Decree On Amending the Decree No. 32 on the Protection of the Value of Turkish Currency is Published

As is known, in order to protect the value of the Turkish currency, the principles regulating and restricting all transactions related to determining the value of the Turkish currency against foreign currencies, foreign exchange and documents representing foreign exchange (including securities and other capital market instruments), the management and use of foreign exchange, the import and export of Turkish currency and documents representing Turkish currency (including securities and other capital market instruments), transactions related to precious metals, stones, and goods, exports, imports, special types of exports and imports, invisible transactions, and foreign exchange transactions related to capital movements were established under the Decree No. 32 on the Protection of the Value of the Turkish Currency (“Decree”), which was issued by the Council of Ministers based on Article 1 of Law No. 1567 on the Protection of the Value of the Turkish Currency (“Law”), as amended by Law No. 6258. This decree was published in the Official Gazette No. 20249 on 11.08.1989 and entered into force.

The Decree has been amended multiple times over the years. Most recently, it is modified by the Amending Decree on the Decree No. 32 on the Protection of the Value of the Turkish Currency (“Amending Decree”), which is published in the Official Gazette No. 32842 on 15.03.2025.

Amended Provisions

The following amendments have been made to the Decree through the Amending Decree:

• Article 2, paragraph (j), subparagraph (xv): A new definition of “Drawn Precious Metal” has been introduced to describe “ precious metals that have been drawn into thin strips or cut into various shapes and weights while maintaining a certain level of purity”. Additionally, a definition for "Refinery" has been included to describe “legal entities authorized by the Ministry to conduct precious metal refining activities within the framework of relevant regulations”

• Article 3, paragraph (d): The limit on taking Turkish currency abroad, which was previously subject to Ministry regulations, has been increased from 25,000 TL to 185,000 TL.

• Article 6, paragraph (7): The regulation stating that all derivative instruments, including futures and options contracts based on foreign exchange and precious metals, must be traded on organized exchanges authorized by the Capital Markets Board (CMB) through intermediary institutions has been modified. It now allows these transactions to be conducted through intermediary institutions and banks, without the restriction of being executed on an exchange, as long as they comply with capital markets regulations.

• Article 6, paragraph (8): It has been clarified that the purchase and sale of all derivative instruments, including futures and options contracts from abroad, must be conducted through banks and intermediary institutions authorized by the CMB. Previously, the regulation only referred to intermediary institutions. Furthermore, Turkish residents are permitted to engage in derivative transactions with foreign financial institutions entirely at their own discretion, as long as no promotional, advertising, or marketing activities targeting Turkish residents are conducted. However, all fund transfers related to these transactions must be made through banks.

• Article 6, paragraph (9): The article regulating leveraged transactions and derivative instrument transactions subject to the same provisions has been expanded. It now includes a provision requiring banks operating under Banking Law No. 5411 and payment and electronic money institutions operating under Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions Law No. 6493 to take the necessary preventive measures. The Capital Markets Board (CMB), Banking Regulation and Supervision Agency (BRSA), and the Central Bank of the Republic of Turkey (CBRT) must share information upon request and notify the Ministry of any violations.

• Article 7, fourth paragraph: The words "bank," "metal," and "drawn" have been added to various subparagraphs.

• Article 7, paragraph (7), subparagraph (d): A new regulation states that the sale of drawn precious metals is restricted to jewelry businesses authorized by the Ministry of Trade and Turkish residents whose tax records indicate involvement in the production or trade of precious metals.

• Article 7, paragraph (7), subparagraph (g): The Ministry has been granted the authority to determine the characteristics of drawn precious metals that can be traded domestically and to establish the procedures, principles, and exceptions for their trade, as well as to take any necessary measures.

• Article 15, fifth paragraph: It has been specified that the purchase and sale of all derivative instruments, including futures and options contracts, shall be conducted in accordance with Article 6, paragraph (8).

• Article 18, fourth paragraph: A new provision allows Turkish residents to provide guarantees and sureties in foreign currency or precious metals through Turkish banks and financial institutions for loans obtained in foreign currency or precious metals from domestic sources. This includes guarantees provided by group companies of the borrower or individual/taxpayer shareholders holding direct shares in the borrowing company.

• Article 19: The term “gold” has been replaced with “precious metal” in various subparagraphs. Additionally, a third paragraph has been added, stating that transactions involving the purchase and sale of precious metals in deposit accounts without physical delivery shall be considered foreign exchange transactions.

Enforcebility

The Amending Decree will be enforced by the Ministry of Treasury and Finance. Article 7 of the Amending Decree whics amends Article 19 of the Decree will come into effect on the second day following its publication, while all other provisions have entered into force as of the publication date.