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Law No . 4046, Adopted on 27 November 1994, Concerning Arrangements For The Implementation Of Privatization And Amending Certain Laws And Decrees With The Force Of Law

 

Law No.: 4046

Date of Adoption: 24 November 1994

Published in Official Gazette Issue: 27

Date of Publication: 27 November 1994

 

 

Purpose and Content

 

Article 1The purpose of this Law is to regulate the principles for the privatization, which aims to improve productivity in the economy and to reduce public expenditures, of:

 

A. Establishments to be placed under the scope of privatization are listed in this article and will be referred to as "Organizations" herein after in the implementation of this Law;

 

a) The State Economic Enterprises (SEEs,) their enterprises, associated corporations, operations, operational units and assets, as well as the public shares in their participations;

 

b) Public shares in commercial organizations that are not under the status of State Economic Enterprises but which are owned in full or by more than 50 % by the state and/or by other public legal entities, and the public shares in the organizations, operations, operational units and assets belonging to these organizations, and in participations;

 

c) Public shares and shares that belong to the Treasury in participations of the State;

 

d) Administrations with national and supplemental budgets and the other subordinate organizations with revolving funds and assets of the State Economic Enterprises which are not directly related to public services provided by the Public Economic Organizations (PEOs) and their shares in their respective participations;

 

e) Commercial organizations and shares in their every type of participations without taking into consideration the amount of their respective shares, that belong to the Municipalities and to the Provincial Directorates;

 

f) Properties and the goods and services production units of the organizations with national and supplemental budgets and assets (dams, lagoons, highways, hospitals, ports and other similar goods and services production units) of the organizations with revolving capital belonging to those above mentioned and the rights of operating appropriate goods and services production units in accordance to the principle establishment purposes of the Public Economic Organizations as referred to in Article 35, paragraph (B) of this Law;

 

B. This Law, in accordance with the purpose stated above, contains the provisions related to:

 

a) The establishment of the "Privatization High Council" and the "Privatization Administration" and the determination of their duties, responsibilities, and rights,

 

b) The establishment of the "Privatization Fund" and the "Public Participation Fund" and the determination of the resources and utilization fields of such funds,

 

c) "Privatization Implementations",

 

d) The accrual of interest to the monetary funds accumulated in the "Account for Encouraging Savings by Employees",

 

e) The supply of financial and social rights to the personnel contracted at organizations included under the scope of privatization who might become unemployed as a result of privatization,

 

f) The personal and social rights of the public employees working for the organizations included within the scope of privatization.

 

Grant or lease of the operational rights of the goods and services production units and assets (dams, lagoons, highways, hospitals, ports and other similar goods and services production units) of the organizations with national and supplemental budgets and their other organizations with revolving capital and the privatization of the Public Economic Organizations that are included among the "State Economic Enterprises" and are defined in the Decree no 233 with the Force of Law and of their subsidiaries, associates, operations, operational units, and assets by methods other than the transfer and/or assignment of ownership, is subject to the provisions of this Law. However, the transfer of ownership's must be drafted by separate laws depending on the nature and characteristics of public services provided by these organizations.

 

Principles

 

Article 2. – In the Privatization Implementations, the principles are as follows;

 

a) Paying “Special Job Loss Compensation” in addition to other indemnities foreseen in the collective bargaining agreements and/or in the existing laws in relation with potential employment reductions that may occur,

 

b) Determining the methods of privatization in line with the terms and conditions of these organizations and in accordance to their respective characteristics,

 

c) Not using the proceeds of privatization for general budget expenditures and/or investments,

 

d) Preventing the negative effects resulting from a monopolistic structure that may occur,

 

e) Procuring of a shareholders' group capable of undertaking the responsibility and authority of management, as well as the expansion of the ownership,

 

f) Including public banks in the organizations having priority in privatization within the framework of the privatization process and having them privatized as promptly as possible,

 

g) Creating privileged State shares for strategic fields,

 

h) Having natural resources privatized only for a certain period of time, through granting operational rights,

 

ı) Having the privatization procedures, including value assessment, implemented on principles of openness and transparency,

 

i) Not allowing for transfers to public institutions, organizations and to the local administrations during privatization, unless the necessitated by the sake of national security and/or the best interest of the public.

 

Priorities on decisions to be taken in accordance with the principles and the purposes defined herein above, and the principles and the methods of privatization of which such priorities will be subject to, are determined by the Privatization High Council on the basis of the qualifications of such organizations and taking into consideration conditions required by the country's economy.

 

Duties of the Privatization High Council

 

Article 3. – (Amended by Law No: 4232 of 3.4.1997) The Privatization High Council, under the chairmanship of the Prime Minister, with the members comprised of the Deputy Prime Minister (in case of a coalition of more than one party, the Deputy Prime Minister belonging to the other ruling party having the highest number of votes in the Turkish Grand National Assembly), State Minister to be designated by the Prime Minister, a State Minister responsible for privatization (if there is no State Minister assigned to this position, then another State Minister will be designated by the Prime Minister), the Minister of Finance and the Minister of Industry and Commerce has been established. The Council will meet in full attendance and all decisions will be taken on full consensus. The secretariat of the Council will be conducted by the Privatization Administration.

 

Duties of the Council are listed herein below:

 

a) To take decisions to include the organizations referred to in Article 1 of this Law within the scope of privatization; to execute the financial and legal restructuring of those organizations which are not deemed ready for privatization to include those organizations whose initial preparations have been completed and/or the ones for which an initial preparation was not deemed necessary, to directly include in the "privatization program"; and to determine time periods for the finalization of the privatization process for the organizations within the scope of privatization,

 

b) To decide to restore organizations back to their former status by removing those which are deemed ineligible out of the scope of privatization and/or to decide to prepare those organizations already in the privatization program and for which the process is deemed necessary,

 

c) To decide on the method of privatization in the transfer of ownership of the organizations whether through sale, lease, transfer of operational rights, granting of property rights other than ownership, and other legal dispositions conforming to the particular transaction by the Privatization Administration;

 

d) To approve the final transfer procedures of the organizations in the privatization program to "actual persons and/or legal entities at private law, through sale, lease, transfer of operational rights, granting of property rights other than ownership, and other legal dispositions conforming to the particular transaction realized by the Privatization Administration;

 

e) To decide to reduce the size of, terminate activities permanently or temporarily, close or liquidate those organizations as deemed necessary under the scope of privatization;

 

f) To decide to borrow funds from domestic and/or foreign sources for use by the Privatization Fund and to this end, to issue government-guaranteed or unguaranteed bonds in local and international markets and if required, to issue all kinds of securities and other negotiable instruments;

 

g) If and when required, to decide to purchase and resell shares, securities and other negotiable instruments of the organizations in the privatization program;

 

h) To discuss and approve the income and expenditure programs of the Privatization Fund and the Privatization Administration,

 

ı) To evaluate the current year's performance and the upcoming year's programs of the Privatization Administration, and if necessary, to take precautionary measures to improve deficiencies,

 

i) To take decisions on other tasks assigned by laws and other legislation.

 

The Council may authorize the Presidency of the Privatization Administration concerning subjects cited in paragraphs (d) and (g) of this article where it sees beneficial for the execution of the service, provided that financial limitations, as well as the procedures and principles of such authorization shall be clearly identified.

 

The establishment and the responsibilities of the Privatization Administration

 

Article 4. – The Privatization Administration (The "Administration") possessing public legal entity and an exclusive budget, reporting directly to the Prime Minister has been established. The Prime Minister can use his/her powers deriving from this law via a State Minister he/she will designate responsible for privatization. The Administration is a temporary establishment and when the task of privatization is completed, the employees of the establishment will be transferred to related organizations based on their qualifications.

 

Duties of the Administration are stated herein below;

 

a) To execute the decisions of the Council,

 

b) To make decisions on pertinent issues and to implement the necessary procedures in line with the rights and duties granted and delegated by the Council,

 

c) To present proposals to the Council for the inclusion of organizations into the scope of the privatization or returning the organizations that have been included in the scope of privatization back to their former status, or orienting the preparation of those organizations that are in the privatization program when required,

 

d) To realize the implementation of all necessary procedures for the privatization of the organizations and to execute the follow-up and coordination of the activities for the preparation of those for privatization,

 

e) To decide whether or not to transform those organizations in the privatization program which do not maintain the status of an incorporation into joint-stock companies,

 

f) To determine the amount of stock capital of organizations in the privatization program, to make necessary arrangements for their establishment, merger or division; to determine the principles for the properties and the rights and obligations; to make all arrangements for the accounts and activities of the organizations that are under the status of an incorporation or transformed into a joint-stock company and to take necessary precautions to ease such procedures until such time that public shares in those organizations drop below 50% (Fifty Percent) and to do the same for others until the date of assignment and/or transfer as a result of the privatization,

 

g) To conduct and to implement every type of procedural operations related to privatization that are essential for privatization,

 

h) Within legal limitations, to make arrangements for the financial, administrative and legal structures of organizations,

 

ı) To make decisions on resource utilization, acquisition and leasing of immovable properties or economizing on those immovable properties by any other agreement; on obtaining domestic and international credits; on recruiting or reducing personnel under the principle of increasing productivity, working conditions; on demands and requirements for the temporary assignment of personnel

overseas, for those organizations that are in the privatization program,

 

i) To present proposals to the Prime Minister for assignments and appointments to and for the withdrawal from the chairmanship and membership of the board of directors of organizations, of auditing and liquidation committees, and from general managerial positions for those organizations under the privatization program separately from the organizations to which they belong and not deemed necessary for transformation into an incorporated company, and of the managerial positions in their administrative units thereof.( A four year university degree is a prerequisite to be eligible to receive appointment to these positions),

 

j) To determine the quantity and value of every type of securities and any other negotiable instruments to be issued through the Council's decision,

 

k) In the event of investing capital in kind in organizations, to evaluate or have evaluated/appraised such capital,

 

l) To manage the Privatization Fund,

 

m) To conduct all types of research activities, project studies, advertisements, promotion, public relations, financial auditing and legal, technical, administrative and financial evaluations and/or to have such works conducted by assigned consultants as and, when needed.

