The Central Bank of the Republic of Turkey (“CBRT”) introduced an amendment (“Amendment”) to the Capital Markets Circular concerning foreign exchange earnings statements on September 4, 2020.
What Does the Amendment Say?
Pursuant to the Amendment, when borrowers state their foreign exchange earnings for the last three accounting years in order to receive foreign exchange loans, they can request in writing that the present accounting year’s foreign exchange earnings be taken into consideration instead of the earnings from three accounting years ago. Accordingly, the foreign exchange earnings declared three accounting years ago will not be taken into account in the foreign exchange earnings calculation.
To benefit from this provision, the present accounting year’s foreign exchange earnings must be submitted to the intermediary bank through i) Foreign Exchange Earnings Statement Forms and ii) reports certifying that the concerned earnings fall within the definition of foreign exchange earnings, which have to be prepared and certified by certified public accountants or independent accountant and financial advisors.
The Amendment gives borrowers greater discretion regarding their foreign exchange earnings statements. In particular, it provides more flexibility to firms with loan balances lower than USD 15 million in accessing foreign exchange loans.