Category: Turkiye

Turkey’s main regulation regarding advertisements, the Regulation on Commercial Advertisement and Unfair Commercial Practices (“Regulation”) was amended with another regulation published on the Official Gazette of 4 January 2017, effective immediately. Those who advertise their products and services, advertisement agencies and the media that publishes such advertisement should abide by the Regulation. 

The main amendments realized on the Regulation are with regard to (i) comparative advertising and (ii) proof conditions with regard to the assertions in the advertisements. Aside from these, what should be disclosed when announcements regarding marketing techniques that give the right to join a lottery or to a competition through collecting a certain number of coupons, labels etc., or through the purchase of the advertised product has been amended. Previously, the obligation was to declare (i) the beginning and end dates of the promotion, (ii) the announcement technique of the lottery result and (iii) the dates and conditions of the delivery of the service products. The amendment is vague as to whether “the announcement technique of the lottery result” should be disclosed—the requirement itself has been deleted, but have been replaced with “disclosure of conditions regarding the delivery of the service or the goods or the disclosure of the announcement method of such.”

Another novelty brought about by the amendment is with regard to the regulation of advertisements regarding electronic communication services. Generally, the amendments impose obligation to disclose to the consumer that the speed promised with the advertisement can be subject to change due to infrastructure related issues and that the perception regarding all consumers may enjoy the speed levels tested in laboratories should not be created.

Amendments on Comparative Advertising

Compliance with the principles (with regard to comparative advertising) set out by the Advertisement Board has been added as one of the conditions under which comparative advertisements can be made. Such amendment brings about the expectation that the Advertisement Board will draft principles under which comparative advertisement can be made.  

Although the trademark or commercial titled of the competitor product can be used in the comparative advertisement, with the amendment, real person or institutional witnesses cannot be used in comparative advertisements. Previously, this paragraph was to enter into force as of 31 December 2016. With the amendment, the entry into force of this requirement has been postponed to 1 January 2018.

Further, the new amendments emphasize the principle that food supplements cannot be subjects of comparative advertisements. The newly added principles provide that health declarations within food commercials cannot be compared and nutrition declarations can only be compared in compliance with the relevant legislations. Comparative advertisement cannot be made with regard to sectors whose price regulations and significant market power obligations are determined by the administrative authorities.

Amendments on Burden of Proof

The new proof system proposed by the amendments will be deemed easier by companies subjected to it. Previously, any assertions in advertisements were to be proven with reports obtained from universities, accredited testing institutions or independent research institutions. With the amendments, this requirement is introduced for comparative advertisements. For the rest of the advertisements the rule is changed. Such a high standard of proof can, now, be required where deemed necessary. However, the rule is to prove all assertions through information and documents which have scientific validity. 

Conclusion

The amendments regarding the burden of proof will especially beneficial for the incumbents of the Regulation. As for comparative advertisements, the future may bring further principles, as the Regulation has been amended to provide that those willing to engage in comparative advertisements should also comply with the principles set out by the Advertisement Board.     

(First published in Mondaq on January 9, 2017)

By Gonenc Gurkaynak, Managing Partner, C. Olgu Kama, Partner, and Burcu Ergun, Associate, ELIG, Attorneys-at-Law

The General Annunciation on Law on Restructuring of Some Receivables numbered 6736 Serial No: 1 has explained the article 7 titled “Acquiring Some Assets to National Economy” of “Law on Restructuring of Some Receivables” (“Law”).

In addition to these explanations, “General Annunciation on Law of Restructuring Some Receivables numbered 6736 Serial Numbered 4” (“Annunciation”) brings more detailed explanations and was published on the Official Gazette dated 02.12.2016, numbered 29906 and came into force as of the same date.

1- Aim and Scope

7th article of the Law regulates that real and legal persons who bring the money, golden, securities and the other capital market instruments (“Assets”) to Turkey from abroad, may dispose freely the said assets under the provision of this article, until 31/12/2016. The Annunciation aims to bring additional explanations to 7th article of the Law.

