3- FREEDOM TO PROVIDE SERVICES
Right of Establishment and Freedom to Provide Services
Law No.4817 on Work Permits for Foreigners, published in the Official Gazette No.25040 dated 6 March 2003, provided for the simplification of the legislation in this field by introducing a single authority for granting work permits. The said Law also repealed Law No. 2007 on “the Arts and Services Allocated for Turkish Citizens in Turkey”. Within this framework, the requirement to be a Turkish citizen for certain professions, such as interpreters, guides, photographers, drivers and waiters, is removed.
Banking Sector and Other Financial Institutions
As a result of the amendment made to the Banks Act No. 4389 by the Act No. 4672 dated 12 May 2001, a “consolidated own funds” definition has been introduced in line with Directive 2000/12/EC of the European Parliament and of the Council relating to the taking up and pursuit of the business of credit institutions, and this definition has been taken as the basis in calculations of standard ratios and lending limits to be applied on a consolidated basis.
The Banks Act No. 4389 published in the Official Gazette No. 23734 dated 23 June 1999 is in compliance with Directive 2001/24/EC of the European Parliament and of the Council on the reorganization and winding up of credit institutions.
Capital Markets
Since the publication of the first National Programme there has been no enacted or amended Law in order to harmonise with the EU legislation in this field.
Insurance
Since the publication of the first National Programme there has been no enacted or amended Law in order to harmonise with the EU legislation in this field.
Information Society Services
Since the publication of the first National Programme, there has been no enacted legislation concerning three Directives with which to be aligned under the title of Information Society Services. However, arrangements have been incorporated in some of the laws indirectly related to the subject. In the Law on the Protection of Consumers No.4077 amended with Law No.4822, contracts signed in an electronic environment are described as distant contracts. Associated with this Law, regarding the distant contracts, necessary amendments were made to the Implementing Regulation on Implementing Rules and Procedures on Distant Contracts, published in the Official Gazette No.25137 dated 13 June 2003. Moreover, calls for tender in electronic media are regulated by Public Procurement Law No.4734.
Personol Data Protection
Since the publication of the first National Programme, there has been no enacted or amended Law in order to harmonise with the EU legislation in this field.
Measures other than laws, enacted in order to harmonise with EU legislation, are given in Annex 3.1 together with the corresponding EU legislation.
I- PRIORITY LIST
PRIORITY 3.1 Identification and removal of potential obstacles to EC Treaty provisions related to the right of establishment and the freedom to provide services and implementation of aligned legislation in this area
PRIORITY 3.2 Completion of legislative alignment in financial services and strengthening the supervisory structures and enforcement record including maintaning the independence of regulatory bodies.
Task 3.2.1 Banking Sector and Other Financial Institutions
Task 3.2.2 Capital Markets
Task 3.2.3 Insurance
PRIORITY 3.3 Alignment with the EU acquis as regards the provision of services in the information society
PRIORITY 3.4 Alignment with the EU acquis on personal data protection and ensuring effective implementation of the legislation
II- MEASURES FOR HARMONISATION WITH THE EU LEGISLATION AND IMPLEMENTATION
PRIORITY 3.1 Identification and removal of potential obstacles to EC Treaty provisions related to the right of establishment and the freedom to provide services and implementation of aligned legislation in this area
1- Priority Description
A detailed scrutiny of Turkish legislation has been initiated in order to identify the potential obstacles to the EC Treaty provisions related to the right of establishment and the freedom to provide services. Accordingly, taking into consideration the negotiations on liberalisation of services and the reciprocity principle, the provisions requiring “Turkish citizenship” under specific laws will be gradually abolished for EU citizens for some professions before membership, while for some others the reciprocity principle will continue to be applicable for the removal of this requirement after membership.
The information regarding the legislative harmonisation efforts in the field of mutual recognition of professional qualifications directly related to the right of establishment and the freedom to provide services, including the Directive 99/42/EC of the European Parliament and of the Council, is given in Chapter 2 - Free Movement of Persons.
Directive 86/653/EEC on the coordination of the legislation relating to the self-employed agents operating in different Member States of the EU underlines the issues to be considered by each Member State regarding agents in different Member States. The Committee Responsible for the Preparation of the Draft Turkish Commercial Law is still working and the aforementioned Directive was submitted to the Committee to be taken into consideration.
2- Schedule of Necessary Legislative Changes
Table 3.1.1
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
1 Directive 1999/42/EC of the European Parliament and of the Council of 7 June 1999 establishing a mechanism for the recognition of qualifications in respect of the professional activities covered by the Directives on liberalisation and transitional measures and supplementing the general systems for the recognition of qualifications See Table 2.1.1
Table 3.1.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
2 Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents Turkish Commercial Law Ministry of Justice 2004, II. Quarter 1-2004, IV. Quarter
3- Schedule for Necessary Institutional Changes
The schedule for necessary institutional changes regarding Directive 1999/42/EC of the European Parliament and of the Council is given in Table 2.1.2 in Chapter 2 - Free Movement of Persons. Institutional changes are not foreseen at this stage for Council Directive 86/653/EEC.
4- Financing Requirements and Sources of Financing
Financing Requirements and Sources of Financing regarding Directive 1999/42/EC of the European Parliament and of the Council is given in Table 2.1.3 in Chapter 2 - Free Movement of Persons.
PRIORITY 3.2 Completion of legislative alignment in financial services and strengthening the supervisory structures and enforcement record including maintaining the independence of regulatory bodies
1- Priority Description
Banking Sector and Other Financial Institutions
Although existing Turkish banking legislation is in compliance with EU banking legislation to a great extent, harmonisation studies to ensure compliance with the EU legislation regarding the relationship between card holders and card issuers still continue.
The Draft Act on Bank Cards and Credit Cards has been prepared to establish principles regarding the usage of credit cards and bank cards issued by banks and other authorised institutions, the rights and liabilities of credit card and bank card users, agreements between card issuers and card acceptors, and to regulate the operating principles of institutions issuing cards or making card acceptor agreements.
The Draft in question has been prepared in compliance with European Commission Recommendation 88/590/EEC arranging the relations between card holders and card issuing institutions, and sent to the related Minister of State and the Deputy Prime Minister on 19 March 2003 to be submitted to the Council of Ministers in order to be debated in the Turkish Grand National Assembly (TGNA).
The Undersecretariat of the Treasury will instruct the non-bank financial institutions, such as leasing, factoring and consumer financing companies, to abide by the provisions of the Implementing Regulation on Accounting Practice prepared by the Banking Regulation and Supervision Agency with the aim of harmonisation with Directive 86/635/EEC of the Council. This Implementing Regulation has been implemented by the banks since 1 July 2002.
