Corruption Risks: What Turkish Companies Can Learn from International Enforcement Actions

Introduction – Geopolitical Context and Growing Compliance Pressures Globally

• Rising Global Anti-Corruption Agenda: In recent years, major world powers and international bodies have elevated anti-corruption as a priority. The United States, for example, has deemed the fight against corruption a core national security interest, recognizing that graft undermines governance, markets, and democracy. Across the G20 and OECD, there is intensified cooperation to crack down on bribery and illicit finance, treating corruption not just as a legal issue but as a threat to global stability.
• Stricter Enforcement and International Cooperation: Enforcement authorities are increasingly collaborating across borders to pursue bribery cases, applying laws with extraterritorial reach like the U.S. Foreign Corrupt Practices Act (FCPA) and UK Bribery Act. Multi-jurisdictional investigations have become common, exemplified by cases such as Rolls-Royce’s $800 million global resolution in 2017 involving U.S., UK, and Brazilian authorities. This trend signals to companies worldwide – including in Türkiye – that unethical conduct anywhere can trigger enforcement actions everywhere.
• Compliance Expectations on the Rise: Geopolitically, there is growing pressure on companies to implement rigorous compliance programs and ethical business practices. Governments and international lenders tie foreign investment and market access to transparency and anti-corruption efforts. In an era where corruption is viewed as corrosive to economic development and investor confidence, firms face higher expectations to police their own operations. The message is clear: strong corporate governance and anti-bribery controls are now essential to staying competitive and avoiding legal jeopardy in the global marketplace.

Overview of Türkiye’s Domestic Corruption Challenges in 2025

• Persistently High Perceived Corruption: Türkiye continues to struggle with corruption at the domestic level, as reflected in international indices. In Transparency International’s latest Corruption Perceptions Index, Türkiye scored just 34/100 (well below the global average of 43) and ranked 107th of 180 countries. This score is unchanged from the prior year and represents Türkiye’s lowest standing in nearly two decades, highlighting a long-term backslide since 2013 when the country’s score peaked at 50. Such stagnant low rankings underscore enduring governance problems and signal to observers that corruption remains a serious concern in 2025.
• Weak Enforcement and Political Interference: A core challenge is the lack of effective domestic enforcement against corruption, especially when high-level figures are involved. Investigations into major corruption cases in Türkiye are rare, and those that do occur have often been limited or derailed by political influence. Notably, a massive December 2013 bribery scandal (involving allegations of illicit oil-for-gold trade with Iran and kickbacks reaching cabinet ministers and even the family of President Erdoğan) was abruptly quashed – prosecutors and police were removed, and the probe was framed by authorities as a “plot” against the government. Since that episode, no substantial corruption prosecutions targeting top officials have succeeded, as judicial independence has eroded. The OECD’s 2024 review bluntly noted that “no individual or company has ever been held liable [in Türkiye] for bribing foreign officials” and most allegations are never even investigated. This climate of impunity, fed by executive control over the judiciary and media censorship, has hampered domestic anti-corruption efforts and created serious gaps in enforcement.
• Regulatory Framework vs. Reality: On paper, Türkiye has laws criminalizing bribery and has made some legislative tweaks (such as increasing corporate fines and extending liability to state-owned enterprises). However, these legal provisions have not translated into real-world action. Watchdogs point out the absence of an independent anti-corruption agency and inadequate whistleblower protections, which leaves wrongdoing poorly detected and unreported. In practice, public procurement processes remain opaque and susceptible to favoritism, with frequent use of exceptions to competitive bidding on grounds like “national interest” that can mask patronage networks. Overall, as of 2025, Türkiye faces a credibility problem in tackling corruption at home – a situation that not only invites external scrutiny but also raises the stakes for Turkish companies operating under these conditions.

