The Ministry of Treasury and Finance issued a new communiqué on September 4, 2018 within the scope of the Council of Ministers’ Decision on the Protection of the Value of Turkish Currency numbered 32 (published in the Official Gazette dated August 11, 1989 and numbered 20249) (Decision numbered 89/14391) in relation to bringing proceeds of export sales into Turkey and their sale. This note summarizes the rules and principles in relation to abovementioned requirements to be applied to export sales pursuant to the Communiqué on Export Proceeds (published in the Official Gazette dated September 4, 2018 and numbered 30525) (Communiqué No.: 2018/32-48) (the “Communiqué”).
I. THE OBLIGATION TO SELL THE EXPORT PROCEEDS
The Communiqué introduces the following obligations to Turkish residents (real and legal persons) who have made an export sale:
- As per Article 3 of the Communiqué, real or legal persons residing in Turkey shall transfer or bring in the proceeds of the export sale immediately and directly to the intermediary bank following the payment by the importer.
- The period of transferring or bringing in the proceeds of the export sale shall not exceed 180 days as of the actual date of the export.
- At least 80% of the proceeds of the export sale shall be sold to a bank.
- The proceeds of the export sale can be brought into Turkey pursuant to one of the following payment methods: (a) letter of credit, (b) payment against documents, (c) payment against delivery, (d) acceptance letter of credit, (e) acceptance payment against documents, (f) acceptance payment against delivery and (g) cash payment.
- In principle, the proceeds of the export shall be brought into Turkey over the declared Turkish Lira or foreign exchange amount; however, it is also possible to bring in foreign exchange for exports made with Turkish Lira.
II. PRINCIPLES ON CASH PAYMENT EXPORTS
The Communiqué introduces the following principles on export sales made with foreign exchange in cash:
- Exports made with cash payment shall be completed within 24 months.
- The period for using the foreign exchange earned in cash pursuant to the export, sales and deliveries deemed as export and foreign exchange earning activities carried out within the scope of Inward Processing Authorization Certificate (Dahilde İşleme İzin Belgesi) and Tax, Duty and Charge Exemption Letter (Vergi, Resim ve Harç İstisna Belgesi) are limited to the duration of the document (including the extensions granted).
III. SPECIFIC EXPORT TYPES
The Communiqué sets forth the following obligations to specific types of export sales:
- Export proceeds earned after exports made by contractor companies shall be brought into Turkey and sold to a bank within 365 days.
- Export proceeds earned after a consignee sale shall be brought into Turkey and sold to a bank within 365 days after the outright sale.
- Export proceeds earned from goods sold in international fairs, exhibits and weeks shall be brought into Turkey and sold to a bank within 180 days after the end of the international fair, exhibit or week.
- Export proceeds earned from goods subject to temporary export shall be brought into Turkey and sold to a bank within 90 days after the end of the duration or outright sale in case the good is not brought back into Turkey or sold within the temporary period.
- Export proceeds earned from exports on credit or leasing by export within the scope of the applicable export regime and financial leasing legislation shall be brought into Turkey and sold to a bank within 90 days after maturity dates defined under relevant agreements.
IV. OTHER PROVISIONS
Some of the other significant provisions of the Communiqué are as follows:
- Intermediary banks are required to monitor the transfer and bringing export proceeds into Turkey and their sales by export companies.
- The Communiqué entered into force on the day of its publication (September 4, 2018) and is valid for a period of 6 months.
- For export sales, which are completed when the Communiqué is in force, the obligation to transfer and bring the export proceeds to Turkey would continue to be applicable after the validity period of the Communiqué expires.
The information provided in this article is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. The information is not intended create, nor does receipt of it constitute, an attorney-client relationship.
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