Regulations For Gold Imports In Turkey

INTRODUCTION

Turkey holds a critical position in the global gold market. As one of the world’s leading countries in terms of both jewellery exports and gold demand, gold imports constitute a highly regulated specialised sector in Turkey. Definitions and regulations concerning precious metals, stones and goods are set out in foreign exchange legislation, and the importation of precious metals, stones and goods into Turkey is permitted within the framework of the foreign trade regime. However, the provisions of the import regime do not apply to the importation of standard and non-standard unprocessed precious metals; a declaration must be submitted to the customs authorities, and the import of standard unprocessed precious metals may only be carried out by Precious Metals Brokerage Firms that are members of the Precious Metals Exchange, subject to the provisions of the Central Bank’s own legislation. 

This situation implies that the import of gold into Turkey for commercial purposes is subject to an extremely restrictive and permit-based framework. This information note summarises the relevant legislation, company incorporation requirements, necessary permits and application procedures, obligations to be complied with during operations, and the legal risks associated with such activities, aimed at C-level executives.

LEGAL FRAMEWORK

The key regulatory sources regarding gold imports in Turkey are summarised in the table below:

The Ministry of Treasury and Finance and Borsa Istanbul A.Ş. (Precious Metals and Precious Stones Market) stand out as the regulatory authorities. The most important authority overseeing gold imports in Turkey is the Ministry of Customs and Trade. 

WHO MAY IMPORT: THE CONCEPT OF AN AUTHORISED ENTITY

Article 7(2)(b) of Decision No. 32 on the Protection of the Value of the Turkish Currency stipulates that the import of standard and non-standard unprocessed precious metals may only be carried out by the Central Bank and, subject to the provisions of their own legislation, by precious metals intermediary institutions.

Within the scope of the Regulation, the concept of a ‘precious metals intermediary institution’ refers to institutions authorised by the Ministry of Treasury and Finance to operate as members of Borsa Istanbul, which conduct transactions in their own name and on their own account, on behalf of and for the account of others, or in their own name but for the account of others, as well as banks, authorised institutions, joint-stock companies engaged in the production or trade of precious metals, and branches in Turkey of companies established abroad. 

Based on this definition, there are two main options available to a company wishing to import gold into Turkey on a commercial scale:

1. To establish a Precious Metals Brokerage Firm from scratch,
2. To apply for membership of Borsa Istanbul as an existing joint-stock company engaged in the production or trade of precious metals.

Both options are discussed in detail below.

COMPANY INCORPORATION REQUIREMENTS

A. Legal Structure and Basic Requirements

Precious metals brokerage firms must be established as joint-stock companies.  In addition:

• Their paid-up capital must not be less than 8 million TL, 
• All shares must be registered in the name of the holder and issued for cash, 
• The trade name must include the phrase “precious metals”, 
• Their articles of association must comply with the provisions of the Regulation 

are required.

Important Note: Whilst the minimum capital threshold of 8 million TL is set out in the Regulation, it is observed that the legislation is updated at regular intervals in a high-inflation environment. It is recommended that the current threshold be verified via official announcements from the Ministry of Treasury and Finance prior to application.

B. Local Ownership Requirement

The Regulation does not impose an absolute prohibition on the proportion of local ownership; foreign entities may also operate in Turkey by establishing a branch or a joint-stock company. Entities established abroad that have obtained a licence from the competent authority of the relevant country to engage in the production, trade or brokerage of precious metals are subject to the approval of the Ministry of Treasury and Finance to operate as Exchange members by opening a branch in Turkey.

However, the provisions of the Regulation regarding documents also apply to foreign nationals, and documents to be obtained from abroad must be certified by the competent authorities of the relevant country and by Turkey’s consulate in that country or by means of an apostille, and notarised translations must be attached to the application.

