Edition 59: 18 January 2018
Editorial Team:
Orçun Çetinkaya, LL.M., Ezgi Baklacı, LL.M., and Pelin Oğuzer, LL.M.
Turkey Introduces Centralised System for Recording Approvals about Commercial Electronic Messages

To send commercial electronic messages in Turkey, senders must first obtain a recipient’s approval. The Ministry of Customs and Commerce (“Ministry”) is now empowered to establish a system, where senders must log recipient approvals and rejections. If senders fail to transfer existing approvals into the new system within the specified period, these consents will be deemed invalid. In that case, senders will need to obtain the approval again. Recipients will also be able to exercise their right to approve or disapprove commercial electronic notifications via the new system. Further details will be announced via secondary legislation.

With the recent changes, Law number 6563 on Regulation of the Electronic Commerce now also regulates that the Ministry can request information to monitor and assess the e-commerce sector’s development. If the Ministry requests information, it must be provided via the new electronic system. Please see this link for more details on recently announced mandatory central registration system for e-commerce activities.

The new provisions were introduced by the Law number 7061 Amending Certain Tax Laws and Other Laws, published in Official Gazette number 30261 on 5 December 2017, entering into force on the same day. Please see this link for the full text (only available in Turkish).

Read More
Turkey to Ban Free Plastic Bags from Start of 2019

Turkey has updated the regulatory regime for packaging and waste, including significant new rules regarding waste collection and recycling. Most notably, free plastic bags will be banned from the beginning of 2019 and packaging used in the Turkish market must be at least partially made from recycled materials.

The Regulation on Packaging Waste Control (“Regulation”) was published in Official Gazette number 30283 on 27 December 2017, entering into effect on 1 January 2018.

Significant changes introduced by the Regulation include:

– From 1 January 2019, sales points (including distant sales) will be prohibited from giving out plastic bags to users or consumers, free of charge.

– Producers of plastic, paper, board, glass and metal packages which will be supplied to the domestic market must now at least partially use:

– Packaging waste collected within Turkey, or

– Recycled packaging waste gathered from such waste.

– At least 80% of recycling targets must now be met from non-industrial sources.

– The due date for submitting annual notifications about packaging materials produced, imported, exported, supplied and/or packages of imported goods, has moved from February to March.

– Municipalities’ responsibilities for collecting packaging waste are now outlined more clearly.

– Residential sites with 100 or more houses must now have storage equipment for packaging wastes which complies with the municipality’s collection system.

– A colour coding system is introduced for bins used to collect packaging waste:

– Blue for paper.

– Yellow for plastics.

– Grey for metals.

– The Packaging Commission will now hold a meeting once per year.

– Each municipality’s vehicle fleet for collecting domestic waste must now include at least 20% vehicles capable of collecting packaging waste.

Please see this link for full text of the Regulation (only available in Turkish).

Read More
Turkey Launches Crowdfunding Legislation

Turkey has introduced a new legislative regime focused on crowdfunding. It is the first time that crowdfunding structures receive specific attention from Turkish legislators. The regime includes definitions, licensing aspects, as well as the roles of various regulators, as previously discussed here.

Notable aspects of the regime include:

– Crowdfunding is defined as fundraising activity conducted by crowdfunding platforms according to the Capital Market Board (“Board”) regulations. It involves collecting funds for a project or start-up. Despite the public offerings and fund-raising activities under Capital Market Law (“Law”) being subject to investor compensation mechanisms in principle, the Law excludes crowdfunding from this principle.

– Companies with more than 500 shareholders are usually deemed to be public companies and are subject to detailed rules which apply to this entity type. An exception is introduced to this rule, excluding crowdfunded companies from being considered public companies, even if they have more than 500 shareholders.

– Crowdfunding platforms can only operate in the electronic environment, within the scope of the permit granted by the Board.

– The Board will publish further rules regarding:

– Establishing crowdfunding platforms.

– Shareholder structures for crowdfunding platforms.

– Necessary employee qualification for crowdfunding platforms.

– Share transfers for crowdfunding platforms.

