TÜRKİYE ORTA ASYA HABER KKUORDİNATÖRÜ

IFJ-INTERNATIONAL FEDERATION OF JOURNALIST, Rule of Law and Compliance Resilience: Türkiye's Journey Beyond Corruption and Sanctions August 28, 2025 Introduction The events of August 2025 have once again placed corruption and governance issues at the center of Türkiye's compliance agenda. Recent developments, from the detention of opposition-leaning mayors to the disclosure of fake diplomas through the e-Government system, reveal systemic weaknesses in both institutional oversight and judicial independence. These scandals have intensified scrutiny not only within Turkey but also among international regulators, who view weak enforcement as a compliance risk with global implications. A recent professional survey confirms this perception: 41% of respondents identified weak rule of law as the top compliance risk for businesses in Türkiye, surpassing concerns about sanctions, political interference, or erosion of public trust. This understanding highlights a fundamental truth: sanctions and corruption risks cannot be fully addressed without a credible and impartial rule of law framework. For companies, investors, and policymakers, a rule of law deficit leads to higher compliance costs, unpredictable sanctions, and reputational damage. For Turkey, it undermines credibility in international forums and increases vulnerability to sanctions enforcement. The path forward requires more than reactive investigations and closely watched detentions. Rebuilding trust requires systematic reform of legal and institutional frameworks to depoliticize sanctions and align compliance standards with international expectations. Current Compliance Challenges in Türkiye The recent surge in corruption investigations has led to a complex compliance problem. While authorities present these actions as a demonstration of commitment to accountability, the concentration of investigations in opposition-governed municipalities has raised concerns about selective enforcement. This perceived politicization undermines trust in the judicial process and signals to businesses that compliance risks are linked not only to legal violations but also to political dynamics. At the same time, the fake diploma scandal exposed critical weaknesses in digital governance and identity verification within government systems. The ability to manipulate e-government records for personal and financial gain has eroded trust in public institutions and exposed how governance failures can lead to broader compliance risks, such as procurement irregularities and licensing fraud. Internationally, these weaknesses increase the risk of sanctions. When oversight is inconsistent and judicial independence is questioned, global regulators are more likely to impose stricter due diligence on Turkish-based entities. This creates obstacles to trade, financing, and supply partnerships, particularly in sensitive sectors such as defense, aerospace, and strategic goods. Therefore, compliance has a twofold impact: Domestically, businesses must cope with uncertainty in enforcement and public procurement; internationally, they must contend with reputational risks and intensified external scrutiny. Both dimensions support the conclusion that unless the rule of law is strengthened, corruption investigations will remain reactive measures that fail to address the structural risks undermining Türkiye's compliance environment. Structural Gaps in the Rule of Law Framework The compliance challenges Türkiye faces stem from persistent structural gaps that weaken the rule of law and limit the effectiveness of anti-corruption practices. These gaps not only weaken domestic accountability but also increase international compliance risks by signaling institutional fragility to global partners and regulators. Judicial Independence remains a major concern. Courts and prosecutors are perceived as vulnerable to political influence, particularly in high-profile corruption cases. The selective targeting of opposition municipalities reinforces the perception that judicial outcomes are shaped by political considerations rather than the impartial application of the law. This perception undermines trust in legal processes and discourages businesses from pursuing legal action to resolve compliance disputes. The lack of corporate accountability further exacerbates the problem. Current provisions primarily focus on individual liability and exclude companies from the scope of meaningful criminal sanctions such as bribery, bid rigging, or sanction evasion. This gap allows fraud to become institutionalized within corporate structures without exposing the organization itself to deterrent penalties.