Moroglu Arseven

Capital Markets Board of Turkey has made amendments on several issues regarding venture capital funds, including new rules on activities of fund, representation of the fund, principles on investment companies and venture capital investments and new requirements for public disclosures, with the Communiqué numbered III-52.4.b on Amendment of the Communiqué on Principles of Venture Capital Investment Funds numbered III-52.4 (“Amendment Communiqué”).The matters regulated by Amendment Communiqué are as follows:

Turkish Constitutional Court recently ruled that imposing a preliminary injunction on the applicant’s immovable property for 19 years violates the right to property. The decision relates to an application in which the applicant alleged a violation of the property right due to the imposition of a preliminary injunction for an unreasonable length of time in a case initiated against the legator and later participated by the heirs.

Turkish Medicine and Medical Devices Office (“TITCK”) has updated Guideline (“Guideline”) regarding the Regulation on the Sale, Advertising and Promotion of Medical Devices  (“Regulation”) on 20 October 2020 and introduced new provisions regarding the process of examination of the candidates and providing of compliance certificates of applicants which are sent by e-mail shall be provided through e-government gateway application.

Turkish Constitutional Court, ruled that the dismissal decision adopted by the first degree court rendered due expiry of the time period of application commencing from tax payment date in correction requests for declaration-based taxes miscalculated due to the applicant’s error, constitutes a violation of the right of access to courts which is an integral part and assurance of the right to a fair trial.

Turkish Constitutional Court ruled that the applicant’s right to fair trial is violated due to Turkish Counsel of State’s failure to unify discrepancies between precedents in tax litigation in a reasonable time. In the present case, Tax administration requested applicant to submit his legal books and documents for the calendar years 2008, 2009, 2010 for the investigation pertaining to the purchase of certain goods and services. Upon applicant’s failure to submit the aforementioned books and documents without providing any valid excuse, the difference amount arising by means of the refusal of VAT deductions for the purchases made in the relevant years was assessed with a threefold amount of tax loss fine. The applicant filed multiple lawsuits against the assessments before Adana 1st Tax Court (“Court”) and claimed that the refusal of lawsuit without examination regarding whether the documents related to the deducted VAT amount were recorded in the relevant books and documents would be illegitimate. The applicant requested for the examination of electronic accounting records and stated that the applicant can submit legal books and documents if a sufficient time was provided hereof. The Court dismissed the case on the grounds that the legal books and documents were not submitted without providing any valid excuse in the term of limitation and it was not proved that the purchase documents, which the deducted VAT amounts were based on, had been recorded in the legal books. 3rd Chamber of Council of State has approved the Court’s decision and dismissed the applicants request regarding the revision of decision. Final decisions were notified on 10 February 2015 and the applicant made an individual constitutional application on 9 March 2015. The Constitutional Court stated that there were two different judgements in the precedents of Plenary Session of the Tax Law Chambers of Counsel of State, which are summarized below, regarding lawsuits filed by taxpayers against VAT amounts and monetary fines occurred as a result of rejection of VAT deduction arising from failure to submit legal books and documents to tax audit officer without providing any valid excuse: If legal books and documents were not submitted to tax audit officer, court decision will be rendered without examination of legal books and documents submitted to court, and Courts are under obligation to examine legal books and documents in order to allow taxpayers to prove their claims. The Constitutional Court further stated that the General Assembly on Unification of Judgements rendered a decision in favor of the second judgment mentioned above on 8 February 2019. The Constitutional Court decided that Turkish Value Added Tax Law numbered 3065 was effective for more than 30 years and the discrepancy between judgments in precedents regarding this issue was not resolved in a reasonable. In conclusion, the Constitutional Court ruled that the applicant’s right to fair trial, stipulated under article 36 of Turkish Constitution, was violated since judicial fairness had been harmed on the grounds that persons were exposed to an indefinite law for a very long time period until the relevant precedents are unified. Please see this link for the full text of Turkish Constitutional Court’s decision dated 9 June 2020, numbered 2015/4255, published in the Official Gazette dated 15 September 2020 and numbered 31245 (only available in Turkish). Turkish Constitutional Court ruled that the applicant’s right to fair trial is violated due to Turkish Counsel of State’s failure to unify discrepancies between precedents in tax litigation in a reasonable time.In the present case, Tax administration requested applicant to submit his legal books and documents for the calendar years 2008, 2009, 2010 for the investigation pertaining to the purchase of certain goods and services. Upon applicant’s failure to submit the aforementioned books and documents without providing any valid excuse, the difference amount arising by means of the refusal of VAT deductions for the purchases made in the relevant years was assessed with a threefold amount of tax loss fine. The applicant filed multiple lawsuits against the assessments before Adana 1st Tax Court (“Court”) and claimed that the refusal of lawsuit without examination regarding whether the documents related to the deducted VAT amount were recorded in the relevant books and documents would be illegitimate. The applicant requested for the examination of electronic accounting records and stated that the applicant can submit legal books and documents if a sufficient time was provided hereof. The Court dismissed the case on the grounds that the legal books and documents were not submitted without providing any valid excuse in the term of limitation and it was not proved that the purchase documents, which the deducted VAT amounts were based on, had been recorded in the legal books. 3rd Chamber of Council of State has approved the Court’s decision and dismissed the applicants request regarding the revision of decision. Final decisions were notified on 10 February 2015 and the applicant made an individual constitutional application on 9 March 2015. The Constitutional Court stated that there were two different judgements in the precedents of Plenary Session of the Tax Law Chambers of Counsel of State, which are summarized below, regarding lawsuits filed by taxpayers against VAT amounts and monetary fines occurred as a result of rejection of VAT deduction arising from failure to submit legal books and documents to tax audit officer without providing any valid excuse: If legal books and documents were not submitted to tax audit officer, court decision will be rendered without examination of legal books and documents submitted to court, and Courts are under obligation to examine legal books and documents in order to allow taxpayers to prove their claims. The Constitutional Court further stated that the General Assembly on Unification of Judgements rendered a decision in favor of the second judgment mentioned above on 8 February 2019. The Constitutional Court decided that Turkish Value Added Tax Law numbered 3065 was effective for more than 30 years and the discrepancy between judgments in precedents regarding this issue was not resolved in a reasonable. In conclusion, the Constitutional Court ruled that the applicant’s right to fair trial, stipulated under article 36 of Turkish Constitution, was violated since judicial fairness had been harmed on the grounds that persons were exposed to an indefinite law for a very long time period until the relevant precedents are unified. Please see this link for the full text of Turkish Constitutional Court’s decision dated 9 June 2020, numbered 2015/4255, published in the Official Gazette dated 15 September 2020 and numbered 31245 (only available in Turkish).