 

n) To provide loans to organizations in the scope of privatization when required for privatization and to determine the interest rates and the terms and conditions for such financing provided by the Privatization Fund under the condition that the interest applicable to such funding shall not be in excess of the highest interest rate applied by public banks,

o) To perform other duties defined by the laws and other legislation.

 

The Administration may authorize the organizations in the privatization program in subjects referred to in paragraphs (a), (b), (h), and (i) where it is deemed necessary and beneficial by the Administration, provided a clear definition of principles and methods of such authorization be outlined.

 

Administration Service Units

 

Article 5. – a) The main service units of the Administration consist of; the Capital Markets Department, Finance and Fund Management Department, Project Evaluation and Preparations Department, Employment and Social Services Department, Consultancy Services Department, and Contract Services Department.

 

b) The Consultancy Units of the Administration consist of; the Department of Legal Consultancy; Research, Planning and Coordination Department; Consultants to the President, and Press and Public Relations Department .

 

c) Supplementary Units of the Administration consist of; Personnel and Education Department, Administrative and Financial Department, and Defense Expertise Department.

 

The president and the units defined in paragraphs (b) and (c) of this Article perform the tasks defined in Law 3046 dated 27, September 1984. The positions for the head-quarters and Istanbul liaison office of the Administration are listed in the enclosed schedules (1) and (2).

 

Personnel Regime

 

Article 6. – The personnel of the Administration is subject to the provisions of Law No 657 on Civil Servants. The President and other managers of the Administration in every level may delegate some of their powers to their subordinates, provided that the limitations of such power assignment shall be clearly defined in writing. The President of the Administration will be appointed by joint decree, the Vice-Presidents through a proposal by the President of the Administration to be approved by the Prime Minister, and other personnel of the Administration will be appointed by the President. The President, Vice Presidents, Advisor to the President, Department and Project Group Heads must be graduates of a 4-year institution of higher education as well as having the sufficient knowledge and experience needed to carry out their duties. The President and the Vice Presidents are subject to the provisions applicable to the Undersecretaries and Deputy Undersecretaries of the Undersecretariats reporting to the Prime Ministry in respect of their salary, additional fringe benefits, pay increases and compensations.

 

The Administration can employ personnel on individual employment contracts for the positions of the President, Vice Presidents, Advisor to the President., First Legal Consultant, Legal Consultant, Department Head, Head of Project Group, Lawyer, Expert (Branch Manager), Expert, Assistant Expert and Department Doctor. They can be enrolled to the Turkish Pension Fund upon demand.

 

Employees of the organizations with national and supplemental budgets can be

recruited by the Administration on the basis of individual employment contracts with the approval of the organizations for which they work. Such Administration requirements are finalized by the related organization(s) on priority. Such personnel are deemed to be on unpaid leave and during this period, their personal rights are maintained as if they would be employed at their respective organizations. Such periods will be taken into account in regards to their promotions and retirement benefits, and will receive promotions when so entitled without the need for formal procedural applications. No compulsory service obligations are required from these employees from their own organizations for the period they serve in the Administration.

 

The terms and conditions of employment contracts for those employed on contractual basis and their financial entitlement, shall be determined by the Council of Ministers.

 

The personnel employed by the State Economic Enterprises and by their subsidiaries and by enterprises who are in the scope of privatization, whose services are required by the Administration, can be retained by the Administration through the sole decision of the Administration, under the condition that their personal rights and entitlement and wages, shall be met by their own organizations. These personnel are deemed to be on unpaid leave from their organizations for the period they will be serving in the Administration.

 

Overtime will be paid both to the personnel actually working at the headquarters organization of the Administration, and to the personnel placed on duty in accordance with the provisions of this Article in respect to the principles and methods to be defined and determined by the Administration, provided that such overtime rates shall not be in excess of the rates and the amounts defined in the amended Article 31 of the Law No. 3056, dated 10 October, 1984.

 

The provisions of Law No. 657 on Civil Servants and Law No. 1389, dated 2 February, 1929 will be applied in the distribution of the attorney's fees collected from the losing party as a result of decisions issued by the Courts and by the Bailiff's Offices in favor for the Administration,

 

Determination, assignment, utilization and the cancellation of positions in the Administration and the other matters in relation to the positions will be governed in accordance to the provisions of the Decree No. 190 with the Force of Law on General Staff Positions and Procedures.

 

Prohibitions and Penal Clauses

 

Article 7. – As for organizations in the privatization program which are subject to the provisions of the Capital Market Law and whose stocks are traded on the stock exchange, the Chairman and members of the Board of Directors, the internal auditors and other personnel, the personnel of the Administration, the President and members of the Council may not disclose any non-public information or dates they learn during their function on accounts, operations, and enterprises of their organizations.

 

They are not allowed to use such information for their own benefit or for the benefit of third parties or to trade securities of such organizations on or off the stock exchange for pecuniary benefits or in such manner so as to disrupt the equality of opportunities among traders. They may not further be beneficiaries of transactions realized through methods of privatization under this Law as or in the capacity of a buyer or a lessee. This prohibition shall be applicable also to the spouses and children of persons mentioned herein. The President and the members of the Privatization High Council and the President of the Privatization Administration, Vice Presidents, Heads of the Departments and Legal Consultants to the Administration and the Head and members of the Value Assessment Commissions, may not take office in privatized organizations for two years following their date of privatization.

 

Persons who violate these prohibitions will be sentenced to six month to two years' imprisonment and a fine equal to three times the unjust enrichment, jointly or separately, depending on the nature and importance of the act.

 

Permanent personnel and personnel under contract of the Administration and the organizations in the privatization program are deemed to be civil servants described in Article 279 of the Turkish Criminal Code and any offense of these personnel in respect to privatization funds, documents, promissory notes and assets, or on balance sheets, memoranda, reports and other similar documents and books, or offenses in relation to their functions, will be governed by the provisions of the third and sixth sections of volume two of the Turkish Criminal Code.

 

Administration Budget

 

Article 8. – The expenditures of the Administration are met by the administration budget, to be determined by the Council under the condition that such expenditures shall not exceed the 5% of the Privatization Fund. The exchequer of the administration budget is the President of the Administration.

 

Privatization Fund and its sources

 

Article 9. – All proceeds obtained from the privatization process and all dividends obtained from the organizations transferred to the Administration as well as proceeds obtained from the sales of securities and other negotiable instruments and documentation, income obtained from the funding supplied to the organizations transferred to the Administration, and other resources and earnings allocated by other legislation, are credited to the Privatization Fund account to be opened at the Turkish Ziraat Bank, separate from the budgets of the related organizations.

 

Utilization Fields of the Privatization Fund

 

Article 10. – Privatization Fund shall be used for:

 

a) Special Job Loss Compansation payments and for the payments, when and where necessary, for transfers in amounts determined by the Council to the account that will be opened for the purpose of meeting such expenditures of education and training services as career development, vocational and apprenticeship training, from the privatization revenues,

 

b) Payment of monthly salaries, fringe benefits and all kinds of personal rights for employees who will be transferred in accordance with the provisions of Article 22 of this Law for the period from their appointment to the termination of their contract with their previous organization,

 

c) In payments, in accordance with Article 24 of this Law,

 

d) Meeting preparatory expenditures of organizations included in the scope of privatization, in order to facilitate their privatization,

 

e) Meeting expenditures required for financial, administrative and legal preparatory work in organizations transferred to the Administration,

 

f) Contributing to the capital increase in the shareholdings of the Administration,

 

g) If required, to purchase (shares), all kinds of securities and negotiable instruments of organizations in the Privatization Program,

 

h) Procuring all kinds of goods and services that are necessary for the implementation of the privatization process,

 

ı) Providing debt financing for organizations that are transferred to the Administration under the terms and procedures to be determined by the Administration,

 

i) Allocating the necessary funds for the budget of the Administration,

 

j) The liquidation of the outstanding debts and obligations of organizations that have been privatized,

 

k) The payment of fringe benefits and of its increases pursuant to Supplemental Article 24 of the Social Security Law, dated 17 July, 1954, No. 506, within the framework of Article 23 of this Law, and

 

l) Performing other duties that are assigned to the Administration under the Legislation.

 

In utilization of revenues accumulated in the Privatization Fund: priority shall be forwarded to special job loss compensation, supply of other related services and for the payments to meet the administrative, financial and legal expenditures for preparatory work of organizations in the scope of privatization,

 

No resource can be transferred from the Privatization Fund to the general budget. In addition, other than the transfer of funds to the Public Participation Fund pursuant to Temporary Article 8 of this Law, no transfer can be made from the Privatization Fund to any other fund.

 

Accounting and utilization terms and procedures of the Fund and the terms and principles for the accrual of interest to the fund balances, will be determined through the regulations to be drafted by the Administration and approved by the Council.

 

(Amended by Law No. 4568/2 of 23/5/2000)

 

The excess resources from the Privatization Fund can be transferred to the Treasury accounts for payment of domestic and international debts. No transfer can be made from the Privatization Fund to any other fund.

 

Accounting and utilization terms and procedures of the Fund and the terms and principles for the accrual of interest to the fund balances, will be determined through the regulations to be drafted by the Administration and approved by the Council.

 

Audit

 

Article 11. – The Administration's budget will be audited by the Exchequer and Audit Court pursuant to Law No. 832 dated 21 February, 1967. Activities of the Privatization Administration and the utilization of the Privatization Fund, as well as every type of services and applications at the time of privatization, are audited in accordance with the provisions and principles of the Decree No. 72 with the Force of Law concerning the Prime Ministry High Auditing Board and of Law No. 3346, dated 2 April, 1987.