– Monetary caps on contributions which each funder can provide to a project or start-up.

– Monetary caps on how much can be collected by each project owner or start-up.

– The Board can take measures and cancel platform licenses in certain circumstances.

– The Information Technologies and Communications Authority will block websites at the Board’s request, if the Board determines that:

– Crowdfunding activity is being performed without a license, or

– A Turkish resident performs a derivative transaction as a leveraged transaction outside Turkey.

The rules were introduced by Articles 107 to 111 of the Law Regarding Amendment on Certain Tax Laws and Other Laws, published in Official Gazette number 30261 on 5 December 2017. Please see this link for the full text of the legislation (only available in Turkish).

Read More
Turkey Announces 2018 Default Interest Rate for Late Payments to Creditors Regarding Commercial Goods and Services

Turkey’s Central Bank has determined the default interest rate as 10.75% for late payments made to creditors in the context of commercial transactions for goods and services, the same rate as used in 2017. The minimum compensation amount which creditors can claim for recovery cost has also increased from 150 to 185 Turkish Liras.

The Communiqué on Default Interest Ratio Determination of Late Payments Made to Creditors for Provision of Goods and Services (“Communiqué”) was published in Official Gazette number 30288 on 1 January 2018, entering into effect on the same date.

In January each year, Turkey’s Central Bank determines the default interest ratio for late payments in delivery of goods and provision of services, where no default interest rate exists in agreements or the relevant provision is invalid in relation thereto are not valid (Article 1530, Turkish Commercial Code). The Central Bank must also set the compensation recovery amount.

Accordingly, the Communiqué sets the 2018 rates as:

– 75% default interest rate for late payments where no default rate is set in the agreement, or the relevant provision is invalid.

– 185 TRY as the minimum compensation amount for recovery cost.

Please see this link for the full text of the Communiqué (only available in Turkish).

Read More
Turkey Launches Online Compilation Scheme for Electronic and Physical Publications

With the Amendment to the Regulation on Compilation of Reproduced Intellectual and Artistic works (“Regulation”), published on 20 December 2017 and entering into effect on the same date, Turkey has launched an online compilation scheme for electronic and physical works. Accordingly, all electronic and physical works, including those published on the internet for the first time, must now be submitted to the Electronic Publication Compilation System (“EYDeS“) within 15 days. The System is operated via the National Library Presidency website.

The owners of physical works must now submit a digital version to the National Library Presidency via EYDeS.

Works compiled in EYDeS will be available to the visually impaired, provided that all the measures are taken to prevent infringement of rights. 

The detailed methods and principles for compiling works, as well as protection measures to prevent infringements of rights, will be regulated via a directive from the National Library Presidency. 

Please see this link for full text of the Regulation (only available in Turkish).

Read More
Turkey Announces Details of Certification Scheme for Geographical Indications and Traditional Cultural Specialities

Turkey recently announced a goods certification scheme for geographical indications and traditional cultural specialties with the Industrial Property Law number 6769 (“Law”). The Turkish Patent and Trademark Office has now announced further details of the scheme, including the emblems which can be used on products which meet the necessary criteria.

The Regulation on Geographical Indication and Traditional Cultural Specialty Emblems (“Regulation”) was published in Official Gazette number 30285 on 29 December 2017, entering into effect on 10 January 2018.

Key aspects announced about the scheme include:

– The emblem can be used by parties which manufacture and market goods that meet the conditions outlined in the registration certificate for geographical indications and traditional cultural specialties.

– The emblem must be used for registered geographical indications, but is not compulsory for foreign geographical indications which are protected in Turkey by bilateral or multilateral agreements.

– Registered traditional cultural specialties which are marketed without the emblem will not be subject to the Law.

– The emblem must be used on the product or its packaging if possible, or it should be visibly displayed in the relevant workplace.

– Emblems are available in different colours for:

– Appellation of origin.

– Designation of origin.

– Traditional cultural specialties.

– Black and white emblems are available for products which have black and white packaging.

– Turkish language emblems must be used on products released in Turkey.

