Category: Turkiye

Paksoy has advised BAE Systems on the sale of its 49% stake in joint-venture company Nurol BAE Systems to Turkey’s Nurol Holding.

The transaction was completed on November 21, 2022.

According to Paksoy, “BAE Systems, a British multinational company providing some of the world’s most advanced, technology-led defense, aerospace, and security solutions, has entered into a share purchase agreement with Turkish conglomerate Nurol Holding for the sale of its 49% stake in their joint venture Nurol BAE Systems, which operates in the aerospace and defense sector in Turkey.”

According to the firm, “BAE Systems remains a key supplier of the TF-X project with Turkish Aerospace, and the parties have agreed to continue exploring joint opportunities in the Turkish aerospace sector.”

Paksoy’s team included Partners Stephanie Beghe Sonmez and Sansal Erbacioglu, Senior Associate Zeynep Toma, Associates Deniz Benli and Goksu Cetin, and Senior Tax Specialist Canay Palak.

Law No. 7420 has made significant amendments related to tax legislation. These amendments cover: the introduction of a new tax treatment on capital reduction, a time extension for conversion to a currency-protected deposit account, an extension of the deadline for the tax benefits granted to individual participation investors (angel investors), income tax exemption for the portion of the meal costs paid in cash to employees that do not exceed TRY 51, and amendments to the tourism share rates.

New developments

Law No. 7420 on Amendments to Income Tax Law and Certain Laws and Statutory Decrees (“Law No. 7420“), which was published in the Official Gazette No. 32008, dated 9 November 2022, introduces various amendments related to tax legislation. This alert covers the significant amendments made by Law No. 7420.

What does Law No. 7420 introduce?

1. Tax treatment of capital reduction

The tax treatment of capital reduction has been one of the most controversial tax issues for many years due to the absence of a clear legal regulation in tax laws on this issue.

In fact, there is no provision in the tax legislation stipulating that in the event of a capital reduction, capital elements that are funded from internal resources such as share capital and profit reserves will be considered as distributed dividends, or from which source the reduction will be deemed to have been made first. However, in the Revenue Administration’s rulings, there has been an understanding that a capital reduction is made from the related accounts in the following order and withdrawn from the business: (i) accounts subject to corporate income tax and withholding tax due to profit distribution (such as inflation adjustment positive difference, revaluation fund, revaluation fund of subsidiaries, cost increase fund, etc.); (ii) accounts subject to withholding tax related to profit distribution (previous year profits, extraordinary reserves, etc.); and (iii) in-kind and cash capital that will not be taxed in the event of withdrawal from the business. Due to the absence of a legal explanation on this issue, the Revenue Administration’s approach has caused many disputes between the administration and taxpayers.

In order to eliminate the legal gap and prevent disputes, Article 32/B titled “Taxation in Capital Decrease” has been incorporated into Corporate Income Tax Law No. 5520 (CITL). Pursuant to the aforementioned article, taxation on capital reduction differs depending on whether the equity items added to the capital are subject to capital reduction within five full years from the date of capitalization. As per the new regulation, the principles of the taxation in capital reduction are as follows:

• In the event that the capital reduction is realized after five full years, the breakdown of the reduced capital amount will be determined by proportioning each of the capital elements to the total capital and taxation will be carried out accordingly.
• In the event that the capital reduction is realized within five years, it will be accepted that the capital reduction has been made from the following capital elements respectively and taxation will be as follows:
  • Capital elements whose transfer or withdrawal are subject to corporate income tax and withholding tax based on the profit distribution or the amount remitted abroad. These items will be subject to corporate income tax and income tax withholding.
  • Capital elements that will be subject to withholding tax based solely on dividend distribution or the amount remitted abroad. These items will be subject to income tax withholding.
  • Non-taxable cash and in-kind capital. This part of the capital decrease is not subject to any taxation.
• If the capital includes some elements that are added to the capital within the five-year time frame and some elements that were added more than five years ago, the elements whose date of addition to the capital has not exceeded five years will be considered withdrawn from the capital.
• In the event of a capital decrease by offsetting retained losses, the capital elements subject to the decrease will be determined as explained above, but withholding tax will not be applied on these amounts based on the profit distribution or the amount remitted abroad.

2. Corporate income tax exemption applied on the income generated within the scope of currency-protected deposit accounts

According to Temporary Article 14 of the CITL, if taxpayers convert their foreign currencies and gold account balances into Turkish lira at a conversion rate/price within the scope to support the conversion to Turkish lira deposits and participation accounts before the end of 2022, the interest and dividends to be accrued on the deposits within this scope and other earnings are exempted from corporate tax.

This time, with Law No. 7420, the deadline for the conversion of foreign currency and gold balances into Turkish lira has been extended until 31 December 2023 within the scope of the application of the corporate tax exemption on the interest, dividends and other earnings of taxpayers who convert their foreign currency and gold account balances into Turkish lira deposits and participation accounts.

In addition, Law No. 7420 authorizes the president to apply the exemption separately or jointly for foreign currencies included in the balance sheets of corporations at the end of each advance corporate tax or annual accounting period until 31 December 2023.

3. Individual participation investor (angel investor) deduction

According to Temporary Article 82 of the Income Tax Law No. 193 (ITL), full taxpayer individual participation investors (angel investors) may deduct 75% of the share price from their earnings and revenues subject to their annual returns in the period in which the shares were acquired, provided that they have held the participation shares of full taxpayer joint stock companies they acquired before 31 December 2017 for at least two full years. However, the annual deduction amount cannot exceed TRY 1 million in accordance with this exemption.

In addition, the mentioned deduction rate is applied as 100% for personal participation investors participating in enterprises whose projects have been supported in the last five years within the scope of research, development and innovation programs.

This time, the effective period of this exemption, which was to on 31 December 2022, has been extended to 31 December 2027 with Law No. 7420 and the maximum deduction amount has been increased from TRY 1 million to TRY 2.5 million.

4. Other significant amendments

• According to Article 23/8 of the ITL, benefits provided by employers to employees by means of food are exempt from income tax. In addition, in cases where employers provide meals outside the workplace or its outbuildings, if the cost of one day’s meal for the days worked does not exceed TRY 51 and the related payment is made to taxpayers providing the catering service, these payments were also considered within the scope of the exemption. Law No. 7420 removed the condition that “the payment should be made to the taxpayers providing the catering service.” In that sense, the employers can also benefit from the exemption if the payment, which does not exceed the mentioned threshold, is made to the employee in cash.
• Benefits provided by employers for the payment of electricity, natural gas and heating expenses of employees up to TRY 1,000 are exempt from income tax until 30 June 2023. In addition, it is regulated that the payment is not included in the earnings based on the insurance premium.
• Salary payments made to employees working in construction, repair, assembly works and technical services abroad, in return for their work abroad, which are covered by the employer’s foreign earnings, are exempt from income tax.
• Tourism share is the share/shares taken from the total net sales and rental income obtained by real or legal persons who are investors or operators of commercial enterprises as a result of their activities in these enterprises. Law No. 7420 redefined the tourism share taxpayers and certain tourism share rates, and terminated the collection of tourism share from marine tourism vehicles with a tourism business certificate obtained from the ministry.

