Corruption in Turkish Public Procurement and Corporate Fraud: 2025 Insights and Compliance Strategies

Turkey continues to grapple with corruption in public procurement (kamu ihale yolsuzluğu) and corporate fraud, issues which undermine the rule of law and economic integrity. Perceptions of corruption remain high – Transparency International’s latest index gives Turkey a score of just 34/100 (rank 107 out of 180 countries). This reflects a steady decline over the past decade (Turkey ranked 53rd in 2013, plummeting to 115th by 2023). Such trends raise serious concerns for legal professionals, compliance officers, and companies operating in Turkey. Below is a list of key insights, supported by recent data and laws, outlining the scope of the problem in public procurement and corporate fraud as of October 2025.

Key Insights on Public Procurement Corruption in Turkey

• High-Risk Sector: Public procurement in Turkey is highly prone to corruption. Surveys of businesses indicate that bribes and irregular payments are common in the awarding of public contracts. Favoritism by officials in tender decisions is frequently reported, and diversion of public funds is a regular concern. These patterns make procurement and construction the riskiest sectors for graft.
• Worsening Corruption Perception: Turkey’s corruption perception ranking has deteriorated significantly. The country’s CPI score of 34/100 in 2024 (placing it 107th globally) shows stagnation at a low level. This is one of Turkey’s worst positions in over a decade, indicating entrenched corruption problems that erode institutional integrity and public trust.
• Legal Framework vs. Loopholes: Turkey’s Public Procurement Law (Kamu İhale Kanunu) enshrines transparency, competition and equal treatment in theory. In practice, broad exemptions in procurement law allow bypassing open tenders on grounds of “national interest” or “urgency”. These loopholes are widely used by ministries and municipalities to award contracts without competitive bidding, a trend the EU has flagged as a major concern.
• Cronyism in Contract Awards: Granting of large state contracts to politically connected firms has become commonplace. Public procurement is often a vehicle for clientelism – major tenders and infrastructure projects are regularly awarded to business groups allied with the ruling government. This kurumsal yolsuzluk (institutionalized corruption) results in inflated costs and subpar outcomes, ultimately harming the public interest.
• Enforcement Gaps: Turkey’s anti-corruption laws are strong on paper but weak in enforcement. Bribery, bid-rigging, embezzlement and abuse of office are criminalized under the Turkish Penal Code, with penalties up to 12 years imprisonment for individuals and asset seizure or tender bans for companies. However, enforcement is inconsistent – there is no independent anti-corruption agency, and investigations into high-level graft are rare and often politicized. Many corruption allegations, especially those involving powerful figures, go unpunished due to political influence and immunity provisions.

These insights set the stage for a deeper analysis of recent cases, legislative developments, and what they mean for compliance and corporate governance in Turkey’s current environment.

Major Scandals and Investigations (Önemli Yolsuzluk ve Dolandırıcılık Vakaları)

Despite the challenges, a number of high-profile corruption and fraud cases have come to light in the past two years, illustrating both the pervasiveness of the problem and the government’s selective approach to enforcement:

