Legislative proposal approved in committee: Penalties for exorbitant pricing have been set!

According to the amendment made to the Law on Cooperatives, if it is determined that the transition process for cooperative and umbrella organization board members to transfer the cooperative's trade registry records, financial statements, annual board activity reports, general assembly meeting documents, and information regarding partners' identities, contact details, shares, and payments to the Cooperative Information System (KOOPBİS) has not been completed, the Ministry of Trade may grant extensions twice, for one year each.

Until this period expires, provisions regarding non-compliance with the KOOPBİS obligation will not be applied to the board members and officials of cooperatives and their umbrella organizations. This regulation will enter into force on the date of its publication, to be applied as of April 26, 2024.

BY COMPETITION BOARD DECISION

The period provided for cooperatives to adapt their articles of association is being extended by another 2 years.

With the proposal, an amendment is being made to the Law on the Protection of Competition in line with the Constitutional Court's decision. Accordingly, provided that it is limited to the staff titles in the schedules attached to the Law, grade changes in filled positions and class, title, and grade changes in vacant positions will be made by the decision of the Competition Board.

The Competition Board will notify the relevant parties of the investigations it has initiated within 15 days from the date of the decision to initiate the investigation. Along with this notification letter, the Board will send sufficient information to the relevant parties regarding the type and nature of the allegations. This is intended to both enable the parties to defend themselves more effectively and to ensure that investigation processes proceed more rapidly.

It will be notified to the parties that they must send their written defenses to the Board within 30 days from the notification of the investigation report. If justified grounds are presented, this period may be extended once, for up to double the original time. Those assigned to conduct the investigation will notify all Board members and the relevant parties of their written opinions within 15 days if there is a change in their views in the investigation report as a result of the written defenses received. The parties will be able to respond to this opinion within 30 days.

The proposal envisages an amendment to the Law on the Union of Chambers and Commodity Exchanges of Turkey and Chambers and Commodity Exchanges.

Accordingly, in transactions related to product certificates and forward contracts, the transfer and payment of the price, the fulfillment of other obligations of the buyer and seller by intermediaries in product specialized exchanges or by the institutions from which they receive clearing and custody services, the registration of the purchase and sale, and other matters related to the purchase and sale will be carried out by the product specialized exchange in accordance with the law and relevant legislation provisions.

The financial liability of the product specialized exchange or the institution authorized by the product specialized exchange as a clearing center in clearing transactions will be limited to the limits they will establish and the guarantees to be taken and the assets of the guarantee fund.

The procedures and principles regarding the establishment, operation, use, and participants of the guarantees to be taken and the guarantee fund that may be created to ensure the fulfillment of obligations arising from transactions carried out in product specialized exchanges and to compensate for losses will be determined by a regulation to be issued by the Ministry of Trade. The regulated guarantees and assets in the guarantee fund cannot be used for purposes other than their deposit, cannot be transferred to third parties, cannot be seized even for public debts, cannot be pledged, cannot be included in the bankruptcy estate, and no precautionary measures can be placed on them.

The procedures and principles regarding the intermediation of the purchase and sale of product certificates and forward contracts in product specialized exchanges, the authorization of intermediaries and the suspension and cancellation of this authority, the supervision and inspection of intermediaries, and other transactions related to brokerage services on product certificates and forward contracts, as well as the accrual of interest on cash receivable balances in customer accounts depending on the authority given by the customer, will be regulated by regulations to be issued jointly by the Ministry and the Capital Markets Board.

PENALTIES ARE BEING INCREASED

By amending the Law on Licensed Warehousing for Agricultural Products, new criminal sanctions are being introduced for certain acts and administrative fines are being increased in order to increase the effectiveness and deterrent nature of the penalties.

Accordingly, an administrative fine of 200 thousand to 1 million liras will be imposed on licensed warehouse operators who demand and collect fees above those determined in the licensed warehousing fee schedule or for services not included in the fee schedule, or who make deductions from the product quantity in a manner contrary to the legislation during product delivery, who act contrary to the "display" provision of the law, or who do not comply with the content, form, and storage conditions regulated in the relevant regulation of the product certificate.

An administrative fine of 200 thousand to 1 million liras will be imposed on licensed warehouse operators who act contrary to provisions including the prohibition of issuing another product certificate for all or part of the agricultural product represented by a product certificate for which a delivery obligation has been regulated and not cancelled, the delivery obligation, and the failure to remedy issues contrary to the law and relevant regulations within the given period despite the warnings and administrative measures of the Ministry of Industry and Trade.

