Transparency International published the Corruption Perceptions Index (“CPI”) for 2021 on 25 January. According to the CPI results, Turkey scored 38 points out of 100, two points fewer than last year. The loss of two points has resulted in a significant fall down the rankings from eighty-sixth to ninety-sixth, out of 180 countries.
The CPI is a worldwide study by Transparency International (“TI”), a well-known global organization that fights corruption. TI has scored and ranked countries on their perceived levels of corruption in the public sector in the CPI report since 1995. The CPI scores 180 countries on a scale of zero to 100, ranging from high to low corruption, respectively. (You can find more detail about the CPI and its measuring method in our article “Turkey's 2020 Corruption Perception Index Score”)
Turkey’s 2021 CPI Score
When compared with the results from 2020, Turkey’s score decreased from 40 to 38, resulting in a drop in its ranking from 86th to 96th.
Considering Turkey’s CPI scores from 2013 to 2021, the loss of 12 points and a decrease of 43 places in the rankings has identified Turkey as one of the “dramatic decliners”. The TI assesses Turkey with the Western Balkan countries and ascribes its falling CPI score to the undermining of judicial independence by the concentration of power in autocratic leaders and their parties.
When compared to the European Union, Turkey received a lower score than any of the 27 member states ranking below Bulgaria. Among 38 OECD member countries, Turkey ranked thirty-seventh; and among the G20 countries, Turkey was third from the bottom.
The Worldwide Assessment Factors Affecting Turkey
1. The OECD Recommendations
The OECD released a statement of its concerns about Turkey’s fight against foreign bribery, and the independence of investigations and prosecutions in June 2021.
The news release stated that Turkey had not taken sufficient steps to address the OECD Working Group on Bribery’s concerns about the implementation of the OECD Anti-Bribery Convention. Turkey has been criticized for the low level of foreign bribery offence enforcement, and its failure to take the necessary actions to ensure that foreign bribery is effectively investigated and prosecuted, to protect the independence of prosecutions, to strengthen its legislation on the liability of legal persons for foreign bribery, and to implement adequate protection for whistleblowers who report suspicions of foreign bribery.
Even though the Working Group appreciated Turkey’s legislative reforms through the amendments made to the Misdemeanors Law, it emphasized the need to demonstrate these reforms in practice, by mentioning that Turkey has yet to successfully conclude a foreign bribery case. Turkey was also criticized for its passive attitude to taking measures to protect the independence of investigations and prosecutions and amending its legislation to adequately protect whistleblowers.
Additionally, the need to catch-up with international standards on the fight against corruption was mentioned in the OECD’s Economic Survey 2021 for Turkey. Due to the perceived decline in the quality of governance institutions and the rule-of-law, it was recommended that Turkey make improvements in these areas with special focus on the independence and credibility of the judiciary, checks-and-balances over government powers, and a strategy for fighting corruption. On the way to its Phase 4 evaluation, regarding the implementation of the OECD’s Anti-Bribery Convention, it was previously recommended that Turkey take the necessary steps in investigating, prosecuting and sanctioning foreign bribery cases, to amend its laws to hold liable all Turkish legal persons, including state-owned and state-controlled enterprises; and to ensure that the investigation and prosecution of foreign bribery is not influenced by considerations of national economic interest, or the potential effect upon the identity of the natural or legal person involved.
2. Turkey has been added to the FATF’s Grey List
The Financial Action Task Force (“FATF”) has placed Turkey onto its grey list, which consists of countries subject to the FATF’s increased monitoring, due to the strategic deficiencies in its anti-money laundering regime, terrorist financing, and proliferation financing. The FATF stated that Turkey has significant deficiencies in applying the FATF Standards. Turkey is expected to implement an action plan through a set of measures stated under the FATF review. Turkey will remain in the FATF’s enhanced follow-up and is expected to report back to the FATF regarding its progress on improving the implementation of recommended anti-money laundering and combatting terrorist financing regime measures in June 2022.
3. Turkey ranked 40th in the Annual Basel Anti-Money Laundering Index
The Basel AML Index (“the Index”) measures and ranks money laundering and terrorist financing risks by jurisdiction worldwide. The Index was developed and is maintained by the International Center for Asset Recovery at the Basel Institute on Governance, which is an independent, non-profit organization working around the world to strengthen governance and counter corruption and other financial crimes. The risk measured by the Index is defined as “the assessment of jurisdictions' vulnerabilities to money laundering and terrorist financing and their capacity to combat them”. Therefore, the number of Anti-Money Laundering (“AML”) and Counter Financing of Terrorism (“CFT”) cases in a jurisdiction is not relevant to the Index's methodology; even if an area has a great number of AML or CTF cases, its overall risk may actually be low and vice versa. This Index has been published annually since 2012.
Turkey ranks 40th with its risk score among 110 jurisdictions, according to the 10th Public Edition of the report, which was released in September 2021. Haiti ranks first on the Index with a high-risk score of 8.49, and Andorra ranks 110th with a low-risk score of 2.73. Turkey, on the other hand, has gone beyond the medium risk with a score of 5.70. The Europe and Central Asia region, including Turkey, has slightly higher AML/CTF risks than the global average, although there has been a general improvement since 2020. There are no significant outliers; risk scores are gradually distributed between 4.63 and 6.09. In this region, Turkey ranks eighth among 11 countries, approaching high risk. The Index made recommendations for “governments across the region to take strong steps to address corruption and bribery in the first instance” and highlighted its concerns regarding the likelihood of “issues with media freedom, independence of the judiciary, and political and civil rights” holding the region back.
