Important new regulations governing foreign loans and foreign currency contracts were published in the Official Gazette on January 24, 2025 (entering into force on the same date). The key changes introduced by the Communiqué Amending the Communiqué on Decree No. 32 on the Protection of the Value of the Turkish Currency (Communiqué No. 2025- 32/71) ("Amendment Communiqué") are summarized below.
Prior to the Amendment Communiqué, agreements (other than real estate sale and lease agreements) involving public institutions and organizations or companies of the Turkish Armed Forces Foundation (tr. Türk Silahlı Kuvvetlerini Güçlendirme Vakfı) were permitted to denominate/index contract prices and payment obligations in/to foreign currency. The Amendment Communiqué has added companies holding a Level (A) or (B) certificate under the Industrial Competency Assessment and Support Program (tr. Endüstriyel Yetkinlik Değerlendirme ve Destekleme Programı) ("EYDEP") to the list of companies allowed to execute contracts in foreign currency. EYDEP is a program aimed at advancing Turkish defense, security, aviation and space sectors companies in line with localization policies. The Amendment Communiqué addresses problematic pricing issues arising from foreign currency-based market structures in these sectors and the high costs caused by exchange rate fluctuations.
A significant new provision allows persons residing in Türkiye to utilize foreign loans through banks established in Türkiye only. The procedures and principles regarding the transfer and use of these foreign loans in Türkiye will be determined by the Ministry of Treasury and Finance. Prior to the Amendment Communiqué, there were certain exceptions to the requirement to use Turkish banks such as loans obtained for overseas operations, overseas ship purchases, and loans secured by export credit agencies or guarantee institutions. All these exemptions are now repealed which will improve transparency in monitoring applicable transactions.
The amendments aim to enhance Türkiye's economic competitiveness and streamline international trade. Granting foreign currency contract exemptions to companies certified under EYDEP will increase the international competitiveness of Turkish defense companies. Furthermore, exclusive use of Turkish banks in foreign loans will improve traceability of financial transactions and thereby strengthen the Turkish economy's resilience against currency fluctuations.
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