The Ministry of Customs
and Trade has various regulatory and supervisory powers to ensure that
companies operating in Turkey carry out their operations in accordance with the
applicable law. These powers stem from the Turkish Commercial Code Nr. 6102
(“TCC”), the Company Audit Regulation and other related applicable regulations.
The Ministry supervises companies' financial status, mergers and acquisitions,
independent audit processes, compliance with consumer rights and unfair
competition practices, starting from the establishment stage.
The supervisory powers of the Ministry of Trade over companies will be discussed in detail, the sanctions imposed and their legal consequences will be evaluated in this article.
1. Introduction
The Ministry of Trade has various supervisory
powers to ensure that companies in Turkey operate in accordance with the applicable
law and economic principles. One of the main pillars of this authority is
Article 210 of the Turkish Commercial Code Nr. 6102. The said article
authorizes the Ministry of Trade to inspect the books, records and commercial
activities of companies and to impose legal and administrative sanctions when
necessary. This audit process aims to ensure that companies are managed
transparently and in compliance with the related applicable regulations, to
protect the economic order and to prevent unfair competition. These audits,
which are of great importance especially for incorporated and limited liability
companies, directly concern both company executives and investors.
"Regulations on company audits aim to
provide accurate and reliable information on activities and financial
statements to shareholders, investors and third parties. In this way, the
economy gains dynamism by providing confidence to international capital in a
global competitive environment." [1] Within this framework, there are some
special provisions and regulations that determine the audit processes, especially
the TCC. Important articles directly related to the supervisory authority of
the Ministry of Trade will be discussed hereunder.
2. Supervision of
Companies Pursuant to Art. 210 et seq. of the TCC
Article 210 of the TCC
authorizes the Ministry of Trade to audit all commercial companies. However,
this audit does not mean the examination of the financial accounts of the
company. The authority of the Ministry is aimed at ensuring that companies
comply with the provisions of the applicable law. How the audit will be
conducted is set out under the Regulation on Supervision of Commercial
Companies by the Ministry of Customs and Trade.
"Pursuant to
Article 5 of the Regulation, the transactions subject to supervision cover a
wide range. In addition to the basic elements such as establishment, trade
registry, title and commercial book transactions, transactions related to
mergers, spin-offs, change of type and group of companies also fall under the
scope of such supervision. General assembly and board resolutions, election of
auditors, amendments to the articles of association, capital transactions,
securities, financial statements, reserves and dividend distribution are also
examined. Electronic services, termination of the company and related
regulatory procedures are also subject to the supervision of the
Ministry." [2]
"Pursuant to
Article 210/3 of the TCC, when the Ministry of Trade detects transactions
contrary to public order or the subject matter of the business, collusive
activities or preparations in this direction, it may initiate a dissolution
action within one year, without prejudice to the provisions of special laws.
However, the Ministry has not only the power to initiate a dissolution action,
but also the duty to warn. Companies may be warned for matters that can be
corrected before filing a dissolution action. It is also possible to file
liability lawsuits against those responsible in line with the inspection
reports issued by the Ministry." [3]
“According to Article 333
of the TCC, the Ministry of Trade is authorized to inspect the legality of the
establishment and articles of association of companies that require statutory
permission. The approval of the Ministry
is required especially during the establishment phase of incorporated and
limited liability companies that will operate in certain sectors. During this
process, the company’s capital structure, partnership structure, and the
compliance of its articles of association with the related applicable
regulations are examined.” [4]
“Although the relevant article sets out that
amendments to the articles of association of incorporated companies are subject
to the approval of the Ministry, it is stipulated that, regardless of their
nature and scope of activity, the establishment of companies and amendments to
their articles of association shall not be subject to the approval of any authority.” [5]
“However, according to
this article, the Ministry may conduct an audit to determine whether there is
any violation of the mandatory provisions of the applicable law. Other than
that, the establishment of an incorporated company and amendments to its
articles of association are not subject to the approval of any authority.” [6]
In this respect, these inspections that are conducted to ensure companies act in accordance with the applicable law and to protect the rights of shareholders and investors, support the sustainability of the economic system by increasing commercial security.
