Edition 22: 17 May 2016
Editorial Team:
Dr. E. Seyfi Moroğlu, LL.M., Işık Özdoğan, LL.M. and Bora İkiler, LL.M.
Turkey Ratifies Supervisory Authority and Transborder Data Flow Aspects of the International Convention on Automatic Processing of Personal Data

In 1981, Turkey signed the Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data (“Convention”) at Strasbourg. In 2001, an amendment Protocol was added to the Convention, specifically addressing supervisory authorities and transborder data flows (“Protocol”). In February 2016, Turkey ratified the 1981 Convention into local legislation (more) and it has also now ratified the additional 2001 Protocol.

Ratification Law No. 6705 Regarding Additional Protocol To The Convention For The Protection Of Individuals With Regard To Automatic Processing Of Personal Data Regarding Supervisory Authorities And Transborder Data Flows (“Ratification Law”) was published in Official Gazette number 29703.

Supervisory Authorities 

The Protocol requires each signatory country to establish  one or more authorities, responsible for ensuring compliance with the Convention’s measures in domestic law, as well as give effect to the General Provisions and Basic Principles for Data Protection.

Supervisory Authorities hold investigatory and intervention powers. They should operate independently and will hear claims about processing of personal data. Decisions can be appealed through the courts.

Supervisory Authorities should be able to apply to the judicial authorities where domestic law is breached and should co-operate with other Supervisory Authorities to the extent necessary.

Transborder flows of personal data 

The Protocol requires signatory country to only transfer personal data to a recipient which is subject to the jurisdiction of a State/organization that is not Party to the Convention if that State/organization ensures an adequate level of protection for the data.

Parties can allow for personal data transfers if:

– The transfer is for the data subject’s specific interests.

– Public interests are more important.

– The responsible data controller provides contractual safeguards for the transfer and these are found adequate by the competent authorities according to domestic law.

The Ratification Law does not accept a clause in the Protocol stating that The Republic of Cyprus is represented by the Greek Cypriot Administration of Southern Cyprus in any manner, nor that the Protocol establishes any obligation to contact The Republic of Cyprus.

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

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OECD Report Names Turkey as Second Largest Source Economy for Counterfeit and Pirated Goods

The 2016 Report on Trade in Counterfeit and Pirated Goods (“Report”) was published on 18 April 2016 by the Organization for Economic Co-operation and Development’s (“OECD”). The Report gives detailed insights into global counterfeiting activities, as well as ranks the most affected countries and industries. The Report notes that more than 100,000 seizures occurred globally during 2011 to 2013 and Turkey is the third largest source economy for infringing goods. Luxury products are identified as the most frequently seized goods around the world.

The report addresses infringement of trademarks, copyrights and patents and is based on studies of international trade statics and customs seizures of infringing products between 2011 and 2013.

Notable points in the Report include:

– In 2013, trade in counterfeit and pirated products represented up to 2.5% of world trade. In the same year, counterfeit and pirated products represented up to 5% of total imports into the European Union.

– A wide range of products are infringed, from high-end luxury goods, through to common consumer products.

– China is the largest source economy, accounting for 63.2% of total seizures in 2013, along with the highest number of seized counterfeit shipments originating from China.

– Chinese companies are also frequently affected by infringement.

– The most affected countries are the United States, Italy, France, Switzerland, Japan, Germany, the United Kingdom and Luxembourg.

– Trade routes and transit points change in response to enforcement developments and security gaps.

– During 2011 to 2013, more than 100,000 customs seizures of counterfeit and pirated goods occurred worldwide.

– Luxury products are the most frequently seized goods.

– After China and Hong Kong, Turkey is noted as the second largest source economy during 2011 and 2013. Turkish seizures constituted 3.3% of total global seizures in 2013.

– The footwear industry is the sector most hit globally by infringement.

– Almost 62% of seizures were postal shipments and small shipment is a rising trend.

– A significant amount of infringing labels and packaging were also seized, apart from infringing products themselves.

The Report was jointly prepared by the OECD and European Union Intellectual Property Office, with support from the World Customs Organization and the Directorate-General for Taxation and Customs Union. Please see this link for full text of Report.

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Turkey’s Energy Regulator Updates Template Agreements for Use and Connection to the Electricity Distribution System

Turkey’s Energy Market Regulatory Authority (“Authority”) has updated and amended certain elements of the template agreements for use and connection to the electricity distribution system. Changes apply to the Distribution System Use Agreement, the Distribution System Connection Agreement for Consumers, as well as the Distribution System Connection Agreement for Legal Entities That Carry Out Production Activities.

