CAUSE AND EFFECT RELATION BETWEEN

COMPLIANCE AND ANTI-CORRUPTION

Compliance is today one of the most important issues for undertakings regarding the elimination of their risk in terms of causing a corruption. Thus, compliance to local law and international conventions must be at the top priority of companies’ management plans. In case of existence of corrupt practices in companies, it causes criminal liability and civil liability of the employees of the company and company itself as legal entity. Thus, corruption issue is a matter of compliance and cannot be evaluated as an issue different than an issue of having cause and effect relation.

There is not a common definition of corruption, which is accepted by all, but Transparency International defined the corruption as ‘the abuse of entrusted power for personal gain’.1 The issue of corruption is regulated both in international and national levels. Turkey is a country that takes tries to combat with corruption problem.

In this regard, Turkey has ratified some European, OECD and UN conventions that aim to keep the issue of corruption under control with detailed regulations. European Anti-Corruption Conventions, which Turkey also ratified, are as follows;

Council of Europe Criminal Law Convention on Corruption (CEO Criminal Law Convention) which provides the coordination in the criminalization of corrupt actions and compliance is controlled by Group of States against Corruption (GRECO)

Council of Europe Civil Law Convention on Corruption (COE Civil Law Convention) that provides the common definitions of civil law and corruption. The Group of States against Corruption (GRECO) controls compliance.

Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism of 8 November 1990 is signed on 28 March 2007 which one of it main aim is to criminalization of money transferring to terrorists groups.

Besides, as mentioned above Turkey ratified OECD Convention Combating Bribery of Foreign Public Officials in International Business Transactions, the United Convention against Transnational Organized Crime and the United Nations Convention against Corruption.

The international conventions that are United Nations Convention against Corruption and the Council of Europe Criminal Law Convention on Corruption and OECD Anti-Bribery Convention regulates the liability of the holding legal persons for their corrupt practices.

1The Transparency International Corruption Perception Index is ranking reports of countries annually "by their perceived levels of corruption, as determined by expert assessments and opinion surveys.' or more information:

http://www.transparency.org/whoweare/organisation/faqs_on_corruption/2/

Germany and UK are the countries that held this issue as a serious problem and regulated comprehensive legislation on this matter. Especially, UK Bribery Act is the cornerstone concerning regulation on the enforcement of corrupt practices of companies that holds the companies liable for corrupt practices of their employees, representatives, agents or subsidiaries. Under the scope of the UK Bribery Act companies should be aware that the Bribery Act has near global jurisdiction and does not distinguish between bribery and facilitation payments or big and small bribery payments.2

In Turkey, the amendment made in the Turkish Criminal Code No 5237 became a significant step in order to combat practices that constitute bribery. In the amendment made 2012 the definitions of the practices, which is deemed as bribery is given, and private commercial bribery is included to the scope of the Criminal Code.

According to the report of Business Anti Corruption 2014, corruption is a commonly encountered problem both in public and private sectors in Turkey.3

In 2013 Transparency International report, it is stated that the clarification on the differences between bribe and a gift should be perceived and the anti-corruption authorities were supposed to be ineffective. Additionally, in Corruption Perception Indexes (CIP) that International Transparency prepares annually, Turkey has taken part in lower levels on this list regarding the increase of corrupt practices in both public and private sectors. Turkey was listed as 54th in 2012, 53 out of 177 in 2014 and 64 out of 175 considering the widespread practice of corruption and in 2015 reports the ranking of Turkey are speculated to be lower than 2014 levels. 4

In order to prevent from causing corrupt practices, companies should be aware of the corporate compliance methods. As to provide compliance, companies should have a corporate compliance program, that mainly should involve;

  • Proportionality; each company’s procedure should be in accordance with the company’s size and risks;
  • From top to bottom creation of a conscious regarding compliance matters of all employees and representatives of the company;
  • Risk assessment that each company should evaluate the risks of the market that it conducts its business;
  • Providing enough resources to follow a compliance program and to train both employees and representatives of the company;
  • Due diligence; to be aware of the fact that who are in the management position of the company and who are the business partners of that company;

     

  • 2- The Business Anti-Corruption Portal is a government-sponsored one-stop shop for anti-corruption compliance resource aimed at the business The Portal is supported by the European Union; Sweden’s Ministry for Foreign Affairs; Germany’s Federal Ministry for Economic Cooperation and Development; the UK’s Department for Business, Innovation & Skills (BIS); the Norwegian Agency for Development Cooperation (Norad); the Austrian Development Cooperation (ADC); and the Danish International Development Agency (Danida). And it is referenced tool by the UN, the OECD, the World Bank, IFC and Transparency International. See more at:

http://www.business-anti-corruption.com/about/about-this-portal.aspx

        Recommendations in this matter for Turkey are to improve data collection and management of foreign bribery    allegations; 6 provide awareness of the corporate compliance matter; pursuant to this, prepare training programs in companies for representatives and employees; improve the enforcement both in criminal and civil perspective of non-compliance and settle more effective monitoring authorities.

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