WORLD TRADE GATS/SC/88/Suppl.3
26February 1998
ORGANIZATION(98-0668)
Trade inServices
TURKEY
Schedule ofSpecific Commitments
Supplement 3
(This isauthentic inEnglish only)
____________________
Thistextreplaces theFinancial Services section contained indocument GATS/SC/88/Suppl.1.GATS/SC/88/Suppl.3
Page2TURKEY
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 (such assubsectors B/landB/m-ii) maybesubject totheexistence of,andconsistency
with, aregulatory framework aimed atachieving theobjectives indicated inArticle 2.1oftheFinancial Services Annex.
Measures applicable toallsectors infinancial services
Banking (3)Establishment ofabank which hasto
beintheform ofajoint-stock
company andopening ofthefirst
branch ofaforeign bank require
authorization from theCouncil of
Ministers. According tothe
prevailing circumstances, the
Undersecretariat ofTreasury may
require additional conditions, which
aredetermined byaregulation, forthe
establishment ofabank oropening the
firstbranch ofaforeign bank in
Turkey. Following theestablishment,
operation license from
Undersecretariat ofTreasury must be
obtained inorder tostartcollecting
deposits orexecute banking
operations.(3)NoneGATS/SC/88/Suppl.3
Page3Modes 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 ofadditional
branches bythebanks issubject tothe
meeting ofthecriteria andratios
required bytheUndersecretariat of
Treasury. TheUndersecretariat has
theright tolimit orprohibit the
additional branch establishment, if
necessary.
According totheBanks Act,lending
limits forthebranches offoreign
banks arebased onbranch capital
rather thanworldwide capital.
Theestablishment ofdomestic or
foreign banks aswellasthefirst
branch ofanon-resident bank are
subject tothesame amount of
minimum capital requirement.
Acquisition ortransfer oftheshares
representing aratio equal orhigher
than5,20,33and50percent ofthe
capital issubject totheauthorization
oftheUndersecretariat ofTreasury.
Insurance (3)Inorder tobeestablished inTurkey,
insurance andreinsurance companies
have tobefounded intheform ofa
joint-stock oramutual company.
Foreign insurance andreinsurance
companies mayoperate inTurkey by
opening branches aswell.
However, reinsurance companies can
doreinsurance business without
fulfilling establishment conditions
mentioned above.(3)NoneGATS/SC/88/Suppl.3
Page4Modes 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
Establishment ofinsurance and
reinsurance companies oropening ofa
branch ofaforeign insurance ora
reinsurance company issubject to
prior permission oftheMinistry of
State. Following theestablishment,
operation licence from
Undersecretariat ofTreasury must be
obtained inorder tostartinsurance or
reinsurance business.
Acquisition ortransfer ofshares
representing 10,20,33,50percent or
higher ofthecapital issubject tothe
authorization ofUndersecretariat of
Treasury.
(3),(4) Engaging ofnatural persons in
brokerage business orestablishment of
aninsurance andreinsurance broker
company oropening ofabranch ofa
foreign insurance andreinsurance
broker company inTurkey issubject
toprior permission andobtaining
operation licence from
Undersecretariat ofTreasury. Such a
firmmust befounded intheform ofa
joint-stock oralimited liability
company, andmust possess the
required minimum paid-in capital.(3),(4) None
Foreign commercial presence or
presence offoreign natural persons
regarding services auxiliary to
insurance ispermitted onlyfor
consultancy andriskmanagement.GATS/SC/88/Suppl.3
Page5Modes 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 market(4)Natural person insurance and
reinsurance brokers have toreside in
Turkey andtheymust have atleast
5years ofexperience asbrokers in
their countries oforigin.
(3)Fortheestablishment ofcapital
market institutions (*)thepermission
oftheCapital Market Board is
required. Ifbanks orinsurance
companies apply totheBoard toform
amutual fund ortoincrease fund
capital, theopinion ofthe
Undersecretariat ofTreasury hastobe
obtained tofinalize theapplications.
Establishment ofbranches and
agencies bysecurities intermediary
institutions established inTurkey also
requires theBoard 'spermission. The
permission oftheBoard isrequired
forobtaining 5percent ormore ofthe
capital ofalready established securities
intermediary institutions byone
shareholder (natural orlegal persons).(4)None
(3)None
*According totheCapital Market Law, capital market institutions arespecified asfollows:
(a) Securities 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.GATS/SC/88/Suppl.3
Page6Modes 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
Intermediary institutions, investment
corporations, portfolio management
companies andrating agencies can
onlybeestablished intheform ofa
joint-stock company.
