Corporate Criminal Liability
Also known as: Criminal Liability of Companies, Security Measures for Legal Entities, TCK 60, Corporate Penalties, Tüzel Kişilerin Ceza Sorumluluğu
Author Ali Gül
In short
The rule in Turkish law that companies cannot be given criminal penalties, but that security measures such as revocation of operating licences and confiscation, and administrative fines, may be imposed on a company for certain offences committed by its organs or representatives for its benefit.
Under Turkish law, criminal liability is personal; criminal sanctions such as imprisonment or criminal fines cannot be imposed on legal entities (Turkish Criminal Code Art. 20). This does not mean companies are unaffected by crimes. Security measures and administrative fines are imposed on companies in the cases provided by law.
Security Measures
Under Art. 60 of the Turkish Criminal Code:
- Revocation of operating licence: Where a company operating under a licence granted by a public authority is convicted of intentional offences committed for its benefit, with the participation of its organs or representatives, by abusing the powers granted by that licence, the licence is revoked.
- Confiscation: Assets used in or obtained from the offence are also confiscated from the company where the offence was committed for its benefit.
These measures apply only to offences expressly specified by law, for example bribery, aggravated fraud, money laundering and cybercrimes. The court may decline to impose a measure where it would have consequences disproportionate to the act.
Administrative Fines
Art. 43/A of the Misdemeanours Law provides for an administrative fine on a company where its organ or representative, or a person acting within it, commits certain offences for its benefit; see Administrative Fines on Legal Entities.
Managers
For offences committed on behalf of a company, criminal liability rests with the natural persons who committed or participated in the act; see Criminal Liability of Managers.
Protecting the Company
A company is not only exposed to risk in criminal cases; it may also be a victim and intervening party in offences committed by employees or third parties. Compliance programmes against bribery, corruption and fraud, business partner checks and internal investigation mechanisms are important both for preventing offences and for proving that the company exercised due care.
Frequently Asked Questions
Can a company receive a prison sentence or criminal fine in Turkey?
No. Under the Turkish Criminal Code, criminal liability is personal and criminal sanctions cannot be imposed on legal entities. However, security measures and administrative fines may be imposed on a company in the cases provided by law.
When can a company receive an administrative fine?
If a company's organ or representative, or a person acting within the company, commits for the company's benefit one of the offences listed in the Misdemeanours Law, such as fraud, bribery, bid rigging, money laundering or smuggling, an administrative fine may be imposed on the company.
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