Administrative Fines on Legal Entities

Administrative fines on legal entities allow a company to be sanctioned for certain offences committed by persons acting on its behalf (Misdemeanours Law Art. 43/A). In Turkish law, where corporate criminal liability does not exist, it is one of the most important sanctions applicable to companies.

Which Offences?

The offences listed in the Misdemeanours Law are:

• Fraud and aggravated fraud (Turkish Criminal Code Arts. 157-158),
• Bid rigging and rigging the performance of obligations (Arts. 235-236),
• Bribery (Art. 252),
• Money laundering (Art. 282),
• Embezzlement under the Banking Law,
• Offences under the Anti-Smuggling Law.

Conditions

• The offence must be committed by an organ or representative of the company, or by a person who, although not an organ or representative, acts within the company’s activities.
• The offence must be committed for the company’s benefit.
• The act must not constitute another misdemeanour carrying a heavier sanction.

Fine and Procedure

The law sets the minimum and maximum of the fine; these limits are increased each year by the revaluation rate. The fine is imposed by the court with jurisdiction over the relevant offence. The company is therefore directly affected by the outcome of the criminal proceedings and should be represented to protect its interests.

What Can the Company Do?

• Document compliance measures such as an anti-bribery and corruption policy, gift and hospitality rules and business partner checks,
• Start an internal investigation without delay when a suspicious situation arises,
• Preserve evidence showing that the offence was committed not for the company’s benefit but against it and to its detriment.

For managers’ personal liability, see Criminal Liability of Managers. For remedies against other administrative fines, see Challenging Administrative Fines.