Turkey

Turkey Corruption Report

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Snapshot

Turkey_250x166.jpgCorruption is widespread in Turkey's public and private sectors. Politics, public procurement and construction projects are particularly prone to corruption, and bribes are often demanded. Corruption allegations against the government caused mass protests in 2013; the government responded with a crackdown on police officers and judges who were voicing such accusations. Turkey's Criminal Code criminalises various forms of corrupt activity, including active and passive bribery, attempted corruption, extortion, bribing a foreign official, money laundering and abuse of office. Anti-corruption laws are poorly enforced, and anti-corruption authorities are ineffective. Punishment can include imprisonment of up to 12 years. Companies should note that despite facilitation payments and gifts being illegal, they are frequently encountered.

December 2015
GAN Integrity Solutions

Judicial System

Corruption, political interference and a weak administration of justice are high risks in the Turkish judiciary (ICS 2015). The constitution provides for an independent judiciary, but it is suggested that the court system is subject to executive interference (HRR 2014). The prosecutors who initiated an anti-corruption investigation on several senior government officials and their families, were accused by the government of abusing their authority and were subsequently suspended (DW, Dec. 2014). The government's response raised concerns of impunity and executive influence negatively impacting the independence, along with impartiality and efficiency of the judiciary (European Commission, Oct. 2014). Almost half of citizens believe the judiciary is corrupt (GCB 2013). Structural weaknesses include slow and inefficient case procedures, and a backlog of a large number of pending cases (BTI 2014). Turkey performs slightly better than the Europe and Central Asian average in relation to enforcing contracts (DB 2015). Only 2.8 percent of firms regard the court system as a major constraint (ES 2013). Despite the Turkish courts having accepted international agreements on arbitration of investment disputes between foreign investors and the state, they have on occasion failed to uphold an international arbitration ruling involving private companies, and are reportedly biased against foreigners (ICS 2015).

Police

Corruption in the Turkish police is a moderate risk. Police impunity is a problem due to inadequate mechanisms to investigate and punish alleged corruption (HRR 2014). Following the anti-corruption investigations into the government, the government reorganized the police force, reassigned thousands of police officers involved, and accused many of a conspiracy to overthrow the government (HRR 2014). Turkey performs moderately in relation to the reliability of police services to protect businesses from crime (GCR 2015-2016). One in three citizens perceive the police as corrupt (GCB 2013).

Public Services

There is a moderate risk of irregular payments and bribes when dealing with Turkish public services (GCR 2015-2016). Respondents believe that many public officials are involved in corruption (SELDI 2014), and 5.8 percent of companies expect to give gifts to officials to get things done (ES 2013). 17.2 percent of firms expect to give gifts or informal payments when acquiring an electrical connection (ES 2013). Impunity of corrupt officials is reported (HRR 2014). Starting a business takes less time but requires more procedural steps and capital than the regional average (DB 2015).

Land Administration

There are several reports of corruption in relation to Turkey's land administration. Main corruption allegations lie in construction projects, for which bids are rigged, permits are illegally awarded, and bribes between government officials and developers are exchanged (Newsweek, July 2014). Nepotism, bribery and corruption in the construction sector go unpunished in Turkey, and the government actively interferes with corruption probes (FT, Jan. 2014). Turkey's president, Recep Tayyip Erdogan, has built a new presidential palace on protected land, which has been ruled illegal by Turkey's Supreme Court (DW, May 2015). 

Tax Administration

There is a risk of encountering petty corruption when dealing with the Turkish tax administration. Very few businesses expect to pay bribes to tax officials (ES 2013), yet 11 percent of citizens state that tax officials have demanded money or gifts from them within the past year (SELDI 2014). Media outlets critical of the government have been subject to targeted tax investigations and subsequent fines (Freedomhouse, 2014). Up to a third of Turkey's economy is unregistered resulting in big losses in the annual tax revenue (Daily Sabah, May 2015; Schneider, 2015). 

