Recent Developments On Commodity Finance

Commodity finance in Turkish market was a long-standing concern of creditors due to the impracticable legislative ground on movable pledges. Until the announcement of the new Law No. 6750 on Movable Pledges (the "Movable Pledge Law") which has entered into force on 01.01.2017 by abolishing the Law No. 1447 on Commercial Enterprise Pledge, pledge over movables (taşınır rehni) could only be established through the transfer of possession (zilyetliğin devri) of the related movable to the pledgee. The only exceptions to this rule were (i) the registration of the pledge at the registry to the extent that the ownership of the relevant movable requires registration onto a special registry; such as vehicles and vessels, and (ii) commercial enterprise pledges. Although various methods within the past years were tried by creditors for the perfection of a clear pledge, none of these methods were completely qualified to circumvent the obstacles of law.