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Turkey clarifies the scope of FX restrictions

February 2019

On 13 September 2018, Executive Order No. 85 (the "Executive Order") was published amending the Decree No. 32 on the Protection of the Value of the Turkish Currency (the "Decree"). 

With the Executive Order, Turkey has restricted the ability to select foreign currency in certain contracts between Turkish residents (as described under the Decree). The authorities have adopted a comprehensive approach by giving these restrictions a retroactive effect and setting a 30-day deadline from the date of publication of the Executive Order (the "FX Restrictions") for amending existing contracts. The Executive Order also indicated exemptions would be issued by the Ministry of Treasury and Finance (the "Ministry") in respect of the restrictions.

Just one week short of the deadline, the Ministry has restructured the FX Restrictions and announced the long-awaited exemptions with the Communiqué on the Amendment to the Communiqué (numbered 2008-32/34) on the Decree (the "Communiqué") which also includes repricing rules for contracts falling out of the scope of exemptions.