Edition 14: 18 January 2016
Editorial Team:
Dr. E. Seyfi Moroğlu, LL.M., Işık Özdoğan, LL.M. and Bora İkiler, LL.M.
Turkish Court Accepts Right to be Forgotten in Digital and Non-Digital Environments

A Turkish court recently accepted the existence of the Right to be Forgotten for the first time (2014/56 E, and 2015/1679 K, dated 17 June 2015). The Assembly of Civil Chambers of the Court of Appeal held that the right includes digital data, as well as non-digital personal data kept in publically accessible mediums. The digital aspect of this decision adopts and applies a similar scope as was granted by the Court of Justice of the European Union in its decision about Google.

The case at hand involved a claim that the personal rights of a sexual assault victim had been infringed. A criminal case was filed regarding the assault and the defendant was found guilty. During the hearings, the claimant/victim gave explicit descriptions of the assault, which were included in the decision’s text. After the proceedings, an academic book was published, containing certain decisions by the Court of Appeal, including the case at hand. The names of the claimant/victim and defendant were not censored in the book. Accordingly, the claimant initiated the case at hand, seeking non-pecuniary damages for violation of her personal rights.

The first instance court partially accepted the case, holding that exposing the claimant’s name would not benefit the publisher. The parties appealed this decision to the Court of Appeal.

The Court of Appeal specifically considered Article 13 of Charter of Fundamental Rights of the European Union, which states that “The arts and scientific research shall be free of constraint. Academic freedom shall be respected.” The Court of Appeal held that in these circumstances, academic freedom should be preferred over personal rights. Therefore, the Court of Appeal ruled that no infringement of personal rights had occurred.

However, the first instance court insisted on its previous ruling, meaning the case was referred to the General Assembly of Civil Chambers (“Assembly”). The Assembly noted the necessity of creating a fair balance between academic or artistic freedom and fundamental personal rights. The Assembly held in this context that the right to privacy, a fundamental personal right, should be preserved.

The Assembly adopted and applied the same scope for the digital aspects of the Right to be Forgotten as was determined by the Court of Justice of the European Union in the Google decision. However, the Assembly also held that the right to be forgotten applies to non-digital personal data which is stored in mediums which are easily accessible by the public.

Accordingly, the Assembly held that academic publications should not expose personal data unless it is in the public’s best interests, due to being of great public importance or high interest. It held that the case at hand failed to meet this threshold and accordingly the claimant is entitled to non-pecuniary damages.

General Assembly of Civil Chambers, 2014/4-56 E., 2015/1679 K. dated 17 June 2015

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Turkish Notary Publics Not Authorized to Check Whether Documents are Compliant with an Entity’s Articles of Association

The Union of Turkish Public Notaries announced that during certification of signature circulars, notary publics are not authorized to investigate and verify the registered decision’s compliance with the entity’s articles of association. The Board of Directors for the Union of the Turkish Public Notaries discussed the matter at a meeting on 30 November 2015, announcing the decision via Notice Number 9, on 17 December 2015 (“Notice”). The Notice amends the earlier Notice Number 1984/41.

The Board’s grounds for the amendment are as follows:

– Trade registry managers and their assistants are responsible for checking whether registered facts are compliant with the articles of association and mandatory rules of law (Article 32 of the Turkish Commercial Code; Article 34 of the Trade Registry Regulation).

– Once a power of attorney has been registered at the trade registry, the company can only allege legal invalidity to third parties regarding the relevant assignments or elections if the third parties’ awareness of the invalidity is proved (Article 373(2) of the Turkish Commercial Code).

– It is possible to file an objection action against Registry decisions within eight days of receiving the decision. The objection action should be filed before the commercial court of first instance where the trade registry is located.

Please see this link for full text of the Notice (only available in Turkish).

