In 1981, Turkey signed the Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data (“Convention”) at Strasbourg. At long last, the Convention has now been enacted into Turkish law. Ratification had been delayed while Turkey completed enactment of the necessary legislative arrangements in its domestic law. However, the importance of the subject matter meant that Turkey changed its approach to proceed with the domestic legislative requirements in parallel to ratifying the Convention.
The Convention’s purpose is to secure respect for every individual’s rights and fundamental freedoms in territories belonging to the Convention’s signatories, whatever an individual’s nationality or residence. The Convention particularly addresses individuals’ right to privacy, with regard to automatic processing of personal data.
Law Number 6669 on Ratification of the Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data dated 30 January 2016 was published in the Official Gazette on 17 February 2016 (“Ratification Law”), entering into effect on the same date.
The Convention requires each signatory to take the necessary measures in its domestic law to give effect to the basic data protection principles outlined in the Convention. In parallel to the Ratification Law, the 2016 Action Plan of Turkey’s 64th Government includes enactment of the Draft Law on Data Protection (“Draft Law”) by the end of March 2016 (more). The Draft Law has been delivered to Turkish Grand National Assembly on 18 January 2016. The Convention and the Draft Law regulate the main principles and conditions for processing personal data in a similar manner, even though the Draft Law’s scope of transmission of personal data to third parties is wider than the scope set out in the Convention.
The Ratification Law declares that the Convention will also apply to personal data which is not processed automatically (as per Article 3(1)(c) of the Convention).
The Ratification Law specifically excludes the Convention from applying to:
– Automatic processing of personal data realized by natural persons exclusively for their personal use, or household purposes.
– Public registers specifically regulated by law in Turkey.
– Data available to the general public information in accordance with law.
– Personal data which is processed by public institutions for the purposes of national security and defense, as well as for investigation and prevention of criminal offences.
A personal data protection council will be established by each member country which is responsible for implementing the Convention. In Turkey, the Personal Data Protection Authority and the Personal Data Protection Board (within the Authority) will be established and responsible for implementing the Convention (Section 6 of the Draft Law).
Please see this link for the full text of the Ratification Law (only available in Turkish) and the Convention (available in Turkish, English and French).
Turkey’s Banking Regulation and Supervision Agency (“BRSA”) has introduced a system for measuring and evaluating capital adequacy in banks which are “too big to fail”. Principles and procedures are outlined to ensure domestic banks hold sufficient equity to balance damages related to probable risks. The Regulation is the latest in a series of Turkish banking regulation changes, which collectively develop a more compatible regulatory structure with the Basel standards. The Regulation on Measuring and Evaluating Capital Adequacy for Banks (“Regulation”) was published in Official Gazette number 29633 on 23 February 2016.
The global financial crisis highlighted the necessity of close monitoring for systematically important banks (“SIB”). The paradigm shift came at the expense of “deregulated approach” that had become the modus operandi of financial markets and competent regulatory authorities in the pre-crisis era. Consequently, it became widely understood that measures to bailout and save SIBs would involve serious costs at a global and domestic level in the event of a crisis or financial difficulties. These entities are accordingly deemed “too big to fail”. Within this context, Basel III standards include provisions to define SIBs and to suggest introducing additional capital adequacy requirements for global banks. In parallel, G-20 Leaders and The Basel Committee have emphasized the necessity of the additional capital adequacy and other safety mechanisms for domestic SIBs. The Regulation determines systematically important banks in Turkey, as well as their additional liabilities.
The Regulation outlines an indicator-based measurement approach for determining whether an entity qualifies as a SIB. Indicators and sub-indicators consider an entity’s:
– Lack of service substitutes.
The Regulation establishes a threshold system for each variable, with the threshold values established and adjusted by the Banking Regulation and Supervision Board (within the BRSA). Banks which have a general score exceeding the relevant thresholds, are deemed to be systematically important. SIBs are then categorized into three groups based on their overall general scores, calculated according to specified weightings of the indicators noted above. Different levels of capital adequacy will apply depending on this categorization.
Banks undergo the SIB assessment each year, based on consolidated data from the previous December.