• Yunus Emre Institute Embezzlement: In late 2024, a criminal investigation exposed massive fraud at the state-funded Yunus Emre Institute (YEE), which promotes Turkish culture abroad. Investigators allege the institute’s former president issued fake invoices totaling $16–17 million for goods and services never delivered. To conceal the scheme, large contracts were illegally split into dozens of smaller purchases below the tender threshold (around 622,000 TL) to evade public procurement requirements. By avoiding open tenders through this “contract splitting” (ihaleyi bölerek kuralları aşma), the suspects bypassed oversight. The ex-president was dismissed and fled the country, while at least 18 people were detained on charges including embezzlement, tender-rigging, forgery and money laundering. This case highlights how internal controls were sidestepped and procurement laws (meant to ensure transparency) were deliberately undermined for personal gain.
• İstanbul Gold Refinery Subsidy Fraud: In October 2025, Turkish authorities detained 21 individuals in a crackdown on a corporate fraud scheme involving İstanbul Gold Refinery (one of Turkey’s largest gold companies). Prosecutors say the suspects formed 24 shell companies to conduct sham gold export transactions, exploiting a government incentive program that pays a 3% subsidy on export revenue. Over a period, these entities carried out about $543 million in fictitious exports and fraudulently claimed roughly $12 million in state export subsidies. Essentially, they manipulated trade data (by “exporting” gold that had been imported and minimally processed) to siphon off public funds. This large-scale scheme – uncovered by financial crime investigators – shows the nexus between corporate fraud and public-sector corruption, as it involved abuse of a government program. An emerging markets analyst noted that the sudden flurry of raids (including this case) appears aimed at projecting a tougher stance on corruption, amid public skepticism that enforcement has been too lenient or politically selective.
• Municipal Tender Rigging Probes: A series of investigations in 2025 targeted local governments run by opposition parties, raising questions about political motives. In Ankara, 13 people were detained over allegations of rigged public tenders and abuse of office related to concerts organized by the metropolitan municipality. Officials claim improper procurement caused some 154.4 million TL (~$3.7 million) in losses to the municipality between 2021–2024. Similarly, in March 2025, Istanbul’s popular opposition mayor, Ekrem İmamoğlu, was arrested and jailed on corruption charges linked to city projects. Critics and the opposition CHP party have denounced these cases as politically motivated, noting that opposition-held cities face intense scrutiny while allegations involving pro-government officials are often ignored. The government insists the probes are legitimate, but many observers see them as selective enforcement – using anti-corruption laws as a tool to sideline political rivals. This climate creates a paradox: while corruption in procurement is widespread, enforcement actions have disproportionately hit opposition figures, underscoring the need for impartial application of the law.

These case studies underscore both the ingenuity of fraud schemes (from tender manipulation to complex subsidy fraud) and the uneven enforcement landscape. For legal practitioners, they offer cautionary tales on how corruption risks can manifest within organizations, and why rigorous compliance measures are vital even when official enforcement may be unpredictable.

Legal Framework and Enforcement Trends (Türkiye’de Yasal Çerçeve ve Uygulama Eğilimleri)

Statutory Framework: Turkey’s legal arsenal against corruption and fraud is comprehensive on paper. The Turkish Criminal Code (Türk Ceza Kanunu) criminalizes bribery (rüşvet) – including active and passive bribery of domestic or foreign public officials – as well as embezzlement, extortion, bid-rigging, money laundering, and abuse of office. Amendments in the last decade expanded the definition of bribery and closed some loopholes (for example, individuals acting on behalf of companies or professional organizations can be deemed “public officials” if they perform public services). Punishments are stringent: individuals convicted of bribery face 4 to 12 years imprisonment, and those who facilitate or agree to bribery are similarly penalized. Additionally, under Article 253 of the Criminal Code, corporate entities cannot be directly criminally convicted but are subject to severe “security measures” – including confiscation of illicit gains, cancellation of licenses/permits, and blacklisting from public tenders. Other key legislation includes the Law on Asset Declaration and Fight Against Bribery and Corruption (Mal Bildirimi ve Rüşvetle Mücadele Kanunu) which mandates asset disclosures by officials and regulates gifts, and the Public Procurement Law which sets the rules for tenders. Notably, Turkish law makes no clear distinction between a permissible gift and a bribe – any gift of value that could influence an official’s duty is prohibited, with no minimum threshold.

Recent Legislative Developments: In terms of new laws or reforms as of 2024–2025, progress has been limited. No major anti-corruption legislation has been enacted in recent years, despite Turkey’s international commitments (e.g. under the UNCAC and Council of Europe conventions). The European Commission’s 2024 report on Turkey noted no new reforms or strategies were adopted to strengthen the anti-corruption framework. Some incremental changes have occurred – for instance, corporate fines for foreign bribery were substantially increased and state-owned enterprises were brought under bribery laws in 2023. However, these improvements have yet to translate into actual enforcement. Key gaps in the legal framework persist: whistleblower protection legislation has not been introduced (a recommendation Turkey has neglected for 17 years according to the OECD), and definitions in the Penal Code (such as the scope of “active bribery”) still fall short of international standards. Crucially, conflict-of-interest rules and financial disclosure systems for public officials remain weak, creating grey zones that can be exploited for corrupt ends.

