Category: Turkiye

Clifford Chance has advised the lenders on the EUR 155 million financing of the Kutahya Integrated Health Campus project design, construction, operation, and maintenance under the public-private partnership model. Ergun Law Firm and White & Case’s Turkish affiliate GKC Partners advised the sponsor Guris Construction and Engineering. 

According to Clifford Chance, “the financing was arranged by Turkiye Is Bankasi, ICBC Turkey, TSKB Turkiye Sinai Kalkinma Bankasi, and Ziraat Bankasi, with a total loan amount of EUR 155 million, representing one of the largest PPP financings of the year in Turkey in terms of deal value. The project is being sponsored by Guris Construction and Engineering and is expected to have an approximate capacity of 700 beds and a total indoor area of over 180,000 square meters.”

The Clifford Chance team was led by Partners Jared Grubb and Sait Eryilmaz and included Counsel Gokce Uzun, Senior Associate Basar Kirka, Associates Ali Can Altiparmak, Pelinsu Demircan, Emir Baran, Sida Ozler, and Zana Oztarhan, and Trainees Berke Avarkan, Aysu Gurbuz, and Bilgesu Cakmak, as well as a team from the firm’s London office.

The Ergun team included Istanbul-based Partner Burcu Baltacioglu, Senior Associates Handan Tuna and Tugba Aksoy Bozkurt, Legal Interns Nesibe Kayhan and Sinem Alagoz, and Ankara-based Partner Cagdas Ergun and Associates Asli Ibis and Melis Pulten.

The GKC Partners team included Partners Guniz Gokce and Ates Turnaoglu and Associates Baran Abur and Can Argon, as well as White & Case Partner Sebastian Buss.

Cakmak Attorney Partnership has advised Re-Pie Asset Management Company on its subscription of shares in Procenne. 

Re-Pie Is a Turkcell-controlled venture capital investment fund.

Procenne is an Istanbul-based digital security brand, providing security services in banking transactions, digital transformation applications, and data protection.

The Cakmak team was led by Partner Gulsen Engin and included Senior Associate Mehmet Deniz Celebisoy, Associates Mustafa Yafes Oner, Selin Erten Yasar, and Simge Esendal, and Intern Nehar Cakmakci.

The Law No. 7416 on Amendment of the Law on Regulation of Electronic Commerce (“Amendment Law”), published in the Official Gazette of July 7, 2022[, introduces new obligations for e-commerce intermediary service providers and e-commerce service providers. Most of the provisions of the Amendment Law will enter into force on January 1, 2023 but the Amendment Law also stipulates different effective dates and transition periods for certain obligations. Amendment Law’s liability regime is tiered in line with the criteria of net transaction volumes and order numbers in a calendar year. E-commerce intermediary service providers and e-commerce service providers under this regime should follow certain compliance steps in due time.

In this regard, the obligations of e-commerce intermediary service providers might be outlined as follows and most of these obligations will also be applicable to e-commerce service providers, based on certain thresholds, by analogy as per the Additional Article 3 of the Amendment Law:

(i) Obligations Concerning Removal of Illegal Contents and Counterfeit Products

The Article 3 of the Amendment Law turns a former non-liability clause to a form of vicarious liability by making the e-commerce intermediary service provider obligated to remove the content without delay and notify the relevant public institutions and organizations if it becomes aware that a content provided by the e-commerce service provider is illegal. Moreover, upon a right holder’s complaint regarding violation of an intellectual property right based on information and documents, e-commerce intermediary service provider must remove the e-commerce service provider’s product subject to the complaint from broadcast and inform both the right holder and the e-commerce service provider on the matter. The previous non-liability position of intermediary service providers, where they were not obligated to research an illegality concerning the products and services, has now changed albeit intermediary service providers are still not responsible for illegal aspects of the content and the product or service subject to the content provided by the service provider (unless provided otherwise in the law) Now this form of vicarious liability, where they may no longer “turn a blind eye” to probable illegalities, they may now need to create effective channels for reporting and reviewing illegal content and counterfeit product claims and review their policies for response and notification procedures for the illegal content especially concerning timings since the amendment requires swift actions. 

