RESTRICTED
WORLD TRADE GATS/SC/88/Suppl.1
28July1995
ORGANIZATION(95-2252)
Trade inServices
TURKEY
Schedule ofSpecific Commitments
Supplement 1
(This isauthentic inEnglish only)
__________________
This textreplaces theFinancial Services section contained inpages 19to31of
document GATS/SC/88.TURKEY -SCHEDULE OFSPECIFIC COMMITMENTS
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
7. FINANCIAL SERVICES
1. Turkey undertakes commitments onFinancial Services inaccordance withtheprovisions ofthe"Understanding onCommitments inFinancial
Services" (theUnderstanding).
2. Themarket access commitments inrespect ofmodes (1)and(2)apply onlytothetransactions indicated inparagraphs 3and4ofthemarket
access section oftheUnderstanding respectively.
3. Theadmission tothemarket ofnewfinancial services orproducts maybesubject totheexistence of,andconsistency with, aregulatory
framework aimed atachieving theobjectives indicated inArticle 2.1oftheFinancial Services Annex.
Measures applicable toallsectors infinancial services
Banking Establishment ofabankwhich hasto
beintheform ofajoint-stock company
andopening ofthefirstbranch ofa
foreign bankrequire authorization from
theCouncil ofMinisters.
Foreign banks wishing toestablish
branches orrepresentative offices must
notbeprohibited from performing
banking operations intheircountry of
origin orinthecountries where they
operate.
According totheBanks Act,lending
limits forthebranches offoreign banks
arebased onbranch capital rather than
worldwide capital.
GATS/SC/88/Suppl.1
Page1TURKEY (continued) GATS/SC/88/Suppl.1
Page2
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Theestablishment ofdomestic or
foreign banks aswellasthefirst
branch ofanon-resident bankare
subject tothesame amount of
minimum capital requirement.
Acquisition ortransfer oftheshares
representing aratioequal orhigher
than5,20,33and50percentofthe
capital issubject totheauthorization of
theUndersecretariat ofTreasury.
Insurance Inorder tobeestablished inTurkey,
insurance andreinsurance companies
havetobefounded intheform ofa
joint-stock oramutual company.
Foreign insurance andreinsurance
companies mayopenabranch aswell.
Establishment ofinsurance and
reinsurance companies oropening ofa
branch ofaforeign insurance ora
reinsurance company issubject toprior
permission oftheMinistry ofState.
Following theestablishment, operation
licence from Undersecretariat of
Treasury must beobtained inorder to
startinsurance orreinsurance business.Branch managers offoreign insurance
andreinsurance companies must reside
inTurkey.
Foreign commercial presence or
presence offoreign natural persons
regarding services auxiliary to
insurance ispermitted onlyfor
consultancy andriskmanagement
services.TURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Aforeign insurance orreinsurance
company wishing toopenabranch in
Turkey must notbeprohibited from
operating initscountry oforigin orin
theother countries where itoperates.
Establishment issubject toaminimum
paid-in capital requirement aswell.
Acquisition ortransfer ofshares
representing 10,20,33,50percentor
higher ofthecapital issubject tothe
authorization ofUndersecretariat of
Treasury.
Engaging ofnatural persons in
brokerage business orestablishment of
aninsurance andreinsurance broker
company oropening ofabranch ofa
foreign insurance andreinsurance
broker company inTurkey issubject to
prior permission andobtaining
operation licence from Undersecretariat
ofTreasury. Such afirmmust be
founded intheform ofajoint-stock or
alimited liability company, andmust
possess therequired minimum paid-in
capital.
GATS/SC/88/Suppl.1
Page3TURKEY (continued) GATS/SC/88/Suppl.1
Page4
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Securities marketInsurance andreinsurance
intermediaries havetoreside in
Turkey.
Fortheestablishment ofcapital market
institutions thepermission ofthe
Capital Market Board isrequired. If
banks orinsurance companies apply to
theBoard toform amutual fund, the
opinion oftheUndersecretariat of
Treasury hastobeobtained tofinalize
theapplications. Establishment of
branches andagencies bynon-bank
intermediary institutions established in
Turkey alsorequires theBoard 's
permission.Establishment ofbranches and
representative offices offoreign
non-bank intermediary institutions is
notpermitted.
Intermediary institutions andinvestment
corporations canonlybeestablished in
theform ofajoint-stock company.
Additionally, operations ofallcapital
market institutions aresubject tothe
permission oftheBoard. While giving
suchpermission, theBoard issues
"Authorization Certificates" forthe
activities tobecarried outbyeach
institution.TURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Non-bank financial
institutions
A.Financial leasing
companiesFinancial leasing companies canonly
beestablished intheform ofa
joint-stock company.
Establishment ofandopening abranch
ofaleasing company aswellas
opening abranch ofaforeign leasing
company arerequired prior permission
oftheMinistry ofState towhich the
Undersecretariat ofTreasury is
attached.