C. Experience Requirement (A Critical Condition)

The founding partners, who hold at least fifty per cent of the company’s capital, must have at least five years’ experience in the production or trade of precious metals; where this condition cannot be met, the managing director authorised to represent the company alone must have at least five years’ experience in a managerial position in the production or trade of precious metals, or in the fields of regulation, supervision and implementation relating to precious metals within public institutions and organisations. It will not be possible to obtain a licence to establish the company unless there is a majority of founding partners with experience in the sector or a professional general manager with similar qualifications.

QUALIFICATIONS REQUIRED OF FOUNDING PARTNERS, MANAGERS AND OFFICERS

Each founding partner of the precious metals brokerage firm established in Turkey, persons holding a ten per cent or greater shareholding in corporate founding partners, and persons associated with the corporate partner, as well as the company’s general manager, board members, employees with signing authority, and internal control and supply chain compliance officers must meet the following conditions:

• Not being bankrupt, not having declared a composition with creditors, not having had an application for restructuring by way of settlement approved, or not having had a decision to postpone bankruptcy issued against them, 
• Not having been convicted of offences such as embezzlement, extortion, bribery, theft, fraud, forgery, breach of trust, fraudulent bankruptcy, money laundering, financing of terrorism, tax evasion, or offences under the Anti-Smuggling Act, even if pardoned for such offences (excluding negligent offences), 
• They must not have held the position of manager or partner in any authorised institution whose operating licence has been revoked by the Ministry within the last five years as of the application date; they must not have submitted false information or documents to the Ministry and must not have been subject to administrative sanctions under foreign exchange legislation, 
• The applicant and any companies in which they hold a 10% or greater shareholding must not have any overdue public debt under Law No. 6183, 
• Possession of the necessary financial strength, integrity, competence and reputation required for the role. 

Furthermore, the general manager must have at least three years’ experience in the fields of economics, finance, authorised institutions and/or precious metals operations, and must have completed a degree-level education.

LICENSING AND PERMIT PROCESS

To operate as a precious metals brokerage firm in Turkey, authorisation must be obtained in two separate stages:

Stage 1: Establishment Licence (Ministry of Treasury and Finance)

The Ministry of Treasury and Finance grants authorisation for the establishment of precious metals brokerage firms. The main documents that must be attached to the application for establishment authorisation are as follows:

• Draft articles of association, 
• Written declarations from each founding partner resident in Turkey and from persons holding a 10% or greater shareholding in corporate founding partners, as well as their related parties, stating that they are not bankrupt, have not filed for composition, have no public debts, and have not been subject to the specified sanctions in the last five years, 
• Documents relating to criminal records, 
• Declarations signed in the presence of a notary, in accordance with the template set out in Annex 1 of the Regulation for natural persons and Annex 2 for legal entities. 

Stage 2: Operating Licence (Ministry of Treasury and Finance)

The founders must apply to the Ministry for an operating licence within 90 days of the date of the establishment licence, having completed the incorporation procedures; the establishment licence of those who fail to apply within this period shall be deemed to have been revoked. 

Documents required to be attached to the application for an operating licence include:

• The issue of the Turkey Trade Register Gazette in which the Articles of Association were published, 
• A bank statement confirming that the minimum share capital has been paid in full and in cash, 
• A board resolution confirming the appointment of the internal control and supply chain compliance officer and that they have been granted the necessary powers 

are included.

Those deemed suitable to operate are issued a “Precious Metals Brokerage Firm Operating Licence” by the Ministry of Treasury and Finance; this licence must be displayed in the workplace where it is visible to the public. 

Stage 3: Istanbul Stock Exchange Membership

Within 60 days of obtaining the operating licence, an application must be submitted to the Borsa Presidency to obtain a Borsa Membership Certificate.  To trade on the Borsa, precious metals brokerage firms granted an operating licence by the Ministry are issued a “Borsa Membership Certificate” by the Borsa, provided they are deemed suitable. 