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Changes to Electronic Money Regulations in Turkey

Changes have been made to regulations for Payment Services, Electronic Money Issuance, Payment Agencies and Electronic Money Agencies in Turkey. Changes apply to onetime payment transactions, as well as some definitions, systems and processes. The Regulation Regarding Changes to the Regulation Regarding Payment Services, Electronic Money Issuance, Payment Agencies and Electronic Money Agencies (”Amendment Regulation”) was published in Official Gazette number 29574 on 26 December 2015, entering into effect on the same date.

Significant changes introduced by the Amendment Regulation include:

– “Onetime Payment Agreement” has been amended to become “Onetime Payment Transaction”. Related amendments are made to information policies and conditions of onetime payment transactions (Section 4, Part 1 of the Regulation).

– The definition of “invoice payment” has been narrowed to exclude taxes, duties, fees, social security premiums and penalties (Regulation Article 3(1)(e) of the Regulation).

– The requirement to execute an additional payment collection agreement has been removed for circumstances where a bank provides services as an intermediary for invoice payments to an agency and is expressly authorized to make payment collections on behalf of the invoicing agency (Article 5 of the Regulation).

– The nature of the framework agreement which must be executed between the payment service provider and the payment service user is defined as being a “continuous periodic payment relation” (Article 33 of the Regulation).

– It is no longer necessary to execute an agreement for one time payments which are below certain thresholds, set out in Article 58 of the Regulation. These payments are deemed to be low value.

– The documents required to obtain an activity license have been narrowed, along with items considered during equity calculations.

Please see this link for full text of the Amendment Regulation (only available in Turkish).

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Restrictions and Notification Requirements Amended for Currency Transfers Across Turkish Borders

Certain restrictions have been introduced in Turkey regarding currency transfers across national boundaries. Also, notification requirements have been amended to increase authorities’ control over cash-flows and protect the local currency’s value in international markets. Decision Number 32 Regarding Protection of the Value of Turkish Currency outlines the regulatory framework and authorizes the Prime Ministry to issue related Comminiqués. Accordingly, the Communiqué Amending Communiqué Number 2008-32/34 on Decision Number 32 Regarding Protection of the Value of Turkish Currency (“Communiqué”) was published in the Official Gazette on 30 December 2015, entering into effect on the same date.

According to the Communiqué:

– When leaving Turkey, passengers must complete a “cash declaration form” to notify customs authorities about any cash or other payment instruments they are carrying which exceeds 25,000 TRY or 10,000 EUR (or equivalent value in other foreign currencies).

– If passengers make a false statement, or fail to make a statement at all, the assets will be confiscated by the customs authority and Financial Crimes Investigation Board; the Chief Public Prosecutor’s Office will be informed.

– Banks must inform the Central Bank within 30 days about money transfer operations which exceeds $50,000 USD (or equivalent value in other foreign currencies). Exceptions include import, export and invisible transactions (including transfers made from foreign exchange deposit accounts).

– Customs Authorities must inform the Central Bank on a monthly basis about cash outflows of $50,000 USD or more (or equivalent value in Turkish Lira).

– Transactions regarding capital outflow must be notified to the Ministry of Economy as well as to the Treasury Undersecretaries.

Please see this link for the full text of the Comminiqué (only available in Turkish).

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New Process and Permit Requirements for Establishing and Operating Tobacco Manufacturing Facilities in Turkey

New requirements have been introduced in Turkey establishing tobacco manufacturing facilities, as well as related permits for establishment and operation. The Regulation Amending the Procedures and Principles of Production and Trade of Tobacco Products (“Amendment Regulation”) was published in Official Gazette number 29572 on 24 December 2015, entering into effect on the same date.

Significant amendments made to the Regulation on Principles and Procedures of Manufacturing and Trade of Tobacco Products by the Amendment Regulation include:

Establishing Tobacco Manufacturing Facilities

– The Amendment Regulation introduces extensive changes for the authorizations and precautions related to preventing environmental pollution.

– Under the Amendment Regulation, to obtain an establishment permit for manufacturing facilities of tobacco products for cigarettes and chopped tobacco products for rolling, the Ministry of Environment and Urbanization (“Ministry”) must first give a Positive Environmental Impact Assessment, or a decision that an Environmental Impact Assessment is not required.

