Turkish residents with no foreign currency income are generally prohibited from making foreign currency loans, either from abroad or from within Turkey. However, the Council of Ministers recently introduced new rules for such loans, as well as new exceptions to the general prohibition.
Amendment Decree on Decree Number 32 Regarding Protection of Value of the Turkish Currency (“Amendment Decree”) was published in Official Gazette number 30312 on 25 January 2018, entering into effect on 2 May 2018. The Amendment Decree makes changes to Decree Number 32 on the Protection of the Value of the Turkish Currency number 89/14391, dated 7 August 1989 (“Decree”).
According to the Amendment Decree, Turkish residents with no foreign currency income are prohibited from making foreign currency loans, either from abroad or from within Turkey.
New exceptions have been introduced to this rule, applying to foreign currency loans which are to be used:
– By public bodies and institutions, banks and financial leasing companies, factoring companies and finance companies which are resident in Turkey.
– By Turkish residents which have a credit balance over US $15 million at the time of use.
– By Turkish residents within the scope of investment incentive certificates.
– For financing several machines and devices, specified by the Council of Ministers
– By Turkish residents who win domestic tenders which were announced internationally.
– By Turkish residents who have undertaken defence projects approved by the Undersecretariat of Defences.
– By Turkish residents conducting PPP projects.
– By Turkish residents under terms and conditions determined by the Ministry of Treasury.
Banks and financial institutions can provide foreign currency loans to each other, either directly or by participating in international syndications, without any term limitations, in accordance with their own customary practices.
The Amendment Decree introduced the following new rules for foreign currency loans:
– If at the time of utilization, the sum of outstanding credit balances for foreign currency loans exceeds certain thresholds, the sum of the outstanding credit balances and the new loan cannot exceed the three financial years’ foreign currency income. These thresholds are:
– $5 million to be utilised outside Turkey.
– $15 million to be utilised within Turkey.
– If it is later determined that the credit balance exceeds the last three financial years’ foreign currency income, the exceeding amount of foreign currency loans from Turkish banks, financial leasing companies, factoring companies and finance companies must be recalled, or converted into Turkish Liras.
– Parties acting as intermediaries for loans from abroad must monitor conformity with restrictions on foreign currency loans.
Please see this link for the full text of the Amendment Decree (only available in Turkish).
Companies in Turkey must now make information disclosures to the Central Bank when their foreign currency loans and foreign exchange loans (either from Turkey and abroad) amount to $15 million or more. Turkey’s Central Bank will establish an online system for this purpose. These companies must also assign an auditor to review their disclosures to the Central bank.
The Regulation on Principles and Procedures for Monitoring Transactions Affecting Foreign Currency Position by the Central Bank of Turkey (“Regulation”) was published in Official Gazette number 30335 on 17 February 2018.
Companies with $15 million or more in foreign currency loans and foreign exchange loans (from Turkey and abroad) on the last working day of the relevant accounting period must now report certain data to the Central Bank from the following accounting period onwards.
If the amount later falls below $15 million, the company will no longer be required to make this disclosure, starting from the following accounting period.
Loan calculations will be determined according to the foreign exchange buying rates, published in the Official Gazette on the last business day of the related accounting period.
Systematic Risk Data Tracking System
The Central Bank will establish the Systematic Risk Data Tracking System, for these purposes.
Companies which must make disclosures to the Central Bank will be required to use the online system at certain dates (to be announced), using the Central Bank’s data form prepared according to the financial reporting framework.
The company’s management is responsible for the accuracy and completeness of the data reported to the Central Bank, which will also cross-check the reported data.
The Central Bank can take further action if a company fails to report, reports incorrectly or incompletely, or fails to correct violations.
Companies which must make disclosures to the Central Bank must engage an auditor within 60 days of the date the obligation arises. The auditor will supervise the data which the company entered into the Central Bank’s system.
The company must identify the auditor to the Central Bank and also upload a copy of the engagement agreement.
Independent audits must be completed by 31 May of the following year, in accordance with the regulations of the Public Oversight, Accounting and Auditing Standards Institution.
If the Central Bank requires, audits may be carried out before the firms.
Please see this link for full text of the Regulation (only available in Turkish).
Turkey has updated the leasing financial support scheme which is available to Turkish companies’ foreign entities. The scheme offers support for leasing stores, warehouses and offices.
Communiqué number 2016/3 (“Communiqué”) was published in Official Gazette number 30334 on 16 February 2018, entering into effect on the same date.
Notable updates include:
– 50% of leasing and storage expenses will now be supported up to US $250,000 per year for industrial and commercial companies which produce and/or supply original parts for foreign industry, as well as branches and organically linked companies.
– 50% of leasing expenses will now be supported up to US $100,000 per year for:
– The Turkish Union of Chambers and Exchange Commodities.
– Sectoral foreign trade companies.