The Law on Restructuring of Certain Receivables and Amendment of Certain Laws (“Law”) was published in the Official Gazette dated 17 November 2020 and numbered 31307.

Turkish Constitutional Court has recently published its decision in which it evaluated the expert report’s positive proof qualification upon the finalization of the court decision. As a result, the court decided that the acceptance of the objection to the expert report in the appeal process breaches the proprietary right of the applicant, since the report was not objected by the parties in the first instance.

Turkish Constitutional Court (“CC”) ruled that it is unconstitutional not to apply the favorable criminal provision within the scope of the law change that occurred during the judgement process.

On 6 November 2020, Turkey’s Personal Data Protection Authority published a summary of a decision dated 10 September 2020 and numbered 2020/791 on its website regarding the processing of the mobile phone number of a data subject by an association for sending advertising SMS without getting explicit consent of the data subject.

Several amendments were introduced on the Implementation Regulation on Direct Foreign Investments Law (the “Regulation”) on 16 October 2020. The companies and branches within the scope of the Law on Direct Foreign Investments (the “Law”) are now required to obtain a registered electronic mail (“KEP“) account. Accordingly, notifications and applications made through Electronic Information System on Incentive Implementation and Foreign Capital (“E-TUYS”) will be carried out via KEP accounts.

Significant changes to shareholders’ meeting procedures and principles on the attendance of a representative of Ministry of Trade have been introduced.

Capital Markets Board of Turkey (“CMB“) has published the Communiqué Amending the Principles Regarding Principles on Financial Reporting on Investment Funds (“Amendment Communiqué“), in the Official Gazette dated 9 October 2020 and entered into force on the same date. Changes introduced by the Amendment Communiqué can be summarized as follows:

Commissioning deadline for production facilities to able to benefit from the Renewable Energy Resources Support Mechanism (“YEKDEM”) has been extended to 30 June 2021, with the annex decree of the Presidential Decree dated 17 September 2020 and numbered 2949 has been published in the Official Gazette dated 18 September 2020 and numbered 31248.

