23 March 2020 – Below we summarize the most recent measures adopted by the Turkish government and the Turkish banks in order to minimize the effects of COVID-19 outbreak on the public and the economy.
1. Suspension of Execution and Bankruptcy Proceedings
The Turkish President issued a decree on March 22, 2020 (“Decree”), suspending until April 30, 2020,
(i) all pending execution and bankruptcy proceedings (except for the execution proceedings for alimony),
(ii) all interim attachment proceedings, and
(iii) any new execution or bankruptcy proceedings.
The Decree is based on Article 330 of the Enforcement and Bankruptcy Law, which, in case of a pandemic, empowers the President to suspend for a certain period of time all execution proceedings in some parts of the country or in favor of an economic class.
Therefore, the Decree does not cover court proceedings, and the suspension does not affect any lawsuits before the courts, including those that relate to the execution proceedings, such as lawsuits for the cancellation of the objection to a payment order and lawsuits to recover property. The courts may also receive the requests for interim attachments or bankruptcy. However, critically, the relevant court decisions will not be enforced by the execution and bankruptcy offices until April 30, 2020.
Finally, the Decree does not have any effect on any applicable statute of limitations.
2. General Assembly Meetings of Joint Stock and Limited Liability Companies
Turkish Ministry of Commerce has adopted the following measures on March 20, 2020 with respect to the general assembly meetings of joint stock and limited liability companies:
the management bodies of such companies are allowed to withdraw their invitation for ordinary general assembly meetings, without convening the general assembly to resolve on the postponement, provided that an announcement for that purpose is made in the Turkish Trade Registry Gazette; and
those companies will be able to convene general assembly meetings electronically for this period even if this method is not clearly stated in their articles of association. Such meetings can be held on “the Electronic General Assembly System” and “the Electronic Board of Directors System”, which are provided by the Central Securities Depository Institution (“MKK”).
3. Measures for the Banks
Turkish public banks, Halkbank, Vakıf Bank and Ziraat Bankası, announced on March 23, 2020 that they adopt several measures to minimize the negative effects of COVID-19 on the Turkish economy. All three public banks announced, among other measures, that:
the repayment of consumer and commercial loans (including instalment, interest and principal) due on March 31, 2020 may be postponed to a later date upon the client’s request; and
clients experiencing cash flow problems may be granted a grace period up to six months and an option to restructure their loans terms with longer maturity dates. Such grace period may be extended to twelve months in sectors engaging in seasonal activities such as tourism.
Following the public banks’ approach, Is Bankasi also announced similar measures. Other private Turkish banks are also expected to follow the suit.
4. Lockdown for People Over 65 and People with Chronic Disease
Turkish Ministry of Internal Affairs enacted a lockdown starting from March 22, 2020 for citizens over the age of 65 and citizens who have weak immune system and chronic pulmonary disease, asthma, COPD, hearth/vascular disease, nephritic, high blood pressure and liver disease and people using immunosuppressive drugs. Exceptions are provided for the public workers such as doctors, health workers, mayors, provincial directors, social service institution workers and pharmacists. Citizens who do not comply with the lockdown shall be imposed a monetary fine of TL 3,150 in addition to any other sanctions that may be applicable to a particular case under Turkish Criminal Code.
For more information please contact Edmund Emre Özer, Partner, at .
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