Conclusion

Law No. 7420 introduced important amendments to the tax laws. Among these amendments, the amendment on capital reduction is particularly important because through this amendment, a new provision titled “Taxation in Capital Decrease” has been added to the CITL to permanently eliminate disputes regarding taxation in capital reductions, which is one of the most controversial tax issues, and to eliminate the legal gap. We recommend that companies consider the new regulation on capital reduction within their capital movements (capital increase/capital decrease) and evaluate its effects before making transactions.

By Erdal Ekinci, Partner, Orhan Pala, Partner, Ozge Kisacik, Associate, Esin Attorney Partnership

Pursuant to Article 350 of the Turkish Code of Obligations; the lessor, his/her spouse, his/her descendants or ascendants or persons who are legally dependent on the lessor; should have a need to use the leased property for residency or workplace purposes for lessor to request the eviction of the property due to personal needs.

According to the doctrinal opinions and decisions of the Turkish Supreme Court, the lessor’s need for eviction must be real and genuine. In this respect, the lessor claiming the existence of a real and genuine need, is obliged to prove this need before the court.

Eviction Decisions of the Turkish Supreme Court Due to Need for “Residency”
Pursuant to the decisions of the Turkish Supreme Court, the lessor must have valid reason for residing separately, to request an eviction due to need for residency. Accordingly, the grounds listed hereinbelow are accepted as valid reasons for the eviction request:

• Currently residing in a leased property,
• Wishing to reside closer to the persons who are responsible to take of the lessor or wishing to reside closer to a hospital,
• Moving to the city where the property is located,
• Property being physically, economically or locationally more convenient, etc.

Besides, if the leased property located in a metropolitan city as Istanbul or in case the leased property is close to lessor’s workplace or to the school of lessor’s children, it is accepted that there is a real and genuine need in terms of convenience for location. Moreover, in today’s conditions, leased property being economically more convenient can be considered as a valid reason for the eviction request.

Decisions of the Turkish Supreme Court for Eviction Due to Need for “Workplace”
In addition to the above-mentioned reasons regarding the need for a workplace, the Turkish Supreme Court seeks existence of a current threat of eviction for the Lessor.

In the light of the Turkish Supreme Court precedents, the Lessor may be deemed to have a valid reason to request eviction in the following cases:

• Lessor leaving his/her current job and becoming unemployed,
• Expansion of the business activities,
• The property which the lessor wishes to move being more eligible for business purposes or
• The property being more suitable for the work without the need for renovations.

The cases that are not accepted as valid reasons for eviction can be exemplified as follows:

• Temporary or possible needs of the lessor,
• The lessor having another immovable property in the city where the leased property is located,
• In case there has been a dispute between the lessor and the lessee regarding the rental fees and if the lessor has resorted to eviction due to such dispute.

The Terms for Filing a Lawsuit
Since the period to file an eviction lawsuit due to need is subject to a “period of prescription” as per the laws, it is essential to determine whether the lease agreement is executed for a definite or an indefinite term.

For the lease agreements executed for a definite term, the eviction lawsuit must be filed within 1 month from the expiration date of the lease agreement. However, if the Lessor notifies the Lessee in writing that he/she will file a lawsuit within 1 month period, the period to file a lawsuit will be extended until the end of the same lease period.

For the lease agreements executed for an indefinite term, the Lessor must notify the Lessee 3 months in advance to terminate the lease agreement at the end of the 6-months’ lease period. Following the termination notification, the eviction lawsuit must be filed within1 month as of the end of the 6-months’ lease period.

Implementation During the Litigation Processes
One of the most common disputes encountered during the eviction lawsuit is lessee’s refusal to pay the rental fee. In that case, the eviction process can be accelerated through initiation of an execution proceeding to collect the receivables and to evacuate the property, which then can be followed by initiation of an eviction lawsuit.

Another common issue raised within this respect is that, whether the lessor can file rental fee determination lawsuit during the eviction proceedings.

Turkish Supreme Court is in the opinion that the lease agreement is still in force until finalization of the eviction lawsuit, and that, therefore it is possible to request an increase in the rental fee through a rental fee determination case while the eviction lawsuit is still ongoing.

Prohibition of Re-Lease
Pursuant to the Article 355/1 of the Turkish Code of Obligations, if the lessor requests for eviction through an eviction lawsuit due to personal needs, the lessor cannot rent such property to any third parties for three years as of the eviction date, without a valid reason.

Within the scope of the same article, in case the lessor violates this obligation and leases the property to any third parties within such 3 years’ period, the lessor is obliged to pay the lessee a compensation in the amount of not less than one year’s rental fee. The lessee can request this amount in the form of a penalty corresponding to his/her damages pertaining to a 1-year period, without the need to prove any damages.

By Ozgur Guner, Partner, Cerensu Cetin Yenigun, Senior Associate, Moral, Kinikoglu, Pamukkale, Kokenek

The Decree on the Determination of the Companies Subject to Independent Audit [“Decree”] No. 6434 published in the Official Gazette dated November 30, 2022 and numbered 32029, abolished the Decree on the Determination of the Companies Subject to Independent Audit No. 2018/11597 dated March 26, 2018, published in the Official Gazette dated May 26, 2018 and numbered 30432, and amended the thresholds of the criteria for determining the companies subject to independent audit while also amending the scope. These amendments aim to adapt the scope of independent audit to today’s needs and to harmonize with the EU regulations.

The Decree will enter into force as of January 1, 2023.