Capital Markets
Completing harmonisation of the capital markets’ legislation and strengthening enforcement are priorities, parallel to the implementation of the Financial Service Action Plan which has been set forth by the EU for the formation of an integrated financial services market.
Through the amendments to the Capital Market Law No. 2499 by Law No. 4487 published in the Official Gazette No. 23910 dated 18 December 1999, the establishment of the Investor Protection Fund and the Central Registry, a corporate entity responsible for the administration of the Investors Protection Fund and dematerialization of securities, are the first steps in the alignment of Turkish legislation with the EU’s investor protection scheme legislation. The Implementing Regulation on the Establishment, Functioning, Operation and Supervision Principles of the Central Registry, the Implementing Regulation on the Procedures and Principles of Gradual Liquidation of Brokerage Houses, and the Implementing Regulation on the Investor Protection Fund were published in the Official Gazette No. 24439 dated 21 June 2001. The Implementing Regulations on the gradual liquidation and investor protection fund entered into force with the establishment of the Central Registry in September 2001. The Central Registry carries out duties for the Investors Protection Fund. It is involved in gradual liquidation of three brokerage houses and payments are made to the clients of the liquidated brokerage houses by the Investor Protection Fund. Although the dematerialization of securities has not yet started, great progress has been achieved in the preparatory projects, including the ones on technical infrastructure.
The minimum public offering rates were increased in accordance with Directive 2001/34/EC through the Communiqué Amending Some of the Articles of the Communiqué on Principles Regarding Registration with the Board and Sale of Shares, published in the Official Gazette No. 25024 dated 18 February 2003. Furthermore, amendments were made in prospectus standards in accordance with Directives 89/298/EEC and 2001/34/EC, and a shelf registration system was introduced after considering the Draft Prospectus Directive. The full harmonisation on prospectus standards will be completed by taking into account the new Prospectus Directive that has been proposed by the Commission. In addition, the sale methods of capital market instruments through public offering were amended in line with the stabilization and distribution principles of the CESR ( Committee of European Securities Regulators). With these amendments, investor groups were defined, and obligations for better informing the public and pro-rata distribution systems introduced.
In order to regulate the individual pension system, which is complementary to the present state social security system on the basis of voluntary participation and defined contributions for providing extra income to the individuals during their retirement period, the Law on Individual Pension Savings and Investment system No. 4632 was published on 7 April 2001 and entered into force on 7 October 2001. The principles regarding the establishment and operation of pension funds, which will be established by pension companies responsible for the management of savings in the individual pension system, are regulated within the framework of the prudentiality principle, through the Implementing Regulation Regarding Establishment and Operations of the Pension Funds, issued by the Capital Markets Board and published in the Official Gazette No. 24681 dated 28 February 2002. The independent auditing of pension funds is regulated by the Communiqué amending the Communiqué on Independent Auditing in the Capital Markets, published in the Official Gazette No. 25024 dated 18 February 2003.
The Communiqué on Investment Advisory Activities and Investment Advisory Companies introducing provisions to cover persons making investment recommendations in the media and by electronic means was published in the Official Gazette No.24734 dated 22 April 2002 . By this regulation, professional journalistic behaviour is separated from personal behaviour for market abuse purposes, similar to the Directive 2003/6/EC of the European Parliament and of the Council on insider dealing and market manipulation (market abuse).
Through the Communiqué on Principles Regarding Portfolio Management Activities and Portfolio Management Companies published in the Official Gazette No.25000 dated 21 January 2003, in addition to financial institutions, national and foreign real and legal professional persons are allowed to hold shares in portfolio management companies, and the portfolio management companies are obliged to be subject to the capital adequacy requirements, as is the case with brokerage houses.
To strengthen supervisory structures, the Association of Capital Market Intermediary Institutions of Turkey was established as a self-regulatory organization in March 2001. It sets rules of conducts for its members and has the power to enforce regulations for the conduct of business. In addition, the principles for issuing certificates showing the vocational training and vocational adequacy of persons who shall engage in activities on the capital markets has been regulated to enhance the professional capacity of persons providing services. The first licensing certificates were issued in 2002.
The Capital Markets Board, having the status of a public legal entity with administrative and financial autonomy, is the regulatory and supervisory authority in the securities markets within the framework of duties and authorities granted by the Capital Market Law.
Insurance
The efforts for strengthening the regulation and supervision of insurance companies and the harmonisation of insurance legislation with the relevant EC Acquis has been initiated.
To this end, the draft law on Regulation and Supervision of the Insurance Activities, which is prepared in line with the related EC Directives to a great extent and submitted to the Prime Ministry on 2 May 2003, is expected to be enacted by the Turkish Parliament this year. The preparations, for the consequent administrative regulations which will be in line with the EC Directives, continue. The on-going stuides for an implementing regulation relating to the accounting system of insurance companies are expected to be finalized by December 2004. Once the new law is enacted by the Parliament, secondary legislation in line with the relevant EC Directives shall be completed by the end of 2005.
Within this framework, a project, proposed in the context of the 2003 programme of the EU’s Pre-accession Financial Assistance to Turkey, on “Reinforcement of Institutional Capacity of the General Directorate of Insurance (GDI) and the Insurance Supervisory Board (ISB)”, which aim to harmonise Turkish insurance legislation with the relevant EC acquis and ensure its proper implementation, is envisaged to be launched in April 2004. On the other hand, in order to strengthen the functions of insurance regulation and supervision, efforts for new arrangements in the framework of existing institutional setting to restructure the GDI and the ISB continue. Furthermore, being one of the options to restrucure the regulation and supervision function, relevant models of the EU countries related to an independent insurance regulatory and supervisory authority which can effectively operate in Turkey’s conditions, are also being examined.
The Law No. 4632 on Individual Pension Savings and Investment System, introduced for the regulation and supervision of the individual pension system which is complementary to the state social security system by providing extra income to the individuals during their retirement period on the basis of voluntary participation and a fully funded defined contribution, was published 7 April 2001 and entered into force on 7 October 2001. The Implementing Regulation on Principles and Procedures for Operation of the Individual Pension Advisory Board was published on 31 October 2001. Secondary legislation issued by the Undersecretariat of the Treasury regarding the system (Implementing Regulation on Principles of Establishment and Operations of Pension Companies, Implementing Regulation on Individual Pension System, and Implementing Regulation on Individual Pension Intermediaries) were published on 28 February 2002. Communiqué No.2002/1 on Establishment and Operations of Pension Companies was published on 6 April 2002. Communiqué No.2003/1 on Private Pension Plans, Communiqué No.2003/2 on Individual Pension Intermediaries, Circular No.2003/1 on Principles and Procedures for Issuing License Within the Framework of the Implementing Regulation on Principles of Establishment and Operations of Pension Companies, and Circular No. 2003/2 on Principles and Procedures Relating to Information, Documents and Forms Given to the Participants Within the Framework of Implementing Regulation on Individual Pension System were published on 13 May 2003.
