CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in Türkiye

Under Turkish law, there is a general obligation to report criminal offences. Pursuant to Article 278 of the Turkish Criminal Code (“TCK”), any person who becomes aware of an offence that is being committed or has been committed is required to report it to the competent authorities. Therefore, failure to report an offence constitutes a separate criminal offence, punishable by up to one year of imprisonment or a judicial fine. This obligation applies particularly to company directors and employees; reporting offences committed in the course of company activities is mandatory.

Certain offences committed within the scope of company activities, such as bribery and corruption, money laundering, and tax evasion, directly affect public order and are subject to ex officio investigation by the public prosecutor, without the need for a complaint. The reporting of such offences is mandatory, and failure to report them may result in criminal liability for both the perpetrator and the person who fails to report the offence, in line with the general reporting rule mentioned above. Furthermore, beyond this general rule, banks are under a specific obligation to report counterfeit currency upon detection.

The following individuals are required to fulfil the reporting obligation for offences committed within a company: members of the board of directors, internal auditors, human resources managers, and financial managers. In addition, employees may be required to notify their superiors or internal audit units under internal procedures or company policies. In any case, they are obliged to report suspected offences in accordance with Article 278 of TCK mentioned above.

The authority to which the offence should be reported depends on the type of the offence. The public prosecutor and the police are the competent authorities for general offences. Reports concerning money laundering and terrorism financing must be made to the Financial Crimes Investigation Board, tax evasion and financial offences to the Tax Inspection Board, and bid-rigging offences to the Public Procurement Authority.

Under Turkish law, failure to report criminal offences may result in criminal, civil, and administrative sanctions for both the individual who fails to report and the company. A person who becomes aware of an offence and fails to report it to the competent authorities may face up to one year of imprisonment. Furthermore, if the person conceals the offence or prevents detection of the offender's actions by failing to report them, this may be considered as aiding and abetting and may lead to additional penalties.

Failure to report specific offences may have distinct consequences for the company. Failure to report money laundering or terrorism financing is punishable by an administrative fine and prohibition from conducting transactions. Failure to report tax evasion or forgery of documents may result in tax penalties and imprisonment for those responsible. Providing misleading information or failing to report activities that influence the outcome of a tender may lead to the company's exclusion from public tenders.

Under Turkish law, reporting a criminal offence may give rise to certain legal and criminal risks for the reporting person and the company, particularly if the report is found to be untrue.

If the allegation proves to be unfounded, the reporting person may be held liable for defamation and sentenced to between one and four years of imprisonment. Additionally, the person who suffers damage due to the false accusation may file a claim for compensation. Knowingly making a false statement during the reporting process may result in criminal liability for false denunciation. Furthermore, if the confidentiality of the investigation is breached during the process, the reporting person may face between one and three years of imprisonment.

In addition, if a company employee is dismissed as a result of an incorrect or malicious report, the employee may have the right to claim job security and compensation under labour law. Providing false or misleading information regarding financial offences or tax liabilities may lead to the imposition of an administrative fine and the revocation of licences.

Under Turkish law, companies and individuals who participate in or facilitate the commission of a crime may incur criminal liability for aiding and abetting, incitement, or complicity. A person who participates in a crime is punished as a principal offender, while a person who aids in the commission of a crime is subject to a reduced penalty. An employee or manager who directly or indirectly assists in the commission of an offence within the company may be held criminally liable under these provisions.

If a crime is committed on behalf of or for the benefit of a company and the company gains direct financial benefit from the offence, the court may order the confiscation of the proceeds of the crime. Furthermore, if a private legal entity operating with the authorisation of a public authority directly benefits from the offence, the court may decide to revoke the entity's authorisation or licence.