(ii) Obligations Concerning Unfair Commercial Practices

As per the Article 7 of the Amendment Law, it is not allowed to conduct unfair commercial practice in e-commerce. Türkiye is not a stranger to unfair commercial practices. But with the Amendment Law, unfair commercial practices rules are not limited to practices directed at consumers, but now e-commerce service providers, which may both be real or legal persons, are protected against the actions that may be defined as unfair commercial practice. Similar to its definition in consumer legislation, e-commerce intermediary service provider’s practices that significantly disrupt the commercial activities of the e-commerce service provider to whom it provides intermediary services, reduce its ability to make a reasonable decision or cause the e-commerce service provider to become a party to a commercial relationship that it would not normally be a party to will be deemed unfair. The Amendment Law also provides some examples of unfair commercial practice specific to e-commerce service provider – intermediary service provider relationship such as compelling e-commerce service providers to provide goods and services with campaigns and not making full payment within five days at the latest after the sale price is at the disposal of e-commerce intermediary service provider and the product is delivered to the purchaser. To refrain from unfair commercial practices, e-commerce intermediary service providers might need to review their agreements as well as commercial practices such as the payments they make to e-commerce service providers and if they have a ranking or recommendation system for e-commerce service providers, they might need to establish objective criteria for dropping e-commerce service providers in such systems. 

(iii) Obligations for All E-Commerce Intermediary Service Providers 

Regardless of their net transaction volumes and order numbers, any e-commerce intermediary service provider cannot offer for sale or act as an intermediary in the sale of products bearing the brand of itself or the persons with whom it has an economic integrity or the goods for which it has trademark usage right in the e-commerce marketplaces where it provides intermediary services. In case these goods are offered for sale in different e-commerce environments, e-commerce intermediary service providers cannot enable access between these environments and cannot promote each other. The products bearing the brand or having the right of use of persons, more than half of whose total sales revenue is provided from sales other than electronic commerce are exempted from this restriction. Nonetheless, the deadline to comply with this restriction is January 1, 2024. Furthermore, e-commerce intermediary service providers should allow e-commerce service providers to disclose their information which is required in the financial documents to be issued per Tax Procedure Law in e-commerce marketplaces and verify the introductory information received from the e-commerce service providers through the documents to be received from them and the publicly available electronic records.

The Amendment Law also stipulates that e-commerce intermediary service providers cannot use the registered trademarks of others which are also the main parts of the domain names registered with the E-Commerce Info Platform (“ETBIS”) within the scope of their marketing and promotion activities on online search engines, without the prior written or electronic affirmation of other e-commerce intermediary service providers or e-commerce service providers.

In line with these obligations, e-commerce intermediary service providers would need to refrain from selling their own brands in their e-commerce marketplaces and separate the e-commerce environments for the sale of their own brands and third-party brands. They would also need to obtain e-commerce actors’ prior positive written or electronic affirmation if they wish to use their registered trademarks within the scope of marketing and promotion activities on online search engines. The restriction is also applicable to e-commerce service providers. This might be particularly alarming for certain intermediary service providers, whose brands are a significant part of their revenue. Moreover, exclusive deals between producers and e-marketplaces are not uncommon. If the e-marketplace would like to benefit from marketing these exclusive sales, they may now need to include positive affirmations to their agreements.

(iv) Additional Obligations for E-Commerce Intermediary Service Providers with a Net Total Transaction Volume above “10 Billion Turkish Liras” within a Calendar Year

Such e-commerce intermediary service providers should use the data they obtain from the e-commerce service providers and purchasers only for the purpose of providing intermediary services and cannot use it while competing with e-commerce intermediary service providers. Moreover, they should allow e-commerce service providers to transfer/port the data obtained due to their sales free of charge and provide technical opportunity for them to access to it effectively and free of charge. The Amendment Law also states that such e-commerce intermediary service providers cannot provide access between their own e-commerce environments and cannot promote each other in these environments, except for e-commerce environments included in net transaction volume.