Sector-Specific Vulnerabilities: Defense and Energy

• Defense Industry – High Risk and Opaque Practices: Türkiye’s defense sector is recognized as particularly vulnerable to corruption. Defence procurements often involve large budgets, secrecy for “national security” reasons, and close ties between political authorities and contractors. Transparency International’s Government Defence Integrity Index rates Türkiye’s defense sector risk as “Very High,” citing extreme opacity and exemptions from standard transparency rules. External oversight of military spending is restricted, and key processes – from budgeting to contract awards – are shrouded in secrecy, undermining accountability. This environment can breed patronage and kickbacks, especially in procurement and offset agreements (where defense contractors provide side investments that can be used to channel bribes). Indeed, the OECD warns that as Turkish defense firms expand exports, the risk of bribery grows commensurately. Past enforcement cases worldwide reinforce these concerns: for example, a U.S. investigation revealed a gun manufacturer’s agent in Türkiye indicated bribe payments to win a firearms contract with Turkish police and military, leading to an SEC sanction. Additionally, many Turkish defense companies have historically lacked robust compliance programs – several major firms score poorly on anti-corruption policy transparency, reflecting “limited” or “very low” commitment to ethical practices. In short, the defense industry’s combination of large government contracts, confidentiality, and political influence creates a breeding ground for corruption if not actively managed.
• Energy Sector – Large Deals and Political Connections: The energy sector (including oil, gas, and power generation) is another area of heightened corruption risk in Türkiye. Energy projects often involve partnerships with state-owned enterprises and politically connected businesses, creating opportunities for rent-seeking. High-value contracts for pipelines, power plants, or resource concessions can become vehicles for illicit payments to officials in exchange for approvals or favorable terms. Türkiye’s recent history offers cautionary tales: the 2013 “gas-for-gold” scheme, for instance, exposed how energy-related dealings were entangled with bribery. In that scheme, a Turkish-Iranian trader (Reza Zarrab) bribed Turkish ministers to facilitate illicit oil revenue transfers, resulting in a domestic scandal that saw several ministers resign before the inquiry was halted by the government. The fallout revealed how deeply corruption had penetrated the energy trade and financial system – and how political intervention shielded the culprits. More broadly, Türkiye’s dependence on imported energy (historically from high-corruption-risk partners like Russia and Iran) and efforts to develop large infrastructure (e.g., pipelines, LNG terminals, a nuclear plant with Russia’s Rosatom) mean that huge sums and strategic interests collide in this sector. Such conditions, without strong oversight, can enable bribery of foreign officials or domestic gatekeepers to secure deals. Globally, the energy industry has generated some of the largest corruption cases on record (from bribery in oil contracts to manipulation of energy tenders), underlining the need for Turkish energy firms to be vigilant. In sum, both defense and energy sectors in Türkiye face a confluence of risk factors – government touchpoints, heavy regulation, and lucrative projects – that make robust anti-corruption measures especially critical.

Key International Enforcement Actions and Takeaways (FCPA, UK Bribery Act, OECD Cases)

