In accordance with the recently published communiqué on export Revenue, revenue relating to export transactions carried out by residents in Turkey must be transferred or passed directly and without delay to the bank which mediates the export following payment by the importer.
The regulation concerns the Resolution No: 32 on the Protection of the Value of Turkish Currency and came into force with the Communiqué Concerning the Resolution: 32 (“Communiqué”) published in the Official Gazette numbered 30525 and dated 4 September 2018. The Communiqué entered into force on this date and will remain so for 6 months.
According to the Communiqué, the period for bringing the export revenue to the country must not exceed 180 days from the date of actual exportation and it is obligatory to sell at least 80% of such revenue to a bank.
In addition, the obligation to bring the export price and to sell it to banks within a period of 365 days for the exportation to be made abroad by the contracting companies, within 180 days for the exportation to be made through consignment, within 90 days in case that the goods temporarily exported abroad are not brought in the country within the given period or additional time or that they are sold within the said period, within 90 days for the exportation by credit or lease, has also been imposed.
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
The Communiqué specifies that the price related to export transactions may be brought into the country via a limited number of ways, and it is obligatory to declare this to the customs administrations should the export amount be brought into the country effectively with the passenger.
With the Communiqué, time limits have also been set for the export against advance foreign exchange by way of compulsory exports within 24 months for cash exchange. In this respect, all cash advances that are not returned at the same time or that are not exported in due time will be subject to prefinancing provisions.
While exporters are responsible for bringing their revenues from the exported goods to the country, selling them to the banks and closing the export account in due time, the banks that mediated the export are obliged to follow the importation of the export revenue and their sale.
The Communiqué deems the cases of dissolution, bankruptcy, concordat of the importer or exporter company; lockout, protest; act of god, state of war or blockade; litigation or arbitration for dispute and the filing of documents that prove this and likewise as the cases of force majeure preventing the sale of the export revenue by being collected within due time.
The Communiqué finally includes regulations for the closing of the bank accounts to which the exporting accounts are to be deposited. Accordingly, in respect of each customs declaration, the following will be closed by cancellation;
(i)Not to exceed 100 thousand dollars, export accounts that are missing up to 10 percent of the price stated in the declaration or form without consideration of the existence of force majeure, regardless of the payment scheme, directly by banks;
(ii) In the event of a force majeure, which is specified in a limited manner in the Communiqué, not to exceed 200 thousand dollars, accounts with a deficit up to 10 percent of the amount stated in the declaration or form, by the relevant Tax Office or the Tax Office Directorate.
Within the scope of the Communiqué, the demands for cancellation of accounts with a deficit of 200 thousand dollars or more will be examined and finalised by the Treasury and Ministry of Finance.
In light of the above-described issues, it is believed that the main purpose of the Communiqué is to ensure all of the export price is brought into the country within a certain period of time after the actual export date and thus to prevent the exporter’s foreign currency from being held in foreign banks.
The government intervention about what to do with the foreign exchange earnings is no stranger to Turkish law; since the form and duration conditions stipulated in the Communiqué were also prescribed in the Communiqué No. 2007-32/33 published in the Official Gazette dated 2 September 2017 and numbered 26429. While before 2008, exporters were required to bring the values of the goods that are exported with commercial purposes to the country and have them certified by the banks if they are in
Turkish lira or sell them to the banks if they are in any other currency, the exporter’s disposal on the export revenue had been liberated with the change made on 8 February 2018.
As of 4 September 2018, there was a “backward return” and the importation of the export price to the country was reinstated. However, if it is taken into consideration that the 1 per mil foreign exchange rate which used to be applied in the foreign exchange sales before 2008 no longer applies, it is foreseen that the exporter restricted by the Communiqué will convert the foreign currency brought into the country to TRY and buy it again at the same time, and then will take it back. It is clear that, if this foresight occurs, such a clear intervention will harm the free market economy rather than the expected benefit, and the obligations brought by the Communiqué will not function.