New Thresholds as per the Decree
Pursuant to the relevant provisions of the Turkish Commercial Code No. 6102 [“TCC”], the Presidency (previously, the Council of Ministers) determines which companies are subject to independent audit. As per the (former) Decree on the Determination of the Companies Subject to Independent Audit No. 2018/11597, the companies subject to independent audit were specified as the companies listed in Annex (I) of the relevant Decree, regardless of any criteria, and the companies that exceeded the required thresholds for at least two of the criteria of total assets, annual net sales revenue and number of employees in two consecutive accounting periods. With the newly published Decree, certain amendments have been made to the thresholds for determining the companies to be subject to independent audit. Accordingly;

• The thresholds for companies whose capital market instruments are not traded on a stock exchange or other organized markets, but which are deemed publicly traded within the scope of the Capital Markets Law No. 6362 dated 6.12.2012, have been amended as 30 million TRY in total assets, 40 million TRY in annual net sales revenue and 50 employees. Therefore, these companies will be subject to independent audit if they exceed at least two of these thresholds in two consecutive accounting periods.
• For the companies listed in Annex (II) to the Decree to be subject to independent audit, at least two of the following criteria must be met for two consecutive accounting periods: having total assets of at least 60 million TRY, annual net sales revenue of at least 80 million TRY, or at least 100 employees.
• In terms of companies other than those listed above, the thresholds have been updated as 75 million TRY in total assets, 150 million TRY in annual net sales revenue and 150 employees. That is to say, companies that are not considered publicly traded under the Capital Markets Law and not included in the Annex (II) of the Decree will be subject to independent audit if they meet at least two of the aforementioned criteria in two consecutive accounting periods.

What is Independent Audit?
With the entry into force of the TCC in 2012, the old legal system, which provided for only the internal auditing system, was abandoned and the independent audit set forth under various regulations was introduced, aiming to create a holistic legal structure in the field of independent audit. Even if the initial provisions of the TCC envisioned independent audit for all capital companies, with the amendment in 2012, it was regulated that companies subject to independent audit would be determined according to the criteria to be stipulated by the Council of Ministers (currently, by the Presidency). The above-mentioned Decree was issued for such purpose.

Independent audit regulated under Article 397 et seq. of the TCC is essentially audit and evaluation of the financial statements and annual reports of the board of directors of the companies subject to independent audit by the auditor so as to provide reasonable assurance to the users of such with respect to the compliance of the financial statements with the financial reporting standards, the consistency and accuracy of the relevant statements and reports, and preparation of a report accordingly. Within the scope of the audit, it is also examined whether the Turkish Accounting Standards, the applicable legislation, and the relevant provisions of the articles of association are complied with.

Independent audit is carried out by independent auditors or independent audit firms. Independent auditors are the persons authorized by the Public Oversight, Accounting and Auditing Standards Authority [“Authority”] holding the title of sworn in certified public accountant or independent financial adviser. Independent audit firms on the other hand, are companies authorized by the Authority to operate in the field of independent audit. The auditor is elected by the general assembly of a company for each activity period before the end of the relevant activity period. The elected auditor shall be registered by the board of directors with the trade registry and announced in the Turkish Trade Registry Gazette and on the website. The TCC regulates in detail who cannot be an auditor. Most importantly, an auditor who has been elected as auditor for the same company for a total of seven years within a ten-year period cannot be re-elected by such company until three years have passed.

By Zahide Altunbas Sancak, Partner, Guleryuz & Partners

Paksoy, working with Latham & Watkins, has advised Imerys on the sale of its high-temperature solutions business to Platinum Equity, at an enterprise value of approximately EUR 930 million.

The transaction remains contingent on regulatory approval.

Imerys is a French multinational company that specializes in the production and processing of industrial minerals. Platinum Equity is an investment firm.

According to Paksoy, “the transaction covers entities in 16 countries worldwide, including the direct sale of Turkish subsidiaries Calderys Refractories and S&B Industrial Minerals, and the indirect sale of Imerys’ stake in Turkish joint venture Haznedar Durer.”

Paksoy previously advised Imerys on its acquisition of a majority stake in the Haznedar group, in 2020 (as reported by CEE Legal Matters on August 24, 2020).

Paksoy’s team included Partner Stephanie Beghe Sonmez and Associates Simge Sengun and Beritan Arik.

Paksoy did not respond to our inquiry on the matter.

The Central Bank of the Republic of Türkiye published the Guidelines on Correlating Business Models in the Field of Payments with Payment Service Types (“Guidelines”).
The Guidelines provide detailed explanations as to how payment services regulated under the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (the “Law”) and the Regulation on Payment Services and Electronic Money Issuance and Payment Service Providers (the “Regulation”) can be correlated with the business models in the field of payments, in order to ensure compliance with the regulations and uniformity in operating licenses to be granted by the CBRT for authorizations. You can access the Guidelines here.

What do the Guidelines say?

• The Guidelines evaluate the business models in the field of payment services and clarify which of these business models must be considered a “payment services” within the scope of Article 12, paragraph 1 of the Law and under which provisions of the Law, the CBRT permission must be obtained.
• The Guidelines further evaluate under which provisions of the Law, the CBRT permission must be obtained for payment account operation, money transfer, virtual POS, physical POS, electronic money issuance and acceptance, digital wallet, mobile payment, and mobile payment intermediation business models.
• The Guidelines clarify the scope of the services deemed payment service under the Law:
• All transactions to operate a payment account, including the services enabling cash to be deposited into a payment account and cash to be withdrawn from a payment account

These transactions include services provided by the payment institution, such as opening a payment account, depositing money into the payment account and withdrawing money from the payment account.

• Payment transactions, including fund transfers to a payment account of the payment service user before the payment service provider, direct debits (including one-off direct debits), the execution of payment transactions through a payment card or a similar device, and the execution of money transfers, including regular standing orders

This type of payment service includes the transfer of funds from a payment service user’s payment account to another payment service user’s account with any payment service provider.

• Issuing or acquiring payment instruments

“Issuing a payment instrument” refers to the process by which the payment service provider makes the payment instrument available to the payment service user to initiate and process payment transactions by assuming legal responsibility for the payment instrument under the contract signed with the payment service user.

“Acquiring payment instrument” involves the process of providing a service for the transfer of funds to the merchant by acquiring and processing payment transactions for the use of payment instrument with the merchant under the contract signed by the payment service provider with the payment service user.

• Money remittance

For this type of payment service, the Guidelines clarify that, at least one of the sender or the recipient must not have been opened an account. Furthermore, the Guidelines note that the funds must be transferred by the sender to the recipient or the payment service provider acting on behalf of the recipient. However, the Guidelines also stipulate that fund transfers between payment accounts opened in the name of the sender and the recipient are deemed money transfer rather than money remittance.

• Payment transactions where the payer’s consent to execute a payment transaction is given by means of any information technology or electronic telecommunication device, and the payment is made to the information technology or electronic telecommunication operator acting only as an intermediary between the payment service user and the supplier of the goods and services

The Guidelines underline that this type of service is described as “mobile payment service” in the sector.