Capital Markets Board of Turkey (“CMB“) has published the Communiqué Amending the Principles Regarding Real Estate Investment Companies (“Amendment Communiqué“) the Official Gazette dated 9 October 2020 and entered into force on the same date. Changes introduced by the Amendment Communiqué can be summarized as follows:

Pursuant to Law numbered 5846 on Intellectual and Artistic Works (“Law“) reproduced copies of musical and cinematographic works and non-periodical publications should bear a special label, called a banderol for commercial exploitation. The breach of banderole liability crimes and related punishments are regulated under article 81 of the Law. Article 81/13 of the Law, on the other hand, sets forth a special joiner of offences rule by making a reference to article 71/1-1 of the Law that infringement of the moral and financial rights crime regarding an artistic work is laid down.

On 6 October 2020, Turkish Medicines and Medical Devices Agency (“Agency”) has published “Guideline on Non-clinical Evaluation of Vaccines for Human Use” (“Guideline”). The Guideline aims to provide guidance on “non-clinical evaluation” of vaccine candidates for vaccine developers.

Legal regulations and judicial practices are in a continuous transformation in order to meet the needs arising from new technological developments. Juridical authorities in different jurisdictions are facing new and highly sophisticated conflicts which are increasing day by day in practice of intellectual property. This global change also necessitates an international information exchange to have an idea on law practitioners’ different approach to different problems.

Pursuant Article 160/A of the Tax Procedure Law (“Law number 213”) taxpayers who are determined by the relevant departments of the Ministry of Treasury and Finance to have a high risk of forging documents will be referred to tax inspection and then their taxpayer status will be abandoned. Within the scope of this amendment, which was brought in order to strengthen the trust in documents and to terminate the acts of those who issue fake documents, the procedures and principles regarding the determination of risky taxpayers, tax inspection and cancellation were determined by the General Communiqué of the Tax Procedure Law number 520 (“Communiqué”).

The 11th Civil Chamber of the Court of Cassation ruled that where the lawsuits are backlogged, mediation is not mandatory for commercial cases initiated with non-monetary claims. Accordingly, it overruled the Regional Court’s decision.

Turkish Patent and Trademark Office (“TPTO”) published “Guidelines on Employee Inventions and Inventions Made in Higher Education Institutions” (“Guidelines”) on its website by virtue of Industrial Property Law numbered 6769 (“IPL”) and Regulations on Employee Inventions and Inventions Made in Higher Education Institutions and Inventions Emerging in Public Supported Projects numbered 30195 (“Regulation”) on 30 June 2020.

The Regulation on Generation and Use of TR QR Code in Payment Services (“Regulation”) prepared by the Central Bank of the Turkish Republic (“Bank”) has been published in the Official Gazette dated 21 August 2020 and numbered 31220, entering into force on the same date.The Regulation determines the procedures and principles for services fall into the scope of payment services within the scope of the Law on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions numbered 6493 (“Law”) and rendered by using a QR Code, besides generation of TR QR Code.

The Decision Amending the Decision on State Aids in Investment amends (“Amendment Decision”) the Decision on State Aids in Investment mainly with the purposes of supporting environmental responsibility in production and high technology investment by considering the investors’ needs. The Amendment Decision has been published in the Official Gazette dated 21 August 2020 and numbered 31220.

The Regulation on Sale of Refurbished Products (“Regulation”) introduced by Turkey’s Ministry of Trade was published in the Official Gazette dated 22 August 2020 and numbered 31221 and entered into effect on the same day. The Regulation aims to regulate the procedures and principles pertaining to re-sale of used goods by refurbishing.

The Law numbered 7251 on the Amendments to the Code of Civil Procedure and Certain Laws (“Amendment Law”) was published in the Official Gazette dated 28 July 2020 and numbered 31199 and entered into effect on the same day.

The ever-changing digital world, on one hand, creates a great number of digital data pertaining to innovative and creative ideas, but on the other hand raises questions on misuse and infringement of these.

In the meeting held in July, the Ministry of Commerce’s Board of Advertisement (the “Board”) evaluated the posts regarding a food supplement that were shared on personal social media accounts of six people, within the scope of surreptitious advertising. The Board ruled the suspension of the advertisements and administrative fine to the advertiser company and six people on the grounds that advertisements violate the general principals regulated by the Consumer Protection Law numbered 6502 and the Regulation on Commercial Advertising and Unfair Commercial Practices, besides the specialized regulations on advertisements of food supplements.

Turkey’s Data Protection Board (“Board”) imposed an administrative fine in the amount of TRY 900,000 on a data controller for transferring personal data abroad without having a valid legal basis. The data controller’s claim that Convention 108 is sufficient per se for data transfer abroad among the parties has been declined by the Turkish Data Protection Board.