• U.S. FCPA Enforcement – Heavy Penalties and Broad Reach: The United States has aggressively pursued foreign bribery through the FCPA, and numerous enforcement actions have touched on Turkey-related conduct. U.S. authorities have not hesitated to investigate multinational companies (and individuals) for bribery schemes involving Turkish officials or business partners. In fact, an OECD analysis noted that the U.S. had successfully brought around 20 enforcement actions involving transnational bribery linked to Turkish industries, resulting in over $1.7 billion in sanctions – a stark contrast to Turkey’s own zero prosecutions. These cases span various sectors: for example, Oracle Corporation paid $22.9 million to the SEC in 2022 to settle charges that its Turkey subsidiary used slush funds to pay bribes for business. Pharmaceutical firm Alexion was fined in 2020 for its Turkish unit funneling money to health officials to get drug approvals. Even a defense contractor, Smith & Wesson, was penalized after its agent in Turkey attempted to bribe officials to win a police and military equipment deal. The key takeaway from U.S. enforcement is the sheer scale of penalties and the extraterritorial jurisdiction: companies found bribing (or failing to keep proper books) face multi-million-dollar fines, and U.S. prosecutors will assert authority if any U.S. nexus exists (such as use of U.S. banking systems or companies listed in the U.S.). Moreover, U.S. enforcement emphasizes corporate cooperation and compliance remediation – companies that voluntarily disclose issues and improve controls can receive leniency, whereas those that don’t can face DOJ/SEC action along with costly monitorships and reputational damage.
• UK Bribery Act and Global Enforcement Trends: The United Kingdom’s Bribery Act 2010 and vigorous enforcement by agencies like the Serious Fraud Office (SFO) and Crown Prosecution Service (CPS) offer further lessons. The UK Bribery Act is notably stringent, including a corporate offense for failing to prevent bribery. One recent case directly implicating Turkey underscores this reach: in 2023, a UK-based gambling company entered a Deferred Prosecution Agreement after admitting it failed to prevent bribery in its Turkish operations. By 2025, UK authorities went on to charge 11 former executives involved in that scheme – including the former CEO and chairman – with bribery and fraud offenses related to paying off Turkish officials. The first hearings are scheduled in a London court, reflecting the determination to hold individuals accountable, not just the company. The UK’s enforcement approach (through DPAs and corporate criminal liability) highlights the importance of adequate compliance procedures: had the company demonstrated “adequate procedures” to prevent bribery, it might have avoided liability. In other major UK cases (often coordinated with the U.S.), companies like Rolls-Royce and Airbus have paid record sums to resolve allegations of bribes across multiple countries. Rolls-Royce’s 2017 global settlement (≈$800 million) involved admitted bribery of officials from Asia to South America – spanning aerospace and energy deals – and was coordinated between the SFO, DOJ, and Brazilian prosecutors. Airbus in 2020 paid an unprecedented €3.6 billion to French, UK, and U.S. authorities over a “decade-long scheme” to bribe officials in various markets to win aircraft and defense contracts. These landmark cases carry clear takeaways: international enforcement bodies are working together to uncover corruption, penalties can be industry-shaking in size, and a company’s failure to instill an anti-bribery culture can have dire financial and legal consequences.
• OECD Convention and Peer Pressure: Türkiye’s membership in the OECD Anti-Bribery Convention means it is under scrutiny to police foreign bribery, and its inaction has drawn sharp criticism. The OECD Working Group’s recent Phase 4 report (2024) not only chastised Türkiye for “near-complete failure” in enforcing foreign bribery laws, but also implicitly endorsed the role of other jurisdictions in picking up the slack. With most Turkish companies expanding into high-corruption-risk markets (Africa, Middle East, etc.), the Working Group warned that the lack of Turkish enforcement “raises serious concerns”, especially in sectors like defense and construction where bribery risks are acute. In effect, this creates a scenario where international enforcement actions (by the U.S., UK, and others) will continue to target illicit conduct involving Turkish businesses. For example, U.S. prosecutors recently indicted individuals for bribery schemes in Mexico’s oil company Pemex, explicitly citing how such corruption disadvantaged honest competitors. Likewise, Swiss authorities, under OECD obligations, penalized a Swiss bank for laundering bribes related to Petrobras contracts. The lesson for Turkish companies is that the global enforcement net is tightening: even if local authorities look the other way, foreign regulators and banks (under anti-money laundering rules) are increasingly likely to detect and act against cross-border corruption. Multinational companies from other OECD countries have faced investigations for bribery in Türkiye as well (e.g., allegations that a major European telecom paid bribes in past Turkish deals), showing that Turkey is not a blind spot internationally. Overall, the enforcement landscape in 2025 is one where no major economy tolerates bribery – and companies, wherever they are based, can be held to account under laws like the FCPA, UK Bribery Act, or EU anti-corruption directives if their misconduct touches those jurisdictions.

