REPUBLIC OF TURKEY
PRIME MINISTRY
PRIVATIZATION ADMINISTRATION

LEGAL FRAMEWORK

The privatization program in Turkey was initiated in 1983. In 1984, the first related regulation (Law No : 2983) and in 1986 (Law No : 3291) was enacted. Within the perspective of the provisions of Law No : 3291, the Council of Ministers was authorized to give decision on the transfer of SOE's (State Owned Enterprises) to the PPA (Public Participation Administration) and the High Planning Council was authorized to decide the transfer of partially state owned companies and subsidaries to the PPA for privatization. In 1992, with the Statutory Decree No : 473, PPHC (Public Participation High Council) was authorized to approve privatization transactions.

Upon formation of a political and social consensus on the needs for privatization, the new privatization law has been enacted on 27 November 1994 with the new Law No : 4046. This new Law contains the provisions related to ;

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

The establishment of the "Privatization Fund" and the determination of the resources and utilization fields of such fund,

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,

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

Paying "Redundancy 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,

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

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

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

Creating privileged State shares for strategic fields,

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.