Corporate Reporting Obligations Regarding Transactions Affecting Foreign Exchange Position

In light of the amendments made in the Regulation on the Procedures and Principles Regarding the Monitoring of Transactions Affecting Foreign Exchange Positions by the Central Bank of the Republic of Türkiye ("Regulation")on 3 May 2025, the criteria for companies subject to reporting obligations have been revised along with the reporting periods. This development has created a need to re-evaluate the reporting obligation, its scope and other practical issues relating to the same.

The Central Bank of the Republic of Türkiye ("CBRT") is authorized to request any kind of information and documents from individuals and legal entities within the framework of procedures and principles it may determine in order to monitor transactions that affect the foreign exchange positions of such persons. Within this scope, certain companies have been required by the CBRT to report certain commercial information through the Systemic Risk Data Tracking System ("SRVTS").

Companies Subject to Reporting Obligations:

Within the framework of the amendments made in the Regulation, the companies subject to the relevant reporting obligation are determined as follows as of 3 May 2025:

• All companies with a total cash loan balance of 250 million Turkish Lira or more as of the last business day of the relevant monthly accounting period irrespective of whether the relevant loans are granted from domestic or foreign sources: When calculating the total cash loan balance of companies, the financial position statement prepared in accordance with the Turkish Accounting Standards for the most recent accounting period shall primarily be taken as the basis. In the absence of such a statement, the balance sheet prepared for declarations made to public authorities within the framework of tax legislation shall be considered. Prior to the amendment, this threshold was 100 million Turkish Lira, but it has been increased to 250 million Turkish Lira as of May 3, 2025. It must be assessed on a monthly basis whether a company fulfil the relevant criterion.
• All companies with net sales revenue or total assets of 1 billion 500 million Turkish Lira or more in the previous one-year accounting period: For determining net sales revenue and total assets, the annual corporate income tax return prepared as per the tax legislation shall be taken as the basis. Prior to the amendment, the threshold was 500 million Turkish Lira, but it has been increased to 1 billion 500 million Turkish Lira as of May 3, 2025. It must be assessed on a yearly basis whether a company fulfil the relevant criterion. Therefore, companies whose total cash loan balance is below 250 million Turkish Lira may still be subject to the reporting obligation due to their net sales revenue or their total assets at year-end.

The reporting obligation will be ended as of the following annual accounting period for companies falling out of the updated thresholds (i.e., the companies whose total cash loan balance, net sales revenue, and total assets are below the limits set by the CBRT as stated above) but were previously subject to reporting obligations.

Scope of the Reporting Obligation:

Within the scope of submissions to be made by company representatives through the SRVTS, the companies are required to provide the CBRT with the following information:

• Balance sheet data based on the balances existing as of the reporting date (please see Form-1 on Balance Sheet Data which is available only in Turkish on the CBRT's website and the Data Form Explanations document outlining how the information under this form should be provided);
• Purchase and sales information, cost of sales and financing data relating to transactions carried out during the relevant period (please see Form-2 on Fixed Assets, Purchase and Sales Information which is available only in Turkish on the CBRT's website and the Data Form Explanations document outlining how the information under this form should be provided).

The purpose of the relevant reports/submissions to be made is to enable the CBRT to monitor companies' financial positions periodically in an up-to-date and consistent manner. Accordingly, while the balance sheet items in Form-1 reflect the assets and liabilities held by companies as of a specific date, the data included in Form-2 represent the activities carried out during the relevant period. Accordingly, the CBRT may be evaluate both static (balance sheet-based) and dynamic (flow-based) data in an integrated manner when conducting systemic risk analyses.

It has been evaluated that the SRVTS is an important and strategic tool from the CBRT's perspective for strengthening financial stability, enabling data-driven policymaking and monitoring the relationship between the real sector and the financial system in a holistic manner. The regular collection of companies' data relating to their balance sheet and operations allows the CBRT to closely monitor indicators such as indebtedness, liquidity, profitability and foreign exchange position in the real sector. At the same time, it is also understood that this aims to ensure early detection of potential systemic risks, targeted-design of macroprudential policies and enhancement of monetary policy effectiveness.

Currently, no independent audit process is required to verify the accuracy of information to be reported by companies. Companies are responsible for accuracy of data they provide. The CBRT will perform cross-checks between the data reported by companies and various databases and conduct consistency checks on data provided to them. If deemed necessary, the CBRT may also carry out audits at the companies concerned.

Reporting Period:

Companies were required to report the relevant data on a monthly basis but as of 3 May 2025, the accounting period is 3 months and submissions must be completed no later than the last day of the month following each quarter. The data included in Data Form-1 shall be prepared as of the last day of each quarter. For example, in the June 2025 report, the account balances as of 30 June 2025 will be calculated by separating them into 0–3 months and all maturities (including 0–3 months) and uploaded to the system by 31 July 2025. The data included in Data Form-2 shall be calculated on a quarterly accounting period basis and must include only the total amounts related to the respective three-month period. The same obligations apply to companies with special accounting periods, and such companies shall fulfil their reporting obligations according to their respective quarterly periods.

Persons Authorised to Report for Companies:

Submissions may be submitted on behalf of companies either by persons duly authorized in accordance with the Turkish Commercial Code or by other users designated by such authorized persons through the system. In this context, the SRVTS operates in integration with the Central Registration System (MERSIS). Since access to the reporting interface can be enabled through e-governmental portal, considering individuals' being eligible to access the relevant portal, a Turkish citizen or a person holding a residence and work permit in Türkiye must be authorised to make the relevant submissions.

Confidentiality:

The CBRT is also subject to confidentiality obligations arising from law. Supported by criminal liability provisions, the CBRT's personnel are required to act in accordance with confidentiality principles concerning information related to companies that they obtain due to their position or duties, and such personnel are prohibited from disclosing such information except where required by legislation.

Furthermore, the Regulation emphasizes that any personal or confidential information collected from companies may not be published or disclosed.

Conclusion

Within the scope of the criteria outlined above, the representatives and relevant officers of companies subject to the reporting obligation but failing to fulfil this obligation in accordance with the procedures and principles determined by the CBRT or providing false information or documents may be subject to a judicial fine ranging from one thousand to two thousand days in accordance with the Law on the Central Bank of the Republic of Türkiye. In this context, a judicial fine of up to 1 million Turkish Lira may be imposed against such representatives and officers, and such fines may be applied separately for each reporting period in which the obligation is not fulfilled.

Accordingly, it is of great importance for companies to determine whether they subject to this reporting obligation and to timely fulfil all necessary procedures within the scope of this obligation.

Special thanks to Ufuk Ege Uçar for his contributions.

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.