An Interview with CBC Law Discussing Anti-Corruption in Turkey - Part 2

4. Have you seen evidence of continuing or increasing cooperation by the enforcement authorities in your jurisdiction with authorities in other countries? If so, how has that affected the implementation or outcomes of their investigations?

Yes. In particular, money laundering-related investigations and prosecutions with the involvement of high-profiles may require extensive cooperation and exchange of information and evidence with foreign authorities. Generally, the authorities contact the foreign public and private institutions through letters related to international anti-corruption cases, asking to freeze the perpetrator’s assets.

5. Have you seen any recent changes in how the enforcement authorities handle the potential culpability of individuals versus the treatment of corporate entities? How has this affected your advice to compliance professionals managing corruption risks?

Under Turkish criminal law, only real persons have criminal responsibility; legal persons are not included in the scope of criminal liability. Legal persons can only be subject to security measures and administrative fines where it is regulated under particular crimes. However, with the amendment made on article 43/A of the Misdemeanours Law, the administrative fines applied to legal persons are increased, provided that a real person entitled to represent the legal person committed a crime and the legal person received monetary benefit for specific crimes, including fraud, bid-rigging, bribery and laundering the proceeds of crime. Also, it is regulated that administrative fines can be imposed on legal persons even without the prerequisite to complete an investigation or prosecution of real persons representing or acting on behalf of the legal persons. Therefore, it can be said that the enforcement authorities will separate the culpability of corporate entities from the involvement and culpability of individuals. On the other hand, the Strategy Document addresses ‘a better, more effective and risk-based implementation and monitoring of the security measures’ as a priority.

6. Has there been any new guidance from enforcement authorities in your jurisdiction regarding how they assess the effectiveness of corporate anti-corruption compliance programmes?

MASAK has been publishing suspicious transaction reporting guides for different kind of sectors such as banks, agents of buying/selling real estate, factoring, finance and leasing companies. The latest of these was published on 18 April 2022 as a guide for crypto asset service providers.

Although the guide does not exactly set out the criteria for the assessment of the effectiveness of compliance programmes, it regulates principles and procedures for reporting suspicious transactions and lays down a number of examples as to the suspicious transaction types and encourages the crypto asset service providers to report to MASAK as soon as possible. How the reporting should take place and the reporting process are also explained.

7. How have developments in laws governing data privacy in your jurisdiction affected companies’ abilities to investigate and deter potential corrupt activities or cooperate with government inquiries?

In its decision dated 28 December 2021 published in the Official Gazette dated 11 February 2022, and numbered 31747, the Constitutional Court determined concrete criteria for keeping a fair balance in employer and employee interests regarding the inspection of employees’ communication tools. In the aforementioned decision, the Constitutional Court ruled that terminating an employee’s employment contract for good cause based on WhatsApp correspondence, constitutes a violation of the right to privacy and freedom of communication. This decision determined the concrete criteria required for the restriction of fundamental rights and freedoms and emphasised the general principles that an employer should pay attention to when processing personal data to control an employee’s communication tools, the obligations regulated for the data controller and the data processing conditions.

What are the critical abilities or experience for an adviser in the anti-corruption area in your jurisdiction?

A lawyer specialising in compliance should be a proactive and ‘outside-the-box’ thinker, recognising that compliance is a multidisciplinary profession drawing not only from law but also from other fields such as governance, finance, management and psychology. Compliance advisers must always consider the ‘human’ factor. Therefore, merely advising the ‘compliant’ or drafting policies and procedures is not sufficient. An experienced adviser should also provide guidance on how to implement the compliance programme, policies and procedures in a customised manner tailored to the specific ‘audience’, who must adhere to these rules.

Furthermore, in addition to possessing comprehensive, up-to-date legal knowledge and expertise, compliance advisers should draw upon insights from other disciplines, including psychology, sociology, finance, and governance.

What issues in your jurisdiction make advising on anti-corruption compliance challenging or unique?

Turkey is currently grappling with economic turmoil resulting from a dramatic decrease in the value of the Turkish lira. Purchasing power has significantly eroded for the working class,and companies are struggling to adjust employee compensation packages accordingly. As a result, without effective controls in place, the potential for employee misconduct has substantially increased.

Furthermore, there is a pressing need to address several critical issues. These include insufficient awareness of binding extraterritorial anti-corruption regulations, the absence of robust local anti-corruption legislation and enforcement, and a prevalent reliance on cultural governance methods, particularly within family holdings, instead of embracing corporate governance principles.

What have been the most interesting or challenging anti-corruption matters you have handled recently?

Recently, we supported our client in one of the biggest fraud cases resulting in millions of US dollars of employee misconduct and enrichment, as well as company losses, identified through effective speak-up and digital forensic partnerships facilitated by our firm. Root cause analysis has been conducted and further actions to foster a human-centric culture have been implemented.

On another matter, we have represented our client, a construction giant, in their internal investigations stemming from employee misconduct and embezzlement in Turkey and neighboring countries. We have revised the risk assessment, monitoring, and training modules as part of a Corrective and Preventive Action after conducting root cause analysis.

* This article was initially published on Lexology. You may access the article on Lexology by following this link