Turkish Data Protection Board (“Board”) decided that a single person may be appointed as the contact person for multiple data controllers abroad at the same time. However, a person can be a contact person for only one data controller in Turkey.

Procedures and Principles Regarding Determination of Power Plant Areas of Production Facilities Subjected to Pre-License and Licenses in the Electricity Market (“Principles”) set forth by the Energy Market Regulatory Authority (“EMRA”) has entered into force as of 18 June 2020.

The First Presidential Board of the Court of Cassation determined conflicting judgments between chambers in the matter of ” whether or not the claim of invalidity arising from not issuing a registered bill can be put forward against the holder in good faith who has taken over through endorsement in case of the issuance of an order bill that should be issued as a registered bill as per 6/A of the Law number 4077 on the Protection of Consumers”. The Assembly decided to resolve the uncertainty between different chambers of the Court of Cassation.12th Civil Chamber of the Court of Cassation stated that “the claims based on the invalidity of the bill are decided to be rejected due to the reason that even if the bill is given within the scope of the consumer contract, it is not possible to claim and prove that the bad faith of the creditor and it is not written in the text of the bill that it is given by reason of the consumer contract and it is not possible to object to the signature and to prove the debt has been paid to the creditor”.

Paragraph 6 of the article regarding the preparation procedures of the Communiqué (“Communiqué”) of the Communiqué on the Signing of the Company Establishment Agreement at the Commercial Registry Directorates was amended through the Communiqué Amending the Communiqué on the Signing of the Company Establishment Agreement at the Commercial Registry Directorates, which entered into force on 22 July 2020.As per this amendment;

TURKEY INITIATES SURVEILLANCE ON IMPORT OF BICYCLE PARTS FROM CHINA, INDONESIA, INDIA, MALESIA AND THAILAND

The Law Amending the (“Amendment Law”) Law number 5651 (“Law Number 5651”) on Regulation of Broadcasts via Internet and Prevention of Crimes Committed through Such Broadcasts was published in the Official Gazette on 31 July, 2020. With the Amendment Law, important changes were made to the internet law. It is possible to examine the changes brought under two main headings: changes in social media regulations and changes in the general process.

The Law Regarding the Establishment of Digital Platforms Commission and Amendment of Certain Laws (“Law”) was published in the Official Gazette dated 28 July 2020 and numbered 31199.

Turkish Competition Authority (“Authority”) underlined the followings with its announcement (“Announcement”) dated 8 May 2020:

Presidential Decree (“Decree”) numbered 2483 was published in the Official Gazette dated 30 April 2020 and numbered 31114 and entered into force on the same day. The Decree regulates the procedure and principles of services to be procured through tenders for the national research-development (“R&D”) projects conducted and supported by the national R&D institutions within the scope of the exceptions of Public Tender Act (“Act”) numbered 4734, excluding the penalties and prohibition from tenders.

In Presidential Government System, which was adopted on 9 July 2018 in Turkey, the President is entitled to issue Presidential Decrees on the matters related to executive power without the need for an enabling law. Presidential Decree, being a fundamental norm as per regulated directly under the Constitution, is a general and framework regulative transaction.

Turkish Constitutional Court ruled that the applicant’s freedom of speech and freedom of the press are violated by the decision to completely block access to the website that the applicant is representative of.

Turkey’s Ministry of Treasury and Finance has published the Regulation Amending (“Amendment Regulation”) the Regulation on Activities to be Evaluated under Insurance Services, on Insurance Contracts Concluded in favor of the Consumer and on Distance Insurance Contracts (“Regulation”) in the Official Gazette numbered 31122 and dated 9 May 2020.

Turkey's Banking Regulatory and Supervisory Authority ("BRSA") published the Regulation on Manipulation and Misleading Transactions in Financial Markets ("Regulation") on 7 May 2020, entering into force on the same date. The Regulation sheds light on the recently introduced article 76/A of the Banking Law Number 5411 ("Law"), which included a brief definition of manipulation and misleading transactions.Turkey’s Banking Regulatory and Supervisory Authority (“BRSA”) published the Regulation on Manipulation and Misleading Transactions in Financial Markets (“Regulation”) on 7 May 2020, entering into force on the same date. The Regulation sheds light on the recently introduced article 76/A of the Banking Law Number 5411 (“Law”), which included a brief definition of manipulation and misleading transactions.