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Scope of Pledges on Movable Property Expanded

10.03.2018

Newly introduced Law on Betterment of Investment Climate in Turkey extends scope of pledge on movable property in order to secure rights and remedies available to creditors.


The newly introduced Law on Betterment of Investment Climate in Turkey aims at providing stronger securities for creditors.  In this respect, certain provisions of the Law on Pledge on Movable Assets were amended to extend the scope and effectiveness of pledge on movable properties.  The new provisions, among others, provide for coverage on insurance proceeds and products of pledged assets.  In the event of establishment of pledge on production processes, the end-products are also subject to the pledge, which enables creditors to secure their receivables from factories and manufacturers.  The law also contains provisions to protect bona fide third party purchasers.

The legislation, as part of an effort to present a more stable and sustainable investment climate in the country to foreign direct investors, will immediately take effect upon its publication on the Official Gazette.

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