Enforcement and Institutions: The enforcement landscape in Turkey is the critical weak link. Several structural issues impede effective anti-corruption action:

• Lack of Independent Oversight: Turkey does not have a dedicated, independent anti-corruption agency. The closest body – the State Supervisory Council under the Presidency – lacks functional independence and a specific mandate to lead anti-corruption efforts. There are no specialized anti-corruption prosecutors or courts. This means corruption cases are handled by general law enforcement and judiciary, which are susceptible to hierarchical and political pressures.
• Political Influence and Impunity: Observers consistently highlight undue political influence over investigations and prosecutions. High-level officials and politically connected individuals enjoy de facto impunity in many cases. Immunity provisions shield members of parliament and certain public officials from prosecution unless and until those immunities are lifted by political bodies – a step rarely taken if the individuals are allied with the ruling establishment. The aftermath of the 2013 graft probe is instructive: prosecutors and police who pursued ministers in a corruption inquiry were purged and the cases dropped. Since then, no significant corruption probes involving top officials have proceeded. This climate has understandably fostered cynicism about the rule of law.
• Selective Enforcement: As seen with the municipal cases, enforcement actions are often selective. Opposition-affiliated entities face aggressive investigations, while allegations around pro-government circles are frequently dismissed or never launched. Such asymmetry in enforcement undermines the credibility of anti-corruption efforts. It also exposes companies to unpredictable risks – a business could be targeted for scrutiny not purely based on wrongdoing, but due to political currents. On the other hand, those with patronage may evade accountability. This uneven playing field complicates compliance planning, since the true risk of enforcement may depend on political factors as much as legal merit.
• Low Conviction Rates: The overall track record of corruption prosecutions is poor. Convictions in corruption and fraud cases remain relatively rare compared to the scale of the problem. For example, Turkey, as a party to the OECD Anti-Bribery Convention, has barely prosecuted any cases of foreign bribery – “no individual or company has ever been held liable for bribing foreign officials” as of 2024. Domestic corruption cases fare little better; many investigations stall or result in acquittals. According to Turkey’s own gendarmerie, hundreds of corruption-related incidents are identified annually, but few lead to meaningful sanctions. The deterrent effect of the law is thus limited when offenders calculate that the chance of punishment is low.
• Institutional Checks and Audits: Internal and external auditing bodies, such as the Court of Accounts (Sayıştay), do conduct audits and report irregularities (indeed, some recent scandals were initially flagged by auditors). However, the follow-up on audit findings is inconsistent. Civil society organizations that promote transparency and investigate corruption have been under pressure, limiting external oversight. Media reporting on corruption has also been curtailed by censorship and legal harassment, reducing another avenue of accountability. All these factors contribute to an environment where corporate fraud and public-sector corruption can thrive unless companies self-police effectively.

Turkey’s legal framework formally aligns with many international standards – bribery is illegal (rüşvet suçu), public tenders are regulated, corporate fraud is punishable – but the political will and institutional capacity to enforce these laws are lacking. Legal professionals must navigate a system where laws exist but may be unevenly applied. This places a greater onus on companies and compliance officers to uphold ethical standards internally, rather than relying on government enforcement as a backstop.