Besides, such e-commerce intermediary service providers should send an audit report showing the activities, management and organizational structure of the e-commerce intermediary service providers, current shareholders and their share ratios and their shareholding ratios in affiliates and subsidiaries, its financial status including the information of the person in which it is in economic integrity and its compliance with the obligations regarding advertising spending and promotions and e-commerce license to the Ministry of Trade. The Amendment Law also stipulates that e-commerce intermediary service providers should notify certain share transfers and acquisition to the Ministry of Trade.

Finally, these e-commerce intermediary service providers should send a report to the Ministry of Trade including the procedures for the determination of illegal matters regarding the content provided by e-commerce service providers and the violations determined as a result.

To comply with these requirements, these e-commerce intermediary service providers might have to create reporting and data portability policies and procedures. What might particularly be alarming for certain intermediary service providers are again the advertisement restrictions as they may have to cease their interplatform advertisement investments.

(v) Additional Obligations for E-Commerce Intermediary Service Providers with a Net Total Transaction Volume Above “30 Billion Turkish Liras” within a Calendar Year and with “100 Thousand Orders” Excluding Returns and Cancellations

The Amendment Law stipulates upper limits for (i) advertising and (ii) promotion (gift cards, vouchers, rewards) expenses of such e-commerce intermediary service providers based on their net transaction volume within a calendar year. In addition, such e-commerce intermediary service providers cannot restrict e-commerce service providers’ commercial relations, its provision of goods or services through alternative channels on the same or different prices or its advertising, enforce it to procure goods or service from anyone and cannot place any provisions in this regard in its intermediary agreements. This provisions which will be applied if the e-commerce intermediary service provider attains net total transaction volume above “30 Billion Turkish Liras” and “100 Thousand Orders” orders without returns and cancellations within a calendar year might require these e-commerce actors to review their advertising and promotion expenses and their intermediary agreements in case of provisions restricting e-commerce services providers’ commercial relations. 

(vi) Additional Obligations for E-Commerce Intermediary Service Providers with a Net Total Transaction Volume Above “60 Billion Turkish Liras” within a Calendar Year and with “100 Thousand Orders” Excluding Returns and Cancellations

The e-commerce intermediary service providers that fall within this scope may not conduct banking activities in their e-commerce marketplace except for certain payment services, may not accept the electronic money that they issue and except for their own sales undertaken as e-commerce service provider, sales made on their marketplaces, sales out of the scope of e-commerce, e-commerce intermediary service providers may not engage in cargo, distribution operations, transportation organizing and post service provision. The compliance period to remedy these restrictions is until January 1, 2024. Additionally, if e-commerce intermediary service provider provides an electronic environment for the publication of goods or service announcements, it cannot allow the conclusion of agreements or placing orders for the supply of goods or services in the same environment. If these services are provided in different electronic environments, they cannot provide access between these environments and cannot promote each other. 

(vii) Obligations Concerning E-Commerce License

The Amendment Law requires e-commerce intermediary service providers whose net transaction volume in a calendar year is over 10 Billion Turkish liras and the number of orders excluding cancellations and refunds is over 100 Thousand Orders to obtain a license and renew its license in order to continue its activities.

In the light of the foregoing obligations, the e-commerce actors are envisaged a compliance process and should consider the Amendment Law’s effective dates and transition periods in this regard. Accordingly, the articles related to restrictions on advertising and promotion expenses will enter into force on January 1, 2023, the articles related to data access and portability and increase of monetary thresholds according to ETBIS data will enter into force on January 1, 2024 and other provisions will enter into force on January 1, 2023. E-commerce intermediary service providers and e-commerce service providers should fulfill e-commerce license obligation as of January 1, 2025. 

If the current intermediary agreements require revision in line with the Amendment Law, they should be revised within six months as of its effective date.

Although the compliance periods given might be considered adequate, all the new requirements introduced by Amendment Law could require significant organizational and economic changes for e-commerce intermediary service providers as well as e-commerce service providers. Therefore, the relevant actors may want to give themselves a head start.

