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Short Title
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1. This Law is cited as the Currency and Foreign Exchange Law.
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Objective
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2. The object of this Law is to regulate the procedures and
principles relating to the import and export of foreign currency and securities
to and from the Turkish Republic of Northern Cyprus, and the circulation of
foreign currency and securities in the country.
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Interpretation
39/2001
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3. In this Law, unless the context otherwise requires:
“Banks” means banks operating under the Banking Law of the Turkish
Republic of Northern Cyprus.
“Central Bank” means the Central Bank of the Turkish Republic of
Northern Cyprus.
“Correspondents” means banks abroad where the Banks maintain foreign
currency accounts or with which carry out transactions.
“Effective Money” means moneys introduced by the currency
authorities of foreign countries and in circulation for the time being.
“Foreign Currency” means all forms of accounts and papers including
effective money enabling payments in the currencies of foreign countries.
Foreign Currency Bureaux” means corporate bodies exclusively dealing
in the purchase and sale of foreign currencies and holding “Foreign
Currency Licences” issued by the Ministry under this Law.
“Foreign Exchange” means all
forms of dealings relating to foreign currencies.
“Material Value” means
money, precious metal, precious stones, securities and valuable goods.
“Ministry” means the Ministry responsible for economic affairs
“Money” means the official currency in circulation and all kinds of
foreign currency.
“Official Currency in Circulation” means the Turkish Lira which is
in circulation in the Turkish Republic of Northern Cyprus as official
currency.
“Precious Metal” means gold, silver, platinum, palladium, radium,
iridium, osmium and ruthenium.
“Precious Stones” means diamond, brilliant, sapphire, ruby, emerald
and similar stones.
“Rate of Exchange” means the amount in units of currency in
circulation to be paid for purchasing a unit of foreign currency, and the
amount in units of currency in circulation to be received where a unit of
foreign currency is sold.
“Value Date” means the actual date of final settlement of accounts
in a purchase and sale or exchange transaction.
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Free Use of Official Currency
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4. The importation into and exportation from the Turkish Republic of
Northern Cyprus of the official currency in circulation and its use in any
way inside and outside the country is free.
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Free Use of Foreign currency
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5. Real persons and corporate bodies in the Turkish Republic of
Northern Cyprus are free to possess or have savings in foreign currency, or
use foreign currency as a means of exchange, and in expressing figures in
payment vouchers and contracts.
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Foreign Currency Movements
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6. Transfers and movements of funds, including funds in foreign
currency, into and outside the Turkish Republic of Northern Cyprus by real
persons and corporate bodies are free, provided that such transfers and
movements are carried out through banks and records are kept of the names
and addresses of senders and receivers. The amounts of incoming and
outgoing transfers shall be reported to the Central Bank. The procedure and
principles relating to such reports, including those with reference to the
names and addresses of senders and recipients, shall be regulated by the
Central Bank by notification to be published in the Official Gazette.
Provided that the
provisions of this section shall not apply where material value is acquired
by real persons and corporate bodies through the commission of an offence
leading to proceedings by judicial authorities or to conviction of such an
offence.
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Cash Movements
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7.
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(1)
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The transfer outside the country and the entry into the country of
banknotes and coins are free within the limits laid down by notification to
be issued by the Central Bank and published in the Official Gazette.
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(2)
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Banks are free to transfer banknotes and coins outside the country
in excess of the limits prescribed by the Central Bank.
Provided that such
transfers may be made upon declaring in writing to the Central Bank the
amount to be carried and obtaining a certificate acknowledging the receipt
of such declaration.
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(3)
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Where upon the entry into the country of banknotes in cash arriving
at the Turkish Republic of Northern Cyprus, it is found that the banknotes
brought exceed the limits set out in sub-section (1) of this section,
customs officials shall require a declaration to be made as to the source
of the money and shall send a copy of the declaration to the Central Bank.
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Foreign Exchange Transactions by Banks
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8.
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(1)
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Banks are free to maintain foreign currency accounts, act as
intermediaries in import and export business, open foreign currency
accounts and accept foreign currency savings, deal in the purchase and sale
of foreign currency, carry out transactions with bonds requiring payment in
foreign currency, give loans in foreign currency, maintain foreign currency
balances in accounts at correspondents, pay interest to foreign currency
accounts, receive interest on investments made in foreign currency, take
active part in money and foreign currency markets and carry out any form of
transaction in conformity with international banking practices.
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(2)
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In transactions relating to foreign trade where banks act as
intermediaries, internationally recognised methods of payment and
international practices shall be observed.
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Foreign Currency Bureaux
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9.
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“Foreign Currency Bureaux” to be engaged in buying and selling
foreign currency have to be engaged in this business, and are obliged to
obtain a foreign exchange bureau licence by producing to the Ministry a
certificate that they have paid every year at the latest by the end of the
month of January an annual sum of 1,000 US Dollars “foreign currency
bureau” fee into the treasury account to be opened at the Central Bank. The
requirements for the establishment, operation and licensing of foreign
exchange bureaux shall be regulated by notification to be issued by the
Ministry and published in the Official gazette.