2.1. Independent Audit,
Supervision of Audit Organizations and Supervisory Authority under the
Regulation on Independent Audit
According to Article
397 of the TCC, the financial statements and financial reports of companies are
subject to independent audit. These audits are supervised by the Public
Oversight, Accounting and Auditing Standards Authority (“KGK”) and the Ministry
of Trade. If the audit results do not reflect the truth, administrative
sanctions may be imposed by the Ministry.
“The Ministry’s audit
under the Regulation is not limited to compliance with the provisions of
Article 210 of the Turkish Commercial Code. The Regulation also grants the
Ministry the authority to audit company accounts.” [7] “Furthermore,
exceeding the limits of the inspections conducted by the Ministry may expose
companies to unpredictable inspection risks and unnecessarily restrict
commercial activities. Therefore, there are opinions that the validity of
sanctions imposed as a result of an inspection without legal basis is debatable
and may be considered contrary to general principles of law.” [8]
As per the applicable law,
companies may also be audited by appointing a special auditor, which also
applies to limited liability companies in accordance with Article 635 of the TCC.
According to Article 438 of the same Code, shareholders may request the general
assembly to appoint a special auditor to examine some certain circumstances. If
the request is accepted, each shareholder or the company may apply to the court
for appointment of an auditor (Art. 438/2 of the TCC). If the request is
rejected, shareholders holding at least one-tenth of the capital, or
one-twentieth in case of publicly traded companies, or a total of at least one
million TRY in shares, are entitled to apply to the court (Art. 439/1 of the
TCC). The applicants must convincingly demonstrate the company's unlawful
actions (Art. 439/2 of the TCC). Plausible proof is sufficient, and the court
may appoint a special auditor if deemed so necessary, and this decision is of final
nature (Art. 440/1-2 of the TCC). The appointed auditors need not be
accountants or independent auditors, and experts suitable for the nature of the
task may be appointed.
By and through the decision
of the Council of Ministers, the audit of incorporated companies not subject to
independent audit and companies covered by the Law Nr. 4572 is regulated by a
regulation drawn up by the Ministry of Customs and Trade and issued by the
Council of Ministers. The Regulation Nr. 28509 on Independent Audit covers
matters such as audit procedures, qualifications of auditors, ethical rules,
duties and authorities, selection, removal from office, and submission of audit
reports to the general assembly.
In accordance with the
Regulation on Independent Audit, the Ministry is authorized to examine the
activities of the relevant companies on site. Within this scope, the books and
documents of the companies can be examined, their financial situations can be
analyzed, and independent audit reports can be requested when necessary. At the
same time, the Ministry of Trade can examine whether the annual financial
statements reflect the truth. This examination is carried out to ensure
compliance with accounting procedures and transparency.
If any violations of
the law are found, the Ministry can impose fines on companies, sustain some certain
activities, or demand corrective actions.
So, the Ministry of
Trade has a bunch of powers to make sure trading companies follow the rules.
They examine companies' financial statements, reports, and accounting records
to make sure everything is transparent and legit. Additionally, mechanisms such
as the appointment of special auditors, independent audits, and administrative
sanctions are used to encourage companies to act in compliance with the applicable
law. If violations of the regulations are detected, the Ministry may impose
administrative sanctions, request necessary corrections, and suspend some certain
activities. Thus, company audits serve as an important mechanism for both
shareholders and market security.
3. Supervision of
Electronic Commerce and Unfair Practices
3.1. Supervision of
Electronic Commerce
Activities of
e-commerce companies are supervised by the Ministry of Trade under Article 11
of the Law Nr. 6563 on Regulation of Electronic Commerce.
Unfair commercial
practices, misleading advertisements, and violations of distance sales
contracts may be investigated by the Ministry. The Ministry has the authority
to regulate the activities of Electronic Commerce Service Providers and
Electronic Commerce Intermediary Service Providers and to determine the
mandatory elements that must be included in intermediary contracts.
