The Decree Amending the Decree No. 32 on the Protection of the Value of the Turkish Currency (the "Amendment Decree"), was published in the Official Gazette dated 15 March 2025 and numbered 32842. Significant amendments have been made to the Decree No. 32 on the Protection of the Value of the Turkish Currency (the "Decree No. 32"). The amendments introduced by the Amendment Decree are summarized below.
- Amendment to the Amount of Turkish Lira to be Taken Abroad
Prior to the publication of the Amendment Decree, the limit on the amount of Turkish Liras that could be taken abroad was set at 25.000 (twenty five thousand) Turkish Liras. With the Amendment Decree, this limit has been increased to 185.000 (one hundred eighty-five thousand) Turkish Liras. The principles regarding the transfer of Turkish Liras exceeding this limit abroad will continue to be determined by the Republic of Türkiye's Ministry of Treasury and Finance.
- Amendments on Derivative Transactions
With the Amendment Decree, it has been clarified that the buying and selling of all types of derivative instruments, including futures and options contracts to be executed between Turkish residents and foreign counterparties, should be conducted through investment institutions (i.e., banks or brokerage firms) licensed by the Capital Markets Board of Türkiye (the "CMB"), thereby clarifying the brokerage regime for such transactions which previously created uncertainty. Furthermore, in parallel with Article 9 of the Communiqué on Principles Regarding Investment Services, Activities, and Ancillary Services of the CMB, the Amendment Decree stipulates that as long as there are no promotional, advertising, or marketing activities targeting Turkish residents, transactions conducted by Turkish residents with foreign financial institutions established abroad on their own initiative (i.e., on a reverse inquiry basis) do not require the involvement of an investment institution licensed by the CMB. However, the transfer of funds related to these transactions will be carried out through banks in Türkiye.
- Provisions on Leveraged Transactions
In parallel with the previous position, the Amendment Decree determines that leveraged transactions and derivative transactions which are deemed as leveraged transactions of Turkish residents should be conducted through institutions authorized by the CMB. With the Amendment Decree, persons that are not authorized by the CMB may not act as intermediaries for such transactions. Additionally, it has been explicitly prohibited to transfer abroad in connection with such transactions. With respect to these transactions, banks subject to Banking Law No. 5411 and payment and electronic money institutions subject to Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions Law No. 6493 are required to take the necessary measures. In this context, through a system to be established or directly, cooperation will be ensured between the CMB, the Banking Regulation and Supervision Agency, and the Central Bank of Türkiye, ensuring more effective supervision of such transactions.
- Matters on Guarantees and Sureties in Foreign Currency
With the addition to the Article titled "Non-cash loans, guarantees, and sureties" in the Decree No. 32, it has been permitted to provide guarantees or sureties in foreign currency or precious metals for loans denominated in foreign currency or precious metals under specific circumstances. Before the Amendment Decree, obtaining foreign currency-denominated loans was possible under certain conditions; however, it was not permitted for companies within the same group that are resident in Türkiye to provide foreign currency-denominated guarantees and sureties to each other. With the Amendment Decree, it has been made possible for Turkish resident group companies or direct shareholders (either real person or legal entity) of the Turkish resident borrowers to issue foreign currency or precious metal guarantees and sureties to Turkish resident banks and financial institutions, as security for foreign currency or precious metal loans.
- Conclusion
The amendments introduced through the Decree No. 32 hold significant importance in Turkish law and commercial practice as they have both introduced new provisions and clarified certain aspects. The execution of derivative transactions with foreign financial institutions without the use of a Turkish intermediary institution or bank has been facilitated. Furthermore, it has been regulated that under specific conditions, guarantees and sureties in foreign currency or precious metals may be provided in favor of borrowers, with the aim of protecting collaterals of loans from exchange rate fluctuations and other economic factors. These amendments have the potential to significantly impact foreign exchange transactions, derivative transactions, and capital movements in Türkiye.
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