Banks which qualify as systematically important must maintain additional loss-absorbency for the following year, in the form of a capital buffer. Additional loss absorbency is calculated according to additional core capital, measured under the Regulation on Capital Maintenance and Countercyclical Buffer, as well as the ratios for each group settled by Regulation.
During the implementing period, the first assessment will be conducted according to consolidated data from December 2014. Banks which are deemed to be SIBs must meet the additional liabilities until 31 March 2016.
Turkey has ratified the Council of Europe Convention on Action against Trafficking in Human Beings (“Convention”). The Convention aims to prevent trafficking in human beings, protect trafficking victims, prosecute traffickers, as well as promote co-ordination of national actions and international co-operation. The Convention will enter into effect in Turkey on the first day of the fourth month after the accession instrument is deposited with the Council of Europe’s Secretary General.
Signatory countries are monitored by the Group of Experts on Action against Trafficking in Human Beings (“GRETA”). GRETA regularly publishes reports evaluating the measures taken by signatories, as well as requires countries which do not fully respect the Convention’s measures to step up their action.
The Convention’s ratification legislation was enacted on 30 January 2016 and published on the Official Gazette on 19 February 2016.
Turkey has ratified the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (“Convention”), with Law Number 6665. The Convention aims to establish a common criminal policy between signatory countries. It requires signatories to adopt domestic legislation and other measures, as well as co-operate with other countries.
The Convention adopts modern and effective crime prevention methods, intended to deprive criminals of the proceeds and instruments of crime, via international co-operation.
Convention signatories must appoint a central, national agency as the financial intelligence unit (“FIU”). FIUs are entitled to access financial, administrative and law enforcement information in order to analyze suspicious transaction reports, as well as execute other duties. To combat money laundering, FIUs should directly communicate with their equivalents in other countries, about requests within the scope of the Convention.
Turkey’s financial intelligence unit is the Ministry of Finance, Financial Crimes Investigation Board (MASAK).
The Convention will enter into effect in Turkey on the first day of the fourth month after the accession instrument is deposited with the Council of Europe’s Secretary General.
Please refer to this link for the full text of the Convention.
New parental leave entitlements have been introduced in Turkey. These include introducing a new leave entitlement available after maternity leave ends, as well as a new right to request part-time work up until the child enters compulsory education. People between 20 and 25 years old are now also eligible for general health insurance for two years after graduation from high school or higher education, without any income determination (in certain conditions).
The Law Amending the Income Tax Law numbered 6663 and certain Laws (“Amendment Law”) was published in Official Gazette number 29620 on 10 February 2016. The Amendment Law makes changes with respect to the above mentioned issues to the following laws, among others:
– Unemployment Insurance Law numbered 4447.
– Social Security and General Health Insurance Law numbered 5510
– Labor Law numbered 4857.
Maternity leave in case of death during or after child birth
Under the Amendment Law, if a mother dies during or after child birth, maternity leave will now be granted to the father (Article 22 of the Amending Law).
Right to un-paid leave after maternity leave ends
An extra un-paid leave is now available for the period following maternity leave. Accordingly, if requested, mothers will be entitled to take un-paid leave for up to half of her weekly working hours. Male or female workers adopting a child under three years old are also entitled to this un-paid leave. Such extra un-paid leaves are available for 60 days for the first birth, 120 for the second and 180 for the third (Article 22 of the Amending Law).
An allowance will be paid during the extra un-paid leave period, which amounts to half of the individual’s weekly working hours. The allowance is paid monthly by the unemployment insurance fund. The principles and procures for payment will be jointly determined by the Ministry of Finance, the Social Security Institution, and the Undersecretariat for the Treasury (Article 20 of the Amendment Law).
The right to request part-time work
Both parents now have the right to request part-time work from their employers. The right exists for the period between when maternity leave ends, up until the beginning of the month after the child’s compulsory education begins. However, if one of the parents does not work, the other is not entitled to request part time work. Employers cannot use such a request as a reason for termination. Couples or individuals adopting a child under three years old are also eligible.
The Ministry of Labor and the Ministry of Social Security will release a regulation outlining the sectors and workplaces where part-time work is possible, as well as principals and procedures (Article 21 of the Amendment Law).
For employees who receive half of their financial rights and social welfare because they are taking advantage of their right to part-time work, the actual service time and payment period will be calculated as half of the full-time amounts. However, the full monthly amount will be paid for general health insurance premiums, without any deduction (Article 30 of the Amendment Law).