Distribution System Use Agreement

Changes to the Distribution System Use Agreement include:

– The provision enabling the legal entity holding the distribution license to cut off a consumer’s electricity has changed. With the new provision, the Distributor Company will off-set the debt from a consumer’s deposit payment if the consumer fails to make payment for eight days after the Distributor Company notifying the consumer. Off-setting will also occur if the user is a legal entity that carries out production activities. If the deposit payment is not enough to cover the debt, a disconnection notification will sent to the legal entity. If the legal entity fails to make the payment within eight days of the notification, then the legal entity’s electricity will be cut off.

– Distributor Companies now require the Authority’s approval to assign, transfer and pledge rights and obligations under the Distribution System Use Agreement.

– Parties must take the necessary precautions to protect commercially significant information obtained as a result of legislation, market activities or agreements, and not disclose this to third parties (including shareholders or affiliates).

– Parties must make a deposit payment to the Distributor Company as a warranty of their payment obligations, within certain limits. The deposit can be cash or a definite and unlimited in time bank guarantee letter.

Distribution System Connection Agreements

Changes to the Distribution System Connection Agreements include:

– A consumer’s facilities must not be connected to the distribution system before execution of a facility agreement between the parties.

– A user which fails to fulfill his obligations due to a force majeure event must submit a report to the Distributor Company within 30 days after the start of the force majeure. The report must include the reasons, nature, duration, and current status of the force majeure, as well as precautions taken.

– If the Distributor Company undertakes a financial obligation for the system connection, it must pay back the deposit amount to the user within 30 days after system connection and fulfillment of related obligations.

– The agreement will be deemed terminated if the user makes a misstatement about ownership of the facility that is/will be connected to the system. In such a case, the user must compensate the Distributor Company for any damages incurred.

– Notifications about the agreement must be made via a notary public. The Distributor Company must announce any address change on its website, whereas the user must notify the Distributor Company of any address change within ten days of the change occurring.

The Authority’s decision number 6193 dated 30 March 2016 was published in Official Gazette number 29686 on 16 April 2016. Please see this link for full text of the Template Agreements (only available in Turkish).

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Turkey Updates Legislative Framework for Extradition and Cooperation with Foreign Countries on Criminal Matters

Turkey has enacted a range of legislation regarding cooperation with foreign states on criminal matters, including criteria and procedures for making and executing requests. The updated legislative framework outlines criteria for extradition from Turkey, including circumstances Turkey can refuse extradition requests. Turkey also recently ratified the European Convention On Mutual Assistance In Criminal Matters, along with related protocols. These steps plays a vital role in Turkey’s European Union harmonization process.

The Law Regarding International Legal Cooperation on Criminal Matters dated 23 April 2016 (“Law”) was published in Official Gazette number 29703 on 5 May 2016, entering into effect on the same date.

The Law appoints the Ministry of Justice to :

– Accept legal cooperation requests from foreign states.

– Determine the conformity of legal cooperation requests made by Turkish legal authorities.

– Regulate the procedures for legal cooperation (within the scope of ratified international conventions and rule of reciprocity).

– Approve or restrict use of documents and information requested by foreign states.

– Impose conditions for using documents.

Turkish Legal Authorities can request legal cooperation from foreign states in any necessary circumstances, including:

– Finalizing the investigation or prosecution process.

– Fulfilling imprisonment sentences.

Turkey’s cooperation with foreign authorities on criminal matters will be fulfilled according to Turkish law. However, special procedure requests by foreign states can also be implemented, provided these do not contradict Turkish law.

The Law allows use of visual and audio communication techniques to be used to fulfil cooperation requests. These operations will be carried out according to the laws of the state fulfilling the request.

Extradition from Turkey 

The Law addresses extradition of foreign criminals who face criminal investigation and prosecution in Turkey, as well as Turkish criminals imprisoned in a foreign state.

At the investigation and prosecution stage, extradition from Turkey is only available for offences which are subject to maximum imprisonment of more than one year. If the maximum sentence available for an offence is less than one year, extradition is not possible.

If a requests relates to circumstances where a sentence has already been given, the sentence imposed must be at least four months’ of liberty binding punishment.

Turkey can refuse extradition requests from foreign countries if:

– The request concerns a Turkish citizen, except for obligations arising from affiliation to the International Criminal Court.

– A strong presumption exists that the person subject to the request will face torture, cruel treatment or will be subject to investigation based on their race, ethnic background, religion, nationality, affiliation to a certain social group, or political views.

– The person subject to the request has already been imprisoned or acquitted in Turkey.

– The request concerns a crime subject to the death penalty, or a sentence could be imposed which is incompatible with human dignity.

– The action subject to the extradition request is:

– A crime of thought, political crime, or crime linked to a political crime.

– Only a military offence.

– Contrary to national security, to the detriment of the Turkish State or Citizens, or a Turkish legal entity which is established accordingly to Turkish laws.

– A crime subject to Turkish jurisdiction.

– The offense is barred by the statute of limitations or has been pardoned. 

