Category: Turkiye

Egemenoglu has advised the shareholders of Tunay Gida on its sale to International Beer Breweries. The Ciftci Attorney Partnership in association with Clifford Chance reportedly advised IBB.

Tunay Gida is a Turkish beverage company. According to Egemenoglu, it is “focused on the production, sale, distribution, marketing, and export of processed fruit products. Tunay Gida also plays an active role in the economically and socially sustainable organic organization, while sharing the products obtained from Turkiye’s special fruits with high taste and aroma with the world markets, and has great social support projects in the regions where it does organic agriculture.”

International Beer Breweries is an Israel-based manufacturer in the beverage sector.

The Egemenoglu team included Partners Efra Aydin Can and Egemen Egemenoglu and Associate Buse Yonat.

On July 7, 2023, Value Added Tax (“VAT”) rates have been significantly increased with the Amendment Decree (“Amendment Decree”) to the Decree on Determination of Value Added Tax Rates Applicable to Goods and Services numbered 7346 (“Decree”) published in the Official Gazette dated July 7, 2023 and numbered 32241.

Accordingly;

The general VAT rate for taxable services specified in paragraph a of the Decree has been increased from 18% to 20%,
The VAT rate for taxable goods and services specified in paragraph c of the Decree has been increased from 8% to 10%,
Whereas the goods in the nature of soap, shampoo, detergent, disinfectants, wet wipes, toilet paper, paper towels, tissues and napkins, regardless of whether they are imbued with soap, detergent or solution, were subject to VAT at the rate of 8% within the scope of Article 1/c of the Decree, this issue has been amended and the VAT rate has been increased to 20%.

The Amendment Decree will enter into force as of July 10, 2023 and the previous VAT rate will apply to the deliveries and imports of goods and rendering of services before this date.

By Cerensu Cetin Yenigun, Senior Associate, and Dilara Atilgan, Trainee Lawyer, Moral, Kinikoglu, Pamukkale, Kokenek

June 2023 – In May 2023, the Turkish Personal Data Protection Authority (the “DPA”) published two data breach notifications but did not publish decision.

On 3 May 2023, the DPA hosted the “e-safe Personal Data Protection Summit” covering various aspects of personal data protection, including legal, sector-specific, and technological developments. The discussions also emphasised the benefits of artificial intelligence and highlighted data subjects’ rights, specifically the right to object, as outlined in the Personal Data Protection Law (the “DP Law”).

In this month’s two-minute recap, we have also compiled the highlights from the 40 decisions issued by the DPA in April.
Ensuring Compliance: Establishing a Valid Legal Basis for Personal Data Transfers!

In its decision published on 24 April 2023, the DPA emphasised the importance of fundamental principles of explicit consent, particularly based on information and free will. In addition, the DPA issued its findings on the sharing of customer data with relevant institutions in the banking sector. With this decision, the data controller bank, which failed to (i) transfer customer data based on a valid legal basis and (ii) obtain explicit consent based on information and free will, has been subject to an administrative fine of TRY 250,000 (approx. EUR 11,200)

Background:

The data subject, which repeatedly received contact from an insurance company on their personal phone, discovered that the data controller bank had shared their phone number with the insurance company. Consequently, the data subject lodged a complaint with the DPA

Considerations by the DPA:

The DPA evaluated a document entitled “Campaign Communication Preferences Instruction” through which the data subject granted authorisation for receiving messages. Upon examining the instruction, several issues were identified:

i. ambiguous expressions were used concerning future actions,
ii. consent boxes were pre-selected by default, and
iii. the data subject was not adequately informed about the transfer of their personal data.

As a result, the DPA has determined that these practices contradict the fundamental principles of explicit consent specifically the principles of being “based on information” and “based on free will”.

Despite the data controller bank asserting that (i) under Turkish banking law, it had the authority to share specific limited data with the institutions it collaborates with for services and support, and (ii) the data subject had given consent to receive commercial messages, these claims were rejected. The DPA concluded that the data controller had no valid legal basis totransfer the data subject’s contact data to the insurance company, since there was no exemption from the confidentiality obligation under Turkish banking legislation, and explicit consent for such transfer was not obtained in line with the DP Law.

What is the Decision?

As a result, the DPA imposed an administrative fine of TRY 250,000 (approx. EUR 11,200) on the data controller due to (i) lack of a valid legal basis for the data transfer and (ii) failure to implement adequate technical and organisational measures when transferring the data subject’s contact data to a third party.

Enhancing Data Security: Embrace the Power of Identity Verification!