Prior to applying for stock exchange membership, it is a prerequisite to establish an internal control system by appointing a sufficient number of internal control and supply chain compliance officers and/or establishing a compliance unit.

If the Exchange Membership Certificate is not obtained within 90 days of its issuance, or if operations do not commence within 270 days of the operating licence being granted, the operating licence will be revoked by the Ministry. 

OPERATING LICENCE APPLICATION FEES

Under the “Regulation Amending the Regulation on Fees to be Collected Under the Law No. 1567 on the Protection of the Value of Turkish Currency“, prepared by the Ministry of Treasury and Finance, a fee of 20 million TL is charged for operating licence applications by precious metals brokerage firms and institutions. 

Other fees have been set as follows:

• The licence application fee for refineries has been increased to 28 million TL. 
• A fee of 350,000 TL is charged annually from precious metals intermediary organisations for the use of the Precious Metals Intermediary Organisations Information System (KMAKBS). 
• From precious metals intermediary institutions or organisations that have been granted an operating licence, a KMAKBS system implementation fee of 10 million TL is charged within one month of the Ministry’s website announcing the system’s launch. 
• Separate applications for operating licences must be submitted to the Ministry for gold, silver, platinum and palladium mines, and a separate fee is charged for each application.

The application fees under this heading are updated at times deemed appropriate by the Presidency and the Ministry of Treasury and Finance; therefore, the current figures must be reconfirmed prior to submission.

BASIC OBLIGATIONS RELATING TO IMPORT OPERATIONS

Once the activity licence and Exchange membership have been obtained, the following obligations must be fulfilled for each import of unprocessed gold:

A. Pre-Import Exchange Notification

Precious metals intermediary institutions must notify Borsa İstanbul of the payment method and purpose of the import at least one business day prior to the closing date of the customs declaration for each unprocessed precious metals import transaction they undertake.

B. Restrictions on Payment Methods

Imports carried out by precious metals brokerage firms may be conducted under the “Advance Payment” and “Delivery Against Payment” payment methods, or under the “free of charge” payment method subject to certain conditions. 

In the case of advance payment: Payment documents must be submitted to the Exchange prior to the closure date of the customs declaration. 

In the case of payment against goods: Documents evidencing that payment has been made to the exporter must be submitted to the Exchange within 60 days following the closure date of the customs declaration.

C. Quota Restriction (Unprocessed Gold)

As of 7 August 2023, a monthly quota system has been introduced; a total monthly quota of 12 tonnes has been established, excluding imports made under the Inward Processing Regime, imports constituting capital contributions made on a non-repayable basis, and transactions relating to the repatriation of gold held abroad by banks.  This quota is allocated on a pro rata basis, taking into account the requests of precious metals intermediary institutions, past import volumes, and net purchase volumes on the Istanbul Stock Exchange.

D. Customs Declaration

For gold imports, the customs declaration is prepared electronically via the Ministry of Trade’s system; the HS code, value of goods, invoice and supporting documents must be entered in full.  It is mandatory to submit the invoice, certificate of origin and customs declaration together with the customs declaration for gold. Under certain customs regimes, it is also mandatory to send the declared precious metals and stones to assay offices for analysis and to attach the expert report issued following the analysis to the declaration.

E. Obligation to Deliver to the Exchange

Brokerage firms that are members of the Precious Metals Exchange are obliged to deliver the standard and non-standard unprocessed precious metals they import to the Exchange within three working days.

F. AML/MASAK Obligations

Precious metals brokerage firms are required, in accordance with the provisions of Law No. 5549 on the Prevention of Money Laundering and related legislation, to verify their customers’ identity details prior to opening an account and to sign a framework agreement with customers before commencing transactions. A MASAK declaration is mandatory for precious goods valued at 10,000 Euro or above; failure to make such a declaration gives rise to suspicion of money laundering and the risk of a financial investigation. 