In addition, it may
request information from the Information Technologies and Communication
Authority (BTK) about individuals and companies that send commercial electronic
messages via voice calls and text messages. As per the regulation, the Ministry
has the authority to conduct inspections and publish their results. Personnel
assigned to conduct inspections may request and review any information,
documents, and electronic records. Those concerned are obligated to fulfill
these requests completely and accurately. Through these authorities, the
Ministry plays an active role in ensuring fair competition, protecting
consumers, and regulating the market within the e-commerce ecosystem.
3.2. Supervision of
Unfair Competition and Consumer Rights
“Competition
violations, unfair competition, and consumer rights violations are subject to
different statutory regulations and are examined by various authorities in
terms of supervision and sanction processes. Competition violations arise from
the disruption of the competitive environment in the market. For example,
creating a negative perception of a competitor is considered unfair
competition, while agreements between businesses on factors such as price and
production volume, or mergers aimed at strengthening market dominance, are
considered competition violations.” [9]
“Accordingly, while the
Turkish Commercial Code aims to protect commercial ethics and fair competition
principles, Law Nr. 4054 on Protection of Competition aims to ensure the
continuity of competition in markets. One of the differences between these two
concepts is the authorities to which applications are made. Claims of unfair
competition are examined by Commercial Courts, and appeals against court
decisions may be filed with the Court of Cassation, while competition
violations are assessed by the Competition Authority, and appeals against the
Competition Authority's decisions may be filed with the Council of State." [10]
“Competition Authority may
only conduct investigations under the Law Nr. 4054 on Protection of Competition
(RKHK) and does not have the authority to enforce the unfair competition
provisions of the Turkish Commercial Code (TTK). The Authority has emphasized
that its authority is limited to anti-competitive agreements, abuse of market
dominance, as well as and mergers and acquisitions. Issues related to unfair
competition fall under the scope of the TCC, and such disputes are heard in
commercial courts or civil courts of first instance. Acts such as defaming
competitors, providing misleading information, or unlawfully using trade
secrets are considered unfair competition and are not investigated by the
Competition Authority. Therefore, claims of unfair competition that fall
outside the scope of the RKHK must be submitted to the judicial system, the
Consumer Disputes Arbitration Boards, or the Ministry of Trade.” [11]
On the other hand,
pursuant to the Law Nr. 6502 on Protection of Consumers, administrative fines
and other sanctions may be imposed on companies in cases of unfair competition
and violation of consumer rights. For example, label inspections are carried
out by the Ministry, municipalities, and relevant professional associations.
Pursuant to Article 54/4 of the same Law, these institutions are responsible
for inspections and enforcement. Municipalities may examine issues such as
price labeling and refusal to sell goods and services offered to consumers.
Sellers and suppliers
are required to provide all information and documents requested during
inspections. If any violations of the law are detected, the minutes and
documents are forwarded to the Governor's Office (Provincial Directorate of
Trade) and the Ministry conducts the proceedings. Inspections may be conducted
either ex officio or upon complaint.
In conclusion, the
protection of competition, unfair competition, and consumer rights are subject
to different statutory regulations, and the relevant inspection and enforcement
processes are carried out by different authorities.
4. Audits Regarding
Companies’ Activities
“Due to the increase in
commercial activities and the emergence of various sectors, new regulations
have been introduced for companies wishing to operate in different sectors.