Ratification of European Convention 

On 22 March 2016, Turkey also ratified the European Convention On Mutual Assistance In Criminal Matters (“Convention”), along with related protocols. The Convention and protocols were ratified into local legislation on 25 April 2016.

Collectively, the Convention and protocols outline procedures and principles for international legal cooperation on criminal matters. They aim to create harmony and maximum unity between European Council members’ legal systems on this issue. Therefore, Turkey’s ratification of the protocols plays a vital role in the country’s European Union harmonization process.

Please see the links below for the full text of the related laws (only available in Turkish) :

– Law regarding International Legal Cooperation on Criminal Matters

– Law regarding Approval of Ratification of the Additional Protocol to the European Convention On Extradition

– Law Regarding Approval of Ratification of the Additional Second Protocol to the European Convention On Mutual Assistance In Criminal Matters

– Law regarding Approval of Ratification of the Additional Third Protocol to the European Convention On Extradition

– Law regarding Approval of Ratification of the Additional Fourth Protocol to the European Convention On Extradition

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Turkey Publishes Details of Tax Exemption for young Entrepreneurs and Deduction for Commercial Income Determined via Simple Procedure

Turkey has published secondary legislation outlining details of new tax exemptions for young entrepreneurs and taxpayers whose commercial income is determined via simple procedure. As a result, from 10 February 2016, qualifying entrepreneurs under the age of 29 can be exempt from income tax for up to 75,000 TL worth of revenue over the next three taxation periods (more). Also, from 1 January 2016, taxpayers declaring commercial income determined via simple procedure become eligible to deduct 8,000 TL from their commercial income.

The General Communique on Income Tax (Registration No: 292) (“Communique”) was published in Official Gazette number 29703 on 5 May 2016. The Communique deals with the articles which were recently introduced to the Income Tax Law by Law No: 6663, Law Amending Income Tax Law and Some Other Laws which was published in Official Gazette number 29620 on 10 February 2016.

If a taxpayer meets the criteria for both the exemption and deduction, he or she is free to choose which benefit they prefer (but cannot receive both).

Young entrepreneurs

From 10 February 2016 onward, if all of the following criteria are met, up to 75,000 TL of an entrepreneur’s income will be exempt from income tax over the next three annual tax periods:

– It is his/her first tax obligation for commercial, agricultural or professional activity.

– He or she is younger than 29 years of age as of the date the tax obligation is established.

– He or she either:

– Works in person at their own job; or

– Has management responsibilities.

– He or she meets other requirements outlined in the Communique.

The Communique outlines these criteria in detail, with examples.

If entrepreneurs begin operations as an ordinary partnership or as a private company, each of them can benefit from the exemption, provided they each meet the criteria. All parties must meet the criteria otherwise it is not available, even if some parties do meet the requirements. The exemption is not available if the entrepreneur joins a partnership with an existing business or occupational activity.

Commercial income determined via simple procedure

For income generated after 1 January 2016, taxpayers declaring commercial income which is determined via simple procedure become eligible to deduct 8,000 TL from their stated commercial income (Article 89(1)(15) of the Income Tax Law).

If a taxpayer who is taxed via simple procedure changes to the real procedure for any reason in the same tax period, they are no longer eligible for the deduction.

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

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Turkey Announces Action Plan to Improve Transparency and Fight Corruption in 2016 to 2019

Turkey’s Prime Ministry has announced an action plan (“Action Plan”) for transparency and anti-corruption during the 2016 to 2019 period. The Action Plan aims to develop a fair, accountable, transparent and credible management mentality, as well as prevent corrupt approaches, by increasing social awareness of anti-corruption. The Action Plan envisages preventative measures, legislative amendments, as well as measures to implement sanctions and increase of social awareness. It also establishes the Commission on Increasing Transparency and Strengthening the Fight Against Corruption in Turkey.

The Action Plan outlines the following steps:

– Developing transparency and audit in funding of political parties and campaigns.

– Reviewing provisions on declaration of wealth.

– Determining ethical principles for elected persons in district government.

– Determining ethical principles for each occupational group in administration, as well as preventing conflicts of interest.

– Implementing a single window system in customs.

– Reviewing the Public Procurement Law.

– Reviewing administrative permission procedures during investigations of public officials.

– Drafting provisions for protection of whistleblowers.

– Supporting social activities in relation to anti-corruption and decent society.

The Action Plan establishes the Commission on Increasing Transparency and Strengthening the Fight Against Corruption in Turkey is assigned to approve and implement the Action Plan. The Commission includes the Ministers of Justice, Labor and Social Security, Customs and Trade, Internal Affairs and Finance. It will be presided over by the Deputy Prime Minister.