 

Organizations in the privatization program are audited in accordance with the provisions and principles of the Decree No. 72 with the Force of Law concerning the Prime Ministry High Auditing Board dated 24 June, 1983, and of Law No. 3346, dated 2 April, 1987 until the public share in their stock capital drops below 50%.

 

Provisions not to be applied

 

Article 12. – Transactions under this Law will not be subject to the provisions of Law No. 2886 concerning State Tenders, Law No. 1050 concerning General Accounting, or the provisions of Exchequer and Audit Court Law No. 832 related to visas and registrations.

 

Determination of strategic fields and organizations and of the preference shares

 

Article 13. – In relation to organizations in the privatization program, the Council is authorized:

 

a) To determine strategic subjects and organizations;

 

b) In the event that the state's shareholdings in organizations determined to be strategic under paragraph (a) above falls below 50%, and for the purposes of preventing monopolization and of protecting national economic and security interests, to determine the number of preference shares granting special management and approval rights in the management bodies of the organizations and the rights attaching to those shares which the state shall enjoy; to change the quantity of these shares and the rights attaching there to; and to remove such sectors and organizations determined to be strategic from the scope of this program.

 

Provided, however, that if and when more than 49% of the capital shares of the organizations listed below are decided to be privatized, preference shares must be established in them:

 

• Turkish Airlines (THY)

• Turkish Ziraat Bank

• Turkish Halk Bank

• TMO (Soil Products Office) Alcoholid Factory

• Turkish Petroleum (TPAO refineries).

 

Sale of Real Estate to Foreigners

 

Article 14. – Sale and transfer of real estate to foreign actual persons and/or legal entities within the framework of the privatization process to be conducted in accordance with the provisions of this Law are subject to the provisions of the Legislation in force on the basis of rules of reciprocity.

 

Privatization of Public Services

 

Article 15. – Notwithstanding the provisions of Article 1 hereof, providing that separate laws will be adopted for privatization of public service organizations through transfer of ownership,

 

a) Administrations with national and supplemental budgets and properties, goods and services production units and assets (dams, lagoons, highways, hospitals, ports and other similar goods and services production units) of their affiliate organizations with revolving capital,

 

b) The Public Economic Organizations and their subsidiaries, associates, operations and operational units offering public services and producing goods and services as a monopoly as described in paragraph (B) of Article 35 hereof, shall be privatized under the provisions of this Law through the transfer of operational rights, leases or similar methods not requiring transfer of ownership.

 

The goods and services production of organizations with national and supplemental budgets and of their associated organizations with revolving funds that are in the form of a monopoly only and the goods and services production of Public Economic Organizations that are in line with their original establishment tasks, will be accepted as concessionary activities. Activities falling outside of those stated herein above are deemed to be concessionary activities. Agreements and contracts to be executed in relation with the activities deemed as concessionary in accordance with the provisions of this Article, are in the form of concessionary agreements and contracts, with the special provisions of other Laws pertaining to these issues being reserved.

 

Duration of rights to be granted under this Article through transfer of operational rights, lease or other similar methods, may not exceed 49 years.

 

Protection of Competition following the Privatization Process

 

Article 16. – As a result of the privatization process in accordance with the provisions of this Law and with regards to the protection of the health and security as well as the economic benefits for consumers in accordance with the operation of the goods and services markets, economic necessities and public benefits, including monopolies within the boundaries of the Republic of Turkey, the following shall be prohibited:

 

a) Dividing up of good and services markets and sharing and/or controlling every type of market resources and units,

 

b) Creation of barriers or limitations for the activities of competitors or the prevention of new players from entering into the market,

 

c) Applying different conditions on contestants with equivalent status for equal rights, obligations and liabilities,

 

d) Obliging buyers to purchase other goods and services in conjunction with certain goods and services, or to make compulsory the sale of certain goods and services demanded by wholesalers or intermediaries on display of other goods and services or to place forth conditions for the resale of certain goods and services already supplied.

 

Necessary precautions are taken by the Ministry of Industry and Commerce safeguarding against the existence of any type of legal operations and acts in the form of mergers or takeovers through certain agreements, applications and decisions in a manner directly or indirectly, seriously preventing, disrupting or restricting competition and causing creation of monopolies, are observed.

 

The procedures and principles for the application of this Article are determined through the regulations prepared by the Ministry of Industry and Commerce and approved by the Council of Ministers. Exemptions and legal and criminal sanctions applicable to circumstances mentioned in paragraphs (a), (b), (c) and (d) of this Article are subject to provisions of the relevant Legislation.

 

Provisions related to the Privatization Process

 

Article 17. – In accordance with this Law;

 

A. Under this law, upon the proposal of the Administrartion, the Council will decide to include the following in the scope of privatization together and/or separately:

 

a) State Economic Enterprises, their subsidiaries, associates, operations, operational units, assets and the public shares in their participations,

 

b) Public shares in the commercial organizations which are not in the nature of State Economic Enterprises but whose capital are fully or by more than 50% owned by the State or by other public legal entities and their subsidiaries, associates, operations, operational units, assets and the public shares in their participations,

 

c) Public shares in other participations of the State and the shares belonging to the Treasury,

 

d) Properties and shares of organizations with national and supplemental budgets and of their subsidiaries with revolving capital and the shares in their participations that are not directly related to the public services supplied by these organizations.

 

The decision of the Council with regards to the inclusion of organizations into the scope of privatization shall also state which organizations will undergo financial and legal preparatory work, which shall be directly taken into the privatization program and which methods will be employed in privatizing and in what time frame their privatizations will be finalized.

 

B. Organizations in the scope of privatization which are to undergo financial and legal preparatory work for privatization will retain their existing status and remain associated to the related ministries or institutions until the completion of the restructuring process. The related financial and legal restructuring process for privatization will be carried out by the organization(s) to be designated by the Council. Upon completion of restructuring for privatization, organizations will then be included in the privatization program through a new decision of the Council. Organizations that are taken directly in the privatization program and organizations that are restructured for privatization (excluding the capital shares and assets of their subsidiaries and the capital shares and assets of the organizations which are not in the nature of a subsidiary, but have a majority of the capital owned by the state) will be deemed to have been transferred to the Administration as of the date of the Council's decision without any further transaction or payment of any consideration. Organizations taken in the privatization program and transferred to the Administration will be deemed to have been disassociated from their related ministry or organization and brought within the range of the Administration, as of the date of the Council's decision.

 

C. As for the organizations with national and supplemental budgets and the goods and services production units and assets of their associated organizations with revolving funds referred to in paragraph (a) of Article 15 and the Public Economic Organizations and their subsidiaries, associates, operations, operational units, and assets, the decisions to take them in the privatization program will be taken by the Council.

Privatization of these entities by methods other than transfer of ownership will be carried out by the Administration. However, they will retain their existing status and remain associated with the institutions and/or organizations owning them.

 

D. If any organizations in the scope of privatization is subsequently removed from the scope of privatization due to changing conditions, its former status shall be restored by a decision of the Council.

 

E. Prices and tariffs of the goods and services produced and /or sold by joint-stock companies in the privatization program is determined by their board of directors, and in other organizations through their authorized management bodies.

 

F. Decisions to include organizations in the privatization program and approval of the final transfer at the conclusion of privatization shall be published in the Official Gazette.

 

Privatization Methods, Value Assessment, Tender Methods

 

Article 18. – (Amended by Law No: 4232 of 3.4.1997) The privatization methods, value assessments and the tender methods with regards to the privatization of organizations in the privatization program are stated herein below:

 

A. Privatization Methods:

 

Organizations in the privatization program are privatized through the use of one or more of the methods mentioned below.

 

a) Sales: Transfer of the ownership of goods and services units in the assets of organizations in full or partially for consideration, or transfer of all or some of the shares of these organizations through domestic or international public offerings, block sales to actual persons and/or legal entities, block sales including deferred public offerings, sales to employees, sales on the stock exchange by standard or special orders, sales to securities investment funds and/or securities investment partnerships, or any combination thereof, by taking into consideration the prevailing conditions of the organizations.

 

b) Lease: Grant of the right of use of all or some of the assets of organizations for consideration and for a designated period of time.

 

c) Grant of Operational Rights: Grant of a right of operation of organizations as a whole or of their goods and services production units in their assets for consideration for a designated period of time, with retention of ownership rights.

 

d) Establishment of Property Rights Other Than Ownership: Restriction of the goods and services production units and assets of organizations with certain property rights, whereby the owner consents to dispositions of the assignee on the rights of facility thereon or the owner renounces from the use of these ownership rights, in the format and under the conditions specified in the Turkish Civil Code, with retention of ownership by the owner institution.

 

e) Profit Sharing Model and other legal dispositions depending on the nature of the business: Other methods defined in general provisions of law and/or special laws which are not included in the aforementioned privatization methods and which take into account the particular characteristics and structures of the relevant organizations.

The Council shall determine which methods of privatization described above will be used in each case depending on the particular requirements of the transaction.

 

B. Value Assessment ( Amended by Law No: 4232 of 3.4.1997 )

Value assessment of organizations in the scope of the privatization program will be performed by Value Assessment Commission formed within the Administration pursuant to this Law.

 

a) Formation of the Value Assessment Commission:

 

The Value Assessment Commission consists of five members chaired by the Head of the Project Group responsible for privatization proceedings of the organization in the scope of privatization and having as members an expert of the project group responsible for the privatization proceedings, Head of the Department of Project Evaluation and Preparation or an expert of this department, Head of the Department of Capital Markets or an expert of this department and Head of the Project Group responsible for Property Affairs Group Head or an expert of this group. The Commission resumes its duty upon proposal of the President of Administration and approval of the Prime Minister. Alternate members are appointed to the positions as described hereabove in the same number and method.

 

b) Proceedings of the Commission:

 

The Commission convenes with the presence of all members and resolves by absolute majority. Abstentions are not allowed in decisions. If deemed necessary by the commission, a sufficient number of local and/or foreign advisors may be appointed by the Administration for assistance to the value assessment proceedings without being allowed to vote for or against decisions.

