Banking and Finance
New measures for foreign currency loans and foreign currency indexed loans:
New measures for foreign currency loans and foreign currency indexed loans. The Decree of the Council of Ministers numbered 2009/15082 published on 16 June 2009 introduces various new measures:
- it cancels the minimum term limit for foreign currency loans extended to Turkish residents by banks working in Turkey for financing of exports, sales and deliveries;
- from now on, foreign currency loans must have an average term of more than one year and loan amount of more than US$5 million;
- from now on, foreign currency loans to Turkish residents by banks working in Turkey will be free, if:
- (i) the security receivables amount kept in Turkey by banks working in Turkey is not exceeded; and/or
- (ii) the value of foreign securities issued by or with the surety of the central governments and central banks of OECD member countries is not exceeded;
- banks will only be able to extend foreign currency indexed loans to Turkish residents for commercial or occupational purposes; and
- Turkish residents can only secure foreign currency loans and foreign currency indexed loans in the form and manner allowed under the Decree.
Corporate and Commercial (including capital markets)
Online public disclosure platform launched: The Official Gazette published the Capital Markets Board's (CMB) Communiqué Serial: VIII No: 61 on 30 May 2009. Under the Communiqué, listed companies and funds, brokerage houses and independent audit firms will from now on have to file various information, reports and explanations to an online public disclosure platform: www.kap.gov.tr . The documents/events that these entities must disclose on line include independent audit reports, material events, financial reports, general assembly minutes and articles of association. Such entities have to get a certificate for a secure electronic signature from the various authorities approved by CMB to make online disclosures. The entities must continue to make public disclosures to the CMB and/or Istanbul Stock Exchange in parallel with online public disclosures.
Turkey enters UN Convention on Contracts for the International Sale of Goods: Through a law published on 14 April 2009. This Convention regulates the form of the sale contract, and the rights and duties of the seller and the buyer arising from it.
New members of the TCB: New members of the TCB, Prof. Dr. Nurettin Kaldirimci (president of the Board), Dr. Cevdet Ilhan Gunay (candidate of the Court of Appeal) and Murat Cetinkaya (candidate of the Turkish Competition Authority) started their duty on 7 April 2009.
Fines imposed on the major steel producers for breach of competition rules: On 16 June 2009, the Turkish Competition Board (TCB) completed its investigation in the flat steel market. The investigation concerns the following companies (names shortened): Eregli Demir; ArcelorMittal Ambalaj; Arcelor Mittal FCE; and Borçelik. The TCB decided that:
- The 25 per cent shareholding of Eregli Demir in ArcelorMittal Ambalaj would result in coordination of competitive behaviour between the parties and was in breach of competition rules. Therefore, the TCB fined Eregli Demir TL10.06 million and ArcelorMittal Ambalaj TL1.2 million.
- The 9.34 per cent interest of Eregli Demir in Borcelik (a joint venture between Borusan Group and Arcelor Group) was restricting competition in the market. Therefore, the TCB fined Eregli Demir TL10.06 million and Borcelik TL2.5 million.
- Eregli Demir must end its partnership in Borcelik and ArcelorMittal Ambalaj within 12 months following the delivery of the TCB's reasoned decision.
Fines imposed for abuse of dominant position in pharmaceuticals: On 20 April 2009, the TCB fined Sanofi Aventis Ilaclari Ltd. Sti TL3.6 million as it has abused its dominant position by fixing sales conditions in the market of various medicines.
TCB Q&As on fuel oil distribution contracts (and ancillary usufruct arrangements): Published by the TCB on 11 June 2009 following its decision on 5 March 2009 on fuel-oil distribution contracts. For further details on this decision please see the Competition section of The Turkish Update - First Quarter 2009. The Q&As answer various questions from various entities in the fuel oil distribution market about how the TCB will apply its approach on specific cases. Please let us know if you want further information on the Q&As.
For a summary of the key legal developments in the telecommunications sector please see our article entitled "Groundbreaking telecommunications law: secondary legislation so far" in the Hot Topics in Part 2 of this Update.
