Edition 25: 1 July 2016
Editorial Team:
Dr. E. Seyfi Moroğlu, LL.M., Işık Özdoğan, LL.M. and Bora İkiler, LL.M.
Turkey Increases Regulator Powers and Requirements for Electronic Communication Service Providers

Turkey’s Information and Communication Technologies Authority (“Authority”) has received new powers to suspend Service Providers’ authorizations, audit information, as well as require companies meet minimum capital thresholds to operate in the electronic communications sector. Turkey has also introduced new obligations for electronic communication Service Providers regarding permissions and notifications for share transfers, as well as data retention periods.

The Regulation Amending the Regulation of Authorization in Electronic Communications Sector (“Amendment Regulation”) was published in Official Gazette number 29739 on 11 June 2016.

New powers for the Authority 

The Amendment Regulation grants the Authority these new powers:

– The Authority can now suspend Service Providers’ authorization for a limited or unlimited time period, or operate the network directly, if this is necessary due to war, full mobilization (or similar), public security, or national defence.

– The Authority can now inspect companies to authenticate application information or documents (except official documents).

– The Authority can set a capital sub-limit which companies must meet to operate in the electronic communications sector.

New requirements for electronic communication Service Providers

The Amendment Regulation introduces these new requirements for Service Providers:

– Companies which provide electronic communication services must store data and traffic information for two years. Other data (including user information) should be kept for the durations required in related laws and regulations.

– For share transactions:

– Transferring 10% shares or more: Authority’s permission is required

– Transferring less than 10% shares: Companies must notify the Authority within two months after the transaction.

– To become an authorized Service Provider, applicants must be Joint-Stock companies.

– Companies must provide sales, maintenance and repairs, and consultancy services in accordance with their operations and services under the authorization.

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

Read More
Occupational Physicians and Safety Specialists Now Required for “Low Hazard” Turkish Workplaces With Less Than 50 Employees

Turkish public institutions and workplaces which fall into the “low hazard” category, which have 49 employees or less, must now provide occupational health and safety staff. From 1 July 2016, these employers must designate staff members as occupational safety specialists and occupational physicians. The requirement already applied to low hazard workplaces with 50 or more employees, as well as to workplaces in the “hazardous” and “very hazardous” categories.

If existing employees have the necessary qualifications, these roles can be assigned to qualified employees. However, if no existing employee(s) are qualified, the employer must enlist a joint health and safety unit to partially or fully provide these services.

Failures to fulfill this requirement will be subject to an administrative fine between TRY 5,000 and TRY 10,000, separately applied on a monthly basis for each staff member who is not provided.

The change was introduced by Article 38 of the Occupational Health and Safety Law no. 6331, published in Official Gazette number 28339 on 30 June 2012. Please see this link for the full text of Law number 6331 (only available in Turkish).

Read More
Turkey Introduces More Comprehensive Incentive Framework For Using Domestically Manufactured Equipment in Renewable Energy Generation

Turkey has introduced a more comprehensive and detailed regulatory regime for incentives available when using domestically manufactured equipment in renewable energy generation. The new regime outlines increased details about the terms, applicable amount, documentation, and supervision of additional participation prices for using domestically manufactured equipment in electricity production facilities based on renewable resources.

The Regulation on Supporting Domestically Manufactured Equipment Used in the Production Facilities Based on Renewable Energy Resources (“Regulation”) was published in Official Gazette number 29752 on 24 June 2016. The Regulation was issued in accordance with the Law on Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy numbered 5346.

The Regulation’s main provisions include:

– License holder entities wishing to benefit from the additional domestic participation price for the first time must apply to the Ministry of Energy and Natural Resources (or institution authorized by the Ministry) by 1 August of each year. The Regulation outlines specific documents required for such applications.

– The additional domestic participation price will be announced by 31 October of each year.

– The additional domestic participation price will be granted to applicants for five years, starting from the production facility’s commissioning. It is calculated via a formula included in the Regulation.

– The Manufacturing Determination Board has discretion to inspect equipment used in the production facilities by license holder entities which apply for the additional domestic participation price.

The Regulation supersedes the Regulation on Domestically Manufactured Equipment Used in the Production Facilities Based on the Renewable Energy Resources published in Official Gazette number 27696 on 19 June 2011. Please see this link for the full text of the Regulation (only available in Turkish).

Read More
Turkey’s Banking Regulator Amends Loan Classifications and Provision Requirements, Plus Method for Calculating Bank Equity

Turkey’s Banking Regulation and Supervision Agency has made a series of regulatory amendments to loan classifications, provisions to be reserved for loans, as well as methods for calculating bank equity. The amendments are intended to help banks increase annual profits, particularly after the discount in general reserve ratios for consumer credits.

Loan Qualifications and Provisions To Be Set Aside

A series of provisions are introduced for banks based on the Turkish Financial Reporting Standards No. 9 (“TFRS 9”), published the by Public Oversight, Accounting and Auditing Standards Authority, which aim to harmonize Turkey’s reporting standards with the corresponding International Financial Reporting Standards.