Customs Administration

While corruption at the border exists, businesses do not consider it a problematic factor for importing and exporting in Turkey (GETR 2014). Trade is impeded by customs procedures that lack efficiency, and exporting and importing require time-consuming paperwork to clear goods at the border (GETR 2014). Time-consuming bureaucracy opens the way for public officials to demand bribes in Turkey (GETR 2014), and 10 percent of Turks state to have been asked for money or gifts from customs officials (SELDI, 2014). 

Public Procurement

There is a high risk of corruption in Turkey's public procurement sector. The legislation generally requires competitive bidding procedures in the public sector, and minimum bidding thresholds exist under which foreign companies are prohibited from bidding on public tenders (ICS 2014). Businesses report that corruption in public procurement is not uncommon as public funds are frequently diverted and favouritism affects decisions of government officials (GCR 2015-2016). Tender notices and business opportunities are published on the website of the Public Procurement Authority (in Turkish). Despite reforms, critics find that there is a bias by government officials to award large contracts to firms related to the ruling AKP Party (ICS 2015). Companies should take note of offset regulations: for public contracts above USD 5 million, companies must invest up to 50 percent of contract value and "add value" to the sector (European Commission, Oct. 2014; ICS 2015).

An investigation into sons of cabinet ministers over corruption in public tender construction projects in Istanbul alleged that bribes were paid to officials in exchange for ignoring zoning rules and approving contentious development projects (New York Times, Jan. 2014). Erdogan's government has claimed that the corruption crackdown was politically motivated and the charges against all 96 suspects were dropped (Al-Monitor, Sept. 2014). The government consequently faced criticism on its willingness to tackle corruption (Hurriyet Daily News, Jan. 2015). Companies are recommended to use a specialised public procurement due diligence tool to mitigate corruption risks related to public procurement in Turkey. 

Legislation

The Turkish Criminal Code criminalises various forms of corrupt activity, including active and passive bribery, facilitation payments, attempted corruption, extortion, bribing a foreign official, money laundering and abuse of office. Law on Asset Disclosure, Struggle against Bribery and Corruption, (in Turkish) and the law on Public Servants, provide regulations for gifts and hospitality. Enforcement of legislation varies and the government is being criticised for its lack of willingness to tackle corruption. The OECD Working Group on corruption, expressed concerns about Turkey's low levels of enforcement of foreign bribery legislation (OECD 2014). Other relevant legislation includes the Law on the Right to Information, the Law on the Prevention of Money Laundering, the Prevention of Laundering Proceeds of Crime Law, the Law on Public Procurement Contracts, the Public Procurement Law, the Public Financial Management and Control Law and the Act on Declaration of Property and Fight with Bribe and Corruption. The legislative protection of whistlerblowers is weak and insufficient (SELDI 2015). 

Turkey has ratified the United Nations Convention against Corruption (UNCAC), the OECD Anti-Bribery Convention (declining an exception for facilitation payments), the Council of Europe Criminal Law Convention on Corruption and the Council of Europe Civil Law Convention on CorruptionTurkey is a member of the Council of Europe Group of States against Corruption (GRECO) but has not responded to GRECO's most recent recommendations (European Commission, Oct. 2014).

Civil Society

Freedoms of speech and of the press are guaranteed by Turkish law but are undermined by provisions of the penal code and a strict anti-terrorism law (FitW 2015). Turkish authorities continued cracking down on journalists with methods of imprisonment, intimidation, wiretapping and mass firings (Freedom House, 2014). Outlets critical of the government are frequently bought or forced out and are subject to targeted tax investigations and fines (Freedom House, 2014). Turkey has one of the largest numbers of imprisoned journalists in the world, and harassment of journalists is common. Nearly all media organisations are owned by large holding companies with interests in other sectors, contributing to self-censorship among journalists (HRR 2014). Social media platforms Twitter and YouTube were repeatedly blocked by Erdogan's government in an attempt to quell corruption allegations against the government (FotN 2014). Turkey's media environment is considered 'not free' (FotP 2015).

Turkey has a moderate tradition of civil society; while CSOs in rural areas are generally effective, CSOs that oppose the government's values often face severe operational difficulties (BTI 2014). The freedoms afforded CSOs following reforms carried out as part of the EU harmonisation process were scaled-back during 2014 (BTI 2014).

Sources

Topics: Europe & Central Asia