– Non-Turkish emblems can be used for products subject to foreign trade.

– Emblems are available free of charge, from the Turkish Patent and Trademark Office.

– Emblems must have a diameter of at least 15 mm.

The emblems are as follows:

 

 

Please see this link for an English translation of the Regulation.

Read More
Turkey Announces Rules for Use of Fluorinated Greenhouse Gases Listed in Kyoto Protocol

Turkey has introduced procedures and principles for use of fluorinated greenhouse gases, supporting the fight against climate change. The new regime addresses fluorinated greenhouse gases listed in the Kyoto Protocol, linked to the United Nations Framework Convention on Climate Change and fluorinated greenhouse gases. The developments were introduced as part of Turkey’s wider efforts to harmonize legislation with the EU.

The Regulation on Fluorinated Greenhouse Gases (“Regulation”) was published in Official Gazette number 30291 on 4 January 2018.

The Regulation prohibits fluorinated greenhouse gases from being:

– Released into the atmosphere.

– Sold to real or legal persons who are not registered with the Environment and Urbanisation Ministry’s Registry.

– Thrown away in disposal plants without recycling.

– Sold without registration or contrary to labelling rules.

The Regulation also contains:

– Fundamental principles for fluorinated greenhouse gases

– Principles for electronic records, labelling, leakage controls, reporting, market supply.

– Prohibitions on use of products or equipment containing fluorinated greenhouse gases.

– Requirements for documentation and training for real and legal persons involved in products or equipment which contain fluorinated greenhouse gases.

– Requirements for stationary devices and equipment which operate or contain three kilograms or more of fluorinated greenhouse gas.

Please see this link for the full text of the Regulation (only available in Turkish).

Read More
Turkey Announces National Broadband Strategy and Action Plan for 2017 to 2020

Turkey’s High Planning Council has announced the National Broadband Strategy and Action Plan for 2017 to 2020 (“Plan”). The Plan outlines three strategic goals and 25 actions in the area, with the primary aim being to increase investments in broadband services in order to spread related infrastructure across Turkey. Notably, the Plan also establishes the Broadband Strategy Monitoring Board, which will monitor and publicly report on Turkey’s progress against the Plan’s goals.

The National Broadband Strategy and Action Plan (2017-2020) was published in Official Gazette number duplicated 30277 on 21 December 2017, entering into effect on the same date.

The Plan’s aims include:

– Improving access to fibre technologies across Turkey.

– Improving capacity and speed of internet connections.

– Progressing in line with market competition principles and market requirements.

– Expanding the scope of inter-machine communications.

– Developing smart city and transportation operations.

– Execution of 5G research development activities.

– Making broadband common and increasing the demand for internet services.

– Making internet services and applications widespread and common.

The Plan’s aims will encourage production and new business opportunities in the broadband sector. The Plan also states that deductions will be made regarding taxes and other financial liabilities.

The Plan also includes broadband plans and investments amounts made by other countries, along with historic data about Turkey’s activities in the area.

Broadband Strategy Monitoring Board Established

Notably, the Plan establishes the Broadband Strategy Monitoring Board (“Board”), which will be made up of related public entities, operators and non-governmental organizations.

The Board’s purpose will be to maintain the Plan’s continuity, as well as to effectively implement and carry out the Plan’s actions. The Board will establish monitoring and evaluation systems for this purpose.

The Board will examine the current status of strategies and regularly publicly report on these.

You may find the full text of the Plan at this link (only available in Turkish).

Read More
Turkish Constitutional Court Rules on Freedom of Press and Expression for Online News

The Turkish Constitutional Court recently ruled that blocking access to certain articles and columns on an online aviation news site infringed the website owner’s constitutional rights regarding freedom of expression and press. It noted that in a democratic and constitutional state, prohibitions and restrictions cannot be at a level which would inevitably violate the use of freedom of speech.