As a result, banks must now group credits based on the associated risks and determine their internal strategies accordingly. Banks are no longer required to apply general provisions to be allocated. Rather, the rate of provision to be set aside must depend on the risk level for each credit group. Specified credit groups include:

– First Group: Loans of Standard Nature

– Second Group: Loans Under Close Monitoring

– Third Group: Loans with Limited Recovery

– Fourth Group: Loans with Suspicious Recovery

– Fifth Group: Loans having the nature of Loss

Moreover, principles and procedures are outlined for illiquid claims, reclassification, as well as restructuring.

Banks are categorized as either being subject to TFRS 9, or not subject to TFRS 9, with different provision rates applying for each category. Banks subject to TFRS 9 are no longer required to allocate a general provision for loans which do not fall within the scope of TFRS 9. On the other hand, general and special provisions are determined separately for banks which are not subject to TFRS 9.

Banks must comply with the new requirements and TFRS 9 by 1 January 2018. Banks which are not compliant at this date will be required to allocate higher provision rates for loans.

Please see this link for the full text of the Regulation On The Procedures and Principles For Determining Loan Qualifications By Banks and Provisions To Be Set Aside, published in Official Gazette number 29750 on 22 June 2016, entering into effect on 1 January 2017  (only available in Turkish).

Calculating Bank Equity 

Changes are made to provisions addressing property and commodity transactions, regulated under Article 57 of Banking Law numbered 5411.

Accordingly, when calculating equity, these transactions are now deducted from the sum of original capital and supplementary capital. The net book value of the property and commodities which are not disposed within three years after the acquisition date (despite banks being required to dispose of them) in accordance with Article 57, are deducted from the sum of the original and supplementary capital.

Please see this link for the full text of the Regulation Amending the Regulation on Equity of Banks, published in Official Gazette number 29750 on 22 June 2016, entering into effect on 1 January 2017 (only available in Turkish).

Please see these links for further information about other recent amendments published by the Agency in the Official Gazette on 23 October 2015 (capital adequacy, risk management disclosures, securitization, and risk assessment models) and 20 January 2016 (internal systems, capital adequacy, liquidity coverage ratio, equity, as well as disclosures related to credit risk reduction techniques and risk management statement).

Read More
Turkish Public Procurement Tenders: Technology Development Zone Projects Now Eligible; Increased Health and Safety Requirements

Turkey has widened the scope of its public procurement regime to now allow Technology Development Zones to participate in tenders. These zones have now become eligible to receive a “competence for technological products” certificate. Legislative changes also increase the occupational health and safety measures which must be implemented in service procurement tenders.

The changes were introduced by the Public Procurement Authority and apply to tenders held by public authorities and institutions governed by the Public Procurement Law. Two separate amendments were published in Official Gazette number 29696 on 27 April 2016 (“Amendment Regulations”).

According to the Amendment Regulations:

– From 1 March 2016, Technology Development Zones are added to the list of projects and entities entitled to be granted a certificate of “competence for technological products”. Accordingly, goods and services which result from R&D, innovation, or cooperation projects are entitled to be granted a certificate of “competence for technological products”, provided these are conducted within Technology Development Zones and supported by public authorities, foundations or international funds.

– From 1 March 2016, projects arising from research and development activities, developed via the owner’s equity, are now entitled to be granted a certificate of “competence for technological products”, provided the Scientific and Technological Research Council issues a document showing the project was developed due to research and development.

– The Standard Contract for Procurement of Services includes contractor liabilities. These liabilities have been widened to include a requirement that contractors provide occupational health and safety, at their own expense. Contractors must now also take all necessary occupational health and safety steps required by law.

– New occupational health and safety requirements are added to the General Conditions for Procurement of Services.

– Contractors must now hire employees with necessary occupational training for tasks classified as “hazardous” or “very hazardous”.

– Contractors must now take all occupational health and safety measures required by law for places where its employees live and work, at their own expense.

Please see these links for the full text of the Amendment Regulations (only available in Turkish):

– Regulation Amending Regulation on the Implementation of Tender Processes for Procurement of Goods

– Regulation Amending Regulation on the Implementation of Tender Processes for Procurement of Services

Read More
Turkey Introduces Rules for Disabled Customer and Over 70s to Improve Accessibility and Safety for Banking Services

Turkey has introduced regulations to improve accessibility to banking services for disabled customers, as well as customers over 70 years old. The changes aim to increase safety and ease of use for banking services. New rules include providing documentation in braille, sign language and audio formats, as well as changes to ATM functions and related security. All banks in Turkey must comply with the new rules by 1 January 2018.

The Banking Regulatory and Supervisory Agency issued the Regulation on Accessibility of Banking Services (“Regulation”), published in Official Gazette number 29476 on 18 June 2016.

To access the services contemplated by the Regulation, customers must submit documents (or approved copies) to their bank, showing more than 40% impairment or disability. Customers above the age of 70 can access the services without notifying or submitting documents to the bank.

