Turkey | How to pull f/x out of a hat: the revival of the repatriation of export revenues and the fallout of amendments made in decree no. 32 on f/x contract prices
17 September 2018
Client Alert | Turkey | Banking & Finance
Before 2008, Turkey had a very stringent export proceeds repatriation regime. In the old exchange regime, Turkish exporters were obliged to repatriate their export revenues within 180 days of the date of shipment. If at least 70% of the foreign exchange revenues were repatriated within 90 days of the date of shipments, exporters were entitled to dispose of the remaining 30% freely (deposit it in f/x accounts in banks or keep it abroad). These repatriation restrictions were abolished on 8 February 2008 by an amendment under Article 8 of Decree No. 32 regarding the Protection of Turkish Currency ("Decree No. 32") as follows: Export proceeds shall be freely disposed of. The Ministry is authorised to issue regulations related to the repatriation of export proceeds, as may be required. In this respect, in the past 10 years, export revenues no longer needed to be converted into Turkish lira, and Turkish exporters were free to dispose of their proceeds under Turkish foreign exchange regulations.
In the past six months, the Turkish authorities have taken a number of measures to ease the recent f/x crisis and the sharp decrease in the value of the Turkish lira. In this regard, Communiqué No 2018-32/48 Regarding Decree No. 32 on the Protection of the Value of the Turkish Currency (Regarding Export Revenues) (the "Communiqué on Export Revenues") was issued on 4 September 2018 by the Ministry of Treasury and Finance (the "Ministry"), setting out a number of obligations for Turkish exporters concerning the repatriation of export revenues within definitive periods, and selling such f/x revenues to Turkish banks. This Client Alert aims to briefly summarise the novelties brought by the Communiqué on Export Revenues.
Please click on the PDF file below to read the full Client Alert.