In cases where the product is accepted into or removed from the warehouse without analysis and classification, the weighing receipt does not meet the conditions determined in the relevant regulation, tools and equipment are used without calibration or periodic checks, or there is a difference between the class and quality specified in the electronic product certificate representing the product and the class and quality of the products in the warehouse due to non-compliance with storage conditions, an administrative fine of 200 thousand liras will be applied to the licensed warehouse operators who perform these acts for each violation.

In cases where a witness sample is not taken and not stored for the period determined in the relevant regulation, the analysis and classification document does not meet the conditions determined in the relevant regulation, the tools and equipment in the laboratory are used without calibration or periodic checks, the witness sample and the analysis and classification document of the product represented by this sample are different, or the values in the records kept during the analysis and the values in the analysis and classification document are different, an administrative fine of 200 thousand liras will be imposed on the authorized classifiers who perform these acts for each violation.

An administrative fine of 200 thousand to 1 million liras will be imposed on authorized classifiers who demand and collect fees above those determined in the authorized classifier fee schedule or for services not included in the fee schedule, or who act contrary to the relevant provision.

In case of repetition of the violation requiring administrative fines within a calendar year, an administrative fine of twice the previous penalty will be applied for each repetition.

COVERED MARKETPLACES

The legislative proposal also envisages an amendment to the Law on the Regulation of Trade in Vegetables and Fruits and Other Goods with Sufficient Supply and Demand Depth.

According to the regulation, the leasing method through limited real rights, which causes sales places and other areas in covered marketplaces to be rented to market vendors at high prices, is being abolished. It is aimed to reduce the costs of market vendors by allowing sales places in marketplaces to be used only through the allocation method.

With the proposal, it is aimed to prevent the increase in costs for market vendors resulting from the allocation of sales places in covered marketplaces to other persons who are not in the market vending profession through the limited real rights method.

Limited real rights and tenancy rights established in covered marketplaces before May 3, 2024, will remain valid until the end of the period provided for the use of these rights.

An administrative fine of 100 thousand to 1 million liras will be imposed for each violation on those who act contrary to the provision that producers, suppliers, and retail businesses cannot make exorbitant increases in the sales price of a good or service.

According to the proposal approved in the TBMM Industry, Trade, Energy, Natural Resources, Information and Technology Committee, with the Law Proposal on Amending the Turkish Commercial Code and Certain Laws, which also includes increasing penalties for exorbitant price hikes and hoarding, the terms of office of chairmen and deputy chairmen in joint-stock companies will be harmonized with board members, which is 3 years.

In joint-stock companies, it will be ensured that the authority regarding the appointment and dismissal of persons other than senior executives can be delegated by the board of directors.

A board member will be able to request the chairman in writing to call the board of directors to a meeting. If the request is deemed appropriate, the call will be made by the chairman of the board of directors. Upon the written request of the majority of the board members, the chairman will be obliged to call the board of directors to a meeting to be held within 30 days at the latest from the date the request reaches him. In cases where the board of directors is not called to a meeting within this period or the chairman or deputy chairman of the board of directors cannot be reached, the call can be made directly by the requesters.

Joint-stock and limited liability companies that fall below the minimum capital amount will be required to adapt to the new capital regime by December 31, 2026. Companies that do not ensure this adaptation will be considered dissolved and will be required to initiate the liquidation process provided for in the law and ensure the deletion of their trade registry record.

Non-public joint-stock companies that have adopted the registered capital system and have an issued capital of at least 250 thousand liras will be considered to have exited this system if they do not increase their initial capital and issued capital to 500 thousand liras.

No meeting quorum will be sought in general assemblies to be held for increasing the capital to the prescribed amounts, decisions will be taken by the majority of the votes present at the meeting, and no privileges will be exercised against these decisions.

With the regulation made in the Law on the Protection of the Consumer due to the Constitutional Court's cancellation, measures regarding the removal of content and blocking of access are included in the powers of the Advertising Board.

ADMINISTRATIVE FINES

In the Law on the Protection of the Consumer, the heading "penal provisions" is changed to "sanction provisions".

In accordance with this law, an administrative fine of 2,200 liras will be applied for each transaction or contract where a violation is detected against those who do not deliver or assemble goods on time, and an administrative fine of 10 percent of the total sales price of the good or service avoided, including all taxes, but not less than 2,200 liras, will be applied for each transaction or contract where a violation is detected against those who avoid the sale of goods and services.

Within the scope of after-sales services, an administrative fine of 1 million 115 thousand liras will be imposed on producers and importers in case of failure to obtain an after-sales service qualification certificate; 18 thousand liras for each service station in case of failure to register with the system created by the Ministry or failure to update the registration; 18 thousand liras against private service stations that do not use the "private service" expression in a way that can be easily seen and read in all kinds of media and activities; and 124 thousand liras for each missing service station against producers and importers who do not provide the minimum number of service stations during the validity period of the after-sales service qualification certificate.

