Foreign Currency Payment Ban Relaxed

Recent developments

The Communiqué Amending the Communiqué on Decree No. 32 on the Protection of the Value of the Turkish Currency (Communiqué No: 2008-32/34) (the “Communiqué”) was published and entered into force on February 28, 2024 (the “Amending Communiqué”).

You can access the Amending Communiqué here.

What’s new?

On April 19, 2022, the amendment to the Communiqué prohibited the settlement in foreign currency of payment obligations arising from movable sales contracts other than vehicle sales contracts concluded between Turkish residents. You can access our legal alert on the implementation principles of this regulation here.

The Amending Communiqué introduces certain exceptions to the provision on the fulfillment and acceptance of payment obligations in Turkish Lira for movable sales contracts other than vehicle sales contracts. Accordingly, payments related to the following movable sales contracts between Turkish residents can be made in foreign currency:

a. Payment obligations arising from negotiable instruments denominated in foreign currency and issued prior to the effective date of the amendment of the Communiqué dated April 19, 2022 within the scope of performing movable sales contracts entered into before April 19, 2022.
b. Payment obligations arising from invoices issued before April 19, 2022.
c. Precious metals and precious stones trading transactions carried out in foreign currency on Borsa İstanbul A.Ş. Precious Metals and Precious Stones Market, and the payment obligations within the scope of settling these transactions.
d. Payment obligations within the scope of the Communiqué on the Status of International Trading Companies and the Communiqué on the Status of Sectoral Foreign Trade Companies; payment obligations within the scope of movable sales contracts for exports through International Trading Companies or Sectoral Foreign Trade Companies under an intermediated export contract; and exports through companies with the status of Export Consortium under the Decision on Export Subsidies No. 5973 and E-Export Consortium under the Decision on E-Export Subsidies No. 5986 under an intermediated export contract.
e. Payment obligations within the scope of movable sales contracts for the delivery of goods subject to the transit and customs warehouse regimes in Customs Law No. 4458, including the sale and delivery of the bunker fuel subject to a customs declaration, and the provisions of temporary storage and the free zone.
f. Payment obligations regarding the delivery of goods subject to the movable sales contracts made within the scope of foreign trade transactions with the companies operating in the free zone.

According to the Amending Communiqué, the exceptions specified in subparagraphs (a), (b) and (c) above will be effective as of April 21, 2022, and those specified in subparagraphs (d), (e) and (f) will be effective as of February 28, 2024.

Conclusion

The Amending Communiqué allows payment obligations to be fulfilled in foreign currency for certain movable sales contracts between Turkish residents.