Turkey has taken a series of new measures involving companies and public institutions in the wake of the State of Emergency declared on 21 July 2016. Latest measures include removing criminal liability for banks and financial institutions which provide financial services to closed companies; appointing the Saving Deposit Insurance Fund as a trustee to manage and represent minority shares held by terror-linked individuals and entities; removing personal liability regarding debt payments for appointed trustees and managers; deeming certain property transfers as collusion, as well as discontinuing a range of legal actions or enforcement proceedings as lacking a cause of action, without having to wait for a court hearing date.
Decree No 675 on Taking Certain Measures within the scope of the State of Emergency (“Decree”) was published in Official Gazette number 29872 on 29 October 2016.
Notable provisions introduced by the Decree include:
– Banks and financial institutions (including staff) will not have any criminal liability for financial services provided to institutions and organizations which have been closed during the State of Emergency Period. Similarly, criminal liability will not apply with regard to companies which were automatically cancelled from the trade registry records, or natural persons and legal entities which have been deemed to be linked to the FETÖ/PDY terror organizations.
– The Saving Deposit Insurance Fund will be appointed as a trustee to companies to manage and represent the shares held by individuals and legal entities linked to the FETÖ/PDY terror organisations (provided they are less than 50% of overall share capital).
– Trustees, managers and liquidators will not be personally liable for public debts, Social Security Institutions debts, employee claims, or other debts that may accrue regarding entities closed during the State of Emergency. These include institutions, organizations, private radio and television stations, newspapers, magazines, publishing house, distribution channels. Provisions in the Law on Collection Procedure of Assets and Law on Tax Procedure will not be applied to such persons.
– Property transfers by private education institutions and organizations and the private student dormitories and pensions to third persons between 1 January 2014 and their date of closure will be deemed as collusive. Such immovable will be directly registered in the title deed without any restrictions or charges to the name of General Directorate for Foundations.
– Certain legal actions will be discontinued as lacking a cause of action, without having to wait for a court hearing date. These include actions against entities institutions, organizations, private radio and television stations, newspaper, magazines, publishing houses, or distribution channels which have been closed down (including natural persons or legal entity owners), bought before 17 August 2016, along with actions against the Treasury and General Directorate of Foundations initiated before that date. Enforcement and bankruptcy proceedings brought against these institutions, organizations and persons will also be discontinued.
– Plaintiffs or creditors receive 30 days from being notified to apply to the Administrative Authority and initiate an action against the decision before the administrative courts. Decisions by administrative courts will be final.
– Legal actions or enforcement proceedings against the Ministry of Finance and General Directorate for Foundations initiated after 17 August 2016 regarding closure or direct cancellation of institutions, organizations, or closed companies will be dismissed due to the lack of cause of action or proceedings.
Please see this link for the full text of the Decree (only available in Turkish).
Turkey has announced operational and structural details for the newly established Turkish Wealth Fund Management Company (Türkiye Varlıklar Fonu Yönetimi Anonim Şirketi; “Management Company”). Details address auditing requirements, activity disclosures, exercising management rights, handling and registering assets, as well as certain restrictions on how assets can be used.
Legislative basis for the Management Company was introduced in August 2016 by Law No. 6741 (more information). The latest details were announced via Decree No. 2016/9429 (“Decree”), published in Official Gazette numbered 29883 on 9 November 2016.
The Decree describes the Management Company’s operations as the establishment and management of the Turkish Wealth Fund (“Wealth Fund”) and other affiliated sub-funds, intended to carry out project development, generate resources on a project basis, as well as establish domestic and international partnerships (among other purposes).
Notable points from the Decree include:
– The Wealth Fund’s assets, as well as assets and rights transferred to the Management Company for management purposes, will be separated from the Management Company’s assets.
– The Wealth Fund will be a legal entity incorporated solely to register assets and rights with relevant registries, as well as other registrable items gained as a result of the Management Company’s operations.
