Prison Sentences for Monetary Debts in Turkey
By Aslı ÇAĞLAR
ADMD Law Office, www.admdlaw.com Istanbul TURKEY
According to Article 38 of the Turkish Constitution (TC) “No one shall be punished for any act, which does not constitute a criminal offence under the law in force at the time committed; no one shall be given a heavier penalty for an offence other than the penalty applicable at the time when the offence was committed.” In addition, a new clause has been added to 38th Article with the amendment No.4709 dated October 3, 2001. As per this clause “No one shall be deprived of his liberty merely on the ground of inability to fulfill a contractual obligation.”
Although such constitutional rules provide a general principle there are relevant exceptions where monetary debts may become a source of prison sentence against the debtor that shall be taken into account. The statement “inability to fulfill a contractual obligation” refers to incapability to execute the obligation in goodwill. If the debtor does not perform his/her obligation intentionally, s/he receives a punishment that restricts freedom.
Declaration of Property
The declaration of property refers to debtor’s assets, incomes, mainstays and capability to pay his/her loans. The debtor is obliged to declare his/her property even if s/he does not acquire any money/asset at the time of an execution file pending against him or herself.
The Turkish Enforcement and Bankruptcy Law (TEBL) Article 337 states that the debtor shall be penalized with ten days of imprisonment upon request of the claimant if s/he is not present at the debt enforcement office for the declaration of property without a valid reason or does not submit a written excuse declaration in his/her absence. When confiscated assets are enough to compensate the debt or the debt is paid, aforementioned penalty gets annulled. However, this Article 337 of TEBL was abrogated by the Turkish Constitutional Court decision dated February 28, 2008 and this abrogation will come into force on April 16, 2009. This annulment is based on the ground of regulations and upgrades parallel to EU harmonization process. Hence, prison sentence for contractual obligations has become debatable and in practice some courts adjudge to imprisonment sentence while some do not.
It is certain that in foreclosure suits, imprisonment was an effective sanction for retrieving the debt. Declaration of property informs the claimant and the court regarding the debtor’s wealth. If the debtor declares his/her properties, then the claimant would have the right to confiscate, otherwise, then s/he would be penalized with imprisonment. Turkish Constitutional Court declared that member nations of EU rejected to cooperate for the confinement warnings to debtors, as a similar crime is not designated in their domestic law.
692nd and following articles of the Turkish Commercial Code (TCC) regulates drawing, handing over or format of a check. However, the insufficiency of this law required an amendment. The most significant innovation of the Law No.3167 titled “Law on Protection of Check Holders and Regulation of Payments by Checks” is that when a check shall not be paid due to lack of cash in the bank account, the person who draws the check is penalized with imprisonment from 1 to 5 years, upon request of the claimant. The use of check has become widespread and the number of criminal suits related to bad check has increased with this prison sentence.
However, the 38th Article of TC, is a reflection of the 4th Protocol of European Convention on Human Rights, signed by Turkey. By this way, liberty-binding punishments for non-execution of contractual obligations are annulled. Therefore, the Law No.4814 dated February 26, 2003 amended the Law On Protection Of Check Holders and Regulation Of Payments By Checks, numbered 3167.
The 16th Article of the Law No. 3167, which is titled “bad check”, is amended as below and entered in force on March 08, 2003. 16th Article states that the drawer of a bad check is penalized with a heavy fine as much as the check value, on condition it is not over 80.000 YTL. This amount gets increased every year according to 2nd Additional Article of Turkish Criminal Code.
Drawing a bad check shall not be considered only as non-execution of contractual obligation. It also comprises cheating therefore, it must be considered as fraud, because, the debtor assures to the claimant that his/her money is in the bank and that s/he shall demand it from that bank. The TCC’s 695th and 707th Articles confirm the mentioned issue accordingly. Crime of bad check shall not be subject to this law as a check is not a debenture; it is a way of payment. Drawing of a check, assumes the availability of sufficient funds in the banks thus, if unpaid it is considered to be a crime while of promissory notes and bills of exchange are not considered to be a part of a contractual agreement. If a bad check is not considered as a crime and is condemned to a civil fine in line with adjustment laws, it would be a misinterpretation of the constitutional amendment and would cause emergence of illegal collection organisms (mafia). The sense of trust to checks, which is an inseparable piece of economic life, is protected in the crimes of bad check. As a result, it may not be useful to impose a fine to an economic crime. Also, lack of penal protection to checks would turn them into bills. However, it would be accurate to state that the economy shall not proceed with the efforts of penal law. As the penal law is ultima ratio (ultimate medium) it should be referred to only when civil, administrative, social security codes etc. are insufficient. Consequently, the penal law shall step in when the society requires.
344th Article of the TEBL states “The obligor that does not fulfill his/her obligations regarding the alimony shall be convicted to imprisonment up to three months upon request of the claimant.” However, Supreme Court considers accrued alimony debts as unsecured claim and does not consider its nonpayment as a crime. According to 344th Article of TEBL, both accrued and future alimony per month should be demanded in order to request a sentence for the debtor. If an execution against the debtor is issued, the alimony debts are of first priority so; primarily the execution methods shall be completed. Then, the prison sentence becomes an issue.
Turkey has made numerous amendments during the European Union full membership process. The Law No. 4709 dated October 3, 2001, amended certain provisions regarding rights and freedoms, such as 38th Article of TC. Imprisonment for non-execution of contractual obligation does not relate to the modern conception of law. Aforementioned obligations refer to contractual obligations, so they arise from private law. On the other hand, obligations arising from public law (such as tax obligations) or that results from a court decision (such as alimony) are not included in this provision. Thus, check and alimony obligations are penalized with imprisonment but declaration of property is not penalized. Even if there are different points of view concerning prison sentences for monetary debts, both views are justifiable. From a practical point of view, annulment of prison sentence will provoke escalation of illegal debt and illegal organisms of collection and will complicate attorneys’ business. On the other hand, from another point of view, it is a fatal adjustment for Turkey as a rapidly developing country. Consequently, this is a clear example for a situation where practice and ideals collide.