The Presidential Decree no. 85Amending the Decree No. 32 on the Protection of the Value of the Turkish Currency (“Decree”) has been published in the Official Gazette dated 13.09.2018and numbered 30534. As per the Decree, contract values or other payment obligations generating from a contract shall not be determinedin foreign currency or indexed to foreign currency concerning sale and purchase agreements for movable orimmovable assets, all sorts of leasingagreements including financial and operational of all kinds of movables andimmovable and employment and service agreements signed by andbetween Turkish residents except forcertain circumstances which are going to be regulated by Ministry of Treasuryand Finance (“The Ministry”).
The contract values which hadbeen determined in or indexed to foreign currency in the existing contractswhich were signed before the Decree and stipulated under the relevant Article,except for several cases to be determined by The Ministry, shall be adjusted bythe parties on Turkish Lira within 30 days from 13.09.2018. Aforementionedexceptions are expected to be announced soon by the Ministry. Accordingly,agreements for the procurement of all kinds of goods and services, all types oflease agreements, construction agreements and contracts executed with employeesshall fall within the scope of the Decree.
As it is indefinite as towhich criteria will be used for the conversion of the previous contract valuesof foreign currency to Turkish Lira, it is understood that the Articlesregarding contract values may be negotiated and redetermined freely by the contractingparties reserving the good faith rule.
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