• NSN Law Bulletin

Amendments to the Communiqué on Decision No. 32 on the Protection of the Value of Turkish Currency

Several changes have been made in the regulations regarding “Authorized Establishments,” (primarily exchange offices). The Ministry of Treasury and Finance published Communiqué No: 2021-36/62 (“the Amendment”) Amending Communiqué No: 2018-32/45 regarding Decision No.32 on the Protection of the Value of Turkish Currency (the Communiqué) in the Official Gazette on 12 October 2021.

Authorized Establishments are corporations that are allowed to carry out transactions related to foreign currency within the framework of the procedures and principles determined by the Ministry affiliated to the Undersecretariat of the Treasury and may also perform transactions related to precious metals, stones, and goods. Decision No. 32 of the Communiqué was published in order to regulate the procedures and principles regarding incorporation, the opening of branches, their operation, and the liabilities and inspections of these Authorized Establishments. With the Amendment, the fields of activity, the subjects of activity, the scope of authority, and the obligations of Authorized Establishments in groups A and B were amended, and at the same time, association conditions, operating permits, and application issues were also included in the Amendment.

The main changes made in the Amendment are as follows:

-The paid capital requirement of Group A Authorized Establishments was increased from 5 million TL to 10 million TL, and the paid capital requirement of Group B Authorized Establishments was increased from 1 million TL to 5 million TL. It is also now obligatory that the total amount of shareholders’ equity of Authorized Establishments should not fall below the minimum paid capital amount.

-Both Group A and Group B Authorized Establishments shall fulfill the capital requirements by 31 December 2022. Establishments that do not fulfill the capital requirement by this date shall be given an additional 90 days. The permission of establishments that do not fulfill their obligations by the end of the period shall be canceled without further warning.

-Headquarters and branches of Authorized Establishments shall not be able to operate in a place other than the addresses they have notified to the Ministry. Title changes, share transfers, and head office or branch address changes to be made outside of the same operating region by Authorized Establishments shall be subject to the permission of the Ministry.

-The letter of guarantee requested during the incorporation phase shall be obtained from banks with private equity.

-If it is determined that there is no activity within 90 days from the issuance date of operating permits or branch operating permits, the Authorized Establishments shall be given up to 60 days to begin operation. If the activity has not begun by the expiry of this period, the activity permit of the Authorized Establishment shall be canceled.

-It is obligatory to maintain the documents and records held by the Authorized Establishment for at least 5 years.

-The obligation to notify the Ministry of headquarters and/or branches that will suspend activities must be fulfilled within 10 days from the date of the suspension.

-Abstracts regarding reconciliation transactions of foreign currency accounts shall be kept electronically by Authorized Establishments for 8 years.

-Authorized Establishments shall keep camera and video recording systems in working condition within the framework of the procedures and principles determined by the Ministry. Recordings obtained with camera and video recording systems shall be kept for at least 1 year from the date of recording.

-Authorized Establishments shall obtain all customers’ Identity Numbers/Passport Numbers and/or Tax Identity Numbers from the customer in all transactions they carry out and record them for each transaction.

-Authorized Establishments shall only perform forward transactions with banks on their own behalf and/or account. Authorized Establishments shall not accept Turkish currency, foreign currency, documents, or precious metals that provide payment with them, and any movable or real estate as trust, and shall not keep them on behalf of someone else, even for a short time. Moreover, they shall not be able to carry out transactions with a credit card and forward transactions on behalf of their customers, and they shall not be able to pay their transactions in installments in any way.

-No interest or profit share shall be charged to foreign currency trading accounts under any name, and bank accounts that do not belong to an Authorized Establishment shall not be used in foreign currency trading transactions.

With this Amendment, significant changes have been made in the fields of activity, operating permits, association conditions, working orders, application and permits for activities, branch opening and inspection principles of Authorized Establishments. Authorized Establishments should take into account the regulations made in the Amendment and comply with the relevant regulations.

You may access the Communiqué by this link; The Communiqué Amending the Communiqué on the Decision No.32 on the Protection of the Value of the Turkish Currency (Communiqué No: 2021-36/62)

Author: Bilge Derinbay, Aysu Eren Yüce