The New Turkish Code of Obligations, which came into force on 1st July, 2012, brought certain changes to form requirements in respect of sureties and guarantees to be issued by real persons and legal entities. The most criticised new rule has been the requirement for provision of a letter of consent by the spouse of the real person issuing the personal guarantee or surety. In the absence of such letter, the personal guarantee or surety issued is deemed invalid. Turkish businessmen have been lobbying the Government to change this requirement given the difficulties it caused in practice.
The lobbying efforts seem to have produced results as the Ministry of Customs and Commerce disclosed last week that the Council of Ministers has prepared a draft bill for amendment of the subject rule and has forwarded the draft bill to the relevant commission of the Parliament. Under the draft bill, the spousal letter of consent requirement is lifted for commercial loans provided that the personal guarantee or surety will be issued by a person who is a shareholder of the borrowing entity.
If the draft bill is passed by the Parliament, it shall obviate the need to obtain spousal consent letters in connection with most commercial loans extended.
This Client Alert is published by Ersoy Bilgehan as a reporting service to the clients and friends of the firm.
This Client Alert is published by Ersoy Bilgehan as a reporting service to the clients and friends of the firm. The information contained in this document is not intended to be read as legal advice on the subject matter hereof. For further analysis or explanation on the matters discussed herein, please contact either of Ms. Gulistan Baltaci ([email protected]) or Mr. Semih Sander ([email protected]) from
(+90) 212 213 23 00.