Although there is no legal framework within the EU regarding individual pension systems, the legal procedure for the Pension Funds Directive launched with regard to occupational retirement provisions as a part of the Financial Services Action Plan is underway. Although the individual retirement system, introduced by the law No. 4632 and related secondary legislation, concerns individual pension funds on the basis of voluntary participation, it also incorporates the arrangements about the persons who contribute to the accounts of the individuals. Employers may, on behalf of their employees, voluntarily contribute to group pension plans which might be deemed as voluntary occupational pension plans. Within this framework, the regulations on the private pension system brought in rigorous prudential standards relating to surveillance and supervision in order to ensure that pension fund members and beneficiaries are properly protected in line with the Pension Funds Directive.
2- Schedule of Necessary Legislative Changes
Table 3.2.1
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Task 3.2.1 Banking Sector and Other Financial Institutions
1 Commission Recommendation 88/590/EEC of 17 November 1988 concerning payment systems, and in particular the relationship between cardholder and card issuer Law on Bank Cards and Credit Cards Banking Regulation and Supervision Agency January 2004 1- December 2004
2- January 2005
Undersecretariat Directive regarding the implementation of Regulations on Accounting Practice by the non-bank financial institutions Undersecretariat of Treasury Directive will be enacted in July 2003 and enter into force by January 2004
Amendment to the Communiqué on Rules and Principles Regarding the Financial Statements and Reports in Capital Markets Capital Markets Board December 2005 2- December 2005
3 Council Directive 89/117/EEC of 13 February 1989 on the obligations of branches established in a Member State of credit institutions and financial institutions having their head offices outside that Member State regarding the publication of annual accounting documents Amendment to the Communiqué on Rules and Principles Regarding the Financial Statements and Reports in Capital Markets Capital Markets Board December 2005 2- December 2005
4 Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions Amendment to the Communiqué on Principles Regarding Capital and Capital Adequacy Requirements of Brokerage Houses Capital Markets Board December 2005 2- December 2005
5 Directive 98/31/EC of the European Parliament and of the Council of 22 June 1998 amending Council Directive 93/6/EEC on the capital adequacy of investment firms and credit institutions Amendment to the Communiqué on Principles Regarding Capital and Capital Adequacy Requirements of Brokerage Houses Capital Markets Board December 2005 2- December 2005
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Task 3.2.2 Capital Markets
Amendment to the Capital Market Law Capital Markets Board September 2005 1- December 2005
2- December 2005
Amendment to the Implementing Regulation on the Investor Protection Fund Capital Markets Board September 2005 2- December 2005
Amendment to the Communiqué on Principles Regarding Issuance of Participating Shares Capital Markets Board June 2004 2- June 2004
Amendment to the Communiqué on Principles Regarding Exemption Requirements for Issuers and Removal from the Board’s Register Capital Markets Board June 2004 2- June 2004
Amendment to the Capital Market Law Capital Markets Board September 2005 1- December 2005
2- December 2005
Amendment to the Communiqué on Principles Regarding Mutual Funds Capital Markets Board December 2005 2- December 2005
Amendment to the Communiqué on Rules and Principles Regarding Financial Statements and Reports of Mutual Funds Capital Markets Board December 2005 2- December 2005
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Amendment to the Capital Market Law Capital Markets Board September 2005 1- December 2005
2- December 2005
Amendment to the Communiqué on Principles Regarding Mutual Funds Capital Markets Board December 2005 2- December 2005
Communiqué on Principles Regarding Intermediary Activities and Intermediary Institutions Capital Markets Board December 2005 2- December 2005
10 Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) Amendment to the Capital Market Law Capital Markets Board September 2005 1- December 2005
2- December 2005
Amendment to the Communiqué on Principles Regarding Intermediary Activities and Intermediary Institutions Capital Markets Board December 2005 2- December 2005
Amendment to the Communiqué on Principles Regarding Portfolio Management Activities and Portfolio Management Companies Capital Markets Board December 2005 2- December 2005
Amendment to the Communiqué on Principles Regarding Investment Advisory Activity and Institutions Undertaking This Activity Capital Markets Board December 2005 2- December 2005
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Amendment to the Capital Market Law Capital Markets Board September 2005 1- December 2005
2- December 2005
Amendment to the Communiqué on Principles Regarding Registration with the Board and Sale of Shares Capital Markets Board June 2004 2- June 2004
Amendment to the Communiqué on Public Disclosure of Material Events Capital Markets Board June 2004 2- June 2004
Amendment to the Communiqué on Rules and Principles Regarding the Financial Statements and Reports in Capital Markets Capital Markets Board June 2004 2- June 2004
Amendment to the Several Communiqués on Principles Regarding Registration of Securities with the Board Capital Markets Board June 2004 2- June 2004
Amendment to the Implementing Regulation on Principles Regarding Establishment and Operation of Stock Exchanges Capital Markets Board September 2005 2- December 2005
Amendment to the Implementing Regulation on Istanbul Stock Exchange Listing Capital Markets Board September 2005 2- December 2005
Amendment to the Decree Law Regarding Stock Exchanges No. 91 Capital Markets Board September 2005 2- December 2005
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Task 3.2.3 Insurance
Life Insurance
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on Life Insurance Undersecreteriat of Treasury December 2004 2- December 2004
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003a)
Implementing Regulation on Life Insurance Undersecreteriat of Treasury December 2004 2- December 2004
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on Life Insurance Undersecreteriat of Treasury December 2004 2- December 2004
Law on the Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003 a)
Implementing Regulation on Life Insurance Undersecreteriat of Treasury December 2004 2- December 2004
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Non-life Insurance
Law on the Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004 a)
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
20 Council Directive 84/641/EEC of 10 December 1984 amending, particularly as regards tourist assistance, the First Directive (73/239/EEC) on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003b)
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003 a)
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004 a)
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003 a)
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004 a)
24 Council Directive 87/343/EEC of 22 June 1987 amending, as regards credit insurance and suretyship insurance, First Directive 73/239/EEC on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance Implementing Regulation on Credit and Surety Insurance Undersecreteriat of Treasury December 2005 2- December 2005
