ERDEM-NEWSLETTER-2018-metin

Intragroup Loans* Att. Melisa Sevinc Atilganer Under Article 241 of Turkish Criminal Law No. 5237 (“TCL”), lending for the sake to gain profit is forbidden. However, in practice, for the purpose of financing affiliated companies, intragroup loans are a frequently employed method. The intention is to eliminate such prohibition as foreseen under the TCL, through an amendment to be introduced to Additional Article 1 of Law on Financial Leasing, Factoring and Financing Companies No. 6361 (“Law on Financing Companies”), through the Legislative Proposal on Amendments on Certain Law and Decree Laws dated 30.11.2018 and numbered 2/1369 (”Legislative Proposal”). Under this Article, the current legal status of intragroup loans, and the status to be construed through the Legislative Proposal, are evaluated. Current Situation As above-explained, the TCL forbids lending to gain profit, and deems the same to be the crime of usury. In contrast, however, the former Turkish Criminal Law No. 765 had regulated constancy as a material condition of such crime. Following the amendment as to the essential conditions of such crime, in the event of multiple implemen- tations of such act, in other words, in the event of the existence of constancy, the Court of Appeal decisions 1 accept the existence of successive crime. * Article of December 2018 1 Decision of Criminal Chamber of Court of Appeal, 03.07.2018, No. 2017/5-1131 E. 2018/331 K.; Decision of 15th Chamber of Court of Appeal, 03.10.2018, No. 2015/9915 E. 2018/6260 K.