Background
As a part of the fight against the terrorist organization that orchestrated the attempted coup – the Fethullah Terrorist Organization (“FETO”) – the Turkish Government, under the constitutionally granted authority, has announced a state of emergency and accordingly issued measures and effective legislation for the expeditious elimination of terrorist threats.
Purposes
Measures and legislation undertaken under the state of emergency include discharging certain members in state and private institutions; closing and seizing certain private institutions linked to the FETO; reorganizing state institutions (Turkish Armed Forces, etc.); and ceasing cash flow into companies and organizations that have links to the FETO.
What companies need to do
1. Relationship with third parties
Companies’ relationships with third parties (customers, suppliers, consultants and other business partners) have become a heightened compliance risk area. Within this scope, companies should exercise great care when entering into relationships with third parties as well as the management of current relationships and conduct scrupulous third party due diligence. Companies should follow and consistently check the list of the real persons, companies and organizations determined by the Council of Ministers to have FETO links.
2. Dawn raid policy
Companies should consider immediately adopting a policy designating the legal process to be followed by their employees in case of a dawn raid, as well as provide these employees with training regarding their duties in such a raid.
3. Internal compliance due diligence
Considering that numerous judges, prosecutors and lawyers were arrested for their links to the FETO, improper conduct may have occurred in past transactions or legal proceedings. Therefore, it is recommended that companies review whether there were any issues related to their past transactions license applications or approvals with the governmental authorities.
Certain law firms have been subject to dawn raids due to allegations of ties to the FETO. Companies that received legal consultancy services from such law firms are particularly advised to check their assignments with these law firms.
Conclusion
During and after the state of emergency, private companies should carefully adopt and implement compliance rules within the corporate structure more diligently than ever in order to abstain from being linked to any real persons, companies and organizations related to the FETO and similar terrorist organizations.