25 Council Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance Implementing Regulation on Legal Protection Undersecreteriat of Treasury December 2005 2- December 2005
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Accounting, Financial Tables and Supervision
26 Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings Implementing Regulation on the Insurance Accounting System Undersecreteriat of Treasury December 2004 2- December 2004
Solvency
27 Directive 2002/12/EC of the European Parliament and of the Council of 5 March 2002 amending Council Directive 79/267/EEC as regards the solvency margin requirements for life assurance undertakings Implementing Regulation on the Solvency of Insurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
28 Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002 amending Council Directive 73/239/EEC as regards the solvency margin requirements for non-life insurance undertakings Implementing Regulation on the Solvency of Insurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
Statistics
29 Commission Regulation (EC) No 1225/1999 of 27 May 1999 concerning the definitions of characteristics for insurance services statistics Implementing Regulation on the Statistics of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
30 Commission Regulation (EC) No 1226/1999 of 28 May 1999 concerning the derogations to be granted for insurance services statistics Implementing Regulation on the Statistics of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
31 Commission Regulation (EC) No 1227/1999 of 28 May 1999 concerning the technical format for the transmission of insurance services statistics Implementing Regulation on the Statistics of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
32 Commission Regulation (EC) No 1228/1999 of 28 May 1999 concerning the series of data to be produced for insurance services statistics Implementing Regulation on the Statistics of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
Winding Up and Reorganisation
Law on Insurance Regulation and Supervision Undersecreteriat for Treasury November 2003 1- December 2003
2- December 2003
Implementing Regulation on the Establishment and Operation Principles of Insurance and Reinsurance Companies Undersecreteriat of Treasury December 2004 2- December 2004
Insurance Mediation
34 Council Directive 77/92/EEC of 13 December 1976 on measures to facilitate the effective exercise of freedom of establishment and freedom to provide services in respect of the activities of insurance agents and brokers (ex ISIC Group 630) and, in particular, transitional measures in respect of those activities Implementing Regulation on Insurance Intermediaries Undersecreteriat of Treasury December 2004 2- December 2004
35 Commission Recommendation 92/48/EEC of 18 December 1991 on insurance intermediaries Implementing Regulation on Insurance Intermediaries Undersecreteriat of Treasury December 2004 2- December 2004
36 Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation Implementing Regulation on Insurance Intermediaries Undersecreteriat of Treasury December 2004 2- December 2004
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Reinsurance
37 Council Directive 64/225/EEC of 25 February 1964 on the abolition of restrictions on freedom of establishment and freedom to provide services in respect of reinsurance and retrocession Law on Insurance Regulation and Supervision Undersecreteriat of Treasury November 2003 1- December 2003
2- December 2003
Supplementary Supervision
38 Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group Implementing Regulation on the Supplementary Supervision of Insurance Undertakings in an Insurance Group Undersecreteriat of Treasury December 2005 2- December 2005
Electronic Trade
39 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) Implementing Regulation on Electronic Trade regarding Insurance Undersecreteriat of Treasury December 2005 2- December 2005
Motor Vehicles
40 Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
41 Second Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
42 Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
43 Council Directive 90/618/EEC of 8 November 1990 amending, particularly as regards motor vehicle liability insurance, Directive 73/239/EEC and Directive 88/357/EEC which concern the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
44 Commission Decision 91/323/EEC of 30 May 1991 relating to the application of Council Directive 72/166/EEC on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and to the enforcement of the obligation to insure against such liability Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
45 Commission Decision 97/828/EC of 27 October 1997 relating to the application of Council Directive 72/166/EEC on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
46 Commission Decision 93/43/EEC of 21 December 1992 relating to the application of Council Directive 72/166/EEC on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and to the enforcement of the obligation to insure against such liability Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
Table 3.2.1 (Continued)
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
47 Directive 2000/26/EC of the European Parliament and of the Council of 16 May 2000 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and amending Council Directives 73/239/EEC and 88/357/EEC (Fourth motor insurance Directive) Amendment to the Road Traffic Law Ministry of Interior 2004, III. Quarter 1- 2004, IV.Quarter
2- 2004, IV. Quarter
a) Provisions regarding freedom to provide services will be handled during the negotiation process on liberalisation of services.
b) Harmonisation with this Directive will be completed after membership.
Although not stated in the above tables, harmonisation efforts on the following legislation will continue.
Banking Sector and Other Financial Institutions
- 94/19/EC: Directive of the European Parliament and the Council of 30 May 1994 on deposit-guarantee schemes
The deposit amount covered by deposit insurance is determined as 50 billion TL, through Decree No 2000/682 on the Saving Deposits Subject to Insurance and the Premium to be Collected for the Savings Deposit Insurance, in line with the minimum level of deposit guarantee of € 20,000 as stipulated by EU norms. However, although not legislatively arranged, the full guarantee application was initiated with an announcement by the 57th Government on 6 December 2000 in order to limit the effects of the crisis encountered in November 2000. The said application will be terminated within a pre-announced schedule provided that stability is ensured within the financial system and the financial indicators. In addition, the Directive differs from the Turkish practice, as it covers all the branches of a credit institution within the EU in terms of deposit gurantee and it stipulates the application of the origin country guarantee system for branches abroad. Accordingly, full harmonisation with this Directive will be completed upon accession.
- 89/117/EEC: Council Directive of 13 February 1989 on the obligations of branches established in a Member State of credit institutions and financial institutions having their head offices outside that Member State regarding the publication of annual accounting documents
According to the commitments in the Letter of Intent submitted to the IMF on 5 April 2003, the regulatory and supervisory power with regard to non-bank financial institutions will be transferred to the Banking Regulation and Supervision Agency (BRSA). Related legislative work will be carried out by the BRSA following this transfer.
