Turkey: The Principles And Procedures To Apply To Factoring Transactions

The Banking Regulation and Supervision Authority ("BRSA") of Turkey published the Regulation on the Principles and Procedures to Apply to Factoring Transactions (the "Regulation") in the Official Gazette on February 4, 2015.

The Regulation provides the principles and procedures that shall be applied by the factoring companies and banks for their factoring transactions. The Regulation is issued based on article 1, second paragraph of article 9 and first paragraph of article 38 of the Financial Leasing, Factoring and Financing Companies Law dated 21.11.2012 (Law No: 6361).

No Transaction without Invoice

Financing can be only provided to the customer in consideration of the invoices or equivalent documents which are issued by the customer for its sale of goods or services.

The total of the finance amount and the revenues of the financing entity such as interest and commissions shall not exceed the total amount of the invoices or the equivalent documents. In case of a 100% financing, the interest and commission revenues can be separately collected from the customer. Financing entity cannot have additional invoices from the customer for differences occurring due exchange rate fluctuations or the differences between the invoice amount and the promissory note amount taken as collateral.

Intelligence Research on the Customer

The financing entities shall not act solely depending on the information provided by the customer. The financing entity shall conduct its own research including but not limited to the following;

  • Controlling the content of the invoice by taking the definition and form of the invoices provided by the relevant legislation into consideration,
  • To set up an internal control system enabling the financing entity to conduct research on the invoice. The system should not approve any financing transaction without confirming that there is no duplicate of such invoice under the Central Invoice Recording System ("CIRS")
  • To assess the financial status and transaction history of the customer and develop procedures that would provide confirmation of the customer's receivable with application to the debtor of the customer's invoice or issuer of the promissory note which the customer is the beneficiary of.

No Duplicate Invoices

As mentioned above, the financing entity should check that there is no duplicate of the invoice in the CIRS. The financing entity should keep copies of the invoices.

Since we have been referring to the Central Invoice Recording System, we would like to mention briefly what the CIRS is. Article 43 of the Financial Leasing, Factoring and Financing Companies Law provides that factoring companies and banks shall consolidate the information concerning the receivables they took over including invoice information in a form that the Financial Entities Association deems appropriate. Based on article 43, the Central Invoice Recording System is set up by the Financial Entities Association basically to create a common document database, to prevent the financing entities to incur damages due to financing based on duplicate invoices and to provide reporting.

Cancellation of Invoices

The financing entities shall take an undertaking from their customers providing that in case of an invoice cancellation, the customer shall immediately inform the financing entity and if a new invoice is issued replacing the cancelled invoice, such invoice to be submitted to the financing entity. The Financial Entities Association shall prepare a standard form of undertaking to be used by the financing entities for such purpose.

Negotiable Instruments and promissory notes

In case any negotiable instrument or other sort of promissory note is taken by the financing entity for a receivable arising from an invoice, the customer which is the creditor of the invoice shall be the one endorsing the negotiable instrument to the financing entity. Furthermore, the issuer or the last endorser of the negotiable instrument before the customer shall be the debtor of the invoice. The amount of the negotiable instrument and the invoice shall be in consistency.

In case the financing entity request additional negotiable instruments as additional security from the customer which are not related to the invoices that form the base of the financing, such negotiable instruments can be enforced and collected only if;

  • The receivable becomes due and not paid,
  • Such additional negotiable instruments are not used for financing of the related parties of those negotiable instruments,
  • The financing entity has registered the additional negotiable instruments as security in its transaction and accounting records.

It is also important to note that the financing entities can collect the additional negotiable instruments only after starting legal proceedings, reserving relevant provision and recording the receivables in its accounts as provided by the Regulation.

Assignment of Receivables that are not due

The receivables arising from the sale of goods and services that will become due in future may be only assigned under the following terms;

  • An agreement should be signed between the financing entity and the customer about the assignment of receivables. Such agreement should include explanation of the transaction, the amount assigned or if the amount cannot be determined at the time, the relevant data to calculate the amount, the maximum factoring limit and the payment terms.
  • The receivable to be assigned shall be documented with relevant documents such as the agreement between the customer and its debtor, orders, pro forma invoices, letter of credit documents, etc.
  • The accuracy and consistency of documents proving the commercial relation because ofsale of goods or services forming the base of future receivable shall be assessed and controlled and such control shall be documented,
  • The invoice that will be issued when the receivable becomes due shall be provided by the customer to the financing entity and added into the transaction file.

Keeping the Documents

The financing entities shall keep the documents related to their transactions including the intelligence researches for at least 5 years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.