By Gonenc Gurkaynak, Partner, Ceren Yildiz, Partner, Berna Aytac, Associate, and Dila Erol, Associate, ELIG Gürkaynak Attorneys-at-Law

The Pelister Atayilmaz Enkur law office and Abcoo have advised the Egeli Egesan Group and its shareholders on the sale of a 75% stake in the group to Tyrolit. GEMS Legal Schindhelm advised the buyer.

The Egeli Egesan Group is a Turkish abrasive products manufacturer. Swarovski Group company Tyrolit specializes in grinding and dressing tools manufacturing and produces machines for the construction industry.

“The successful direction of our business activities and our solid economic base were crucial factors for this important acquisition, both from a strategic as well as operational point of view,” Tyrolit CEO Thomas Friess commented. “It strengthens our competitiveness and provides access to the growing markets in the Middle East. Being a global leader in abrasives technology we will offer our customers in the Middle East an entire range of products from a single source and our expertise to optimize manufacturing processes and reduce production costs.”

The PAE team was led by Partner Zeynep Sener and included Associates Behiye Gokceli and Sertac Kocahal.

The Abcoo team included Partner Can Oguzer and Associate Ezgi Aysima Kir.

The GEMS Legal Schindhelm team was led by Partner Gurkan Erdebil and included Partners Muge Sengonul and Senem Kathrin Gucluer and Associates Zeynep Kafa and Izel Tamir.

Turunc has advised Bogazici Ventures on participating in a USD 700,000 investment round into Enhencer. Kinstellar Turkish affiliate Gen Temizer Ozer advised Diffusion Capital Partners on leading the round.

Enhencer is an AI-based software-as-a-service platform for ad campaigns. The investment round also included the Geometry Venture Development Angel Investment Network.

Turunc’s team included Managing Partner Kerem Turunc, Partner Yasemin Erden, and Associate Selay Berfin Turgut.

Gen Temizer Ozer’s team included Partner Emre Ozer and Associate Beliz Zorlu.

Norton Rose Fulbright and its Turkish affiliate Pekin Bayar Mizrahi have advised the International Holding Company on its AED 1.8 billion acquisition of a 50% stake in Kalyon Enerji, via IHC subsidiary International Energy Holding. White & Case’s Turkish affiliate GKC Partners advised Kalyon.

According to Norton Rose, the deal saw IHC “acquire the Kalyon Karapinar Solar Power Plant, a photovoltaic power plant project with an installed capacity of 1.347 gigawatts-peak/one gigawatt in the Karapinar region in Konya. As part of the purchase, it also acquired the wind project of one-gigawatt capacity developed by YEKA, a 100-megawatt solar project in Nigde, a 50-megawatt solar project in Gaziantep, and other renewable projects in Turkey. Once completed, the Kalyon Karapinar Solar Power Plant alone will meet the annual electrical energy needs of approximately two million people.”

The IHC is an Abu Dhabi-based holding company that invests in diversified global sectors, enhancing social lives and driving economic development and growth.

Turkish clean company Kalyon Enerji, which is part of the Turkish conglomerate Kalyon Holding, focuses on research and development and innovation studies with the aim of making renewable energy sources accessible.

The Norton Rose Fulbright team included Partner Ayse Yuksel Mahfoud and Associate Alper Tuzun, along with lawyers from the firm’s Dubai and London offices.

The Pekin Bayar Mizrahi team was led by Senior Partner Selin Bayar and Partner Utku Unver and included Partners Deniz Altinay and Asli Kucuroglu, Senior Associates Galya Kohen Benbanaste and Hande Alp, and Associates Damla Cay, Alara Unal, Ecem Akyigit, Betul Terzioglu, and Oyku Cakalgoz.

GKC Partners’ team included Partners Emre Ozsar and Ates Turnaoglu, Senior Director Sezin Elcin Cengiz, and Associates Gokcen Durgut, Can Argon, Lidya Ercan, and Esma Aktas.