The applicant in the case at hand was the owner and general editor of an aviation news website, who simultaneously also wrote columns on the website. The applicant published news and columns about the head of the Turkish Aeronautical Association in April 2014. The content in question accused this individual of being a “thief”. The court stated that everyone is presumed innocent unless proven otherwise, so an article which does not contain a court order about this accusation cannot be deemed news, but rather simply defamation which cannot be protected by law. Accordingly, the Ankara 5th Criminal Court blocked access to these webpages via a decision on 14 April 2014. The Criminal Court stated the content exceeded the limits of legitimate notification and reached the level of insult. Therefore, the content was blocked according to Article 9 of the Law Regulating Internet Broadcasting and Fighting Crimes Committed through Internet Broadcasting number 5651 (“Law”).

The website owner applied to the Constitutional Court. The court considered the claim on the basis of Articles 26 and 28 of the Constitution, which respectively relate to freedom of speech and freedom of press and also stated that Article 9 of the Law is a protection mechanism and the decision to block access is an exceptional judicial measure intended for serious crimes, such as child pornography, child sexual abuse and racism in democratic countries.

On this basis, the Constitutional Court ruled that in a democratic and constitutional state, prohibitions and restrictions cannot be at a level which would inevitably violate the use of freedom of speech. Therefore, the Constitutional Court ruled that the website owner’s freedom of expression and press has been infringed.

Please see this link for the full text of the Constitutional Court decision dated 26 October 2017 and numbered 2014/5552 published in the Official Gazette number 30270 on 14 December 2017 (only available in Turkish).

Read More
Turkish Constitutional Court: Pro-Rata Attorney Fee in Consumer Courts is Constitutional

The Turkish Constitutional Court recently ruled that the pro-rata attorney fee imposed on consumers is constitutional for annulment actions filed against decisions by consumer arbitration committees, if the decision is annulled. The Constitutional Court stated that consumer courts can calculate an attorney’s fee on a pro-rata basis, even if this results in a fee which is less than the fixed fee for that particular court.

In the case at hand, the Bursa 7th Consumer’s Court applied to the Constitutional court, claiming the Attorney’s Minimum Wage Tariff is unconstitutional because it only applies to consumers and this causes inequality between consumers and sellers/service providers. It argued that the provisions mean consumers are forced to pay high attorneys’ fees, which mean they are reluctant to pursue legal remedies. The Consumer Court claimed these circumstances violated Article 2 and Article 10 of the Constitution.

The Constitutional Court noted that:

– The “social law state” principle (Article 2 of the Constitution) means the state must look out for social justice and social balance by:

– Establishing a just legal order in all areas

– Protecting the less powerful from the powerful.

– The “equal protection of law” principle (Article 10 of the Constitution) does not mean everybody will be subject to same rules; only parties with the same legal status will be subject to same rules.

In general, a pro-rata attorney’s fee cannot be less than the fixed fee determined for each court (Article 13 of the Attorney’s Minimum Wage Tariff). Under this approach, even if the pro-rata fee is less than the applicable fixed fee, the court must impose the (higher) fixed fee. However, the Constitutional Court stated that Article 13 does not apply to consumer courts. Therefore, consumer courts can calculate a pro-rata fee which is less than the fixed fee.

The Constitutional Court concluded that consumers (defendants) and sellers/service providers (claimants) hold different legal status within annulment actions, filed against decisions by consumer arbitration committees. Therefore, the two categories can be subject to different rules, without harming the principle of equal protection of law.

The Constitutional Court noted that the pro-rata fee mechanism actually weighs in consumers’ favour, encouraging them to pursue legal remedies, on the basis that the pro rata fee will apply regardless of how much the fixed fee is.

Accordingly, the Constitutional Court ruled that pro-rate fee mechanism does not breach:

– The “social law state” principle (Article 2 of the Constitution).

– The “equal protection of law” principle (Article 10 of the Constitution)

– The state’s requirement to take all precautions necessary to defend and inform consumers, as well as promote initiatives for consumers to protect themselves (Article 172 of the Constitution).

Please see this link for the full text of the Constitutional Court decision dated 15 November 2017 and numbered 2016/162 E., 2017/156 K. which was published in Official Gazette number 30264 on 8 December 2017 (only available in Turkish).