 

c) Functions of the Commission

 

The Commission, through the application of at least three of the internationally recognized methods as: discounted cash flow (net present value), book value, net asset value, depreciated replacement value, break-up (liquidation) value, price/profit ratio, market capitalization value, market/book value, expertise value and price/cash flow ratio ; shall undertake value assessments and tender method with regards to attribute, service distinction, potential future cash flow, sector and market specifications, industrial, commercial and social features, machinery, vehicles, equipment, goods and row materials, finished and unfinished material stocks, all movable and immovable properties owned by the organization, virtues and current conditions, receivables and payable accounts and bills and all rights and obligations of those establishments within the scope of privatization. The Administration will make public upon approval the tender outcome and value assessment results.

 

Provided that the privatization procedures of an establishment in the privatization program is carried out based on the last paragraph of Article 4 of this Law, value assessment shall be realized within the parameters as dictated in this paragraph under the guidance of a commission established through the judgment of the official decision making bodies and chaired by the exchequer of the establishment at hand.

 

C. Formation of Tender Commissions and Tendering Methods :

 

Bidding proceedings related to the application of the tender methods described in paragraph (A) of this Article are carried out by tender commission established pursuant to this Law.

 

a) Formation of the Commission:

 

The Tender Commission consists of five members, chaired by the Vice President in charge of the project group responsible for the privatization proceedings of the organization in the privatization portfolio and having as members the Head of the Project Group, an expert of the group, Head of the Department of Tender Services or an expert therefrom and a legal consultant or a lawyer from the Legal Consultancy Department. The Commission shall resume duties upon proposal of the President of the Administration and approval of the Prime Minister. Alternates are appointed to the positions in the Commission as described hereabove in the same number and method.

 

b) Proceedings and duties of the Commission:

 

The Commission convenes with the presence of all of members and sanctions decisions through an absolute majority. Abstentions are not allowed in decisions. Any member objecting to the decision must justify opposing views and record it beneath the decision with his / her endorsement. Each meeting of the Commission and the discussions between the Committee and bidders are recorded in memoranda which are endorsed by the commission members and/or the present bidders.

 

c) Tender Methods:

 

The tender methods consist of the closed bidding, bargaining, public auction and closed bidding among designated bidders.

 

Closed Bidding Method: Proposals shall be received in written form. The proposal is sealed in an envelope on which name, surname and notice address of the bidder are cited. The bidder stamps or signs the envelope flap at the sealing place. Together with receipt of the temporary bid bond or bank guarantee letter and other required submittals, this envelope is placed in a second envelope and sealed. The name, surname and open address of the bidder and title of the tender are cited on the second envelope. The bidder must quote the offer price in letters and numbers, sign the proposal and state in writing that all specifications and appendices thereto have been read and understood.

 

Any proposal which does not comply with any of the above provisions or which contains erasures, scrapings or corrections on the outer surface shall be rejected and considered non-submitted. The proposal envelopes are delivered to the Administration against signed receipts until deadline of the date and hour for proposal submission. All other matters are stated on the tender specifications. The submitted proposals may not be withdrawn for any reason whatsoever. The outer proposal envelopes are opened in the order received at the predetermined date and hour, and all received proposals are listed in a memorandum, followed by determination of existence of all the required submittals and the required temporary bid bond. The receipt reference on the outer envelope is also inscribed on the inner envelope. If submittals and temporary bid bond found in the outer envelopes are not complete and in compliance, the inner envelopes are not opened but returned together with all related documents to its bidder or its representative who shall not be permitted to participate in the tender. Prior to the opening of the inner envelopes containing the proposals, all persons related directly with the tender are asked to leave . The envelopes are then opened in serial sequence , read aloud by the commission chairman or an assignee and recorded as a list which is later signed by the chairman and members. Non-complying or conditional proposals shall not be accepted. Should more than one bidder proposes the same price and all are determined to comply written second proposals are requested from those bidders, if present, and the process is continued until a higher price is proposed. If no proposals are submitted or the proposals are not deemed acceptable by the commission, a new a tender is opened under the same conditions or if deemed beneficiary by the commission, the tender is finalized by the bargaining or public auction method.

 

The Bargaining Method: The tender process may be commenced by inviting more than one bidder to submit their proposals in enclosed envelopes. More than one bargaining session may be held with the bidders and these are conducted separately with each bidder. At any stage of the bargaining, the Commission may decide to hold joint bargaining with the bidders. During the bargaining process, in response to new conditions emerged, the Commission may stipulate new principles provided they do not cause any unfair competition, do not contradict basic principles of the invitation to bidders and/or tender specifications and are applied to all bidders on equal treatment basis. If deemed necessary by the Commission, the tender may be finalized by the public auction method upon participation of the bidders involved in the bargainings. This is pre-announced in the invitation to the bidders and/or the tender specifications. The proceedings are taken under memorandum by the Commission, which is later endorsed by the commission members and the bidders.

 

The Public Auction Method: Only bidders having submitted the required temporary bid bond and pre-qualified by the Commission which regard to the conditions of eligibility as announced in the invitation to bidders may participate in the public auction. The initial value and the minimum increments at each stage of the public auction shall be determined by the Commission. The duration of the public auction shall be determined by the Commission and conveyed to the bidders before the auction. This duration may be extended for one time only, and only on the condition that it does not exceed half the previous duration time if the Commission deems fit. All proceedings and bidding orders shall be recorded by the Commission in the presence of the bidders. The public auction shall continue if proposals received are at the same level or are higher than the initial proposed value. The bidders shall submit their new proposals in order to go over the previous offer. If ,in consequence, no new proposals are submitted, the chairman of the Commission shall publicize three times announced that the tender is to be concluded on the last proposal received. If there are no new proposals submitted notwithstanding the announcement, the public auction shall be concluded. The auction proceedings are recorded in a memorandum endorsed by the Commission members and the bidders.

 

Closed Bidding Method Among Designated Bidders: If the applied tender method do not give any positive result in at least two tenders and in cases where the organization in the scope of privatization portfolio has contributions to the local and national economies, or it is deemed necessary for prevention of a probable monopoly, preservation or increase of employment possibilities, or partial or full commitment is given for technological innovations and investments, certain bidder or bidders qualified to enter into partnership in the form of a joint venture aiming at spreading the ownership and bearing the required technical or professional capability and financial standing or management responsibilities and powers shall be invited to bid by the close bidding method, with a prior consent of the Council. If only one proposal is received , the tender shall be conducted by the bargaining method, whereas if more than one proposal is received, the public auction method shall be initiated.

 

d) For tenders related to privatization implementations through sales of assets, one of the methods of closed bidding, bargaining or public auction shall be adopted. The method to be adopted shall be determined by the Administration in the light of the characteristics of the organization and the value assessment results. In the closed bidding tenders, upon consideration of value assessment results and evaluation of the proposals, the Commission may decide to conclude the bid by the bargaining or public auction method. For tenders involving the block sale of shares of the organization in the privatization portfolio, the bargaining method shall be utilized.

 

e) Tenders related to privatization implementations with methods other than sales, the Administration shall opt either the bargaining or public auction method, by considering the attributes and properties of the organization in the scope of privatization, characteristics of the services offered and structure and legal status thereof.

 

f) Privatization implementations by domestic or international public offering of stocks or stock exchange sales or sales to securities investment funds or securities investment partnerships are subject to capital market legislation.

 

g) In tenders for selection of advisors, the Administration conducts a pre-qualification study in line with the nature of the subject matter of the tender and characteristics of the sector and based on experience and competence factor, at least three consultants are invited to bid in writing and the bargaining method is adopted. The tender is concluded upon approval of the President of the Administration. The Tender Commission for selection of consultants consists of five members chaired by the Vice President of the Administration in charge of the Consultancy Services Department and having as members the Head of the Consultancy Services Department, an expert of that department, Head of the Group or Department in charge of the related Project, an expert of that Group or Department and a lawyer from Legal Consultancy Department. Alternates are appointed to the Committee positions in the same number and the method. The Committee resumes its duty upon approval of the President of the Administration.

 

Decisions taken by the tender commission following tenders are submitted for Council's approval by the Administration (with the exception of tenders for selection of consultants) and the results are made public upon the Council's approval. Provided that the privatization procedures of an establishment under the scope of privatization is carried out based on the last paragraph of Article 4 of this Law, tenders shall be realized within the parameters as dictated in this paragraph under the guidance of a commission established through the judgment of the official decision making bodies and chaired by the exchequer of the establishment at hand. Tender results are approved by the Council.

 

Investment of Capital in Kind and the Transfer of Treasury's Real Properties

 

Article 19. – (Amended by Law No: 4105 of 27.4.1995) The following provisions shall apply to the real property of the organizations in the privatization program:

 

A. If an organization is converted to a joint-stock company, the organization's real property may be contributed as capital in kind for the entire equity capital of the company. The Administration shall appraise the value of the capital increases of these organizations (but not their affiliates). Shares issued for capital in kind will be deemed to have been transferred to the Administration as bonus shares. In sections 285, 299, 392 and 404 of the Turkish Commercial Code, the term "the end of the accounting period" in paragraph of duplicate Article 298 of the Tax Procedures Code and sub-paragraph 5 thereof, and the provisions of the Banking Law and the Capital Market Law pertaining to cash capital subscriptions, shall not be applied to capitalization of real property hereof.

 

B. Reserving the provisions of Articles 43,168 and 169 of the Constitution, in respect of the transfer of real property owned by the Treasury and used by organizations whose majority capital is owned by the State and are in the privatization program; and in respect to real property under the ownership and disposition of the State, and excluding real property that is not allowed to be registered due to special laws; and in respect to transfer to these organizations and/or establishment of property rights other than ownership on this real property, in favor of such organizations:

 

a) ownership of real property currently used by organizations that have been and/or are to be converted to joint-stock companies under this Law and the total and/or majority of whose capital is owned by the State shall be transferred to such institutions for no consideration, provided that such real property is invested as capital in kind, either at establishment or during a capital increase. Shares to be issued for capital in kind invested as described above will be deemed to have been transferred to the Administration as bonus shares.