– The Wealth Fund’s assets cannot be pledged, provided as a guarantee, or otherwise disposed of, attached, subject to injunctions, included to the bankrupt’s estate for any reason (including the collection of public receivables) if such actions are not within the scope of transactions carried out for authorized operations of the Wealth Fund and its sub-funds.
– The Wealth Fund is entitled to receive financing and resources from all domestic and foreign monetary and capital markets, without being subject to the permits and approvals required under the relevant legislation.
– It is possible to establish collateral, pledge, bailment and mortgage on Wealth Fund’s portfolio in order to obtain finance.
– The Management Company exercises management and financial rights for assets in the fund portfolio. However, these rights could also be exercised by outsourced companies, provided they have executed a fund/portfolio management agreement with the Wealth Fund.
– Sub-fund assets can be reserved by a domestic or foreign fiduciary company, if authorized under the internal regulations and fund incorporation deed.
– The Management Company can only use services provided by real estate appraisal companies which have been authorized by the Capital Market Board to value real estates, real estate projects and real estate-based rights.
– Independent audit companies (authorized under the Capital Market legislation) will audit the financial reports of the Management Company, the Wealth Fund, its sub-funds and other companies to be incorporated by the Management Company.
– The Management Company will publically announce annual activity reports on its website regarding the Management Company and the Wealth Fund.
Please see this link for the full text of the Decree (only available in Turkish).
Turkey has introduced a range of amendments to tax processes. These include new rules and processes for the Tax Inspection Board, tax inspections and Tax Commissions. The changes are intended to provide clarity, streamline inspection processes, as well as extend the reporting power of the Tax Inspection Board.
Tax Commissions must now present a report to taxpayers before the hearing, summarizing the disputed matter.
Notable amendments for the Tax Inspection Board include:
– Investigations by the Tax Inspection Board (“Board”) are now clearly defined as administrative (rather than judicial). In most cases judicial and administrative investigations are independent, meaning they can result in different rulings and penalties.
– Tax Inspectors are now authorized to inform competent authorities about any act which may constitute crime, under any legislation, via the Presidency of Tax Inspection Board (“Presidency”). Previously, Tax Inspectors could only inform authorities about acts which may constitute crimes within the scope of the Law on Declaration of Property, Bribery and Corruption.
– The Presidency can now extend time under tour programs for Tax Officers, without limitation. Previously, extensions for such temporary assignments were limited to ten days.
– Investigation reports issued on officials and other public officials will now be presented to the Presidency and the Presidency will present such reports to the Chief Public Prosecutor’s Office. Previously, these were submitted directly to the Chief Public Prosecutor’s Office.
– Audits of chambers and unions can now be conducted within the scope of Accountant and Financial Advisor and Certified Accountant Law numbered 3568. Chamber and Union Audit Report will be issued and presented to the Presidency.
Notable amendments for tax inspection processes include:
– Tax inspections will now be conducted solely depending on the subject and period indicated under the assignment notice. Any information or document which is not related to the investigation subject and period cannot be requested from the tax payers.
– The period given to tax payers for submitting books and document is clearly stated as minimum 15 days, whereas previously the duration was left to the Tax Administration’s discretion.
– Tax inspection reports must now include alteration proposals if tax transactions must be altered due to an issue under dispute and determined by the authorized tax inspector.
Please see below links for the full text of the amending regulations (only available in Turkish)
Turkey has made significant amendments to customs regulations, intended to improve the effectiveness of the authorized customs broker system. Changes also impact the return of goods confiscated on suspicion of smuggling, analysis of goods at border gates and introduce simplified customs procedures for rail and maritime transport.
The Regulation Regarding Amendment of the Regulation on Customs (“Amendment Regulation”) was published in Official Gazette number 29850 on 7 October 2016, entering into effect on the same date, although some provisions enter into effect on 15 August 2017.
Significant changes introduced by the Amendment Regulation include:
– From 15 August 2017, approved customs operator certificates will be standardized and current categorizations removed.
– Persons applying for certification as an approved customs operator due to an acquisition, merger or partial spin-off will not be required to have operated for at least two years.
