Turkey has amended various rules and related processes for pledged movables. Notably, it has been clarified that if a pledge is placed on a business, immovables assigned to the business' commercial activities will not be considered within the scope of such pledge. Other amendments relate to criteria for when a third-party is deemed to be "in good faith", as well as an increased scope for assets which can be pledged.
Notable amendments to the pledged movables regime and related processes include:
- It has been clarified that if a pledge is placed on a business or a craftsman business, immovables assigned to the business' commercial activities will not be considered within the scope of such pledge.
- A third-party who does not know (or
is not expected to know) that a movable is pledged will be
considered to be "in good faith" if:
- The third-party is not required by law to check the pledged movables registry, or
- The third-party does not have legal capacity to be a party to the pledge contract.
- The list of assets that can be pledged has increased. It is now possible to pledge "all movable assets and rights similar to the list of assets which can be pledged".
- If a movable has no distinctive quality, the movable's general qualities which enable its specification must now be included in the pledge contract.
- The provision which stated that lapse of time does not apply to receivables once the pledge contract is registered to the pledged movables registry has been revoked.
- The deadline for requesting a pledge
contract be released once receivables expire has increased from
three business days to:
- 30 business days for pledgors subject to foreign laws.
- 15 business days for local pledgors.
- The requirement to include an annotation that "the pledgor is able to exercise its right to transfer ownership in case of default" has been removed for pledge contracts.
- Processing, merging or mixing pledged movables no longer qualify as circumstances where valuation may be requested.
- Pledges on construction vehicles are no longer required to be reported to the pledged movables registry center.
The full text of the regulations published in Official Gazette number 30428 on 22 May 2018 can be found below (only available in Turkish):
- Regulation Amending Pledged Movables Registry Regulation
- Regulation Amending Regulation on Establishment of Pledges in Commercial Transactions and the Use of Rights After Default
- Regulation Amending Regulation on the Valuation of Pledged Movables in Commercial Transactions
Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.
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.