How These Lessons Apply to Turkish Companies

• No Immunity from Extraterritorial Laws: Turkish companies must recognize that doing business internationally exposes them to foreign anti-corruption laws and regulators. Even if a firm is headquartered in İstanbul or Ankara, it can fall under the FCPA, UK Bribery Act, or similar statutes if, for instance, it has a U.S. subsidiary, raises capital on a foreign exchange, uses a foreign bank, or even engages in transactions in foreign currency. The enforcement cases above demonstrate that authorities will assert jurisdiction broadly – and they cooperate across borders. As a U.S. official noted in the Rolls-Royce case, the “global nature” of corruption “requires a global response,” and international enforcement partnerships aim to ensure all companies compete on an even playing field. For Turkish businesses, this means corrupt practices abroad (or involving foreign counterparties) can and will be investigated by agencies in the U.S., UK, EU, and beyond. In practical terms, a Turkish construction firm bribing an African official, or a energy trader paying kickbacks via a U.S. bank, could face prosecution overseas even if local authorities stay silent. The era of assuming certain markets is “safe” for bribery is over.
• Reputational and Business Risks: Apart from legal penalties, Turkish companies have much at stake in terms of reputation and market access. Global partners and investors are increasingly wary of companies embroiled in corruption. For example, a Turkish defense contractor seeking to join a European consortium or to supply a NATO program may be subject to due diligence – any history of bribery investigations could disqualify it or raise the cost of capital. Likewise, export credit agencies and development banks often require anti-corruption compliance as a condition for financing projects. Turkish firms with poor compliance records might lose out on international contracts or partnerships. The flipside is also true: by adopting strong anti-corruption measures, Turkish companies can differentiate themselves, reassure foreign stakeholders, and integrate more deeply into global supply chains. The lessons from enforcement actions are clear: companies that proactively address corruption issues can avoid disruptions (as seen when firms escaping prosecution due to good compliance), whereas those caught in scandals suffer years of legal fees, monitorships, and lost opportunities.
• Personal Liability for Executives: Another lesson for Turkish corporate leadership is the real personal liability that can arise from anti-corruption enforcement. Many countries are now willing to charge not just companies but also individual executives and board members who facilitated or turned a blind eye to bribery. The UK case charging former executives after a Turkish bribery scheme is a stark reminder that C-suite officials can face criminal prosecution, extradition, fines, and even imprisonment. U.S. enforcement likewise has prosecuted foreign nationals (including those from third countries residing outside the U.S.) for roles in bribery conspiracies. For Turkish company directors, this means that “willful ignorance” is no protection – strong oversight and a compliance-oriented tone at the top are necessary not only to shield the company but also to protect themselves from becoming targets of investigation.
• Competitive Advantage of Compliance: Ultimately, aligning with international anti-corruption standards can be a competitive advantage for Turkish companies. As global supply chains emphasize ESG (Environmental, Social, and Governance) criteria, multinational clients prefer partners who uphold ethical standards. Turkish firms that learn from the costly mistakes highlighted in FCPA/UK cases – such as inadequate controls over agents, or failure to vet high-risk transactions – can implement better practices and thereby win trust. In contrast, those that do not adapt may find themselves shut out of lucrative deals or facing heightened scrutiny. The legacy of enforcement actions should serve as a guide: by internalizing these lessons (e.g. instituting thorough due diligence, refusing to pay bribes even if competitors do, and cooperating with authorities when issues arise), Turkish companies can both avoid legal pitfalls and present themselves as reliable players on the international stage.

Compliance and Risk Mitigation Recommendations

• Build Robust Compliance Programs: Turkish companies, especially in high-risk sectors like defense and energy, should establish comprehensive anti-corruption compliance programs in line with international best practices. This starts with a clear tone at the top – company leaders must publicly commit to zero tolerance for bribery and back it up with resources. Companies should implement formal codes of conduct and anti-bribery policies that meet the expectations of laws like the FCPA and UK Bribery Act. Training programs are essential to educate employees (and third-party agents) on what conduct is prohibited and how to spot red flags. Effective internal controls (such as approval processes for gifts, donations, and third-party payments) and regular audits can detect and prevent improper payments. Regulators have emphasized that having “reasonable prevention procedures” in place can be a strong defense if an incident occurs. In the UK, new corporate criminal reforms underscore that firms should “put systems, training, and controls in place now to mitigate risk.” Likewise, U.S. DOJ guidance outlines that an effective compliance program – one that is well-designed, resourced, and empowered to act – can significantly reduce penalties or even avert prosecution when issues are self-disclosed. In short, investing in a genuine compliance infrastructure is not just good governance; it’s also insurance against enforcement shocks.
• Enhanced Due Diligence on Third Parties: A frequent theme in enforcement cases is the use of intermediaries (consultants, local agents, distributors or JV partners) to channel bribes. Turkish companies must rigorously vet and monitor any third parties acting on their behalf. This includes conducting background checks for red flags (e.g. connections to government officials or lack of qualifications), using transparent, written contracts with anti-corruption clauses, and requiring third parties to certify compliance with anti-bribery laws. High-risk arrangements – such as agents in foreign countries who are paid success fees, or lobbyists helping to secure government permits – should face extra scrutiny and controls (for instance, approval by a senior committee and detailed invoicing requirements). By knowing exactly who they are doing business with and for what purpose, companies can avoid the defense of “rogue agent” being undermined by evidence that proper oversight was lacking. Many FCPA cases (Oracle, Microsoft, etc.) involved slush funds at distributors or unexplained discount margins used to finance bribes. Learning from these, Turkish firms should implement strict discount approval processes, maintain transparency in accounting, and promptly address any signs a third party’s fees are being used improperly. In the defense sector, offset partners and brokers should be scrutinized, and in energy projects, local joint venture partners must be carefully chosen for integrity.
• Strengthen Internal Reporting and Controls: Encourage a corporate culture where employees can report suspected corruption without fear of retaliation. As the OECD has pointed out, Türkiye lacks adequate whistleblower protections, but companies can fill this gap internally by setting up confidential reporting hotlines, protecting whistleblowers, and actively responding to their tips. Early detection of issues through internal reports or audits can allow a company to take corrective action before a problem escalates or becomes public. In tandem, companies should perform periodic risk assessments to identify where their operations are most exposed (e.g. interacting with customs officials, large public tenders, facilitation payments at ports) and tailor controls to those areas. Financial controls—such as requiring dual signatories on payments, limiting cash transactions, and reviewing expense claims—can deter and detect bribery. Regular compliance audits (possibly with independent third-party reviewers) can test the effectiveness of these measures. Turkish companies might also seek certification under frameworks like ISO 37001 (Anti-Bribery Management Systems) as a way to benchmark their programs internationally. Ultimately, robust internal controls make it harder for corruption to occur and demonstrate to enforcement agencies that the company is serious about compliance.
• Plan for Incident Response and Remediation: Despite best efforts, if a potential bribery incident is discovered, how a company reacts is crucial. Turkish firms should have in place an incident response plan – for example, immediately involving legal counsel and forensic experts, preserving relevant documents, and conducting a thorough internal investigation. If the misconduct is substantiated, boards should consider the benefits of voluntary self-disclosure to authorities. U.S. DOJ policies incentivize timely self-reporting and full cooperation by significantly reducing fines and sometimes declining prosecution altogether. Remediation steps are equally important: disciplining or removing wrongdoers, revamping controls that failed, and providing additional training. Demonstrating to regulators that the company has learned and improved can mitigate penalties (as seen in cases where companies avoided prosecution by showing extensive compliance enhancements and cooperation). Turkish companies can also draw on lessons from foreign settlements – for instance, establishing a compliance monitor internally before one is imposed. By being proactive and transparent in the wake of a breach, companies not only reduce legal exposure but also show stakeholders they can be trusted to handle problems responsibly.