Insurance
- 78/473/EEC: Council Directive of 30 May 1978 on the coordination of laws, regulations and administrative provisions relating to Community co-insurance
- 91/370/EEC: Council Decision of 20 June 1991 on the conclusion of the Agreement between the European Economic Community and the Swiss Confederation concerning direct insurance other than life assurance
- 91/371/EEC: Council Directive of 20 June 1991 on the implementation of the Agreement between the European Economic Community and the Swiss Confederation concerning direct insurance other than life assurance
- 91/675/EEC: Council Directive of 19 December 1991 setting up an insurance committee
- 91/2155/EEC: Council Regulation (EEC) of 20 June 1991 laying down particular provisions for the application of Articles 37, 39 and 40 of the Agreement between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance
3- Schedule for Necessary Institutional Changes
Table 3.2.2
No Necessary Institutional Changes Period of Implementation
Task 3.2.1 Banking Sector and Other Financial Institutions
1 Development of human resources planning and institutional training programme within the BRSA 2003-2005
2 Installation of a shared database within the BRSA, improvement of analytical tools and establishment of “Management Information System” 2003-2005
Task 3.2.2 Capital Markets
3 The improvement of the CMB – the ISE computer based market surveillance system to monitor securities trading activities as well as to detect and investigate anomalies in trading promptly, such as manipulation, speculation, insider trading 2004
4 Ensuring the collection and public disclosure of financial statements, balance sheets and material events of public companies and intermediaries via Internet. To ensure the security criteria in this project, e-signature technology will be used. 2004
5 Dematerialization of securities to enhance investor protection and improve transparency in the market 2007
6 To make the futures and options exchange operational to complement securities markets 2005
7 Training of the staff and receiving consultancy for the harmonization of the relevant legislation 2003-2006
Task 3.2.3 Insurance
8 Formation of financial reports, chart of accounts and statistical tables in line with the related EU legislation 2003
9 Twinning project for legislative studies, institution building and training 2004-2006
10 Harmonisation of financial monitoring and statistics reporting with EU requirements 2004-2006
4- Financing Requirements and Sources of Financing
Table 3.2.3 (Euro)
Requirements Year National Budget EU Resources Other Resources Total
Task 3.2.1 Banking Sector and Other Financial Institutions
I- Harmonisation with the EU Legislation and Implementation – Banking Regulation and Supervision Agency
Training
Development of human resources plan and institutional training programme within BRSA 2003-2005 200,000 200,000
Other
Installation of a shared database within BRSA, improvement of analytical tools and the establishment of “Management Information System” 2003-2005 250,000 250,000
Total 450,000 450,000
Task 3.2.2 Capital Markets
I-Investment – Capital Markets Board
The establishment of computer based market surveillance system 2003-2004 650,000 650,000
The collection and public disclosure of information via internet 2003-2004 1,300,000 1,300,000
II- Harmonisation with the EU Legislation and Implementation - Capital Markets Board
Training 2003-2006 300,000 300,000
Consultancy 2003-2006 1,500,000 1,500,000
Table 3.2.3 (Continued) (Euro)
Requirements Year National Budget EU Resources Other Resources Total
Translation 2003-2006 15,000 15,000
Total 1,950,000 1,815,000 3,765,000
Task 3.2.3 Insurance
I-Investment– Undersecretariat for Treasury
Establishment of technological infrastructure for financial monitoring and statistics reporting
(hardware & software) 2004-2006 275,000 825,000 1,100,000
II- Harmonisation with the EU Legislation and Implementation - Undersecretariat for Treasury
Consultancy 2003 147,000 147,000
Other
Twinning 2004-2006 2,000,000 2,000,000
Total 275,000 2,972,000 3,247,000
PRIORITY 3.3 Alignment with the acquis as regards the provision of services in the information society
1- Priority Description
Directive 2000/31/EC considered within the “Freedom to Provide Services” chapter includes provisions regarding the establishment of service providers, commercial communication, electronic contracts, liabilities of intermediary service providers, out of court dispute resolution, court actions, and encouragement for drawing up codes of conduct.
Article 9 of this Directive, known as the Electronic Commerce Directive, is related to contracts concluded by electronic means; Article 12 includes provisions related to the cases where the intermediary service providers are not liable and the provisions regarding the dispute resolution in the courts are given by Article 18 under the title of court’s actions . In this context, Directive 2000/31/EC is submitted to the Committee Responsible for the Preparation of Draft Code of Obligations, especially to be taken into consideration with these aspects. For matters apart from the said Articles, necessary legislative regulations will be prepared by the Undersecreteriat of Foreign Trade in the framework of the acquis related to electronic documents and electronic data.
The subject matter of Directive 98/84/EC on the legal protection of services based on, or consisting of, conditional access is the regulation of measures against illicit devices which allow access to services (through television broadcasting, radio broadcasting and internet) based on conditional access (encoded and fee payed). The issue also covers exports, imports and judicial actions together with the technical matters related to broadcasting and internet. In line with this Directive, the European Convention on the Legal Protection of Services Based on, or Consisting of, Conditional Access prepared by the Council of Europe with ETS No.178 entered into force on 24 January 2001. Although Turkey is not yet a party to the aforementioned Convention, the Convention is expected to be signed by the Council of Ministers in the near future and sent to the TGNA.
Directive 98/34/EC of the European Parliament and of the Council related to the provision of information in the field of technical standards and regulations is amended with Directive 98/48/EC. The notification mechanism for national technical regulations and standards on the non-regulated matters regarding goods set by the EU is expanded in order to include notification for technical regulations and standards on similar information society services. In line with this, the title of Directive 98/34/EC was changed to the “Directive related to the provision of information in the field of technical standards, regulations and information society services”.
Harmonisation with Directive 98/34/EC is provided by the “Implementing Regulation on the Notification of the Technical Legislation and Standards between Turkey and European Union,” published in the Official Gazette No. 24714 dated 3 April 2002 and which entered into force on 3 May 2002. It is one of the Implementing Regulations of “Law No.4703 on the Preparation and Implementation of the Technical Legislation for Products” published in the Official Gazette No. 24459 dated 11 July 2001. During this process of harmonisation the provisions of EC-Turkey Association Council Decision No.2/97, which adapt Directive 98/34/EC to Turkey, were taken into consideration.
Since the conditions are not yet clarified for the reflection of the amendment introduced with Directive 98/48/EC to the Implementing Regulation on the Notification of the Technical Legislation and Standards between Turkey and European Union, there is no ongoing legislative work in this context. Negotiations are ongoing with the European Commision within this framework.
Through the Draft Law on Electronic Signature, which is largely based on Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community Framework for electronic signatures, it is stipulated that an electronic signature, with certain qualifications, has the same legal effect as a hand signature. In the Draft there are also provisions on transactions and contracts where electronic signatures would not apply, and provisions on issues concerning electronic signatures and certification service providers.