Establishment ofbranches and
representative offices offoreign
non-bank intermediary institutions is
notpermitted.
Additionally, operations ofallcapital
market institutions andbanks are
subject tothepermission oftheBoard.
While giving such permission, the
Board issues "Authorization
Certificates" fortheactivities tobe
carried outbyeach institution.
Rating agencies should have aknow-
howagreement withaninternational
rating agency recognized bythe
Board. Incaseofpartnership withan
international rating agency recognized
bytheBoard, theshare ofthe
international rating agency shall notbe
lessthan25percent ofthecapital of
thedomestic rating agency.GATS/SC/88/Suppl.3
Page7Modes 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
OTHER FINANCIAL
SERVICES
A.Financial leasing service (3)Financial leasing companies (lessors)
canbeestablished (a)intheform ofa
joint-stock company, and(b)through
theestablishment andopening ofa
branch ofalessor, aswellasopening
ofabranch ofaforeign lessor. Inthe
caseof(b),subject toprior permission
oftheMinistry ofState towhich the
Undersecretariat ofTreasury is
attached.(3)Theminimum paid-in capital required
foropening abranch byaforeign
lessor ismore thanthatof
establishing acompany.
B.Factoring andconsumer
credit services(3)Factoring companies andconsumer
credit companies must beestablished
intheform ofajoint-stock company.
Fortheestablishment ofthese
companies, prior permission ofthe
Undersecretariat ofTreasury must be
obtained.(3)None
C.Authorized institutions
(foreign exchange
dealers)(3)Inorder toengage inactivities asan
authorized institution, thepermission
oftheUndersecretariat ofTreasury
must beobtained.
Authorized institutions must be
incorporated intheform ofa
joint-stock company.(3)NoneGATS/SC/88/Suppl.3
Page8Modes 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
exchange(3),(4) Precious metals intermediaries
(banks, authorized institutions,
precious metals intermediary
institutions aswellasresident and
non-resident natural orlegal persons)
canoperate inIstanbul Gold Exchange
after being granted theoperation
licence bytheUndersecretariat of
Treasury andbeing registered bythe
Istanbul Gold Exchange.(3),(4) None
A.Insurance andinsurance
related services
(a)Direct insurance
(i)Non-life (1),(2) Unbound except:
(a)Thehullinsurance ofaircrafts,
helicopters andships which are
purchased through aforeign loan
orleased through afinancial
leasing contract from abroad,
provided thattheinsurance period
islimited totheterm ofthecredit
orleasing contract;
(b)marine liability insurance;
(c)transportation insurance of
imported andexported goods;
(d)individual accident, sickness and
motor vehicle insurance during
anytravel abroad.(1),(2) NoneGATS/SC/88/Suppl.3
Page9Modes 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 can
onlybedone bythose insurance
companies whose majority ofpaid-in
capital belongs toTurkish citizens.
(4)None (4)None
(ii)Life (1)Unbound
(2)None
(3)Acertain percent ofpaidinsurance
premiums isdeducted from gross
wages andcorporate income inorder
todetermine realindividual and
corporate taxable income. Inorder to
benefit from thisfacility, life
insurance policies must beconcluded
withtheinsurance companies orthe
branches offoreign insurance
companies established inTurkey.(1)None
(2)None
(3)None
(4)None (4)None
(b)Reinsurance and
retrocession(1),(2) Non-life insurance premiums,
after holding theretention, aresubject
toacertain percent compulsory ceding
toMilli Reinsurance Co. Ifthetotal
retention ratio oftheinsurance
company reaches to75percent,
compulsory ceding iscancelled.(1),(2) None
(3)None (3)None
(4)None (4)NoneGATS/SC/88/Suppl.3
Page10Modes 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
(c)Insurance intermediation (1),(2) Unbound fordependent
intermediaries (agencies, producers).
Dependent intermediaries canactonly
onbehalf ofinsurance companies
authorized tooperate inTurkey.(1),(2) None
(3)Insurance andreinsurance brokers and
fully authorized agencies canonly
engage ininsurance-related business.(3) None
(4)Unbound except administrative and
technical personnel.(4) None
(d)Services auxiliary to
insurance(1),(2) None except adjusters and
actuaries.