General health insurance for people between 20 and 25 years old
People between 20 and 25 years old are now included in the scope of general health insurance for two years after graduation without any income determination, provided they meet the following conditions:
– They are not dependent on their parents.
– They do not receive general health insurance from other countries.
– They have graduated from either:
– High School, or equivalent (if under 20 years old), or
– Higher Education (if under 25 years old).
Please see this link for the full text of the Amendment Law (only available in Turkish).
Turkey has introduced a tax exemption for young entrepreneurs, under 29 years’ old. Provided certain conditions are met, TRY 75,000 of income over three tax periods will be exempt from income tax. Passport fees are also waived in certain conditions. The Law Number 6663 Amending the Income Tax and other Laws (“Amendment Law”) was published in Official Gazette number 29620 on 10 February 2016, entering into effect on the same date.
The Amendment Law makes changes to the Income Tax Law number 193 dated 31 December 1960 (“Income Tax Law”). Accordingly, fully responsible natural persons, under the age of 29, who are subject to income tax liability for the first time (due to commercial, agricultural or professional activity), TRY 75,000 of revenue generated over three taxation periods will be exempt from income tax if:
– The employment start date is notified within legal notice periods.
– He/she either:
– Works in person at their own job; or
– Has management responsibilities.
– Professional activities or businesses are not be taken over from spouses, blood-relatives, or up to third degree relatives (except for take over by spouses and children due to death).
– He/she should not become partner to an existing business or professional activity later on.
If the activity is carried out within an ordinary partnership and unlimited company, all partners must meet the Amendment Law’s conditions.
Even if less than TRY 75,000 revenue is generated, an annual tax return should still be submitted.
The exemption will not apply to taxes paid pursuant to Article 94 of the Income Tax Law.
The Amendment Law also changes Article 85 of the Fees Act Number 492, dated 2 July 1964. Accordingly, passports issued for persons under 25 years’ old who are still pursuing academic studies are now exempt from fees.
The Ministry of Finance is empowered to establish implementation procedures and principles for the Amendment Law in relation to amendments to the Income Tax Law.
Please see this link for the full text of the Law (only available in Turkish).
Principles and procedures have been published for implementing tax exemptions related to financial assistance granted for the 2014 – 2020 period within the European Union’s pre-accession financial assistance package to Turkey. Accordingly, Union Contractors operating within the scope of the financial assistance program can receive tax exemptions, provided certain conditions are met.
The Framework Agreement Between the Republic of Turkey represented by the Government of the Republic of Turkey and European Commission on the Arrangements for Implementation of European Union Financial Assistance to the Republic of Turkey under the Instrument for Pre-Accession Assistance (“IPA II”) was signed on 11 February 2015.
Accordingly, the General Communiqué (Rank No: 1) (“Communiqué”) related to Framework Agreement on Instrument For Pre-Accession Assistance (IPA II) Between Turkey and European Union, was published in Official Gazette number 29623 on 13 February 2016.
The recent Communiqué covers:
– Joint financing of Sectoral agreements and financing agreements executed between Turkey and the European Union.
– Agreements executed between Contract Authorities and Union Contractors.
Contract Authorities are defined as the European Commission and entities entrusted by European Commission to make use of European Union financial assistance.
Union Contractors are defined as natural or legal persons rendering service, supplying goods, executing works and/or running business under a Union Contract. Union Contractors can be either financed solely by the European Union or jointly by the European Union and Turkey.
Union Contracts are defined as any grant or contract which involves an activity financed by the IPA II (including co-financing by the beneficiary of IPA II assistance) and which is signed by the European Commission, IPA II beneficiary or grant beneficiary. Union Contracts also include sub-grant contracts and delegation agreements under indirect management.
According to the Communiqué, provided certain certificates and approvals and conditions are met, Union Contractors can be exempt from:
– Value Added Tax.
– Special Consumption Tax.
– Income and Corporate Tax.
– Inheritance and Transfer Tax.
– Stamp Duty.
– Special Communication Tax and Motor Vehicle Tax.
– Import Taxes.
Suppliers to Union Contractors can also deduct Value Added Tax for any goods, service, or work provided.