– Time periods are outlined in detail for accepting goods which were confiscated on suspicion of smuggling, but a judge has ruled should be returned.
– If analysis is required to determine customs tariff statistics for goods entering Turkey’s customs territory via land border crossings, the analysis will be made by internal customs, rather than at the actual border. The change is intended to reduce waiting lines at the land border gates.
– A simplified procedure is introduced for rail and maritime transport. Further details will be determined by the Customs and Trade Ministry.
– The circumstances where the customs authority can extend 24 month temporary import permits have been expanded to include certain air vehicles. Accordingly, additional time can be granted for ambulance, fire extinguishing, agricultural spraying or sanitary disinfection air vehicles, provided they are:
– Imported for commercial use.
– Registered outside the Turkish Customs Region, in the name of a person who is also resident outside the Turkish Customs Region.
– Subject to an agreement executed with public institutions, municipalities and public economic enterprises with entirely public capital.
Please see this link for full text of the Amendment Regulation (only available in Turkish).
Electricity production license holders in Turkey can now sell, transfer or lease electricity production plants by simply obtaining permission from the Energy Market Regulatory Authority. Under the new approach, once approval is received, the transferee will be granted a license constituting a continuation of the former production license. The transferee is no longer required to obtain an entirely new production license for the plant. A number of changes are also made to requirements for pre-licenses and all electricity license holders are now required to only use data processing centres located within Turkey, or receive such services from domestic data processing centres.
The Regulation Amending the Electricity Market License Regulation (“Amendment Regulation”) was published in Official Gazette number 29865 on 22 October 2016. The Amendment Regulation makes changes to the Electricity Market License Regulation (“Regulation”) published in Official Gazette number 28809 on 2 November 2013.
A number of changes are also made to requirements for pre-licenses.
– The maximum pre-licence period determined by the Energy Market Regulatory Board (“Board”) has now been extended from 24 months to 36 months, depending on the generation resource type and installed capacity. The Amendment Regulation also allows this period to be differentiated between Energy Resource Utilization Areas.
– Pre-license applications require 12 months’ worth of solar or wind measurements. These can now be taken from within the previous five years. Previously, the measurements were required from within the last three years. This requirement will not apply to generation facilities applying for a pre-licence within an Energy Resource Utilization Area.
– Pre-licence applications regarding peat, oil shale, bituminous shale, coccolith and sapropel are no longer required to include an Environmental Impact Assessment approval decision.
– The following are added as grounds for the Board to refuse a pre- license application:
– It is impossible to build the production plant in the area stated in the application.
– Legal entities which have not applied for a pre-licence after winning the tender within the scope of the Tender Regulation for the Pre License Applications regarding Construction of Wind and Sun Power Plants (published in Official Gazette number 28843 on 6 December 2013).
– The legal entities have not submitted the required information and documents, or the submitted documents do not meet the standards set in related legislation.
Please see this link for the full text of the Amendment Regulation (only available in Turkish).
Turkey’s Energy Market Regulatory Authority (“Authority”) has announced exemptions to the ban on share transfers for wind and solar generation facilities with installed capacity up to 1 MW, until provisional acceptance of such unlicensed facilities. Persons eligible to apply to produce energy from the wind or solar based generation facilities have also been narrowed, among other amendments.
A range of changes and the exemption were announced in Official Gazette number 29865 on 22 October 2016, entering into force on the same date. These make changes to:
– The Regulation Regarding Producing Unlicensed Electricity in the Electricity Market (“Regulation”), published in Official Gazette number 28783 on 2 October 2013; and
– The Communique on Application of the Regulation Regarding Producing Unlicensed Electricity in the Electricity Market (“Communique”), published in Official Gazette number 28783 on 2 October 2013.
Accordingly, the following circumstances are now exempt from the general prohibition on share transfers which applies until unlicensed facilities receive provisional acceptance:
– Shareholding changes arising out of a change in the publicly held shares of the public entity itself, or its public entity shareholder.
– Direct or indirect changes in the shareholding structure arising out of exercise of pre-emption rights held by existing shareholders.
