Some amendments have been added to Law No. 7226 on Amendments of Certain Laws, issued on 26.03.2020, regarding the unpaid cheques and outstanding receivables not being evaluated by credit rating agencies.
#1 What is the new regulation?
Provisional Article 2 added to the Law No. 5834 about Omission of Past Records for Unpaid Checks and Protested Promissory Notes, and Credit and Credit Card is:
“(1) The records maintained by the Risk Center of Banks Association of Turkey that was established by the Supplementary Article No.1 of the Banking Law No. 5411 (regarding bad cheques, protested bills, credit card and other credit debts of real persons who engaged in or not in commercial activities), shall not be taking into consideration by the financial institutions or credit rating agencies if the principal or interest due date is before 24.03.2020, and the real or legal persons, who disrupted the payment of principal, interest, or secondary cash or non-cash credits, pay, or restructure of the arrears part of the unpaid cash and non-cash loans until 31.12.2020.
(2) Restructuring existing loans or issuing new loans according to the provisions of the first paragraph does not form any legal or criminal liability for such credit rating agencies or financial institutions.”
What does it tell us?
With the mentioned regulation, ease for payment has been provided for debtors who have difficulty in payment of credit or bill of exchange; and it is aimed to revive commercial life by reducing the restrictive effect of late payments on commercial activities and transactions following the outbreak. Briefly, if the unpaid debts that were due before 24.03.2020 are to be paid or restructured until 31.12.2020, the records maintained by the Risk Centre of Banks Association of Turkey shall not be taken into consideration in financial transactions made with such individuals.
#2 What is the new regulation?
Some of the amendments that we consider particularly noteworthy regarding the “Provisional Article 5” added to the Cheque Law No. 5941 are given below. For a detailed examination, it is recommended to read the whole article.
- The execution of the punishment of individuals who have been convicted for committing the crime defined in Article 5 of the law, before 24.03.2020, shall be suspended starting from the date that this article enters into force.
- The convicted persons have to pay one-tenth of the unpaid amount of the check at the latest within three months of the release date.
- Following the end of the three months, the remaining part of the payment can be paid in fifteen equal installments with an interval of two months.
- If the payment is completed under the conditions above, the court shall decide for the criminal conviction to be abolished with all consequences.
- If one-tenth of the unpaid amount of the check is not paid within three months from the date of release, upon the claim of the creditor, the court shall decide to proceed with the execution of the order.
- If the convicted person does not pay one of the installments for the first time in due, the unpaid installment shall be added as a further installment at the end of the period. If the convicted person does not pay another installment, upon the claim of the creditor, the court shall decide to proceed with the execution of the order.
- The provisions of this article may be applied only once for each offense.
What does it tell us?
To reduce the number of entry into prison for those convicted of this crime, an opportunity to pay the check amount to the creditor is granted to the persons who were sentenced for issuing bad checks before 24.03.2020. If the cheque amount is paid under the procedure and terms stated above, all consequences of issuing a bad check shall be abolished, as if no penal has been ruled.
We would like to remind you that this regulation concerns only the individuals who have already been convicted until 24.03.2020. That is, it does not concern individuals who have not yet been convicted or no legal action has been proceeded against yet or the persons who have a bad check, which they paid neither partially nor completely. We are expecting a broader regulation to be issued on this matter.
#3 Periods regarding the use of legal rights
In-Law No. 7226 On Amendments of Certain Laws, dated 26.03.2020, there is some suspension of periods on using legal rights, besides other regulations.
The legal periods for the rightful owner to use their rights have been suspended; regulations have been made to ensure that the courts and enforcement and bankruptcy offices do not process non-urgent legal transactions until 30.04.2020. That is, judicial and enforcement and bankruptcy activities are suspended for a while except for urgent transactions.
Some major notes from the regulation:
- All legal periods regarding the establishment, use or abolishment of a right including filing a lawsuit, commencing execution proceedings, applications, complaints, objections, warnings, notifications, submissions, periods of prescription, periods of limitation and obligatory administrative applying periods,
- Legal periods under The Administrative Jurisdiction Procedure Law, The Criminal Procedure Law and The Civil Procedures Law and other laws in which procedural provisions are specified for the parties, and the periods determined by the judge within the scope of them,
- Legal periods determined in The Enforcement and Bankruptcy Law and other laws related to enforcement proceedings, and periods determined by the judge or the executive and bankruptcy offices within this scope,
- Legal Periods in mediation and conciliation institutions,
- All enforcement and bankruptcy proceedings, except for the enforcement proceedings of the alimony receivables,
- Parties and executive proceeding transactions,
- Receiving new execution and bankruptcy follow-up requests,
- Transactions regarding enforcement and execution of precautionary attachment decisions have been suspended until 30/4/2020 (included). This date may be extended by the President.
- The periods will begin to run on the following day that the suspension period ends.
- As of the starting date of the suspension period, periods that expire in fifteen days or less are to be counted as extended for fifteen days, following the day that the suspension period ends
- The following periods are excluded from the scope of the regulation:
- Periods of limitation on crime and punishment, misdemeanor and administrative sanctions and disciplinary imprisonments and preventive detentions
- Periods for protection measures under the Turkish Criminal Law No. 5271
- Periods for complementary transactions to provisional injunctions regulated under the Civil Procedures Law No. 6100
- Regarding the scope of the Enforcement and Bankruptcy Law No. 2004, and other laws related,
- If the sale day announced by the enforcement and bankruptcy office regarding the goods or rights is within the suspension period, without the need for a new request, a sale day shall be determined for these goods and rights by the enforcement and bankruptcy offices after the suspension period. In this case, the announcement of the sale is made only electronically and no fee is paid for the announcement.
- Payments that are done willingly during the suspension period shall be accepted and one party may request that transactions be made in favor of the other party.
- The consequences of the concordat period in terms of creditors and borrowers continue during the suspension period.
Disclaimer: This information and our comments above are for guidance purposes only and should not be regarded as a substitute for taking legal advice. Vona Law Office makes every effort to ensure accurate and up to date content, however, it may not reflect the most current legal developments based on the amendments on the applicable laws and legislations after the publishment of this article. Therefore, nothing in this article should be considered as legal advice and you should consult with lawyers before making any decision or taking any action based on the information included in this article.