The recent political and anti-corruption machinations in Turkey must have provided an interesting and diplomatic challenge for the OECD’s Phase 3 examiners whose report was published last week.
A copy of the report is here (pdf).
Particularly, what to make of law enforcement independence and compliance with Art 5 of the Anti-Bribery Convention (pdf). Art. 5 says,
Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved.
In December 2013, an allegedly factional domestic bribery investigation resulted in the reassignment of 2,500 law enforcement personnel, arrests of police and prosecutors, greater governmental control of the Judicial inspectorate (since repealed) leading to the dismissal of a raft of high ranking Judges and the appointment of new ones who remain in position.
Conflicting explanations were given for this continuing imbroglio but the working group’s acceptance of the government’s assurances that it would not affect foreign bribery investigations can probably be taken at face value. Turkey, despite having the 17th largest global economy, is a member of that not too exclusive club whose members have failed to achieve a single foreign bribery conviction since implementing the Convention. Consequently, the working group recorded concerns “about the insufficient proactivity of Turkish authorities in detecting and investigating foreign bribery cases.”
Concern was also expressed about the absence of any corporate liability prosecution in the last five years and the lack of sufficiently flexible sanctions for bribery. Corporate liability, which constitutionally is an administrative offense, is conditional on prosecutions (and possibly convictions) of natural persons. It does not extend to state owned or controlled enterprises and merely carries a maximum sanction of a €700,000 ($887,000) fine. For convicted natural persons no financial penalties can be imposed at all, leaving them to face possible incarceration.
The OECD’s Phase 3 examiners criticized the absence of a specialized economic and financial anti-corruption unit. The absence of any money laundering offences predicated on bribery offenses or any statutory or regulatory measures to address politically exposed persons was also recorded.
Despite adopting ISA accounting standards, the shortcomings in corporate auditing and the failure to look for indications of foreign bribery were recorded as possible breaches of Art 8 of the Convention.
The examiners took encouragement from the maintenance of mutual legal assistance statistics but assistance was only given in two and sought in four cases. Concerns were expressed about the lack of effective reporting mechanisms so that the authorities were, notwithstanding foreign media reports, unaware of foreign bribery allegations involving Turkish companies. Although some progress had been made in foreign bribery whistleblower protection serious shortcomings remain.
Finally, the working group welcomed the rules and registers for bribery-related public procurement disbarment but presumably Turkish entries are still awaited.
Alistair Craig, a commercial barrister practicing in London, is a frequent contributor to the FCPA Blog.
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