Read More
Turkish Court Rules on Likelihood of Confusion for Combined Trademark Application Involving “House Mark + X”

The highest body within the Turkish Court of Appeal system recently rendered a decision in which it discussed the likelihood of confusion for a “House mark + X” combined trademark. The court held that the house mark and also the secondary word element (the product name) are both dominant. Therefore, the existence of house mark does not remove the likelihood of confusion.

In the dispute at hand, Company B filed a trademark application involving a combination of its house mark and a secondary word element (product name), in the format “House Mark + X”.

Company A opposed Company B’s trademark application, claiming that the word “X” is visually, phonetically and conceptually similar to Company A’s earlier trademark registration, which covers the same trademark class which Company B had made the later application for.

In its opposition, Company A claimed that confusion could arise due to the existence of similar word elements in both trademarks. However, the opposition was rejected by the Re-evaluation and Examination Department of the Turkish Trademark and Patent Office (“TPTO”).

Upon the opposition being refused, Company A initiated a lawsuit seeking to overrule the rejection, as well as expunge the Company B’s trademark application from the TPTO’s register.

Both the TPTO and Company B requested the lawsuit be dismissed, arguing that the disputed trademark lacked distinctiveness for the secondary word element, which also includes Company A’s house mark.

The Court of First Instance ruled in Company B’s favour, holding that the dominant and distinctive element of the later application is the house mark, and the trademarks are both visually as well as phonetically different.

Company A appealed the Court of First Instance’s decision. The Court of Cassation overruled the Court of First Instance’s decision. Company A argued that the application’s word element is not secondary, but rather should also be considered to be a dominant element, together with the house mark. The Court of Cassation confirmed the likelihood of confusion claims.

The file was sent back to the Court of First Instance for a re-examination. However, the Court of First Instance insisted that its former decision should stand, in favour of Company B. Therefore, the matter was escalated again, this time to the highest body within the Court of Cassation, the Assembly of Civil Chambers (“Assembly”).

The Assembly agreed with the Court of Cassation’s decision in favour of Company A, recognizing the similarity between the application’s second word element and earlier registration. It held that since both the house mark and other word element are written with same type font and size, both have dominant character. Accordingly, the Assembly held that Company B’s later trademark application, which covers the same class, poses the likelihood of confusion.

Case reference: HGK., E. 2017/73 K. 2017/1048 T. 31.5.2017; only available in Turkish at this link.

Read More
Turkish Constitutional Court: Expropriation Does Not Violate Property Rights, Despite Stay of Execution Decision

The Turkish Constitutional Court recently ruled that the right to property had not been violated by completion of expropriation proceedings, initiated by the Energy Market Regulatory Authority (“Authority”), despite a decision from the administrative court to suspend execution of the Council of Ministers’ decision which authorized the urgent expropriation.

In the case at hand, the Council of Ministers decided that certain properties, including those owned by the applicants, must be urgently expropriated. However, the Council of State suspended execution of the decision.

In the meantime, within the scope of the expropriation procedure, the Authority filed a lawsuit for valuation and registration of the applicants’ properties in its name before the Civil Court of First Instance. The applicants requested that the administrative judicial decision regarding stay of execution for the Council of Ministers’ decision should be considered as a preliminary issue during the valuation and registration case. However, the court rejected the request and ultimately decided the property should be registered in the Authority’s name.

The Council of Ministers’ decision was subsequently appealed and then cancelled at a Plenary Session of the Administrative Law Chambers, on the basis that the public interest and public order conditions were not met, as is required for exceptional urgent expropriations.

The former owners of the properties applied to the Constitutional Court, alleging that the right to property had been violated. In its decision, the Constitutional Court analyzed the differences between normal and urgent expropriations. It noted that the sole difference between them is that urgent expropriations allow the administration to seize property, before completing the expropriation procedure.

Accordingly, the Constitutional Court ruled that cancelling the Council of Ministers’ decision about urgency will not automatically make the entire expropriation process contrary to law. As the expropriation procedure was lawful, the right to property is not violated.