– Commodity exchanges.
– Employers’ associations.
Please see this link for the full text of the Communiqué (only available in Turkish).
Turkey’s Constitutional Court recently annulled a legislative provision which allowed the president of the Turkish Information Technologies and Communications Authority (“Authority”) to ex officio block foreign-hosted websites based on obscene content. The court ruled that the provision violated the principle of restriction of fundamental rights and freedoms by law, freedom of communication, as well as freedom of expression (Articles 13, 22 and 26 of the Turkish Constitution).
Through a majority decision on 15 November 2017, the Constitutional Court annulled Article 8(4 ) of Law number 5651 Regulating Internet Broadcasting and Prevention of Crimes Committed by Internet Broadcasting (“Law”).
The 13th Chamber of the Council of State applied to the Constitutional Court in 2007, seeking to annul Article 8(4) because it violates freedom of communication (Article 22 of the Turkish Constitution).
Article 8(4) allowed the Authority’s president to prevent access to websites due to certain crimes specified in the Law. These crimes include encouraging suicide, child pornography, prostitution, obscenity, and crimes against Atatürk. regulated under the same law.
The Constitutional Court reviewed Article 8(4) and ultimately ruled to strike out the provision, effective from 7 February 2019. It noted that Article 8(4) gave authority to prevent access with an undetermined scope and content. Therefore, the Constitutional Court decided that the article, which constitutes a limitation of fundamental rights and freedoms, does not meet the condition of clarity. Therefore, it ruled that Article 8(4) violates the principle of restriction of fundamental rights and freedoms by law, freedom of communication, as well as freedom of expression (Articles 13, 22 and 26 of the Turkish Constitution).
Please see this link for the full text of the Constitutional Court decision dated 15 November 2017 and numbered 2015/76 E., 2017/153 K. published in Official Gazette number 30325 on 7 February 2018 (only available in Turkish).
Turkey has announced principles for industry cooperation projects focused on innovation, localization and technology transfer. These new rules apply to the procurement of construction work, as well as purchasing goods and services.
The Regulation on Application of Industrial Cooperation Program (“Regulation”) was published in Official Gazette number 30335 on 17 February 2018.
According to the Regulation, the main criteria during tenders for industry cooperation projects will be:
– Equal treatment.
– Public scrutiny.
– Able to satisfy the requirements under suitable conditions and on time.
– Efficient usage of resources.
Notable provisions in the Regulation include:
– During tenders, both price and non-price factors will be considered, including:
– Operating and maintenance costs.
– Technical advantages.
– Industry and technology contribution.
– There must be a reasonable natural link between the purchase of goods, services, or construction works, for these to be put out to tender as combinations of multiple elements.
– Public authorities will use either open tender or tender to predetermined bidders. However, public authorities can receive offers from a single candidate on the grounds of:
– Strategic priorities.
– National interest.
– Technologic concentration at one point.
– Requirements for special expertise due to:
– High technology.
– Standardization requirements.
– Public authorities must establish a supply group for each industry coordination project, made up of technically competent persons.
– Contractors are categorized as:
– Local contribution.
– Technological cooperation.
– Contractors cannot place any financial burden on public authorities or ministries while performing their obligations.
– Contractors must provide a letter of guarantee amounting to 6% of their obligation, for a one year period, starting from the date they complete their obligation.
Please see this link for the full text of the Regulation (only available in Turkish).
Turkey’s Energy Market Regulatory Authority has extended its requirements to apply protection measures when adding national markers to fuel. Under the change, all fuel producers holding processing licenses must now implement these protection measures. Also, waste processing license holders will now be provided with auditing devices to check that sufficient national markers exist in fuels.
National marker protection measures extended
The Regulation to Amend the Regulation on National Marker Practice in Oil Market (“Amendment Regulation”) was published in Official Gazette number 30335 on 17 February 2018.
Under the Amendment Regulation, all fuel producers with processing licenses must now apply protection measures during injection of national markers. Previously, the obligation only applied to biodiesel producers and storage licence holders which were subject to national marker injection in their facilities.
Accordingly, all fuel producers which hold processing licences must now:
– Ensure the injection devices for national markers comply with the related technical regulations and provide security for operations.
– Take necessary measures to protect the environment and human life during injection of national markers. Include injection devices and national marker injection points in their licence.
– Take all measures to secure injection devices from outside intervention.
Auditing devices for waste processing license holders
The Energy Market Regulatory Board (“Board”) also amended decision number 5605-2 dated 21 May 2015, regarding control devices for national markers. The amendment decree was published in Official Gazette number 30335 on 17 February 2018 (“Amendment Decree”).
Under the Amendment Decree, waste processing license holders will now be provided with auditing devices, to check that sufficient national markers exist in fuels.
Turkey has updated several provisions of the Health Practices Communiqué relating to obesity operations and refunds for certain medicines. A cap has also been removed on physiotherapy and rehabilitation services for disabled soldiers.