The Executive Committee on Increasing Transparency and Strengthening the Fight Against Corruption In Turkey is assigned to carry out the Commission’s decisions, do required studies, monitor implementation of the Action Plan and ensure coordination. The Executive Committee includes Deputy Secretaries of the Ministries of Justice, Labor and Social Security, Customs and Trade, Internal Affairs and Finance Executive Committee. It will be presided over by the Deputy Secretary of the Prime Ministry.

The Action Plan was announced in Circular numbered 2016/10, published in Official Gazette numbered 29699 on 30 April 2016. Please see this link for the full text of the Circular and Action Plan (only available in Turkish).

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Turkey Clarifies Road Transport Regulations, Intended to Boost Sector Growth

Turkey’s Ministry of Transport, Maritime Affairs and Communications has issued regulatory amendments intended to clarify certain detailed procedural issues in the road transport sector, which have been subject to different interpretations. The clarifications aim to increase certainty in international road transport activities and mostly apply to authorization certificate processes.

The Regulation Amending the Road Transport Regulation was published in Official Gazette number 29702 on 4 May 2016 (“Amendment Regulation”), entering into effect on the same day.

Significant clarifications made by the Amendment Regulation include:

– If one party to a lease agreement holds an authorization certificate, further notarization will not be sought.

– Post can be transferred by road transport, provided authorization is obtained pursuant to the Postal Services Code numbered 6475.

– International non-scheduled passenger transportation must use a single border gate and cannot change the selected gate.

– A fee reduction will be made for parties requesting an authorization certificate for a single vehicle.

– Firms conducting international and domestic cargo transportation can now execute agency agreements with domestic cargo transportation agencies.

– Permanent warnings on authorization certificates are removed, along with cancellations of authorization certificates due to the warnings. All warnings on the authorization certificates will be removed before the change, renewal, combination of authorization certificates.

– A vehicle’s authorization certificate will be removed if:

– The vehicle is not inspected within 30 days of the statutory time period.

– The vehicle is older than the age determined under the Regulation.

– The vehicle does not have required insurance.

– The requirement to notify the related authorities within 60 days after a vehicle is removed has been cancelled.

– Various regulation has been introduced to prevent repeated penalties. Several provisions have been cancelled regarding requirements to cease activities.

– If a tax registration becomes inactive, authorization certificates which require active tax obligations will temporarily cease, rather than be cancelled. Authorization will be re-granted once their tax registration is active again.

– If an authorization certificate has been cancelled due to 50 or more warnings, forfeiture of the minimum capacity requirement, or not being an active tax payer by 4 May 2016, the authority-holder can apply to retake their (cancelled) authorization certificate until 1 August 2017. If all conditions are met, a new authorization certificate will be issued after payment of 15% of the applicable authorization certificate.

– A renewal fee (for the first time) will not be requested from legal persons whose authorization certificate was cancelled due to 50 or more warnings given, forfeiture of the minimum capacity requirement, or not being an active tax payer by 4 May 2016, provided they have already taken same type of authorization certificate by paying the whole amount.

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

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Omnibus Law Introduces Arbitration to Dispute Traffic Insurance Claims and Loosens Employee Annual Leave Requirements in Turkey

An omnibus law in Turkey has amended insurance provisions of the Highway Traffic Law No. 2918 to clarify document requirements and introduce the option of arbitration. It also loosens a legislative requirement for employees to take annual leave in one continuous period under the Labor Law No. 4857.

The Law No. 6704 on Putting Pension to the Destitute, Weak and Helpless Turkish Citizens and Amending Several Laws and Decree Laws (“Omnibus Law”), was published in Official Gazette number 29695, on 26 April 2016.

Changes to the Highway Traffic Law No. 2918 

The Omnibus Law introduces changes regarding compulsory automobile liability insurance:

– When applying for compensation, the claiming party must first apply to the insurer. If the insurer does not respond to the application in writing within fifteen days, or the dispute is not solved, the claiming party can choose to either file a lawsuit, or they may now also initiate arbitration (with the Insurance Arbitration Commission).

– Exceptions for compensations based on the General Rules on Compulsory Automobile Liability Insurance are expanded.

– If a traffic accident occurs, the claiming party must now apply for compensation with the documents required by the General Rules on Compulsory Automobile Liability Insurance, rather than an accident and loss report or an expert’s report. However, The General Rules do not list the specific documents required. The claiming party must apply to the insurer within ten days of a traffic accident and provide the relevant documents within a reasonable time.

Changes to the Labor Law No. 4857

It is now legislatively permitted for an employee to use annual leave in parts (by agreement with the employer), provided one part is at least ten days long (Article 56(3) of the Labor Law, revised by Article 16 of the Omnibus Law).

Previously, an employee’s entire annual leave allowance could technically only be used in one part. However, regardless of this prior legislative requirement, in practice it was possible to use the annual leave in parts, at the employee’s request. Therefore, the change simply updates the Labor Law to better reflect common practices.

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

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