SUSTAINABLE FINANCE IN THE SPOTLIGHT: Turkey joins the rest of the G20 by ratifying the Paris Agreement
Turkey's transition to a more eco-friendly country gained momentum earlier this year with Turkey's release of a landmark Green Deal Action Plan in July. Yesterday, following the UN General Assembly that took place at the end of September which focused on, inter alia, climate change, Turkey has joined the rest of G20 by ratifying the Paris Agreement. In order to mark this long-anticipated milestone, we have prepared a brief summary of sustainable finance products and an overview of the global and Turkish markets in which they have been launched.
On 16 March 2021, the Central Bank of Turkey ("CBT") has amended Article 22 of its Capital Movements Circular originally dated 2 May 2018 (the "Capital Movements Circular") in an effort to smoothen the operational mechanics of refinancing cross-border loans by allowing the application of refinancing loan proceeds directly towards the repayment of existing facilities (without bringing such proceeds into Turkey).
The Ministry of Labour and Social Security ("Ministry") introduced the Remote Working Regulation1 ("the Regulation") on 10 March 2021. While the concept of remote working has been in the Labour Law (Law No: 4857) since 2016, it has gained an increasing attention since March 2020 and enabled many industries to continue their operations during COVID-19. The Regulation addresses several issues related to remote working that were not previously addressed by the Labour Law, which will eliminate uncertainties in addition to repeating various concepts already existing under the Labour Law.
On 11 March 2021, in response to extension requests of the major market players and professional organisations, the Data Protection Board of Turkey (the "Board") has once again extended the deadline for Data Controllers' Registry ("VERBIS") as the data controllers were unable to complete VERBIS registration due to lockdowns caused by Covid-19 pandemic.
The Turkish Data Protection Board (the "Board") published certain decisions on its website on 2 March 2021, clarifying implementation of data privacy rules in Turkey to greater extent. In majority of its decisions, the Board once more affirmed previous precedents on unlawful processing and transfer of personal data and highlighted the importance of data minimisation principle where processing of personal data should be adequate and limited to data processing purposes. In addition to those, other decisions of the Board are notable for implementation of data privacy rules.
A draft omnibus law was submitted to the Turkish Parliament on 1 March 2021 (the "Draft Law") which proposes amendments to a number of laws, one significant amendment being in relation to the Law on the Realisation of Certain Investments and Services within the Framework of Build-Operate-Transfer Model (Law No. 3996) (the "BOT Law"). If enacted, the Draft Law is expected to scale up the sovereign support available for Turkish Build-Operate-Transfer ("BOT") projects, by allowing the Ministry of Transport and Infrastructure (the "Ministry of Transportation") to become an additional party to debt assumption agreements to be signed in connection with certain eligible projects.
The Turkish Presidency published a decree (Decree No. 3453) (the "Decree") on 30 January 2021 on the new renewable energy resources support mechanism (Yenilenebilir Enerji Kaynakları Destekleme Mekanizması, commonly referred to as "YEKDEM") which introduces the highly-anticipated feed-in tariff scheme that will apply to renewable energy power plants becoming operational between 1 July 2021 and 21 December 2025 (inclusive). The new YEKDEM scheme shifts the currency of previously US Dollar (USD)-denominated feed-in tariff and domestic components incentive premia payments to Turkish Lira (TRY), whilst still capping the price based on USD.
Turkey is one of the most dynamic regions in the world with respect to the generation of electricity from renewable sources. In just over a decade, Turkey has tripled its installed renewable generation capacity to around 45 gigawatts and invested nearly USD 40 billion in renewable energy projects. According to International Energy Agency (IEA), the country is expected to rank fifth in Europe in 2020 in terms of increase in renewable energy capacity.
Two European outliers, Turkey and the UK have entered into on 29 December 2020 a free trade agreement (the "FTA") for the establishment of tariff-free trading arrangements. This development could be considered a significant step towards unwinding the ambiguities caused by the Brexit transition and will help to secure the continued tariff-free flow of goods on the supply chains of strategically important industries, including automotive, manufacturing and steel industries.
On 9 October 2020 an extensive amendment to the Regulation on Procedures and Principles applicable to General Assembly Meetings of Joint Stock Companies and Presence of Representatives of the Ministry of Customs and Trade at such Meetings (the "Regulation") has been published in the Official Gazette numbered 31269 (the "Amendment").
On 18 September 2020, the Turkish Presidency has published a decree (Decree No: 2949) (the "Decree") regarding the extension of the deadline for the operational dates of generation facilities who are aiming to benefit from the YEKDEM mechanism.