Please see this link for the full text of the Communiqué (only available in Turkish).
The Turkish Competition Board has outlined principles for assessing competition law violations regarding indirect information exchanges in terms of hub and spoke exchanges. The Board’s decision was given upon a complaint (dated 3 August 2015) alleging competition law violations by three major competitors in the tyre sector.
The complainant claimed that three major tyre manufacturers violated competition laws by exchanging information about tyre sale units and negotiating price increases.
The Board evaluated two aspects of the information exchanges.
Information exchanges made by the distributors of competitors
The Board referred to criteria determined by UK Competition Appeal Tribunal’s Tesco decision. Accordingly, competition would deemed as restricted if:
– Competitors in the upstream market disclose future pricing information to their distributors with the intention of affecting the market behaviour of other market players,
– Distributors disclose the acquired information to other market players in the upstream market, and
– Upstream market players determine their pricing policies using such disclosures.
The Board also emphasized that practices should be examined to assess whether their object is to restrict competition. Accordingly, the Board also considered whether the information exchange is strategic and could be performed through another source.
In the present case, the Board concluded that distributors disclosed the information to competitors in the upstream market with the intention of bargaining. Accordingly, the distributors’ practice was not intended to restrict competition.
Information exchanges made through research companies and associations of undertakings
The Board held that disclosure of consolidated historic data does not have the object of restricting competition.
However, the Board held that information exchanges made through research companies and sectoral associations are deemed to restrict competition if:
– Commercially sensitive competitive information is disclosed,
– The data’s characteristics are important in terms of market structure, frequency of disclosure, disclosed information’s market coverage and participation, and
– The anti-competitive effects of the violation can be observed in the market.
In the present case, the effects of the information exchange could not be determined.
Accordingly, the Board decided not to initiate an investigation because:
– There is no written agreement or evidence to suggest that the object of the alleged conduct is to restrict competition.
– Distributors make the information exchange indirectly and some disclosures are made outside control of the competitors in the upstream market.
You can read the full text of the Competition Board’s recent decision at this link (only available in Turkish)
The Turkish Competition Board (“Board”) has ruled to return documents obtained via a dawn raid on the basis that the documents are protected by attorney-client privilege (Decision Number 15-42/690-259, 2 December 2015). The Board ruled that the privilege includes correspondence between outside counsel and clients, which do not have employer-employee relationship. However, correspondence which has no direct relation to the right of defense and which helps or covers a violation is not included, even if it is related to a pre-investigation, investigation or examination.
The Board outlined the framework for attorney-client privilege in an earlier decision which established a precedent for the Board’s future analysis of the privilege, in line with European competition laws (Decision Number 09-16/374-88, 20 April 2004).
The primary goal of attorney-client privilege is to protect the right to defense. The Board defines the privilege as applying to communication between enterprises or individuals with their attorneys. It includes correspondence and information given within the scope of consultancy services. Such information is protected and can resist compulsory disclosure.
Please see this link for full text of the decision (only available in Turkish).
The Turkish Competition Authority has introduced new information requirements for merger control notifications to the Competition Board and applications regarding competition law violations. The new information requirements enter into effect on 13 February 2016.
Merger Control Notification Forms must now also include the transaction parties’ electronic notice addresses, e-mail addresses MERSİS number (central registration recording system number), as well as for their representatives and contact persons (if any).
When making an application to the Competition Board regarding a competition law violation, the following information must now also be submitted:
– If the applicant is a real person or a representative of the applicant, electronic notice address (if any).
– If the applicant is a legal person, the applicant’s electronical notice address and MERSİS number.
Please see the links below for the full texts of the recent both Communiqué (only available in Turkish):
Amendments have been introduced in Turkey for determining prices, prices changes and reference price changes regarding human medicinal products. The Council of Ministers’ Decree for Amending the Decree on Pricing of Medicinal Products for Human Use (“Amendment Decree”) was published in Official Gazette number 29631 on 21 February 2016, entering into effect on the same date.
The Amendment Decree makes changes to the Decree on Pricing of Medicinal Products for Human Use, dated 15 June 2015 and numbered 2015/7752 (“Decree”).
