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

MONITORING OF THE FX TRANSACTIONS BY THE CENTRAL BANK OF TURKEY

In line with the recent protectionist policies implemented through FX regulations, the Central Bank of Turkey has announced its new Communiqué on Monitoring of the Transactions Affecting the Foreign Currency Positioning (the “Regulation”) in the Official Gazette dated 17.02.2018 and numbered 30335. The Regulation has entered into force on the same date of its announcement in the Official Gazette, i.e. 17.02.2018.

 

According to the Regulation, if the entities’ total sum of (i) foreign currency cash loans utilized in Turkey or abroad and (ii) foreign currency indexed loans, equals to or exceeds USD 15 million as of the last day of the relevant calculation period, such entities must report their status to the Central Bank of Turkey. The requirement of those entities which fall into the scope shall survive as long as the sum of the transactions reach the USD 15 million limit.

 

According to the Regulation, the definition of entity includes any real person or legal entity that is not a bank or financial institution as defined in the Banking Law no. 5411.

 

In order to determine which entities are within the scope of the Regulation, financial statement prepared in accordance with the Turkish Accounting Standards will be taken into consideration. The entities must submit the data form to the Central Bank of Turkey through the Systemic Risk Data Monitoring System (which will be available at www.tcmbveri.gov.tr) on quarterly and annually basis. The data to be submitted by these entities shall also be audited by auditor.

 

The entities which are within the scope of this Regulation must enter into an agreement with an auditor within 60 days following the commencement date of such entity’s requirement. The auditor will examine the data of the entity including its consistency with the previous interim data reports and prepare a separate audit report to be uploaded to the records of Central Bank of Turkey.

 

According to the Regulation, the Central Bank of Turkey will cross examine the data submitted by the entities and the auditors. In case of any misleading data determined by the Central Bank of Turkey or in the event of non-compliance with the notification requirement by the entities, which fall into the scope of the Regulation, judicial fine may be applicable.

Practice Areas:
#Banking and Finance Law
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