Edition 46: 13 June 2017
Editorial Team:
Orçun Çetinkaya, LL.M., Ezgi Baklacı, LL.M., and Pelin Oğuzer, LL.M.
Turkey Clarifies Tender Rules for Wind and Solar Power Plant Pre-Licenses

Turkey’s energy regulator has updated the tender rules for determining eligible bidders for grid connections during pre-license applications for wind and solar power plants. Tenders are held by Turkish Electricity Transmission Company if multiple applications are made for the same region. The updates specifically clarify that tenders will be held where applications exceed the declared capacity for the connection grid.

The Regulation on Tenders for Pre-License Applications for Wind or Solar Power Plants (“Regulation”) was published in Official Gazette number 30065 on 13 May 2017, entering into effect on the same date.

Key changes and clarifications introduced by the Regulation include:

– Bids will now be evaluated based on “the lowest price offer”, rather than “the highest contribution rate offer”. If the same price is offered, an underbidding method will apply.

– If capacity is allocated for a price less than zero, the participant must now pay a participation fee based on the net electricity power which will be generated by the units to be built, including the ones built for the capacity increase.

– A tender procedure will apply for Energy Market Regulatory Authority decisions adopted before 13 May 2017 to determine the right owners of intersecting facilities and the bids will be evaluated based on Wind Power Plant Contribution Fees paid.

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

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Turkey Updates Financial Guarantee Arrangements in Wholesale Electricity Market

Turkey’s Energy Market Regulatory Board (“Board”) has amended procedures for financial guarantees in the wholesale electricity market. Amendments address the market operator’s (Enerji Piyasaları İşletme A.Ş.) risks where market participants fail to fulfil obligations. Changes introduce new daily requirements for submitting guarantees, as well as consequences for failures to meet required guarantee levels.

The Board’s 20 April 2017 decision was published in Official Gazette numbered 30051 on 28 April 2017, entering into force on 1 May 2017.

Notable changes include:

– The requirement for wholesale market participants to present at least 25% of the initial guarantee in Turkish Lira cash has been removed and no new limit is set.

– Wholesale market participants must now also submit:

– Guarantee letters to the Market Operator by 16:30 each day.

– Other guarantees to the central settlement bank by 17:00 each day.

– At the daily 11:00 guarantee check, if a market participant’s guarantee fails to meet the required level for bilateral agreements regarding sale/purchase of electricity and/or capacity, the participant now cannot notify the agreement as the seller.

– Various processes will now apply if a market participant’s guarantee levels fail to meet the additional margin for three consecutive business days.

– The Market Management System will now be used to inform market participants about other participants which are subject to processes due to failures to meet guarantee levels.

– Days when the central settlement organization does not provide clearing and guarantee management services for the electricity market will now also be considered as a holiday.

Please see this link for the full text of the Decision number 7042-6 (only available in Turkish).

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Turkish Constitutional Court: Government Body Holds Burden of Proof in Lawsuits Against Administrative Fines

The Turkish Constitutional Court recently ruled that the Criminal Court of Peace violated an applicant’s presumption of innocence by failing to investigate his fault in a dispute, simply holding that he failed to prove the claim. The applicant had disputed an administrative fine for exceeding the maximum load limit while transporting goods. The Constitutional Court ruled that, as the claimant, the burden of proof in these circumstances actually rests with the party which imposed the fine.

The applicant objected to the fine before the Criminal Court of Peace. However, the court rejected his case on the basis that the applicant had not submitted any proof of his claim. Accordingly, the applicant escalated the matter to the Constitutional Court, claiming violations to his right to a fair trial and the principle that penalties must be imposed in accordance with the law.

The Constitutional Court ruled that the constitutional presumption of innocence had been violated. Therefore, the applicant was entitled to initiate a new trial to address the results of this violation.

The Constitutional Court reasoned that:

– The presumption of innocence requires a person to be deemed innocent until a final ruling is given (Articles 36 and 38 of the Constitution).

– The burden of proof rests with the party claiming the other party’s guilt.

– The Criminal Court of Peace objected to the applicant’s case without any investigation into whether he was at fault, ruling that he had not proved the claim.

– As the claimant, the burden of proof in these circumstances actually rests with the administration which imposed the fine.