The unauthorized sharing of processed personal data with third parties through unlawful means is a matter of significant concern for both the DPA and the companies involved. The DPA has received numerous complaints on this issue and made decisions accordingly. You can find our article on these decisions from here.

Based on the non-discriminatory assessments across sectors made by the DPA, during the processing of personal data, data controllers should follow the below principles:

• Accuracy and timelines: data controllers must ensure that personal data is accurate and kept up to date when necessary.
• Periodic verification: regularly verifying the communication information of the data subjects and establishing the necessary mechanisms to keep data up to date; and
• Robust identity verification: implementing a robust identity verification mechanisms, as suggested in relevant decisions of the DPA, in order to prevent unauthorised accessing by third parties.

The Board announced the following data breach notification in May:

• Data controller: Boyner Büyük Mağazacılık

o Affected Data Subjects: Customers (Users)
o Affected Personal Data: Identity, Communication Information, Finance
o Number of Data Subjects: Approx. 3,055,907

• Data controller: Trabzonspor Sportif Yatırım ve Futbol İşletmeciliği Ticaret

o Affected Data Subjects: Employees, Users, Students, Customers and Potential Customers
o Affected Personal Data: Identity, Communication Information, Personnel Information, Customer Transaction, Finance, Professional Experience, Marketing, Visual and Audio Records and Other
o Number of Data Subjects: N/A

By Ceren Ceyhan, Associate, Hatice Nur Arslan, Junior Associate and Bahar Bozdemi, Legal Trainee, Kinstellar

Lexist has advised the TWF IFM Real Estate Construction and Management joint stock company on the regulation to establish the Istanbul Financial Center.

TWF is the Turkiye Wealth Fund, a USD 33 billion sovereign wealth fund established in August 2016 and owned by the Government of Turkiye.

According to Lexist, “Istanbul aspires to be a global financial hub through the creation of a mega project, the IFC. To realize the IFC, new legislation was required. On July 7, 2023, the IFC regulations came into force upon publication in the Official Gazette.”

According to the firm, “the IFC project is a critical step in enhancing the financial services sector in Turkiye. The land and air rights of the project are equivalent to 3.5 million square meters – twice the size of London’s Canary Wharf. Tenants of the IFC will enjoy certain tax exemptions and tax reductions.”

The Lexist team included Partners Murat Erbilen and Mesut Kaya and Associate Sevde Nur Paksoy, supported by the firm’s wider team.

ISS Turkey has appointed Gamze Sandurac Baykal to Chief Legal Officer in Istanbul.

Baykal has been with the company since 2018, when she joined as the Head of Legal. Before that, she was the Head of Legal Affairs at Endemol Shine Group between 2016 and 2018.

Before moving in-house, Baykal was a Senior Lawyer at Postacioglu Law Office between 2004 and 2015, having first joined the firm in 2003 as a Legal Intern.

Originally reported by CEE In-House Matters.

Dentons and its Turkish affiliate Balcioglu Selcuk Ardiyok Keki have advised Papara on its acquisition of Rebellion from Beka Finance. Spain’s Araoz & Rueda reportedly advised Beka Finance.

Papara is a Turkish financial technology company. Rebellion is a Madrid-based neobank.

Beka Finance is a Spanish financial services company created in 1989 as a subsidiary of Caja Madrid. It specializes in providing and developing financial products and services, asset management, financial advisory, investment banking, and direct investment.

The BASEAK team included Partner Okan Arican, with Dentons fielding a Madrid-based team.

The Regulation Amending the Electricity Market Capacity Mechanism Regulation and the Regulation Amending the Regulation on Renewable Energy Source Guarantee Certificate in Electricity Market published in the Official Gazette on 21 May 2021, introduced significant changes to the capacity mechanism and renewable energy resource guarantee certificate (“YEK-G“) applications.

What changes have been introduced?

1. The definition of facilities that can benefit from the capacity mechanism has been changed.

(i) Build-operate projects and (ii) power plants that are existing and in operation in accordance with their licenses, whose temporary acceptance date is more than 13 years (calculated starting from the provisional acceptance date of their oldest unit) and that are not based on domestic resources, both of which were previously not included in the capacity mechanism, can participate in the capacity mechanism.

Licensed legal entities with these facilities that want to participate in the 2021 capacity mechanism should apply to the system operator within 15 days from 21 May 2021.

2. YEK-G system transition provisions have been regulated.

(i) Issuance transactions for the period of 1 March 2021 to 31 May 2021

YEK-G system users can request the issuance of YEK-G certificate from the market operator (EPİAŞ) after the market operator notifies the certified generation amount for this period.

