The Regulation On Principles And Procedures To Be Applied In Factoring Operations

Introduction

The Regulation on Principles and Procedures to be applied in Factoring Operations ("Regulation") was published by the Banking Regulation and Supervision Agency ("BRSA") in the Official Gazette dated 04.02.2015 and numbered 29257. Notably, the Regulation entered into force prevailing as of 01.01.2015. The Regulation envisages the principles and procedures to be applied in factoring operations to be conducted by factoring companies and banks; the novelties introduced by such Regulation are examined below.

Avoidance of Duplicate Invoices and Cancellation of Invoices

The second section of the Regulation entitled "Avoidance of Duplicate Invoices and Cancellation of Invoices", stipulates certain obligations, and envisages various procedures for banks and factoring companies that are established in Turkey. Firstly, Art. 4 of the Regulation imposes a prohibition that aims to avoid operations, which are not based on an invoice. In this sense, the Regulation