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Fixing Rates of Exchange
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10.
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(1)
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Official Rates of Exchange to be adopted as a basis in official
transactions are fixed daily by the Central Bank and announced by
publication in the Official Gazette.
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(2)
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Banks, foreign exchange bureaux and the Central Bank are free to fix
for their own business purposes their own buying and selling rates of
exchange of foreign currency. Different rates of exchange may be fixed for
the same foreign currency unit depending on the nature of the foreign
currency and the transaction to be carried out, the value date and the due
date of the transaction. Banks and foreign exchange bureaux shall report to
the Central Bank at the close of daily business the minimum buying and
maximum selling rates of exchange that have actually taken place in foreign
currency transactions throughout the day.
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Foreign Currency Accounts and Loans in Foreign Currency
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11.
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(1)
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Real persons and corporate bodies are free to obtain loans in
foreign currency, or lend money in foreign currency, express amounts in
contracts entered mutually by the parties in foreign currency, and effect
necessary payments in foreign currency.
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(2)
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Banks may open foreign currency accounts for real persons and
corporate bodies; and my provide cheque books for current foreign currency
accounts.
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(3)
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The capital and interest accruing thereon in foreign currency
accounts opened in banks are payable in the same kind of foreign currency,
provided that where a request is made by the account holder, transactions
in a different kind of foreign currency or in official currency in
circulation may be made..
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(4)
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In the absence of an agreement to the contrary, loans given by banks
in foreign currency or moneys borrowed shall be paid to the bank in the
same kind of foreign currency.
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Reports Relating to Foreign Currencies
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12.
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Banks and foreign currency bureaux shall send to the Central Bank
the reports relating to the balances of foreign currency maintained by them
and foreign currency transactions which they have carried out. Procedures
and principles regulating the form, requirements and contents of the
reports shall be laid down by the Central Bank.
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Securities
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13.
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(1)
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Real persons and corporate bodies in the Turkish Republic of
Northern Cyprus are free to make direct investments abroad, to buy and
sell, import into or export outside the country, and hold in possession
stocks and shares, bonds, debentures, options and any other kind of
securities dealt with in financial markets inside and outside the country.
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(2)
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Real persons and corporate bodies residing abroad may invest in and
hold in their possession all kinds of securities inside the Turkish
Republic of Northern Cyprus.
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40/1996
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(3)
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Real persons and corporate bodies which will be engaged
professionally in the purchase and sale of securities shall operate in
conformity with the provisions of the Stock Exchange Law.
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Precious Metals and Precious Stones
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14.
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(1)
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Real persons and corporate bodies are free to hold in possession and
trade in precious metals and precious stones and articles made of them. ..
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(2)
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The limits, procedures and principles governing the importation and
exportation of precious metals and precious stones shall be laid down in
Regulations to be issued by the Council of Ministers and published in the
Official Gazette.
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Offences and Penalties
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15.
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(1)
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Real Persons and/or corporate bodies who contravene the provisions
of sections 6, 7, 9 and 14 of this Law and the directors and managers in
charge of corporate bodies and/or persons who have actually contributed to
any act contravening the provisions of the said sections shall be guilty of
an offence, and may, on conviction be liable to a fine up to 1,000,000,000
TL (one billion Turkish Liras) or to imprisonment up to ten years or to
both.
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(2)
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Real persons and corporate bodies who contravene the provisions of
this Law and of the rules made under this Law, and the directors, managers
in charge of corporate bodies and/or persons actually contributing to the
act contravening the said provisions shall be guilty of an offence and may,
on conviction be liable to a fine up to 1,000,000,000 TL (one billion
Turkish Liras) or to imprisonment up to ten years or to both
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Repeals
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16.
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Without prejudice to any act done or to be done under them the
following legislation shall be repealed as from the date of entry into
force of this Law:
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38/1992
22/1987
46/1992
46/1994
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(1)
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Currency and Foreign Exchange Law.
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4/1979
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(2)
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Foreign Currency Stabilisation Law.
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Notif.603 O.G.02.11.87
Notif.453 O.G:13.10.88
Notif.528 OG 12.12.88
Notif.483 O.G 03.11.89
Notif.539 O:G:25.10.91
Notif.639 O:G 20.12.91
Notif.268 O:G 25.06.92
Notif.540 O.G 16.12.92
Notif.154 O:G:12.04.93
Notif.165 O:G 01.03.95
Notif.438 O:G 09.05.96
Notif.474 O:G 24.05.96
Notif.509 O:G 01.06.96
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(3)
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Currency and Foreign Exchange Regulations.
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(4)
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Orders, resolutions and notifications issued under the foregoing
Laws and Regulations.
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