Recent Development
An amendment was published in the Official Gazette on April 19, 2022 altering the Communiqué No. 2008-32/34 on the Decree No. 32 on the Protection of the Value of Turkish Currency. Pursuant to the amendment, it is no longer possible pay the purchase price in foreign currency in respect of sale of goods between parties that are resident in Turkey, even when the purchase price is denominated in a foreign currency or indexed to a foreign currency in the sale contract. The amendment entered into force on the same date of publication in the Official Gazette.
Impact of the Amendment
Before the amendment, contract prices and contractual payment obligations could be determined in foreign currencies or indexed to foreign currencies for the sale of goods to be concluded among Turkish residents, other than vehicle sales contracts. While the amendment does not prevent Turkish residents from determining the contract price in foreign currencies or indexed to foreign currencies, it sets out that the relevant payment can only be made in Turkish lira.
Conclusion
Parties must consider the effects of the FX payment ban on the contract falling within the scope of the amendment and the payments to be made thereunder. Also, in order to avoid any conflicts on the exchange rates and the Turkish lira amount to be paid, parties must consider updating their contracts to fix the exchange rates and the date to be used to fix the exchange rates therein.