2- Schedule of Necessary Legislative Changes
Table 3.3.1
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Code of Obligationsa) Ministry of Justice December 2005 1- December 2005
2- December 2005
Legislation on electronic documents and electronic data Undersecretariat of Foreign Trade October 2005 1- October 2005
2- October 2005
Table 3.3.1
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
2 Directive 98/84/EC of the European Parliament and of the Council of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access Legislation on conditional access Telecommunication Authority December 2005 1- December 2005
2- December 2005
3 Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998 amending Directive 98/34/EC laying down a procedure for the provision of information in the field of technical standards and regulations Implementing Regulation amending the Implementing Regulation on the Notification of the Technical Legislation and Standards between Turkey and European Union Undersecretariat of Foreign Trade December 2004 1- December 2004
2- December 2004b)
4 Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures Law on Electronic Signature Ministry of Justice 12 June 2003 1- December 2003
2- December 2003
a) Harmonisation with Articles 9, 12 and 18 of Directive 2000/31/EC will be provided through the Draft Code of Obligations.
b) In order to have the stated amendment completed by 2004, it is necessary to clarify the conditions for the harmonisation by Turkey with Directive 98/48/EC
3- Schedule for Necessary Institutional Changes
Table 3.3.2
No Necessary Institutional Changes Period of Implementation
1 Arrangement and development of in-service training programmes for strengthening the human resources of Telecommunication Authority regarding the certification of electronic signature 2004-2005
2 Development of e-commerce statistics within the Undersecretariat of Foreign Trade 2004
3 Twinning project within the Undersecretariat of Foreign Trade for legislative and administrative building and training. 2005-2006
4- Financing Requirements and Sources of Financing
Table 3.3.3 (Euro)
Requirements Year National Budget EU Resources Other Resources Total
I- Investment
Installation of e-commerce database and production of statistics within the Undersecretariat of Foreign Trade 2005-2006 200,000 600,000 800,000
II- Harmonisation with the EU Legislation and Implementation
Arrangement and development of in-service training programmes for strengthening the human resources of Telecommunication Authority regarding the certification of electronic signature 2004-2005 200,000 200,000
Twinning project
Counselling and training within the Undersecretariat of Foreign Trade, in order to support the legislative harmonisation efforts regarding the e-Commerce Directive 2005-2006 1,500,000 1,500,000
Counselling and training within the Undersecretariat of Foreign Trade regarding the legislation on the financial and administrative support for the encouragement of e-Commerce 2005 150,000 150,000
Training within the Undersecretariat of Foreign Trade regarding the e-Finance services and the establishment of the criteria 2005 200,000 200,000
Training, translation and consultancy within Ministry of Justice regarding harmonisation with electronic signature legislation and related implementation 2004-2005 200,000 200,000
Total 200,000 2,850,000 3,050,000
PRIORITY 3.4 Alignment with the EU acquis on personal data protection and ensuring effective implementation of the legislation
1- Priority Description
Alignment with the EU acquis on personal data protection is one of the short term priorities in the Ability to Assume the Obligations of Membership chapter of the 2003 Accession Partnership Document published by the European Commission, especially under the Justice and Home Affairs, and Freedom to Provide Services titles. Effective application of personal data protection legislation is covered as a medium term priority in the Accession Partnership Document.
Preparation of the draft law for the purpose of harmonisation is almost at the final stage. The support of the European Union and the Council of Europe experts on this draft law is provided in the context of the Sub-committee for Support to the Legal Reforms in the framework of the on going Council of Europe-European Union-Turkey Joint Projects.
Through the draft law, issues such as; protection of personality and fundamental rights and freedoms; recording and use of data within certain clear purposes in line with the rule of law; reliability and up-to-dateness of data, its renewal and erasure when necessary; security of confidential personal data such as race, political opinion, religion, health, sexual life, and the right of persons regarding provision of information related to themselves; will be regulated within a framework.
2- Schedule of Necessary Legislative Changes
Table 3.4.1
No Title and Number of EU legislation Title of Draft Turkish legislation Responsible Institution Proposed Date of the Approval of the Board/Minister/ Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Law on Personal Data Protection Ministry of Justice December 2004 1- December 2004
2- December 2004
Complementary legislation regarding Law on Personal Data Protection a)
Ministry of Interiorb)
Telecommunication Authorityc) December 2005 2- December 2005
2 Commission Decision 2001/497/EC of 15 June 2001 on standard contractual clauses for the transfer of personal data to third countries, under Directive 95/46/EC (notified under document number C(2001) 1539) Law on Personal Data Protection Ministry of Justice December 2004 1- December 2004
2- December 2004
a) The Personal Data Protection Authority will complete the complementary legislation regarding implementation within the framework of its duties and authorization once it is established.
b) The Ministry of Interior will complete the complementary legislation within the framework of its duties and authorization
c) The Telecommunication Authority will complete the complementary legislation within the framework of its duties and authorization
Although not stated in the above tables, harmonisation efforts on the following legislation will continue.
- 2000/518/EC: Commission Decision, of 26 July 2000 pursuant to Directive 95/46/EC of the European Parliament and of the Council on the adequate protection of personal data provided in Switzerland, will be taken into consideration following membership. The requirement of this Decision is fulfilled through declaring a provision, within the Draft Law on Personal Data Protection, consistent with article 25 of Directive 95/46/EC.
- 2000/519/EC: 2000/519/EC: Commission Decision of 26 July 2000 pursuant to Directive 95/46/EC of the European Parliament and of the Council on the adequate protection of personal data provided in Hungary, will be taken into consideration following membership. The requirement of this Decision is fulfilled through declaring a provision, within the Draft Law on Personal Data Protection, consistent with article 25 of Directive 95/46/EC.
- 2001/45/EC: Since the Regulation of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data is related to the regulations at the Community and Member State level, harmonisation with this legislation will be completed after membership.
3- Schedule for Necessary Institutional Changes
Table 3.4.2
No Necessary Institutional Changes Period of Implementation
1 Establishment of the Personal Data Protection Authority 2005
2 Establishment of the Supreme Council for Personal Data Protection and the service units 2005
4- Financing Requirements and Sources of Financing
Table 3.4.3 (Euro)
Requirements Year National Budget EU Resources Other Resources Total
Personal Data Protection Authority a)
I-Investment
Setting up of the necessary physical infrastructure 2005-2006
Table 3.4.3 (Continued) (Euro)
Requirements Year National Budget EU Resources Other Resources Total
II- Harmonisation with the EU Legislation and Implementation
Personnel
(248 staff) 2005-2006
Training 2005-2006
Consultancy 2005-2006
Translation 2005-2006
a) Although the necessary activities stated in the table regarding the institution building of the Personal Data Protection Authority are foreseen to be carried out, no budget estimation can be made at this stage.