The Regulation has mitigated the concern that the option for payment of the price at a later date where the customer has already received the goods/services within the scope mobile payment services can be considered as extending loan. The Regulation has also clarified that the collection of the amount to be paid until the due date of the invoice issued by the information technology or electronic telecommunication operator acting as intermediary will not be deemed as extending loan and that for payment services performed within this framework, the institution cannot make a payment to the recipient or guarantee the payments to be made unless the amount of the goods or services is collected.

Pursuant to the Guidelines, it is advisable for payment institutions to follow a cautious approach to pay utmost attention to the provisions of the Law and the Regulation for the cases where the payment institutions execute “Succession Agreements” with a third party company in order to mitigate the risk for the merchants.

• Intermediation of invoice payments

This payment service relates to the intermediation of payments arising out of continuous business relationships based on a subscription agreement. The scope of these invoice payments is regulated under the Regulation as payments made for the provision of utility services, as well as other payments deemed appropriate by the CBRT.

• Payment order initiation service where the payment account is maintained by another payment service provider, upon the payment service user’s request

The Guidelines explain that within the scope of this payment service type, the payment order initiation service provider (PISP) enables payment service users to benefit from payment order initiation services by accessing their payment accounts with the payment service provider holding the payment account.

Parties to the payment order initiation service are the payment service user, the account service providers and the PISP. The Guidelines summarize the process visually by including a table on the Basic Workflow of the Payment Order Initiation Service.

• Presenting the consolidated data relating to one or more payment accounts maintained by payment service providers on online platforms

Under this payment service, account information service providers (AISP) compile information on a payment service user’s accounts with different account service providers and make it available in aggregated form on online platforms. The Guidelines summarize the process visually by including a table on the Account Information Service Workflow.

• Issuance of electronic money

By referring to the Law, the Guidelines underline that issuance of electronic money is not a payment service but a value that is used in payment services. The Guidelines further include explanations on differentiating the account in which the electronic money is deposited from the payment account used in the provision of payment services and in which funds are deposited, as well as the business models of the instruments through which electronic money may be issued. It addition, business models designed to be used as a payment instrument at a merchant place are likely to be deemed electronic money, but it is still useful to conduct both technical and legal examination on a case-by-case basis in light of the general principles.

Conclusion
The Guidelines are important in terms of clarifying the activities that are deemed payment services and e-money under the Law and the Regulation, and providing guidance to those who wish to engage in these activities.

By Muhsin Keskin, Partner, Can Sozer, Partner, Aybuke Gundel Solak, Senior Associate, Nihat Aral, Associate, Esin Attorney Partnership

Dentons Turkish affiliate Balcioglu Selcuk Ardiyok Keki Attorney Partnership has advised Sabanci Ventures on its investment in SCW.AI.

Sabanci Holding company Sabanci Ventures is a Turkish venture capital operation active in the financial services, energy, industrials, building materials, and retail sectors.

Supply Chain Wizard entity SCW.AI offers its software-as-a-service platform to manufacturing companies with a specific focus on regulated industries, such as pharma and food and beverages.

The BASEAK team was led by Partner Okan Arican and included Associate Dilruba Guldogan and Efe Ozen.

BASEAK did not respond to our inquiry on the matter.

Following a thorough evaluation and review of the 2010 rules regarding vertical agreements and concerted practices, the European Commission adopted the Vertical Block Exemption Regulation (“VBER”), which entered into force on 1 June 2022, accompanied by revised Guidelines on Vertical Restraints. It is assumed that the latest alterations and their potential effects on the commercial ecosystem will slowly find their place in Turkish competition legislation and practice.

The VBER is crucial in terms of offering a safe harbour for vertical agreements (i.e., agreements between two undertakings operating at different levels of the supply chain). Under the VBER, if the market shares of a supplier and a buyer (i.e., reseller) do not exceed 30% of the relevant product market and the agreement between them does not contain any “hardcore restrictions” (including, for example, resale price maintenance or certain territorial/customer restrictions) and all other criteria stipulated in the VBER are met, the agreement can automatically benefit from the block exemption.

Among the changes brought by the revised VBER, two points regarding the aforementioned safe harbour draw attention, which can be summarised as follows:

(i) The scope of the safe harbour offered to dual distribution agreements and parity obligations has been narrowed down. Correspondingly, certain aspects of dual distribution and certain types of parity obligations will no longer be exempted under the revised VBER but must instead be subject to an individual exemption under Article 101(3) of the Treaty on the Functioning of the European Union (“TFEU”).

(ii) The scope of the safe harbour has been expanded regarding a reseller’s ability to actively approach customers (i.e., active sales), its ability to charge the same reseller different wholesale prices for products to be sold online and offline, and its ability to impose different criteria for online and offline sales in selective distribution systems. Accordingly, these restrictions will no longer be assessed individually and will be block exempted, provided that the conditions of the VBER are met.

The revised VBER, while updating the scope of the provided safe harbour, also introduces new provisions in an attempt to adjust the vertical block exemption rules in parallel with the changing commercial needs of the ever-growing e-commerce and platform economy.

In line with these significant features, below we provide a comparison between the newly introduced rules of the VBER and Turkey’s Vertical Block Exemption Communiqué No. 2002/2 (“Communiqué No. 2002/2”) and the accompanying Guidelines on Vertical Agreements.

1. Dual Distribution

Dual distribution refers to a system where the supplier of a product or service sells both directly (on the downstream market) and through independent resellers (on the upstream market), thereby competing with its independent resellers. In this regard, an e-commerce platform that sells goods or services that compete with the undertakings operating on its platform (i.e., business users) can be cited as an example of dual distribution systems.

The safe harbour provided to dual distribution agreements still remains within the scope of the new VBER. However, with the growth of digitalisation and online sales, the exemption provided to vertical agreements has been narrowed down with respect to the following two particular subjects:

a. Information exchange between the parties to such agreements will be scrutinised individually under Article 101(3) of the TFEU. However, in cases where such information exchange is (i) directly related to the implementation of the vertical agreement or (ii) necessary to improve the production or distribution of the goods/services by the parties, it will be considered within the scope of the block exemption provided by the revised VBER. For example, any information regarding the logistics of a product shared between Amazon and a business user may benefit from the VBER. On the other hand, information exchange concerning the prices to be applied by a business user cannot be block exempted.

b. Safe harbour exclusive to dual distribution agreements cannot be applied to online intermediation service providers that have a hybrid function (i.e., the providers of online intermediation services that also compete for the sale of the intermediated goods/services). Therefore, distribution agreements concluded with such suppliers need to be assessed on a case-by-case basis under Article 101(3) of the TFEU.