– Indirect changes in the shareholding structure arising out of shareholding changes in the foreign shareholders.
– Direct or indirect changes in the shareholding structure arising out of public offering of the legal entity or its shareholders.
Persons eligible to apply to produce energy from the wind or solar based generation facilities have also been narrowed. Accordingly, the following categories can no longer apply to produce unlicensed energy in the relevant distribution region:
– Direct or indirect shareholders of distribution or supply companies appointed for a specific region.
– Entities controlled by distribution or supply companies appointed for a specific region.
– Persons employed by direct or indirect affiliates of the distribution or supply companies appointed for a specific region.
– Legal entities controlled by the above persons.
Other notable changes made to the Regulation and Communiqué include:
– Distributions companies continue to be required to notify the Turkish Electricity Transmission Company (“TEİAŞ”) about the total installed capacity which can be connected to each transformation centre for generation facilities based on renewable sources with installed capacity of up to 1 MW (or threshold determined by the Council of Ministers). However, the provision in the Regulation which required TEİAŞ’s evaluations to be taken as the base for establishing such connections has now been repealed.
– Capacity which is allocated to wind and solar applications which TEİAŞ determines are eligible to produce uninterrupted renewable power using renewable energy upon technological improvements, is now excluded from the capacity quota which is allocated to facilities based on wind and solar resources up to 1 MW installed capacity (or threshold determined by the Council of Ministers).
– Distribution companies can now cancel the Call Letter to Connection Agreement, Connection Agreement and System Usage Agreement of the facility if it is determined that leaked electricity was used in a consumption facility.
– Additional support granted to local content fees for unlicensed producers has now been abolished.
– Before receiving provisional acceptance, applicants must submit a construction licences for the consumption facility and/or a similar substitute document.
Turkey’s Energy Market Regulatory Authority (“EMRA”) has introduced service standards for call centres run by electricity distribution companies and appointed supply companies which provide 24/7 services to consumers. Among other things, the standards set maximum waiting times for callers, as well as require all transactions and conversations to be recorded and stored for a certain period.
Decision numbered 6507-6 was issued on 29 September 2016 and published in Official Gazette number 29865 on 22 October 2016, entering into force on the same day.
Accordingly, call centres for electricity distribution companies and appointed supply companies, which are established to receive consumer objections and complaints or provide information, must now meet the following criteria:
– Call centres which have interactive voice response systems must:
– Allow connection to an operator within maximum 45 seconds, via the primary and sub-menu system.
– Automatically connect callers to an operator if the caller has not connected to any other option after two minutes.
– Advertisements, announcements and information are included when calculating the time limits noted above.
– Complaints must be classified according to their headings and frequencies.
– A tracking number must be created for each application and must be notified to the caller by the interactive voice response and/or operator.
– Call centres must respond to users via e-mail, telephone, SMS or in writing, according to the user’s request, as well as record the date and content of feedback.
– Calls made to or from call centres must be recorded.
– All transactions performed through call centres must be recorded.
– Work orders created for objections and complaints to call centres must be recorded.
– All data and information recorded in call centre systems must be irrevocable.
– All records must be kept in a directly accessible way for one year and stored in backup units for five years. This includes all transactions and records regarding calls made to call centres, voice records and authorizations, updates, as well as changes to the menu or announcements.
Electricity distribution companies and appointed supply companies must open their call centres to accredited entities within the next year, to assess whether the call centres have met the required qualifications and are operated in accordance with the new standards. The assessment will also address whether reports drafted by call centres are accurate. Companies must submit the evaluation report to EMRA by the end of March of each following year.
Please see this link for the full text of the Decision (only available in Turkish).
Turkey has amended rules to protect electricity consumers who are dependent on life support units. The rules outline processes for consumers to register with distribution companies, as well as obligations and restrictions which apply to notifying and disconnecting such consumers.
The Regulation Amending the Electricity Market Customer Services Regulation (“Amendment Regulation”) was published in Official Gazette number 29863 on 26 October 2016, entering into effect on the same date.