 

b) ownership of real property currently used by organizations that are not converted to joint- stock companies will be transferred to these organizations for no consideration. These real properties will be considered as assets during value assessment of the organization's properties by the Administration.

 

c) in value assessments by the Administration during privatization of organizations to which the real property mentioned in sub-paragraph one, paragraph (B) of this Article are transferred, the value of the real property subject to valuation will be assessed by the "Value Assessment Commissions" referenced in Article 18 of this Law which shall conduct value assessments in light of principles of valuation regulated by Nationalization Law No. 2942, dated; 4 November, 1983;

 

d) for real property referenced in sub-paragraph one of paragraph B of this Article and other than those which are the subject of a final judgment by the date of their registration in the land registry, accrued compensation for use of the property, can not be claimed and the compensation already collected will not be refunded;

 

e) real property owned by the Treasury which are used by the organizations in the privatization program whose majority capital is owned by the public and real property under the ownership and disposition of the State, excluding that real property not allowed to be registered due to special legislations, may be transferred to these organizations and/or transferable rem rights other than ownership may be established on these properties in favor of the same organizations.

 

C. Problems that may arise between organizations in the privatization program and between other public institutions and organizations about or in connection with transfer and division of real property, or transfer and cancellation of leasing rights, usufruct, operation and lease or transfer of real property mandatorily for compensation, or in any other matter with respect to implementation of this Article, will be resolved by the Ministry of Finance upon the recommendation of the Administration. During the allotment of the real properties that are required to be transferred within the scope of this Article, restrictions in Law No. 3194 concerning Public Works shall not be applied.

 

D. As for organizations in the privatization program which are joint-stock companies, until the public share in their capital falls below 50%, and for other organizations, until completion of their transfer in the privatization process, all arrangements in respect to allotment and unification of real property owned by such organizations and all transactions thereunder will be completed by the Administration. Upon notification of the completion of allotment and unification of the aforementioned properties to the Administration, registration or cancellation transactions thereof shall be undertaken by the relevant Office of Land Registry without the need for any further procedure. Completion of the registration will be notified by the Directorate of the Land Registry Office to the related municipality(ies) and provincial governor's office. The provisions of Articles 15 and 16 of Law No. 3194 concerning Public Works shall not be

 

applicable to allotment and unification of the real property covered hereby.

 

Transformation of Organizations to Joint-Stock Companies and Transfer of Rights and Obligations

 

Article 20. – With respect to organizations in the privatization program:

 

A. The Administration may decide to confirm the articles of association of organizations which are joint-stock companies through the provisions of this Law, to transform other organizations to joint-stock companies under articles of association prepared in accordance with this Law, to separate the organizations which are joint-stock companies by selling a part of their assets to another company, or by establishing a new company with capital in kind consisting of a part of the existing assets of the organization and/or to merge companies to form a new joint-stock companies upon its own discretion and provided that it always approves articles of association of organizations. The provisions of Articles 147, 148,149, 150, 152, 451 and 452 of the Turkish Commercial Code are not applicable to the transactions mentioned herein.

 

B. All kinds of rights, benefit and debts belonging to and/or at the disposition of organizations prior to being taken in the privatization program shall survive after being taken in the program and even after their privatization. If an enterprise, operations or operational units are independently transformed to a joint-stock company, the Administration shall decide which rights and obligations of their parent will be transferred to the new joint-stock company.

 

C. The conditions set forth in the Turkish Commercial Code, the Capital Markets Law and other related laws pertaining to the establishment of companies will not be sought for transformation of organizations which are in the privatization program to joint-stock companies as and when deemed necessary, or during the time the newly-formed joint-stock companies are in the privatization program. The provisions concerning general assembly meetings of the Turkish Commercial Code are not applied to establishments that are in the privatization program, whose capital is completely state-owned and have joint-stock company status.

 

D. The State guarantee on State backed internal and external borrowings and of bonds issued by organizations to be privatized may continue. The Council is authorized to determine the conditions thereof and other related matters. The Minister to whom the Undersecretariat of the Treasury and Foreign Trade reports, is authorized to guarantee payment of price procurement agreed by organizations in the scope of privatization based on procurement agreements for purchase of goods and services.

 

Partnership rights of actual persons and legal entities arising out of the Turkish Commercial Code are reserved.

 

Special Job Loss Compensation Payments and Other Services

 

Article 21. – Employees who work in organizations in the scope of privatization under this Law (excluding their participations) for compensation and pursuant to an employment contract and whose contracts are terminated due to restructuring for privatization, privatization, down-sizing, cessation of activities in full or in part, permanent or temporary closing or liquidation of such organizations and which are entitled to redundancy payments in accordance with labor laws and their current collective bargaining agreements, will be paid a special job loss compensation under the Law in addition to, and not in place of, the redundancy payment envisaged by laws and in their current collective bargaining agreement. Furthermore, these employees will be given priority in services for finding new employment opportunities, career development, vocational and apprenticeship training, with the support and financing of the Privatization Fund. Disabled employees (covering first, second and third degrees of disability as defined in applicable laws) may not be dismissed except from organizations which are being closed or liquidated. In the case of closing and liquidation, the disabled personnel (covering first, second and third degrees of disability as defined in applicable laws) shall be offered a special job loss compensation equal to twice the amount set forth herein. All transactions with respect to special job loss compensation and other services will be carried out by and under the direction and responsibility of the Turkish Employment Authority (IIBK).

 

Employees who work in organizations in the scope of privatization under this Law and who are subject to labor laws and whose contracts are terminated during restructuring for privatization, privatization, down-sizing, cessation of activities, closing or liquidation of the organizations by their employer without cause, or are terminated by the employees with cause within one year following the date when public shares in their capital falls below 50%, or, for organizations not converted to joint-stock companies following their date of transfer and delivery, are entitled to the redundancy payments and other services foreseen by this Law.

 

Privatization proceeds collected in the Privatization Fund for the purpose of the special job loss compensation and other services mentioned in this Law, shall first be applied to meet special job loss compensation payments. The Administration will deposit special funds and allocations provided from domestic and foreign sources for special job loss compensation and other services to an "Account for special job loss compensation and Other Related Services" to be opened in the name of the Turkish Employment Authority in a state bank to be selected by the Council. Turkish Employment Authority shall be responsible for using and managing this account. If urgent and mandatory disbursements can not be made due to lack of sufficient funds, at the request of the Turkish Employment Authority, funds may be transferred from the Privatization Fund to the Account of special job loss compensation and other Related Services upon a decision of the Council and such transfers shall be set off against future transfers from the same Fund.

 

The special job loss compensation is the daily net income to be calculated in accordance with the principles and procedures regulated in Articles 77 and 78 of Law No. 506 on Social Security. Those entitled to a special job loss compensation pursuant to this article will receive the special job loss compensation for 90 days if the worker has uninterrupted service of at least 550 days with the same employer as of the date of termination of his/her employment contract, for 120 days if the worker has service of at least 1100 days, for 180 days if the worker has service of at least 1650 days, and for 240 days if the worker has service of at least 2200 days. To be eligible to benefit from the special job loss compensation and other services, workers must apply to the Turkish Employment Authority within 30 days at the latest following the date of termination of their employment contracts. Turkish Employment Authority shall complete the necessary review within 30 days at the latest following the employee's date of application, and if the end result is positive, shall start to make redundancy payments on a monthly basis within 10 days following completion of the review and the related transactions, to be effective as from the date of termination of the employment contract. The monthly payments shall be equal to the 30 days sum total of the daily net wage according to the number of days which are the basis for compensation.

 

Of those persons with employment contracts as envisaged in this article, those who have earned the right to the pension grant according to both premium payment and service periods in accordance with the provision of Law No. 506 on Social Security as of the date of the termination of their employment contracts, shall not benefit from the redundancy payments and other services. Of those persons who benefit from compensation for redundancy and other services, those who are placed in or find a new position will lose all rights to compensation and other related services. Procedure and principles concerning the payment of redundancy compensations and the supply of other related services shall be regulated by a protocol to be signed between the Administration and the Turkish Employment Authority.

 

Social security deductions for periods for which the compensation for redundancy is actually paid, shall be paid to the institution concerned, from the account to be opened, hereunder, in the name of the claimants by the Turkish Employment Authority.

 

The amount of redundancy compensation which shall be paid to the persons who have earned the right to compensation due to redundancies as a result of the privatization process carried under Article 26 of this Law, shall be calculated by the municipality or provincial administrations concerned within the framework of principles and procedures set forth herein. Amounts of indemnity to be calculated in this fashion, shall be paid to the rightful earners by the concerned municipality or provincial administration out of the proceeds collected in a special account under Article 26.

 

Transfer of Personnel in the Organizations

 

Article 22. – (Amended by Law No: 4105 of 27.4.1995 and Law No: 4232 of 3.4.1997) The personnel subject to Law No. 657 on Civil Servants and personnel under contract (including the personnel who are under contract but not included as the permanent staff of that organization) who are employed at the organizations in the privatization program, that are privatized, down-sized, closed or liquidated, or whose activities are ceased shall be transferred to other public organizations and/or institutions, in accordance with the provisions stipulated in paragraph (f) of Article 8 of the Decree No. 217 with the Force of Law in the manner as follows:

Organizations concerned shall be notified of the results of transactions by the Administration within 15 days,

 

a) Following the signing of contracts concerning the sale or transfer of organizations, if public shares in the capital of those institutions fall below 50% as a consequence of privatization, or if their subsidiaries, associates, operations, operational units are sold or transferred.