Please see this link for the full text of the Constitutional Court decision dated 18 October 2017 and numbered 2015/17510 published in the Official Gazette number 30250 on 24 November 2017 (only available in Turkish).

Read More
Turkish Constitutional Court: Balance Must be Struck Between Public Benefit and Individual Interests When Determining Compensation for Expropriations

The Turkish Constitutional Court recently considered a claim that property rights had been violated by insufficient compensation being paid for the decreased value of an applicant’s property. The court underlined that a fair balance must be established between the public benefit and the individual’s interests.

The Constitutional Court stated that if adequate compensation is not paid to cover decreased property value, the state’s intervention cannot be considered as proportional and this would constitute a violation of the property right.

Please see this link for the full text of the Turkish Constitutional Court’s decision dated 26 October 2017 and numbered 2014/18103 (Only available in Turkish).

Read More
Turkish Constitutional Court: Tax Authority’s Approach to Calculating Time for Undeclared Buildings and Land Does Not Breach Constitution

The Turkish Constitutional Court recently ruled that a provision which allows tax authorities to claim unpaid tax and tax fines for undeclared buildings and land within five years of becoming aware of these undeclared properties does not violate the constitution. The provision’s reference to the tax authority’s awareness is an exception to the normal approach to calculating the period’s starting point.

In general, taxes should be imposed or accrued within five years, calculated from the beginning of the year after which the taxable event occurred (Article 114 of Tax Procedure Law). However, Article 40 of Real Estate Tax Law introduces a different start point for calculating the time period: When the tax authorities become aware of the undeclared real estate.

Thus, Article 40 allows tax authorities to retrospectively claim all unpaid tax and tax fines for undeclared buildings and land within five years of becoming aware of these undeclared properties.

In the case at hand, the Ankara Regional Administrative Court ruled that Article 40 breached the state of law principle (Article 2 of the Constitution). Accordingly, it applied to the Constitutional Court, requesting that Article 40 be struck out.

The Constitutional Court ruled that Article 40 does not violate Article 2 of Constitution, on the basis that:

– The calculation mechanism for real estate forces taxpayers to declare their properties and aims to collect taxes properly. Thus, it aims to encourage and support the state’s ability to collect more tax.

– Taxpayers facing the threat of having to retrospectively pay taxes is a consequence of the taxpayers’ intention or negligence in terms of not declaring the properties.

Please see this link for the full text of the Constitutional Court decision dated 1 November 2017 and numbered 2016/43 E., 2017/146 K. which was published in Official Gazette number 30276 on 20 December 2017 (only available in Turkish).

Read More
Turkey Updates Fees for Foreign Notification and Rogatory Requests

Turkey’s Ministry of Justice (“Ministry”) recently published its annual update to the framework for international service and rogatory procedures. Accordingly, international service and rogatory fees will increase around 10% in 2018.

The Communiqué on Procedures and Principles to be Followed in Foreign Notification and Rogatory Requests (“Communiqué”) was published in Official Gazette number 30282 on 27 December 2017, entering into effect on 1 January 2018. The Communiqué amends Circulars number 63/2 and 63/3, published on 16 November 2011.

Recent amendments introduced by the Communiqué include:

– A range of service and rogatory fees have increased, generally by around 10%, in line with Turkey’s annual inflation rate.

– Separate procedural rules are introduced for Estonia, Bahamas and San Marino.

– Offices authorized to receive notification or rogatory requests have been amended in France and Lithuania.

The Communiqué introduces new rules for public files and files with legal aid requests. In these files, the Treasury pays expenditures in advance without parties needing to request this. In this context, the Treasury must now:

– Pay postal fees to the Ministry and attaching a payment receipt to the document which will be served.

– Supply the requested expenditure in advance and attach a receipt to the document to be mailed.

– Not deposit requested advance expenditure or make payments after conclusion of the process.

– Not request commitment letters, which may be requested from parties in some rogatory procedures.

Please see this link for full text of the Communique (only available in Turkish)

Read More