Aminimum paid-in capital isrequired
fortheestablishment ofaleasing
company andfortheopening abranch
byaforeign leasing company.
Foreign financial leasing companies
mayopenbranches inTurkey provided
thattheyareauthorized todealin
financial leasing intheirhome country
orinthecountries where theyoperate.Theminimum paid-in capital required
foropening abranch byaforeign
leasing company ismore thanthatof
establishing acompany.
GATS/SC/88/Suppl.1
Page5TURKEY (continued) GATS/SC/88/Suppl.1
Page6
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
B.Factoring and
consumer credit
companiesFactoring companies andconsumer
credit companies must beestablished in
theform ofajoint-stock company.
Fortheestablishment ofthese
companies, prior permission ofthe
Undersecretariat ofTreasury must be
obtained andminimum paid-in capital
isrequired.
C.Authorized institutions
(foreign exchange
dealers)Inorder toengage inactivities asan
authorized institution, thepermission of
theUndersecretariat ofTreasury must
beobtained.
Authorized institutions must be
incorporated intheform ofa
joint-stock company. Establishment of
anauthorized institution andopening a
branch offoreign legalentities
performing similar activities
necessitates aminimum capital
requirement which isanequal amount
forbothresidents andnon-residents.TURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
D.Precious metals
exchangePrecious metals intermediaries (banks,
authorized institutions, precious metals
intermediary institutions andthe
branches which shallbeestablished in
Turkey ofsimilar institutions abroad)
canonlyoperate inIstanbul Gold
Exchange. Inorder toengage in
activities asprecious metals
intermediaries, thepermission ofthe
Undersecretariat ofTreasury must be
obtained.
Precious metals intermediary
institutions must beincorporated inthe
form ofajoint-stock company.
GATS/SC/88/Suppl.1
Page7TURKEY (continued) GATS/SC/88/Suppl.1
Page8
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
A.Insurance and
insurance related
services
(a)Direct insurance
(i)Non-life (1),(2)Unbound except:
(a)Thehullinsurance ofaircraft,
helicopters andships which
arepurchased through a
foreign loanorleased through
afinancial leasing contract
from abroad, provided that
theinsurance period islimited
tothetermofthecredit or
leasing contract.
(b)Marine liability insurance.
(c)Transportation insurance of
imported andexported goods.
(d)Individual accident, sickness
andmotor vehicle insurance
during anytravel abroad.(1),(2)NoneTURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(3)None (3)Compulsory traffic insurance of
publicly owned motor vehicles
canonlybedonebythose
insurance companies whose
majority ofpaid-in capital
belongs toTurkish citizens.
(4)None (4)None
(ii)Life (1),(2)None
(3)None(1),(2)None
(3)Acertain percentofpaid
insurance premium isdeducted
from gross wages andcorporate
income inorder todetermine real
individual andcorporate taxable
income. However, thisdeduction
isnotmade forpremiums paidto
branches offoreign insurance
companies.
(4)None (4)None
GATS/SC/88/Suppl.1
Page9TURKEY (continued) GATS/SC/88/Suppl.1
Page10
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(b)Reinsurance and
retrocession(1),(2)Non-life insurance premiums,
afterholding theretention, are
subject toacertain percent
compulsory ceding toMilli
Reinsurance Co.Ifthetotal
retention ratiooftheinsurance
company reaches to75percent,
compulsory ceding iscancelled.(1),(2)None
(3)None (3)None
(4)None (4)None
(c)Insurance
intermediation(1),(2)Unbound fordependent
intermediaries (agencies,
producers). Dependent
intermediaries canactonlyon
behalf ofinsurance companies
authorized tooperate inTurkey.(1),(2)None
(3)Insurance andreinsurance brokers
andfullyauthorized agencies can
onlyengage ininsurance related
business.(3)None
(4)Unbound except administrative and
technical personnel.(4)NoneTURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(d)Services auxiliary to
insurance(1),(2)None except adjusters.
(3)None
(4)None except adjusters.(1),(2)Adjusters havetobeTurkish
citizens.
(3)None
(4)Adjusters havetobeTurkish
citizens.
B.Banking andother
financial services
(e)Acceptance ofdeposit (1),(2)None (1),(2)None
(3)Norealperson orlegalentity
other thanthose authorized under
theBanks Actorunder specific
lawsmayaccept deposits.(3)None
(4)None (4)None
GATS/SC/88/Suppl.1
Page11TURKEY (continued) GATS/SC/88/Suppl.1
Page12
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(f)Lending ofalltypes
(i)Consumer credit (1),(2)None
(3)Banks andconsumer credit
companies maylendconsumer
credits.
(4)None(1),(2)None
(3)None
(4)None
(ii)Factoring (1),(2)None
(3)Banks andfactoring companies can
engage infactoring activities.