Key changes under the Amendment Regulation include:
– Consumers dependent on electrically operated life support units (such as dialyzer, respirator and similar) can apply in writing to electricity distribution companies to register their electricity subscriptions. Applications should documents evidencing their dependency (such as a medical certificate).
– Distribution companies must inform electricity suppliers about receiving such an application within three business days.
– Distribution companies cannot cut off electricity for registered subscribers based on debts for electricity consumption. If the subscriber requests, debts can be split into installments, paid over maximum four months.
– Distribution companies must inform registered subscribers about planned and unplanned power cuts via the communication means determined by the consumer.
Please see this link for full text of the Amendment Regulation (only available in Turkish).
Turkey’s Energy Market Regulatory Board has updated procedures and principles for profiles which will be used in conciliation calculations, to maintain the equilibrium between electricity supply and demand.
Decision numbered 6513-2 on Procedures and Principles Determined Regarding Profile Application to be Used in Conciliation Calculations (“Decision”) was issued on 3 October 2016 and published in Official Gazette number 29863 on 20 October 2016, entering into effect on the same date.
The Decision outlines rules for determining profiles which will be applied to measurement values. These profiles will be used in case of failure to measure meters which are subject to reconciliation draw units, within a specific reconciliation term, within the scope of the Balancing and Conciliation Regulation. The Decision also addresses approval of such profiles and party duties during the procedure.
The Decision repeals the earlier Decision Procedures and Principles Regarding Profile Application to be Used in Conciliation Calculations as per the Balancing and Conciliation Regulation, published in Official Gazette numbered 27255 on 11 June 2009.
Please see this link for full text of the Decision (only available in Turkish).
Turkey’s Central Bank has amended secondary legislation on the principles and procedures for reserves which it is required to hold. It introduced a new opportunity bracket and parameter for Turkish Lira obligations, allowing up to 5% of required reserves to be deposited as gold in frozen accounts, subject to certain requirements.
The Central Bank published the Communiqué number 2016/5 on Amendment of the Communiqué on Required Reserves with number 2013/15 (“Communiqué”) in Official Gazette number 29865 on 22 October 2016, effective from 21 October 2016.
Notable provisions introduced by the Communiqué include:
– Maximum 5% of the required reserves to be kept for Turkish Lira obligations may be put in frozen accounts as standard gold, manufactured in total from in-country production or scrap gold over the amount, calculated by multiplying 0-5% of the opportunity bracket by the parameter of 1.0.
– The sections of the Turkish Lira equivalent to foreign currency and standard gold, converted according to the opportunity bracket above, exceeding the limits set forth under the Communiqué, will not be taken into account for calculation of required reserves.
– Standard gold in this context must be collected after 3 November 2016. Whether it is processed or converted into gold bars or bullion must be documented by a Refinery Registration Certificate.
Please see this link for the full text of the Communiqué (only available in Turkish).
Turkey’s Ministry of Food, Agriculture and Livestock (“Ministry”) has published a Communiqué intended to encourage agriculture investments between 2016 and 2020. It outlines procedures and principals to improve rural incomes and develop capacity in rural communities. The Communiqué includes economic and social improvements in rural areas, development of agricultural and non-agricultural employment, as well as donations (primarily to women and young entrepreneurs).
The Ministry published the Communiqué on Support for Investments Based on Agriculture within the Scope of Supports for Rural Developments (“Communiqué”) in Official Gazette number 29864 on 21 October 2016, entering into effect on the same date.
The Communiqué aims to:
– Take natural resources and environmental preservation into account.
– Support small and middle sized enterprises to perform industrial integration based on agricultural production and agriculture.
– Develop agricultural marketing infra-structure.
– Improve food safety.
– Popularize new agricultural technologies amongst consumers.
– Enhance efficiency of on-going rural development works.
– Support investments, including new technologies.
Notable provisions introduced by the Communiqué include:
– A scheme will be introduced to support investments and donations for:
– Building storage, package and processing facilities for:
– Agriculture products.
– Animal products.
