CLIENT ALERT

July 2018

   

 

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Harmonisation Decrees for the New Presidential System in Turkey

The Turkish government issued decrees adjusting Turkey’s laws to the new presidential system on July 9, 2018.

The main amendments introduced by the decrees are as follows:

Amendments to the Health PPP Law

  • Pursuant to the Decree No 703 dated 9 July 2018 (“Decree No.703”), the President of Republic is empowered to issue regulations on the implementation of the Health PPP Law. Previously, the regulations were prepared by the Ministry of Health and issued by the Council of Ministers upon obtaining the opinions of the Ministry of Finance, Ministry of Development and the Treasury.
  • A provisional article has been added to the Health PPP Law, which provides that in the projects the agreement of which was signed prior to July 9, 2018, in the event that new needs arises during the construction period and such needs cannot be met within the variation limits provided under the agreement, additional variation can be made, only for once, upon request of the Ministry of Health and approval of the President of Republic or a board or authority appointed by the President of Republic. For such variations, which exceed the variation limits provided in the agreement, the consent of the project company shall also be required.

Establishment of the Nuclear Regulatory Authority and NÜTED:

  • The Turkish Nuclear Regulatory Authority (“NRA”) has been established by the Decree No. 702 dated 9 July 2018 (“Decree No. 702”). Its establishment was a long-awaited development in the Turkish energy sector. Reference to the NRA was first made in the Nuclear Power Plants Law No. 5710 dated 9 November 2007, which provided that the Turkish Atomic Energy Authority (“TAEK”) would act as the regulatory control authority until a separate nuclear regulatory authority (i.e. the NRA) is established.
  • The NRA is an independent regulatory authority with separate legal personality and administrative and financial independence. It is empowered to control the nuclear energy and ionizing radiation facilities, and as such, it replaces the role of the TAEK. Pursuant to the Decree No.702, any facilities, equipment and materials which are related to nuclear energy and ionizing radiation are subject to the supervision and regulation of the NRA. The NRA is authorized to issue various licenses and permits to companies operating nuclear energy and ionizing radiation facilities. Through such licenses and permits, the NRA is authorized to supervise and regulate the activities of not only such companies, but also their contractors, suppliers, sub-contractors and sub-suppliers.
  • Pursuant to the Decree No. 702, nuclear power plant operators are obliged to pay a fee of 0.15 US$ cents per kWh that they have generate, to each of the special accounts for the radioactive waste management and decommissioning separately.
  • The Decree No.702 also establishes the Nuclear Technical Support Company (“NÜTED”), which is a joint-stock company operating according to private law rules under the provisions of the Turkish Commercial Code. The NRA will own at least 51% of the shares of NÜTED, to run the services that the NRA will need during the execution of the duties, such as support, analysis, consultancy, audit, training and certification services.
  • The NRA is expected to begin its activities with the initial meeting of the board following the appointment of the president and board members within two months after enactment of the Decree No.702, i.e. by September 9, 2018.

Abolishment of the Privatization High Council

  • The Privatization High Council (the “PHC”) has been abolished with the amendments made to Law No. 4046 on the Privatization Practices under the Decree No. 703.
  • As of the enactment of the Decree No. 703 (i.e. July 9, 2018), all works which were previously assigned to the PHC shall be concluded by the President of the Republic or the authority empowered by the President.

Abolishment of the General Directorate of Renewable Energy

  • The General Directorate of Renewable Energy (the “YEGM”) has been abolished under the Presidential Decree No.1 dated July 10, 2018 and its duties have been transferred to the General Directorate of Energy Affairs (the “EİGM”), which is another general directorate under the auspices of the Ministry of Energy and Natural Resources.
  • With respect to the changes in the structure of the Ministry of Energy and Natural Resources set under the Presidential Decree No. 1, all matters in relation to the renewable energy which were previously concluded by YEGM, shall continue to be concluded by EİGM.

Merger of Türkiye Elektrik ve Taahhüt A.Ş. (TETAŞ) with Elektrik Üretim A.Ş. (EÜAŞ)

  • TETAŞ has been integrated with EÜAŞ with the amendments made to the Energy Market Law No. 6446 by the Decree No. 703.
  • All rights, liabilities and obligations, assets, equipment and personnel of TETAŞ have been transferred to EÜAŞ. EÜAŞ replaces the role of TETAŞ and becomes the subject of any claims and lawsuits filed against TETAŞ.
  • EÜAŞ shall enforce the purchase and sale agreements which were executed under the existing contracts and be authorised to conclude bilateral agreements for the sale and purchase of the electricity power and capacity. Besides it shall be entitled to execute purchase and sale agreements within the scope of existing concession and implementation contracts and power exchange, export and import agreements.
  • EÜAŞ has been authorized to operate in organised wholesale electricity markets.

Establishment of the General Directorate of Mining and Petroleum Exploration

  • Pursuant to the amendments made to the Mining Law No. 3213 by the Decree No. 703, the General Directorate of the Mining Affairs (the “MİGEM”) and the General Directorate of the Petroleum Affairs (the “PİGEM”) have been merged under a new entity named as the General Directorate of Mining and Petroleum Affairs (the “MAPEG”).
  • All assets of MAPEG are regarded as state assets which are non-seizable and any crimes committed against such assets shall be considered as a crime against the state assets.
  • All equipment, goods, written records and documents and personnel of MİGEM and PİGEM have been assigned to MAPEG. Such assignment will be completed under the principles determined by the Ministry of Energy and Natural Resources and MAPEG within six months from July 9, 2018.

 

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