Recent Developments
In a historic move, the Constitutional Court of the Republic of Türkiye (the “Constitutional Court”) has overturned the core legal basis for currency control regulations. The decision is expected to have far-reaching implications for markets, financial institutions, regulatory authorities, and businesses engaged in cross-border transactions.
Decision of the Constitutional Court File No. 2024/193 and Decision No. 2025/136 (the “Decision”) on Articles 1, 2, and Additional Article 5 of the Law No. 1567 on Protection of the Value of Turkish Currency (the “Law”), was published in the Official Gazette dated 15 October 2025 and numbered 33048.
You can access the Decision here (in Turkish).
What’s New?
- Article 1 of the Law granted the President authority to issue regulations within the scope of protecting the value of the Turkish lira. In this context, numerous regulations were introduced, including the Decree No. 32 on the Protection of the Value of Turkish Currency, the Communiqué on the Decree No. 32 on the Protection of the Value of Turkish Currency (2008-32/34) and the Capital Movements Circular of the Central Bank of the Republic of Türkiye (collectively, the “Currency Control Regulations”).
- The Constitutional Court decided to annul Article 1 of the Law on the grounds that the authority granted to the President violates Article 7 of the Constitution, which stipulates that parliament’s legislative power cannot be delegated and violates Article 13 of the Constitution, which provides that restrictions on fundamental rights and freedoms can only be prescribed by law.
- The Constitutional Court also annulled Article 2 and Additional Article 5 of the Law, which became unenforceable following the annulment of Article 1. Article 2 regulated the entry into force of decisions taken by the President pursuant to Article 1 of the Law, whereas Additional Article 5 provided that, in the event of a favorable amendment or complete repeal of any decisions taken by the President under Article 1, the provisions more favorable to the offender would apply.
- The Decision will enter into force on 15 July 2026, which is nine months after its publication in the Official Gazette.
What Will the Implications of the Decision Be?
- If the Grand National Assembly of Türkiye (the “Parliament”) does not enact a new law that can serve as the basis for the Currency Control Regulations by 15 July 2026, Currency Control Regulations will cease to have any legal basis.
- However, even if no new law is enacted after this date, under the principle of legality of administrative acts, the Currency Control Regulations, which are general regulatory acts of the administration, will remain in force unless they are annulled through a separate action for annulment. If a competent court decides to annul any of the Currency Control Regulations on the grounds that it no longer has any legal basis. In that case, the relevant regulation will lose its validity and the restrictions thereunder will cease to apply.
Conclusion
The Parliament is expected to introduce a new law that will serve as the legal basis for the Currency Control Regulations by 15 July 2026.
In the absence of such regulation, currency exchange field (the transactions involving the exchange of currencies and other valuable assets) which have been subject to increasingly stringent controls since 2018 will become more liberal than at any previous time.
Considering the diversity and scale of local and international financial transactions governed by the Currency Control Regulations, it would not be an extraordinary expectation to anticipate that such a development would be revolutionary.