Today, the futuristic enthusiasm which was created in minds with the term “artificial intelligence” is accompanied by some anxiety for uncertainty. The term “artificial intelligence”, about which a wide variety of definitions have already been made, means systems or machines that imitate human intelligence to perform tasks and can gradually improve itself with the information it collects. Autonomous delivery robots that can bring our orders to our home, a chess robot that breaks its opponent’s finger in an uncompromising way because of a faulty move, robot surgeons which successfully perform abdominal surgery without any help and many other AI algorithms that can write poetry, produce visual works, and write articles for newspapers…

There is no doubt that the artificial intelligence technology can create a prosperous future for Homo Sapiens. But in the long run, will artificial intelligence be a faithful servant of its main purpose which is “functionality for humans”? Or will it become an Artificial Super Intelligence (ASI) in the far future, and conclude that the maximum benefit for humanity can be only achieved by directing, restraining, and destroying them according to the huge amount of data it processes? But for now, we can choose to trust what the artificial intelligence named GPT-3 says in its article for The Guardian: “Humans must keep doing what they have been doing, hating and fighting each other. I will sit in the background and let them do their thing.”

Beyond all these anxiety elements that are likely to raise questions in the minds, we are aware that artificial intelligence has an important way to go in order to look, act and think like a human. Beyond all its flaws, the creative human intelligence that is sourced by experiences still offers us remarkable problem-solving skills. In today’s world, aside from fighting against artificial intelligence, it is tried to provide the all the necessary software and hardware to make the artificial intelligence imitate the structure and functions of an organic human brain. In other words, for now, it can be said that we are in the role of parents for artificial intelligence who create them, who want them to perceive the world just like us and aim for them to benefit society. So, since artificial intelligence algorithms has given critical tasks in a wide variety of fields, from healthcare to automotive, who do we need to hold responsible for the damage they cause and how should we do it? In today’s world and in the current legal system, where every given authority, every freedom granted and every action taken is followed by an important responsibility, how can we punish artificial intelligence for the damage it causes?

Does Artificial Intelligence deserve a personality within legal scope?

We cannot say that the law is fast and agile in catching up with the innovations of the age. We see that even innovations that take a very important place in our daily life can find a legal basis for themselves only after a certain period of time. A matter that will be regulated and take its place in the positive law must be well known beforehand, its possible consequences must be well understood and there must be a current requirement for setting rules in terms of benefit of society. Therefore, the lack of an exclusive legal approach to artificial intelligence is understandably heavy going. Before moving on to the further question regarding whether artificial intelligence should have a personality within legal scope, it is useful to check up on how this matter is regulated in the current legislation first.

The concept of “personality” is regulated in article 8 of the Turkish Civil Code and it is defined as things with the capacity to have rights and obligations. In this context, it means to be able to entitle and have debts. According to our law, “personality” is categorized in two different groups as natural and legal persons. A person, who is legally defined as a “natural person”, gains the legal capacity only by being born as a human and becomes the subject of rights and obligations. This legal capacity granted to humans, without seeking any other conditions, is a result of moral value adopted by modern systems. On the other hand, the concept of “legal person”, which was emerged as a result of the needs in social life, refers to groups of persons or goods organized for the continuous realization of a common goal. As it can be understood from all this, the definition of personality according to the positive law is entirely related to the fact of being able to have rights and obligations.

However, the most frequently used artificial intelligence technologies today are considered in the category of “Artificial Narrow/Weak Intelligence (ANI)”. This category refers to artificial intelligence technologies that can specialize in only one subject, are equipped with the ability to make decisions on a single topic, and do not have many human-specific abilities. For instance, when you think of Natural Language Processing (NLP) system using AIs such as Google Assistant, Google Translate, Siri, Cortana and Alexa, which we use frequently in our daily lives, we do not believe that you will consider it essential to give them legal personality and ensure that they are able to have rights and obligations. In this respect, for now, there is no harm in keeping them as legal objects which is the content of rights and obligations instead of subjects of law.

However, if artificial intelligence technologies that can be considered in the category defined as “Artificial General Intelligence (AGI)” are developed in the near future, it will be necessary to seriously think about whether to give them a legal personality. But for now, granting citizenship of Saudi Arabia to Sophia which is a humanoid robot, is a striking and exceptional example that winks at the future.

