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