– Manufacturing facilities must be located in a detached or dedicated building with closed area. In organized industrial zones or industrial areas, such facilities must be at least 10,000 m2, or at least 1,000 m2 for facilities located in other places.

Establishment Permits 

A Manufacturing Establishment permit from the Tobacco and Alcohol Market Regulatory Authority (“Authority”) is required to establish manufacturing facilities for tobacco products. The Amendment Regulation introduces a Certificate of Compliance for Establishing Facility, which is valid for three years. If an applicant fulfills the requirements, the Authority issues a Certificate of Compliance for Establishing Facility. The Authority receives the discretion to grant an extra year after the document’s validity period expires. If a project is not completed within the given time, a Certificate of Compliance for Establishing Facility will be deemed cancelled. 

Operation Permits

– The Amendment Regulation introduces new requirements for Operation Permits. Accordingly, it is now obligatory to display an easily readable signboard at least three meters above the ground, including the company name and logo, production category, as well as the warehouse name. It should be placed at the main entrance of the facility, as well as the main entrance for the warehouses holding raw material and finished products.

– Manufacturers must obtain a separate Operation Permit from the Authority for each category of tobacco products produced by the same facility. The Amendment Regulation introduces a requirement that a 500m2 covered area must be added at the facility for each category of tobacco. 

Alteration of Projects

The Amendment Regulation makes significant amendments for alteration of projects, including introducing two categories for machines, with separate requirements for each category:

– Category one: Includes vascular slaughter machines directly used in tobacco manufacture, machines used for production and packaging, as well as filter rod manufacturing machine. Authority permission is required to make an addition to these machines, transport them, transfer to another company, as well as to export or destroy them.

– Category two: For machines not included in Category one, it is sufficient to notify the Authority about additions, transportation, transfers, exports or destroying such machines.

Facilities with Existing Operation Permits

Facilities which obtained an Operation Permit before 24 December 2015 are subject to an inspection within 90 days of that date, to determine compliance with the Amendment Regulation’s requirements.

The Authority has discretion to grant extensions until 31 December 2016 for facilities to become compliant with requirements under the Amendment Regulation.

Please see this link for full text of the Amendment Regulation (only available in Turkish).

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Certain Expiry Dates Under Electricity Market Law Extended in Turkey

Certain expiry dates under the Electricity Market Law (“Law”) have been extended in Turkey. Extensions apply to certain aspects of the price equalization mechanism, national tariffs, production license incentives, as well as budget allocations for lighting. The Council of Ministers issued Decree 2015/8317 on 14 December 2015, published in Official Gazette number 29572 on 24 December 2015, coming into effect on 1 January 2016.

Time periods for the price equalization mechanism, national tariff and implications of cross-subsidization in the national tariff are extended to 31 December 2020 (Provisional Articles 1(1) and 1(2) of the Law).

Incentives are now available until 31 December 2020 for legal entities which hold production licenses and are entering business for the first time (Provisional Article 4(1) of the Law).

General lighting expenses will be funded until 31 December 2017 under the budget of the Ministry of Energy and Natural Resources, as well as the budgets of the relevant municipalities and provincial administrations (Provisional Article 6(1) of the Law).

Please see this link for the full text of the Decree (only available in Turkish).

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Updated Procedures and Principles for Electricity Supply Companies to Calculate Retail Prices in Turkey

The Turkish Energy Market Regulatory Authority (“Authority”) has published updated procedures and principles for supply companies to determine the base costs for retail price calculations, as well as elements which can be used during calculations and corrections. The Communiqué Regarding Regulation of Retail Prices for Energy (“Communiqué”) was published in Official Gazette number 29578 on 30 December 2015, entering into effect on 1 January 2016.

Supply companies must calculate energy retail prices in line with an equation outlined in Article 6 of the Communiqué. These prices must be determined based on the activities which are necessary for the relevant supply company to carry out energy sales activities (Article 5 of the Communiqué), including operation and energy costs. Supply companies cannot consider costs which are not specified. The Communiqué outlines the allocation keys to use when categorizing activities, as well as variables such as number of consumers and consumption amounts.