Considering that companies also serve the public interest, it has been
understood that it is important to supervise companies operating in areas such
as banking, insurance, and the energy market. The Ministry's supervisory
authority over the relevant companies is limited by the laws governing the
companies' activities." [12]
“For example, insurance
companies being an indispensable institution in economic life, it is inevitable
that they be subject to the Ministry’s supervision in order for the expected
benefits of insurance activities to materialize. The supervision of insurance
companies is carried out by the Ministry under the Insurance Law.” [13]
5. Audit Results and
Applicable Sanctions
As a result of the
Ministry of Trade's inspection processes, various sanctions may be imposed on
companies, one of which is imposition of administrative fines. Companies found
to be in violation of the law may be subject to high fines. Another sanction is
suspension of activities. If illegal activities are not rectified, a decision
may be made to temporarily suspend some certain activities. The liquidation or
closure of the company is another sanction that may be applied. In cases of
serious violations, a decision may be made to liquidate the company or remove
it from the commercial register. Corrective measures may be required,
particularly in cases of violations of consumer rights and advertising
regulations, to ensure that companies comply with the law. The most severe
sanction is the termination of the company's existence as a result of the
Ministry's inspection. Accordingly, the Ministry may file a dissolution lawsuit
in accordance with Articles 201/3, 353, and 530 of the Turkish Commercial Code.
6. Conclusion
The Ministry of Trade
has broad supervisory powers to protect the economic order and ensure fair
competition in the markets. These supervisory activities are carried out to
ensure that companies operate in accordance with the applicable law, and to protect
consumers, and safeguard the market. The Ministry conducts investigations
across a wide range of areas, from companies not subject to independent
oversight to e-commerce platforms, price labeling, and unfair commercial
practices. Inspections may be conducted either on the Ministry's own initiative
or in response to complaints, and administrative sanctions are imposed if
non-compliance is detected. In this way, the Ministry both encourages companies
to operate in compliance with the applicable law and establishes an effective
oversight mechanism to protect consumers.
Att. Gülçin Kırcı
References:
1. Doç. Dr. ASLANOĞLU, Suphi
Doç.̧. Ve
BULUT Erdem, ‘Türkiye’de Bağımsız Denetim ve Yeni Türk Ticaret Kanunu’, Journal
of Customs and Trade, Year: 2013, Issue: 1
2. Article 5 of the
Regulation on Supervision of Commercial Companies by the Ministry of Customs
and Trade
3. Prof. Dr. Tekin MEMİŞ,
‘Şirketler Hukukunda Denetim’, Year: 2012, Issue: 3-4
4. Prof. Dr. Tekin MEMİŞ, ‘Şirketler Hukukunda
Denetim’, Year: 2012, Issue: 3-4
5. Prof. Dr. Tekin MEMİŞ, ‘Şirketler Hukukunda
Denetim’, Year: 2012, Issue: 3-4
6. Gökçe, Selman Yavuz, ‘Gümrük ve Ticaret
Bakanlığının Ticaret Şirketleri Denetim Yetkisi ve Sonuçları’, 2016, sayfa 139
7. Doç. Dr. Suphi
ASLANOĞLU ve Erdem BULUT, ‘Türkiye’de Bağımsız Denetim ve Yeni Türk Ticaret
Kanunu’, Journal of Customs and Trade, Year: 2013, Issue: 1
8. Doç. Dr. Suphi
ASLANOĞLU ve Erdem BULUT, ‘Türkiye’de Bağımsız Denetim ve Yeni Türk Ticaret
Kanunu’, Journal of Customs and Trade, Year: 2013, Issue: 1
9. Att. Ballı Mehmet,
‘Türk Ticaret Kanunu’na Göre Haksız Rekabet’, Journal of Customs and Trade,
2015, 5
10. Att. Ballı Mehmet,
‘Türk Ticaret Kanunu’na Göre Haksız Rekabet’, Journal of Customs and Trade,
2015, 5
11. Güner, Mehmet Yavuz,
‘Rekabet Hukuku ve Haksız Rekabet Hukuku İlişkisi’, Dissertation Series of the
Competition Authority, 2021, Issue: 184
12. Gökçe, Selman Yavuz,
‘Gümrük ve Ticaret Bakanlığının Ticaret Şirketleri Denetim Yetkisi ve
Sonuçları’, 2016, page: 93
13. Gökçe, Selman Yavuz,
‘Gümrük ve Ticaret Bakanlığının Ticaret Şirketleri Denetim Yetkisi ve
Sonuçları’, 2016, page: 93