Under the Turkish competition law, Communiqué No. 2002/2 stipulates an exception concerning the vertical agreements that involve suppliers operating both as a reseller and a manufacturer. According to this, an agreement of such supplier with another reseller will be considered as vertical and may benefit from the block exemption, provided that legal conditions stipulating block exemptions are met.

2. Parity Obligations

Parity obligations usually refer to requiring a company to offer terms as favourable, or no less favourable, to its contracting party as those offered on any other sales channel. Following the growth of online platforms, parity obligations have gained increasing importance in competition regulations. In line with this, the revised VBER introduces new rules to regulate the stated obligations and stipulates that the clauses that directly or indirectly restrict a business user from offering more favourable conditions to end-users compared to competing online intermediation services (i.e., wide parity clauses) are to be evaluated on a case-by-case basis.

For example, Amazon’s agreements involving clauses that forbid resellers to trade their goods at lower prices on rival e-commerce platforms cannot benefit from the exemption under VBER and must be examined under individual exemption. In contrast, Turkish competition law states that an agreement that includes a generic most-favoured-customer (MFC) clause as a parity obligation can still benefit from the block exemption, provided that the market share of the party granted MFC status does not exceed 30% on the relevant market and the agreement in question fulfils the criteria stated in Communiqué No. 2002/2.

Alongside the distinction regarding the wide parity clauses mentioned above, the Guidelines on Vertical Restraints delivers a side note for narrow parity clauses, which demonstrates the Commission’s close watch on concentrations on platform markets. Accordingly, agreements that involve a most favourite customer clause as a narrow parity can benefit from the block exemption under the revised VBER. However, the Commission may withdraw this exemption in the cases where such parity obligations lead to a cumulative effect on concentrated platform markets and if the parity clauses in question do not produce efficiencies. To this day, Turkish competition law indicates no rule that is specific to the narrow parity clauses to be applied in concentrated platform markets. However, the Board’s approach on narrow parity clauses suggests that such clauses do not generally raise competitive concerns, may serve the preservation of economic value, and may produce efficiencies in the market. On the other hand, the Board has indicated that the interpretation of parity clauses in general is not independent from the conditions of the relevant market, and therefore it must be noted that the Board may deem such clauses uncompetitive depending on the concentration level of the market. In one of its recent decisions, the Board indicated that the narrow parity clauses in question may generate barriers to market entry for rival e-commerce platforms.

3. Active/Passive Sales and Distribution Systems

The new VBER clarifies the definitions of active sales and passive sales, introduces a novel approach to distribution systems, and refines the scope of active sales restrictions. These newly introduced changes are summarised as follows:

• Under the new VBER, it is possible to establish a distribution system of “shared exclusivity”, namely a system where the supplier is allowed to appoint up to five resellers for each exclusive territory or customer group. In contrast, under Communiqué No. 2002/2, it is not permissible to establish an exclusive territory with multiple resellers.
• Much like Turkish legislation, under the revised VBER it is possible for a supplier to assign an exclusive territory for itself. In addition, the revised VBER does not even oblige the supplier to make active sales within this assigned territory. Turkish competition rules take an opposing approach in this matter. According to the Turkish Competition Authority’s Guidelines on Vertical Agreements, there is no exclusive territory without active sales performed either by the reseller or the supplier itself.
• Under VBER, a supplier may restrict the active sales of a reseller operating within the exclusive territory, as well as the sales of the customers of such resellers. Under Communiqué No. 2002/2, a supplier’s restriction of a reseller that is assigned to an exclusive territory or customer group from making active sales can benefit from the block exemption.
• Irrespective of distribution systems, the new VBER enables suppliers to restrict a reseller’s sales on e-commerce channels under certain conditions. However, the Turkish Competition Board takes generally a rather strict approach when it comes to online sales restrictions.
• According to the Commission’s Guidelines on Vertical Restraints, suppliers can only operate through one particular distribution system in the cases where the supplier establishes a system of exclusive or selective distribution. In this regard, suppliers cannot apply both selective and exclusive distribution for the same territory. On the other hand, in Turkey, the distribution system through which the supplier applies both of the distribution systems can benefit from the safe harbour provided by block exemption, on the condition that the supplier does not prohibit the active sales of the reseller.
• As an adjustment, the revised VBER outlines a third distribution system, namely the system of free distribution. According to the Guidelines on Vertical Restraints, free distribution refers to a system where the supplier chooses to distribute its goods or services using neither selective distribution nor exclusive distribution. Under Turkish competition law, there is no specific term for the distribution system that is neither categorised as selective or exclusive, although the Guidelines on Vertical Agreements uses the term of “free area” for the territories in which two or more than two resellers operate.
• Furthermore, the revised VBER provides an additional adjustment to passive sales: The activities of a reseller on websites are still considered within the scope of passive sales. However, such activity will be regarded as active selling if a website (i) has a top-level domain corresponding to the particular territories, or (ii) offers languages that are not commonly used in the territory, where such languages are different from the ones commonly used in the territory in which the reseller is established.

4. Online Sales

The revised VBER and the rules applicable for vertical agreements in Turkey are quite different with regard to online sales. It is unknown whether or when the changes in the VBER will be implemented in Turkish legislation. Nevertheless, any changes that will be carried by e-commerce platforms in Turkey to prevent the risks that the new VBER might pose are essential for the future well-being of these platforms.

The revised VBER introduces definite concepts for the e-commerce platforms and business users that are parties of online sales transactions. In this regard, undertakings that offer online intermediary services are defined as “suppliers”, while business users that sell goods/services through e-commerce platforms are referred to as “buyers”. For example, as an online intermediary service provider, Amazon is considered as a “supplier”, while a business user that sells on Amazon is considered as a “buyer” according to the definitions outlined by the new VBER. In contrast, there are no such precise definitions regarding the concepts of “supplier” and “buyer” in Turkish competition law with respect to online intermediary services. However, the classifications introduced by the Turkish Competition Board’s Trendyol Interim Measures decision are quite similar to the definitions included in the VBER, although they are not precisely clarified.

One of the eye-catching novelties indicated by the Guidelines on the Vertical Restraints is that, under the new VBER, suppliers may offer different prices in accordance with the sales channel on which the relevant products will be offered for sale. In this direction, such difference in prices should be reasonably related to the differences in costs and investments that arise from the dissimilar nature of the two different sales channels. On the other hand, pursuant to the Guidelines on Vertical Agreements, an agreement that conditions the reseller to pay a higher amount to the supplier for the products that will be sold on online stores cannot benefit from block exemption under the Turkish competition law.

