Evaluation of Kickback Practices under the Turkish Criminal Law

Introduction

Kickbacks constitute a form of bribery and corruption whereby a person involved in approving purchases or contracts implicitly agrees to receive an unauthorized benefit from a vendor in return for awarding or facilitating business.[1] As kickback schemes typically involve collusion linked to procurement or contracting processes, they are most associated with employees operating within purchasing or supply-chain functions

Examination of Kickbacks under TCC

Turkish Criminal Law does not regulate “kickbacks” as an independent or expressly defined criminal offence. Nevertheless, depending on the factual circumstances, kickback-related conduct may fall within the scope of various offences regulated under the Turkish Criminal Code (“TCC”). These potential qualifications are examined below with reference to the relevant offence types.

Evaluation under Article 155 of the TCC

Pursuant to Article 155 of the TCC, the offence of abuse of trust is constituted only if certain cumulative statutory elements are satisfied. First, the subject of the offence must be property belonging to another person, such as corporate assets, funds, or goods. Second, possession of this property must have been voluntarily transferred to the perpetrator by the owner or lawful possessor, typically for a specific purpose such as custody, management, or use. Third, the perpetrator must use, dispose of, or divert the property in a manner contrary to the purpose for which it was entrusted, usually to obtain personal benefit.

Among these elements, the voluntary transfer of possession constitutes the decisive criterion for the applicability of Article 155. The perpetrator must have obtained factual control over the property directly from the victim, together with an obligation to safeguard, manage, or use it in accordance with an agreed or implied purpose. In the absence of such entrustment, the offence cannot be established, even where the conduct may be ethically questionable or contrary to internal corporate policies.

Accordingly, where employees neither receive nor control the employer’s funds, goods, or other assets, and where contractual payments or purchased goods never enter their factual possession, the statutory requirement of entrustment is not fulfilled. Similarly, where a financial benefit is provided directly by a third party—such as a supplier—and does not originate from, nor pass through, the employer’s assets, the conduct cannot be characterized as a misuse of entrusted property within the meaning of Article 155 TCC.

This interpretation is consistent with the established case law of the Turkish Court of Cassation, which holds that the offence of abuse of trust cannot be constituted in the absence of an entrusted property and a transfer of possession. The Court further emphasizes that a mere breach of an employee’s duty of loyalty toward the employer, by itself, does not amount to the offence regulated under Article 155.

Consequently, where no voluntary transfer of possession has occurred, kickback-related conduct cannot be subsumed under Article 155 TCC, and the offence of abuse of trust is not applicable under such circumstances.

Evaluation under Articles 157–158 of the TCC: Simple and Aggravated Fraud

Under Articles 157 and 158 of the TCC, the offence of fraud requires the cumulative existence of (i) deceptive conduct, (ii) the inducement of the victim into error, and (iii) damage suffered by the victim accompanied by a corresponding benefit obtained by the perpetrator. The deceptive acts must be of sufficient intensity to impair the victim’s ability to make a free and informed decision.

In kickback-related scenarios, the mere concealment of a kickback arrangement does not, in itself, satisfy the element of deception required for fraud. Where the underlying transaction is knowingly and voluntarily approved, the element of inducement into error is generally absent. Moreover, fraud presupposes the existence of concrete and measurable financial damage, such as an inflated price or disadvantageous contractual terms directly attributable to deceptive conduct.

Furthermore, where the benefit obtained through the kickback is provided by a third party and does not derive from the victim’s assets, the causal link between the alleged deceptive conduct and any claimed damage is further weakened. In such cases, the advantage gained by the perpetrator arises independently of the victim’s disposition of property.

Consistent with the settled jurisprudence of the Turkish Court of Cassation, fraud requires qualified and sophisticated deception capable of misleading the victim’s reasoning. Simple misrepresentation, omission, or nondisclosure is insufficient. Accordingly, in the absence of qualified deception and demonstrable financial damage, the constituent elements of simple or aggravated fraud under Articles 157 and 158 TCC are not fulfilled.

Conclusion

The criminal law assessment of commercial kickback allegations under the TCC depends on whether the statutory elements of the relevant offence types are satisfied in the specific circumstances of each case. Where no property has been entrusted to the individuals concerned, the offence of abuse of trust cannot be established. Likewise, in the absence of qualified deceptive conduct and demonstrable financial damage, the requirements of simple or aggravated fraud are not met.

Accordingly, although commercial kickback practices may give rise to compliance and ethical concerns for companies, they do not automatically result in criminal liability under TCC. Therefore corporations needs to make independent criminal law assessment according to the merits of the kickback case before taking any action.

With thanks to Ali Berke Şengün for his contributions.

References

Kickbacks. (Retrieved from Sage: https://sk.sagepub.com/ency/edvol/encyclopedia-of-white-collar-and-corporate-crime-2e/chpt/kickbacks#_