(3)None
(4)None except adjusters andactuaries.(1),(2) None
(3) None
(4) None
B.Banking andother
financial services
(e)Acceptance ofdeposits (1),(2) None (1),(2) None
(3)Nonatural person orlegal entity other
thanthose authorized under theBanks
Actorunder specific regulations may
accept deposits.(3) None
(4)None (4) NoneGATS/SC/88/Suppl.3
Page11Modes 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 ofthese
activities.
(4)None(1),(2) None
(3) None
(4) None
(g)Financial leasing (1),(2) Leasing contracts related to
cross-border leasing transactions must
bepermitted bytheUndersecretariat
ofTreasury.
(3)Lessors canengage infinancial leasing
transactions.
(4)None(1),(2) Regarding cross-border leasing
transactions, theannual rent
maynotbelessthantheTurkish
Liraequivalent of$25,000.
(3) None
(4) NoneGATS/SC/88/Suppl.3
Page12Modes 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
(h)Allpayment andmoney
transmission services(1),(2) None
(3)Transfers offoreign exchange abroad
must becarried outthrough the
banking system.(1),(2) None
(3) None
(4)None (4) None
(i)Guarantees and
commitments(1),(2) None except thatperformance
bonds withthetransactions specified
intheState Tender Lawmust be
obtained from abank operating in
Turkey.(1),(2) None
(3)None (3) None
(4)None (4) None
(j)Trading forownaccount
orforaccount of
customer
(i)Money market
instruments(1),(2) None (1),(2) None
(3)Banks andsecurities intermediary
institutions canengage intrading of
money market instruments.(3 None
(4)None (4) None
(ii)Foreign exchange (1),(2) None (1),(2) None
(3)Banks andauthorized institutions can
engage inforeign exchange trading.(3) None
(4)None (4) NoneGATS/SC/88/Suppl.3
Page13Modes 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
(iii)Derivative products (1),(2) None
(3)Banks andrelated intermediary
institutions canengage intrading of
these products.
(4)None(1),(2) None
(3) None
(4) None
(iv)Exchange rateand
interest rate
instruments(1),(2) None
(3)Banks andrelated intermediary
institutions canengage intrading of
these instruments.
(4)None(1),(2) None
(3) None
(4) None
(v)Transferable
securities(1),(2) None
(3)Banks andsecurities intermediary
institutions canengage intrading of
these products.(1),(2) None
(3) None
(4)None (4) None
(vi)Other negotiable
instruments and
financial assets,
including bullion(1),(2) None
(3)Banks andrelated intermediary
institutions canengage intrading of
these products. Only precious metals
intermediaries canengage intrading
ofbullion intheIstanbul Gold
Exchange.
(4)None(1),(2) None
(3) None
(4) NoneGATS/SC/88/Suppl.3
Page14Modes 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
(k)Underwriting and
placement(1),(2) None
(3)Banks andsecurities intermediary
institutions canprovide underwriting
andplacement services forthe
securities tobeissued after being
registered bytheCapital Market
Board.(1),(2) None
(3) None
(4)None (4) None
(l)Money broking*(1),(2),(3),(4) None (1),(2),(3),(4) None
(m)Asset management
portfolio management(1),(2) None
(3)Banks, securities intermediary
institutions andportfolio management
companies 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 incollective
investment management.(1),(2) None
(3) None
(4)Themajority ofthemembers ofthe
board ofdirectors ofaninvestment
corporation must have Turkish
nationality.(4) None
*Thisisanewfinancial service.GATS/SC/88/Suppl.3
Page15Modes 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
(ii)Pension fund
management*(1),(2),(3),(4) None (1),(2),(3),(4) None
(iii)Custodial,
depository andtrust
services(1),(2) None
(3)Banks andsecurities intermediary
institutions operating incapital market
canprovide custodial services fortheir
customers 'securities, until their
buying-selling orders arerealized.(1),(2) None
(3) None
(4)None (4) None
(n)Settlement andclearing
services(1),(2) None
(3)Only Takasbank A.S¸.canprovide
securities settlement andclearing
services.(1),(2) None
(3) None
(4)None (4) None
(o)Provision andtransfer of
financial information(1),(2) None
(3)None(1),(2) None
(3) None
(4)None (4) None
*Thisisanewfinancial service.GATS/SC/88/Suppl.3
Page16Modes 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
(p)Advisory, intermediation
andother auxiliary
services(1),(2) None
(3)None
(4)None(1),(2) None
(3) None
(4) None