As per the Presidential Decree announced on September 13, 2018, there has been uncertainty on the parties located in Türkiye, which were to be prohibited from signing foreign currency-based contracts. The uncertainty has mostly raised a question for the parties that have a casual connection with parties outside Türkiye, have non-Turkish shareholder/ownership, and/or have an obligation of foreign currency-based payments to abroad with the services, consultancy, and relevant agreements.

Regulation No: 2008-32/34 Regarding Amendment On The Regulation (Regulation No: 2018-32/51)

Article 1- (1) The abrogated Article 8 of the Regulation Regarding the Decree No.32 on Protection of the Value of Turkish Currency (Regulation No: 2008-32/34) which is published in 28/2/2008 dated and 26801 numbered Official Gazette, is revised as follows.

“The Agreements in Foreign Currency and the Agreements Based on Foreign Currency

Article 8 – (1) Residents in Türkiye; shall not settle the contract price in real estate sale agreements including residences and roofed working places of which subject is the real estates in the country including free zones, and other payment obligations arise from these agreements that are signed between each other, as in foreign currency or based on foreign currency.

(2) Residents in Türkiye; shall not settle the contract price in real estate leasing agreements including housing premises and roofed working places of which subject is the real estates in the country including free zones, and other payment obligations arise from these agreements that are signed between each other, as in foreign currency or based on foreign currency.

(3) Residents in Türkiye; shall not determine labor agreements’ contract price and other payment obligations arise from these agreements, except the ones performed abroad, in foreign currency or based on foreign currency.

In the recent days, several banks are demanded an explanation from the receiver with blocking the foreign currency units over 50.000 USD which are Transferred from Abroad, because of their notification and explanation liability to the Turkish Central Bank.

The foreign companies to transfer money with foreign currency to Türkiye, shall be provided against possible delays with respect to payment dates and contractual obligations. It is important to fulfill the obligation of declaration and statement by the receiver party not to be subject of any trouble.

It has been announced on our website that we have expecting upcoming statements due to uncertainty regarding both the market expectation and the decree interpretation after the Presidential Decree which is published on the date of 13.09.2018.

The Ministry of Treasury and Finance issued a press statement about the Presidential Decree with regard to converting the agreements in foreign currency into Turkish lira. However, no progress has been made yet regarding the subsidiary regulations following the press statement.