The Central Bank of the Republic of Turkey (“CBRT“) published the Regulation on the Principles and Procedures for Monitoring Transactions Affecting FX Positions (the “Regulation“) in the Official Gazette No. 30335 on 17 February 2018. The Regulation entered into force on the same day.
Enterprises (except banks and financial institutions) whose FX loan and FX indexed loan balances amount to USD 15 million or more as of the end of an accounting period are obliged to report to the CBRT. Such reporting will be made for each accounting period using an information form to be drafted by the CBRT.
Enterprises’ financial statements prepared in accordance with Turkish Accounting Standards will be taken into consideration when determining the reporting obligation. If an enterprise does not have financial statements available, their balance sheet prepared in accordance with the Turkish tax procedure laws will be considered instead.
In case the aggregate of the FX loan and FX indexed loan balance falls below the defined threshold, the reporting obligation will cease as of the following accounting period.
Enterprises obliged to report are required to appoint an independent auditor within 60 days of the date on which the reporting obligation was triggered. The independent auditor will audit the accuracy of the information in the reports provided to the CBRT. The CBRT will also cross- check the accuracy of the information.
The Regulation aims to establish a system to easily and effectively monitor the FX risks Turkish enterprises take.