The Central Bank of the Republic of Turkey introduced an amendment to the Capital Movements Circular (“Circular“) on 15 September 2021.
The amendment introduces another exemption to the obligation to bring the proceeds of loans utilized from abroad to Turkey. This is in addition to the exemption granted in March this year (please see our Client Alert dated 19 March 2021 for a review of this exemption), pursuant to which Turkish borrowers are not required to bring the loan proceeds to Turkey to the extent that the loan refinances an existing loan utilized from abroad by the same borrower. According to this amendment, the proceeds of the loans obtained from abroad through the Ministry of Treasury and Finance acting as borrower or guarantor on behalf of the Republic of Turkey will not be required to be brought into a Turkish bank account.
Loans obtained from abroad in such way can be used through banks and financial institutions abroad as well.