Retail sales revenue must be calculated for each tariff year, prior to the implementation period, based on the regulated operation cost and the depreciation charges specified for retail sale activity (Article 7 of the Communiqué).

For consumers which are subject to regulated retail tariffs, supply companies can only charge specified amounts or amounts which are collected in accordance with legal obligations (Article 9 of the Communiqué). These amounts are determined under the Communiqué, related laws, as well as by the Authority. The Communiqué includes a non-exhaustive list of revenues which are not subject to regulation, such as interest and incentive revenues.

Supply companies must present the necessary data to the Authority in the requested format (Article 16 of the Communiqué). The Authority will calculate the amount in accordance with the equation outlined in this article. The amount will be considered when calculating the revenue ceiling for 2016, under Article 11 of the Communiqué. The energy supply cost will be calculated in accordance with the equation given under Article 17 of the Communiqué.

The reference retail price for 2016 is set at 0.7233 kr/kWh under the circumstances outlined in Provisional Article 3 of the Communiqué.

Please see this link for the full text of the Communiqué (only available in Turkish).

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Updated Procedures and Principles for Electricity Transmission System Use and Operation Revenues in Turkey

The Turkish Energy Market Regulatory Authority (“Authority”) has published updated procedures and principles for the state-owned transmission company to determine transmission system use and operation revenues. The Communiqué Regarding Transmission Revenue Regulations (“Communiqué”) was published in Official Gazette number 29578 on 30 December 2015, entering into effect on 1 January 2016.

Under the Communiqué, transmission costs must be determined based on the expenditures necessary for the Turkish Electricity Transmission Company (“TEİAŞ”) to carry out transmission system activities. These include system use and operation costs, as well as other costs which may arise in accordance with relevant legislation. The Communiqué defines and outlines calculation methods for revenue necessity, operation costs, investment costs, maximum revenue, revenue gap adjustment, as well as investment gap adjustment.

TEİAŞ must submit a method declaration to the Authority, including information about items specified in the Communique, along with determination of which items will apply for different user groups. The Authority has discretion to make any necessary changes to the method declaration.

Revenue necessity, maximum revenue and revenue gap adjustment are considered when determining transmission system use activity as well as system operation activity. However, investment costs and adjustment are only considered for transmission system use activities.

The Communiqué repeals the earlier Communiqué Regarding the Transmission System Revenue Regulations and the Communiqué Regarding the Transmission System Operation Revenue Regulations (both published in Official Gazette number 24843 on 11 August 2002).

Please see this link for full text of the latest Communiqué (only available in Turkish).

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Electricity Price Equalization Mechanism to Protect Consumers Has Been Updated in Turkey

The electricity price equalization mechanism in Turkey has been updated. The mechanism aims to partially or completely protect consumers from price differences arising from cost differentiations incurred by distribution and authorized supply companies (for their regulated sales activities) in different regions. The Energy Market Regulatory Authority published the Communiqué on the Price Equalization Mechanism (“Communiqué”) in Official Gazette number 29579 on 31 December 2015, entering into effect on 1 January 2016.

Factors considered when calculating the support amount include (Article 5):

– The amount of each distribution company’s income cap determined for the current tariff year within the frame of related legislation and approved by the Energy Market Regulatory Board, along with annual demand estimations (as allocated to each retail sale period by taking into account the seasonal haulage rates);

– The income requirement for the relevant retail company for the current tariff year, within the frame of related legislation.

Significant points under the Communiqué include:

– Parties to the price equalization mechanism are (Article 6):

– Distribution companies.

– Authorized supply companies in each region.

– The Turkish Electricity Trade and Contracting Corporation (“TETCC”).

– The parties must transfer the support amount determined by the price equalization mechanism through TETCC (Article 8).

– Legal entity license holders must pay the support amounts as a priority (Article 9).

