Recent development
In an ongoing effort to better monitor and control the capital flows out of Turkey, on December 30, 2015, the Undersecretariat of the Treasury updated its procedures on (i) the export of Turkish lira exceeding TRY 25,000 (approx. USD 8,200), and (ii) the export of foreign currency exceeding the equivalent of EUR 10,000, by amending Communiqué No. 2008-32/34 on Decree No. 32 on the Protection of the Value of the Turkish Lira.
What the communiqué says
Under the communiqué, the Treasury has tightened the procedures to export Turkish lira and foreign currency:
- Persons travelling abroad with Turkish lira exceeding TRY 25,000 or foreign currency exceeding the equivalent of EUR 10,000 must notify the customs administration by submitting a cash declaration form. The customs administration is obligated to report the failure to submit, or misrepresentations, in a declaration to the Financial Crimes Investigation Board and to the public prosecutor.
- The customs administration is obligated to notify the Turkish Central Bank of Turkish lira and foreign exchange outflows exceeding USD 50,000 or its equivalent on a monthly basis.
- Turkish banks are obligated to notify the Central Bank in relation to foreign exchange outflows exceeding USD 50,000 within 30 days of the transaction, with the exception of import, export and "invisible" or "non-deliverable" transactions.
- The Ministry of Economy and the Treasury must be notified of capital outflows for the purposes of establishing a company or a branch, or becoming a shareholder, of a company abroad. The Ministry of Economy and the Treasury must also be notified if these companies are liquidated or their shares transferred. Previously, only the Treasury oversaw capital outflows.
- Annual reporting of capital outflows are now filed with the Ministry of Economy, instead of the Treasury.
Conclusion
The new declaration and reporting requirements for Turkish lira and foreign currency outflows are intended to better monitor currency outflows. Financial institutions and others should consider how to ensure compliance with these new rules.
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