 

b) Following the finalization of the transactions, if the structure of employment changes as a result of down-sizing, total or partial cessation of activities, closure for a definite period, or indefinitely, or liquidation.

 

The organization concerned shall send the information on both the civil servants and contracted personnel to the State Personnel Department within 30 days following the date of notification.

 

Within the 45 days at the latest following the notification to State Personnel Department the personnel concerned, upon the proposal of this Department, shall be transferred to those appropriate posts and positions in keeping with their status vacant in the public organizations and institutions. Concerning the date of commencement of employment of those employees who have been appointed and procedures to be taken in instances of failure of commencement work, provisions of Articles 62 and 63 of Law No. 657 on Civil Servants shall be applied. In case no appropriate vacant position in line with their status exists in organizations subject to the Decree No. 190 with the Force of Law on General Posts and Employment Procedures, Council of Ministers is authorized to change the class, title and degree of the existing posts. Readjustments under this article shall not be subject to the provisions of the last paragraph of Article 9 of Decree No. 190 with the Force of Law.

 

Time-period stipulated in that paragraph shall commence at the beginning of the month following the date of discharge from military service for those who have been conscripted. In the establishment in the privatization program, where conditions under clauses (a) and (b) have not been realized, the provisions of this article shall govern in the transfer of excess personnel from those establishments to other public institutions and establishments (excluding the time-frame of employment).

 

The posts and positions to become vacant due to transfers to other public organizations and institutions pursuant to this article shall be deemed to have been canceled as of the vacancy date. Salaries, social rights and fringe benefits together with any and all kinds of personal rights of the personnel appointed to other public organizations and/or institutions, accruing during the period from the date of their appointments as stipulated in paragraphs (a) and (b) of this Article and the date of the severance of their relations with their former organizations, shall be paid from the Privatization Fund, and those who are enrolled in the Turkish Pension Fund shall continue to remain under the Fund during this period. If the present salary, supplementary payments, bonus, any and all kinds of wage increases and rights to compensation or the net total of contracted wages, are more than the net total of salary, supplementary payments, bonus, if any, any and all kinds of wage increases and rights to compensation, or the net total of contracted wages (including bonus if any) to be accrued at the organization transferred, then, the difference shall be paid in the form of a compensation free from all deductions until the difference is eliminated.

 

Rights pertaining to the salaries, supplementary indicators and all wage increases and compensations (exclusive of supplementary compensations) pertaining to the previous positions of the personnel graded by Chart 1 appended to the Governmental Decree in Force of Law ref. 399, out of the personnel (including those in the joint- stock companies merged pursuant to this Code) transferred under the present article, shall be reserved as long as they remain at their assigned position. Any personnel having been previously transferred, whilst positioned within Chart 1, pursuant to the Governmental Decree in Force of Law ref. 399, shall also benefit from the provisions of this paragraph.

 

Social Assistance Supplements

 

Article 23. – The social assistance supplements paid, pursuant to the supplementary Article 24 of Law No. 506 dated 17 July, 1994, to personnel who have gained right to social assistance supplements before either the public share in the organizations in the scope of privatization falls below 15%, or those organizations are either liquidated or closed and cease to exist as a legal entity as a result, shall be paid from the Privatization Fund by the Administration to the Social Security Institution upon a written request of the latter within at most two months after the placement of the request thereof. In the event that Social Assistance Supplements are not paid to the Social Security Institution in their due time, taking into consideration other obligations of the Privatization Fund, the Social Assistance Supplements shall be covered by the Treasury.

 

Retirement

 

Article 24. – Of the personnel subject to Law No. 5434 on Turkish Pension Fund in the organization in the scope of the privatization program, those who are entitled to retirement as of the period of service under the Turkish Pension Fund Law, shall receive pension bonuses at a 30% (thirty percent) increment if they ask to be retired within two months. The 30% (thirty percent) to be paid in addition to the retirement bonus shall be covered by the Privatization Fund upon the demand of the General Directorate of the Turkish Pension Fund.

 

Creation of Posts

 

Article 25. – Of the personnel employed in the organizations in the scope of privatization, the positions mentioned below have been created and added to Decree No. 190 with the Force of Law dated 13 December, 1983, for those to be appointed to other public organizations and institutions pursuant to Article 22 of this Law.

 

CREATED POSTS

CHART NO (V)

Class Position Rank Number
General Staff 10 20,000
Administrative
Service Staff

 

Positions stated in this table can be allocated to the central and provincial organizations and revolving capital and funds of the organizations as stipulated in Article 2 of Decree No. 190 with the Force of Law in case no positions in keeping with the status of the personnel employed in the organizations under the scope of privatization are available, and upon the Resolution of the Council of

 

Ministers to modify class, title and degree thereof.

 

Privatization Applications in Local Administrations

 

Article 26. – Transactions concerning the privatization of commercial organizations owned by the municipalities and provincial administrations and their shares in all participations, irrespective of the percentage of shares owned, shall be determined and executed by their authorized organs, in accordance with the principles in this Law.

 

Proceeds earned in this manner, shall be collected in a special account by the municipality or provincial administration concerned. The proceeds collected in this special account shall be used by the municipality or provincial administration concerned with a priority for compensations for redundancies which may occur as a result of privatization and, when necessary, for the expenditure required by the administrative, financial, legal agreements to be executed in the organizations to be privatized by the municipality or provincial administrations concerned pursuant to this article. Having deducted the aforementioned expenditures with priority from the privatization proceeds to be collected according to this article, the balance remaining shall be credited as revenue to the budgets of municipality and provincial administration concerned.

 

Consultancy, research, marketing and technical services concerning issues which require special expertise within the framework of the privatization applications to be executed by the municipality or provincial administrations, can be provided by the administration upon such request from the municipality or provincial administration concerned.

 

Municipalities and other local administrations and associations must receive prior approval of the Council of Ministers, in order to establish commercial organizations to engage in commercial activities and to participate in the capital of existing companies or of companies to be established.

 

Exemption

 

Article 27. – a) Transactions in respect to the privatization process under the provisions of this law (including contracts) are exempt from all taxes, duties and fees with the exception of the Value Added Tax.

b) The annotation "23- The Privatization Administration and the Privatization Fund" has been added as a paragraph to the Article 7 of Law No. 5422 on Corporate Taxes.

c) Establishments that are in the privatization program will not be charged for registry processes in the commercial registry and registry to the Capital Markets Board.

 

Article 28. – Article 4 of the Law No. 2983, dated: 29 February, 1984 and its heading are hereby amended as follows:

 

Public Participation Fund

 

Article 4. – Proceeds from the sale of profit sharing certificates to be issued, any and all kinds of negotiable instruments from the operation of infrastructural facilities and granting of operational rights in respect to projects and works financed by the Public Participation Fund and resources allocated by other legislation, shall be collected in the Public Participation Fund to be established at the Central Bank of Turkey. Public

 

Participation Fund shall be directed and managed by the Undersecretariat of the Treasury and Foreign Trade.

 

Article 29. – Article 5 of the Law No. 2983 and its heading are hereby amended as follows.

 

Utilization Areas of the Public Participation Fund

 

Article 5. – Public Participation Fund is to be utilized ;

 

a) To finance the facilities designated for financing by the Public Participation Fund, to meet their operational, maintenance, repair, and all kinds of similar expenses,

 

b) To finance the infrastructure and other facilities for which profit sharing certificates are to be issued or operational rights are to be granted,

 

c) To make all kinds of payments in respect to profit sharing certificates,

 

d) To purchase profit sharing certificates and all kinds of negotiable instruments offered to the public, when deemed necessary,

 

e) To allow expenditures necessary to execute all kinds of transactions in relation to the areas of utilization of the Public Participation Fund as specified by the legislation.

 

In addition, at least 10% of the proceeds of the Public Participation Fund may be used in the financing of expropriation and construction investments in organized industrial zones and infrastructural investments and employment promoting investments in regions with priority in development. Principles and procedures pertaining to total or partial investment of

fund balances for accrual of interest in state banks shall be determined by the Undersecretariat of the Treasury and Foreign Trade, and those principles and procedures pertaining to their investment outside of state banks shall be determined with the approval of the Prime Minister, upon the proposal of the Undersecretary of the Treasury and Foreign Trade.

 

Article 30. – Article 6 of the Law No. 2983 and its heading are amended as follows:

 

Duties of the High Planning Council

 

Article 6 – The duties and powers of the High Planning Council in respect of the Public Participation Fund are set forth below:

 

a) To decide to issue profit sharing certificates, all kinds of securities and other negotiable instruments and to grant operational rights for infrastructural facilities;

 

b) To determine annual profit distribution principles applicable to profit sharing certificates conforming to market conditions and with a view to increasing the value of these certificates;

 

c) To determine the number, value and other related features of profit sharing certificates, securities and other negotiable instruments to be issued;

 

d) To determine the price lists and fees to be charged for the infrastructural facilities whose profits are sold and/or are to be sold through issuing of profit sharing certificates;

 

e) To select the infrastructural facilities for which profit sharing certificates will be issued or operational rights will be granted in the future, and for other facilities to be financed by the Public

Participation Fund, and to take decisions on financing these facilities and all or some of the operation, repair, maintenance and other similar costs thereof from the Public Participation Fund;

 

f) To determine which infrastructural projects included in the investment program by the Council of Ministers will have profit sharing certificates issued for them in the future;

 

g) To decide to borrow from local and foreign sources for use in the areas of application of the Public Participation Fund, and to issue bonds, securities or other negotiable instruments with or without a State guarantee on local or international markets;

 

h) To discuss and take decisions as to the budget of the Public Participation Fund;

 

ı) To decide on the principles of financing expropriation and construction investments in organized industrial zones and in the infrastructure and other investments having the effect of promoting employment capacity in the regions with developmental priority in light of the applicable investment incentive system.

