Capital Movements Circular (“Circular”) has been amended with a letter of T.R. Ministry of Treasury and Finance on 16.03.2021.
Accordingly, following amendments have been introduced to the Turkish banks’ monitoring obligations of the offshore money transfers and Turkish residents’ exemptions from the obligation to bring foreign loan proceeds to Turkey:
- Prior to the amendments, Turkish banks were obliged to monitor the content of the SWIFT messages regarding funds transferred abroad to the foreign exchange accounts of Turkish residents to determine if they are transferred in relation to a loan utilized from abroad by the Turkish resident. Following the amendments, in addition to the transfers made to the foreign exchange accounts, Turkish banks are now obliged to also monitor the content of the SWIFT messages regarding funds transferred abroad to the TRY deposit accounts of Turkish residents for the same purpose.
- Again, prior to the amendments, Turkish banks were obliged to request written declarations from the receiving entities of unidentified foreign exchange transfers made from abroad with a minimum amount of USD 50,000, in order to determine whether or not such amounts are transferred as a loan to be utilized by a Turkish resident. Following the amendments, Turkish banks are now obliged to also obtain the same written declaration from the receiving companies of unidentified Turkish Lira transfers made from abroad in the amount exceeding TL 250,000.
- With the amendments made to the Circular, the scope of the exemptions to the obligations of Turkish residents to bring the proceeds of foreign loans to Turkey is expanded. Accordingly, Turkish residents will not be obliged to bring foreign loan proceeds to Turkey to the extent that such loans are provided with the purpose of refinancing an existing loan utilized from abroad by the same borrower, and will be utilized directly for the repayment of such existing loan. The portion of the refinancing loan that is not used directly for the repayment of an existing loan, will still be transferred to Turkey through Turkish banks by the borrower. In addition, the Turkish resident borrower is also obliged to submit a written declaration to the relevant Turkish bank indicating the amount of the portion of the loan used for refinancing of an existing loan provided from abroad and not brought to Turkey.
For more information on what the new changes bring, please contact our team.
