Restriction on Payment in Foreign Currency in Export Registered Sales
PROHIBITION OF PAYMENT IN FOREIGN CURRENCY IN EXPORT-REGISTERED SALES
In Article 4, paragraph "g" of Decree No. 32 on the Protection of the Value of the Turkish Currency, published in the Official Gazette dated 11/8/1989 and numbered 20249, it is stated that "Resident individuals in Turkey, except for cases determined by the Ministry, cannot agree in foreign currency or indexed to foreign currency for any kind of securities and real estate transactions, including vehicle and financial leasing, as well as any kind of securities and real estate leasing, leasing, service, and work contracts between themselves." In Article 20 of the same decree, it is stated that the Ministry of Treasury and Finance is authorized to take any necessary measures to ensure the implementation of the decree and to protect the value of the Turkish currency. In line with this authority, the Ministry of Treasury and Finance issued the Regulation on Decree No. 32 on the Protection of the Value of the Turkish Currency, numbered 2008-32/34, in which the matters left to the discretion of the Ministry were regulated. While Article 8, paragraph nine of this regulation states that "Resident individuals in Turkey are allowed to agree on the contract price and other payment obligations arising from securities sales contracts, except for vehicle sales contracts, in foreign currency or indexed to foreign currency," the sentence "However, it is obligatory for the payment obligations under the contract to be fulfilled and accepted in Turkish currency" was added to the end of paragraph nine of the same article by Regulation No. 2022-32/66 published in the Official Gazette dated 19.04.2022, and the amendment entered into force on the date of publication.
According to the aforementioned amendment, as of 19/4/2022, it is prohibited to make payments in foreign currency for sales other than vehicle and real estate sales. Accordingly, while it is possible to have the contract in foreign currency for such sales, it is prohibited to make the payment in foreign currency. Public institutions and Turkish Armed Forces Strengthening Foundation companies are exempt from this requirement.
Regarding the mentioned amendment, a press release was issued by the Ministry of Treasury and Finance on April 21, 2022, specifying the implementation principles. In the press release, it was stated that there is no obligation to fulfill and accept payment obligations in Turkish currency for securities sales contracts concluded/ to be concluded between residents in Turkey and residents abroad. However, no statement was made regarding whether export-registered sales are subject to this obligation.
Upon the request for an opinion regarding whether payments for export-registered goods can be made in foreign currency, a letter was issued by the Financial Markets and Exchange General Directorate of the Ministry on 23.06.2022 with reference number E-37518347-045.991304383. In the said letter, it was stated that since export-registered sales among residents in Turkey are considered as securities trading according to the current legislation, it is not possible to make and accept payments in foreign currency for such sales. However, it was mentioned that the subject is among the topics evaluated by the Ministry. However, no evaluation has been made by the Ministry on this issue during a period of over a year.
Currently, it is mandatory to pay the price in Turkish Lira for export registered sales, and until a legal regulation or any evaluation by the Ministry is made on the matter, payment in foreign currency is prohibited. In case of non-compliance with this prohibition, administrative fines ranging from 14,200 TL to 118,500 TL may be imposed for the year 2022, applicable separately to each party, in accordance with Article 3 of Law No. 1567 on Protection of the Value of Turkish Currency and relevant legislation. In 2023, considering the revaluation rates, these amounts range from 31,680 TL to 264,294 TL. In case of repeat offenses, these fines are applied twice. According to Law No. 1567, since the subject of the offense is foreign currency, the "foreign exchange selling rate" of the Central Bank of the Republic of Turkey will be taken into account in the calculation of the administrative fine based on the date the act was committed.