The Law on Amending Civil Procedures Law and Certain Laws numbered 7251 was published in the Official Gazette dated 28 July 2020 and numbered 31199 (the "Omnibus Law"). The Omnibus Law, consisting of 64 articles, mainly focuses on the functioning of legal proceedings such as increasing the threshold for applying simplified procedures in commercial disputes, mandatory mediation for consumer disputes and changes regarding injunctive relief decisions.
The new Communiqué on Material Transactions and Exit Rights No. II–23.3 was published in the Official Gazette and entered into force on 27 June 2020 (the "Material Transactions Communiqué"). The Material Transactions Communiqué tracks the recent amendments to the Capital Markets Law No. 6362 (the "CML").
The Ministry of Treasury and Finance of the Republic of Turkey (the "Ministry") and one of the biggest international central securities clearing and settlement houses, Euroclear Bank ("Euroclear") announced on 9 June 2020 that an agreement was reached to make Turkey's local government bond market euroclearable.
Earlier this year in April 2020, the Turkish Parliament enacted an Omnibus Law1 that restricted companies from distributing dividends exceeding 25% of the net profit pertaining to the 2019 financial year. This temporary restriction will be in force until 30 September 2020. In an effort to provide further guidance on the implementation principles of this restriction as well as introducing certain exemptions, the Ministry of Trade published the Communiqué2 on the Procedures and Principles of the Implementation of Temporary Article 13 of the Turkish Commercial Code on 17 May 2020 (the "Communiqué").
Despite enactment of the Data Protection Law of Turkey on 7 April 2016 (the "DPL") and secondary legislation, cross-border data transfer has been one of the major controversial data privacy issues in Turkey. Given the significance of cross-border data transfer for operations of multinational corporations, market players has long sought a streamlined mechanism to transfer personal data abroad. On 10 April 2020, the Data Protection Authority of Turkey (the "Authority") announced that data processors would be able to adopt binding corporate rules ("BCRs") for transferring personal data to their affiliates outside Turkey.
The Central Bank issued a guideline on the implementation of new rules in respect of the commercial banking fees (the "Guideline") and clarified the scope and applicable exemptions on the recently introduced restrictions under the Communiqué on Fees Payable to the Banks by Commercial Clients (No. 2020/4) (the "Communiqué").
On 10 February 2020, the Central Bank of the Republic of Turkey (the "Central Bank") published the Communiqué on Fees Payable to the Banks by Commercial Clients (No. 2020/4) (the "Communiqué"). The Communiqué authorises the Central Bank to set forth limits and determine caps applicable to the fees chargeable by Turkish banks from their corporate and commercial clients, in a bid to ensure transparency and foreseeability of costs in the Turkish banking sector.
The Presidential Decree No. 2279 on the Suspension of Execution and Bankruptcy Proceedings (the "Presidential Decree") has been published in the Official Gazette dated 22 March 2020 and numbered 31076 as part of the Turkish Government's plan to keep the spread of Covid-19 disease at bay.
As the Coronavirus (Covid-19) outbreak continues to spread, Ministry of Trade (the "Ministry") introduced certain privileges to avoid or suspend physical gatherings for the general assembly meetings of joint stock companies and limited liability companies.
As the Coronavirus (Covid-19) outbreak continues to spread, businesses face a range of issues. What are the key risks and legal considerations for employers?
As the Coronavirus (Covid-19) outbreak continues to spread, entities are implementing an increasing number of measures to prevent contamination of their premises and amongst their staff all over the world. These measures sometimes require them to collect, analyse and share information about individuals, but it does raise data protection challenges. What types of personal data can be collected, and how? Can it be shared with other entities?
A draft law has been submitted to the Turkish Parliament on 17 February 2020 (the "Draft Law") which proposes amendments to several laws regarding, amongst others, renewable energy, mining, criminal offences, civil registry services (nüfus hizmetleri), individual pension system, foundations and associations. While the Draft Law covers a variety of subjects, there are three notable amendments to the renewable energy legislation:
On 6 February 2020, a bill that introduces significant structural changes to the Banking Law (Law No. 5411) (the “Banking Law”) and Capital Markets Law (Law No. 6362) (the “Capital Markets Law”) of Turkey was submitted to the Turkish Parliament (the “Draft Law”). The Draft Law proposes significant improvements to the legal framework applicable to project bond issuances in Turkish capital markets and Turkish securitisation and debt funds, such as the introduction of security trustees, and adopts new rules that will enable a wider investor base to provide financing directly to Turkish projects.
The long-awaited draft bill regarding the Amendments to the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (the "Amending Law on Payment Services") has recently been enacted by the Grand National Assembly of Turkey. The amendment meets the need to consolidate payment practices and ensures compliance with the EU’s Payment Services Directive 2 (the "PSD2").
The Data Protection Board of Turkey recently clarified the implementation of data privacy rules and has extended the deadline for compulsory registration with the data controllers' registry (VERBIS).