4. The Lack of Legislation and Weak Enforcement Remains Ongoing
As is known, there is no specific intra or extra-territorial legislation for anti-corruption and anti-bribery in Turkey. The legal framework for anti-corruption is weak in the private sector, and the scope of bribery offenses does not cover bribery in the private sector, except in some excluded entities. Turkey also does not have a specific legal framework to provide a whistle-blower mechanism in the public or private sector, or any act that protects whistle-blowers also including non-retaliation.
Concerns remain ongoing regarding Turkey’s poor tracking record for the investigation, prosecution, and conviction of corruption cases, including those that attract public attention. Turkey’s fight against corruption needs to be demonstrated and enforced through a specialized and independent anti-corruption body, prosecution services for corporate/public-specific corruption investigations and conducted through courts that specialize in anti-corruption lawsuits.
It is worth to remarking here on the Judges and Prosecutors Council (“HSK”) decision regarding the establishment of new specialized courts, which was published in the Official Gazette No. 31675 and dated 30 November 2021, in accordance with the reforms stated in “The Human Rights Action Plan”, published in the Official Gazette No. 31470 and dated 30 April 2021. According to the decision, HSK decided in favor of the specialization of certain assize courts and criminal courts of first instance, in relation to cases of cybercrime regulated under the Turkish Criminal Code No. 5237; the crimes regulated under the Law on the Payment and Securities Settlement Systems, Payment Services and Electronic Currency Institutions No. 6493; and some financial crimes regulated under various laws including the Turkish Commercial Code No. 6102, the Banking Law No. 5411, the Capital Markets Law No. 6362. This specialization is expected to create better understanding and consistency in proceedings for cybercrime and financial crime committed by electronic means.
The Corruption Perceptions Index score for 2021 represents the undeniably close relationship between the fight against corruption and the rule of law, judicial independence and consistency, and transparency in decision-making authorities. As the CPI scores show the perceived level of public sector corruption in the ranked countries, the need to ensure equity and consistency in justice to provide a trustworthy and consistent perception of justice for the public must be emphasized. The CPI score is not about the number of corrupt practices in a ranked country, it is about a society’s trust in their state’s honesty and proactivity in detecting, investigating, and resolving corruption cases under the basic principles of law, providing independent and timely justice; and the extent to which states take the necessary legislative measures.
The CPI shows a map of corruption risks that benefits both multinational companies and foreign investors when identifying and managing their risks in international markets. While still protecting its unique position as a tempting market for foreign investment, it is expected that Turkey will take necessary actions both in the legislative and executive areas to demonstrate an effective, honest and transparent fight against corruption. However, it must once again be underlined that the absence of legislation or enforcement in Turkey does not remove real or legal persons’ liabilities arising from other cross-border ABAC laws, such as the FCPA. Whereas the risk remains the same in this market, it is highly recommended that companies and investors in Turkey take these worldwide risk assessments into consideration and mitigate and control their ABAC risks through tailor-made compliance programs, while keeping up to date and complying with the legislative reforms.
Apart from country or region-specific assessments, the fact that corruption is a global problem should not be overlooked. The TI states that even “the seemingly ‘clean’ countries are enabling and/or fueling cross-border corruption, even if it may originate from other places further down the CPI ranking”. Corruption is not only connected to geography, and forms or structures of governments, but also to societies’ ethical, moral and legal perceptions of corruption. Wherever there are people, there is a risk of corruption. What is important here is for all states to demonstrate their determination to fight corruption and bribery and to develop defense mechanisms. Neither the CPI results nor any other recommendations given in the international organizations should not be perceived as personal ideas or political critiques, rather, they should be used as guidance that benefits the common sole aim: the worldwide fight against corruption and bribery.
 Transparency International, CPI 2021 For Eastern Europe & Central Asia: Democratic Hopes in the Shadow of Growing Authoritarianism
 Turkey - OECD Anti-Bribery Convention, News Releases, “Turkey should urgently implement key reforms to boost fight against foreign bribery, including to preserve independence of investigations and prosecutions”
 You can find out the details regarding the amendment of Misdemeanors Law in our article “Turkey Amends Misdemeanours Law to Increase Administrative Fines for Corporations in Bribery and Similar Crimes”.
 OECD Economic Surveys: Turkey 2021, Recommendations under institutional modernization and green growth
 OECD’s Phase 3 follow up: additional written report by Turkey, DAF/WGB(2019)38
 Index conveys four trends. These are virtual assets and effectiveness of AML, AML and CFT systems, Beneficial Ownership as a pillar of an AML or CFT system, and AML and CFT Vulnerabilities Beyond the Financial Sector. Afterwards, these trends were also evaluated and scores and rankings and regional evaluations were created.
 Basel AML Index 2021: 10th Public Edition, https://baselgovernance.org/publications/basel-aml-index-2021
 Professional organizations with public institution status, companies established with public participation and foundations operating within them, public benefit associations, and only cooperatives and public joint stock companies are included in the scope of bribery in terms of the private sector.
 Transparency International, CPI 2021: Trouble at The Top, January 25, 2021
Kemal Altuğ Özgün