(4)None(1),(2)None
(3)None
(4)None
(iii)Mortgage credit
andfinancing of
commercial
transactions(1),(2)None
(3)Banks canengage intrading of
these activities.
(4)None(1),(2)None
(3)None
(4)NoneTURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(g)Financial leasing (1),(2)Leasing contracts related to
cross-border leasing transactions
must bepermitted bythe
Undersecretariat ofTreasury.
(3)Financial leasing companies can
engage infinancial leasing
transactions.
(4)None(1),(2)Regarding cross-border
leasing transactions, theannual
rentmaynotbelessthanthe
Turkish Liraequivalent of
US$25,000.
(3)None
(4)None
(h)Allpayment and
money transmission
services(1),(2)None
(3)Transfers offoreign exchange
abroad must becarried outthrough
thebanking system.(1),(2)None
(3)None
(4)None (4)None
(i)Guarantees and
commitments(1),(2)None except thatperformance
bonds withthetransactions
specified intheState Tender Law
must beobtained from abank
operating inTurkey.(1),(2)None
(3)None (3)None
(4)None (4)None
GATS/SC/88/Suppl.1
Page13TURKEY (continued) GATS/SC/88/Suppl.1
Page14
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(j)Trading forown
account orforaccount
ofcustomer
(i)Money market
instruments(1),(2)None (1),(2)None
(3)Capital Market Institutions* can
engage intrading ofmoney market
instruments.(3)None
(4)None (4)None
(ii)Foreign exchange (1),(2)None (1),(2)None
(3)Banks andauthorized institutions
canengage inforeign exchange
trading(3)None
(4)None (4)None
(iii)Derivative
products(1),(2)None
(3)Banks canengage intrading of
these activities.
(4)None(1),(2)None
(3)None
(4)None
*According totheCapital Market Law, capital market institutions arespecified asfollows:
(a) Banks andnon-bank intermediary institutions.
(b) Investment Corporations.
(c) Mutual Funds.
(d) Other capital market institutions permitted tooperate inthecapital market such asclearing andcustodial houses, rating andauditing institutions, etc.TURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(iv)Exchange rate
andinterest rate
instruments(1),(2)None
(3)Banks canengage intrading of
these instruments. Capital Market
institutions other thanbanks,
authorized toactasintermediaries
forthecontracts regarding
financial indicators, capital market
instruments, commodities and
precious metals, canalsoengage in
trading ofthese instruments.
(4)None(1),(2)None
(3)None
(4)None
GATS/SC/88/Suppl.1
Page15TURKEY (continued) GATS/SC/88/Suppl.1
Page16
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(v)Transferable
securities(1),(2)None
(3)TheCapital Market Institutions can
engage intrading oftransferable
securities.(1),(2)None
(3)None
(4)None (4)None
(vi)Other negotiable
instruments and
financial assets,
including bullion(1),(2)None
(3)Thecapital market institutions can
engage intrading ofthese
instruments andassets. However,
precious metals intermediaries can
engage intrading ofbullion.
(4)None(1),(2)None
(3)None
(4)None
(k)Underwriting and
placement(1),(2)None
(3)Banks andnon-bank intermediary
institutions canprovide
underwriting andplacement
services forthesecurities tobe
issued afterbeing registered bythe
Capital Market Board.(1),(2)None
(3)None
(4)None (4)None
(l)Money broking (1),(2),(3).(4)Seeheadnote (3)on
Financial Services.TURKEY (continued)
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(m)Asset management
portfolio management(1),(2)None
(3)Banks andintermediary institutions
canprovide these services.(1),(2)None
(3)None
(4)None (4)None
(i)Collective
investment
management(1),(2)None
(3)Mutual funds andinvestment
corporations canengage in
collective investment management.(1),(2)None
(3)None
(4)Themajority ofthemembers of
theboard ofdirectors ofan
investment corporation must have
Turkish nationality.(4)None
(ii)Pension fund
management(1),(2),(3),(4)Seeheadnote (3)on
Financial Services.
(iii)Custodial,
depository and
trustservices(1),(2)None
(3)Banks andnon-bank intermediary
institutions operating incapital
market canprovide custodial
services fortheircustomers '
securities, untiltheirbuying-selling
orders arerealized.(1),(2)None
(3)None
(4)None (4)None
GATS/SC/88/Suppl.1
Page17TURKEY (continued) GATS/SC/88/Suppl.1
Page18
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(n)Settlement and
clearing services(1),(2)None
(3)Only theclearing house established
within theStock Exchange of
Istanbul provides these services.(1),(2)None
(3)None
(4)None (4)None
(o)Provision andtransfer
offinancial
information(1),(2)None
(3)None(1),(2)None
(3)None
(4)None (4)None
(p)Advisory,
intermediation and
other auxiliary
services(1),(2)None
(3)Intermediation andintermediary
services canbeprovided bybanks
andintermediary institutions.(1),(2)None
(3)None
(4)None (4)None