The Ministry of Treasury and Finance published the Communiqué No. 2018-32/48 on the Decree No. 32 on the Protection of the Value of Turkish Currency (“Communiqué“), introducing an obligation for Turkish resident exporters to bring export proceeds into Turkey.
The Communiqué, which entered into force through its publication on the Official Gazette on September 4, 2018, will be valid for six months.
This legal alert lays out the most significant issues introduced by the Communiqué.
What Does the Communiqué Say?
- According to the Communiqué, proceeds arising from Turkish residents’ export transactions must be directly brought or transferred to the intermediary bank immediately upon the importer’s payment.
- The proceeds must be brought into Turkey within 180 days as of the actual export transaction.
- At least 80% of the proceeds must be converted into Turkish lira.
- The export proceeds can be paid through one of the following: (a) letter of credit; (b) cash against documents; (c) cash against goods; (d) acceptance credit; (e) documents against acceptance; (f) goods against acceptance; or (g) advance payment.
- The Communiqué’s primary law is to return export proceeds to Turkey, whether in the Turkish or foreign currency declared during exportation; however, exporters can also bring the export proceeds in foreign currency for export transactions made based on Turkish currency.
- For export proceeds paid in advance in foreign currency, the export transaction must be realized within 24 months.
- The Communiqué introduces different time limits for export proceeds falling within the scope of “special export” transactions (exports to contracting firms; exports on consignment; temporary exports; and exports credits or leases within the scope of the current Export Regime and Financial Leasing legislation).
- Exporters are responsible for bringing the export proceeds into Turkey, selling them to banks and closing the export accounts by the stipulated deadline.
- Intermediary banks are responsible for monitoring the processes of bringing the export proceeds into Turkey and the sale to banks.
- Intermediary banks will close the relevant export accounts for export proceeds relating to commercial goods brought into Turkey by the stipulated deadline.
- Intermediary banks will notify the tax office of any export accounts that are not closed by the stipulated deadline in written form and within five business days. Within ten days of this notification, the tax office will send the relevant persons a warning letter requesting the closure of the accounts within 90 days. The accounts must be closed within this deadline or the account owners must provide and prove the existence of force majeure events or other justifiable reasons. Otherwise, the account owners would be subject to the legal sanctions foreseen in the Law on the Protection of the Value of Turkish Currency.
- The obligations for export transactions made while the Communiqué is in force will remain in force even after the deadline for bringing export proceeds into Turkey ends with the abolishment of this Communiqué.
Turkey imposed similar export proceeds obligations in the past, which were abolished in 2008 through an amendment to the Decree No. 32 allowing exporters to freely dispose of their export proceeds, i.e. without bringing them into Turkey. It appears that Turkey resuscitated these obligations due to the recent currency deprecation.
Within this context, Turkish residents who export goods abroad should be aware of the Communiqué’s temporary obligations for bringing export proceeds into Turkey.
Exporters who converted their export proceeds into Turkish lira in line with the Communiqué will be able to freely dispose of these export proceeds afterwards.