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S P R I N G 2 0 1 5
47
terms will prevail if there are any conflicts
between their terms and existing Turkish
laws.
Following such amendment on the
CAL, on April 1, 2013, a Directive on
implementation and enforcement of the
Irrevocable De-registration and Export
Request Auhtorization ("IDERA") was
introduced by the Flight Operation
Directorate of the Civil Aviation
General Directorate of the Ministry of
Transportation, Maritime Affairs and
Communication ("CAD") which was then
published in the CAD's official website.
Obviously, the issuance of this directive
was quite an important step taken on the
implementation of the provisions of the
CTC, given the fact that IDERA is the
essential tool for the interest holders to
exercise their remedies under the CTC.
As a result of Turkey's continuous efforts
to ensure the full implementation of the
CTC/Protocol and eliminate the practical
problems that the parties face during this
process, a brand new and updated IDERA
Directive entered into force on July 7,
2014, the purpose of which was to provide
further clarity for the CAD on how to honor
the duly issued IDERA forms.
Furthermore, a Circular came into
effect in Turkey on July 31, 2013, as
issued by the Association of Financial
Leasing, Factoring and Financing
Companies (who is the current competent
legal authority for the registration of
cross-border financial lease agreements)
("Association") and this Circular regulates
the registration methods and principles of
cross border financial lease agreements
under Turkish Law. While doing so, the
Circular provides for a specific provision
on implementation of the CTC by stating
that the Association will de-register the
lease agreements from its records, in the
event that the applying party provides
a certificate as issued by the CAD
stating that in case a lessor attempts to
exercise its remedies under the CTC, the
Association will not be able to refrain
from de-registration of the financial lease
agreement from its records.
This year, the Omnibus Bill
1
("Omnibus Bill") (Torba Yasa) dated
February 6, 2014, clarified on how
claims of the interest holders should be
executed at the execution and bankruptcy
offices in Turkey. The Additional Article
2 (Ek Madde 2) as introduced by the
Omnibus Bill to the Law on Execution
and Bankruptcy
2
(Icra ve Iflas Kanunu)
now clearly states that the claims arising
from Article 8/1(a) and Article 10/1(a)
of the CTC can be raised by the interest
holders before the Ankara Execution
Offices (Ankara Icra Daireleri) only.
Consequently, (i) the creditors can take
possession or control of any object charged
to the same in the event of a default of the
debtor pursuant to Article 8/1 (a) of the
Convention and (ii) the Conditional Seller
or the Lessor can re-possess or control of
any object related to a title reservation
agreement or a leasing agreement in the
event of default pursuant to Article 10/1(a)
of the Convention but in any case through
Ankara Execution Offices.
Accordingly, the authority for the
execution of claims of the interest holders
have been assigned to only one particular
execution office in Turkey, in Ankara, the
capital city of the country, in which the
CAD is located as well, for cases when
the contract provides that the terms of
the CTC/Protocol will apply. Obviously,
because the implementation of CTC is
quite a unique practice, the Turkish
legislator felt the necessity to structure a
one-stop agency for a repossession in order
to facilitate the process and eliminate
most of the arguments made by certain
practitioners in the sector that enforcement
of CTC terms would not be understood and
possibly made by the execution authorities
in Turkey.
All these major changes in the
local laws of Turkey are the results of
a substantial progress on recognition/
implementation of the CTC/Protocol
in Turkey by other governmental/
quasi-governmental authorities other than
the CAD.
Current Status: Very Important
Achievement
On October 20, 2014, Turkey was added
to the list of states ("Cape Town List") as
defined under the Sector Understanding on
Export Credits for Civil Aircraft ("ASU"),
which stands for the states qualifying for
the reduction of the minimum premium
rates and consequently whose airlines are
eligible to enjoy the Cape Town Treaty
discount. In order to deserve this, Turkey
has made the declarations which it must
have made under the CTC/Protocol and
did not make the declarations which
it should not have made. On the other
hand, Turkey's making or not making the
necessary declarations under the CTC/
Protocol was not enough for participating
in the Cape Town List and enjoying the
Cape Town Treaty discounts. Turkey's
implementing the terms of the CTC and
the Protocol without exception has led
Turkey's success to participate in the Cape
Town List.
Regarding the procedures in this
respect: ASU provides for the framework of
predictable, consistent and transparent use
of officially supported export credits for the
sale or lease of aircraft and other aircraft
engines and spare parts. Therefore, the
terms and conditions for being listed in the
Cape Town List are set out under the ASU,
together with the procedures to be pursued
for participation of a state in the Cape
Town List. Because Turkey is included
in the Cape Town List of countries as of
October 20, 2014, now the airlines in
Turkey, desiring to obtain financing for
aircraft with the involvement of export
credit agencies will enjoy a discounted
rate to the applicable fee as required to
be charged by the export credit agencies
under the terms of the ASU.
Turkey's entrance into this Cape
Town List is obviously a big success
given the fact that only 21 countries have
accomplished participation in this list so
far. This success will noticeably affect the
aviation sector in Turkey in a very positive
way, since obtaining finance with the
assistance of export agencies is a preferred
financing method for the airline companies
from all around the world. Furthermore,
for the financings to be obtained from the
capital markets, Turkey's inclusion on
the Cape Town List will have a positive
effect in increasing ratings from the
rating agencies.
1 Omnibus Bill numbered 6562, published in the Official
Gazette dated February 19, 2014 and numbered 28918.
2 Law on Execution and Bankruptcy dated June 6, 1932
and numbered 2004 published in the Official Gazette
dated June 19, 1932 and numbered 2128.