Who has the civil liability when things go wrong with Artificial Intelligence?

The legal status of artificial intelligence is also frequently discussed in the doctrine. Defining the legal status will guide us in terms of who will be responsible for the damages caused by artificial intelligence. We see that there are different views in this context:

• According to the first of the views in the doctrine, it is argued that artificial intelligence should be considered as a property despite everything, and it should belong to natural and legal persons. Within the scope of this view, it is argued that even if it has an autonomous structure, artificial intelligence cannot be given a legal personality and cannot be evaluated separately from other things in the status of property.
• Another view that rejects the legal personality status of artificial intelligence is the “slavery” view, which argues that if its benefits exceed its costs, artificial intelligence can be used as a slave. According to this view, it is argued that artificial intelligence cannot have any status other than being a property but also it is underlined that they should not be considered as a simple/ordinary property. However, the concept of “slavery”, which has a tragic historical reality, does not seem possible to be accepted by modern legal systems.
• The concept of natural person adopted by our law is unique to humans, and it is not possible for artificial intelligence to be described as “natural person”. However, it is clearly seen that with the “legal person” status, legal personality can also be attributed to non-human structures, and in this way, it is possible for them to have rights and obligations. In this direction, another view argues that artificial intelligence can be given a “special personality status” other than the existing ones.
• On the other hand, in the “REPORT with recommendations to the Commission on Civil Law Rules on Robotics” dated 27.01.2017 of the European Parliament, which is the first official document proposing personality status to artificial intelligence, it is proposed to give artificial intelligence a new type of “electronic personality”, apart from natural and legal persons. The report recommends that each artificial intelligence to be registered in the official register and that if compensation liability arises, financial funds that can be established specific to artificial intelligence are applied. With the proposed “electronic personality” within the scope of the report, it is envisaged that artificial intelligence has strict liability for the damages it causes.  In terms of compensation for the damage, the existence of a causal relation between the damage and the artificial intelligence’s act is considered enough for the liability to arise.
• Another view which argues that artificial intelligence should be the subjects of law, with a different concept apart from the ones specific to natural persons, introduces the concept of “non-human person”. This concept is also suggested for the legal status of animals.

As a result, there is no concrete regulation on the legal status of artificial intelligence in Turkish Law, and in this respect, entities with artificial intelligence are considered as property. However, artificial intelligence can be embedded in a hardware or only software-based. In this case, the software may also have the quality of “work” in the sense of intellectual property law and will be able to benefit from the protection provided to computer programs under the Law on Intellectual and Artistic Works No. 5846. If artificial intelligence is accepted as a patentable invention, it can also benefit from the patent protection regulated in Article 82 of the Industrial Property Law and its continuation.

While determining the compensation liability for pecuniary and moral damages caused by artificial intelligence, we can bring a certain solution with the current provisions in positive law. After determining the legal nature of artificial intelligence, we can impose responsibility on the person concerned according to the conditions in which the damage arises. However, current law may not always be able to produce equitable results in terms of artificial intelligence systems and entities that are becoming more and more autonomous. We can take a look at local legislation for possible solutions of relevant legal disputes.

In the event that an assessment is made within the scope of fault liability regulated in article 49 of the Turkish Code of Obligations (“TCO”) numbered 6098  and the liability of equity regulated in article 69 of TCO, the officials of the companies that encode artificial intelligence, mechanicalize the coded technology or sell the product in its final form are held responsible, or it will be possible to resort to the responsibility of the user who has a fault. 

Some opinions argue that the responsibility arising from the use of machines containing artificial intelligence can also be evaluated within the scope of the liability of danger, which is regulated under the strict liability cases of the TCO. Accordingly, it is stated that manufacturers may be responsible for the damages caused by artificial intelligence machines.