Changes introduced by the Amendment Decree include:
– The price of products which have been a reference product for 20 years and whose warehouseman’s sale price is above a certain value, cannot exceed 80% of the reference price. Under the Amendment Decree, the relevant value increases from TRY 6.93 to TRY 7.32.
– The price list prepared by the Turkish Medicines and Medical Devices Agency (“Agency”) is used when determining warehouseman’s sale prices. The sale prices to the current warehouseman will be used as the reference price if there is no reference price for products that are 20 years old and whose warehouseman’s sale price is above a certain value, according to the price list. Under the Amendment Decree, the relevant value increases from TRY 6.93 to TRY 7.32.
– Prices can be set independently from the Decree for products which are approved as medicines and are more than 20 years old (as per the Council of Ministers’ Decision dated 6 February 2004 and number 2004/6781) and whose warehouseman’s sale price is a certain value or less. Under the Amendment Decree, the relevant value increases from TRY 6.93 to TRY 7.32.
Prices can also be set independently from the Decree for products that have a warehouseman’s sale price that is below a certain value. Under the Amendment Decree, the relevant values increases from TRY 3.63 to TRY 3.84.
– Approved warehouseman’s sale prices which may result from reference price or reference state changes will not be reflected in prices until the changes exceed 3%.
– If an amount in the Agency’s price list is voluntarily reduced, the updated price will apply without being subject to the statutory 60 day wait-period in certain circumstances. Price corrections by the Agency are introduced as one of these circumstances.
Please see this link for the full text of the Amendment Decree (only available in Turkish).
The Committee on Foreign Affairs (“Committee”) in Turkey’s Grand National Assembly recently discussed a Draft Law regarding Approval of the Council of Europe Convention on the Counterfeiting of Medical Products and Similar Crimes Involving Threats to Public Health (“Convention”). The Convention specifies certain acts as crimes, protects victims’ rights, as well as encourages national and international co-operation. When the draft Law is approved, the Convention will enter into force in Turkey.
The Convention defines “medical product” as including medicinal products and medical devices. It applies to generics, as well as irrespective of whether a medical product is protected by intellectual property rights.
The Convention defines the following as crimes:
– Manufacturing counterfeits and/or adulterations of products.
– Supplying, offering to supply, and trafficking in counterfeits.
– Falsifying documents.
– Unauthorized manufacturing, keeping stock for supply, importing, exporting, supplying, offering to supply, or placing on the market of medicinal products.
– Commercial use of original documents outside their intended use within the legal medical product supply chain.
– Aiding, abetting, or attempting any of the crimes outlined in the Convention.
The Convention introduces criminal liability for natural persons and legal entities. Criminal actions based on these crimes would not require complaints by victims or third parties.
The Convention outlines imprisonment for manufacturing, supplying and trafficking counterfeits. It also contemplates confiscation of products and documents which are subject to the crimes (or used in the crimes), as well as revenues obtained as a result of crimes.
The Convention suggests preventive measures, including regulations on quality and security specifications, creating awareness, as well as providing education.
The Convention suggests measures to protect victims. These include helping victims to access information on relevant issues, supporting recovery and criminal actions, as well as providing a right to claim compensation.
The Convention would constitute a legal basis for extradition and mutual legal assistance if compatibility issues arise between domestic legislation.
Please see this link for the full text of the Convention.
The scope of activity for organizations conducting foreign exchange transactions in Turkey has been extended. Authorized organizations may now buy, sell and exchange foreign currency via bank transfer, provided they place the transfer order on the same day as their customers, or the actual physical delivery is made on the same day. The regulatory change represents the re-enactment of a previously repealed provision (Article 3(d)).
The Communiqué Amending the Communiqué No. 2008-32/34 on the Decision No. 32 Concerning Protection of Value of the Turkish Currency was published in the Official Gazette on 12 February 2016, entering into effect on the same date.
Please see this link for the full text of the Communiqué (only available in Turkish).
Qualifying travel agencies which bring tourists to Turkey via certain airports during April and May 2016 will receive US $6,000 per flight from the Ministry of Culture and Tourism (“Ministry”). To qualify, flights must arrive between 1 April 2016 and 31 May 2016, via airports at Gazipaşa, Antalya, Dalaman and Milas–Bodrum (for scheduled or non-scheduled flights), as well as via İzmir Adnan Menderes and Kütahya Zafer airports (non-scheduled flights).