Notable changes include:
– The refund system is expanded to now include:
– Obesity operations performed on:
– Patients with body mass index of 35-40 kg/m2 and coexisting diseases.
– Patients with the body mass index above 40 kg/m2.
– Certain medicines, such as cancer medicines.
– Physiotherapy and rehabilitation services provided to disabled soldiers are no longer limited.
The Communiqué Amending the Health Practices Communiqué was published in Official Gazette number 30322 on 4 February 2018. Please see this link for full text of the Communiqué (only available in Turkish).
In 2017, the Turkish Medicines and Medical Devices Agency (“Agency”) announced that from 1 January 2019, human medicinal products must bear the product’s name in Braille, as well on the outer packaging. The Agency has now announced transition procedures for Braille alphabet and name modifications (“Announcement”) which must be completed by 31 December 2018.
The Regulation for Pharmaceuticals’ Packaging Information, Patient Leaflet and Tracking of These (“Regulation”) was published in Official Gazette number 30048 on 25 April 2017. The Announcement outlines transition procedures for requirements introduced by the Regulation.
According to the Announcement, license holders must make a “Braille Transition Notice” by 31 December 2018, accompanied by:
– Expert approval regarding the suitability of the information to be written in Braille on the packaging.
– An approved document showing the expert’s competence in Braille.
The Agency will not issue an official letter stating it has received the notification. Therefore, license holders must monitor and ensure their own regulatory compliance for the transition.
A variation application is not necessary if the Agency requests the product name be amended, without changing the medicine’s name. For example, adding the medicine strength or a pharmaceutical shape. The Announcement says such modifications can be made via an annotation request submitted with the original license or certificate.
Please see this link for full text of the Announcement (only available in Turkish).
Turkey’s Ministry of Economy (“Ministry”) annually updates the rules and procedures for product certifications and notifications related to importing various tobacco and alcohol products. According to the latest announcement, conformity certificates and out of scope statements can now be provided electronically.
These documents can now be obtained from the Ministry, after the Tobacco and Alcohol Market Regulatory Authority was recently closed down (more).
The goods prohibited from being imported to Turkey remain unchanged in the latest announcement, along with the products which are excluded from the Ministry’s area of activity.
The Communiqué on Import Inspection of Tobacco, Tobacco Products, Alcohol and Alcoholic Beverages (Safety and Quality Control: 2018/19), was published in Official Gazette number 30334 on 16 February 2018. Please see this link for the full text of the Communiqué (only available in Turkish).
Turkey has updated various aspects of the TURQUALITY® reimbursement scheme, which provides state support for companies promoting Turkish products abroad. Changes remove the time limit for companies to open franchised stores, as well as the ability to request support be extended to cover new target markets.
Communiqué Number 2018/3 Amending Communiqué Number 2006/4 (“Amendment Communiqué”) was published in Official Gazette number 30335 on 17 February 2018, entering into force on the same date. The Amendment Communiqué makes changes to the Communiqué on Branding Turkish Products Abroad, Creating the Image of Turkish Goods and Supporting TURQUALITY®.
Notable changes under the Amendment Communiqué include:
– Previously, companies receiving support for products, which bear the TURQUALITY® certificated trademark could receive the reimbursement only for franchised stores that were opened within a five-year support period. However, the five-year limitation has now been removed.
– Development Road Maps outline the key criteria, qualifications and thresholds for entities which wish to receive state support. If the Ministry of Economy has approved a company’s Development Road Map, the company can no longer ask to extend this to introduce new target markets within the support’s scope.
– Any unauthorized use of the TURQUALITY® trademark will now be governed by Turkish Industrial Property Law number 6769, rather than the Trademark Decree Law (repealed on 10 January 2017).
– The TURQUALITY® Committee will be shut down and no alternative has been announced. Previously, the body would determine the supported companies and certificated trademarks.
Please see this link for full text of the Amendment Communiqué (only available in Turkish).
Turkey has removed the fee which previously applied for changing the name and nature of integrated topography circuit owners in the Integrated Circuit Topography Registry, operated by the Turkish Patent and Trademark Office Registry. Previously, when applying to make one of these changes, the right owner was required to submit a document showing that the related fee had been paid.
Integrated circuit topography owners can now make requests to change their name or nature on the Registry by submitting the following documents:
– Request petition.
– A copy of the Trade Registry Gazette showing the change in name or nature, or a document approved by the competent authorities (with a certified Turkish translation by a sworn translator if the document is in a foreign language).
– Power of attorney (if the application is made by an attorney).
The Regulation Amending the Regulation on Implementation of Integrated Circuit Topographies’ Protection Law was published in Official Gazette number 30341 on 23 February 2018. Please see this link for full text of the Amendment Regulation (only available in Turkish).