Annex 3.1
Secondary Legislation promulgated after the publication of the Council Decision of 8 March 2001 on the Accession Partnership with the Republic of Turkey
Title of the EU Legislation Corresponding Turkish Legislation
Banking Sector and Other Financial Institutions
Regulation on the Establishment and Operations of Banks (Official Gazette No. 24445 dated 27 June 2001)
Regulation on Measurement and Assessment of Capital Adequacy of Banks (Official Gazette No. 24657 dated 31 January 2002)
Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investments firms and credit institutions Regulation on the Principles and Procedures Regarding the Calculation and Implementation of “Foreign Exchange Net Position/ Own Funds” Standard Ratio on Consolidated and Unconsolidated Basis (Official Gazette No. 24657 dated 31 January 2002)
Council Directive 89/117/EEC of 13 February 1989 on the obligations of branches established in a Member State of credit institutions and financial institutions having their head offices outside that Member State regarding the publication of annual accounting documents Regulation on Accounting Practice and related Communiqués (Official gazette No. 24793bis dated 22 June 2002)
Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions Regulation on Accounting Practice and related Communiqués (Official gazette No. 24793bis dated 22 June 2002)
Capital Markets
The Regulation on the Establishment, Functioning, Operation and Supervision Principles of the Central Registry (Official gazette No. 24439 dated 21 June 2001)
The Regulation on the Procedures and Principles of Gradual Liquidation of Brokerage Houses (Official gazette No. 24439 dated 21 June 2001)
The Regulation on the Investor Protection Fund (Official gazette No. 24439 dated 21 June 2001)
Title of the EU Legislation Corresponding Turkish Legislation
Communiqué on Principles Regarding Registration with the Board and Sale Of Shares (Official gazette No. 23524 dated 15 November 1998)
Communiqué Amending Some of the Articles of the Communiqué on Principles Regarding Registration with the Board and Sale of Shares(Official gazette No. 25024 dated 18 February 2003)
Communiqué on Principles Regarding Registration with the Board and Sale Of Shares (Official gazette No. 23524 dated 15 November 1998)
Communiqué Amending Some of the Articles of the Communiqué on Principles Regarding Registration with the Board and Sale of Shares(Official gazette No. 25024 dated 18 February 2003)
Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) Communiqué on Principles Regarding Investment Advisory Activity and Institutions Undertaking This Activity (Official gazette No. 24734 dated 22 April 2002)
Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field Communiqué on Principles Regarding the Portfolio Management Activities and Portfolio Management Companies (Official gazette No. 25000 dated 21 January 2003)
Insurance
Regulation Concerning Amendments in Regulation on Insurance and Reinsurance Brokers (Official gazette No. 24522 dated 13 September 2001)
Regulation Concerning Amendments in Regulation on Insurance and Reinsurance Brokers (Official gazette No. 24700 dated 19 March 2002)
Regulation Concerning Amendments in Regulation on Insurance and Reinsurance Brokers (Official gazette No. 24522 dated 13 September 2001)
Regulation Concerning Amendments in Regulation on Insurance and Reinsurance Brokers (Official gazette No. 24700 dated 19 March 2002)
Regulation Concerning Amendments in Regulation on Insurance and Reinsurance Brokers (Official gazette No. 24522 dated 13 September 2001)
Regulation Concerning Amendments in Regulation on Insurance and Reinsurance Brokers (Official gazette No. 24700 dated 19 March 2002)
4- FREE MOVEMENT OF CAPITAL
The Law on Direct Foreign Investment was published in the Official Gazette No.25141 dated 17 June 2003 and entered into force.
I- LIST OF PRIORITIES
PRIORITY 4.1 Removing all restrictions affecting foreign investments (originating from EU) in all economic sectors in Turkey
PRIORITY 4.2 Removing all restrictions affecting the acquisition of real estate in Turkey by EU citizens and legal persons
II- MEASURES FOR HARMONISATION WITH THE EU LEGISLATION AND IMPLEMENTATION
PRIORITY 4.1 Removing all restrictions affecting foreign investments (originating from the EU) in all economic sectors in Turkey
1- Priority Description
AltThough the alignment of Turkish legislation with the acquis in the field of foreign investments is well advanced, some restrictions still remain. An authorisation system is in place and the minimum capital requirement (per real or legal person) is USD 50,000. There is no limitation in the participation of foreign capital, except in some strategic sectors like civil aviation, maritime transportation, port undertakings, and radio and television.
The new Law on Direct Foreign Investment, abolishing all restrictions deriving from foreign investment legislation (the authorisation procedure and the minimum capital requirement) entered into force with its publication in the Official Gazette No. 25141 on 17 June 2003. The new law will liberalise all restrictions on foreign investments, without prejudice to other laws governing sectors.
Some exceptions are recognised with respect to sectoral restrictions. The Aarticles 27 and 29 of the Tourism Incentive Law No. 2634 and the Yacht Tourism Regulation contain exceptions to the Law No.815 on Maritime Transportation, Cabotage and Harbouring and Performing Crafts and Trade in Turkish Territorial Waters (Law on Cabotage), for private and commercial yachts with a foreign flag, in case where they are used for excursion, sports and amusement. In the same way, articles 3 and 27 of the Tourism Incentive Law No.2634 and article 21 of the Yacht Tourism Regulation allow enterprises established abroad to work in the tourism service sector.
The Law on the Establishment of Radio and Television Enterprises and Their Broadcasts No. 3984, which regulates the radio and television broadcast sector, has contains restrictions concerning foreign capital. The Law No.3984 was amended bythe Law No.4756 published in the Official Gazette No. 24761 dated 21 May 2002 and the Law No.4771 published in the Official Gazette No. 24841 dated 9 August 2002 for the harmonisation with the EU Acquis. In this context, paragraph (h) of the article 29 “Establishment and Ownership Ratio” which, determines the foreign capital ownership in radio and television enterprises was amended to as “The share of foreign capital in one private radio or television enterprise may not exceed 25 percent of the capital paid up”. Previously, This this ratio was limited to with 20% previously.
Acquisition and selling of securities by non-residents is unrestricted according to article 15 of the Decree No.32 Regarding the Protection of the Value of the Turkish Currency.
The removal of obstacles to the admission of foreign securities to the Turkish capital markets and direct investments of foreign financial service providers will facilitate the integration of the Turkish financial sector to the EU.
Upon EU membership Turkish Legislation will be harmonised with the Directive 97/5/EC of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers upon EU membership.