Implications for Compliance Strategy and Corporate Governance (Uyum ve Kurumsal Yönetim İçin Çıkarımlar)

Given the current climate, organizations operating in Turkey’s market should be proactive and vigilant in their compliance and corporate governance efforts. The blend of high corruption risk and inconsistent enforcement creates a tricky dual reality: on one hand, unethical practices might seem normalized (“everyone does it” attitudes, facilitation payments, etc.), yet on the other hand, companies can suddenly find themselves in legal trouble or reputational scandals when corruption comes to light or political winds shift. Here are key implications and considerations for compliance and governance:

• Strengthening Internal Controls: Companies should assume that regulatory oversight may miss red flags, so robust internal controls are the first line of defense. This includes stringent financial controls, procurement oversight committees, and separation of duties in high-risk processes. For example, the tender-fraud cases show the need for controls against contract splitting and fake invoicing. Implement approval workflows that detect if multiple small contracts are being issued below tender thresholds to the same vendor (a red flag for circumvention). An empowered internal audit function (iç denetim) is critical to regularly review procurement transactions and vendor relationships for anomalies. In Turkey’s environment, corporate boards must take an active role in overseeing anti-fraud controls as part of their fiduciary duty.
• Comprehensive Compliance Programs: It is vital for companies – especially those in infrastructure, construction, energy, and other government-facing sectors – to develop a comprehensive compliance program (kapsamlı uyum programı kurması) tailored to corruption risks. This means having clear anti-bribery policies, gift and hospitality registers, third-party due diligence procedures, and regular employee training on ethical conduct. The program should be bilingual if needed (Turkish/English) and account for local practices (e.g. how to handle common gift-giving situations without violating policy). Given the lack of whistleblower protections nationally, companies should internally foster a safe whistleblowing mechanism (ihbar hattı) where employees can report suspicions anonymously without fear of retaliation. A strong compliance program not only helps prevent misconduct but also serves as a mitigating factor if authorities do investigate the company.
• Third-Party and Supplier Due Diligence: Public tenders often involve agents, local partners, or subcontractors. Conduct thorough due diligence (durum tespiti) on all third parties – especially those interacting with government officials on your behalf. Screen for politically exposed persons (PEPs) among partners to understand if a counterparty’s political ties could pose corruption risks. The use of shell companies in the subsidy fraud case is a cautionary tale: always verify the beneficial ownership of entities in your supply chain. Leverage available tools – for instance, specialized public procurement due diligence tools are recommended to mitigate risks in Turkey’s tender processes. These can help flag if a certain bidder or intermediary has a history of suspicious dealings.
• Navigating the “Unwritten Rules”: Compliance officers must be aware of the local business culture. In Turkey, relationship-based dealings are common, and there may be pressure to provide “facilitation” gifts or informal payments to speed up bureaucratic processes (even though such payments are illegal). Companies should establish clear guidelines that no bribes or undue gifts are allowed, while training staff on polite ways to resist or deflect such requests. At the same time, maintain a policy of documentation and transparency for any interaction with officials – e.g. meeting logs, strict limits on travel or hospitality expenses for public officials – to protect your organization from allegations of misconduct. Remember that facilitation payments and gifts, although frequent in practice, are outlawed, so your policy should reflect zero tolerance.
• Monitor Legal and Political Developments: The regulatory environment can change, and enforcement can intensify unexpectedly (sometimes for political reasons). Stay updated on Turkish legal developments – for instance, if a long-discussed whistleblower protection law finally gets enacted or if public procurement regulations are reformed to close exemption loopholes. Also, be aware of the political context: a company caught between political factions can become a target. Strong corporate governance (kurumsal yönetim) principles – such as having independent directors, transparent ownership structures, and audit committees – can make it easier to demonstrate that your business is managed with integrity regardless of external pressures. If your company is multinational, also remember that laws like the U.S. FCPA or UK Bribery Act could apply to corrupt acts in Turkey, providing an additional layer of enforcement even if local action is lacking.
• Incident Response and Remediation: Despite best efforts, if a corruption issue is discovered within your organization, respond swiftly. Conduct an internal investigation (with legal counsel involvement) to understand the scope of the issue. Cooperation with authorities can be delicate in Turkey’s context, but outright cover-ups are dangerous – regulators do appreciate self-reporting of fraud in some cases. Demonstrating remediation actions (firing culpable employees, improving controls, voluntary disclosure when appropriate) can help reduce sanctions. It’s also wise to have a crisis communication plan; corruption scandals can become public and damage a company’s reputation among clients and the broader public, so a candid and proactive communication strategy is important.