In this context, the difference between Turkish and EU competition law for online sales is far-reaching. The first major difference is that e-commerce platforms that operate as both buyers and suppliers (i.e., with a hybrid function) are excluded from the safe harbour of the new VBER. For example, the e-commerce platform Amazon selling a particular product of its own brand on its own platform among other business users that also sell the exact product denotes a situation where Amazon cannot benefit from the safe harbour provided by the VBER, on the grounds that Amazon is the supplier, as an online intermediary service provider, but also a business user competing with other business users on the platform that sells the relevant product. On the other hand, under Turkish competition rules, there is no prohibition specifically preventing such online intermediary service providers from benefiting from the block exemption.

Furthermore, the VBER provides that a digital platform cannot restrict a business user from offering more advantageous terms to end-users on a competing e-commerce platform where such user also trades its products. To illustrate: an obligation imposed by the e-commerce platform Alibaba prohibiting a business user from selling a particular product at a lower price on a different e-commerce platform cannot be considered within the block exemption under the new VBER. However, this obligation may still benefit from block exemption in Turkey.

In accordance with the EU’s revised Guidelines on Vertical Restraints, resellers may be restricted from trading on online channels irrespective of the distribution system, provided that the restrictions imposed by the supplier do not carry the object of preventing a reseller’s effective use of the Internet. However, for such a restriction to benefit from the block exemption, the Guidelines on Vertical Restraints specifies several examples, such as (i) the requirements intended to ensure the quality or a particular appearance of the reseller’s online store; (ii) requirements regarding the display of the contract goods or services in the online store; and (iii) a direct or indirect ban on the use of online marketplaces under certain conditions. In contrast, under Turkish competition rules online sales are considered as a passive sales restriction and are therefore deemed as a hard-core violation of competition law, albeit several exemptions are granted to selective distribution systems under certain conditions.

Another one of the significant features involves the “principle of equivalence”. As per this principle, the criteria to be applied by a supplier (i) should serve the same purpose, (ii) must provide comparable results, and (iii) must be reasonably related to the inherent differences between two channels. In this regard, the Commission adopts a lighter approach in terms of the sales made in a selective distribution system. According to the Guidelines on Vertical Restraints, suppliers no longer need to apply equivalent criteria for the sales made online and offline in a selective distribution system, provided that such criteria do not prohibit the reseller’s effective use of the Internet. On the other hand, suppliers may not offer the identical terms for online and offline sales in Turkey. However, the Guidelines on Vertical Agreements indicates that an imposition that does not fulfil the conditions of principle of equivalence and that impels resellers from using the Internet as a sales channel may be categorised as a serious violation of Turkish competition law.

Furthermore, the new VBER allows the supplier to determine a minimum absolute amount of the products/services that the reseller can sell in its physical store by specifying the value or volume. However, this obligation cannot be implemented by means of determining a certain ratio for the online sales of the reseller. In this regard, Turkish competition law follows a similar approach, albeit with a different methodology. Pursuant to Communiqué No. 2002/2, suppliers may oblige resellers to commit a certain ratio of sales to physical stores without prohibiting the online sales of the reseller. Additionally, suppliers are permitted to stipulate conditions so as to ensure the compatibility of online sales to the general distribution system. However, it must be noted that obligations involving the restriction of the ratio of online sales to total sales are still regarded as a restriction of passive sales in Turkey, and thus prohibited.

5. Resale Price Maintenance

Similar to the previous version of the VBER, resale price maintenance (“RPM”) is regarded as a hardcore restriction under the new VBER. The VBER clearly states that any vertical agreement containing restrictions stipulating minimum or fixed resale-prices is excluded from the block exemption provided by it.

Alongside the accustomed rules concerning RPM, for the first time the concept of “minimum advertised pricing”—the lowest price that a retailer can advertise a product for sale—is included in the rules governing vertical agreements in the EU. As per the Commission’s Guidelines on Vertical Restraints adopted alongside the new VBER, requiring a reseller to advertise at a minimum price constitutes an indirect form of resale price maintenance. Therefore, any imposition made by a supplier with regards to the minimum price of advertising will be treated as a hardcore restriction.

In addition to the explanations stated above, there is flexibility specified in the Commission’s Guidelines on Vertical Restraints concerning the activities that essentially may constitute RPM. Examples of exemptions that may apply under the new VBER, even in cases of RPM, are as follows: (i) to increase product recognition for the launch of a new product, (ii) to implement a short-term low-price campaign, (iii) to help provide pre-sales services, and (iv) to save brand image against a dealer who constantly sells at a loss. In Turkish competition law, no exemption is specifically given for the four listed occasions.

Quite similar to the approach in the EU, the Turkish Competition Authority takes a firm stance against activities involving RPM and has adopted the approach of “by object violation” in its recent decisions. In other words, it is widely accepted that the activities constituting RPM have the potential to restrict competition by their very nature. Thus, such practices cannot benefit from the block exemption and in principle cannot be granted an individual exemption under Turkish competition law. However, the “efficiency” based approach that is adopted in the EU shows itself in the decisions of the Board occasionally.

6. Non-Compete Obligations

The revised VBER and Guidelines on Vertical Restraints liberalise the rules regarding non-compete obligations imposed on resellers by a supplier. First of all, the general rule that any non-compete obligation that has an indefinite duration or that has a term exceeding five years is excluded from the block exemption remains applicable under the new VBER. However, as a novelty, non-compete obligations that are tacitly renewable beyond five years can in fact benefit from the block exemption, on the condition that the reseller is able to renegotiate or terminate the vertical agreement containing such obligation with a reasonable period of notice and at a reasonable cost.
Even though the concepts of “reasonable period of notice” and “reasonable cost” are not specified, it is assumed that any clause included to vertical agreements with a tacitly renewable non-compete obligation should not hinder a reseller’s capability to effectively change its supplier after the expiration of the five-year period. For example, a vertical agreement where the supplier provides a loan to a reseller would benefit from the block exemption under the VBER, if the repayment of such a loan would not prevent the reseller from terminating the non-compete obligation that is tacitly renewable beyond five years.

Similar to the general rule applied in the EU, non-compete obligations of indefinite duration or exceeding five years cannot benefit from the block exemption within the scope of Turkish competition law. In addition, any non-compete obligation that can be renewed tacitly to cover a period exceeding five years will be regarded as having an indefinite duration and therefore will be outside the scope of the block exemption in Turkey. Nevertheless, it should be noted that non-compete obligations with a term beyond five years can benefit from the block exemption provided that (i) the parties have explicitly agreed upon each extension of time that causes a duration exceeding five years, and (ii) there is no condition that impedes the reseller from terminating the non-compete obligation after the term of five years.