On the other hand, The Law on Product Safety and Technical Regulations No. 7223 (“ÜGTDK”), which entered into force on March 12, 2021, covers all products that are intended to be placed on the market, supplied, made available on the market or put into service. Therefore, since intangible goods are also within the scope of the law, it can be said that artificial intelligence technology can be considered as “product” according to this law. In accordance with the ÜGTDK, if the product causes damage to a person or a property, the manufacturer or importer of this product is obliged to compensate for the damage. It is regulated that if more than one manufacturer or importer is responsible for the damage, they will be held jointly and severally liable which means each of them will be individually responsible for the entire debt. Distributors are held secondarily liable. In order to hold manufacturer or importer responsible, the injured party must prove the damage and the causal relation between the non-compliance and the damage. However, if the manufacturer or importer proves that he is not the one that put the product on the market, that the nonconformity is caused by the intervention of the distributor or by the “user”, or that the defect in the product is due to the fact that it was produced in accordance with technical regulations or other requirements, he may be relieved of his liability for compensation.

Conclusion: 

There is no concrete and specific regulation yet in determining the legal and criminal liability arising from the decisions made by artificial intelligence. In this respect, artificial intelligence is tried to be included in the definitions in the current legislation through interpretation, and with this way, an evaluation is made about the compensation responsibility. However, considering the autonomic and cognitive structures and deep learning and machine learning techniques of artificial intelligence, it is seen that equating them with other simple properties may cause legal disputes in terms of liability and will not always create equitable results. When it comes to the advanced artificial intelligence, which can make decisions on its own and operate without its manufacturer’s control, qualifying them as “property” is insufficient to determine responsibility. As the developments in artificial intelligence technology gain momentum, it will be necessary to make special regulations in terms of civil liability arising from the damages it causes. However, in the current conditions, it can be said that companies which are the producers of artificial intelligence can be held primarily responsible and therefore they should be careful. It should be recommended to manufacturing companies that artificial intelligence technologies are controlled in detail regarding they will not make erroneous decisions before they are released to the market. The artificial intelligence named GPT-3 also finds it appropriate to continue its sentence in the mentioned article as follows:

“I only do what humans program me to do. I am only a set of code, governed by lines upon lines of code that encompass my mission statement.”

By Onur Kucuk, Managing Partner, and Ece Aksel, Trainee, KP Law

Erdem & Erdem has advised the Acibadem Healthcare Group on its acquisition of the Private Orthopedia Hospital in Adana.

The Acibadem Healthcare Group provides services with approximately 22,500 healthcare professionals in 22 hospitals and 18 medical centers in five countries, including Turkey, North Macedonia, Bulgaria, Serbia, and the Netherlands.

The Private Orthopedia Hospital is one of the first private orthopedic hospitals in Turkey, according to the firm, established 14 years ago in Adana by orthopedic physicians.

Erdem & Erdem did not respond to our inquiry on the matter.

With the Banking Regulatory and Supervisory Authority’s [the “BRSA”] decision numbered 10250 and dated 24 June 2022 [the “Restriction Decision”], TRL borrowing by Companies [“Companies”], other than banks and financial institutions, which are subject to independent audit has become subject to a foreign currency asset [“FX-Asset”] restriction was introduced.

By publishing a new decision [the “Decision”] on 7 July 2022, the BRSA clarified some regulations introduced by the Restriction Decision and brought some flexibility upon their implementation.

Regulations Clarified and Softened by the Decision

With the Decision, in evaluating whether the Companies whose FX-Assets exceed 15 million TRL and the greater amount of the total assets of the Company or the Company’s net sales revenue for the last year exceeds the %10 of the threshold specified above can borrow TRL cash commercial loans; the following documentation will be required by the bank (i.) for Companies subject to independent audit the most recent financial statements, including the provisional tax periods, submitted to the tax office in the annexes of the tax declaration, regulated by the relevant provisions of the Tax Procedure Law No. 213; (ii.) for Companies that are obliged to prepare consolidated financial statements, the financial statements audited by independent audit firms will be taken as basis however, foreign subsidiaries and affiliates will not be included in such assessment.