OTHER OBLIGATIONS TO BE COMPLIED WITH DURING OPERATIONS

A. Supply Chain Compliance Report

Precious metals intermediary institutions are required to prepare a Supply Chain Compliance Report, confirming that their operations comply with the procedures and principles regarding the responsible precious metals supply chain as determined by the Exchange, by the end of March of the year following the reporting period. This report must be audited by authorised independent audit firms in accordance with the Assurance Audit Standards published by the Public Oversight, Accounting and Auditing Standards Authority, and an Independent Assurance Report must be prepared by the end of June of the year following the reporting period.

B. Capacity Report

Precious metals brokerage firms are required to submit capacity reports certified by chambers of commerce and/or industry to the Exchange by the end of January each year.

C. Record-keeping and Documentation Obligations

A Precious Metals Purchase Certificate or a Precious Metals Sale Certificate must be issued for each transaction, and the documents and records kept must be retained for a minimum of 5 years.

D. Website Requirement

Precious metals intermediary institutions other than banks are required to establish a website and to dedicate a specific section of this site to the publication of notices required under the Regulation.

PROHIBITED TRANSACTIONS AND ACTIVITIES

Precious metals brokerage firms may not issue securities relating to precious metals within the scope of their brokerage activities, buy or sell capital market instruments, or engage in lending transactions. Furthermore:

• They may not engage in any commercial, industrial or agricultural activities other than those for which authorisation has been obtained from the Ministry, 
• They may not accept deposits as defined in the Banking Law No. 5411, 
• They may not make any commitment that a certain income will be generated from the purchase and sale of precious metals, 
• They may not carry out buying and selling transactions that do not result in a genuine change of ownership of precious metals. 

LEGAL RISKS AND SANCTIONS IN THE EVENT OF NON-COMPLIANCE

PROCESS SUMMARY: STEP-BY-STEP ROADMAP

The basic process that a company wishing to import gold into Turkey must follow can be summarised as follows:

1. Establishment of the legal structure: Incorporation as a limited company in Turkey; inclusion of the phrase ‘precious metals’ in the trade name; securing a minimum paid-up capital of 8 million TL.
2. Identification of qualified founding partners: Partners holding 50% of the capital or the appointed managing director must have at least 5 years’ experience in the sector; preparation of character and solvency certificates for all partners and managers.
3. Application for establishment licence: Submission of a complete set of documents to the Ministry of Treasury and Finance.
4. Company registration and payment of capital: Registration with the Commercial Registry within 90 days of the establishment licence being granted, and provision of a bank statement confirming the capital has been paid in full.
5. Application for an operating licence: Appointment of an internal control system and supply chain compliance officer; submission of an application for an operating licence to the Ministry, payment of an application fee of 20 million TL for each precious metal.
6. Borsa İstanbul membership: Application for membership to the Exchange within 60 days of obtaining the operating licence; commencement of operations within a general period of 270 days.
7. Establishment of operational processes: Notification to the Exchange prior to each transaction; customs declaration, delivery to the Exchange, AML/MASAK procedures; establishment of the annual reporting cycle.

CONCLUSION

Importing gold into Turkey on a commercial scale is not merely a foreign trade activity subject to customs regulations; it is, in its own right, a highly regulated financial services activity subject to a specific licensing regime and ongoing supervision. Import authorisation is legally available only to ‘precious metals brokerage firms’ that are members of the Precious Metals Exchange and hold an operating licence from the Ministry of Treasury and Finance, as well as to certain banks.

To qualify for this framework, significant upfront investments are required, including a minimum paid-up capital of 8 million TL, founding partners or a qualified managing director with five years’ experience in the sector, comprehensive internal control mechanisms, and an application fee of 20 million TL per precious metal. Following the commencement of operations, ongoing obligations such as monthly quota allocation, transaction-based reporting to the Exchange, an annual Supply Chain Compliance Report, and independent assurance audits come into effect.

Yours faithfully