In line with the explanations above, the contrast between European and Turkish competition rules in terms of the non-compete obligations asserts itself in tacitly renewable non-compete obligations. According to the new VBER, it is possible that the non-compete obligations can benefit from the block exemption even though there is no explicit consent between the parties. On the contrary, under Turkish competition law, a non-compete obligation with a duration beyond five years can benefit from the block exemption only on the condition that such duration is explicitly agreed upon by the parties.

The EU’s novel approach might be followed by the Turkish Competition Authority and take its place in Turkish competition law. However, in the meantime, undertakings must be prudent when applying non-compete obligations exceeding five years in order to benefit from the block exemption in Turkey and should keep in mind that any such obligation that does not fall within the exception explained in the second paragraph of this subtopic must be assessed individually in order to avoid any competition law violation.

Conclusion

The new VBER and Communiqué No. 2002/2 have some differences, especially in the areas covered by this article. Because of this, vertical agreements prepared in line with the new rules of EU may not be directly implemented in Turkey, as was the case before. Therefore, it is beneficial for all undertakings that carry out business activities in both Turkey and the EU to keep a close eye on developments in both jurisdictions and prepare their vertical agreements in alignment with these divergences.

By Bulut Girgin, Counsel, Simru Tayfun, Associate, Merve Zeynep Aydas, Associate, Efe Utku Cal, Student Intern, Gen & Temizer Ozer

In the previous article, we have included information about the value of cryptocurrencies in the metaverse within the framework of the financial metaverse and the transactions that constitute the subject of the financial metaverse. Now, from the perspective of the financial metaverse, we will discuss the banking sector, the current status of cryptocurrencies in Turkey, and whether the digital products obtained as a result of financial transactions can be evaluated within the scope of property rights by the courts, the compliance processes and legal aspects that should be considered in Meta-Fi.

Banking Sector

The year 2022 continues to change the trends in banking with the digitalization movement. Metaverse brings innovations in banking with artificial intelligence, personalized financial advice, and digital transformation. Especially with the development of the game industry, in-game purchases seem to have increased considerably. Players buy clothes and necessary items for their avatars that reflect their character. So much so that young players who do not have a credit card can make their purchases through virtual cards. It will be possible for young players who have created their avatars, for now, to sell their avatars to different players with NFT in the future.

According to the Metaverse: Web 3.0 cloud economies report, the number of metaverse wallets increased 10 times between June 2020-2021. Fintech institutions and banks also took action by not being indifferent to these developments. To give an example, Garanti BBVA Portfolio in Turkey established the “Garanti Portfolio Metaverse and New Technologies Variable Fund” (MET). Investments can be made in this fund through Garanti BBVA branches and digital channels. Those who have an account in another bank also have the opportunity to invest through TEFAS without a lower limit. Aktif Bank bought a large area from Decentraland consisting of virtual lands and started design works. Various organizations and events will be held in this area with Passo, a sports and entertainment platform. In addition, Türkiye İş Bankası was the first bank from our country to advertise on Roblox, a global online gaming platform with more than 200 million users worldwide. Players will see the advertisements for İşbank’s Maximum Gaming credit card on the billboards in the relevant parts of the game in the metaverse. Akbank Art stated that it is working on opening the exhibitions in the metaverse in connection with NFT, and Akbank hosts the ‘Now in Digital Art: Alternative Realities + NFT’ Exhibition.

It is noteworthy that collateralized loans according to the value of NFTs are quite popular. It also provides a ‘Metaverse mortgage’ to purchase virtual land. JPMorgan, one of the largest American banks, announced that it has officially opened an office on its blockchain-based metaverse platform Decentraland. JPMorgan, with its office called Onyx Lounge, stated in its whitepaper that it has taken place in the virtual universe to meet the needs of its users such as leasing, mortgage transactions, and loan use.

Meta-Fi, Cryptocurrencies and Legal Dimension

Cryptocurrencies and digital assets will be more and more important in the future. Countries are preparing the basis of their regulations based on the understanding that cryptocurrencies can be used as a means of payment. As it is known, the Central American country El Salvador was the first country to accept Bitcoin as a legal payment instrument. Positive developments regarding cryptocurrencies stand out in Lugano, Switzerland. According to the new regulation, citizens will be able to purchase products and services and pay taxes via Bitcoin and Tether (USDT). In addition, the local crypto-asset LVGA pegged in Swiss francs can also be used as a means of payment.

If we look at whether NFTs can be evaluated within the scope of property rights and beyond that, the judicial decisions that affect their relationship with finance; We can give the first example from Singapore. The Singapore Court applied an injunction to prevent the sale of an NFT used as loan collateral after the dispute between the parties. The BAYC #2162 NFT was marked as “suspicious activity” by OpenSea, the world’s largest NFT marketplace, making it impossible for the current owner to sell the NFT, while buyers were unable to bid. In mid-April, the plaintiff borrowed money from an anonymous user named “chefpierre.eth” and in return offered his NFT as collateral. When the plaintiff could not pay the loan on the due date, the anonymous user took ownership of NFT, that is, NFT was transferred to his wallet. The plaintiff sued for unjust enrichment, claiming that his BAYC (Bored Ape Yacht Club) NFT was worth much more and that he only wanted to use the NFT as collateral for his loan and had no intention of selling his NFT. The court, on the other hand, gave an injunction to prevent the sale of NFT until the dispute is resolved. With the court’s decision of injunction in favor of the plaintiff, it was decided to be ready to recognize and protect NFT within the scope of property rights. Shaun Leong, chief counsel of the case and shareholder of Withersworldwide, said that this is the first decision in a commercial dispute where NFTs have been recognized as valuable property worth preserving. 

In this court decision, which includes property rights and copyrights, the issue of NFT secured loans draws attention. With an unexpected decision, Nexo, which is the credit institution in the digital finance sector, announced that it has given an NFT-backed loan of 3 million dollars. According to the news in Bloomberg Technology – Crypto, two ‘CryptoPunks Zombies’ were used as collateral for NFT-backed loans. The annual interest rate for the 60-day loan from the anonymous borrower who pledged Zombie NFTs as collateral was 21%. The transaction also demonstrates how the financialization of NFTs has evolved since the rise of non-cashable tokens in the crypto markets last year. As another example, we can give the crypto borrower having to give up his NFT, which he showed as collateral on the loan platform NFTfi, due to his inability to pay his loan on time. In terms of the credit platform, it is not a problem that the 12.000 TL loan is not paid on time, on the contrary, it has made a profit. Collateralized as part of the “Art Blocks Curated” set, NFT was valued at $300,000 as its popularity skyrocketed. With the debtor’s inability to repay the loan, the NFTfi platform became the owner of a $300,000 NFT collector’s item for a $12,000 loan.