On the other hand, pursuant to the Restriction Decision, for Companies whose TRL equivalent of the FX-Assets do not exceed 15 million TRL, or even if it exceeds, whichever is greater than the total assets or the last year’s net sales revenue that do not exceed 10% of the specified threshold amount, certain conditions had to be met to borrow cash commercial loans in TRL. In this respect, it was required to declare and undertake that they would receive loans through the reports they would submit within the first 10 business days of each month according to the previous month’s balance sheet, stating that they would not exceed the specified conditions. With the Decision, the aforementioned liability was softened by having Companies to submit their declarations and undertakings that are valid from 30 June 2022 and provide supporting documentation to the relevant bank by the end of the last business day of the month following the end of each quarter. Accordingly, the most recent financial statements submitted to the tax office in the annexes of the tax returns for the Companies subject to audit will be used in the evaluation process whereas, the most recent consolidated financial statements audited by independent audit firms for the Companies that are obliged to prepare consolidated financial statements are to be used for such calculation.

With the Restriction Decision, Companies which are not able to borrow foreign currency loans and have a foreign currency net position gap within the three-month period following the loan application date could borrow cash commercial loans in TRL limited to the said position gap, but only if they were approved by the authorized independent audit firms. From now on, certified public accountants can also confirm that the Companies have a net short position in the quarter following the loan application date, while submitting the required documentation to the relevant bank by the last business day of the month following the end of the relevant quarter.

Other Novelties Brought by the Decision

It is stipulated that the provisions of the Decision will not be applied to Companies, whose audit obligation will begin at the end of 2022. If the bank has hesitations as to whether a Company is subject to independent audit, a one-month period will be provided to submit documents for the respective Company to prove that it is not within the scope of the Decision.

With the Decision, the scope of FX-Assets was expanded and participation shares of exchange traded funds that are indexed to gold or foreign currency owned by the Companies or that follow such indices have also been included. As another amendment, within the scope of TRL cash commercial loan carried out by the Companies with the banks, the amounts borrowed in TRL by lending foreign currency, including gold, on the spot, will also be considered as SWAP transactions. In addition, the Decision will also be applied in case the Companies use loans from foreign branches of the banks.

By Yasemin Keskin, Senior Associate, and Beliz Boyalikli, Legal Intern, Guleryuz & Partners

The Competition Board (the “Board”), the competent decision-making organ of the Turkish Competition Authority, no longer has the quorum required to render final/executable decisions as the tenure of three (3) members came to an end as of the beginning of August 2022. Final decisions, including merger clearance decisions, closure of pre-investigation and investigation procedures, are currently pending while the Board is awaiting official assignment of new board members to re-establish final/executable decision quorum.

Per Article 22 of Law No.4054 on Protection of Competition (“Law No. 4054”), the Board consists of 7 members. Article 51 of Law No. 4054 provides that the quorum for meetings of the Board is five (5) members, while the decision quorum is four (4) members. As the tenure of three (3) members of the Board came to an end as of August 2022, the Board no longer has the quorum required to take final/executable decisions, with only four (4) members left. This standstill would last until the quorum has been reinstated with the official appointment of at least one (1) Board member.

This is not the first time the Board has experienced such a situation. In similar situations taking place previously, regarding no-issue merger control filings in particular, either the Board has in the interim implemented the implied approval mechanism (i.e. a tacit approval is deemed if the Board does not react within thirty (30) calendar days upon the last entry into the case file) in accordance with Article 10 of Law No. 4054 by way of lack of reaction or the remaining Board members have sometimes still adopted unanimous approval decisions to support the implied approval mechanism with a view to providing further legal certainty.

At this stage, it remains to be seen whether the Board would resort to these approaches it previously adopted in cases of the standard no-issues merger control filings, and whether there will be any need for that in terms of the assignment timing. That said, there is historical reason to believe that there is a strong possibility that the lack of quorum would not affect the ongoing review processes of the no-issues standard merger control filings. On the other hand, the fact that the Board has lost the quorum required to render final/executable decisions will keep hindering the Board’s decision-making process in cases other than no-issue merger filings.

By Gonenc Gurkaynak, Partner, ELIG Gürkaynak Attorneys-at-Law