The Law on the Prevention of Financing for the Spread of Weapons of Mass Destruction ("Law") has been published in the Official Gazette dated 31 December 2020 numbered 31351.
The general aim of the Law is to meet conditions in the fight against money laundering and the financing of terrorism in several different areas in light of the 2019 FATF (Financial Action Task Force) report and UN Security Council (UNSC) resolutions.
Within this context, the new Law brings many changes impacting many laws with one of the most significant amendments being made to Article 43/A of the Misdemeanours Law (No. 5326), regarding the administrative liability of legal persons.
In Turkish law criminal responsibility is deemed as personal (for real persons), while legal persons (corporations) are not included in the scope of criminal liability. However, corporations can be subject to security measures and administrative fines. Article 43/A of the Misdemeanours Law regulated administrative fines for legal persons provided that a real person entitled to represent the legal person committed a crime and the legal person received a monetary benefit for specific crimes including bribery.
What has changed?
With the latest amendments made to Article 43/A of the Misdemeanours Law, a new category of crime has been added, and the list of crimes subject to the execution of administrative fines has been expanded. There has also been a dramatic increase in the upper limit of administrative fines that can be imposed on legal persons:
1) The upper limit of administrative fines has increased 25 times from TRY 2,000,000 to TRY 50,000,000. The minimum fine limit remains at TRY 10,000, however, it has been stipulated that the amount of a fine will be no less than twice the monetary gain of a crime.
2) Administrative fines may be imposed on corporations even without the prerequisite to complete an investigation or prosecution of real persons representing (or acting for) the corporations.
3) Relevant Crimes Subject to Administrative Fines:
- Production and trade of narcotics and psychotropic substances (recently added)
- Rigging a bid
- Rigging the performance of fulfilment
- Laundering the proceeds of crime
- Offences of embezzlement defined in the Banking Code No. 5411
- Offences of smuggling defined in the Anti-Smuggling Law No. 5607
- Offences defined in Appendix article 5 of the Oil Market Law No. 5015
- Offences of financing of terrorism defined in the Law on Prevention of Terrorist Financing No. 6415 (recently added)
In today's world, where cross-border crime is becoming more widespread, there is no doubt that "the fight against corruption" is one of the most discussed issues in the international dimension. With the amendments made to the Misdemeanours Law in Turkey, the importance of taking concrete steps in the fight against corporate corruption has once again been emphasized. However, when taking into consideration the impact of the new amendments, such as larger administrative fines and the facilitation of punishment for corruption, legal persons should prioritize the establishment of compliance mechanisms to prevent and detect violations that may arise from the changes.
With these new amendments, the scope of 'liability' for legal persons has been expanded by adding a new category of crime and facilitating a way to impose administrative fines. It is clear that these changes have aggravated the liability of legal persons indicating the need for an anti-corruption compliance mechanism to strengthen the fight against corruption. As a result, a proactive, prevention strategy is a must to reduce the risk of corruption and bribery.
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.