On 13 September 2018, the Decree of President of Republic No: 85 was published in the Official Gazette (“Presidential Decree No: 85”).  Presidential Decree No: 85 introduced certain restrictions in the use of foreign currency in contracts by introducing new terms to the Decree No: 32 On Protection of the Value of the Turkish Currency (“Decree No: 32”). 

Contract price and other contractual payment obligations may not be determined in foreign currency or as indexed to foreign currency in the following type of agreements among person resident/domiciled in Turkey:

• real estate and movable sale agreements
• all types of movable and immovable lease agreements, leasing agreements including those for vehicle and financial leasing agreements
• employment contracts
• service agreements
• construction contracts (eser sözleşmesi)

(Limb (g) of Article 4 of the Decree No: 32 (introduced with Presidential Decree No:85))

Exceptions to the above mentioned restrictions are to be determined by the Ministry of Treasury and Finance. (Limb g of Article 4 of the Decree No 32 (introduced with Presidential Decree No:85))

Regulations on restrictions in the use of foreign currency takes effect starting from 13 September 2018. (Article 3 of Presidential Decree No:32)

In the agreements which fall within the scope of the restriction in use of foreign currency as stated above, the parties are required to re-determine the contract price and other contractual payment obligations which are in foreign currency or indexed to foreign currency in Turkish currency within 30 days as of 13 September 2018, except for the cases to be determined by the Ministry of Treasury and Finance. (Provisional Article 8 of the Decree No: 32 (introduced with Presidential Decree No:85))