 

Article 31. – Article 15 of the Law No. 2983 is hereby amended as follows:

 

Auditing of the Public Participation Fund

 

Article 15 – The Public Participation Fund will be audited in accordance with

 

the Law No. 3346 dated 2 April, 1987 and the Decree No. 72 with the Force of Law dated 24 June, 1983.

 

Article 32. – The last paragraph of Article 4 of the Law No. 3417, dated 9 March, 1988, is hereby amended as follows:

 

Funds collected as referred to above will be deposited in the "Account for Encouraging Savings by Employees" to be opened at the Main Ankara Branch of T.C. Ziraat Bank in the name of the Undersecretariat of the Treasury and Foreign Trade by the end of the month following the month of collection.

 

Article 33. – Article 5 of the Law No. 3417 is hereby amended as follows:

 

Article 5. – The Undersecretariat of the Treasury and Foreign Trade shall invest the funds in the account opened under Article 4 hereof in all kinds of securities and other productive investments, excluding purchase and sale of real estate, in accordance with principles to be determined by the High Planning Council.

 

Article 34. – Paragraph 3 of Article 2 of the Decree No. 233 with the Force of Law dated 8 June, 1984, is hereby amended as follows:

 

3. A Public Economic Organization is a fully state-owned enterprise established for the production and marketing of goods and services having a monopolistic nature with an eye to public interest and as a result of such public service whose goods and services are in the nature of concessions.

 

Article 35. – A. Of the enterprises indicated in the section entitled "B. PUBLIC ECONOMIC ORGANIZATIONS (PEOs)" attached to Decree No. 233, with the Force of Law Türk Hava Yolları A.O. (Turkish Airlines

Inc.), Çay İşletmeleri Genel Müdürlüğü (General Directorate of Tea Works), Tarım İşletmeleri Genel Müdürlüğü (General Directorate of Agricultural Works) are hereby removed from this list and added in the "Appendix A. STATE ECONOMIC ENTERPRISES (SEEs) of the same Decree.

B. The section entitled "B. PUBLIC ECONOMIC ORGANIZATIONS (PEOs)" attached to the the Decree No. 233 with the Force of Law is hereby amended as follows:

 

B- PUBLIC ECONOMIC ORGANIZATIONS (PEOs)

• T.C. Devlet Demir Yolları İşletmesi Genel Müdürlüğü (General Directorate of Turkish State Railways)

• Devlet Hava Meydanları İşletmesi Genel Müdürlüğü (General Directorate of State Airports)

• Tütün, Tütün Mamulleri, Tuz ve Alkol İşletmeleri Genel Müdürlüğü (General Directorate of Tobacco, Tobacco Products, Salt and Alcohol Factories)

• T.C. Posta İşletmeleri Genel Müdürlüğü (General Directorate of Turkish Postal Services)

• Türk Telekomünikasyon A.Ş. (Turkish Telecommunications Inc.)

 

Article 36. – In paragraph one of the 59th Article of Law No. 657 on Civil Servants, the words "and Public Participation..." have been deleted, and the words "to the President, Vice-President, Advisor to the President, Head of Department, Head of Project Group and Public Relations Advisor" have been added immediately after "Advisors to the Prime Minister" in the same paragraph.

 

Miscellaneous Provisions

 

Article 37. – (Amended by Law No: 4105 of 27.4.1995) With respect to Privatization applications:

 

a) The organizations included in the privatization program according to the provisions of this Law are subject to special law provisions, but provisions of their own establishment laws, if any, and other provisions of laws conflicting with this Law and provisions of Decree No. 233 with the Force of Law conflicting with the rules and provisions of this Law, shall not be applicable to them. However, the provisions of Law No: 815 on Marine Shipping on Turkey's Coasts and Doing Business and Trading within the Limits of Turkey's Ports and Territorial Waters dated 19/04/1926; and provisions of Article 823 of Law No: 6762 on Turkish Commerce dated 29/06/1956 are preserved. Privatization of ports through transfer of ownership is not allowed and only actual persons and/or legal entities of Turkish nationality can take advantage of the privatization of ports by methods other than transfer of ownership. For the company to take advantage of this right: it must be registered in the Turkish Registry of Commerce; it must not have a foreign capital share of over 49 %, Turkish citizens authorized to direct and represent the company must comprise the majority of the relevant personnel and Turkish citizens must have a voting majority as stipulated in the company master agreement.

 

b) Implementations to be made in accordance with the provisions of this Law and principles to govern tender procedures shall be specified by the regulations to be prepared by the Administration. Such regulations shall be in force at the date of their publication in

 

the Official Gazette, after approval by the Council.

 

General provisions of law shall be applied to any matters where there is no specific provision applicable in this Law, notwithstanding the provisions of paragraphs (a) and (b) in this Article.

 

Article 38. – The following provision is added to Law No. 5434 on Turkish Republic Retirement Fund dated 8 June, 1949.

 

Supplementary Article 71. – Personnel enrolled in the Turkish Pension Fund for social security purposes and who are appointed to organizations in the privatization program or personnel enrolled in the Turkish Pension Fund and who are working at such companies in which the public share decreased below 50 % and at those of them which are sold or transferred irrespective of their being converted into joint-stock companies, or not, shall remain under the Turkish Pension Fund if they so wish. However, no retirement premium shall be paid for that period for service under the Turkish Pension Fund after the date public share in the capital falls below 50 % or after the date of sale or transfer of companies not having corporate status.

 

Article 39. – Article 6 of Law No. 6326 on Petroleum dated 7 March 1954 is hereby amended as follows:

 

Article 6. – All rights to obtain petroleum permits, exploration licenses and

 

operation licenses belong to Turkish Petroleum Inc. (Türkiye Petrolleri Anonim Ortaklığı) in the name of the State. The corporation will use these rights either directly or indirectly through specialized institutions under its own shareholding or management control or may delegate its rights to these institutions in accordance with the provisions of this Law.

 

Subject to the principles set forth in this Law, joint stock companies or private law legal entities that are classified as limited liability companies under the applicable laws of foreign jurisdictions, including state-owned companies, may be granted permits, exploration licenses or operation licenses.

 

Provided it is consistent with the scope and objectives of their establishment, the aforementioned legal entities may be granted licenses and certificates by the Council of Ministers if it is deemed useful for the national economy. However, as a result of privatization, under current legislation, ownership of the licenses and certificates will be deemed to have been transferred and assigned to those legal entities at private law which have taken over the organization, the General Directorate of Petroleum Affairs will undertake the registration of the certificates and other related transactions.

 

Article 40. – The following paragraph has been added to article 116 of Law No. 6326:

 

Provided however that the foreign capital imported in relation with and for the purpose of privatizations under the currently applicable laws and regulations will and may not have any connection to the exchange rate guaranteed money transfers which are regulated by this Law.

 

Article 41. – (Amended by Law No: 4232 of 3.4.1997) The following paragraph has been added after first paragraph of Article 9 of Law No. 3194 on Public Works:

 

Improvement in the city plans, local city plans and the associated city plan status of the fields and lands located within the municipal boundaries and residential areas and owned by the organizations in the privatization program, will be prepared by the Privatization Administration under the Prime Ministry in consultation with the related organizations (related Municipalities) and with respect to the integrity of the environment, and made effective upon approval by the Privatization High Council, not allowing the related municipalities to change the city plan functions of these lands and fields for a period of 5 years. Related municipalities should declare their opinion within 15 days.

 

Repealed Provisions

 

Article 42. – Paragraph (c) of Article 1 of Law No. 6224, dated 18 January, 1954, first and fourth paragraphs of Article 14 of Law No. 3291, dated 28 May, 1985, and first paragraph of Article 17 thereof, are hereby repealed.

 

Additional Article 1. – (Amended by Law No: 4232 of 3.4.1997) Heads of Project Group of the Administration shall be subject to provisions applied to heads of departments of the Administration in terms of salaries, supplementary indicators, wage increases, status and compensations.

 

Provisional Article 1. – The posts listed in the attached Schedule (2) are hereby created and added under the heading of "the Privatization Administration" to the schedules appended to Decree No. 190 with the Force of Law.

 

Provisional Article 2. – All personnel and all kinds of motor vehicles, moveable and immovable properties, equipment, materials, furnishings and fixtures which were originally employed in or owned by the Public Participation Administration and then transferred to the Privatization Administration, successor of the Public Participation Administration under Decree 530 with the Force of Law, which was canceled by the Constitutional Court, are hereby transferred to the Privatization Administration established under this Law.

 

As for the personnel employed in the Public Participation Administration or the Privatization Administration prior to the date of effectiveness of this Law and deemed to have been transferred to the Privatization Administration pursuant to the first paragraph of this Article, monthly supplementary payments, wage increases, bonus premiums, contractual wages and allowances payable pursuant to Decree No. 30 with the Force of Law, and overtime pay pursuant to revised Article 31 of Law No. 3056 dated 10 October, 1984, and all other personal rights and fringe benefits, shall be calculated and paid in accordance with the same principles and procedures for the period from the date of promulgation in the Official Gazette of the stay of execution judged by the Constitutional Court for Decree No. 530 with the Force of Law, to the date of effectiveness of this Law provided, however, that any previous payments for the same period shall be deducted.

 

Employees in the removed posts will be assigned to appropriate jobs until appointment to a new post. Such employees personally reserve their rights on existing wage, additional payments, wage increases and bonus premiums, contractual wages, compensation and other personal rights and fringe benefits until appointment to a new post.

 

Contracted personnel reserve their rights arising out of the contracts. If such personnel are recorded on the payroll, they are appointed to appropriate posts in grades and degrees determined in accordance with the provisions of the Supplementary Provisional Articles 1, 2 and 3 of Law No. 657 on Civil Servants and Decree No. 458 with the Force of Law, on the condition that the maximum allowable level of their educational background is not exceeded. In the event that the net monthly sum of the contracted wage of such personnel (including monthly portion of the yearly bonus payments, but excluding overtime pays) is above the net monthly sum of the wage, additional payments, wage increases, bonus premiums and overtime pays allowed in the newly appointed post, the difference will be paid to them as a compensation free from all kinds of deduction, until the difference is eliminated.

