To whom it may concern,
The following issue was announced in the Official Gazette dated 30 March 2023 and numbered 32148.
The Communiqué on Support to be Provided to Foreign Currency or Turkish Lira Deposit and Participation Accounts of Legal Entities with Foreign Currency Liabilities (No: 2023/6) was published. Accordingly;
- Procedures and principles regarding the support to be provided to the foreign currency conversion or Turkish Lira deposit and participation fund accounts of domestic resident legal entities with foreign currency liabilities are regulated.
- As per the Communiqué, it is regulated that support will be provided to legal entities resident in the Republic of Turkey who have obligations regarding the repayment of imports or foreign currency loans and who document their foreign currency liabilities; within the framework of the conversion of foreign currency deposit accounts and participation funds into Turkish lira deposit or participation accounts.
- These companies will be able to convert their US dollar, Euro and British Pound denominated foreign currency accounts and foreign currency denominated participation fund account balances existing in banks into Turkish lira deposits or participation accounts. In this case, the relevant bank will open a Turkish lira deposit or participation account for the company with a maturity date to be determined by the Central Bank at any case, not less than 1 month.
- At the end of maturity period, the principal and interest are paid to the Turkish lira deposit account holder and the participation account holder. If the exchange rate at the end of maturity is higher than the exchange rate at the beginning of maturity period and the amount calculated over the exchange rate difference is higher than the interest or dividend to be paid by the bank, the amount calculated by deducting interest or dividend from the amount calculated over the exchange rate difference will be paid to the relevant company.
- Within the scope of this Communiqué, a commitment not to purchase foreign currency during the maturity period of the account will be taken from the domestic resident legal entity that opens a deposit or participation account, and if the commitment not to purchase foreign currency is not fulfilled, the credit/loan utilisation requests of the companies that do not fulfil their commitment will not be accepted for a period of one year from the date on which it is determined that the commitment has not been fulfilled.
This Communiqué entered into force on the date of its publication in the Official Gazette (30.03.2023).
Kind Regards,
Kılınç Law and Consulting
* This Regulation Alert has been prepared for advisory purposes in order to provide information and benefit to the reader and does not contain any certainty regarding the changes in question. If you require more detailed information regarding the issues in this Alert, please contact us via [email protected].