Conclusion – Implications for Corporate Governance and International Competitiveness

• Necessity for Ethical Corporate Governance: The overarching insight is that combating corruption is not a “nice-to-have” for Turkish companies – it is a strategic imperative. Persistent corruption issues in Türkiye have already eroded confidence in the business environment, with OECD and other observers warning that weak integrity mechanisms undermine investor trust and economic stability. Addressing corruption and strengthening governance, therefore, are preconditions for sustainable economic growth and resilience. Companies that heed this call will contribute to a culture of transparency that benefits not only their own operations but the broader market’s reputation. This in turn can attract higher quality foreign investment and partnerships, creating a positive cycle of improvement. On the other hand, firms that ignore these risks may find themselves at odds with both regulators and market forces, suffering legal penalties and losing out in the long run. Good corporate governance – including diligent anti-corruption oversight by boards and audit committees – should be seen as integral to a company’s value and longevity.
• Enhancing International Competitiveness: By learning from international enforcement actions and proactively managing corruption risks, Turkish companies can bolster their international competitiveness. In a global economy increasingly focused on compliance and ESG standards, a clean record and robust anti-corruption program can be a selling point. It signals that a company can be a reliable partner in joint ventures, a stable supplier in defense or energy projects, and a responsible borrower for international banks. Moreover, alignment with global anti-bribery norms will prepare Turkish businesses for potential future regulatory changes (for instance, if Türkiye strengthens its own enforcement or if the EU requires stricter compliance as part of business dealings). In essence, the ability to operate transparently and ethically is becoming as important as price or quality in winning contracts. Companies that internalize this – investing in compliance personnel, training, and systems – are likely to find themselves more adaptable and welcome in markets worldwide. Conversely, any short-term gains from corrupt deals can be quickly wiped out by enforcement costs or reputational damage, as countless cases have illustrated.
• Path Forward – A Culture of Compliance: For Turkish firms, the path forward involves embedding a culture of compliance and integrity at all levels. This means moving beyond a mere checkbox approach and ensuring that every employee, from executives to field agents, understands that bribery is unacceptable and preventable. As global enforcement will continue to serve as a backstop (given OECD oversight and active agencies like DOJ and SFO), companies should act now to avoid being made examples of. The long-term payoff is twofold: internally, a culture of ethics reduces losses from fraud and fosters pride and accountability; externally, it enhances the company’s image and alignment with international norms. In conclusion, what Turkish companies can learn from international enforcement actions is that anti-corruption compliance is not just about avoiding penalties – it is about strengthening corporate governance and positioning themselves for success in a world where business integrity is indispensable for competitiveness. The sooner companies adopt this mindset, the better equipped they will be to thrive in the global marketplace under the scrutiny of 2025 and beyond.