The Council of Ministers rendered the decision on 11 January 2016 (number 2016/8508), after the Ministry’s approval on 28 December 2015 (numbered 244284).
Three license classes exist for travel agencies in Turkey, allowing license holders to conduct different scopes of activity depending on their license. The decision at hand relates only to Group (A) travel agencies, which have the broadest license scopes.
The Ministry previously granted support to travel agencies bringing passengers from thirteen specific countries. However, the latest decision expands support to include tourists from all countries, as well as adds Kütahya Zafer airport to the list of qualifying airports.
If passengers from different travel agencies arrive on a flight, the support will be divided between those agencies on a pro rata basis. The Ministry will give priority to requests by agencies transporting their passengers in a single flight.
To receive the support, travel agencies must present documents to the Ministry proving they have brought tourists to Turkey via the noted airports. The Ministry will make payments by the fifteenth of the following month after examining the application. Payments will be make in Turkish Lira, using the USD:TRY exchange rate which applies on the payment date.
Please see this link for the full text of the Ministry’s Decision (only available in Turkish).
Revised procedures and principles have been released in Turkey for procurement of goods and services by the General Directorate of the State Airports Authority (“Directorate”). Affected procurements include those which are made within the framework of commercial and industrial activities approved by the Public Procurement Agency and which are directly related to the Directorate’s principal activities, subject to exclusions under the Public Procurement Law Number 4734 (“Public Procurement Law”).
The Regulation on Monetary Powers of the General Directorate of State Airports Authority and Procedures and Principles for Procurement of Goods and Services by the Directorate Within the Scope of Article 3(g) of Public Procurement Law Number 4734 (“Regulation”) was published in Official Gazette number 29623 on 13 February 2016, entering into effect on the same date.
The Regulation addresses:
– Establishment and working principles for procurement commissions.
– Principles for calculation of approximate costs.
– Procurement procedures and preparation of procurement documents.
– Principles for participation in procurements.
– Process of receiving and evaluating tenders.
– Rules for execution of contracts at the end of the procurement process.
The Directorate must ensure transparency, competition, equal treatment, reliability, confidentiality, public inspection, proper and timely fulfilment of needs, as well as efficient use of resources during public procurement performed in line with the Regulation.
Significant provisions in the Regulation include:
– Detailed conditions are outlined for tendering officials, procurement commissions and calculating approximate costs.
– Available procurements procedures:
– Open procurement: The principal method for the Directorate to procure goods and services under the Regulation.
– Negotiated procurement. Direct procurement is possible in certain specified circumstances, subject to the Public Procurement Law and its secondary legislation.
– Rules for the content and preparation of procurement documents, administrative and technical specifications and contract drafts.
– Rules for participating in public procurement. The Directorate determines which documents are required to demonstrate participants’ economic, financial, professional and technical capability.
– Conditions for presenting and evaluating bids, as well as their validity period. Determining the economically most advantageous bid can be based on the price alone, or also take other factors into account. Further principles are outlined to determine the economically most advantageous bid where there is a tie.
– Procedures for rejecting all bids and cancelling the procurement.
The Regulation abrogates the Procurement Regulation for General Directorate of State Airports Authority that was published in Official Gazette number 25323, dated 21 December 2013. Public procurements which were announced and called for tender prior to 13 February 2016 will be concluded pursuant to the regulations which were in effect on the date of the relevant announcement and call for tender.
Please see this link for the full text of the Regulation (only available in Turkish).
From February 2016 onward, the Official Industrial Designs Bulletin (“Bulletin”) will be published twice per month in Turkey, on the 9th and 24th of each month. The Bulletin contains new industrial design applications and was previously published on the Turkish Patent Institute’s website only in the first half of each month.
Oppositions to industrial design applications must be filed within six months of the date the application being published in the Bulletin. Therefore, opposition deadlines will now fall into the first or second half of the month, according to the relevant Bulletin’s publication date. Interested parties will need to carefully follow deadlines to avoid confusion or loss of rights due to the increased regularity of Bulletin publications.
A similar change was also recently made regarding the Official Trademark Bulletin (more)
Please see this link for the announcement published on TPI’s web site (only available in Turkish).