2- Bringing assets to Turkey from Abroad #

The Annunciation provides convenience on tax and many other procedures about bringing Assets to Turkey from abroad in accordance with the 7th article of the Law. Detailed regulation is issued under the 2nd article of the Annunciation and conspicuous points are as follows;

In the situation of bringing Assets to Turkey from abroad, there shall not be tax assessment; so, real or legal persons shall not pay any tax.

Notifying the securities and other capital market instruments to a bank or an intermediary by own or empoweree is also enough for acceptance of bringing the said securities to Turkey. For the ones who prefer the notifying option, bringing the securities and other capital market instruments to Turkey via transfer or physically is optional. Banks and intermediaries shall conserve securities or other capital market instruments as per relevant legislations except the situations transferring to an account or opening an account via bringing said instruments physically. Moreover, banks and intermediaries shall not create an account or track the instrument.

The assets that seem to belong to legal representatives, partners or deputies of a company but actually belong to the company can be also brought to Turkey. In said situations according to Annunciation legal representatives, partners of the company or company’s deputies who have signed representation contract issued by competent authority before 19/8/2016, they may bring the company’s Assets valued abroad to Turkey.

3- How Will the Valuation of Assets Brought to Turkey Be Done?

The money, gold, foreign currency, securities and other capital market instruments that are abroad will be valued at the date they are brought to Turkey or notified in accordance with the 3rd article of the Annunciation as follows:

• Money in Turkish Lira in nominal value
• Gold, with current market value
• Foreign Currency, with buying rate of exchange of The Central Bank of Turkish Republic
• Securities and other capital market instruments;
  • Common stocks as equities, with stock exchange value if any, if there is not stock exchange value with market value, if this price cannot be specified with buying price, if buying price cannot be specified with nominal value
  • Debt instruments such as bill, bond or Eurobond, with stock exchange value if any, if there is not stock exchange value with current market value, if this price cannot be specified with buying price, if buying price cannot be specified with nominal value
  • Investment funds participation certificates, with closing price at relevant market
  • Derivative instruments such as forwards and options, with stock exchange value if any, if there is not stock exchange value, with current market value, if this price cannot be specified with buying price, if buying price cannot be specified with nominal value There is a detailed regulation in the Article 3 of the Annunciation about the charge that shall be taken as a basis in valuation.

4- Nonexecution of Examination, Inspection, Investigation and Prosecution for Tax Audit and Assessment

Article 4th of the Annunciation regulates that there shall not be enforced any examination, inspection, investigation and prosecution, tax penalty and administrative fine about a tax audit and assessment for the ones who benefit from 7th article of the Law due to assets brought to Turkey from abroad and for legal representatives of the ones who did said proceedings because of the act of bringing the assets to Turkey from abroad.

It is regulated in the Annunciation that any tax, levy, fee and fund shall not be applied for these assets, including the imported ones.

Assets brought to Turkey or notifications concerning these shall not be utilized in scope of any examination, inspection or investigation.

By Eylul Bengisu Gumuş, Junior Associate, Yigit Parmaksiz, Senior Associate, and Sibel Buyukkilic, Trainee Lawyer, Moral Law Firm

Effective 1 January 2017, higher fines will be imposed for certain violations of Law No. 6502 on Protection of Consumers (the “Consumer Protection Law”). Fines will increase by 3.83 percent compared to 2016.

In particular, companies that are found to have:

Used unfair terms unlawfully or failed to use 12-point bold type with clear language in consumer agreements, failed to provide a guarantee certificate, or failed to provide explicit and legible safety information to consumers for goods deemed potentially harmful to consumers or the environment will be subject to a fine in the amount of TRY 240 (approximately USD 70) per violation;

Failed to comply with the obligations on consumer loan and housing finance agreements and agreements concluded outside the workplace (such as direct sales agreements) will be subject to a fine in the amount of TRY 1,206 (approximately USD 340) per agreement or transaction;

Made deceptive or misleading representation through mass media advertising will be subject to a fine in the amount of TRY 6,034 to 241,413 (approximately  USD 1,700 to 70,000) per violation.