(ii) Redemption transactions for the period of 1 January 2021 to 31 May 2021

YEK-G certificates to be redeemed due to the consumption of consumers within this period will be subject to redemption notification of suppliers as of the date of the May 2021 final settlement notice within the scope of balancing and settlement regulation.

Conclusion

With the changes regarding the inclusion of build-operate projects in the capacity mechanism, some build-operate projects are expected to be reactivated. Regarding the YEK-G system, necessary provisions regarding the transition period were regulated.

Nigar Gokmen, Head of Energy, Mining, and Infrastructure, and Tugay Hanegelioglu, Associate, Esin Attorney Partnership

Paksoy, working with the UK offices of Bird & Bird, has advised the EBRD on a EUR 125 million loan for the Ankara Metropolitan Municipality to finance the Ankara Natoyolu-Dikimevi metro line.

The loan is part of a EUR 250 million co-financing package with the Agence Francaise de Developpement.

According to the EBRD’s press statement, “Ankara, the country’s capital, is Turkiye’s second-largest city. It has a population of 5.7 million and official projections indicate that Ankara will have 6.3 million inhabitants by 2025. The city has an integrated network of railways, metro lines, buses, and cable cars, in addition to privately owned bus lines – all of which remain under pressure due to the rapid growth in population.”

The construction of the metro line will improve connectivity in the city, the EBRD announced. “It will also allow a significant reduction in carbon emissions by encouraging greater use of public transport and shifting transport to a low-emission metro option. Once the construction has been completed, the project aims to reduce air pollution by 75% and to bring an estimated average reduction of 18,169 tons of carbon dioxide equivalent per year.”

According to the statement, “the project is financed under the EBRD Green Cities program and addresses some of the key environmental challenges of climate mitigation and air pollution identified in Ankara’s Green City Action Plan. Ankara is one of the most densely populated cities in Turkiye and has been part of the Green Cities program since in 2021.”

In addition, the bank reported “the project will increase mobility in Mamak, one of the city’s underprivileged districts, where overcrowded transport remains a challenge, particularly for women with young children. The new metro line will offer women faster, safer, and more accessible trips at a lower cost, increasing their active participation in daily life.”

The Paksoy team included Partner Sera Somay, Senior Associate Beril Paksoy Yalti, and Associate Muhammed Tosun.

The Aksan Law Firm has advised Simularge Global and its founders on its investment round with a sub-fund of Turkiye Kalkinma Fonu. The Ozbek Attorney Partnership advised the fund.

Simularge Global offers industrial applications and development platforms containing data analytics, machine learning, mechanical simulation, and app creation modules to reduce manufacturing costs, predict maintenance time, and prevent quality issues before they happen, according to the company’s own description.

According to Ozbek, the specific fund making the investment was Kalkinma Girisim Sermayesi Portfoy Yonetimi Anonim Sirketi Yenilikci Ve Ileri Teknolojiler Katilim Girisim Sermayesi Yatirim Fonu. 

Turkiye Kalkinma Fonu, a development fund, was established in 2019 by the Development and Investment Bank of Turkey and aims to invest in companies and funds which support Turkiye’s sustainable development. It has six sub-funds with a total committed capital of approximately TRY 1.6 billion.

The Aksan team was led by Partner Onur Ergun.

The Ozbek Attorney Partnership team included Partner Atahan Sevimli, Managing Associate Ece Ersoy, Senior Associate Ceren Avunduk, and Associate Kubra Durmus.

Turunc has advised Gelecek Etki Fonu on its USD 1.25 million investment in e-commerce solutions provider Rierino.

Rierino is a software company offering a data-first, low-code e-commerce platform designed to create personalized experiences. It was established in 2020 in Turkey.

According to the firm, Gelecek Etki Fonu (Future Impact Fund) is a Capital Markets Board-regulated venture capital fund managed jointly by Tacirler Asset Management, a leading asset management company, and Vestel Ventures, the corporate venture capital arm of home appliances company Vestel.

“Rierino is uniquely-positioned in the fast-growing low-code/no-code space with its hyper-flexible solutions that easily adapt to companies’ internal strategy, competition, and customer drivers,” Vestel Ventures CEO Metin Salt commented. “Developed by a highly-experienced founding team, the technology is intuitive and efficient, further supporting its high growth potential.”

The Turunc team included Managing Partner Kerem Turunc, Partner Esin Camlibel, and Associates Naz Esen, Ovgu Kopal, and Baran Ezeli.