The Constitutional Court gave its decision on 19 April 2017 (application number 2014/3905) published in Official Gazette numbered 30069 on 17 May 2017. Please see this link for the full text of the decision (only available in Turkish).

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Turkish Constitutional Court Awards Compensation to Land Owners for Expropriated Land After Legal Basis Cancelled

Turkey’s Constitutional Court recently ruled that land owners’ property rights had been violated by expropriation of land for a dam and hydroelectric power plant project. The legal basis for the expropriation was subsequently cancelled, but the property had been registered as a state asset regardless, rather than being returned to the prior owners.

The Council of Ministers made an urgent expropriation decision, enabling the Electricity Market Regulatory Authority (“Authority”) to expropriate land for the Pembelik Dam and Hydroelectric Power Plant project. However, the Council of State later suspended execution of the expropriation decision. Regardless, the Authority took steps to register the expropriated land as belonging to the Secretariat of Treasury.

The property owners who lost their land for the project applied to the Constitutional Court, claiming violations of their constitutional property rights.

The Constitutional Court ruled that as the basis for the expropriation had been cancelled, interference with property rights did not meet the legal requirements, and therefore violated property rights. It awarded compensation accordingly.

During the case, the Ministry of Justice presented its opinion that natural habitat losses are outweighed by the project promising to provide:

– Large volumes of energy, as well as irrigation projects.

– An economic investment and positive contribution to the region’s social and economic life.

The Constitutional Courts decision (Application No. 2015/17451, dated 16 February 2017) was published in Official Gazette number 30057 on 5 May 2017. Please see this link for full text of the decision (only available in Turkish).

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Payments for Foreign Trade Involving Free Trade Zones Can Now be Made in Turkish Liras

Turkey’s Council of Ministers has announced that commercial payments between parties operating in free trade zones and parties in other countries can now also be made in Turkish Lira, if requested. Previously, such payments could only be made in foreign currencies.

Payments for lease, license, permits, services and activities provided by free trade zone operators will continue to be required in Turkish Liras.

The Ministry of Economy will determine procedures and principles for Turkish Lira transactions in the future.

The Council of Ministers’ Decree was published in Official Gazette number 30063 on 11 May 2017, entering into effect on the same date. Please see this link for the full text of the Decree (only available in Turkish).

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Turkey Announces Return Process for Vehicles Confiscated before July 2014 due to Unpaid Customs Tax

Turkey has announced that the owners of land vehicles which were confiscated under Anti-Smuggling Law 5607 before 18 June 2014 for failures to pay customs taxes can now apply to receive their vehicle back, under certain conditions. Vehicle owners must apply to the customs authority by 31 July 2017, as well as pay any outstanding taxes within one month.

Under the amnesty, confiscated land vehicles which are subject to public prosecution for failures to pay customs tax can be returned to their owner if:

– The confiscation occurred before 18 June 2014.

– The liquidation process is not yet finished.

– No annexation decision have been issued for the vehicle.

Vehicle owners should contact the customs authority to learn the outstanding amount owing for their vehicle. Once the customs authority notifies the amount due, the vehicle owner should formally apply and then pay the amount due within one month of their application. Applications must be made by 31 July 2017.

If the customs authority does not respond to a vehicle owner’s initial enquiry about the overdue amount, the owner will be deemed to have formally applied on 31 July 2017. Payment will be due by 31 August 2017.

Once a vehicle owner pays the customs authority, they must then apply to the relevant prosecution court, requesting their vehicle be returned.

The Regulation Regarding Return of Land Vehicles Confiscated Due to Deficient Payment of Customs Taxes Within the Scope of Anti-Smuggling Law numbered 5607 was published in Official Gazette number 30061 on 9 May 2017, entering into force on the same date. Please see this link for full text of the Regulation (only available in Turkish).

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Turkey Updates Labelling Rules for Distilled Alcoholic Beverages in Line with EU

Turkey continues to make changes to food regulations to harmonize its approach with the European Union. The latest changes update local product labelling rules and principles for distilled alcoholic beverages (excluding fermented beverages), as well as related use of geographical indications. Market participants must comply with the new rules by 31 December 2017.