Actions to consider

Companies should take note of these changes in fines and their effects on their operations in Turkey, and take steps to ensure compliance with the Consumer Protection Law.

By Hakkı Can Yıldız, Senior Associate, and Can Sözer, Senior Associate, Baker McKenzie

The Turkish Constitutional Court recently decided that the right to privacy can be violated on the Internet.  

The court’s decision numbered 2014/16701 (“Decision”) was delivered on October 13, 2016 and concerned a military officer’s dismissal from the Turkish Armed Forces (“TAF”). The ground of the dismissal was that the officer’s private life is not suitable for TAF’s ethical code of conduct and this information was provided from the images which were broadcasted on the Internet.  The officer (“applicant”) individually applied to the Turkish Constitutional Court claiming that the principle of proportionality was not considered in the dismissal and his right to privacy was violated since the evidence is obtained unlawfully.  

In 2010, an inquiry was established about the applicant in the TAF after images of him and a woman were published on the electronic environment. The contents about the applicant on the Internet were seen as unethical, embarrassing and shameful by the military authorities. As part of the inquiry, the applicant was questioned about the details of his private life without being adequately informed of his rights and the inquiry concluded with his dismissal from the TAF. The applicant brought a claim to the High Military Administrative Court (“Court”) against the Ministry of Defense and argued that the dismissal decision was unlawful as it was based on his private life and did not take into account his successful career records. His claim was rejected by the Court and the Court’s decision stated that through the broadcast of the images on the Internet his private life was publicized and it was understood that he was not fit to perform a military role. One of the dissenting judges stated that images published on the Internet cannot be considered as legal evidence on their own, and another judge stated that the statements given by the applicant during the examination were regarding his private life and since the statements have not been accompanied with other concrete evidence his dismissal was unlawful.  

The applicant individually applied to the Constitutional Court on October 23, 2014. The court evaluated his claim that Article 20 of the Turkish Constitution which regulates the right to privacy was violated. The court defined right to privacy comprehensively and stated that right to privacy includes individual independency and the right to pursue a private life as one desires and without any interventions from the outside world. The court also referred to the definition of right to privacy under the European Convention on Human Rights and Ozpinar v. Turkey case where the European Court of Human Rights decided that if a person’s behavior and attitude is considered as a reason for dismissal, it will be deemed a violation of one’s right to privacy.

This decision is touching upon crucial discussions on the right to privacy as well as setting an example of a constitutional right being violated on the Internet. After establishing that there is an intervention to the complainant’s private life, the court moves on to discuss whether the intervention constitutes a violation or not. This discussion sheds light on a very important aspect of the right to privacy which is its scope and limitations. Article 13 of the Turkish Constitution states that the fundamental rights and freedoms can be limited, without affecting their core, only based on specific reasons stated in the Turkish Constitution, in accordance with the Turkish Constitution and the necessities arising from the democratic societal order, and in a proportionate way. The court states in Paragraph 53 that the intervention in the case can be said to have the legitimate purpose of implementing discipline in the military and ensuring fulfillment of public service work properly. On the other hand, when evaluating the measure taken by TAF which is dismissing the complainant, on the ground of necessity and proportionality, the Constitutional Court stated that the limitations on the right to privacy require imperative circumstances. The reasoning of the complainant’s dismissal decision does not display clearly the impact of the complainant’s sexual life on the military, and his career as a soldier. Therefore, it cannot be concluded that the dismissal decision was taken as a last measure upon imperative circumstances. In light of this evaluation, the Court decided that the intervention constituted a violation.  

The Decision and the discussion regarding the limitations on the right to privacy raise an important question that is very relevant to Internet law. The availability of information has significantly increased with the Internet. The case is an example of details of a person’s private life being exposed on the digital platform and this example is becoming more and more common. Therefore, the question on the limits of the right to privacy is becoming increasingly important. Where the line should be drawn? Can the right to privacy of certain people be limited to a further extent than some others? What are the overriding factors, if there are any?  