Under the Regulation, banks will be required to:

– Take the special needs of disabled or elderly customers into consideration and give priority where possible.

– Provide banking service agreements on their websites in vocal format and as sign language videos.

– Provide banking service agreements on their websites in audio format and sign language videos.

– Provide agreements for banking services, information and documents (such as account statements, PIN, passcode) in braille, via audio information, or via sign language videos (if requested).

– Educate personnel about the possible needs of disabled customers, such as sign language. Personnel must give information to customers about access, usage and security.

The Regulation also requires banks to rearrange ATM’s to include:

– Screens which avoid extreme brightness or darkness.

– Voice information and instructions for sight impaired customers

– Sign language menu options for hearing impaired customers.

– Security measures to maintain secure use of the services.

Under the new rules, disabled customers will able to check account balances, make withdrawals, deposit money, as well as check and pay credit card debt free of charge at all ATM’s (even those not operated by their own bank), provided they submit disability information to the bank.

Banks will be required to designate service regions by the number of disabled customers. Each region must have at least one ATM device allocated and designed for use by orthopedically handicapped customers. All measures must be taken to ensure secure usage of the ATM’s by disabled customers, without needing assistance.

A transition period applies from 1 January 2017 to 1 January 2018, for banks to adapt to the new requirements. However, services planned for provision during the transition period must comply with the new rules.

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

Read More
Turkish Constitutional Court: Employee Complaint to Public Authorities Protected by Freedom of Expression

The Turkish Constitutional Court recently held that terminating an employment agreement based on the employee lodging a complaint about the employer to the Prime Ministry Communication Centre (“BİMER”) violated the employee’s constitutional rights. The court held the employee’s freedom of expression is protected under Article 26 of the Constitution.

In the case at hand, the employer terminated the agreement immediately. It claimed just cause for the termination (under Article 25 of Labour Code numbered 4857) due to the employee lodging a complaint before BİMER. The employee filed a re-employment lawsuit, seeking the termination be cancelled.

The first instance court ruled the employment agreement was not terminated on a justified ground, since the employee’s action did contradict honesty and loyalty.

The Supreme Court reversed the first instance court’s decision, holding the employee’s statements in the complaint were insulting to the employer.

The employee appealed the matter to the Constitutional Court. On review, the Constitutional Court ruled in the employee’s favour, reasoning:

– Lodging a complaint to BİMER is constitutionally protected as freedom of expression, under Article 26 of the

– Assessing violation of the employee’s freedom of expression will be made in two steps:

– Determining whether there is an interference with the employee’s constitutional rights.

– Determining whether such interference is based on valid grounds.

– Terminating the agreement based on the employee’s application to a public authority is an interference with the employee’s freedom of expression.

– The employee’s application to BİMER was intended as a “call for aid” from public authorities. The application does not constitute a public statement which may affect the employer’s reputation.

The Constitutional Court’s decision (dated 14 April 2016, with application number 2013/6829) was published in Official Gazette number 29742 on 14 June 2016. Please see this link for the full text of the Constitutional Court’s decision (only available in Turkish).

Read More
Exemptions Introduced for Foreign Health Workers Under Temporary Protection in Turkey, New Rules for Midwives

Turkey’s Ministry of Health has introduced exemptions from certain pre-application criteria for employing foreign health workers in private health institutions. In certain conditions, individuals who are temporarily under Turkey’s protection are no longer required to meet criteria related to approval and registration of qualification documents, or legal practicing restrictions. The regulatory regime has been extended to now also apply to midwives, who were previously exempt.

In principle, foreign health workers who under Turkey’s temporary protection must meet the following criteria before applying for employment in private Turkish health institutions:

– Have their diploma or certificate of expertise approved for equivalency, and registered with the Ministry of Health.

– Be free of any legal restrictions on practicing their profession.

– Be competent in the Turkish language.

– Hold a Turkish work and residence permit, as per applicable laws.

– For physicians, hold professional liability insurance.

The Regulation on Temporary Protection (published in Official Gazette number 29153 on 22 October 2014) defines “temporary protection” as applying to foreigners who are forced to leave (and cannot return to) their country, coming into Turkey’s borders en mass (or in person during large movements) and whose international protection requests cannot be taken into consideration personally.

The amendments mean that the first two criteria no longer apply to individuals who are under temporary protection in Turkey, provided the Ministry of Health authorizes them to practice their profession and they are employed by certain specified healthcare institutions.

Dentists, pharmacists and caretakers are excluded from the pre-application criteria noted above. Midwives were previously also excluded. However, the pre-application criteria above will now also apply to midwives.

The Amendment Regulation on the Regulation of Working Procedures and Principles of Foreign Health Workers in Private Healthcare Institutions in Turkey was published in Official Gazette number 29744 on 16 June 2016, entering into effect on the same date. Please see this link for the full text of the Amendment Regulation (only available in Turkish).

Read More