– Water products.
– Greenhouses, using renewable energy.
– Fixed investments towards agriculture products.
– Renewable energy production facilities.
– Upper limits are placed on the donations towards certain economic investments.
– Investors must apply within 45 days of 21 October 2016.
Please see this link for the full text of the Regulation (only available in Turkish).
The Turkish Competition Authority (“Authority”) has published a final report following research into the cement sector (“Report”). The Report provides a comprehensive competition-focused analysis, based on data about firms and customers. It presents a long term and holistic reflection of the market and firm attitudes.
The Report includes two sections:
The Competition Authority’s Experience in the Cement Sector
An overview of sector characteristics and problems, including:
– Seasonal Market Structure.
– “Maverick” (killjoy) Firms’ Effect on the Cement Market.
– Vertical Integration & Manipulation of Plant-Mixed Concrete Market.
– Division of Clients.
– Unusual Price Movements.
– New entrants to the Market and Entry Barriers.
Cement Sector Economic Analysis
Economic analysis of five different factors: national, city, enterprise, product and client type, as well as clients.
– Price-Cost-Demand: The Report notes that:
– Price changes are mostly effected by previous period price alterations
– It is not possible to observe specific correlation between price and cost changes in either long nor short terms.
– If cement production cost for an undertaking decreases, the price of cement does not always decrease respectively. Rather, it may even increase.
– Joint Pricing: The Report notes that:
– Joint Profit Maximization was mostly carried out by the sector participators.
– According to the Authority, Joint Pricing may originate from oligopolistic structure and rational choices; but also may originate from concerted action between the undertakings or collusion.
Overall, the Authority concluded:
– Competition issues in the cement market are once again highlighted, as they have been in prior reports from the Authority.
– The sector is falling behind the expected level of competition in respect to market division claims.
– Competition in the market is not functioning properly due to regional and city market concentrations.
Please see this link for full text of the Report (only available in Turkish).
Turkey’s Professional Competence Authority has published a range of Communiqués introducing and amending National Occupational Standards for a number of professions.
The Communiqué on National Occupation Standards No 2016/11, 2016/12, 2016/14 and The Communiqué Amending National Occupation Standards No. 2016/10 and 2016/13 were published in Official Gazette number 29868 on 25 October 2016.
In general, Occupational Standards are made up of three sections, contemplating the profile and definition of the profession as well as the method for assessment, evaluation and certification.
The Communiqués specify the working environment, equipment, and other occupational requirements such as necessary health checks and trainings (if any). The Communiqués also outline duties and obligations for members of these professions, as well as success criteria and other personal abilities, such as knowledge, skills and behavior.
The Communiqués introduce Occupation Standards for:
– Leatherwork Machinery Operator (Level 3)
– Vehicle Cleaning, Maintenance and Protection Staff (Level 3)
– Façade cleaner (Level 4)
– Pool Operator (Level 4)
– Corporate Trainer (Level 5)
– Corporate Trainer (Level 6)
– Rug Cleaning and Maintenance Staff ((Level 3)
– Window Film Implementer (Level 4)
– Foil Implementer (Level 4)
– Tire Maintenance and Protection Staff
– Roadway Cutting Machinery Operator (Level 4)
– Underground Preparation Staff (Level 3)
– Underground Preparation Staff (Level 4)
– Arbor culturist (Level 3)
– Orchardist (Level 3)
– Vegetable Culturist (Level 3)
– Seed Culturist (Level 3)
– Disabled and Senior Maintenance Staff (Level 3)
– Disabled and Senior Maintenance Staff(Level 4)
– Disabled and Senior Maintenance Coordinator (Level 5)
– Gerontologist (Level 6)
The Communiqués also amend Occupational Standards for:
– Geographic Information Systems Operator (Level 5)
– Land Surveyor(Level 4)
– Body Waxing Staff (Level 2)
– Manicurist (Level 3)
– Female Coiffeur (Level 4)
– Male Coiffeur (Level 4)
Please see these links for full text of the Communiqués (only available in Turkish):