The Communiqué on Beverages Containing Distillate Alcohol was published in Official Gazette number 30014 on 21 March 2017.

Notable changes introduced by the Communiqué include:

– Presentation and labelling for alcoholic drinks which are not within the Communiqué’s scope cannot include the following (or similar) words to indicate category names and geographical indications:

– “Like”

– “Type”

– “Style”

– “Similar”

– “Production area”

– “Patent”

– “Aroma”

– If a product falls under multiple distilled alcoholic beverage categories, it can be sold under one or multiple categories.

– Product labels cannot include the name of raw materials if alcohol is added to the product to maintain the smell and taste of the raw material.

– Labelling and presentation of products produced by maceration and distillation processes must include the expression “produced by maceration and distillation process” in the same font, size, colour and position as the phrase “alcoholic fruit drink“. If the drink is bottled, these expressions must be on the front label.

– If certain distilled alcoholic beverages are mixed with other distilled alcoholic beverage, or mixed with certain agricultural distillates, the sales description must clearly include the expression “Distile Alcoholic Beverage Mix“. The text should include the same percentage as the product name, in the same characters and colour, no larger than half the size of the type used in the sales description.

– Alcoholic beverages cannot be used in conjunction with category names if such beverages contain alcohol that has been externally added, outside the production process. The origin and type of agricultural alcohol with the expression “agricultural alcohol” shall be clearly stated at the label. This provision does not apply to certain liquors produced in EU member countries.

– Sales descriptions for distilled alcoholic beverages cannot be replaced by brands, trademarks, or proprietary names if these do not reflect the product’s contents.

– Labels for fruit liquors which meet certain conditions can include the expression “traditional liqueur“, with the fruit name.

– The Communiqué’s categories and geographical indications can only be used to identify or present distilled alcoholic beverages.

– Raki Labels must not contain claims about the presence or absence of energy and food items.

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

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Turkey Introduces Conduct and Ethics Rules for Patent and Trademark Attorneys

Turkey has introduced a new regime outlining how Patent and Trademark attorneys should act, as well as related disciplinary procedures. The Turkish legal system treats Trademark and Patent attorneys differently to other attorneys, who are subject to Attorneys Law Number 1136 as well as a Code of Practice, determined by the Union of Turkish Bar Associations. However, a Code of Practice has now also been introduced specifically for Patent and Trademark attorneys.

Previously, no regulation included conduct and ethics rules for Patent or Trademark attorneys. However, an overhaul of the Turkish intellectual property legislative framework in early 2017 (more) included provisions which pathed the way for this specific Code of Conduct to be introduced.

The Code of Practice and Disciplinary Regulation for Patent and Trademark Attorneys (“Regulation”) was published in Official Gazette number 30070 on 18 May 2017.

Significant rules introduced by the Regulation include:

– Trademark and Patent attorneys must avoid any attitude and behaviour which would damage the profession’s reputation.

– Failure to follow the Code of Practice and fulfil related duties can result in disciplinary boards issuing the following sanctions:

– Warning.

– Reprimand.

– Suspension.

– Dismissal.

– Disciplinary boards must comprise seven members:

– Three Patent and/or Trademark attorneys.

– Three employees of the Turkish Patent and Trademark Office.

– One employee of the Ministry of Science, Industry and Technology.

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

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Turkey Expands Scope of Appeal Board for Intellectual Property Registration Decisions

The Re-examination and Evaluation Board (“Board”) examines decisions by the Turkish Patent and Trademark Office (“TPTO”) about registration of industrial property rights. From 10 January 2017, the Board will now also examine TPTO decisions about traditional specialties.

Boards must also now have at least three members, including:

– Two senior examiners.

– The head of the Re-examination and Evaluation Department, who selects Board members and leads the board.

Previously, the Board was led by the TPTO’s Chairman.

Parallel to existing regulations, Board decisions are made by simple majority. The Board is generally bound by the requests and arguments of the appealing parties. Parties can oppose the Board’s decision if an error of fact occurs. Board decisions can be challenged by legal actions initiated before the courts.

The Turkish Patent and Trademark Office’s Re-examination and Evaluation Board Regulation was published in Official Gazette number 30064 on 12 May 2017. Please see this link for the full text of the Regulation (only available in Turkish).

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