 

In line with the new arrangements under this Law, "The Principles of Service Contracts for the Personnel Working on Contractual Basis at Privatization Administration" will be decided and enacted by the Council if Ministers within two months following the date of effectiveness of this Law.

 

Provisional Article 3. – Restructuring of State Banks (other than the Turkish Central Bank, Ziraat Bank, Halk Bank and Eximbank) for privatization will be completed within two years following the

date of effectiveness of this Law.

 

Provisional Article 4. – Unless otherwise decided by the Council, any decisions previously taken by the High Planning Council or the High Council of Public Participation will remain in force as the decisions of the Council, if and to the extent they do not conflict with the provisions of this Law.

 

The production and service activities of public economic organizations that are

covered by the original objectives thereof, and of which the "monopoly" franchise has been withdrawn and canceled by the related laws prior to the date of effectiveness of this Law, are exempted from the provisions of Article 15 hereof.

 

Provisional Article 5. – Until rearranged under this Law, the functions already assigned to various units of the Administration will be carried out by the same units.

 

Provisional Article 6. – Both the management of the Public Participation Fund and the associated documents and records and the documents and records about the Account for Encouraging Savings by Employees opened pursuant to Law No. 3417 and the investments with the funds thereof will be deemed to have been transferred to the Undersecretariat of the Treasury and Foreign Trade as of 1 January, 1995. A memorandum of transfer will be executed by and between the Administration and the Undersecretariat of the Treasury and Foreign Trade in connection therewith.

 

Transactions in respect of management of the Public Participation Fund, and management and utilization of the Account for Encouraging Savings by Employees, and investments with the funds of this account will be carried out by the Administration until 31 December, 1994 and the Undersecretariat of the Treasury and Foreign Trade after 1 January, 1995.

On 1 January 1995;

 

a) The portion of the balances in the Privatization Proceeds Account and Dividends Account in the assets of the Public Participation Fund, which have previously been transferred to the Public Participation Fund under management of the Public Participation Administration pursuant to the decisions of the High Planning Council, will be transferred to the Privatization Fund; and

 

b) the funds in the Account for Encouraging Savings by Employees that has previously been opened in the name of the Public Participation Administration will be transferred to the Account for Encouraging Savings by Employees to be opened in the name of the Undersecretariat of the Treasury and Foreign Trade pursuant to this Law.

 

Funds that have been transferred to the Privatization Fund formed pursuant to Decree No. 530 with the Force of Law which has been canceled by the Constitutional Court will be transferred to the Privatization Fund formed under this Law.

 

Last paragraph repealed by Law no. 4568/5 of 23/5/2000

 

Infrastructural projects included among the projects of the Public Participation Administration and/or financed from the Public Participation Fund prior to the date of effectiveness of this Law will be deemed to have been excluded from that scope and included in the projects of therelated organizations. These projects will be continued to be financed by the Public Participation Fund.  

 

Provisional Article 7. – The 1994 disbursements of the Administration formed hereunder will be met from the budget of the Public Participation Administration which has already been approved by the concerned authorities pursuant to the laws in effect prior to this Law.

 

References in Law No. 2983 dated 29 February, 1984 and other pertinent laws to the High Council of Public Participation, the Public Participation Administration, the President of the Public Participation Administration and the Public Participation Fund are deemed to have been made to the High Council of Privatization, the Privatization Administration, the President of the Privatization Administration, the Privatization Fund, the Undersecretariat of the Treasury and Foreign Trade and the Undersecretary Treasury and Foreign Trade and High Planning Council in the context thereof.

 

Provisional Article 8. Repealed by Law no. 4568/5 of 23/5/2000

 

Provisional Article 8. – Within the areas of application of the Public Participation Fund, financing obligations and other liabilities as to investment programs which have been assumed by the Public Participation Administration prior to the date of effectiveness of this Law will be paid from the Privatization Fund when they become due and payable. If the Privatization Fund does not have sufficient funds to pay them, the outstanding debts and obligations will be paid from the Public Participation Fund.

 

Provisional Article 9. – As for the contracted personnel (including the personnel who are under contract but not among the permanent staff of the organization) of State Economic Enterprises and of their subsidiaries, who are transferred to the organizations subject to Law No. 657 on Civil Servants pursuant to Article 22 of this Law, and thereby become a civil servant, their period of employment as contracted personnel will be taken into account in calculating their vested rights, wages, grades and ranks irrespective of their being on permanent staff, in accordance with the Supplementary Provisional Articles 1, 2 and 3 of the said Law, also taking into consideration the provisions of Decree No. 458 with the Force of Law, on the condition that the maximum allowable level of their educational background is not exceeded. The provisions of this Article and Article 22 hereof, pertaining to the compensation of difference, will also be applied for the civil servants and the contracted personnel who have been transferred from the organizations in the scope of privatization to other public organizations prior to the date of effectiveness of this Law.

 

Provisional Article 10. – If the payroll or contracted personnel of the organizations in the privatization program, who are enrolled in the Turkish Pension Fund and have already been entitled to retirement as of the date of effectiveness of this Law, apply for retirement within two months following the effective date hereof, they are entitled to the provisions of Article 24 above.

 

Provisional Article 11. – Organizations which have been transferred to the Public Participation Administration for privatization pursuant to the laws in force prior to the date of effectiveness of this Law will be deemed to have been taken into the privatization program as of the date of transfer. All transactions already completed by the Public Participation Administration in relation to the privatization of such organizations are valid and the privatization process will hereafter be continued in accordance with the provisions of this Law. However, if deemed necessary, the Committee will decide upon proposals of the Administration within 3 months after the effective date of this Law which organizations will be the first to be restructured for privatization and which will be excluded from the scope of privatization.

 

Provisional Article 12. – All transactions completed by the Public Participation Administration or the Privatization Administration in accordance with the laws and regulations in vigor, prior to the effective date of this Law, and all personnel transfers and appointments by the related organizations under Article 5 of Decree No. 531 with the Force of Law canceled by the Constitutional Court, and all readjusting of posts and compensation payments under the Provisional Article 2 of Decree No. 546 with the Force of Law, are valid.

 

Provisional Article 13. – Personnel who were working in organizations privatized prior to the effective date of this Law in the status mentioned in Article 21 hereof, and were dismissed for the reasons set forth in the said Article, are also entitled to the career development, vocational and apprenticeship training services in accordance with the principles and procedures regulated by the said Article 21, if they apply to the Turkish Employment Authority within 30 days following the date of effectiveness hereof.

 

Provisional Article 14. – The personnel subject to Law No. 657 on Civil Servants and the contracted personnel and permanent staff currently working at the Hereke Carpet and Silk Weaving Factory and the Yıldız Tile and Porcelain Works, will be appointed to the posts created and allocated to the Turkish Grand National Assembly under Article 25 of this Law if they apply in writing and are accepted by the Turkish Grand National Assembly to civil servant status within 30 days following the date of effectiveness thereof. The provisions of Article 22 pertaining to compensation payments and the provisions of Provisional Article 9 hereof, will be applicable to such persons. Personnel who do not apply for or are not appointed to civil servant status, will be assigned to other units of Sümer Holding A.Ş. in their existing position.

 

Provisional Article 15. – Moveable and immoveable properties, rights and benefits of the organizations already in the scope of privatization program as of the date of effectiveness of this Law or included therein hereafter are exempted from obligations as long as these organizations remain in the scope of privatization, and any obligation already applied will be lifted and execution proceedings will be stopped. The rates of interest applicable on the outstanding debts of these organizations may not exceed the rediscount interest rates of the Turkish Central Bank as of the due date thereof.(*)

 

Provisional Article 16. – ( Amended by Law No: 4232 of 3.4.1997) The two years foreseen as the planning stage for the completion of privatization procedures of state banks as indicated in the Provisional Article 3 of this Law, is hereby extended by another two years upon the termination of the initial two- years period.

 

Effectiveness

 

Article 43. – This Law will become effective upon its publication.

 

Enforcement

 

Article 44. – The provisions of this Law will be implemented by the Council of Ministers.

 

(*) The warranted decision on the annulment of Provisional Article 15, announced upon the conclusion of the Constitutional Court's meeting dated 9 April 1997, has still not been published in the Official Gazette.

 

ANNEX : CHART LİST 1

PRIVATİZATİON ADMINISTRATION CENTRAL CONSTITUTION

 

President Vice Presidents. Main Service Units Consultancy Units Assisting Units

------ ------------ -------------------- ----------------- -----------------

-President –Vice -Capital Markets –Legal Consultancy -Personnel and Training

President Dept. Dept.

-Vice -Finance and Funds -Research, Plan. and -Admin. and Financial

President Mng. Dept. Coord. Dept. Works Dept.

-Vice -Consultancy Serv. -Press and PR -Defence Dept.

President Dept. Dept

-Vice -Tender Serv.

President Dept.

-Vice -Project Evaluation -Presidency

President and Preparation Consultancy

Dept.

-Employment and

Sosyal Planning Dept

 

CHART SHOWING ACTIVATION DATES OF LEGISLATION THAT BROUGHT ANNEXES AND AMENDMENTS TO LAW NO. 4046

 

Law

No. Articles activated on different dates Date of Activation

----------- ----------------------------------------------- ------------

4105 --- 2/5/1995

4232 --- 8/4/1997

4568 --- 1/1/2000

 

LIST OF LAWS AND STATUTES THAT REPEALED LAWS MAKING ANNEX AND AMENDMENTS IN LAW NO. 4046

 

Repealed Laws

Laws or Provisions ----------------- ----------------

Repealed Date Number Article

------------------------------- --------- -------- -------- ----------

Law no. 4046 of 24/11/1994

Article 19

Paragraph (E) 24/4/1995 4105 3

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Republic Of Turkey Prime Ministry Privatization Administration 2014