The upcoming section of this article will be dedicated to listing two circumstances in which the right to privacy can be limited. First of all, if the person concerned is a public or a political figure, the scope of his or her right to privacy might be argued to be narrower. The Constitutional Court stated in the case of June 30, 2014 with application number 2013/5574 that while a person not known publicly has the right to protection of his or her personal reputation and the right to request a special protection,  people who are publicly known do not have the right to request a protection on that level. For example, while information about an ordinary citizen’s personal life will be considered to fall within the scope of his or her private life, a public or a political figure’s personal life might be of relevance to the general public.

Another circumstance in which the extent of private life can be limited may be when there is a greater public interest. This circumstance arises when details of a person’s private life are newsworthy and exposed through the news. For example, when activities that a political figure  undertakes outside of his or her official capacity has an impact on the general public, the details become newsworthy and therefore, moves outside the scope of his or her private life. There is a Supreme Court decision numbered 1991/4-628 on the matter stating that when the right to be informed and criticize is in conflict with personal rights, the public benefit prevails. Therefore it is understood that when there is public benefit in learning the details of a person’s private life, the scope of that person’s private life can be narrowed without affecting its core.  

To conclude, the Decision is an important one for a number of reasons. The right to privacy has long been established in Turkish law, but this case extends the scope of the right to the digital environment. The decision might be a precedent for when a violation of a constitutional right through the Internet comes into question. The Decision also touches upon a very crucial aspect of the right to privacy. Like many of the other rights and freedoms, the right to privacy is not unlimited. The Constitutional Court evaluates the intervention in the case at hand from this perspective, and goes through a checklist before deciding whether the intervention constitutes a violation or not. This checklist includes but not limited to necessity and proportionality. The discussion upon the limits of private life, as explained, needs many aspects to be evaluated, especially when it comes to protecting private life in the Internet realm. Therefore, this Decision is not only very crucial for the constitutional right to privacy but also to Internet law.     

(First published in Mondaq on January 6, 2017)

By Gonenc Gurkaynak, Managing Partner, and Ilay Yılmaz, Partner, ELIG, Attorneys-at-Law

Prime Ministry Circular No. 2016/27 on Trade Facilitation Board (“Circular”) has been published with the Official Gazette dated 03.12.2016. The Circular stipulates a process involving many public institutions and establishments with regard to the adoption of measures to enhance the competitiveness by improving the international trade infrastructure.

• The Circular is intended to fulfill the requirement of establishing a national trade facilitation board in accordance with the Trade Facilitation Agreement signed before the World Trade Organization. In this context, the “Trade Facilitation Board” is established with the aim of providing coordination and cooperation among the relevant institutions in order to contribute to the creation of strategies and action plans for facilitating trade and fulfill our obligations arising out of the Trade Facilitation Agreement.
• The Board is established by the co-chairmanships of  Undersecretaries of the Ministry of Customs and Trade and the Undersecretaries of the Ministry of Economy and by the representatives of the Ministers of Science, Industry and Technology, Environment and Urbanism, Foreign Affairs, Economy, Food, Agriculture and Livestock, Customs and Trade, Development, Health, Transportation, Maritime Affairs and Communications Ministries, Foreign Economic Relations Board, Presidency  of the Administration for the Development and Support of Small and Medium Scale Enterprises, the Turkish Exporters Assembly, Turkish Union of Chambers and Exchange Commodities, the International Transportations Division, the International Transport and Logistic Service Creation Department, the Turkish Standards Institute and the Turkish Banking Association and the Customs Consultancy Association. 
• According to the Circular, the Board will convene at least twice a year and the operating procedures and principles will be decided on the first meeting. 

By Ecem Baglarlıoglu, Junior Associate, and Yigit Parmaksız, Senior Associate, Moral Law Firm