Amendments to Regulation on Pharmaceutical Product Registration: Published on 22 April 2009. The amendments mostly focus on what documents/ information licence owners must give to the Ministry of Health to register their pharmaceutical products Energy and Infrastructure (including oil and gas and electricity
Amendment to the Electricity Market Licence Regulation: Published in the Official Gazette on 20 June. Some of the changes this Regulation introduces are:
- the rights and duties of a company which has applied for a generation or auto-producing licence can transfer to another legal entity. However, this transfer can only take place if this legal entity separated from or has the same ownership as the transferee. Any such transfer needs Energy Market Board approval;
- a company cannot assign rights of distribution and transmission (granted under a relevant licence) to third parties without Electricity Market Board approval. Companies which have electricity generation licences do not need such approval;
- it sets out extra documents/information that companies that have received Electricity Market Board consent for a licence must provide;
- further duties for legal entities to amend their Articles of Association to comply with the Electricity Market Licence Regulation;
- it amends the rules on licence amendments;
- It amends the procedure for EMRA to return a letter of guarantee (presented as part of a licence application) if EMRA temporarily accepts the relevant power generation plant;
- legal entities with an electricity wholesale licence can affiliate with legal entities engaged in electricity generation; and
- share transfers leading to a change of control in a legal entity's partnership are subject to Board approval. Issuing redeemed shares is no longer subject to such approval.
The Electricity Market Balancing and Settlement Regulation:
Published in the Official Gazette on 14 April. This Regulation sets out procedures and principles for:
- balancing electricity supply and demand; and
- achieving settlement between licence-owning entities.
The Regulation replaces the old Electricity Market Balancing and Settlement Regulation of 3 November 2004, which is still applicable until 1 October 2009. In practice, we understand that electricity companies are continuing to apply the old regulation.
TETAS tender: In April, TETAS, the Government-run wholesaler of electricity, cancelled the tender to buy electricity from private companies for four years.
Privatisation tenders: The privatisation administration published tender announcements for the following electricity distribution companies: Coruh Elektrik Dagitim A.S.; Osmangazi Elektrik Dagitim A.S.; and Yesilirmak Elektrik Dagitim A.S. All tenders will be block sales.
Liquefied Natural Gas
Regulation on Liquefied Natural Gas Plant Use: Published in the Official Gazette on 16 May. The Regulation mainly deals with how LNG plants should store LNG.
Nuclear Tender: TETAS, Government-run wholesaler of electricity, filed its report on the first nuclear tender of Turkey to the Ministry of Energy on 26 June. The Government will now decide on whether to go on with the tender or to cancel it.
US$600 million loan from the World Bank: The World Bank has granted a US$600 million loan to Turkiye Sinai ve Kalkinma Bankasi and Turkiye Kalkinma Bankasi for financing private renewable energy projects. The Turkish Treasury guaranteed and publicly announced the loan.
Draft Law on Renewable Energy: Government will discuss this law in the next legislative year and it may come into force in the second half of 2009.
Simplifying application proceedings before the Turkish Patent Institute: On 21 April 2009, three amending regulations on Patents, Geographical Marks and Industrial Designs came into force. The main aim of these amendments is to streamline procedures at the Turkish Patent Institute by decreasing the number of documents which applicants need to present.
Abolition of various IP Decrees: The Turkish Constitutional Court has, in two different decisions, abolished certain important rules on certain infringements and their sanctions of the:
- Patent Decree;
- Geographical Marks Decree; and
- Industrial Designs Decree.
The Court's reasoning was the rules infringe the basic Turkish constitutional principle that "laws" and not "decrees" should set out crimes/punishments. The Court's decision on the Geographical Marks Decree will come into force on 30 November 2009 whereas its decisions on the Patent Decree and Industrial Designs will come into force on 1 June 2010. Meanwhile the onus is on the Turkish Government to fill in the legislative "gap" by passing relevant laws before those dates. We will continue to follow these developments, however if you want any further information about this decision or its potential impact please let us know.
Elections to the Radio and Television High Board (RTUK): According to the General Assembly decision of the Parliament of 28 May 2009 Hasan Tahsin Fendoglu (AKP - the current Government's nominee) and Esat Ciplak (MHP - a Turkish nationalist party's nominee) will replace Pasa Yasar (AKP's nomineed) and Saban Sevinc (CHP - a Turkish social democratic party's nominee) in the RTUK Board. In addition Davut Dursun (AKP's nominee) was reelected for the next term.
State broadcaster to buy a stake in Euronews S.A: According to ministerial decision no. 2009/14919 of 6 April 2009, the state broadcaster, the Turkish Radio and Television Corporation (TRT), may buy up to 16 per cent of the shares in Euronews S.A. to improve Turkish broadcasting and aid Turkish prospective membership to the European Union. Euronews S.A. is a multilingual and pan-European television news channel launched on 1 January 1993 in Lyon. The channel produces and broadcasts news programmes simultaneously in eight languages on issues that are of European and global concern.
Guner Law Office was established in 1996 and has since grown into one of the major corporate, M&A, banking, litigation, energy and TMT practices in Turkey. Guner Law Office is headed by Ece Guner and works with international law firm Denton Wilde Sapte.