• It is the spirit and not the form of law that keeps justice alive.
    Earl Warren

EFFECTS OF THE NEW RETAIL TRADE ACT No. 6585 ON SHOPPING MALLS

The long-awaited Retail Trade Act No. 6585 (“Retail Trade Act”) has been published in the Official Gazette today (29.01.2015) and introduced many adjustments that would affect the shopping mall sector.

As per the new legislation, shopping malls are included within the definition of retail business. In that respect, any business (establishment) which bear a building or area integrity with centralized management and communal areas and which also has big stores or places where nourishment, dressing, entertainment, resting, cultural or similar needs can be fulfilled, shall be qualified as a ‘shopping mall’. 

Although the implementation of the Retail Trade Act will be clarified following the secondary legislations to be issued within 9 months, we have summarized below some of the significant novelties introduced by the new legislation:

Retail Information System (“PERBIS”) and Licences 

According to the Retail Trade Act, an information system called PERBIS shall be established by the Ministry of Customs and Trade (“Ministry”), through which retail businesses shall submit their applications in relation to opening and operations. Such applications will be transmitted to the relevant institutions and organizations for evaluation and conclusion. PERBIS will be granting work place opening and operation licenses for retail businesses. 

Metropolitan municipalities will be competent to grant the required licences for shopping malls located in metropolises. With respect to construction licenses to be granted in that respect, opinions of supreme professional organizations shall also be obtained. 

Restrictions on Contributions 

Retail businesses shall not be entitled to request contribution or consideration from producers or suppliers for services which would directly affect the demand of the product unless type of the contract and ratio of the contribution/consideration is indicated.
  
Sales Campaigns and Shopping Festivals

Retail businesses shall be able to hold discount or promotional sales campaigns and shopping festivals in compliance with the provisions of the Consumer Protection Law. However, the duration of such campaigns shall not exceed (i) three months in case of a work place opening, transfer, closing, change of address or activity and (ii) six months in case of liquidation.
 
Payment Term

In principle, payments arising from purchases between producers/suppliers and retail businesses shall be made on the date specified under the sales contract. However, the payment term of those products, which should be consumed within 30 days as of the production date, shall not exceed 30 days as of the delivery date, provided that the producer/supplier is a small-sized enterprise and the relevant retail business is a big-sized enterprise.
 
Communal Areas

An area corresponding to at least 5/1000 of the sales area of a shopping mall shall be reserved as a communal space to be used for cultural and social activities. The Ministry will be authorised to increase such ratio within the limits set up by the Retail Trade Act.
  
Under the Retail Trade Act, shopping malls should provide space for communal areas, such as immediate medical response units, prayer rooms, and baby care rooms and play grounds. On the other hand, as per Act No. 4250, there must be at least 100 meters of door-to-door distance between prayer halls and stores where retail or open sales of alcoholic beverages take place. In that respect, provisions of the Retail Trade Act about the requirement of prayer rooms may raise a query on whether the reference to prayer rooms will be accepted as prayer halls within the context of Act No. 4250 and whether the sale of alcoholic beverages is prohibited in shopping malls. These concerns will probably be crystallized following the issuance of secondary legislation in relation to the Retail Trade Act.

Working Hours

Working hours of retail businesses shall be determined by the governor with the joint proposal of professional organizations. However, such determination at regional or national levels shall be made by the Ministry upon the proposal of supreme professional organizations.
 
Effects of the Retail Trade Act to Existing Shopping Malls 

Work place opening and operation licences received by retail businesses before the effective date of Act No. 6585 shall remain valid. However, the relevant shopping malls must comply with the provisions on communal areas at least within one year as of the effective date of the said act.
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