2- Schedule of Necessary Legislative Changes
Table 4.1.1
No Title and Number of EU legislation Name of the Corresponding Turkish Draft Legislation Responsible Institution Proposed Date of the Approval of the Board / Minister / Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Decree Law Regarding Stock Exchanges No 91 Capital Markets Board September 2005 December 2005
Implementing Regulation on Principles Regarding Establishment and Operation of Stock Exchanges No 84/8581 Capital Markets Board September 2005 December 2005
Implementing Regulation on Istanbul Stock Exchange Listing Capital Markets Board September 2005 December 2005
Communiqué on Principles Regarding the Registration with the Board and the Sale of Foreign Capital Market Instruments Series: III No: 20 Capital Markets Board December 2005 December 2005
Communiqué on Principles Regarding Registration with the Board and Sales of Foreign Mutual Fund Shares Series VII No 14 Capital Markets Board December 2005 December 2005
Communiqué on Regarding the Principles on Intermediary Activities and Intermediary Institutions Series V No 46 Capital Markets Board December 2005 December 2005
Table 4.1.1 (Continued)
No Title and Number of EU legislation Name of the Corresponding Turkish Draft Legislation Responsible Institution Proposed Date of the Approval of the Board / Minister / Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
The Law on the Establishment of Radio and Television Enterprises and Their Broadcasts No. 3984 Radio and Television Supreme Council Will be determined during the negotiation process.
Law on Turkish Civil Aviation No. 2920 Ministry of Transport Will be determined during the negotiation process.
Law on Cabotage No. 815 Undersecretariat of Maritime Affairs Will be determined during the negotiation process.
Turkish Code of Commerce No. 6762 Ministry of Industry and Trade Will be determined during the negotiation process.
Law on Telegraph and Telephone No.406 Telecommunication Authority Will be determined during the negotiation process.
Tourism Incentive Law No.2634 Ministry of Culture and Tourism Will be determined during the negotiation process.
2 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems Istanbul Stock Exchange Settlement And Custody Institutions Regulation Capital Markets Board September 2005 December 2005
3- Schedule of Necessary Institutional Changes
Table 4.1.2
No Necessary Institutional Changes Period of Implementation
1 Training of experts and getting obtaining consultancy for harmonisation with the EU acquis. 2003-2006
4- Financing Requirements and Sources of Financing
Table 4.1.3 (Euro)
Requirements – (CMB) Year National Budget EU Resources Other Resources Total
I-Investment
II- Harmonisation with the EU legislation and Implementation
Personnel
Education 2003-2006 80,000 - 80,000
Consultancy 2003-2006 500,000 500,000
Translation
Other
Total 580,000 580,000
PRIORITY 4.2 Removing all restrictions affecting the acquisition of real estate in Turkey by EU citizens and legal persons
1- Priority Description
Real estate acquisition of by foreign natural persons in Turkey is regulated by article 35 of the Land Registry Law No. 2644 in accordance with the principle of reciprocity and legal restrictions.
The restrictive legal provisions are the following : article 36 of the Land Registry Law, article 87 of the Village Law No.442 and articles 9/b and 28 of Military Forbidden Zones and Security Areas Law No.2565 and articles 9/2 and 27 of the Military Forbidden Zones and Security Areas Regulation,.
According to article 36 of the Land Registry Law No.2644, the foreign natural person can acquire detached farms that are outside of a village and real estate more than 30 hectares outside of a village only with the government’s authorisation., Legal inheritance is outside of this provision., Acquiring more than 30 hectares of real estate or a farm by means of testament or testamentary heir is also subject to the authorisation of the government., If the authorisation is not given, the farm and the exceeding parts are converted to value by means of liquidation.,
In accordance with article 87 of the Village Law No.442, the real estate acquisition of both foreign natural and legal persons in villages is prohibited.
According to articles 9/b and 28 of the Military Forbidden Zones and Safety Areas Law No. 2565 and the articles of 9/2 and 27 of the Military Forbidden Zones and Safety Areas Regulation, foreigners cannot acquire any real estate that are in military forbidden zones, security areas, and strategic areas. This restriction is valid for all acquisitions.
According to the foreign capital legislation, there is no restriction in acquiring real estate for foreign capital companies, which are established in Turkey.
On the other handWith the Law No. 4916 Amending Various Laws prepared by the Ministry of Finance and adopted by the TGNA the on 3 July 2003, article 35 of the Land Registry Law is amended., According to this amendment, the reciprocity principle for natural persons is conserved. The same reciprocity principle for natural persons will apply to the acquisition of land by non-resident firms, regarding which there were no provisions in the foreign capital legislation.
According to the Law No. 4916, in compliance with the reciprocity principle and legal restrictions, foreign natural persons and foreign firms will be able to acquire real estate in the territory of the Republic of Turkey. In the application of the reciprocity principle, it is essential that foreign states extend the same rights to Turkish citizens or firms as are extended to their own citizens and firms.
Article 35 of the Law No. 4916 abrogates article 87 of the Village Law No.442. Also, as article 18 of the Law No.4916, which re-regulates article 35 of Land Registry Law No.2644 covers provisions of the article 36 of the Land Registry Law No.2644, article 36 is also abrogated.
According to the Law No. 4916, foreign natural persons and foreign trading companies registered in their own countries will have the right to buy and sell real estate of up to 30 hectars in Turkey. If foreign persons and trading companies want to buy real estate over 30 hectars, they have to obtain the authorisation of the Council of Ministers. The Council of Ministers is authorised to specify the areas in which foreign natural persons and foreign trading companies are not allowed to buy, on the grounds of public interest and security. Accordingly, EU citizens and trading companies will be able to buy real estate in Turkey, on a reciprocal basis and in compliance with the legal restrictions.
According to the article 8/e of the Tourism Incentive Law, acquisition of real estate in tourism areas and centres, could be excluded from the restrictions existing in the Village Law No.442 and the Land Registry Law No.2644 on acquisition of real estate by foreign nationals, by the decision of Council of Ministers.
2- Schedule of Necessary Legislative Changes
Table 4.2.1
No Title and Number of EU legislation Name of the Corresponding Turkish Draft Legislation Responsible Institution Proposed Date of the Approval of the Minister / Council of Ministers Proposed Date of
1- Adoption by the Parliament
2- Entry into Force
Law Amending Various Laws Ministry of Finance Adopted by the TGNA on 3.7.2003 July 2003
Military Forbidden Zones and Security Areas Law No, 2565 Ministry of National Defence Will be determined during the negotiation process
3- Schedule of Necessary Institutional Changes
Institutional changes are not foreseen for this priority,
4- Financing Requirements and Sources of Financing
Financing requirements are not foreseen for this priority.