– If a party fails to make a payment, the sanctions outlined under Article 16 of Electricity Market Law Number 6446 will apply.

The Communiqué repeals the earlier Communiqué on the Price Equalizing Mechanism in the Electricity Market, which was published in Official Gazette number 28579 on 6 March 2013.

Please see this link for full text of the Communiqué (only available in Turkish).

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Default Interest Rate Updated in Turkey for Late Payments to Creditors Regarding Commercial Goods and Services

Turkey’s Central Bank has updated the default interest ratio to 11.5% for late payments made to creditors in the context of commercial transactions for goods and services. The minimum compensation amount which creditors can claim for recovery cost has also been updated to become 130,000 TRY. The Communiqué on Default Interest Ratio Determination of Late Payments Made to the Creditors With Regards to Provision of Goods and Services (“Communiqué”) was published in Official Gazette number 29579 on 31 December 2015, entering into effect on 1 January 2016.

In January each year, Turkey’s Central Bank must determine the default interest ratio for late payments in delivery of goods and provision of services, where no default interest rate exists in agreements or the relevant provision is invalid in relation thereto are not valid (Article 1530, Turkish Commercial Code). The Central Bank must also set the compensation recovery amount.

Accordingly, the Communiqué sets the 2016 rates as:

– 5% default interest rate for late payments where no default rate is set in the agreement, or the relevant provision is invalid.

– 130,000 TRY as the minimum compensation amount for recovery cost.

Please see this link for the full text of the Communiqué (only available in Turkish).

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Tax Rates and Amounts Announced for Certain Categories of Alcohol, Soda, Tobacco, Agricultural Products and Cellular Phones in Turkey

Rates for Value Added Tax, Special Consumption Tax and tobacco fund amounts for certain goods have been determined in Turkey. Changes relate particularly to certain categories of alcohol, soda, tobacco, agricultural products, as well as cellular phones. Council of Ministers’ Decree number 2015/8353 dated 29 December 2015 (“Decree”) was published in Official Gazette number 29580 on 1 January 2016, entering into effect on the same day.

Significant provisions in the Decree include:

– Certain Value Added Tax rates have been updated with regard to agricultural Line 23 is removed from section named “B) OTHER GOODS AND SERVICES” under List (II) annexed to the Council of Ministers’ Decree dated 24 December 2007 and numbered 2015/8320 as regards determination of Value Added Tax rates for goods and services. Lines 19 and 20, which generally pertain to agricultural products, have been moved to List (I), annexed to the Decree.

– Tax rates, minimum fixed and fixed tax amounts for the goods stated in the Special Consumption Tax Law Number 4760 have been amended. Accordingly, Table A and B under List III annexed to the Special Consumption Tax Law have been updated:

– Table A: Tax rates and minimum fixed tax amounts for sodas containing starch and alcoholic beverages in general. The tax rate for sodas containing starch is noted as 25%. The tax rate for malty beer is determined as 63%, with a minimum tax amount of TRY 1.03 (the lowest minimum tax rate noted in the table). Liquor and beverages which have an alcohol content over 22% have a minimum tax rate of TRY 150.71 (the highest minimum tax rate noted in the table). A 0% tax rate applies to all other beverages listed in the table (such as wine, fermented beverages and liquors).

– Table B: Tax rates, minimum fixed tax amounts and fixed tax amounts for tobacco products in general. For these products, the tax rates vary between 40% and 65.25%, while the minimum fixed tax amount varies between TRY 0.0577 and TRY 0.221. The fixed tax amount for all these products is determined as TRY 0.2468.

– The tax amount for mobile cellular phones with the H.S. Code 8517.12.00.00.11 increases from TRY 120 to TRY 160.

Please see this link for the full text of the Decree (only available in Turkish).