We can cite another striking example from the United Kingdom Supreme Court decision. Lavinia Osbourne, the founder of Women in Blockchain Talks, filed a lawsuit demanding injunctive relief to stop the transfers of the NFTs in question, claiming that two of her works from the “Boss Beauties” NFTs collection were stolen via the OpenSea platform. In that case, the UK Supreme Court ruled that NFTs should be considered “properties”. Accordingly, a provision was made to prevent the sale and transfer of NFTs until the end of the litigation process. The court also gave OpenSea time to submit information about the two users who committed the violation to its file. On top of that, the OpenSea platform announced that it had frozen accounts that allegedly transferred NFTs without the owner’s consent. The relevant decision of the Supreme Court was also a precedent, considering NFTs as an asset value that can be subject to an injunction and must be legally protected. 

Our last example will be the case filed by artist Ma Qianli, which was the subject of the Chinese Hangzhou Internet Court’s decision dated April 22, 2022. The artist stated that his work, which is a part of his NFT series titled “I am not a chubby tiger” and includes a vaccinated tiger image, was sold for 899 Chinese Yuan by a user on the BigVerse NFT platform under the name “a chubby tiger taking vaccination” without his consent. Thereupon, the plaintiff stated that BigVerse, as the NFT marketplace platform, also received a certain share from this sale, alleging copyright infringement. He demanded that the acts within the scope of the rape be stopped and BigVerse pay 100,000 Chinese Yuan in compensation. The court decided that BigVerse should not act only with the ‘notice and takedown’ method. It also decided to pay 4,000 Chinese Yuan in compensation and stop the transfer of NFTs, emphasizing the importance of users doing a review before uploading NFTs to the platform and the need for research on authorship prior to uploading. So, NFT platforms need to develop systems that verify entitlement as a marketplace.

As we have seen in the examples, NFTs that are the subject of court decisions are considered within the scope of property rights. This understanding also enables NFTs to be used as collateral in a financial sense. However, the issue that should not be forgotten is the application of regulation technologies (RegTech) for the management of the compliance processes that are becoming more complex in the financial sector. The solution to this complexity in the financial sector is methods such as AML (Anti-Money Laundering), KYC (Know Your Customer), and sanctions list scanning. AML is used for anti-money laundering and KYC is the design definition of ‘know your customer’. Anti-Money Laundering (AML) Law Compliance includes detailed customer investigation and monitoring of customer activities, reporting suspicious transactions, and conducting internal audit activities. The Know Your Customer Model and Compliance (KYC) is a profile review such as identifying and verifying customers. In the coming days, it will be very important for Turkey to take necessary actions in case of processes that do not comply with the regulations and suspicious movements for banks, payment institutions and actors in crypto money exchanges subject to MASAK sanctions. Otherwise, there will be both financial and reputational losses for financial institutions.

What’s happening in Turkey?

It can be said that the situation in the Turkish cryptocurrency exchange is still uncertain. The regulation on the non-use of crypto assets as a means of payment with the effective date of 30.04.2021 still remains in effect. Payment and electronic money institutions are prohibited from intermediating on platforms that provide trading, custody and transfer services for crypto assets or fund transfers from these platforms. However, the ownership of cryptocurrencies by mining method, wallet to wallet or through exchanges without using these institutions is not within the scope of the ban. Unless the Crypto Asset Law and a new regulation regarding payments made with crypto assets come into force, any legal dispute regarding virtual lands purchased through platforms will not be subject to lawsuits in our country’s courts, and legal claims based on virtual lands will not have a counterpart in Turkish legislation.

The management of cryptocurrency exchanges is provided by companies registered in the Turkish Trade Registry, and no inspection, license, or capital adequacy is sought. For this reason, investors suffer from both the loss of value due to market conditions and the collapse of stock markets that do not have strong capital. So much so that it has been only one year since the Thodex haul, which featured famous names and luxury cars in its advertisements and gave 150 Dogecoins to its new members. Although companies such as Thodex and Vebitcoin have created an erosion of confidence in the market, cryptocurrency exchanges remain attractive for Turkish investors due to the reality of exchange rates and inflation. For this reason, some meetings are held in Ankara for the preparation of legislation for the crypto market. As a result of these negotiations, according to the statements made by the actors of the cryptocurrency exchange and the government, it is stated that the aim is not to prohibit but to create a regulatory legal regulation. As a result, it is expected that the current draft will be turned into a law proposal with institutions such as the Ministry of Treasury and Finance, the BRSA, and the SPK, and the final version will be discussed in the parliamentary commissions.

Conclusion

It is generally thought that video games are the only way to experience the metaverse. Virtual reality glasses (VR) may be the first thing that comes to mind when most people think of the metaverse. However, we see that the metaverse is a universe of virtual reality, augmented reality, and video. Therefore, the existence of various devices is not necessary for the experience of virtual worlds. The diversity of this user experience on a sectoral basis is due to the easy and simple access of the players to the activity they want. It is beneficial to quickly integrate the regulations in the world in terms of the situation of electronic wallets and banks in the metaverse remains in place.  The transaction volume will expand considerably;

• when the complex structure and transitions in the Metaverse and transitions between different virtual worlds are provided seamlessly,
• when identity and asset transitions are seamless,
• when the necessary network security and common protocols are created,
• when users are using the wallet infrastructure.

When the necessary infrastructure and equipment are provided, wearable technologies will perhaps take us to the seaside and allow us to breathe in the smell of summer. We will follow the developments related to this universe.

By Onur Kucuk, Managing Partner, and Ezgi Anasiz, Associate, KP Law

Paksoy has advised the General Directorate of Mint and Stamp Printing House of the Ministry of Treasury and Finance of Turkey on a gold certificate issuance and listing on the Borsa Istanbul Commodity Market.

According to Paksoy, “the issuance of 500 million Gold Certificates backed by 5,000 kilograms of gold with a 0.995 purity aims at offering an alternative investment tool for investors willing to invest in commodities. The Gold Certificates provide an alternative way of settlement with an option to physically convert them to gold. The Gold Certificates have started to be traded on the Borsa Istanbul Commodity Market with the ticker of ALTIN.S1 on November 21, 2022.”

Paksoy’s team included Partner Omer Collak, Counsel Okkes Sahan, and Associate Bulent Ozturk.