The recently revamped New Turkish Penal Code (TPC) entered into force on 1 June 2005, mainly as a result of Turkey's efforts to harmonize its legislation with that of the European Union. The TPC holds that legal entities cannot be subject to criminal liability. The "criminal liability is personal" principle is one of the cornerstones of modern criminal law, and is likewise sovereign under Turkish law. This principle is regulated under both the Constitution of the Turkish Republic and the TPC.
On the one hand, according to Article 20/I of the TPC, no one shall be held responsible for the acts of another person. On the other hand, according to Article 20/II of the TPC, while legal entities shall not be sentenced to criminal sanction, they can be subjected to security measures. For security measures to be applied to legal entities, TPC Article 60 dictates that the crimes for which security measures shall apply must be specifically defined in the TPC. The text of Article 60 and the reasoning of Article 20 also limit qualification of legal entities to private law legal entities only, and exclude public law legal entities from the coverage of Article 20/II. Accordingly, under the TPC, a legal entity is a private law legal entity and legal entities may be subjected to certain security measures under Article 60.
There are two principal security measures provided for under the TPC: (1) the cancellation of a license enabling the legal entity and/or its management and/or representatives to commit a crime by abusing the authority or privileges granted by such license;1 and (2) seizure of the goods utilized in a crime committed by the representatives of a legal entity, or seizure of the goods received as a result of such crime and seizure of monetary benefits resulting from, or provided for, the commission of a crime.
The judge may not rule in favor of these measures in situations where taking these measures would lead to more severe consequences than the crime committed has caused. For example, if these measures would cause the unemployment of a great many people, the court – proceeding from the proportionality principle – will not order these measures.
a. Cancellation of Activity License
Three conditions need to be met for the cancellation of activity license. First condition is that a license must have been issued to the legal entity to be active in a certain subject area. Second condition is that, there should be deliberate crime committed through the abuse of power entrusted to the legal entity giving rise to a favorable result for the benefit of legal entity. Third condition is that, the bodies and the representatives of the legal entity should contribute to the committing of that crime.
The provisions of TPC concerning seizure relate to special seizure circumstances. These provisions regulate seizure circumstances where there is property directly related to the crime, such as property specifically allocated to the committing of a crime or resulting from the committing of a crime. Seizures under the TPC are considered under two headings, i.e., property seizure and earning seizure.
- Property Seizure
According to article 54 of the TPC, property seizure is the transfer of property related to crime to the State. Property planned for use in the commission of a crime would be seized in cases where it poses a threat to public safety, public health or the public ethics. If the seizure of such property is impossible, then seizure of monetary funds equivalent to the value of such property would be seized.
- Seizure of Gains
According to Article 55 of the TPC, seizure of gains is seizure of the financial benefits resulting from the crime. According to the reasoning of the TPC, the main purpose behind this rule is to prevent gains from committing crimes. As a result, earnings seizure has turned out to a sanction that features a very effective deterrent against crimes such as money laundering, narcotics or drug trafficking, racketeering, smuggling and bid rigging for economic benefit. If seizure of such gain has become impossible as a result of consumer spending, or destruction, the money equivalent of such gain would be seized.
As we have stated earlier, the Constitution of the Turkish Republic and Article 20/1 of the TPC provide that criminal liability is personal and that no one shall be held responsible for the acts of another individual. Thus, the directors or managers of a company should not, in principle, be held criminally liable for the offences of another director, manager or employee of the company. However, Article 205 of the Turkish Commercial Code states that "for the losses caused by the inauthenticity of certificates and other documents, shareholders and those who cooperate in issuing such documents and certificates shall be jointly and severally liable and shall be sanctioned by the TPC." Just as the TPC provides an exception for the criminal activity of legal entities in the form of security measures, so the TPC provides – in specific cases – for situations in which a company's officers and directors can be held criminally liable for offences committed by other individual officers or directors.
1. Other examples of security measures that may be imposed on legal entities are also regulated within the continuing provisions of the TPC under Articles 54 and 55, including confiscation of property and confiscation of revenues.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.