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Turkish Ministry of Finance Issues a Range of Import Product Safety and Inspection Communiqués

The Turkish Ministry of Finance has issued a range of communiqués (“Communiqués”) regarding product safety and compliance inspections for technical import regulations. The 23 Communiqué’s include tobacco products, scrap metals, batteries and accumulators, controlled chemicals for environmental protection, building materials, medical devices, products subjected to special permission from the Ministry of Health, toys, as well as food and agricultural products imported from Japan. These were published pursuant to the Council of Ministers’ Decree regarding Technical Regulations Regime number 2013/4284, dated 28 January 2013. The Communiqués were published in Official Gazette number 29579 on 31 December 2015.

The purposes of the Communiqués include:

– Ensuring products involved in foreign trade are compliant with technical and safety regulations.

– Adapting and implementing technical regulations in accordance with foreign trade, as well as conduct inspections of imports and exports

– Establishing procedures and principles for determining institutions to conduct inspections and prevent import and export of non-compliant or unsafe products

– Coordinating legislation, policies and practices regarding technical regulations, product safety and inspection, as well as ensure these meet international obligations.

Importing some products requires permission from official authorities, whereas other products require a certificate of conformity.

The Risk Based Control System in Foreign Trade (“TAREKS”) has been established. TAREKS is an online application which supports inspection, compliance and permission procedures for imports.

The Communiqués stipulate that the sanctions under relevant laws will apply for failures to comply. The upper and lower limits of administrative fines are outlined in the Law on Preparation and Implementation of Technical Legislation of Products Number. 4703. The Law numbered 2016/13 adjusts these limits, taking into account the recently announced 5.58% revaluation rate, issued under the Tax Procedure Law (more information).

Please see this link for the full text of the Communiqués (only available in Turkish).

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Turkish Patent Institute’s 2016 Fee Schedule Published

The Turkish Patent Institute’s (“TPI”) 2016 fee schedule has been published. Changes apply to fees for patent, trademarks, utility model, integrated circuits topography, geographical indications and industrial designs. Compared to 2015, fees have increased 7% for online applications and 17% for hand-delivered applications. The Communiqué on 2016 Tariffs (“Communiqué”) was published in Official Gazette number 29579 on 31 December 2015 (Bis 4), entering into effect on 1 January 2016.

The Communiqué continues the approach whereby the total fee payable to the TPI is the sum of TPI fees, valued added tax and legal fee.

The Communiqué continues to distinguish between applications submitted by hand and online applications, with fees for online applications being lower than hand-submitted applications. However, a single fee applies for geographical indications and integrated circuit topographies, irrespective of how the application is made.

Please see this link for full text of the Communiqué (only available in Turkish).

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Omnibus Law Amends a Range of Turkish Legislation

An omnibus law has been published in Turkey, amending certain aspects of laws relating to expenditure tax, income tax, value added tax, personal pension savings, sentencing and security measures, social security and health insurance, as well as corporate tax. The Law Numbered 6655 was published in Official Gazette number 29580 on 1 January 2016 (“Omnibus Law”), entering into effect the same day.

Significant amendments under the Omnibus Law include:

– Bank and insurance operations tax will not apply for money obtained within the scope of credits for financing machinery and equipment which are purchased specifically for use in manufacturing process by industrial business which hold an industrial registry certificate under Industrial Registry Law Number 6948 (amendment to Article 29(1) of the Expenditure Tax Law).

– The validity period for tax deductions applicable to banks and intermediary institutions has been extended from 31 December 2015 to 31 December 2020 (amendment to Provisional Article 67 of the Income Tax Law).

– The exemption period for computer and software donations made to the Ministry of National Education is extended from 31 December 2015 to 31 December 2020 (amendment to Provisional Article 23 of the Value Added Tax Law).

– The period for partially or completely transferring pension amounts to a personal pension system is extended from 31 December 2015 to 31 December 2017 (amendment to Provisional Article 1 of the Personal Pension Savings and Investment System Law).

– The period during which certain earnings and revenues are not deemed to be commercial enterprise is extended from 31 December 2015 until 31 December 2020 (Amendment to Provisional Article 2 of Corporate Tax Law).

Please see this link for the full text of the Law Number 6655 (only available in Turkish).

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