there are interesting public debates in India in terms of the bribery legislation. For instance, Kaushik Basu, the chief economic advisor to India’s Ministry of Finance argues in his paper called “Why, for a Class of Bribes, the Act of Giving a Bribe should be Treated as Legal” that certain bribes shall be referred as “Harassment Bribes” and they should be legal in the aspect of the bribe giver. He claims that this will reduce the corruption in India, since it will increase the possibility of the co-operation of the bribe giver with the government authorities in case of an incident involving bribery .
IV. United States of America:
United States of America can be described as the main source of inspiration for the international legislation for prevention of corruption and bribery. Therefore, when discussing corruption and bribery United States of America has a special importance. The Foreign Corrupt Practices Act of 1977(“FCPA”) is a pioneer in terms of regulating the bribery and corruption in international business transactions. In fact, the investigations made by the Securities and Exchange Commission (“SEC”) uncovered in mid-1970’s over 400 companies making illegal payments to foreign government officials, politicians and political parties. This created a big blow in the public and resulted in the enactment of the FCPA by the Congress in order to regain the public confidence.
The FCPA applies to three categories of persons, which are named as “Issuers” (Any domestic or foreign entity that issues securities to SEC), “Domestic Concerns” (US citizens, US resident aliens, corporations organized under US state laws and their officers) and the “Other Persons” (Any person acting in the US territory) . Therefore, the law has a far reaching scope, covering any business activity that has an involvement with U.S.A. The FCPA also designates the bribe-taker part quite wide, since it includes employees of a government owned business such as clinics, hospitals and telecom companies .
The main source of information for the SEC and the most crucial part of the legislation is the provisions of “whistleblower”, which is enacted with the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) on July 21, 2010 . Dodd-Frank created an extra power for SEC called “whistleblower bounty program”, which allows persons, who aid and provide information in a successful SEC enforcement, to obtain the 10 to 30% of the monetary sanctions over 1 million dollars.
Turkey adapted the real free-market liberal policies after early 1980’s. Since then, it is obvious that the governments, especially after 2002, have taken big steps with a large amount of privatizations, free-market supporting policies and foreign investment encouraging regulations. Along the way, Turkey has achieved large number of growths in terms of GDP.
Nevertheless, governments should remember that trust of its citizens is the main source to provide their sustainability. Transparency may be a good way to consolidate this trust and reduce the distance between the state, thus the government and its citizens. This will strengthen the bond between them and make both parties happy. A citizen will know that there is an absolute equality in the society, in terms of dealing with the state and its extended arms. On the other hand, this will bring the citizens closer to the pure free-market, since one of the disturbing factors of the competition in the market will be minimized.
Reviewing and harmonizing the foregoing information leads us to the point where we realize differences between Turkey in comparison with other states. Researching all the bright ideas coming from people’s minds such as “whistleblower” and “harassment bribes”, we see the reason why there is a world of difference between the abstract theory of lawmakers and the absolute practice of the subjects of the law, in terms of the enforceability and efficiency of the legislation. Rules of law derive from a necessity of its subjects. Duties of legislators does not come to an end by enacting laws, instead they should ensure the applicability of implementation of such rules and answer such necessities. In order to achieve such duty, legislators shall be supportive for innovative and efficient laws. Particularly in the discussions on corruption and bribery, achieving such efficient rules will have many advantages such as having a high standards of political and economical stability, general peace and welfare, foreign investments inflow and most importantly, establishment of the rule of law. Such outcome will also be beneficiary for European Union accession process of Turkey.
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