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21 November 2018
Client Alert | Turkey | Banking & Finance
As you may recall from our earlier Client Alert, Decree no. 32 on the Protection of the Value of the Turkish Currency ("Decree no. 32") was amended on 13 September 2018 in order to restrict f/x and f/x-indexed payments for certain Turkish resident-to-resident transactions. In accordance with the amendments made in Decree no. 32, all prices denominated in a foreign currency under contracts already executed and falling within the scope of the restrictions were to be re-determined in Turkish Lira within 30 days following the introduction of the said amendment (i.e. 13 October 2018), except for cases be determined by the Ministry of Treasury and Finance (the "Ministry").
The Ministry further issued Communiqué no. 2018-32/51 amending Communiqué no. 2008-32/34 regarding Decree no. 32 dated 6 October 2018 ("Communiqué no. 2018-32/51") to introduce a number of exceptional cases for the restrictions provided under Decree no. 32. Moreover, in order to explain the implementation of the exceptions/restrictions, the Ministry issued a list of FAQs and its official interpretations/answers to clarify the exceptional cases provided under Communiqué no. 2018-32/51.
Recently, the Ministry issued Communiqué no. 2018-32/52 amending Communiqué no. 2008-32/34 regarding Decree no. 32 dated 16 November 2018 ("Communiqué no. 2018-32/52") in order to restate the exceptional cases for the restrictions provided under Decree no. 32 by way of (i) keeping "as is" a number of provisions previously provided under Communiqué no. 2018-32/51; (ii) introducing new exceptions in addition to the ones provided under Communiqué no. 2018-32/51; and (iii) amending certain exceptions that were provided earlier under Communiqué no. 2018-32/51.
As the f/x restrictions were introduced as an emergency measure to stabilize the value of Turkish Lira, the legal texts were prepared in a rush to meet the urgent needs of the Turkish economy, and later required a number of clarifications from the Ministry. Even though Communiqué no. 2018-32/52 appears to reflect the concerns of a number of Turkish sectors and market participants, several provisions may require further clarifications related to their implementation.
This Client Alert aims to summarize recent amendments introduced under Communiqué no. 2018-32/52, by referring to earlier versions of such restrictions where necessary.
