3.1. General restrictions and duties

Persons subject to anticorruption regulations are prohibited:

The Law on Public Service (Article 19) sets the following limitations related to the performance of public service with regard to both state authorised persons and public servants:

• to engage in any other paid activity, except academic, research and creative work;
• to engage in entrepreneurial activity personally or through entrusted persons;
• to use state property and official information for purposes not related to the service;
• to employ for personal benefit the services of citizens and legal entities in connection with the discharge of official duties.

The Law “On Restriction of Joint Service of Relatives in the Organs of State Power and Government” prohibits relatives to serve in the same governmental entity or to be interdependent from each other in any governmental entities.

Due to poor anticorruption regulation the list of restrictions and duties is limited. However, we highly recommend checking with local counsel in case of any anticorruption compliance concerns in order to avoid reputational damage and personal liability of a company’s officers.

3.2. Gifts and other benefits  

Acceptance of gifts by public servants is not explicitly prohibited by the legislation.  The definition of gifts and their permissible value are not clearly described by law.  A gift of any value can be considered a bribe if the gift is in exchange for an action or omission in favour of the offeror.

Gifts carrying a company logo are less likely to be characterised as bribes since these items generally cannot be resold. However, if they were given in exchange for an action or omission in favour of the offeror, then it is still possible that they may be considered a bribe.

There are no clear regulations that establish limits on the value of a gift or the number of times that a gift may be given.  The only monetary limit established under the legislation of Turkmenistan is a requirement to report gifts, the value of which exceeds ten times the minimum monthly wage (total value 500 Turkmen manats (175 USD) per reporting period received by an individual from a legal entity under Article 187 of the Tax Code of Turkmenistan (2004) for income tax purposes.  The current minimum monthly wage in Turkmenistan is 50 Turkmen manats, therefore gifts valued in excess of 500 Turkmen manats must be reported for tax purposes. (Note: the minimum monthly wage is subject to change).

There are no rules, regulations or otherwise established standards with regard to business courtesies. In practice such courtesies are not limited to those held in conjunction with business meetings, but may be appropriate in connection with other events, such as national holidays, anniversaries, presentations, training or social events.

The only monetary or other value limitation arising is set out in Article 158 of the Tax Code of Turkmenistan, which establishes the tax deductions that legal entities may take with regard to such expenditure.  Article 158 allows for deductions for “representation costs related to official receptions and services provided to representatives of other legal entities taking part in negotiations for the purpose of establishing and developing cooperation” to the extent that such costs do not exceed 1% of gross income.  This provision is equally applicable to receptions and services provided to governmental entities.

The provision of business courtesies to public servants, especially with respect to international and local travel and lodging, should be approached on a case-by-case and agency-by-agency basis.  Generally, the best practice to minimise risk is to request formal approval from the superior governmental official or agency.  Such request should be made in writing and include a detailed explanation of the programme for the trip and the expenses which are to be covered by the host.

It is permissible to provide meals and refreshments to public servants on or off company premises which are relevant to business meetings with no monetary limitations, as long as such meals are not granted in exchange for an act or omission in favour of the offeror.  Meals which are not related to business are also allowed.  There are no requirements or customs and traditions suggesting that the cost of such meals must be “reasonable.”  As a result, the host may decide on type of food or drinks to offer, as long as the intent is not to improperly influence the official.

As mentioned above the only monetary limitation relates to the deductibility of costs for tax purposes.

Pursuant to local practice it is permissible to pay for entrance to and hospitality at entertainment establishments, sports and cultural events or other group events incidental to business meetings, so long as such entertainment is not granted in exchange for an act or omission in favour of the offeror.  Acceptance of entertainment by public officials is generally widespread in Turkmenistan. The host is permitted to determine the type of entertainment he/she would like to offer, so long as the intent is not to improperly influence the official.  Officials are free to accept entertainment within the limits set by their superiors.

Facilitation payments to a public official in Turkmenistan will be considered a bribe, unless such payments are officially permitted.  For example, a payment made to speed up an administrative process, such as obtaining an entry visa issued by the State Migration Service of Turkmenistan in an urgent manner.

It must be noted that the Resolution of Assembly of the Supreme Court of Turkmenistan "On Judicial Practice on Cases of Bribery", dated 28 April 1997, No. 5, instructs courts of justice to take into consideration that money, securities, material assets as well as paid services which are rendered free of charge (e.g. recreational or tourist tours, travel tickets, performance of repair, restoration, construction and other works) can constitute a bribe.

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