An administrative fine of 2,200 liras will be applied for each transaction where a violation is detected against producers, importers, or private service stations that act contrary to their obligations.

If the violation occurs via the internet, the Advertising Board may decide to notify the relevant party electronically through communication tools, domain name, IP address, and similar sources obtained on the relevant internet page for the removal of the content, and to block access if the content is not removed within 24 hours despite this notification.

The decision to block access will be made primarily limited to the content where the violation occurred. However, in cases where it is technically impossible to block access to the content related to the violation or where the violation cannot be prevented by blocking access to the relevant content, a decision to block access to the entire website may be made.

In real estate subject to timeshare for which a building permit has been obtained, timeshare providing real rights linked to ownership shares or timeshare providing personal rights, including sales by prepaid method, may be sold for 5 years starting from April 1, 2022; timeshare rights may be granted through cooperative or commercial company partnership or association or foundation membership; those who do not have real rights on the property subject to timeshare may sell timeshare.

HIGH PENALTIES

With the amendment envisaged in the Law on the Regulation of Retail Trade, an administrative fine of 100 thousand to 1 million liras will be imposed for each violation on those who act contrary to the provision that producers, suppliers, and retail businesses cannot make exorbitant increases in the sales price of a good or service.

Those who act contrary to the provision that producers, suppliers, and retail businesses cannot engage in activities that create scarcity in the market, disrupt market balance and free competition, and prevent consumers from accessing goods may be fined 1 million to 12 million liras for each violation.

The Ministry of Trade will be authorized to close the workplaces of producers, suppliers, and retail businesses that have been fined administratively for acting contrary to this provision at least 3 times within a calendar year for up to 6 days.

The total amount of administrative fines for a calendar year cannot exceed 20 million liras if the business is small-scale, 200 million liras if it is medium-scale, and 1 billion liras if it is large-scale.

With the proposal, with the amendment to be made in the Law on Product Safety and Technical Regulations, an administrative fine of 240 thousand 566 liras to 2 million 405 thousand 665 liras will be applied to those who export non-compliant products in case of a violation regarding product safety; and 96 thousand 226 liras to 962 thousand 265 liras in other cases of violation.

A new article was added to the proposal with a motion accepted in the committee.

According to the amendment made to the Law on Licensed Warehousing for Agricultural Products, businesses whose licenses are suspended will not be able to demand warehouse rental fees for the days they remain suspended.

Storage fees accrued for products stored in licensed warehouses by the General Directorate of the Turkish Grain Board and paid to licensed warehouse operators in monthly periods will not be paid during the suspension period.

This article will enter into force 6 months after the date of publication of the regulation.

During the discussions on the articles of the proposal, CHP Malatya Deputy Veli Ağbaba took the floor and argued that the municipal buildings that the CHP took over from the AK Party were in splendor and ostentation, and claimed that there were VIP rooms in the Sancaktepe Municipality building.

Committee Chairman Mustafa Varank said, "Look at the CHP's municipal building in Tekirdağ. I saw the Sancaktepe Municipality building, there are no such VIP rooms," he said.

Upon the criticism of opposition deputies in the committee regarding the regulation for giving sales places in covered marketplaces to market vendors through the allocation method instead of renting them, Varank asked two committee member deputies to conduct an inspection in the marketplaces in Ankara accompanied by Ministry of Trade officials.

Deputy Minister of Trade Mahmut Gürcan provided information about the fines imposed on businesses that engaged in exorbitant pricing in the earthquake zone. Explaining that the fines written in the cement sector as of January were sent to the businesses, Gürcan stated that cement prices are always under control and that there is currently no exorbitant price increase in cement.

Deputy General Manager of Internal Trade Hüseyin Altındal stated that 54 million liras in fines were imposed on those who engaged in exorbitant pricing and hoarding in ready-mixed concrete and cement products, and said, "We have applied a total of approximately 579 million 904 thousand in fines as exorbitant pricing and hoarding penalties to 2 thousand 899 businesses. The amount of fines we imposed on 331 businesses for earthquake needs in the earthquake zone, such as containers, at that time is 78 million 846 thousand liras. Apart from that, as the Unfair Price Evaluation Board, we have applied 54 million in fines to 39 business owners in the ready-mixed concrete and cement sector across Turkey, not just in the earthquake zone" he said.

Altındal also stated that the fines given for hoarding to date have only been applied in the automotive sector, and noted that the Board has not imposed any hoarding fines on markets, other manufacturing firms, and businesses other than this.

News Source: 12punto