Best Practices to Mitigate Corruption and Fraud Risks (Riskleri Azaltmak için En İyi Uygulamalar)

To summarize the guidance for legal and compliance professionals, here is a checklist of best practices that can help mitigate the risks of corruption in public procurement and corporate fraud in Turkey:

• Embed Ethical Culture: Ensure top management consistently communicates a zero-tolerance stance on bribery and fraud (“tone at the top”). Develop a code of ethics (etik kurallar) in Turkish and English that explicitly prohibits unethical shortcuts in procurement processes.
• Risk Assessments: Conduct regular corruption risk assessments focusing on areas like procurement, licensing, and interactions with government officials. Identify where your operations are most exposed (e.g. use of agents, cash handling, large tenders) and prioritize those for enhanced controls.
• Due Diligence on Partners: Before entering joint ventures, partnerships or major supply contracts, perform background checks on the other party’s reputation and political ties. Avoid or closely monitor third parties who have red flags such as prior fraud allegations or connections to officials that could imply conflicts of interest (çıkar çatışması).
• Strengthen Procurement Procedures: Implement transparent procurement procedures internally even if not required by law. For example, use competitive bidding for significant purchases and document the justification for any sole-source awards. Set up a tender committee to review and approve supplier selection, and rotate members to prevent collusion. Use e-procurement tools and the government’s EKAP platform for tenders to increase transparency and audit trails.
• Segregation of Duties: Make sure no single employee has end-to-end control over financial transactions. The person requisitioning or managing a contract should not be the one approving payments. Dual signatures and multi-department oversight (e.g. procurement, finance, legal) for big expenditures can deter fraud schemes.
• Training and Awareness: Provide practical training to employees on how corruption might present in their daily work – for instance, how to respond if a public official hints at a bribe, or how to spot a fake invoice. Use real scenarios (anonymized from cases like YEE or others) to illustrate the consequences. Regularly refresh training, especially for high-risk roles like procurement officers, project managers, and sales staff dealing with public clients.
• Gift & Hospitality Controls: Enforce a strict gifts and entertainment policy. All gifts above a modest threshold (or any gift related to a pending business decision) should be either declined or recorded and surrendered. Maintain a gift register and require approval for any business hospitality offered to officials. This protects the company and employees from accusations of bribery. Encouraging a culture of “when in doubt, ask Compliance” can empower staff to handle gray areas correctly.
• Whistleblower Mechanisms: Set up confidential reporting channels (a hotline, secure email, or third-party service) for employees and even suppliers to report suspicious behavior. Since Turkish law offers limited whistleblower protection, assure potential whistleblowers internally that their identity will be protected and retaliation is forbidden. Each tip should be evaluated seriously and, when credible, investigated by independent personnel.
• Monitor and Audit: Use data analytics where possible to monitor transactions (for example, flag if multiple invoices just under approval limits are submitted by the same vendor – an indicator of splitting). Periodically audit high-risk operations – surprise audits in procurement departments can be effective. Engage external auditors or forensic experts for deep-dive reviews if you operate in an especially high-risk area.
• Stay Informed and Adapt: Keep abreast of any changes in Turkish laws or enforcement patterns. Participate in industry compliance forums or consult legal updates (for instance, any new regulations from the Public Procurement Authority or guidance from MASAK, the Financial Crimes Investigation Board). Adapt your compliance program to new requirements – e.g. if Turkey moves toward requiring beneficial ownership transparency or if new anti-fraud technologies (like e-invoicing mandates) are introduced, integrate those into your controls.

Implementing these best practices can significantly reduce the likelihood of your organization falling victim to or unwittingly participating in corrupt activities. While achieving full compliance in a challenging environment requires commitment, it ultimately protects the business’s long-term interests. Companies that operate with integrity are less likely to face sudden legal crises, are more competitive in international markets, and contribute positively to improving the overall business climate in Turkey.